Jobs and unemployment

This paper appeared in The Wall Street Journal.

When the economic crisis struck in 2008, the French government assured its citizens that our social model would protect and cushion us; that we would not be hit nearly as hard as other countries in the downturn.

Two years later, one can hardly claim that France has been shielded by its social model. Unemployment has risen constantly, even more strongly than for our peers such as the U.K. and Germany. Even Germany has emerged better off than France, with its excellent export figures.

The French ministers decided not to follow the example of their Spanish colleagues and keep their salary at the current level (about 14 000 €). They considered that to cut…

The last statistics from the OECD are unequivocal: the unemployment rate in France is and has always been well above the average for the OECD countries and also above the average of countries from the euro zone. This is a proof that the State is not the solution for unemployment.

In his testimony on Capitol Hill, the economist Russel Roberts is exposing the reasons why the The American Recovery and Reinvestment Act of 2009 (ARRA) has not the anticipated by government effect on jobs creation. He is pointing out that given the lack of success so far and the role uncertainty plays in the decision-making of entrepreneurs, investors and consumers, doing less might, paradoxically, be more successful than doing more, especially if the “more” that is done works in the wrong direction.