With job insecurity garnering headlines in the U.S. and many
demanding that the government "do something" about it, few reporters
have looked overseas to see what happens when governments try.
Time's Jay Branegan did. According to Branegan, in the April 15
issue, "The rich benefits that have made Europe a sweet place to
work have clogged its economic arteries. Call it Eurosclerosis --
the combination of a staggering tax burden and a blanket of
regulations that smother new businesses and entrepreneurship."
Branegan's evidence: "Europe's unemployment rate of 11 percent is
twice as high as the U.S.'s, and its job creation chart is a flat
line. Over the past three years, the U.S. has created 8.4 million
new jobs, Europe none. Significantly, many of those new American
jobs pay higher than average wages, and as many as 60 percent are
managerial or professional." Branegan also pointed out that high
minimum-wage laws in such countries as France mean "many [Frenchmen]
aren't working at all. Joblessness among young people, hit hardest
by minimum-wage laws, is roughly twice France's overall unemployment
rate of nearly 12 percent." Something for reporters to keep in mind
as American politicians debate raising the U.S. minimum wage.
On the March 26 CBS Evening News, correspondent Ray Brady
reported on one form of government spending that has largely escaped
the budget ax -- corporate welfare. Specifically, Brady looked at
federal subsidies for ethanol. According to Brady, "Critics, even
those within the U.S. government, say the virtues of ethanol are way
overstated. At a time when the government is cutting on social
programs, they question why it's still handing out subsidies to the
ethanol industry, subsidies that amount to nearly $800 million a
Brady recounted how "ethanol was born of desperation during the
Arab oil embargo of the 1970s, when gasoline prices soared and lines
pressed for miles. But now gasoline is plentiful, much cheaper to
produce than ethanol. And today, ethanol accounts for just over one
percent of all U.S. energy consumption." And while "ethanol does
reduce some pollutants, the Congressional Budget Office says it
contributes to others, such as ozone pollution."
Why, then, does the subsidy continue? "Many point to the lobbying
of corn growers and generous political donations to both parties by
Archer Daniels Midland, the world's largest producer of ethanol, and
a major beneficiary of the government's subsidies." According to
Brady, the ethanol industry has "racked up $6 billion in subsidies,
courtesy of the American taxpayer."
Kudos to Branegan and Brady for practicing journalism at its
best, with Branegan looking at the results of programs politicians
are proposing and with Brady questioning programs neither political
party wants questioned.