The Catch 22 in France

I was just reading some information about the riots or "demostrations" if you like in France. They are very interesting to me from my political/economic viewpoint.

What I currently see is that unemployment in many European countries is very high due to the fact that the government has placed so much regulation in place. Why would someone want to find a job if the government will take care of them?

Also, I think that many of the problems are due to the labor unions being so strong and so demanding. From a business perspective, let's be completely honest, I want to make a profit. If that were not the case I wouldn't be in business. The union continues to push for less work out of the employees while paying them more. So the company pays more for less work. They would need to hire more employees to get the same amount of work done. But can they afford to hire more employees at the increased rate? Remember that even the evil corporations have a specific budget that they must meet or the very evil shareholders/owners don't make anything.

So what happens when the companies can't do this? They either go to a more business friendly county, outsource jobs, or go out of business. What happens to those jobs? Gone. What happens to unemployment? It skyrockets.

Now the viscious cycle has begun though. Because of the increased unemployment costs on the government, they must raise taxes. Those taxes cut into the profits of the companies and more move or go out of business.

What is interesting to me is the attitude of the French people. They truly believe that it is the government's job to provide them jobs. So they expect that more regulation will make things better. This is the beauty of the welfare state. After a while the citizens actually look to the government for the solutions to all of their problems. So the government taxes to provide services. Who will pay the taxes to provide all of those services?

Margaret Thatcher took the correct approach in the U.K. in the 1980s. Deregulate the industries and remove some of the welfare state programs. Allow the evil capitalist market to do it's job.

Companies provide jobs. Jobs provide money for the people. People buy more products. Products must be produced by more companies. The evil capitalist cycle does what politicians can't -- provide jobs and money.