The White House today announced a new initiative, part of the wider “We Can’t Wait” initiative, to help young people find summer work. With help from the private sector, the White House says that nearly 180,000 youth working opportunities will be available this coming summer. With an election coming up it would make political sense to announce this sort of initiative, especially while the President is visiting Ohio, a swing state with high unemployment and a manufacturing base. Despite the political benefits that these sorts of initiatives might reap, they rely on a blind faith in economic miracles.

Schemes and initiatives such as these are used by right and left leaning governments, and not exclusively the recourse of traditionally economically interventionist governments.  Over in the UK a conservative-lead government announced a similar scheme in November’s Autumn Statement, for which British taxpayers will be expected to pay almost £1 billion. According to the plan announced by Cameron’s government, young people who have been unemployed for more than three months will be offered private-sector work experience. Young people who do not take up the offer risk losing their unemployment benefits. The scheme was introduced by the British government in light of the depressing youth unemployment figures. When faced with such figures, any politician’s first instinct will be to do something.

The plan announced by the White House shows the same damaging instinct in practice. Faced with a falling popularity and disappointing employment figures, the President has decided to implement a plan that aims to boost employment while maintaining support from underemployed or unemployed youth.

The root cause of unemployment here and in the UK is flawed fiscal and monetary policy. Businesses are not hiring because there is not enough flow of credit. In addition many times the regulations and procedures in place for the hiring process make taking someone on economically prohibitive. Governments should let the private sector do the hiring and training and concentrate on developing a sound fiscal and monetary policy that will enable economic growth and employment.