Now we're going to bail out graduates. The government is alarmed by the high rates of unemployment faced by recently graduated students, and is proposing to fund new 'internships' with big companies like high-street banks.

When is this nonsense going to end? Pretty soon the whole country will be bailed out by some new wizzo government scheme. The only trouble is that the whole country will be paying for it at the same time.

First, governments can't create jobs. Entrepreneurs create jobs by recognizing the demands of customers and serving those demands. Willing customers give them money, and they grow businesses and hire staff to capture it. The most that govenment can do is dip a bucket into one side of the nation's money pool, run round to the other side (spilling quite a bit on the way), and (with great fanfare) empty it into the other side, where of course it will create jobs. But not lasting jobs, only jobs that exist solely because of the new cash.

Second, any such scheme is arbitrary. I'm sure that the Adam Smith Institute would love to have a few government interns, but we'll never get the chance. The scheme will be focused on larger employers. Why? Again, it's just a way of politicians doing something that looks highly visible. They can say that they've found 1,000 'jobs' in Barclays or whatever. If they found jobs in ones and twos with employers across the country, however, it wouldn't have the same media impact.

And of course all these arbitrary schemes do generate some real jobs – in the bureaucracy. The more arbitrary and quirky and focused they are, the more people are needed to manage them. Which means, of course, the more taxes need to rise and the more small businesses (and large ones) start firing people...