Saturday, January 22, 2011

Who are the real "job-creators"?

Republicans are fond of claiming that legislation that helps working people and the poor are "job-killing" measures--most notably, the Patient Protection and Affordable Care Act. They claim that it is the business tycoons, hedge fund managers, Wall Street credit default swappers, and insurance company CEOs that create jobs. Therefore, they say, any regulations that slow down the profit-generating machinations of business are bad for the economy.

In the real world, however, it is not the wealthiest Americans who create jobs. This can be understood from the fact that Bush II's tax cuts for the wealthy created only a few hundred thousand jobs over his eight years in office. Since 2000, the U.S. has lost 10% of its middle-class jobs. Today, businesses are holding billions of dollars in their vaults rather than using that money to hire workers. Why? Because they are waiting until the market shows more evidence of spending by consumers. When consumers spend, businesses hire. Therefore, it is in reality the American people who create the jobs through their demand for goods and services.

Why is this an important distinction? Because it means that our government would be much more effective in putting people back to work if they were to put more money directly into the pockets of the people who are now jobless (such as through extending unemployment benefits) or are working but not spending (such as by cutting middle class tax rates), rather than cutting tax rates for the rich in half (as Rep. Paul Ryan, R-Wisc., proposes to do) or choking off regulations that protect our environment (which we hold in trust for our children and grandchildren) and the purity of our food supply.

If you need further evidence that the Republicans are not serious about creating jobs, look no further than Rep. Ryan's latest "deficit-reduction" budget. It would mandate a 15% cut in the number of federal employees, as if that would not add to the unemployment problem. The current crop of Republicans are either idiots or are lying to us. (Feel free to pick the least "uncivil" option.)

1 comment:

ChristopherH said...

I watched Michael Moore's "Capitalism: A Love Story" recently and was appalled. We all KNOW these things that Michael Moore points out to us, but somehow he has a way of illuminating truths which are easily forgotten in the humdrum of our daily lives.

During the Roosevelt era and after (through the mid-70s I believe), the wealthiest Americans were taxed at rates upwards of 90% ... and considered it a duty to give. Certainly, I knew this at some point, but it was a stunning fact to hear uttered in context with the current Zeitgeist.

I sometimes despair that we're in for much greater suffering and even more devastating economic catastrophes as the political, economic, and social elites STILL don't seem to understand the basic principle that one prerequisite of a consumer economy is that consumers actually have money to spend--and that requires that they have jobs.

But even more disconcerting, for me, is the lack of apprehension that it is/was the existence of a vital and vibrant middle class that enabled our democracy (warts and all) to thrive during the latter half of the twentieth century.