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Profits Do Not Create Jobs

Profits are not the same thing as jobs. Profits do not put food on American families tables, jobs do.

Profits do not create jobs, they capitalize on them. Profits are extra money for the owners of business, and they bear little relation to jobs.

In fact, one of the best ways to increase profits is  to fire workers. It's called 'Reducing Costs'.

Workers that cost too much money are fired and replaced by workers who will work more for less.

Firing well paid workers and hiring cheap labor means more profits.

But Henry, Robots Don't Buy Cars

Right before the Great Depression, American companies were doing very well. They experienced massive profits. The Stock Market could only go up, up up.  

That's a good thing, right? We hear it on the news all the time.

Well, it can be. Remember profits are not jobs, and profits do not create jobs. During the run up to the Great Depression companies made more products with less labor and experienced great profits as a result. This pushed wages down. The combined effect of lower wages and less people working meant that there was not enough demand to keep up with supply.

Companies were making so much money in profits that they lost track of the foundational tenet of business: the law of supply and demand. If you are going to sell something, you have to have a supply of widgets and people that can buy those widgets.

Demand caved as supply raged the system broke and millions of Americans suffered.

Sound Public Policy Creates Jobs

The lesson of the Great Depression is that profits are not the key to economic health of a nation and it's people. Sound public policy that maintains a proper balance between jobs and profits is the key to economic health.

For 60 years we created and lived under laws that did just that, ensured that jobs and profit were balanced. But in the early 70s that sound public policy which created the middle class, protected American workers from exploitation and protected companies and profits alike came under attack.

Suddenly everything was killing profits - government was killing profits, unions were killing profits, pensions were killing profits - if only our companies were making profits we'd all be better off. Better Jobs, better lives, a better America.

What Happened?

Well, we've gotten our profits back and what happened? Do we have better jobs? Do we have better lives? Is America better?

99% of people work more and are paid less, well those that can find jobs. Millions of jobs have been sent offshore to reduce costs to make more profits.

Profits are up and Jobs are down. The owners of companies get more profits and the workers of companies get exploited.  

Profits do not create jobs, they capitalize on them. This is reality today. We are experiencing it, first hand. Record profits and skyrocketing markets with double digit unemployment. Something is wrong here.

It's time we, as a people, come to realize that profits alone do not create jobs and that we start to work together to craft some sound public policy that reflects that understanding.

Originally posted to k9disc on Wed Mar 02, 2011 at 02:40 AM PST.

Also republished by Team DFH.

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Comment Preferences

  •  Tip Jar (2+ / 0-)
    Recommended by:
    HoundDog, Edger

    Democracy - 1 person 1 vote. Free Markets - More dollars more power.

    by k9disc on Wed Mar 02, 2011 at 02:40:48 AM PST

  •  Hat Tip to greywolf for the inspiration... (1+ / 0-)
    Recommended by:

    Words matter.  Every time progressives try to do something to help the 98% of Americans who are under assault by the top 2% (and really the top .1%) we are accused of waging “class warfare.”  Most of the time we mutter back something like “Nuh-uh, you are!” and while that may be true it's a totally lame comeback.  I read another diary recently that suggested we should instead embrace the class warfare mantra.  While the diarist laid out some interesting arguments for why that might work, I have to ultimately disagree.  People just don't like warfare.  It's messy.  It's violent.  It can be bloody.  No one wants to support that.

    Democracy - 1 person 1 vote. Free Markets - More dollars more power.

    by k9disc on Wed Mar 02, 2011 at 02:46:21 AM PST

  •  What increasing profits at the expense of jobs (1+ / 0-)
    Recommended by:

    leads to is this:

    The extraordinary events in Tunisia, Egypt and Libya are the initial high tides of an eventual tsunami that will impact the world that globalists have so fervently promoted for decades, in ways not necessarily to their liking. The first wave has struck and is now retreating from the shore, but will shortly return with redoubled force, and what and who will be swept away and what will be left standing is anyone’s guess.


    In the United States, 48 years after Dr. Martin Luther King delivered his stirring “I have a dream” speech at the base of the Lincoln Memorial, 45 percent of young African-Americans have no jobs and the top hedge fund managers are paid, on average, $1 billion a year, a thoughtful American can only expect the mass protests against cuts in services and jobs in Wisconsin to spread.

    And America’s propensity for eventual chaos is far higher than the Middle East, demonized in the press as a violent region, when one considers that America’s 300 million citizens have between 238 million and 276 million privately owned firearms.

    As a prescient 23-year old from Hibbing, Minnesota, Bob Dylan warned an earlier generation 47 years ago about to embark on its misguided mission to safeguard and democratize in Vietnam, “There’s a battle outside and it is raging, It’ll soon shake your windows and rattle your walls, For the times they are a-changin’.”

    America has older prophets on the current situation – as Thomas Jefferson observed, “A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.”

    Take heed, Governor Walker of Wisconsin and all the rest of you political leaders in Washington DC – or fuel up your learjets and head for the Cayman Islands.

    --The Extraordinary Events in the Middle East and the Coming Global Tsunami

    Libya yesterday...

    Wisconsin, Indiana, Ohio...... and Peoria, tomorrow?

    Antemedius | Liberally Critical Thinking

    by Edger on Sat Mar 05, 2011 at 05:32:04 PM PST

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