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It may be that progressives have been taking the wrong approach to foster economic reform in the U.S.  Our candidates say the three top issues are, “Jobs, jobs, and jobs.”

Somehow, as a country we don’t find the need for jobs to be so compelling that we enact at least one more stimulus.   While we’re at it, let’s provide more incentives for manufacturing to remain in the U.S. and penalties to companies for outsourcing.

Maybe we have more of a love for shopping than we do for jobs.  Naturally it helps to have a paying job if you want to shop, but that may be too sophisticated a connection for some of the captains of business.

The other day I heard KMOX conservative talk show host Mark Reardon interviewing another radio host in Minnesota’s Twin Cities.  By that time the state of Minnesota had shut down its government for thirteen days.  People were beginning to feel real pain.  Those who frequent grocery stores, convenience stores, liquor stores, and bars were truly paying a price.  They couldn’t purchase any MillerCoors beer products.  Apparently there are thirty-nine such kinds of beers, but they had all been pulled off the shelves because the state of Minnesota had not fully processed the MillerCoors license renewal.  The problem was a technical snafu which could be fixed in a day.  However, that day had come and gone when the state shut down non-essential government services because no agreement could be reached on raising necessary revenue to keep the state afloat.  As is becoming more frequently the case, Republicans just don’t know how to say ‘yes’ to a good deal.  Democratic Governor Mark Dayton agreed to significant spending cuts if taxes were raised on those making over a million dollars.  Republicans said no.

But how does that relate to the MillerCoors beer?  Well, there’s the obvious answer that if the government was functioning the license would have been processed.  But this presumably temporary and minor hardship for drinkers may be just the tip of the iceberg of a looming problem.  If Americans don’t have jobs they don’t have money to spend and if they don’t have money to spend, demand for products goes down, business suffers, more workers are laid off which refuels the cycle of recession and possibly brings about the big ‘D’ word.

Republicans are probably right that more tax cuts for businesses would mean that they could and would hire more workers.  I don’t know if these Republicans are being lobbied by representatives from low-wage countries such as China, Mexico, and the Philippines.  If the past three decades teach us anything it is that many American companies will spare no effort to find low-wage countries.  It’s not that American business leaders are any less sensitive than those of previous generations; they are following the age-old practice of looking for the cheapest labor available that can do what work needs to be done.

If I was a betting person, I’d wager that very few workers in developing countries are going to shop at the Mall of America in Minnesota or any other mall in the United States.  They’ll take their wages and spend what they have in nearby stores and outlets that produce other products manufactured in developing countries.

So, here’s a thought for America’s wheelers and dealers on Wall Street, in the Board room, in our legislative halls, and in fancy K Street restaurants.  Americans also know how to shop and they’re pretty good at it.  When given the corporate stimulus of credit cards, it’s amazing how much shopping Americans can do.  If I was a manufacturer, I’d be lining up to get my products into America’s malls, independent stores, amusement parks, and on-line markets.

The problem is that without jobs, Americans just aren’t going to have that much money to spend.  We’re finally becoming a little wiser about not extending endless credit, especially to those who are without either income or wealth.  Americans have so little disposable money that half of our families could not raise $2,000 in cash in two months if necessary.

Presumably, business leaders know what investment means – spending a little to get a lot more.  If America’s wealthy individuals and businesses would be willing to go back to the fair taxes they were paying during the Clinton administration, the government would not have to go into interminable debt to transfer money in the form of wages to people who want to work.  And if those people are working, they have money to shop which then will put more money in the pockets of wealthy businesses and corporations.

Talk about living on borrowed time, that’s how I often feel when driving along commercial streets and seeing so many stores open for business while unemployment is over 9%.  If we create only 18,000 jobs a month as opposed to the 150,000 we need just to keep up with population growth, we’re in real trouble.  One by one, more shoppers and will making more purchases in Fantasy Land and fewer in real stores.

To our Republican and other conservative friends, if the idea of jobs for more Americans doesn’t make sense to you, perhaps having people in the wealthiest country in the world having the disposable income to buy your good and services will resonate.

If that doesn’t ring your bell, then please tell us what will awaken you to the consequences of a country in which more and more people have neither jobs nor money to spend.

Cross-published on the Occasional Planet.

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Comment Preferences

  •  Related news article (0+ / 0-)

    Companies churn out profits but not jobs

    About 78 per cent of companies in the benchmark S&P 500 index that have reported second-quarter earnings have beaten Wall Street expectations. Many benefited after slashing costs when the financial crisis hit and then keeping tight control on them even as sales recovered.

    "We've never seen the kind of shedding of jobs that we saw in this recession. America's corporations have never been running so efficiently," said Ellen Zentner, senior U.S. economist at Nomura Securities in New York.

    What's more, workers have never claimed such a paltry share of real national income growth. Economists at Northeastern University in Boston recently found corporate profits captured 88 per cent of income growth between the second quarter of 2009 and the fourth quarter of 2010.
    Workers' take? Slightly more than 1 per cent.

    "Workers have no money, no purchasing power, so that's why consumption is not moving," he said. By sitting on profits, firms are acting like earners "who take their money and stuff it in the mattress. That's happening across the economy."

    "It's a chicken-and-egg thing -- whether demand or supply drives growth," Zentner said. "Studies show that lack of sales for small business is the biggest impediment to hiring."


    I hadn't seen this article any place yet and it fits your jobs topic.  

    Almost seems the companies won't hire because it would help the economy, thereby increasing the chances Democratic wins in 2012.

    [the human race is divided into two sharply differentiated and mutually antagonistic classes, almost two genera] -- Mencken

    by redneonexpress on Mon Jul 25, 2011 at 09:22:18 PM PDT

    •  Awareness of American public (0+ / 0-)

      It seems that several years ago retail stores were closing, auto sales were morbid, and of course the housing crisis was just getting on the media's radar screen.  Do businesses think that they can survive when the American public has little disposable income?  If so, it may turn Keynes and others upside down.  Regardless of the theory, tens of millions of Americans are suffering without jobs or spending power.

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