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In the upside down world of the GOP spin-meisters we must all bow down to, coddle and protect the JOB CREATORS. Give them tax breaks that mean they pay a lower effective rate than the vast numbers of W2 wage earners.

The truth is people who run businesses are there to make a profit by meeting DEMAND of consumers and other businesses and government. Without demand there is no business and when the economy slows down it is because DEMAND has slowed, not becuase JOB CREATORS are in a snit over their tax rates. This is especially true in an economy that is well below capacity.

Henry Ford (that well known socialist) paid his worker three times average wages so they could afford to buy his cars. He understood, no demand, no sales, lower profits.

Why can't the GOP understand this? They remain committed to supply side economics which contends " if we build it, they will come". One could say that, perhaps, of Steve Job's products but very few others.

In an economy where aggregate demand is failing to employ tens of millions of people, more than willing to work, it is demand creators who we need to coddle and nurture, not job creators. If people demand, then companies will seek to supply and in the process create jobs. That is really how the system works.

So how do we create more demand creators?

The temporary payroll tax cut is one way to put cash in the hands of people who will spend most of it, thus boosting demand. I feel this is a band aid that has its downsides of likely being spent on things of short term value and a lot on imports.

I would like to see the government build a great deal of new transportation infrastructure, repair the current infrastructure and upgrade the power distribution grid. This creates a great deal of demand and long term value and is likely local in nature. This is the right time to do it, given we can borrow long at very low interest rates. This is a far healthier way than defunding social security for short- term growth stimulation.

And the point of this diary is, don't let the GOP spin- meisters get away with the false choice of never taxing the wealthy because it will hurt their job creating behavior. History and facts shows that this is simply untrue. Even when upper tax rates were 70 pct you cannot find evidence that business failed to meet demand, when it was there.

The failure to keep wages growing with increases in productivity and the fear induced reduction in aggregate demand, also hurt by governments being more debt focused than job and demand creating focused, all combine to create an underperforming nation.

Shame on us all for not working out a better solution that puts millions more to work faster. Where is FDR when you need him?


What creates jobs?

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Comment Preferences

  •  Thanks for saying this. (3+ / 0-)
    Recommended by:
    David Frenkel, MKSinSA, Marjmar

    I was thinking the same thing just yesterday while listening to someone prattling on about job creators - we, the customers, create jobs by buying their products.

    You can't scare me, I'm sticking to the Union - Woody Guthrie

    by sewaneepat on Sat Dec 24, 2011 at 05:32:31 AM PST

  •  Force the Party to Remember Wealth Compression. (3+ / 0-)
    Recommended by:
    MKSinSA, Marjmar, David Frenkel

    When the marginal income rates, estate and cap gains taxes were higher, today's gigantic compensations were never offered in the first place because most of them would have to be surrendered to government in taxes.

    So today's casino economy based on managing for ultra short term gains and intense profit returns, with the future be damned, made no sense. Nobody could collect the jackpots.

    And that meant more money was left in enterprises, which themselves were taxed more, which meant they would not want to have outlandish profits on the books come tax time.

    So there was more money to pay suppliers, more money to compensate low-taxed workers, more money for local charity, more money to plow back into the long term growth and innovation of the enterprise.

    And that's how most of society's family net worth was for one brief shining half-lifetime found distributed out among most of the common people, instead of locked up in the top few percent as it has been for all the rest of America's industrial and information age history.

    The Democratic Party is our second conservative party and is as allergic to this gift that they gave to the American Dream as the Republicans are.

    They need to be forced to remember it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat Dec 24, 2011 at 06:12:28 AM PST

  •  So... (0+ / 0-)''re fine with a $13/hr wage?

    A quant and damned proud of it.

    by Cera on Sat Dec 24, 2011 at 06:13:43 AM PST

  •  Steve Jobs (0+ / 0-)

    products, as popular as they seem, are for the ten percent, or what I am now terming the sub-elite.

    and I wait for them to interrupt my drinking from this broken cup

    by le sequoit on Sat Dec 24, 2011 at 06:43:11 AM PST

  •  This simple truth can't be said enough. (2+ / 0-)
    Recommended by:
    sewaneepat, David Frenkel

    Thank you for saying it again; my hope is, eventually this simple truth will "catch on."

    "The most potent weapon in the hands of the oppressor is the mind of the oppressed." ~ Steven Biko

    by Marjmar on Sat Dec 24, 2011 at 07:51:27 AM PST

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