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There is a nice little piece by Nick Hanauer that has been making the rounds on social media for several weeks.  Hanauer makes the case that the rich are not “job creators.”  He attempts to debunk this right-wing messaging contortion that would have us believe that cutting taxes on the richest people will induce them to hire workers.  However, since the rich have enjoyed historically low taxation for the past ten years or so, it begs the question of why we have so much unemployment since we gave them so much incentive to hire people.  It’s a crock at best, and a nasty threat at worst (“give us your money and we’ll think about giving you a low-wage job”), and Hanauer mostly gets it right.

Hanauer’s main point, which is valid, is that putting money in the hands of rich people rather than working people is counter-productive because “capitalists without customers are out of business.”  What he fails to mention – perhaps because he understands the point I am about to make – is that the Republicans have a plan to deal with this.  It is the elimination of all labor standards.  While Hanauer makes the point that we must have a stable middle class that can afford to buy products, the Republican Plan is that we should have lower prices so that an increasing low-income class can afford to buy products.  The idea is that prices are high due to labor costs.  Lower labor costs as much as possible and prices come down.  Labor standards – including even child labor laws and prohibitions against indentured servitude  – appear to be on the cutting block for Republicans.  They have resurrected the fallacy that lowering the minimum wage increases employment.  In fact, the Republicans are so opposed to labor standards that they are trying to eviscerate the NLRB for merely upholding federal law, including a fairly trivial requirement that businesses hang a poster in the break room that informs workers of their rights under federal law.  Hanauer recognizes something Henry Ford did seventy years ago – if you pay your workers better they can buy your products.  (Ford, by the way, was no liberal.)  The Republican Plan operates in the opposite direction.  If you pay your workers less you can lower prices so your workers can buy your products.  The difference is that Ford’s plan actually worked and the Republican’s has been an abject failure.  And that is just the economics of it – never mind the values argument.

Originally published by this author at The Big Idea.

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