Skip to main content

One sentence that entirely debunks the Republican myth of trickle down, 1% , here-have-some-crumbs economic theory.

This sentence was spoken this morning by Katrina Vanden Heuvel in response to some waspish, self-important pronouncement by George Will who was speaking about Job Creators in all capitals and unironically. Katrina looked like she couldn't believe he was actually shoveling this crap and then unleashed her response.

"The only real job creators are consumers."

May we all enshrine this statement into our collective upfront consciousness and repeat it at every opportunity because it fits so neatly into both politcal and economic discussions.

I know many of you are saying, "Well, duh." Because we have been talking for literally  decades now about how supply-side, trickle down economics DOESN'T WORK.

Why then have Republicans re-embraced the concept for this election when in reality we know and live the proof of its failure? Why don't we attack them aggressively at every turn for having the gall and ignorance as identifying employers as job creators when we all know that in reality their actual goal is to have as few employees as possible since that makes their profit margin higher.

And I mean no animosity to employers for stating this fact. I have been a small business person with over thirty people on a payroll. We always spoke in terms of "We'll have to add another ___" in terms of both regret and hope. It meant that our capacity was being taxed by the exisiting staff. Adding another employee could make us more productive and add revenue or it could work as just a drain on exisiting revenue, but to not add the employee would mean worse customer service and probably a resultant loss in business which would mean less revenues, more jobs lost, etc. I believe this is how most small and large business people really think.

But only one thing makes an employer add to payrolls - demand. Demand is a direct result of consumers having dollars and disposable income in their pockets. That is what drives them to eat out, buy new tires, re-carpet their house, take a trip, you name it.

Until we get those dollars in the hands of consumers the economy will continue to inevitably contract and contract and contract. We gave trillions to the banks and what happened? They sat and sit on it. They prefer to mint money out of air by earning interest from no risk ventures like taking zero interest money from the Fed, turning around and buying Treasuries and then having the government PAY them money in interest on the bonds bought with free money in the first place. I would like to get in on that deal.

Why can't the government give all of us zero interest loans and let us buy Treasuries and just up our incomes by 2-3%?

Banks Buy Treasuries at Seven Times Pace in 2011

The Fed’s low-rate policy “has been a plan to buy time for the banks to take free money and invest it, and make some kind of spread, and work their way out of the hole they were in,” said Mark MacQueen, a partner and money manager in Austin, Texas, at Sage Advisory Services Ltd., which oversees $10 billion, in a telephone interview on March 6. “Banks are trying to clean up and improve the appearance of their balance sheets and buying Treasuries accomplishes this.”
Your government at work. Seriously, every American could have been given the same bucks as the banks to pay off student loans, buy down mortgage principle, and reduce credit cards bills. Once their debt burden was lightened, Americans would have frolicked as they traditionally do - by consuming and those freed up dollars would have flooded into the marketplace, creating JOBS and causing DEMAND.

Or, the government could just decide they have suckled (my quiet tribute to Alan Simpson) the TBTFs long enough and turn their attention to the taxpayers, the consumers, the 99% and say, "Hey, what about them? You, know, the REAL Job Creators?" and given us 10 or 20 grand apiece. Consumers and Aesop know what banks and government apparently don't:


A Miser had a large store of gold which he buried at the base of an old oak tree. Once a week he visited the tree, dug up his treasure and let the coins run through his fingers. When he was through gloating over his fortune, he reburied it. One day his crafty neighbor followed him and saw the hidden cache of gold, which he promptly dug up and stole as soon as the Miser left.

The next week when the Miser returned to the tree, he saw the hole and that his gold was gone. He wept and screamed in disbelief and agony. An old woman heard the commotion and came to investigate and the Miser told her of his loss. "There, there," she said "put this handful of acorns in your hole and visit them weekly. They'll do you the same good your buried gold did."

Moral - Wealth gets it value from it's use, not it's possession

Speaking as just one of the golden geese currently turning into a cheap alloy, I would like to remind the government and our corporate overlords, that in order to soak us and steal our tax dollars well into the future, we have to actually make dollars to be taxed. It is to our Master's benefit to give us healthcare to keep us alive and jobs with just enough of wages keep us yoked and turning the grindstone. Where will the dollars for the charter schools come from if this doesn't happen?

Perhaps instead of us speaking about the 99% and labor uniting for a better world, we should speak in terms of Shoppers of the World Unite and our motto can be

E Pluribus Emptio!


Thanks to madhaus for finding and posting the transcript of Katrina on This Week in their comment. Her actual phrasing was :

VANDEN HEUVEL: And you know who the job-creators are? Seventy percent of demand come from consumers. If we can get money in their pockets -- corporate profits, George, are at a 45-year high. Tax rates on the wealthiest, who should pay their fair share I believe, probably at a century, decade low.
I guess I paraphrased her, but she still deserves credit for the thought and for lambasting Calvin Coolidge's younger brother with it.

Originally posted to Phoebe Loosinhouse on Sun Jun 17, 2012 at 09:58 AM PDT.

Also republished by Money and Public Purpose.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site