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"Smart investment, wise regulations and fair taxation are the things that restore economic confidence in the Real World".

Paul Davidson

DEMAND creates jobs, not tax breaks, fewer regulations.

Recently I went to a well-known restaurant in Evanston, Illinois. This restaurant has a reputation for providing excellent food and service. But the night I was there, it was less than half full. I asked the manager if he would he hire more waiters and chefs if his taxes were reduced and/or government removed the existing regulations controlling the way his restaurant could operate. His answer was that even if his taxes were reduced and regulations eliminated, he would only hire more staff if more customers came in for dinner. On the other hand, if there were twice as many customers for dinners than there were on this night (and there were many more customers before the recession began in 2007) he would gladly double the number of workers he employed even if his taxes were not reduced or regulations changed.

 That’'s how things work in the Real World. This simple case illustrates clearly that entrepreneurs will have confidence to expand and hire more workers only if they find the market demand for their products and services strong and growing.

In a recent “Face the Nation” broadcast, Republican presidential candidate Mitt Romney expressed his devotion to the Confidence Fairy when he told us that a magical economic recovery would happen if only we got rid of the terrible burden the federal government had put on businesses by imposing regulations and big government financed by heavy taxation. In other words, if only government would shrink itself and relax business regulations, the resulting freed-up markets would make people who run businesses confident enough in the economy to bring forth a wonderland of prosperity and full employment.

Conservative economics professor Tyler Cowen took a page from the same storybook recently in the New York Times, blaming the lack of significant economic recovery from the financial crisis of 2007-'08 on the unhappiness of the Confidence Fairy. Politicians, he says, have failed to make us as “safe, financially speaking, as we used to be.” So Cowen argues that the “slow cure” for our economic malaise is to allow asset prices, wealth, trust, and so on to gradually rise in a free-market environment without any interference from government. Cowen states that the textbook cure for recession -- namely, significant “Keynesian” government stimulus spending -- will not quickly restore prosperity because the Confidence Fairy doesn'’t like things like building roads, repairing schools and putting firefighters to work.

 But if we can move past this mythical land created by conservative economists to that place known as the Real World, we can easily see what really drives people like the Illinois restaurant owner to engage in the kind of activity that gets the economy humming. It turns out that they invest and expand when people demand their goods and services.

Everybody knows by now 70% of our economy is/was driven by consumer spending. Rmoney and the rest of the wealthy class needs to explain how terminal low taxes for them and fewer regulations puts MONEY in OUR pockets.

Read the entire article here:

http://www.alternet.org/...

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