Skip to main content

The popular notion of the so-called “Job Creator” is a myth. Yet the very idea of Job Creators represents the most basic argument in the Supply Side story, a concept which postulates that economic growth requires expanding the means of production. The term Job Creator has been repeated and spun so frequently on Capitol Hill and across America, almost exclusively from Conservatives, that it has become accepted wisdom that job growth is determined by the means of production, the supply-side of the economy. It is not.

The reason is so stunningly simple and basic that it’s almost entirely invisible by politicians and pundits alike. This is because contrary to the supply-side mantra, most businesses are unwilling to expand hiring unless the new jobs are justified by sufficient Market Demand. It is for this reason that the popular supply-side policies of tax cuts and credits have done little to stimulate domestic hiring. If anything businesses have converted the government largesse of lower taxes into enhanced profitability, with little in the way of new jobs materializing.

So who precisely are the real job creators? Simple, just visit the mall, or any place where goods and services are purchased. The real source of market demand is consumption, and it is the increase in demand, not supply, and that persuades businesses to hire. Yet for the past thirty years conservatives have had an ideological love affair with supply side economics. It entirely fits of course. Modern day conservatives are clearly the party of the top 1%, and so a policy of rewarding wealthy interests is perfectly aligned with their support base. And as everybody else would prefer lower taxes, it plays well to many voters, or at least those people who are unable or unwilling to recognize the vast wealth that is being surreptitiously funneled to the super rich.

Except that it doesn’t work, at least for the bottom 99%. So it is not surprising that since supply side went main stream wealth has gone almost entirely to the top, and real wages have been stagnant. Yet conservative politicians remain adamant that low taxes will fix the economy AND low spending will fix the deficit, completely ignoring that the only genuine solutions to balancing our public finances requires more revenues as well. Even business interests are coming around to acknowledge that President H. W. Bush was right all along, it really is Voodoo Economics.

So if businesses are unwilling to expand hiring on US soil until domestic demand warrants it, a pointedly Demand-Side requirement, then why does this ineffective ideology continue to wreck so much havoc on Washington’s ability to implement economically sensible policies? I contend that only when we figure that out will we be able to avoid artificially created Fiscal Cliffs.    

Originally posted to Realist-at-Large on Fri Jan 04, 2013 at 04:05 PM PST.

Also republished by Community Spotlight.

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

  •  For Republicans, it's real... (6+ / 0-)

    Very, very real.

    Insofar as it's the workhorse of their propaganda toolbox. It doesn't matter how much data is presented to them disproving it, they continue to use it to justify their tax cuts and deregulation efforts.

    They will never stop using it. Shows you how solid their arguments are when they have to continuously resort to using it.

    Somebody has to do something, and it's just incredibly pathetic that it has to be us.
    ~ Jerry Garcia

    by DeadHead on Fri Jan 04, 2013 at 05:14:34 PM PST

  •  Because the Economic Powers That Make & Break (6+ / 0-)

    campaigns reward the fairy tale being promoted and punish it being disputed or fought. That includes the owners and sponsors of our mainstream public square.

    Almost everyone, even conservatives who try to deny that the New Deal and GI Bill etc. did any good, accept that the 10fold greater government purchasing and hiring of WW2 did it. So the great majority of conservatives are a millimeter away of accepting the effectiveness of government creation of demand during recessions.

    But the other factor is the economic fundamentalist conviction that it is improper for government to meddle in the general welfare at all.

    So here we sit, watching 2 now-conservative parties bring us austerity and demand reduction.

    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 Fri Jan 04, 2013 at 05:35:42 PM PST


    As a result of the tax changes stemming from the fiscal cliff negotiations, we can now run an actual experiment to find out if the long-standing premise of

    "You can't raise taxes on the high brackets because those are job creators and you will kill jobs"

    is true or not.

    It'll take a few months / years to run, but it's running now, it's no longer a "thought experiment".

    •  The difficulty with the experiment . . . (0+ / 0-)

      is that it isn't the only variable that is being changed.

      e.g. spending is also being cut, there are external factors relating to trade and energy prices that can influence the trend.

      Historically, we have enough correlation between periods of even larger tax increases on the wealthy, or near-wealthy, as well as periods where there have been cuts -- and the economy has moved on as before.   The big differences are in the way that the "spoils" get distributed -- and in terms of the impact of the cuts or increases on the budget deficit.  

      I wouldn't be surprised to see a decline in the rate of the economic expansion over the next year.  However, I doubt that the slower rate of growth will be due to what is really a pretty modest and targeted tax increase.  

  •  J/Cs have had decade of tax breaks, where are jobs (8+ / 0-)

    Seems like the only jobs created by the job creators were those gifted to Karl Rove and dickhead Armey to get a congress that would lower the top tax rates even lower.
    The real idiocy of our government is the ability of those not taxed enough to spend part of their vast wealth to influence politicians to tax them even less. The crime being perpetrated on the electorate is the revolving door of legislator to lobbyist.
    Good diary, Realist. We need to get the country screaming that the way to balance the budget is to cut defense. Turning swords into plowshares may be an old idea, but it still makes a lot of sense for a civilization looking for a future.

  •  A myth or a religion? (4+ / 0-)
    Recommended by:
    caul, RUNDOWN, kyril, A Citizen

    Religions typically have chosen ones who create and perpetuate a core belief system, which their followers embrace as "gospel". The chosen ones sit back and reap the benefits provided by the unwavering belief of the many.

    Doesn't that sound a lot like supply-side economics?

    A waist is a terrible thing to mind.

    by edg on Fri Jan 04, 2013 at 08:07:56 PM PST

    •  Is Objectivism a Religion? (1+ / 0-)
      Recommended by:

      The above is a link to a free e-book "Is Objectivism a Religion". There is a lot in common with the Philosophy of Ayn Rand and religion. It's essentially Calvinist: the prosperity gospel of the religious right is similar to Ayn Rand's philosophy, both consider wealth to be a sign of inherent virtue.

      The wolfpack eats venison. The lone wolf eats mice.

      by A Citizen on Sat Jan 05, 2013 at 03:11:34 PM PST

      [ Parent ]

      •  David Sloan Wilson says the same thing... (0+ / 0-)

        in his book, "Evolution for Everyone", in chapter 30, 'Ayn Rand, Religious Zealot'.

        Lots of people say this, including your interesting link, which I will have a look at.

        But why doesn't the evaluation that Objectivism is a Religion stay STUCK? I mean, here and other places, their acolytes write as if they are postulants to Objectivism as a Religion, and they react to daylight no differently than christianists or vampires!

        My, my...!

        Ugh. --UB.

        "Daddy, every time a bell rings, a Libertaria­n picks up his Pan Am tickets for the Libertaria­n Paradise of East Somalia!"

        by unclebucky on Sat Jan 05, 2013 at 05:48:07 PM PST

        [ Parent ]

  •  You Have a Big Point (7+ / 0-)

    I think you might want to consider, however, that job creators are essential for the American economy. You just have to know who creates jobs.

    Here's who creates jobs: workers. Think about the process. A guy with money has an idea for a job. He has a job opening. He makes a job offer. But he doesn't have a job. No job exists until a worker decides to accept the job. At that point, when the worker actually starts working and gets paid for it, that's when there's an actual job. Until then, nothing. Until then, there's only the idea for the job, not the job itself.

    So, workers are job creators. That's clear just from the process.

    So if businesses are unwilling to expand hiring on US soil until domestic demand warrants it, a pointedly Demand-Side requirement, then why does this ineffective ideology continue to wreck so much havoc on Washington’s ability to implement economically sensible policies? I contend that only when we figure that out will we be able to avoid artificially created Fiscal Cliffs.
    This is really nothing to do with businesses. There would be plenty more jobs in the U.S. (and they'd pay more) except it's our national policy to ship wealth-producing jobs overseas and keep wages down. That policy was set by Congress and it's their responsibility to change it.

    Of course, we'd have to elect people who have the vaguest idea about economics. You're never going to have that with Republicans there. Republicans don't know money.

    •  After the Black Death (6+ / 0-)

      of the umpteenth century (too lazy to look it up) peasant women were the 'real' job creators, then, because they had children who grew up to be workers.

      While I'm sympathetic to any argument that gets us away from the conservative meme 'rich people create jobs', finessing the argument to the worker because he accepts a job is not really convincing. Sure, worker A 'creates' a job when Owner B hires him, but if worker A hadn't accepted the job, surely worker C, D, E or F would have taken it, especially in today's economy.

      The only worker who creates a job is a self employed artisan of some type, and even then, the job would not exist without some demand for whatever product or service the worker sells.

      Demand creates jobs. Period. Without someone willing to buy a good or service, whether the good or service is tangible or intangible, public or private, there is no job providing the service or producing the good.

      "The problems of incompetent, corrupt, corporatist government are incompetence, corruption and corporatism, not government." Jerome a Paris

      by Orinoco on Fri Jan 04, 2013 at 10:03:52 PM PST

      [ Parent ]

      •  Creating "demand" is a job too. (4+ / 0-)

        Or creating the perception of demand.

        Seems our society is ever more dependent on this artificiality - making us more of a a consumer society, as opposed to a producer society.

        Kind of like the "job" of "making money" (while making nothing else of course).

        If not us ... who? If not here ... where? If not now ... when?

        by RUNDOWN on Sat Jan 05, 2013 at 08:14:31 AM PST

        [ Parent ]

      •  Who Creates the Job (0+ / 0-)

        My argument is at least more convincing than the Republican argument that rich people or employers create jobs. From a frame perspective we need to turn this back on them. All the effort they've made to build up "job creators" and get people to think that taxes should be cut for the rich becomes our point when the real job creator is the worker.

        From a purely logical perspective, it is the worker that creates the job. Until the worker agrees to do it, it's nothing more than a dream. I'll give the employer the dream part, but I insist that the "job creator" is the worker. That's what makes it a job.

        But you are entirely right that this is only looking at it from the point of a job. For the economy as a whole, the number of jobs is increased when more jobs are created than lost. This increase usually comes about because someone borrows money and then uses it to expand the number of jobs. That can happen when the government borrows money (and the opposite happens when government pays off those loans). It can also happen when a business borrows money and expands (or uses accumulated savings).

        What causes businesses to expand? There's always the natural business cycle, which expands and then contracts, and hopefully expands again. Then there's government policy.

        The primary problem we have is that government policy for the last three decades at least has been to ship wealth-producing jobs overseas and hold down wages. This causes structural unemployment. I see repeated cries to stimulate the economy. That's appropriate to smooth out and lessen the damage caused by the business cycle. But that effect is dwarfed by the damage caused by bad trade policy (backed up by bad industrial policy and generally bad economic policy) from Congress.

        If you want to see jobs created then the way to get that is to address the trade deficit.

        It would, of course, be nice if we could just expand the number of jobs by getting consumers to spend more. But that doesn't help the economy, and any increase in jobs would be short-lived. We have to bring production jobs back to the U.S. Production jobs are what create wealth. That wealth creation is what really drives jobs. You get more jobs and better quality jobs.

        I'm sympathetic to these other arguments about why "rich people creating jobs" is a total myth. But in practical terms, the message should be that the real job creators are the workers. Every time some Republican-duped person talks about a job creator I think we should interrupt them and say, "You mean the worker, right?"

        After that you can have a sensible discussion about creating jobs. But while people have their fool-value set to equate "job creator" with "wealthy investor" that's never going to happen.

        •  This line of argument (1+ / 0-)
          Recommended by:

          is somewhat akin to teachers telling kids "you can't take a larger number away from a smaller number" because it makes teaching elementary arithmatic a bit easier to grasp, but having to go back later and tell them, "You know that stuff you learned about subtraction back in second grade? That wasn't entirely true. You CAN take a larger number from a smaller number..."

          You avoid the issue by talking about 'the natural business cycle.' What causes this cycle? Demand. Sometimes more people go shopping (and this includes industrial buyers purchasing heavy production machinery or buildings as much as it includes Suzy Creamcheese buying new earings and shoes). Same thing goes for government spending, someone demands something and pays money for it. It really doesn't matter if what we get is servicemembers defending our shores or librarians or WPA murals in public spaces or infrastructure or kids with food in their bellies when they go to sleep at night: government gets something for it's money, and is another aspect of demand.

          You are right about our sucky industrial policy and trade policy for the past few decades and the effect on the quality and quantity of jobs available here, but that only provides the environment in which job creation takes place.

          I wonder if you have tried this approach on any Republican-duped people? Somehow I don't think you would move quite as quickly to a sensible discussion about job creation as you hope.

          "The problems of incompetent, corrupt, corporatist government are incompetence, corruption and corporatism, not government." Jerome a Paris

          by Orinoco on Sat Jan 05, 2013 at 06:39:25 PM PST

          [ Parent ]

          •  This isn't about the hard core supply siders (2+ / 0-)
            Recommended by:
            NotGeorgeWill, Orinoco

            It's all about everybody else.  The worker creating the job argument won't compete well with trite stuff like, "When did you get a pay check from a poor person?"

            Non starter.

            The demand argument carries more weight.  

            "Sales down?  Pay me enough to spend and I'm happy to do business."

            We need to continue to refine this.  I don't see the extreme view of the job creator doing that, but I can see a cyclic argument of the entire business cycle doing so.

            ***Be Excellent To One Another***

            by potatohead on Sat Jan 05, 2013 at 10:33:42 PM PST

            [ Parent ]

            •  My computer just ate my four paragraph response (0+ / 0-)

              but it was pessimistic and bleak, so it's probably a good thing. My computer takes good care of me. Go Linux! Windows would have posted it twice, complete with typos and 'corrected' grammar.

              Anyway, you have a good point about using everyday language and straightforward anecdotes to get the message out.

              "The problems of incompetent, corrupt, corporatist government are incompetence, corruption and corporatism, not government." Jerome a Paris

              by Orinoco on Sun Jan 06, 2013 at 10:44:17 PM PST

              [ Parent ]

    •  you've missed that BIG POINT (9+ / 0-)

      Workers or employers misses the mark here. In either case, you're referring to creation of more goods/services, with the mere increase in supply creating jobs.

      Lacking sufficient demand, all that does is depress prices.

      An honest entrepreneur will tell you, in no uncertain terms, that (s)he will hire if that will result in greater customer revenue.

      The diarist's point was that the customer's ability to spend is the key determinant in whether Acme Widgets will ramp up production by hiring additional line workers, sales/service staff, and back office. If the hiring does not support a broader revenue stream that generates a greater net, it won't happen.

      The GOP has obfuscated successfully, extending supply-side lunacy to a ridiculous extreme. It behooves us all to point out the insanity, and to work hard to not extend it. Eschew supporting the madness by assiduously avoiding the quibble about whether the job is created by the employer or the worker, because it only exists, in whatever case, because market demand (desire and ability to buy) exists.

      SCOTUS did what?!!?

      by wystler on Fri Jan 04, 2013 at 10:20:48 PM PST

      [ Parent ]

      •  The Big Point (3+ / 0-)
        Recommended by:
        unclebucky, JerryNA, NotGeorgeWill

        I hardly missed the point. I think the tactics should be different.

        This comment, for Orinoco's comment, probably covers most of what I'd say to you.

        If you want consumers to have the money to demand more from Acme, then we have to have more of them and they have to have more discretionary income. The way to do that is to move production jobs back to the U.S. That's what provides the money for them to spend.

        I don't think I disagree with anything you say. I just think we need to dispute who is the job creator. It is their simple-minded way to get the actual job creators to vote for tax cuts for the wealthy. Ending that meme is one of my primary targets.

        •  sorry for the late follow-up ... (0+ / 0-)

          ... but, were i to have distilled my gripe, it'd have come out something like this:

          Your argument - Worker v. Employer - accepts the supply sider's framing of job creation.

          Granted: Americans need work, whether it comes from making production employment market more competitive thru either a race-to-the-bottom in wages or structures that otherwise encourage hiring America (Means could be increased tariffs or well-designed VAT structures in key market segments), or a re-prioritization of federal and state budgets toward spending on capital projects that rebuild infrastruction (crumbling roads and bridges, improving conditions of public institutions such as schools, upping the tech of the electrical grid, extending the reach and thru-put rate of wireless communication, expanding greening of energy production).

          Problems exist around each solution. Merely bringing production home means depressing job-markets elsewhere. Government spending projects are temporary, even if some are longer-term commitments.

          SCOTUS did what?!!?

          by wystler on Wed Jan 09, 2013 at 08:06:55 PM PST

          [ Parent ]

  •  Job Creation for Lobbiests, (3+ / 0-)
    Recommended by:
    caul, RUNDOWN, a2nite

    Hedge Funds, Tax Loophole Experts, Vulture Capitalists
    and the Criminals on Wall Street.

    For Everyone ELSE, NOT so Much.

    On Giving Advice: Smart People Don't Need It and Stupid People Don't Listen

    by Brian76239 on Fri Jan 04, 2013 at 08:58:25 PM PST

  •  I work in a call center in Sales. (9+ / 0-)

    Our staffing is based on the number of calls anticipated per hour.

    The more people calling in to order, the more jobs are needed to take these calls. Period

    Perhaps a tax break might allow the company to place more advertisements, but, unless there is a mandate that the tax break must go towards marketing, the owner of the company is welcome to pocket the money as profit.

    Even with thousands of dollars in tax breaks, it would be foolish and unheard of for the company to staff employees to sit around and do nothing.

    The company will increase staff only if the demand increases.......

    •  Exactly, Intheknow. Before I retired, I managed (5+ / 0-)
      Recommended by:
      RUNDOWN, kyril, 2dot, Intheknow, NotGeorgeWill

      an organization for which I also did the majority of the hiring. I did not hire people for patriotic reasons or beause I "wanted" our organization to be bigger. I hired people ONLY when products produced by the organization were such that they required people to produce and sell them.

      Broadly, this includes determining the demand potential, planning and designing products to meet the  demand, producing products in forms needed/wanted by buyers (and "worth their price"), promoting and advertising products so potential buyers would be informed of their availability and utility, and deliverinng the products to the buyers.

      This was true whether the product was more concrete such as a book, or less concrete such as a conference.

      “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

      by RJDixon74135 on Sat Jan 05, 2013 at 07:14:01 AM PST

      [ Parent ]

    •  These days it's more like (2+ / 0-)
      Recommended by:
      kyril, Intheknow

      when "poor service" (due to lack of labor) hurts their bottom line.

      Pulling a "job" out of some of these outfits these days - is like pulling teeth.

      If not us ... who? If not here ... where? If not now ... when?

      by RUNDOWN on Sat Jan 05, 2013 at 07:31:45 AM PST

      [ Parent ]

    •  But I'm sure if the government reduced taxes (1+ / 0-)
      Recommended by:

      on your employer, they'd spend it all on hiring more employees, to give you longer paid breaks during the day and paid vacation!

  •  In the early 80's (9+ / 0-)

    business ceased sharing the rewards of increased productivity. I can remember sitting down with the company deciding how we were to divy up our share into a combination of pay and benefits. That all stopped in the Reagan years. The assault on the unions and the working class has been pursued in earnest and the result has been a drastic widening discrepancy in income. Jobs have been shipped overseas to take advantage of slave labor.

    I could really use a vehicle with less than 200,000 miles on it. I'd like to have a new tv. I don't know how I'm going to afford secondary education for my girlfriends granddaughter whom we are raising. And I am not the only one in this predicament. The American Dream of the 70's is a distant memory now. And I don't believe the younger workers have a clue of what it was like to live that dream. But I can understand where their fatalism and cynicism stems from. Somehow, someway they must be made aware of the true value of their labors and demand their fair share. We fought and sacrificed for that fair share only to be pushed aside in the name of greed. We built this countrys highways, technology and safety nets with a great deal of teamwork. That teamwork seems to have been replaced with dog eat dog. Government is good in achieving team goals and being made aware of that is a first step in turning the blind right around.

    "What really matters is what you do with what you have." H. G. Wells

    by spunhard on Fri Jan 04, 2013 at 09:07:12 PM PST

    •  No, you're not the only one... (2+ / 0-)
      Recommended by:
      kyril, NotGeorgeWill

      My car just turned over 194,000, last week. And yesterday, my girlfriends car went over 155L, as we returned from helping to raise her grand-daughter.  My corporate job is looking at cuts because of reduced demand.

      When banjos are outlawed, only outlaws will have banjos.

      by Bisbonian on Sat Jan 05, 2013 at 09:13:07 AM PST

      [ Parent ]

  •  It's repackaging of the trickle-down myth (7+ / 0-)
    Recommended by:
    Orinoco, caul, Bisbonian, a2nite, kyril, 2dot, JerryNA

    I've been waiting for 30 years for that Republican money to trickle down on me.  It hasn't happened.  The standard treatment for people who can't trickle is catheterization.  Let's catheterize them with Eisenhower-era tax rates.  That ought to get them going.

    •  During the Eisenhower era (6+ / 0-)
      Recommended by:
      caul, RUNDOWN, kyril, 2dot, Back In Blue, unclebucky

      people talked about 'empire building' in businesses. That was code for office politics that resulted in a manager or company officer having more employees under his supervision than some other manager.

      Status, at the time, was based on quantity of employees rather than the amount of money the manager was paid, because at higher tax rates, it made more sense to invest surplus revenue than to use it for executive salaries and bonuses, which would be mostly taxed away.

      So, during the Eisenhower era, business managers worked at finding ways to hire more employees. They came out with new products to sell (and a new product manufacturing line to staff), they poached market share from competitors, they came up with new and improved ways to increase demand for their products (which would require a larger staff to produce).  

      Be nice to get those incentives working again.

      "The problems of incompetent, corrupt, corporatist government are incompetence, corruption and corporatism, not government." Jerome a Paris

      by Orinoco on Fri Jan 04, 2013 at 10:11:44 PM PST

      [ Parent ]

  •  And even when there is (6+ / 0-)
    Recommended by:
    caul, RUNDOWN, Bisbonian, kyril, 2dot, JerryNA

    added demand, the hiring lags or maybe doesn't happen at all.  Why do you think productivity has continued to climb the past 30 years while wages stay flat?  Because many employees are expected to take on extra tasks in the same amount of time, or they are paid salary, but work 60-70 hrs a week effectively putting one person out of a job.

    Loyalty to petrified opinion never yet broke a chain or freed a human soul in this world--and never will. Mark Twain

    by whoknu on Fri Jan 04, 2013 at 09:13:10 PM PST

    •  Do more with less! (1+ / 0-)
      Recommended by:

      That's been the corporate mantra for at least the last dozen years.

      The priest said, "Today's sermon is called 'Liars', but first I have a question. How many of you have read Chapter 66 in Matthew?" Nearly every hand went up. "You're just the group I need to speak to," the priest said. "There's no such chapter."

      by Back In Blue on Sat Jan 05, 2013 at 04:20:31 PM PST

      [ Parent ]

  •  The Republicans believe too many myths (12+ / 0-)

    They believe...

    Cutting taxes will result in greater government revenues because of the “Laffer Curve,” based on something scribbled on a napkin. Bullshit.

    Cutting taxes will encourage job creators to create jobs. Not if the economy is bad and demand is down. And look at Newt Gingrich, who had a $500,000 line of credit at Tiffany’s. If you cut his taxes and he buys more diamonds for his wife, from Africa or Russia, what jobs does he create?

    Deficits are always bad. No. In a recession, you run a deficit to stimulate the economy. In a growing economy, you pay down the deficit.

    People who get entitlements are lazy, including people who paid into Social Security and Medicare and veterans benefits or who got injured fighting for their country. This pisses me off so much.

    Government does everything wrong. The private sector does everything right.

    I could go on and on, but I'll stop now.

    “If you misspell some words, it’s not plagiarism.” – Some Writer

    by Dbug on Fri Jan 04, 2013 at 09:15:23 PM PST

  •  The meme that rich people... (2+ / 0-)
    Recommended by:
    caul, Bon Temps

    ...create jobs is false.

    However, workers or 'demand' doesn't create jobs either.

    Jobs are created by organic demand for goods and services by people who produce enough to afford the output.

    At the end of the day, production of goods and services of value is what matters. Everything else is a shell game that pushes resources around but doesn't produce anything.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri Jan 04, 2013 at 11:35:53 PM PST

  •  Here's a real world example (7+ / 0-)

    My company, let's call them GlobalAirFreight, is currently parking aircraft in the desert because of a drop in demand.

    I'm sure we'd appreciate a tax break, but we're not going to buy more planes just to park in the desert next to the ones we've already got parked there.

    And we're not going to hire pilots or mechanics to not fly them just because we get a tax break.

    If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

    by Major Kong on Sat Jan 05, 2013 at 01:08:55 AM PST

  •  Here's a scenario (1+ / 0-)
    Recommended by:

    My boyfriend is in the advertisement music business. The allure of his company relies on the quality and size of their music library.

    Unfortunately business has been slow due to competition growth. He'd like to hire more composers, engineers, and studio musicians, as well as rent recording space more often in order to produce more music, thus increasing the attractiveness of his small business to prospective clients. Such a tax break would help him potentially create hundreds of jobs.

    While I agree with you 99.9%, just know that there are companies for whom a tax break would make them "job creators."

    •  Tax credit v grant/loan (3+ / 0-)
      Recommended by:
      kyril, Back In Blue, JerryNA

      Small business administration loans used to be the way that these things were handled. The use of a tax credit, per se, only works if one's taxes are the issue. At the rates they are in the U.S., they're not the issue unless someone else has an unfair advantage by being part of MUZAK or something, where they can squirrel assets offshores and have a large profit while reporting a loss.

      Tax credits, were they issued, would go to his competitors as well as him. An incentive for companies under X employees, or start up loans, would go to the new guys.

      People complain about dirt, but I'd like to see them make some.

      by The Geogre on Sat Jan 05, 2013 at 06:10:51 AM PST

      [ Parent ]

    •  Implied in your story, he would find (4+ / 0-)

      Ready buyers for his new output. This tells me that, if so, he works in a sub sector of the economy where demand does justify new hiring. Or Regardless of his ambition, there is really not enough demand to justify up front spending on new product that may or may not find a ready buyer

      We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

      by bmcphail on Sat Jan 05, 2013 at 08:41:54 AM PST

      [ Parent ]

    •  That's a subsidy. (0+ / 0-)

      ***Be Excellent To One Another***

      by potatohead on Sat Jan 05, 2013 at 10:36:29 PM PST

      [ Parent ]

  •  Good points (1+ / 0-)
    Recommended by:

    When any of us make a purchase, we are creating demand and thereby creating jobs.

    "Hidden in the idea of radical openness is an allegiance to machines instead of people." - Jaron Lanier

    by FDRDemocrat on Sat Jan 05, 2013 at 05:24:17 AM PST

  •  Good explanation (3+ / 0-)
    Recommended by:
    RUNDOWN, kyril, JerryNA

    I think that they were working another magic, too, though. In their own minds, and it the communicative sphere, they were trying to conflate "entrepreneur" and "business owner." They were erasing entirely the distinction between the largely static and fundamentally cautious owner of a business and the energetic, expansive, and creative small business start-up.

    They further attempted to evacuate the traditional moral critique of the wealthy. For . . . oh, centuries. . . Christianity and Islam had criticized the rich and constrained them tightly with warnings that their wealth made it harder to be virtuous, not easier. The "job creator/ supply side" myth folded in the amoral critique from Bernard de Mandeville that "private vices are public virtues" -- a rich kook is still a public good, because all the kooky spending will flow out to the little people.

    (Mandeville only sought to drive a wedge between morality and economic theory. His argument is susceptible to economic critique, obviously.)

    Their result? Taxes (income taxes) hurt small business entrepreneurs (plutocrats, finance), who create jobs with their investments (corporate profits are now "jobs," and GDP is now family income. . . watch the birdie!), and they're the victims of much persecution by the state, which has no business intervening in a system that will always take care of itself (Mandeville).

    People complain about dirt, but I'd like to see them make some.

    by The Geogre on Sat Jan 05, 2013 at 06:05:41 AM PST

  •  the bulk of the jobs (4+ / 0-)
    Recommended by:
    RUNDOWN, Bisbonian, a2nite, kyril

    created in the last 12 years have been created outside the US by unamerikan companies while US workers are fired.  Its called trade policy and tax rates are irrelevant

    "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." -James Madison

    by FreeTradeIsYourEpitaph on Sat Jan 05, 2013 at 06:41:16 AM PST

  •  Business Executives have one "job" (3+ / 0-)
    Recommended by:
    Bisbonian, a2nite, kyril

    That is to increase profits, by any means, and usually by cutting labor, and by cutting wages.

    Labor is never counted in the "asset" column, but in the "liability" column.

    If not us ... who? If not here ... where? If not now ... when?

    by RUNDOWN on Sat Jan 05, 2013 at 07:23:43 AM PST

  •  The diarist wonders (2+ / 0-)
    Recommended by:
    Bisbonian, kyril

    why a concept that is destroying the economic engine of this country holds so much sway in Washington.

    It has to do with the FACT that most or not all of the people we elect as Democrats and/or Republicans, are closer to being 1% people that 99%, and they damn well sure won't be headed toward 99% once they are in office.

    Its in their economic interest, and those of their biggest donors (both pre and post election), to enact policy that favors good things for the wealthy and powerful, because that is who they are and or have a good shot at becoming.

    More and more I realize that the operation of the federal government is not Kabuki, its Pro Wrestling. Fans (the vast majority of the operation, the ones with the least control and the ones paying for it), of the show have a hard time dealing with the show when it "veers from the reality" that truly exists. They don't like being told its fake. Because whether they cheer for the "good guys" or "bad guys", admitting its fake is admitting they are fools, and its human instinct to believe your not being fooled/foolish until your FORCED to admit it.

    So I thinks its easy to see why our "leaders" do things that are counterproductive to most of us. And I don't see how we can change easily when the top will lose money and the rest will lose face, which is mostly all they have because they don't have money.

  •  Higher wages drive demand (1+ / 0-)
    Recommended by:

    Let's say BigCo comes out with a better tablet than all others. If wages do not go up, Joe refrains from buying something else to afford the tablet. No net increase in spending. But if wages go up, Joe will keep buying at the same rate AND buy the tablet, a net gain in spending. This seems to be overlooked in most or all discussions. Merely making a better widget will not increase spending if it merely replaces something else.

    Wouldn't it be cool to be a teabagger named Balzac?

    by armadillo on Sat Jan 05, 2013 at 01:45:21 PM PST

    •  minimum wage and middle class wages frozen (1+ / 0-)
      Recommended by:

      The same people who brought us the never-ending tax cuts and job creator lies also brought us minimum wage and middle class wages frozen for the last 30 years.  When you count inflation, buying power has dropped for the lower ~80% of the country.  When the majority of our nation cannot afford to live well, then of course our economy suffers.  Production has risen, and the resulting profits all went to the top 1%.

  •  show me trickle down, i show you offshore (0+ / 0-)

    being in their shoes- if i was clearing a tremendous level of profit turning over large tracts of commercial real estate-

    would i add employees? to do what?

    thanks for post

    “It is hard to free fools from the chains they revere.” -Voltaire

    by downtownLALife on Sat Jan 05, 2013 at 02:46:36 PM PST

  •  70 percent of GDP (roughly) . . . (0+ / 0-)

    comes from consumer demand.  So obviously, unless Richie Rich is a charitable enterprise with a huge, inexhaustible endowment, she, he, or it won't create new jobs unless there is sufficient business reasons for doing so.

    Most businesses aren't in the business of charity.  They hire workers because they are able to capture a part of the profits of their worker's labor.  Hiring usually takes place when the business's existing capacity proves insufficient to meet demand.  The only exceptions are start-ups, which are predicated on expectations about demand for a service or product.  If that demand doesn't materialize, they go out of business sooner or later.

    With a lot of these things, I don't think conservatives or Republicans even care whether or not the "job creators" claim is true.  The term probably does well in poll-tests, so they keep using it.  It polls better than "rich people" the "wealthy" or "Richie Rich" -- especially in conjunction with the words "tax cut" -- that's really the only reason why they use it.

    That's true of a lot of GOP ideas and slogans.  The justifications and reasoning are mostly bullshit, they just need the appearance of plausibility.

    Get beyond the b.s., and the only consistent thing about their actions -- not their words -- is that they push policies that make their donor base more wealthy.  They are more interested in making their donor base wealthy EVEN IF it comes at the expense of job creation.  The GOP just invokes the word "jobs" because they think that someone somewhere might find the idea persuasive.

    That's part of what is kind of annoying about their use of the term.  It's Orwellian b.s.  Even if 70 percent of the public doesn't buy it, they still have a low enough regard for the public's intelligence, understanding and reasoning, that they try to sell it anyways.

    In the end I think this stuff will come back to bite them.

    In any event, a great topic and very good presentation of the subject.

Click here for the mobile view of the site