As I was driving someplace on the labyrinthine freeway system in Los Angeles to a destination I no longer remember, I heard some relatively good news on the radio: job growth during the previous month had been much better than expected, as around 160,000 new jobs had been added to the economy during the month of October.
This was good news, I thought. If only such good tidings had come out before the election, perhaps we might have had evidence with which to build the narrative that prosperity could have perhaps been just around the corner. But alas, it wasn't to be, and the tea-fueled Republicans obtained a significant majority in the House--and, to hear the media tell it, upon all of Washington, despite only controlling one of the three stool-legs of legislative procedure.
These same Republicans, of course, have as one of their top priorities ensuring the continuation of tax cuts for the wealthy and for corporations, on the supposed grounds that reducing the tax burden on these entities will lead to increased prosperity and increased hiring--an idea which made the next part of the news segment so fascinating. The segment went on to feature an interview with a human resources manager at the Lego plant in Southern California. This supervisor noted the increased consumer demand that had necessitated the modest spurt in overall hiring, and described his company's reaction to it. As best as I can remember it, the quote was something like this: "we stretched our existing workforce as far as it could go, but eventually, we were forced to hire more people."
And as this insane debate continues about whether we should add $700 billion to the deficit by further cutting taxes to the wealthy on the grounds that it would harm businesses, this anecdote is particularly instructive, because it demonstrates one fundamental point very clearly: businesses do not actively want to create jobs.
This sounds like a capitalist heresy, but it is the absolute truth: the purpose of a business is to make money, and labor is a cost associated with doing business. Unless there are other concerns that somehow override the profit motive, businesses will not hire new workers unless it is profitable to do so; they will instinctively seek to make the existing workforce do as much as it can to handle increased demand until it is simply beyond the capabilities of the existing workers, at which point they will seek to hire more workers to ensure that demand is able to be met.
This is crucial for one main reason: the conservative belief that tax cuts for the wealthy will somehow create jobs is based on a fundamentally mistaken notion about the motivations of business--namely, that businesses are eager to hire more people if they only had increased profitability. But profitability clearly isn't the problem: US corporations are on pace for their biggest earnings growth in over twenty years, and the stock market is heading for its best back-to-back annual gains since 2004. And yet, employment is still in the doldrums. In general, our corporations could theoretically hire more workers if they wanted to--but they're not.
The reason why is simple: businesses will not waste money on workers they don't need. As the co-owner of a very small business, the only time I hire subcontractors is on the occasions when there is too much work for me to handle alone. When there isn't enough work for that to be the case, I will not hire anyone else--and no amount of cutting corporate taxes or my personal income taxes (even were I to fall into the tax bracket that the GOP seems to care about the most) will change that equation. I'm certainly not alone in this way of doing things. The best way to get businesses to hire more workers is to ensure that there is adequate demand for the goods and services that those workers produce. And while conservatives may argue that tax cuts for the wealthy may increase demand by making more money available, but the truth is already out there: such tax breaks are one of the least effective forms of stimulus available.
There's really only one inescapable conclusion: those who are so desperate to pass tax cuts for the wealthy that they will hold everything else hostage to that agenda are either completely misguided, or they have no actual regard for the health of the economy and are trying to further their own enrichment while passing it off as being for the good of the country.
At this point, it's not simply a factual argument--it's a moral one. And Democrats shouldn't be afraid of turning it into one to get the upper hand on this issue during the lame duck session.