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Monday, September 19, 2011

"Job creators"? Bullshit.

At the risk of pissing off lambert, I'm going to reprint a short piece he wrote today:
Anybody propagating the "jobs creator" meme is a fool or a liar. Businesses don't exist to create jobs. They exist to create profits. And that's not necessarily a bad thing, if properly regulated. [Pause for discussion of glibertarian, anarchist, and socialist perspectives on "regulation."] But if a business could make profits without creating a single job, it would -- and its fiduciaries would insist it should.

The real job creators are the people who do the work and demand the goods. No demand, no jobs, no business. As everybody but the top 1% are discovering as the country spirals down into Osterity, a controlled flight into terrain by the elites.
What irritates the hell out of me is that the "job creators" bullshit is heard only in propaganda pronouncements. When businessmen talk amongst themselves, they may freely admit that the real problem is lack of demand.  See the Wall Street Journal piece here: "Dearth of Demand Seen Behind Weak Hiring."

Speaking of bullshit economics, I've been wondering: What is Larry Kudlow up to now?

Kudlow, as you may recall, is the arch-conservative supply-side economist who endorsed Obama. Previously, he may be best known for his pieces which firmly predicted that Dubya's tax cuts on the wealthy would -- stay seated, please -- increase the surplus. (He doesn't like all tax cuts, though. He wants to increase payroll taxes on working people.)

He also predicted that there would be no recession in 2007-2008. Savor his words from December, 2007:
"The recession debate is over. It's not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that's a minimum). The Bush boom is alive and well. It's finishing up its sixth splendid year with many more years to come"
Last month, he said that he doesn't believe we are heading into a recession. That means we're doomed.

And now, here's Larry from just a couple of days ago:
New York City mayor Mike Bloomberg, in a radio interview on Friday, warned that high unemployment could lead to widespread rioting. That’s right. He actually said that.
Larry is shocked that someone would dare to say that high unemployment could lead to civil unrest. Perhaps Larry will also be shocked if I point out that women have breasts. That's right. I actually said that.
There’s a whole history here of liberals threatening riots if they don’t get their way.
This is hilarious. Of course, there's a difference between a forecast and a threat. You want to see actual threats? What about the militia maniacs of the 1990s, threatening revolution simply because a Democrat happened to be sitting in the oval office? What about the fact that the militias came back during the Obama presidency? What about Sharron Angle and her threats that if we don't get rid of "entitlements" -- by which she means Social Security and Medicare -- there would be "second amendment solutions"? What about the fact that you can find violent, incendiary rhetoric of that sort spewing out of right-wing radio pretty much every hour of every day?

Let's conduct the experiment. Let's compare any given hour of far-left radio -- Pacifica is still a going concern, isn't it? -- with any given hour of "the right stuff." Let's see who's talkin' 'bout revolution.

Now let's bring it all back to lambert's point.
Large dollops of government spending combined with temporary tax cuts do not promote investment or entrepreneurship, which are the true job-creators. Tax-rate incentives must be permanent in order to grow the economy. Digging holes for infrastructure may be necessary, but it’s no job-creator for the private sector.
There we go again: The "job creator" myth.

Experience has shown that top tax rates below 40 percent won't increase job creation. When Clinton raised top tax rates to cut the deficit, supply-side economists everywhere (I'm sure Kudlow was one of them) predicted doom. We didn't get doom; we got boom.

In fact, lowering taxes on the rich further would mean even fewer jobs.

Less revenue means increased dumping of government employees onto the unemployment rolls. (There's already been a lot of that, although guys like Kudlow never tell you that fact.) Moreover, there will be a massive impact on all firms that do any kind of business with the government. Result: Lay-offs everywhere. Decreased spending; decreased demand. Leading to yet more lay-offs. And so we spiral down, down, down.

I agree that the tax cuts in the previous stim package were a mistake. I agree that Obama's proposed new tax cuts would be a mistake. Tax cuts don't work. Tax cuts don't work. Tax cuts don't work.

I disagree with the presumption that a ton of money has gone or will go into infrastructure. Didn't happen. Isn't going to happen. Did you see Obama create anything like the TVA or the WPA? I didn't. So stop hallucinating, dammit.
Digging holes for infrastructure may be necessary, but it’s no job-creator for the private sector.
Yes it is, dummy. Get this through your head: Entrepreneurs don't create jobs -- workers do. Workers buy things. "Buying things" is what creates jobs. Entrepreneurs simply exploit the workers' desire and ability to buy crap they don't really need. The economy depends on a whole bunch of people spending money on crap they don't really need.

Right now, demand is low because too many people have no work, which depresses wages for everyone. People can't spend money they don't have, and they are afraid to spend the money they do have.

Giving people jobs, any jobs, means that they will buy things and thus get the economy rolling again. We have to take money from the vampiric rich -- at gunpoint (or stake-point) if necessary -- and use it to create jobs. (The vampiric rich are not entrepreneurs, by the way.)

Infrastructure repair and creation is one very useful way to create jobs and increase demand. I've offered my own solution which would create full employment for two years -- and which has one added benefit: No-one (aside from the very nuttiest of the libertarian nuts) could ever call it "socialism."

Reagan did it though weapons manufacture -- military Keynesianism, the one form of Keynesianism Republicans seem to tolerate. (At least, they used to.) But frankly, I don't care if we pay people to throw rocks at walls. I don't care if we pay people to try to grab clouds. As long as there are paychecks for everyone, as long as there is upward pressure on wages, the economy will grow.
Comments:
Krudlow has been and is a totally discredited piece of sh*t pseudoconomist who didnt know anything when he was young, and is full time employed in propoganda now that he is old.

He is worth no more than the value of any organs you could harvest.

Harry
 
" You want to see actual threats? What about the militia maniacs of the 1990s, threatening revolution simply because a Democrat happened to be sitting in the oval office? What about the fact that the militias came back during the Obama presidency? What about Sharron Angle and her threats that if we don't get rid of "entitlements" -- by which she means Social Security and Medicare -- there would be "second amendment solutions"? What about the fact that you can find violent, incendiary rhetoric of that sort spewing out of right-wing radio pretty much every hour of every day?"


Joseph....I don't know if you've seen this YouTube video of Andrew Breibart, but it's a perfect example of the incendiary rhetoric coming from the right.

http://www.youtube.com/watch?v=LHslkhZWzUQ&feature=player_embedded
 
I present, for your amusement, one sweaty, twitchy member of the Republican establishment saying: BRING IT ON!

http://www.youtube.com/watch?v=LHslkhZWzUQ&feature=player_embedded
 
Supply Side vs. Keynesian economic theory is too hard to prove one way or the other because there are too many factors to point at and too many ways to manipulate the numbers.

Each side claims they have the "facts" and they have charts and historical tales and stats to back them up.

All the cabbies and waitresses have all figured out. It is the economists who have a devil of a time knowing what is right. They are just looking in the wrong place. They need to hail a taxi and have some eggs at their local diner.
 
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