A mutual friend, I believe, Evan J. Parker III, had an interesting post in which he more or less (at least) correctly claimed that corporations do not create jobs. He gave a good argument, but of course it was rejected by some of his Republican friends. So I weighed in, and I hope I helped a little bit. Their names are irrelevant so Ive omitted them. I hope the following helps sometime with talking points, but you can learn as much (Im sure even more) from watching Robert Reichs documentary Inequality For All: You may not be buying Keynsian economics only because it hasnt been explained to you thoroughly or in terms to which you can relate. I cant blame you for that, but try to keep an open mind while I explain a few things here. 1) John Maynard Keynes was one of the worlds most preeminent economists in his day and he set the standard for a large part of macroeconomic analysis methods. He is still recognized as the father of modern macroeconomics. 2) Demand-side theory doesnt state that demand creates supply directly. Naturally you (as a small business owner) create demand by being innovative, but unless consumers have money to buy your products your business will fail even with great products. 3) Taxation is not the issue nearly as much as are direct grants and subsidies to large businesses. Grants and subsidies ARE used in part by government to draw down costs on some kinds of goods such as oil, but the system is incredibly top-heavy and much of what goes to business goes to waste and does NOT help small businesses like yours which are perhaps responsible for even more than 60% of new jobs and economic expansion. Approximately $870 of the taxes of every average Americans family goes directly to these subsidies. Naturally some of this is justified, and included in that is research by universities and corporations, but if the waste was even as much as 3% (which economists are quite convinced is an extremely low figure) it would equal or surpass ALL of the money spent on welfare (the average American earning $50K per year pays approximately $43 for all welfare programs combined). 4) Trickle-down economics does work, sort of, but in the absence of a healthy and growing middle class it does worse than not work - it makes the situation worse. Since Bush was in office the middle class has shrunk and the income and savings of the middle class which remains has shrunk with it. The number of people in poverty has increased significantly. In these 14 years approximately 95% of all profits from economic expansion has gone to the wealthiest 1% which now owns approximately 42% of the countrys wealth. This is NOT how it has always been. In fact the income and wealth disparities that exist now exceed all but only one time in the history of this country -- the time directly before the great crash of 1929 which caused the depression. AS A MATTER OF FACT the crash was primarily caused itself by a bubble economy which was not supported well enough by the middle class having enough disposable income to keep the expansion going. We are in such a bubble expansion once again - this that you see as expansion does not have enough support from underneath and unless things change it will burst as it did in 2008. Companies are already buying substantial portions of their own stock back from investors in an effort to provide dividends. This tactic only works in the short term, and it the long term will end in disaster. 5) You are correct that taxation on business is passed to the consumer, in general. There is a problem, however, with the WAY in which taxation on business occurs. The 15% low flat tax rate on capital gains is not really tied to anything ... certainly not to employment and not really very tightly to re-investment in infrastructure. We could make an enormous difference simply by making the capital gains tax a progressive tax like income tax and giving substantial tax breaks for hiring and paying wages on a reverse-progressive scale (so that the tax breaks dont go to pay huge salaries and bonuses to executives). Its not as simple as that, but explaining it further would take as much or more space as Ive already dedicated. My point is that Republican policies are still in force despite a President who is a Democrat. He and the Senate have been able to make nearly zero inroads into the tax structure created by George Bush which heavily favors the wealthy and places a greater burden on the middle class. The argument that the wealthy pay most of the taxes is totally irrelevant to how well the economy is doing. The wealthy pay by far the smallest share of DISPOSABLE income, and disposable income drives the economy. The wealthy do not buy hundreds of times more goods than do the poorest among us when you count gas and groceries and housing. One can only benefit so much from having so many jackets, shoes and pillowcases and electronic devices. After a certain amount the wealthy do not spend money. They invest in stocks and bonds and banks. That benefits fund managers and big corporations and banks mostly, but a very high portion of that money basically is taken out of circulation. When a man who is unemployed gets an unemployment check that money goes back into circulation almost entirely and immediately. When a man making $50 K a year gets a raise most of that money also gets spent. When big oil and big ag and big chem and big pharma get government subsidies in the hundreds of billions of dollars, the economy by and large does not benefit much. The companies and the stock owners and the executives and the 1% benefit and THAT is the reality of the current situation.
Posted on: Tue, 04 Nov 2014 01:32:53 +0000
Trending Topics
Recently Viewed Topics
© 2015