Who creates the jobs?

[BadBear]

Thanks for the article and graphs p4man, it's a good read.  i also like his rebuttal linked at the end. 

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[onesalt]

Apparently not rich people, according to the article.

Alright, let's see the argument.

rich people do not create jobs, even if they found and build companies that eventually employ thousands of people

These companies that employ thousands of people aren't creating jobs? Those jobs would exist without those companies? I think not. Nice try.

No you moron, people aren't going to found companies when no one has any money to buy their products. This is the core of the problem. Republicans have been giving tax breaks to the rich and tax hikes to the poor for so long now that the rich have more money than they can ever spend while the poor are forced to buy essentially nothing, which stifles the economy and prevents job growth by decreasing demand for essentially everything.

[JA37]

No you moron, people aren't going to found companies when no one has any money to buy their products. This is the core of the problem. Republicans have been giving tax breaks to the rich and tax hikes to the poor for so long now that the rich have more money than they can ever spend while the poor are forced to buy essentially nothing, which stifles the economy and prevents job growth by decreasing demand for essentially everything.

No need for name-calling. Although I disagree with almost everything b2c writes I think we should try to keep the tone civilized and respect each others viewpoints.

[bb113]

Apparently not rich people, according to the article.

Alright, let's see the argument.

rich people do not create jobs, even if they found and build companies that eventually employ thousands of people

These companies that employ thousands of people aren't creating jobs? Those jobs would exist without those companies? I think not. Nice try.

No you moron, people aren't going to found companies when no one has any money to buy their products. This is the core of the problem. Republicans have been giving tax breaks to the rich and tax hikes to the poor for so long now that the rich have more money than they can ever spend while the poor are forced to buy essentially nothing, which stifles the economy and prevents job growth by decreasing demand for essentially everything.

Where do you get the idea its the "republicans" specifically that are to blame? Also, which tax hikes to the poor are you talking about and what are your definitions of rich and poor?




Basically I think this thread is getting too emotional so peoples arguments are starting to suck.

[onesalt]

Apparently not rich people, according to the article.

Alright, let's see the argument.

rich people do not create jobs, even if they found and build companies that eventually employ thousands of people

These companies that employ thousands of people aren't creating jobs? Those jobs would exist without those companies? I think not. Nice try.

No you moron, people aren't going to found companies when no one has any money to buy their products. This is the core of the problem. Republicans have been giving tax breaks to the rich and tax hikes to the poor for so long now that the rich have more money than they can ever spend while the poor are forced to buy essentially nothing, which stifles the economy and prevents job growth by decreasing demand for essentially everything.

Where do you get the idea its the "republicans" specifically that are to blame? Also, which tax hikes to the poor are you talking about and what are your definitions of rich and poor?




Basically I think this thread is getting too emotional so peoples arguments are starting to suck.

Possibly something to do with the Reagan era tax cuts, the Bush era tax cuts, the second bush era tax cuts and the extension to the bush era tax cuts that republicans forced through congress.

[RodeoX]

When I hear politicians making the "job creator" argument I can't help but wonder if they think I have down syndrome. The idea that a business person would leave money on the table because their personal taxes are too high is ridicules.
If my customers demand is higher than my ability to produce, then I hire someone. It does not matter what I pay in taxes. I hire people to make more money for me, not some act of kindness.
So, who creates jobs? I do. (well, I have.) Want me to create more jobs? Then show me how it will lead to greater profits and the job is yours.

[bb113]

Apparently not rich people, according to the article.

Alright, let's see the argument.

rich people do not create jobs, even if they found and build companies that eventually employ thousands of people

These companies that employ thousands of people aren't creating jobs? Those jobs would exist without those companies? I think not. Nice try.

No you moron, people aren't going to found companies when no one has any money to buy their products. This is the core of the problem. Republicans have been giving tax breaks to the rich and tax hikes to the poor for so long now that the rich have more money than they can ever spend while the poor are forced to buy essentially nothing, which stifles the economy and prevents job growth by decreasing demand for essentially everything.

Where do you get the idea its the "republicans" specifically that are to blame? Also, which tax hikes to the poor are you talking about and what are your definitions of rich and poor?




Basically I think this thread is getting too emotional so peoples arguments are starting to suck.

Possibly something to do with the Reagan era tax cuts, the Bush era tax cuts, the second bush era tax cuts and the extension to the bush era tax cuts that republicans forced through congress.

So why didn't the democrats repeal them? Why not force their own bills through congress? Also I was more confused on what tax hike you were talking about on the "poor."

My main thing though, is that I am interested in your complete lack of interest in monetary policy. Apparently your model for how wealth has been draining into the hands of the already rich is completely fleshed out without needing to take that into account. Impressive.

[The Script]

So I've been thinking about this.  It makes sense that you need demand for products as well as companies to actually produce those products.  Also, I understand that the disparity in income is increasing, but I'm not so sure that poor people are buying less stuff.  Most of my friends have higher standards of living then I do regardless of whether or not they earn more than I do.  For example, my brother earns far less than I do but has an x-box, play station, lots of games for those consoles, movies, tv shows, x-box live, bigger flat screen tv than I do, etc.  I have an x-box which was given to me by someone and have only bought one game for it.  My wife and I bought a flat screen TV for just over $100 because we used gift cards from out wedding.  We buy cheap food as much as possible and don't eat out very often.  I'm in school and so funds are pretty tight most of the time. 

Perhaps part of the problem is people who live outside of their means?  I know plenty of people who make fairly low wages (like I do) but who have gotten new vehicles because they magically got approved for loans with little or no down payments.  This then saddles them with debt for years keeping them from developing savings that can be used to improve themselves (schooling, start up business, whatever) and increase their wages.  I'm not trying to blame poor people entirely for their own poverty, but certainly wise financial decisions have to play a part.  So, anecdotally, at least, it seems to me that "poor" people are still spending lots of money. 

Anyone have thoughts on this?  Are people living outside of their means and how does that affect the economy? 

P.S. I'm referring mostly to Americans, not because I'm trying to be ethnocentric but it's where I live and what I have experience and context for.  My apologies to JA37 and anyone else who is from a different country.  Perhaps the situation in Europe or Australia is different.  I'd be curious to hear your thoughts on the situation in your respective countries.

[P4man]

People have been maintaining living standard despite falling (relative) wages by increasingly getting in to debt for almost a generation.



Most of this debt was mortage debt. This has kept the economy going for a while, but as you can imagine its not exactly a long term solution.

As for other countries, this may interest you:

[bb113]

hmm, is there a reason you appear to be equating relative wages with personal savings rate?

[The Script]

People have been maintaining living standard despite falling (relative) wages by increasingly getting in to debt for almost a generation.

But why?  Are they simply unaware that their relative wages are falling?  Are loans to easy to get, should they be harder to get?  Is it a matter of educating a culture of savings?

[P4man]

People have been maintaining living standard despite falling (relative) wages by increasingly getting in to debt for almost a generation.

But why?  Are they simply unaware that their relative wages are falling?  Are loans to easy to get,

All of the above I suppose. There used to be a time were people bought their cars and often even houses with money they had saved. Today thats impossible for the majority of people. There used to be a time when you didnt get 29 credit cards in your mailbox without even asking. When you didnt need loans to get through college. Where households got around nicely with just one income.  Ask your parents or grand parents, they might remember.

should they be harder to get?  Is it a matter of educating a culture of savings?

Perhaps, but the real solution can only be to increase wages. The current wealth inequality is back to the levels from just before the great depression:


Fixing that by at least taxing the rich IMO is not a matter of fairness, its a matter of economic common sense.

[Bind]

The people create jobs, not government.

The government kills job making ability of the people by creating restrictive laws, restrictive enviromental legislation, and ratification of restricting treaties.

The government used to get their money for projects and services from mainly trade tarrifs.

They are now gone and we have WTO, NAFTA, and GATT which effectively killed our manufacturing infrastructure and domestic markets.

Gone also are the farmers who once supplied this nation with food.

You can thank your representatives and the people who keep voting them into office.

Make illegal and treasonous, under penalty of death, any lobbying of our representatives or 3rd party political advertising or donations offered or accepted and you have fixed the majority of the problems. Then vote in sane legislators who will work for us because they have no one else to work for.

Now, the govenrment is so big and so many rely on it instead of themselves, that I dont see any meaningful change coming anytime soon. The masses feel entitled whether by ideology, greed, or just plain and simple need for survival.

It all boils down to us, The People. Its our own fault for our apathy and disinterest, allowing our employees to take over and tell us, their employers, what to do and how to do it, so dont expect us to bite off the hand feeding us any time soon.

[The Script]

People have been maintaining living standard despite falling (relative) wages by increasingly getting in to debt for almost a generation.

But why?  Are they simply unaware that their relative wages are falling?  Are loans to easy to get,

All of the above I suppose. There used to be a time were people bought their cars and often even houses with money they had saved. Today thats impossible for the majority of people. There used to be a time when you didnt get 29 credit cards in your mailbox without even asking. When you didnt need loans to get through college. Where households got around nicely with just one income.  Ask your parents or grand parents, they might remember.

should they be harder to get?  Is it a matter of educating a culture of savings?

Perhaps, but the real solution can only be to increase wages. The current wealth inequality is back to the levels from just before the great depression:


Fixing that by at least taxing the rich IMO is not a matter of fairness, its a matter of economic common sense.

So you propose taxing the rich and what?  Giving the money to the poorer people to spend?  Using it on infrastructure?  Government creating jobs?

[P4man]

So you propose taxing the rich and what?  Giving the money to the poorer people to spend?  Using it on infrastructure?  Government creating jobs?

Or pay down the debt, or lower taxes on the other 99%. Its not up to me to say how US taxpayers money should be spent, whether its on a functional healthcare system, infrastructure, education or something else, but from an economic POV its madness to have an upper 1% who own nearly 40% of the wealth and effectively tax them at lower rates than the bottom 99%. Wealth doesnt create jobs, demand does.

[The Script]

So you propose taxing the rich and what?  Giving the money to the poorer people to spend?  Using it on infrastructure?  Government creating jobs?

Or pay down the debt, or lower taxes on the other 99%. Its not up to me to say how US taxpayers money should be spent, whether its on a functional healthcare system, infrastructure, education or something else, but from an economic POV its madness to have an upper 1% who own nearly 40% of the wealth and effectively tax them at lower rates than the bottom 99%. Wealth doesnt create jobs, demand does.

That's not strictly true, either.  You have to have capital (wealth) to start a business.  But without demand you will not survive long.  Like I said earlier it's a double-sided coin.  I would like to see taxes lowered on everyone and I'd rather see spending lowered then taxes raised.  The US government survived just fine without an income tax all the way up until 1913 and since then it's just been one excuse or another to keep raising taxes.  Taking a third of a working person's income seems much much too high in my perspective, especially with the sorts of things I see it spent on (undeclared wars overseas, corporate subsidies, fat wasteful defense contracts, inefficient welfare programs, etc.). 

[P4man]

That's not strictly true, either.  You have to have capital (wealth) to start a business.

There is not exactly a lack of capital. US banks are literally sitting on trillions of dollars, thats not the problem. The problem is the majority of consumers are broke.

The US government survived just fine without an income tax all the way up until 1913 and since then it's just been one excuse or another to keep raising taxes.  Taking a third of a working person's income seems much much too high in my perspective, especially with the sorts of things I see it spent on (undeclared wars overseas, corporate subsidies, fat wasteful defense contracts, inefficient welfare programs, etc.).  

Whether a third is too much or not you can debate, what really matters is what you get for your tax dollars. I actually dont mind paying over a third (in fact I pay about 50%) since I get a lot back for it. Decent infrastructure and public transport, excellent and virtually free healthcare, top notch and virtually free education and a social security system thats good enough to give me peace of mind even in difficult times. If I were to pay all that out of my own pocket Id likely end up paying more for less.

But if people want less of that for less taxes, thats fine. As I see it the major problem in the US is the political system that legalizes corporate bribery. As a result you have a government thats not working in the people's interest, but for special interests and your tax dollars are wasted and further enrich the rich. I can understand that breeds hate for government, but  IMO the solution to that is not so much shrinking the government as fixing campaign financing and "lobbying". If one day you again have a government that is by and for the people, perhaps you may be less inclined to want to abolish it and end up with a Somalia style government-"free" country.

[altuin]

I think the article really does not highlight the fact that the middle class must have expendable income, and rather just makes statements without good evidence. however, he does have a point, even if it is not clear. All elastic goods will not be purchased if the average consumer cannot afford them, which is the major issue here.

[JA37]

That's not strictly true, either.  You have to have capital (wealth) to start a business.  But without demand you will not survive long.  Like I said earlier it's a double-sided coin.

If there's demand, not just a will but also means to buy something, there is capital. Demand is key. Wealth is optional.

[The Script]

That's not strictly true, either.  You have to have capital (wealth) to start a business.  But without demand you will not survive long.  Like I said earlier it's a double-sided coin.

If there's demand, not just a will but also means to buy something, there is capital. Demand is key. Wealth is optional.

So you are saying that if the average person has enough money he will invest it himself?