Who Are the Job Creators?

Discussion in 'Politics, Religion, Social Issues' started by Huntn, May 25, 2012.

  1. Huntn Suspended

    Huntn

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    #1
    This is an incredible 5 min video because of the simplicity of the message. Capitalists are not job creators. Jobs are created by a symbiotic relationship between producers of goods and consumers who can afford to make a purchase. Ultimately, jobs are only created with consumer demand.

    If middle class consumers held the same portion of the economy that they held in 1970, instead of $50k per year, they would be making $90k per year.

    My take: Trickle down is the all time lie foisted upon average citizens. It is all about perks delivered to the wealthy as a reward for their successes. Lowering taxes kills job creation. The GOP has it all wrong or they are are being dishonest. My vote is the latter. As voters we have to be smarter.

    http://youtu.be/bBx2Y5HhplI
     
  2. iJohnHenry macrumors P6

    iJohnHenry

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    #2
    Ultimately, jobs are only created with consumer demand.

    Always have been.

    Your strongest vote in Society today is with your money or your feet.
     
  3. vrDrew macrumors 65816

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    #3
    Consumer demand is often a strong motivator for companies to hire additional staff.

    Of course, not all consumer demand is equally powerful at creating jobs, and especially not in places where you might want additional jobs.

    A very high-income individual, who finds himself with an extra half-million in cash to spend, and who decides to blow it down at the local Bentley dealership - isn't going to do much to boost employment in his own town. And likewise, the thousand middle-class folks who end up with an extra $500 each, which they blow on Chinese-made doodads at Wal-Mart, aren't likely to spur US factories to start posting want-ads.

    Any politician who tells you he "knows how to create jobs" is full of B/S. ESPECIALLY if he points to his successful business career as proof. Businesses hire people as a side-effect of being successful. Businesspeople generally try to hire as few people as possible in order to maximize profits. The only way politicians can, in the long term, "create jobs" is by having the courage and foresight to invest in education (so businesses will have qualified employees to hire, and smart entrepeneurs/engineers/etc. to start new companies) and infrastructure: so businesses will have the ports, highways, and airports they need to access global markets.
     
  4. MadeTheSwitch macrumors 6502a

    MadeTheSwitch

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    #4
    EXACTLY!!!! To listen to the Republican party and Romney spin it, you would think they did it out of the goodness of their hearts. But the truth is, workers are a huge cost to a company. Business people would replace their workers with robots if they could. And they sometimes do!!
     
  5. edk99 macrumors 6502a

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    FL
    #5
    Well as soon as a homeless guy offers me a job I will let you guys know.
     
  6. LethalWolfe macrumors G3

    LethalWolfe

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    #6
    If the homeless guy sleeps at a shelter that shelter requires staffers to run and maintain it. You could always apply for a job there. If no homeless people use that shelter it will be shut down and its employees will be let go. If homeless people are a seen as a nuisance by some business owners they might be looking for security guards to watch their stores so maybe you could get work as rent-a-cop.

    As Nick Hanauer says in the video, consumers and producers have a symbiotic relationship. If you make a product and no one can afford to buy it you aren't going to be in business very long let alone expand so you can hire more workers.
     
  7. codo macrumors 6502

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    #7
    This is extremely interesting. I would be interested in seeing similar statistics for the UK - no doubt the situation is even worse.
     
  8. hafr macrumors 68030

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    Sep 21, 2011
    #8
    Actually, it seems like stimulating an economy by lowering taxes is in general more effective than stimulating it with public funding (aka debt or raised taxes). I say in general, because things like lowering the top marginal income tax is way more inefficient than say lowered income taxes for low and medium income takers. Meaning, of course, that increased taxes could be positive. I just wanted to point out that it's not as simple as just yelling "raise the taxes", but you need to be more specific :)

    The rich need to be taxed, the poor need to be left alone. Today, it seems like it is the absolute opposite in the US, with effective income taxes being lower the more money you make. Have I interpreted what I have read about the US correctly, in your opinion?
     
  9. citizenzen macrumors 65816

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    #9
    I have to assume that you didn't watch the video.

    Even homeless guys consume.

    It's the homeless guy's (as well as everyones') consuming that creates the demand for jobs.
     
  10. jackc macrumors 65816

    jackc

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    #10
    There's a reason why TED rejected this talk -- it's not very good. He's just throwing up some correlations.

    In a recession, you're going to show a simple graph of tax rates vs. unemployment and try to conclude something about job creation? Meaningless.

    Yes, obviously businesses need demand to stay in business. Not much really follows from that.
     
  11. citizenzen macrumors 65816

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    #11
    Here was his key point ...

    Yes, the businessman sets up the original condition of employment. However, without the consumers' demand for the product, those jobs would never last.

    By moving money away from the middle class—most of the consumers—we reduce their ability to consume, reduce the demand on products and thereby reduce the need for employment.

    Is that a wrong assumption?
     
  12. jackc macrumors 65816

    jackc

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    #12
    Well, first of all the death of the middle class is a myth. The income data is not as straightforward as he makes out.
    http://www.econtalk.org/archives/2012/04/burkhauser_on_t.html

    And, rich people don't just eat their money (and if they did, it would just lower prices). They invest. Investment creates jobs.

    You can argue for a change in the tax system -- although it's more progressive than a lot of people think -- I just think he's taking some things for granted.
     
  13. citizenzen macrumors 65816

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    #13
    The point is that investment doesn't sustain jobs.

    Nobody invests to create a job. They invest to hopefully see a return on that investment.

    The jobs created are a byproduct of that intent to make money. However, without the consumer actually buying that product or service the venture fails.
     
  14. Mak47 macrumors 6502a

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    #14
    There are two factors at play here, job creation and job sustainability.

    Consumers and their expendable income dictate what products and services are in demand, thus ensuring the continued employment of those who provide them. However, those products and services cannot be in demand in the first place if someone hasn't invested to create them. It's a chicken or the egg scenario. You simply can't have one without the other.

    The problem we have in this country today (and in many worldwide) is that politicians and the media like to pit one against the other, as though each player (producer vs. consumer) has an interest in the other's demise. It's entirely untrue, but that doesn't stop it from happening. It's easy for a liberal politician to get ahead by demagoguing a corporation's greed, or for a conservative politician to get ahead by painting the corporation as a faultless creator of jobs and prosperity who should never be questioned.

    Both sides are right for the wrong reasons. While in general I do believe in the top-down wealth creation model, I think it has been misappropriated over the years. In general, if you cut taxes and reduce impediments to production, more investment will occur and thus, more jobs will be created. This is common sense.

    However, over the last 20-30 years or so this has been implied to mean reducing taxes on "The wealthy". This should not actually be the case. It should mean cutting or eliminating corporate & business taxes and reducing or eliminating the numerous impediments that stand in the way of production. Businesses don't pay taxes, their customers do. Every cent that a business pays in tax gets repackaged in the price of their products. There is no debate here, there is no room for argument. It is a simple mathematical fact.

    So what happens then? A business essentially passes on the tax to their consumers in the form of higher prices. As long as consumers wallets are growing fatter in sync with the tax rates this doesn't necessarily pose a problem for the economy as a whole. Unfortunately, it doesn't work that way, and it forces some products to be priced out of the reach of some consumers--thereby limiting the market for some products. Limited marketability means less sales, as a result, less job creation.

    So, eliminating corporate taxes should fix that right? Wrong. Sort of. Maybe.

    The problem we have if corporate taxes are removed is that someone else will have to take up the slack. This means those taxes are passed on to individuals. Now that they pay them directly, their income is equally limited, thus causing the same problem we had before--some products are out of the reach of some consumers. Reversing the scenario (shifting the entire tax burden to corporations) works the same way.

    The only solution to the problem is to reduce the amount of taxes that need to be collected in the first place. This means cutting spending. This is not a conservative vs. liberal issue. Both sides love to waste money. Whether it's multi-hundred billion dollar "Stimulus" packages or trillion dollar wars; corporate welfare or public welfare--all need to go.

    When and if this happens, along with the myriad other wasteful projects funded by politicians, then we can look at a more sustainable tax model that will allow for both greater consumption and greater investment. Quite honestly, even as a top-down advocate, I'd be in favor of shifting the tax burden entirely to the business side with a simple flat tax. Businesses are by nature better structured to handle collecting and organizing the data needed to pay taxes than consumers are. They would pass on the taxation anyway, but the hassles and headaches would be placed on a smaller number of people--who are likely getting paid to handle them. The only way for that to really stick in the long run however would be to create a Constitutional Amendment that bans individual income taxes in the US. (arguments to the existing constitutionality of the income tax aside) Otherwise within a few years you'd see the whole cycle start back up again.
     
  15. citizenzen macrumors 65816

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    #15
    I don't buy that for a second.

    Public welfare needs to go? No Social Security? No Medicare? No promise of Universal Healthcare?

    That's not the world I want to live in.

    Tax me. Tax me more.

    But stop wasting it on war and start taking care of the people back home.
     
  16. ThisIsNotMe macrumors 68000

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    Aug 11, 2008
    #16
    Please elaborate as to why I need Social Security?

    If I were to take the money I give to Social Security over my life time and invest it in "safe" treasury bonds I would get >3% return on that money compared to a < 1% return.

    Social Security is nothing more than another program designed to redistribute wealth. The reason people are against touching it is because they paid into it their entire lives. If they had never paid into the program they would be far better off.

    There is a case study of a county (maybe city) in Texas that somehow opted out of Social Security for its employees. The retired employees are far better off.
     
  17. citizenzen macrumors 65816

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    #17
    Now you could just say, "**** them. If they didn't plan ahead then they deserve everything they get."

    But I prefer to think we can do better than that.
     
  18. jackc macrumors 65816

    jackc

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    #18
    You don't want to give money to the rich, right?

    So why do you favor a system that redistributes from relatively poor workers to relatively rich retirees? Make it a welfare program if you want redistribution.
     
  19. ThisIsNotMe macrumors 68000

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    Aug 11, 2008
    #19
    You have yet to address my point that those people would be better off had they never paid into the system in the first place.

    Social Security is nothing more than an interest free loan to the federal government. That is why there is a difference between national debt, public debt, and intergovernmental holding debt.

    Someone would be far better off putting their money into treasury bonds (or other investments) rather than Social Security.

    Well and also a private investment is owned, can be deeded, borrowed against in times of emergency, sold, ect while Social Security can be reduced or taken away on a whim by congress, cannot be passed through an estate, isn't owned, ect.

    Trust the government vs owning a private asset. Hrm.

    (Then again we know the ultimate goal of the program isn't to provide a safety net so why even pretend)
     
  20. citizenzen macrumors 65816

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    #20
    The rich seem to have no problem with doing that for themselves.

    It's the poor that I believe need to attending to more than the rich.

    ----------

    What's that saying ...?

    If ifs and buts were candies and nuts we'd all have a merry Christmas.

    Yes. If we all saved like good little boys and girls, then this would never be a problem.

    If we never encountered divorce, injury, illness, layoffs, stock market failures or other finance-threatening issues, then this would never be a problem.

    Nice little fantasy world you live in.
     
  21. jackc macrumors 65816

    jackc

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    #21


    So why do you support a program that redistributes from poor to rich instead of a welfare program?
     
  22. citizenzen macrumors 65816

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    #22
    Do you mean Social Security?

    If you can explain to me how it redistributes from the poor to the rich, maybe I would change my mind.
     
  23. jackc macrumors 65816

    jackc

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    #23
    Simple. Poor workers pay, it goes directly to retirees who don't need it.
     
  24. citizenzen macrumors 65816

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    #24
    The poor workers get that money back when they retire ... in theory, of course.

    The people Social Security really screws are those who die early and never have the chance to get their money back.

    That's a discrepancy nobody can control.

    Mind unchanged.
     
  25. jackc macrumors 65816

    jackc

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    #25
    Sure, later the system will tax other poor workers, and will have cut benefits by then since they also have to pay out to rich retirees. As long as you're aware of how it works.
     

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