POLITICAL PARTY POOPER

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Basic Rules For Job Creation

Posted by politicalpartypooper on August 2, 2010

Despite Conservatisms’ undying devotion to trickle-down economics, there are really only a few basic rules when it comes to job creation.  Concentrating wealth at the top isn’t one of them.

1.  Consumers create demand.

2. Demand creates jobs.

Simple, right?  Taxes have little to do with job creation, as can be seen by following charts:

From the Tax Policy Center,

From USPolitics.about.com

See all of those years where the top rates were 70% and above?  From 1936 until 1980, top marginal tax rates never fell below 70% in the US.  We didn’t see any higher unemployment figures from 1949 until 1980 than we do today, where tax rates aren’t even half what they used to be.  So what’s all this talk about raising taxes being a job killer?

It’s hog wash!  Taxes don’t create jobs, and tax cuts don’t either, unless the tax cuts go to the people who spend the money, like the poor and the middle class.  Again, it all goes back to the basic rules of economics:  consumers create demand and demand creates the need for more jobs.  Supply Side economics is a fable. Demand is color-blind, class-blind, and tax-blind.  If a person wants and has the money for it, he’ll buy it.  That’s how it works.  The more people who buy it, the more there is demand for that product.  That only and always starts with the lowly consumer.  So, in essence, consumers create jobs.

Got it?  If not, look at those two charts again.  During periods where the Trickle-downers were taxed the most, at or above 70%, unemployment remained unaffected by the actual tax rate.  Consumers create jobs, and if those consumers are jobless, they can’t very well spend money to create more jobs, can they?  Where are the jobs?  Overseas, where the Free Traders wanted them.  And who wanted Free Trade?  The wealthiest Americans and corporate greed.

People, if after seeing these facts, you still believe in Trickle Down economics, then I suggest that your economic theory is based on faith and not on actual fact.  Economics aren’t anecdotal.  The numbers are what they are.  Taxes on the wealthy and even taxes on small businesses do not stifle job creation.  But consumers without money to spend does.  That’s what goes on in America today, like it or not.

The reason there are no jobs in America is because there is no demand.  It feeds on itself, and will only get worse so long as we continue to allow large corporations to ship American jobs overseas.  Don’t applaud the Supply-siders; they are lying to you.  The only thing that matters in a free market economy is demand.  That’s it.  It’s simple.     Ω

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4 Responses to “Basic Rules For Job Creation”

  1. I can't believe you said that said

    (The reason there are no jobs in America is because there is no demand.)

    It would be interesting to see a chart using the nafta factor and the ‘we are a global society’ theme in regards to income tax rates and the various economic meltdowns we have seen over the last few decades.

  2. I can't believe you said that said

    (The reason there are no jobs in America is because there is no demand.)

    It would be interesting to see a chart using the nafta factor and the ‘we are a global society’ theme in regards to income tax rates, unemployment rates and the various economic meltdowns we have seen over the last few decades.

  3. the better path to compare to the tax rates is not unemployment but GNP growth. Productivity, innovation also drives demand. The higher unemployment is more a product of monetary instability. Supply side is not just about lower taxes on the wealthy, but lower taxes across the board, especially the middle class COMBINED with a stable currency.

    • politicalpartypooper said

      GNP does not represent a true measure of economic health. Especially since it does not take into account the fact that Middle Class income is disappearing while upper Class income is sky rocketing. As for higher unemployment being a product of monetary instability, I disagree. Our higher unemployment actually has more to do with the rush of our two political parties to give away American jobs through Free Trade.

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