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Working people are the Job Creators

In the last couple of days, I have been very disappointed in the decline of our collective American IQ.  There have been new and former commenters who actually believe that Republican shit about the Job Creators.

Of course, the right leaning voters aren’t the only ones who have lost their ability to think critically.  There are plenty of people on the left who have developed latent idiocy.  They’re the ones who are running around screaming how narcissistic, ruthless and incompetent Obama is while at the same time screaming even louder that Bill Clinton is worse even while they admit that most Americans did better under his administration and still think very highly of him.  Oh, and they tend to ignore all of the evidence that says that Obama is waaaaaay to the right of Clinton on just about everything.  So, you know, perspective and all that.

But back to the right leaners who seem to think that the regular people, such as themselves, are not worthy.  I don’t know why they feel they are not worthy.  Maybe it has something to do with them being a tad more religious and believing in original sin or something equally 4th century. Jesus certainly never thought that average working people were not worthy.  But whatever.  For some reason, they seem to be primed to accept that working people are not as good as people who have scads of wealth.

Let’s just put aside the fact that you don’t need to be fabulously wealthy to be successful.  And you don’t necessarily  get rich from working hard.  Sometimes, contentment is enough.  As long as you have  a relatively nice place to live, food to eat, can pay all your bills and can save for the future, you’re doing ok and life is pretty damn good.  That is independent of wealth.  I have theory called it “niche theory” but I won’t go into it here.

Anyway, leaving aside the philosophical aspect, there is a straightforward reason why the real job creators are average working people.  And when I say working people, I mean anyone not living on their investments.  That means drop outs to professionals. I’m not an economist and I’ve only taken a couple of econ courses but none of this is over your head.  It’s all common sense.   Here’s how it works: you get money from work or a benefit that you worked for.  With that money, you can buy things.  And the more things you can buy, the more things need to be created for you to buy.  And the more need for things to be created, in either goods or services, the more people need to be hired to create those goods and services.

Note that all this depends on there being money priming the pump.  There must be a release of money into the system that gets the whole ball rolling.  That money can come from either the private or public sector.  There is no good or bad money.  Public sector money is just as virtuous as private sector money in priming the pump.  The money goes into the hands of working people and those working people pass that money into the hands of other working people.

Let me stop here and say a few words about the Government.  Wealthy people make The Government sound like some big, unresponsive, evil thing.  But the government is whoever you elected to office.  They’re supposed to spend money in the way that YOU direct them to.  So, if you elect a lot of people who want to spend money in Iraq and Afghanistan, that’s what they’ll do.  If you elect people who want to give all our disposable tax money to bankers who wrecked the economy, that’s what they’ll do.  If you don’t want the treasury to run out of money to fund highways, schools, high speed internet infrastructure and all of the other stuff that makes this country a potentially nice place to live, stop voting for the people who are giving away your tax money to other wealthy people.  It’s YOUR government and you have a right to say what things are important to you to fund.  If Government is not working for you, get rid of the people who aren’t listening to what you want.  We don’t have to live in a banana republic.

Our little Depression is in part being caused by the lack of money in the system going to working people.  Without money, there can be no demand for goods and services.  So, when you see the term “lack of demand”, that’s what it means.  People ain’t got no jobs, people ain’t got no money.  Giving people jobs and money will put money back into the system and will help generate demand.  It has nothing to do with how hard you are working.  You can work very hard for no money at all.  Lots of people do that as interns and volunteers.  They do it so their skills don’t rot while they’re waiting for the job market to improve. But working hard for no money tends to not help the economy.

Last week, Paul Krugman brought up obsolescence as another source of demand.  When your car breaks down and you can’t get to work, somehow, you will find some money, somewhere, god knows how at this point, to buy another one.  So, at some point, Americans will have to go back into debt to buy new things and that will stimulate demand and hopefully trigger more hiring.

Now, the people in the private sector would have you believe that they’re the only ones who can release the money.  This is not true.  It is true that they are sitting on obscene wads of cash but in my humble opinion, they are creating an artificial scarcity.  The money is there, they just don’t want you to have it.  That’s why they are laying off so many people, in some cases to the detriment of their own industries.  They have an agenda.  Their agenda is to make working people cry uncle and give up something important, like social security or medicare.  But those are benefits that working people worked hard for and I don’t think we should yield one nanometer.  To do so would allow the wealthy to commit fraud.  Back in the 80’s, we were told to pay extra in payroll taxes in order to retire comfortably. And then the wealthy borrowed from our trust fund to pay for their tax breaks.  Now, the time has come to pay the piper and they don’t want to give up their tax breaks to pay us back.  That’s what this is all about.  So, they’re going to make us feel unworthy of our own money in order for them to keep what they borrowed.

But there’s more to it than that.  Many of us younger working people got shorted on pensions and were forced to put most of our savings into 401Ks.  That gives the wealthy financial sector interest free loans that they can use to gamble at the global casino. Average working people get a small percentage of the winnings and bear all of the risk if the bets don’t pan out. The brokers and bankers take a huge cut and pay themselves handsomely with bonuses. Not only can they gamble with our money without restraint, anyone under the age of 59.5 years old can’t remove that money from their 401Ks without paying a steep penalty- the 10% excise tax.  That excise tax is on top of regular income taxes. If you make your living off of your capital gains, you pay a measly 15%.  If you’re an average working person and you want to use your 401K to start your own business, you could end up paying more than 40% on the money you withdraw.  Sure, it’s meant to discourage you from removing your money before retirement but if you haven’t got a job or prospect of one, this is a cruel and pointless tax.  Unless you are a broker, in which case, it’s a good thing that people can’t take their money out of the casino without a huge penalty.  More for you to play with.

So, the money that might have been used to fuel a recovery, for example having working people start their own businesses, is tied up in the stock market.  Working people *could* remove that money at any time and recirculate that money into the economy but the tax is so onerous that most people won’t do it until they’re desperate.  That’s a shame.  If I were the Democrats, I’d remove the excise tax on regular working people and let some of that money get released.  Yes, some people will have less to retire on but since the economy is going nowhere, the chances are good that they’re going to have to tap those funds at some point just to survive and pay their bills. Might as well use that money to make money and your own work. There are exemptions from the excise tax but they are too tight and serve no useful purpose at this point.  We need economic stimulus and as long as the government is not making the wealthy get off their asses to release the money they’re sitting on, we should have access to our own funds to do it.

Government stimulus is the other thing that would have a multiplier effect.  That can come in many forms, such as unemployment insurance and public sector jobs.  The more teachers, firemen, police officers, librarians, etc, who are able to buy goods and services, the more goods and services will be needed and the more people will be hired to fulfill those needs.  If you strangle public sector jobs, there will be fewer people demanding goods and services and the economy will stall.  The more the economy stalls, the less tax revenue the government is able to collect and the more the tax burden falls on the remaining working people who are still working or have money.

These are not terribly difficult concepts to understand but for some reason, a greater proportion of right leaning voters fail to understand them. They tend to listen to authority figures and not question them.  Apparently, wealth gives you more authority than being an average working person.  The right leaning voter should sit and think about why they think so little of their own capacity for knowing what is good for them.

The bottom line is YOU are the job creators, not some rich person who is playing a game of economic chicken.  At some point, those rich people will have to release the money they’re sitting on in order to not permanently damage their own ability to sell goods and services to regular working people.  We’re getting pretty close to that point.  But many of them are not thinking clearly.  They’re just in a selfish, greedy frenzy.  They’re going to take all they can because there is nothing to stop them.  And they’ve been very successful at screaming “TAXES!” to frighten right leaning voters to vote for their chosen mouthpieces and politicians.

Like I said, this is not terribly difficult to understand, so I can only guess that there is something that is preventing average right leaning Americans from understanding it.  I blame cable news.  ANY cable news.  And radio, especially talk radio.  And Facebook.  I wouldn’t use it.  I think those three things have a tendency to make people stupid because the wealthy are very good at using those outlets to spread deceptive messages.  They use your friends to spread them on Facebook.  Well, it all sounds so reasonable and who likes taxes?  But if you believe them, you’re only going to make the conditions for economic recovery that much more difficult to achieve.  That’s what they want.  They are using you to put pressure on the system so working people give up what they have worked so hard for.

Deep down inside, you know there is something wrong but you can’t put your finger on it and you’re just frustrated and angry.  That’s just where they want you.  They want you to take it out on other working people.  If you do that, they win.  Because they are not the job creators, they are the economy destroyers and your future masters.

They are not nice people.  They’ve already destroyed the economy once and they’ll do it again until you stop them.  Why would you want to be like them?  They are greedy, selfish, cruel.  they lie, they are careless.  They don’t care about you and they certainly don’t want you in their club.  They take great delight in making you turn on other working people, people who are more deserving of your respect.  They know that when people are under stress, they’ll take short term solutions to relieve that stress and they know how to make you turn on your friends and family.

That’s what’s going on here.  If you buy into it, you’re making it easy for them to screw you and everyone you know.  So, drop the “commie!” bullshit. It’s meaningless and shows a profound lack of understanding about communism or socialism. That doesn’t mean you have to vote for Obama.  Just wake the f^&* up and realize what’s going on here.  The more you listen to the bad guys, the longer this economic recovery is going to take.

13 Responses

  1. Well Said – Thank You

  2. Much, much better post 🙂 Pairs well with that ‘4 Histories of the 47%’ post that came out yesterday.. rortybomb I think.

  3. “In the last couple of days, I have been very disappointed in the decline of our collective American IQ.”

    Here’s one, the many people who still believe ‘Wall Street’ is a gauge/fundamental for our national economy. This belief has always rubbed me wrong for many years now when peeps recite it without thinking. So here’s a nice post from Mark Cuban today:

    What Business Is Wall Street In?

    Cuban says,
    “The important issue is recognizing that Wall Street is no longer serving the purpose that it was designed to. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings. What percentage of the market is driven by investors these days?”

    When financial services make up the overall profitability of stocks, with no desire to remedy this, there can be no such thing as a market designed for investing in potentially good outcomes/things for America. For example, If you went to Vegas sat at the blackjack table and the majority of players were making their profit ONLY through the amount of games played, why would anybody concern themselves about chancing a winning strategy? (traditional winning strategies such as in getting a 21-blackjack, not busting, etc). My2c.

    • If you are trying to say that the market has become a thing unto itself and sort of an artificial investment entity where the participants trade baseball cards with each other but have no interest in really fielding a team that competes and takes risks and wins, then I think you are right. It is certainly true of the pharmaceutical industry where the financial industry has forced companies to get out of risky businesses like antibiotics, contraceptives and CNS drugs. We do not invest in these therapeutic areas because there is no instant gratification. It’s just a big money pit until someone makes a significant discovery. So, it’s much easier to just swap the pharmas around between big players and eek out as much value as possible from the swaps themselves. But the underlying industry is very, very sick because the mergers, acquistiions and layoffs have had a damaging effect on research. Meanwhile, investors are thinking that they can swoop in on some little biotech company and license or buy the patents from a bunch of struggling scientists and then turn around and make that patent into a billion dollar blockbuster. But that ain’t going to happen as long as the scientists have no way to fund their research, which tends to be expensive, grueling and time consuming. Even the nerds have to eat.
      So, no, there won’t be any chancing on winning strategies. The game will just keep going between the big players, swapping cards, until there are no cards left and the game ends.

      • and the game will contract progressively – George Gilder speaks of “Metaphysical Capital” the skills and drive of entrepreneurs. You repeat the mantra of drones needing to eat without ever entering the Venture Capitalists’ Economy…if your idea, or invention or drug meets a demand, or if your technology springs from the best of what’s already on the market and is the “next new, exciting thing,” then the world is your oyster. You may have to modify your working conditions and pace, and you may have to accept that you won’t have time to learn all about tax shelters as you become “rich” off your independent effort. But you will be wealthy beyond all fantasy, attracting likewise independent performers whose life is the work, not the risk. And you will create – first YOUR “job” and then your entire community of collaborators. The Economy moves when people interact. It takes everybody getting out and making contact, follow-up, determined to connect ideas with each other day by day, for the sheer joy of working at optimum effectiveness. That IS Communism, but without the State involved, it is the ideal. Include the state and it corrupts into comerades looking out for themselves instead of each other.

        • I don’t think you grasp the reality of the situation. If some poor shrub scientist’s dinky biotech finds a cure for something, there’s going to be a Merck or Pfizer waiting like vulture with a 400 page contract written by the best legal team money can buy that will separate that scientist from his patent. He will get a pittance. Oh sure, it might be a pittance that will make his life comfortable for a a couple of decades and that’s proabably all anyone should get. But the company that buys it is going to be raking in the big bucks and goring everyone who has to cough up $45,000 a year for the treatment. Someone is definitely going to get unbelievably rich. It won’t be the inventors.
          Don’t tell me that can’t happen. It happens all the time. I went to a seminar last year where a presenter says that if a big company offers you a 1% return on the patent you sell to a big company, take it. You’ve got bills to pay.

  4. Very good down-to-earth description of the present situation. The basic problem is the complete capture of our economy by short term financial interests. This financialization has been ongoing for nearly 40 years and both parties are culpable. This bankers’ grip must be dislodged for recovery to begin. Just like the fault for this is bi-partisan, the solution transcends partisanship.

    • The solution doesn’t “transcend” partisaship. It was the VichyDems collaborating bipartisanly with the Repuglans who “transcended partisanship” to create this situation to begin with.

      What is needed is a sincerely partisan Social Class Justice Party which takes no prisoners and shows no mercy towards its Class Enemies above it on the Class Ladder.

  5. To answer the MP maker, the fat cats who got the lion’s share of the tax cuts kept right on moving all the jobs to countries where they can treat the workers as slaves in everything but formal legal status. 👿

    • And the various Free Trade Agreements and Laws prevent us from tarriffing those goods and services out of our country in order to force
      thingmaking and thingdoing back into our country. And whichever Brand Name Candidate wins will bring us worse of the same with the Trans Pacific Partnership, which a bipartisan Repuglan-VichyDem coalition will of course ratify.

      The cure is to abrogate and repeal and abolish every FTA, probably going all the way back to the First GATT round passed under Harry Truman I think it was. That won’t happen of course. We can expect 20 more years of deepening “Soviet Collapse and Yeltsinization” of America under twenty more years of the Forced Free Trade Globalonial Occupation Regime.

      You and I will both still be alive in 20 years. If America is full of millions of new working-middle class workers in new and/or restored and repatriated industries, you can look back on my prediction and laugh your ass off. I will mind being laughed at, of course. But if 20 more years of Forced Free Trade is a good thing, I will admit my mistake as I cry while counting my money.

  6. RUR, I’m confused here. I don’t support the “Free” Trade global plutocracy. Did I give an impression that I did? 😕

    • No, in hindsight you certainly did not give that impression. I must have been self-confusing mhyself at the time.

      I will ammend that part of it to . . . those who DO think Free Trade Agreements are a good thing will certainly have the last laugh on me in twenty years if my prediction of a general Free Trade burndown of the American economy to a fraction of its present wealth turns out to be wrong. And they, in whomever general, can laugh as loud and long at me as they like. In twenty years we should know.

  7. “I have been very disappointed in the decline of our collective American IQ.”

    So was this guy. 😈

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