Confessions of a Job Creator by Rob Morris

The argument below is perfect.  A very succinct explanation of late/post industrial economics.   The Republicans dream of old ways: control of the means of production.  That was a monopoly.  That got them lots of money.  That enabled them to be called “job creators.” 

Unfortunately for them, we live in an age of a demand economy.  A demand economy is beyond the control of Republicans, a fact which they’ve hated for 50 years.  In a demand economy, the “job creators” are the “demanders” – consumers.  If the people have no money, they won’t demand.  No demand = no jobs. 

Business owners in the 21st century are not job creators.  They are demand suppliers.   No demand = no jobs.  Using the government to make rich people richer is not class warfare.  It’s theft.  Its time we called the Republicans on it.    

Now, all this said, we still have the little ‘ole issue of ecological limits.  Over-promising is a bad thing.  This demand economy is also disappearing.  Ecological limits is forcing – forcing  – a new economy on us.  We can live even better in this new, “solar economy.”  Will we choose to?

————-

From Rob Morris

I’m a job creator.  And job creators are important.  

At least that’s what we’ve been hearing from Republicans lately.

House Speaker John Boehner cited “job creators” and “job creation” 26 times in a speech about the economy last week.  

And in that speech, the Speaker invoked us job creators to attack the Republicans’ Unholy Trinity: taxes, regulation, and government spending:

Private-sector job creators of all sizes have been pummeled by decisions made in Washington.

They’ve been slammed by uncertainty from the constant threat of new taxes, out-of-control spending, and unnecessary regulation from a government that is always micromanaging, meddling, and manipulating.

To hear Boehner’s version of events, the government stands as the sole obstacle to us job creators as we valiantly attempt to create more jobs.

Indeed, the entire Republican establishment keeps talking about the special role we job creators play in our fragile economic recovery.  

In their “House Republican Plan for America’s Job Creators” – a 10-page, large-type tome [PDF link] about the same length as this blog post – the House Republican leadership repeatedly promise to slash the Unholy Trinity of tax, regulation, and spending.  On Sunday talk shows, more of the same.

If only we job creators paid less money in taxes, Republicans say, we would hire more.  

If only we were free from government regulation, we would hire more.  

If only we were less concerned about government spending, we would hire more.

As much as I appreciate Republicans’ apparent concern – their willingness to dump money in my pocket, their longing for my freedom to pollute with abandon, their eagerness to drive the nation to the edge of default to keep government spending in check – here’s the thing:

Their efforts won’t help me create a single job.

Not one.

In fact, Republican attacks on taxes, regulation, and spending do quite the opposite, because Republicans are thoroughly wrong on the mechanics of hiring.  

I don’t hire because I have extra jingle in my pocket.  I don’t hire because I can avoid complying with some regulation or tax.  I don’t hire because the government is spending less.  I hire because there’s more work to do

No responsible businessperson is going to hire simply because they have extra money lying around or because they can dump motor oil in the sewer. As generous as I might be, I won’t hire out of charity. 

Entrepreneurs hire because they have work to do, and a new employee can help them get that work done.  They hire to help meet demand. And demand is fueled by customers who have money to spend.

And that’s the fallacy of the Republican job creator mythos: Job creators don’t “create” jobs.  Our customers do.

And the evidence proves the Republican fallacy. Taxes are at historic lows [PDF link]. Corporate profits are at record highs. Government spending has collapsed.  These are the very conditions under which, according to Republicans, we job creators should be creating jobs.

But we aren’t.

Despite these supposedly wonderful conditions for job creators, one in six Americans remain unemployed or underemployed. Income and household wealth has stagnated for over a decade. Instead of hiring in this environment, corporations are hoarding record stockpiles of cash in the face of weak demand.  

No demand, no jobs.

That’s not to say that we entrepreneurs – let’s just drop the “job creator” garbage – are powerless.  We can foster conditions which promote growth (the right business model, the right service, the right people); but we need customers with a willingness to spend to make our businesses grow and to create an environment where hiring is possible and profitable for us.  

Bottom line: Give me money, and I’ll sock it away in the bank.  Give me customers, and I’ll give you jobs.*-

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One response to “Confessions of a Job Creator by Rob Morris

  1. You’re not the only person who has noticed this. I believe we have not only passed the point of diminishing returns on increased “productivity,” but we overshot it by a considerable margin. Businesses do not want to hire people anymore. They purposefully avoid hiring them not because of taxes but because they make more money if they don’t. They only hire when demand requires it, and very often now even increased demand only means a few more hours for existing underemployed workers, not more jobs.

    One author (named below) put it this way:

    “I have, in the past, written about many of these horrid features of Capitalist economies, especially its abject immorality. Today I want to discuss an obvious falsehood that still gets repeated especially by right wing politicians and their counterparts in the economics profession and the business community, that is, businesses, not governments, create jobs.

    This generic claim is, of course, obviously false and its generality makes it grossly ambiguous. What precisely does it mean, especially since the politicians who utter it spend piles of money and time trying to get jobs that are not created by any business? No business created the jobs of Congressman or President, so what sense does it make for such a person to claim that businesses, not government, creates jobs? The claim is utterly stupid.

    In fact, businesses have no interest in creating jobs. Consider the vignette described above. Merchants flocked to the mining camps after gold was discovered and they left when the lode petered out. They did not use the capital they acquired from the miners to open productive businesses to provide jobs to the now jobless prospectors. In capitalist economies, capital is not acquired to be spent; it is acquired to be accumulated. Employees are merely means to that end, and whenever a business can accumulate capital without the use of employees, it will do it. And that is what has happened in large measure in America today. Businesses have found ways of accumulating capital without the need for American employees and government has aided and abetted businesses in doing so.

    So, when a politician advocates giving financial incentives to businesses to induce them to create jobs, those politicians are involved in a ludicrous absurdity. All the proposal does is provide businesses with another tool for extracting money from common people without even having to deal with them, and the capital acquired by businesses in this way will merely be added to the capital accumulation bank. Why would a business want to create a job with it and put that capital in jeopardy? To assume that businesses will use that capital to create jobs is the fallacy of supply side economics, which, incidentally, is based on nothing but pop-psychology.

    Supply side economics is based on the belief that if the government cuts taxes on the wealthy, they will invest their savings in new factories fitted with new technologies that will produce goods at lower costs, that newly hired workers will increase employment, and that more output will increase tax receipts. The economy will lift itself by its bootstraps. But there is no way to make sure the wealthy actually invest their wealth in productive enterprises, especially in the U.S. This entire theory is based on the mere pop-psychological belief that if you give a person money, s/he will do “the right thing” with it, namely, invest it in productive ways. But nothing forces wealthy people to do that, and they haven’t, worse, never really have, since creating jobs is not an essential business function, only making money is, and getting financial incentives from government is merely another way of making money, Giving money to businesses will not end recessions or depressions. In fact, it is likely to prolong them, since businesses will not go where money cannot be made, because merchants are attracted to money like flies are attracted to dung. Businesses do not exist to create jobs. Jobs are created by businesses only when it suits their purposes.”

    John Kozy is a retired professor of philosophy and logic who writes on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on http://www.jkozy.com/ and he can be emailed from that site’s homepage.

    There is no way the mc-wally-wort jobs being created in this country can provide living wage jobs or sufficient tax revenues to run either local, state, or federal government programs – even essential ones. I just want to smack someone when I hear some idiot pundit say that people aren’t spending because they’re “afraid” or “worried” about something. Bull. People aren’t spending because their hours and/or wages have been cut, or their pay frozen five years ago – meanwhile real inflation is 4% a year, meaning prices for everyday necessities is up 20% over the last five or six years while their wages went down or didn’t move. It’s not rocket science. People are broke. And until wage stagnation is eliminated, they will stay that way. Hence, no demand and no recovery.

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