Business doesn't create jobs.

[ThomWV]

I want to dispel a Republican Myth Here is my argument.

There is a Republican mantra that divines that business creates jobs and then goes on to suggest that low taxes are the only thing that will cause them to do so. They then misrepresent the chain of events that leads up to this miracle of economics. Their argument goes something like this. Lower taxes and the newfound funds will be used by business to hire in order to produce goods and services. When these goods and services come to market their mere presence will spur demand, now capable of being fulfilled by the newly hired workers. Were it to work that would indeed be a miracle of economics.

No, that is not how it works. Here is how the chain of events actually plays out:

When people have the money to buy their demand for products and services goes up. Companies wishing to take advantage of that demand must up production or increase their potential to render services and to do so they are forced to take on additional labor. It is money in the hands of people, not money in the hands of business, that creates jobs.

So the first order of business is to find a way to get disposable funds to the largest number of of people possible if one wants to increase employment.

[Angry Dragon]

1. There is a huge hole in your arguement

The people that you need to convince of this are the ones that have a huge hole in their brains.
They do not listen, they do not hear, they do not see and all they want to do is sit on their asses and tell everyone who will listen that they are doing the best they can.

[rucky]

9. They know very well that what the OP says is true.

it's the first thing they learn in Econ 101 - supply & demand.

Then they get their MBA and learn to work the system to defy the laws of supply and demand and focus on the more predatory tactics to get the most for the least - to create wealth without demand (or force demand through "public-private partnerships"), no matter how much money it costs them to set it up (paying lobbyists to pay off Congress critters), just to prove they can do it. And apparently it pays off, because in then end, they have full control over demand.

[dkf]

2. A company with a shaky balance sheet isn't going to hire/expand either.

It takes both access to capital and demand to make it work. If either is missing forget it.

[CJCRANE]

3. That's what business loans are for. nt

[dkf]

7. Who wants to loan to a company on the verge?

Not me.

[CJCRANE]

13. Plenty of small businesses will take a loan to expand

if the demand is there, it's common practice in the good times.

Put money in the pockets of the middle class and the demand will be there.

[Cosmocat]

4. profit ...

is the prime directive for any business venture. As noted, if there is a demand and the capital to do so, a business will create jobs to fill the demand if that is NECESSARY.

But, times have changed dramatically, and frankly, the productivity of the average worker has increased several times over.

It might have taken 4 or 5 people to do the books for a 10 million dollar business 15 years ago, but with the accounting software and computers we have now, it takes a book keeper and a financial officer.

Frankly, overall, today, businesses exist pretty much to KILL jobs more than make jobs. The bottom line is the bottom line, why have 5 people in the accounting department when you can have a book keeper and CFO?

[ThomWV]

6. You see, you said it too.

Look at your very first sentence. You say "a business will create jobs" That is not what happen. It was the consumer's demand that created the jobs, not the business who stepped in to profit from that demand. This is not a chicken and egg thing either. The Demand has to come first - no business can survive, let alone profit, if there is no demand for the goods and services it is capable of producing.

[Hydra]

5. Supply side vs demand

Demand is the usual generator. Like right now, there's a HUGE actual demand, but the required token(money) has been choked off.

We've been running off a false model for a long time- create something, and then create a demand for it(usually by lying).

The problem is that once someone gets comfortable with a bad habit, they think it's the only way to do something.

As for the tax cuts, that's just naked greed with a fig leaf of "It will benefit other people too!" Every tax cut given does not reduce a price, it increases a profit.

[eleny]

8. That's why government is the one that has to step in and create the jobs

Repairing infrastructure is an area of government job creation. We all know there's a need for it. So these jobs would help both problems, the need for jobs and the need for repairs.

Republicans know this as does the corporate sector. But they both appear to want the Dems to fail so they can gain control of the nation.

So logical arguments fall on deaf ears. The corporations and the Republican Party are using racial tactics to wage their battle. Fear trumps logic in their book. So we need to stay sharp and fight the real tactics being used against us.

Elijah Cummings was on State of the Union today. He pointed out that in the black community in Baltimore the unemployment rate is 40%. The corporations and the Republicans don't give a crap. And they'd like it just fine if the president would join the ranks of those unemployed.

[Angry Dragon]

11. It takes money to repair........no money there

[eleny]

12. You have two choices as I see it

Borrow money to get it done or start planning on how you will weather the stalemate. Jump start or die.

I'd rather we just borrow and get the repairs done because we know we need them. There's no magic bullet only a long, slow slog and tough rows to hoe.

[Angry Dragon]

15. How are you going to convince the republicans

to let this country borrow money when they do not even want to fund the programs they now have??

Progressive taxation has a long history: As Jefferson said in a 1785 letter to James Madison, "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." That is where I would start.

[eleny]

18. Of course, being a liberal, I agree with progressive taxation

Both of our ideas could work in tandem. Borrow in the short term to get people to work and pay back loans with the monies garnered from progressive taxation.

However, the R's and their corp masters are determined to use fear and loathing to win in 2012. Hopefully, they'll be so over the top in their approach that they won't appeal to the independent voter. Hopefully, most independents can't relate to racial tactics.

[texshelters]

16. Right on

Peace,
Tex Shelters

[GKirk]

10. Lots of businesses create demand...

...that's what advertising is for.

"Be cool and buy this product"

[CJCRANE]

14. IMO advertising is more about brand loyalty during a downturn

because there is less spur of the moment purchasing, people think more carefully before they spend their money...but in the boom times we'll buy any old piece of...stuff...e.g. pet rocks, useless gadgets etc. That's when advertising creates the demand, when people have disposable income.

[GKirk]

17. Pet rock is a good example of...

...a business creating demand. I don't recall anyone saying, prior to it's introduction, "I sure wish someone sold pet rocks".

[CJCRANE]

21. Good point but let's look a little deeper...

did the inventor of the pet rock create a demand or find a need that was unmet? (The idea behind it was the need for a maintenance-free pet).

Also, let's face it, there's always a demand for cheap novelty Christmas gifts and this idea just happened to be flavor of the month.

But let's look at the bigger picture. Let's look at GM and Chrysler at the height of the recession. They were making and supplying cars but the supply outstripped the demand because not as many people could afford to buy them.

So it isn't just a case of supplying stuff in any quantity and people will just buy it. There's obviously a limit.

So the real question at this time is (in order to grow the economy): how do you create more demand?

You can try making more stuff but we keep coming back the limiting factor: disposable income. Increase the disposable income and you'll increase the demand.

So we're both right to a certain extent.

[blkmusclmachine]

19. Consumers fuel the engine of the economy. Take away their buying power, and $h!t happens.

n/t

[sad sally]

22. Bingo

Right now, today, employers can offer low paying jobs and people will take them because they have to work, but low paying jobs means weak sales so there's little demand for new employees. The circle keeps going around...

[jtuck004]

20. Demand creates jobs. /nt