"Job Creators" and lowering taxes for the rich

I recently got into a debate with a conservative friend and found some things really striking. Basically, I argued that the uber-rich do not create as many jobs as they think.

He proposed that demand is fine, because otherwise why else would businesses be profiting so well? It must be the consumers.

But profit is revenue - cost. Personally, I feel it’s because demand is suffering. When the recession hit, lots of people were laid off and businesses started taking operations overseas to limit costs. This massive cost-cutting meant larger profits for those who were still lucky enough to be working.

I asked him why he felt businesses should be given additional tax advantages when wages are at all-time lows and employment is in the tanker. Businesses are already enjoying low tax burdens and huge profits, and are sitting on massive cash reserves.

Apparently there’s a “environment of uncertainty” because taxes are too high and regulation is stifling. But isn’t it really the fact that demand is low? A failure of supply-side economics? If demand is low, why would I hire people if the resulting output won’t get purchased? To me, this seems to be a blatant demand problem, and yet I keep getting told that it’s all about taxes. Lower the taxes, and they’ll take the risk, etc. But I don’t see how Obama’s policies can be considered so harmful to business when they’re some of the most lenient in history.

I don’t understand how much merit these points have or if the data is speaking plainly, here. Which side better reflects reality? Do the rich really act as the job creators, or is it more of a mantra that gets repeated for some ideological pursuit?

Are taxes actually high from a historical perspective? I think one could reasonably look back at a time when tax rates were higher, yet the economy was doing OK. What does this tell us about high taxes causing an “environment of uncertainty”?

Are there significantly more regulations now than there were in the past when the economy was doing better? Is there an economist anywhere that would say that our recent job losses during the past recession were due to stifling levels of regulation? OR that “stifling regulations” even played a minor part in causing the recent recession?

This tax and regulation explanation that lead to “an environment of uncertainty” that then leads to job losses actually make no sense at all to me. There is no evidence that I can see for this explanation.

It seems to merely be an ad hoc rationalization that fits a pre-determined world view that would have us believe that any level of taxes and regulation are always bad.

Jobs are created when there is demand. Period.

Business does not create a position out of the goodness of their hearts, thought they might want you to think that. They do it so they can make more money.

Welcome to the Dope, freeone

If you look through GD threads, you’ll see that this has been covered many times. Businessmen are not stupid - they don’t hire new workers or add production capacity if there is no demand. You might ask your friend exactly why they would add jobs for no reason.
As for our horrible taxes, you might ask him to compare capital gains and high bracket tax rates now, with a bad economy and inadequate investment, and the '90s, with a booming economy and high investment. If anything, it shows he is totally wrong.
Finally, all business pretty much involves uncertainty. Does he think that a capitalist willing to invest in a very risk venture is going to be stopped by the possibility of his taxes going up a few percent assuming he actually makes money? Anyone so frozen in fear by this that they forgo good opportunities is a pussy, and should just work at making widgets on an assembly line.

I do not understand why so many businesses then are reluctant to hire when they’re sitting on huge profits and cash reserves.

Because customers aren’t buying stuff. They’ll hire when they need more workers to handle all the extra orders/customers. Keynes says that in situations like these the government needs to step in and raise demand by spending more money.

Probably because there is no change in consumer demand.

How come the GOP gets away with all these talking points, then, if there’s really no data to back any of it up?

How can someone like Romney be so rich and yet make these sort of basic errors?

The GOP (or really any party for that matter) does not run on logic and data.

They run on talking points that may or may not reflect reality. The purpose of the talking points is not to educate, or show data, or convince voters that their position is the most logical; the purpose is rather to appeal to base emotion, to sway voters to their side using rhetorical devices and sometimes outright falsehoods.

To echo what others have said here: Hire them to do what? Sit around all day picking fleas off the other employees? Why on earth would a company hire another employee when there is not enough demand, and hiring that employee would not lead to higher sales and thus more profit?

To put it another way; Companies don’t hire extra employees because they have extra money lying around. They hire them in order to make more stuff (or provide more services) because their current number of employees can’t keep up with demand.

Is there something about this OP that isn’t covered in the other 2 active “job creator” threads in this forum?

I guess the fact that the OP was banned is new.