Unless said businesses rely on cheap Chinese/Indian/African labour. Then you’ll get fuck all.
- Why will demand increase, if no one has any money to buy anything?
- Why would anyone start a new buisiness when there is barely enough demand to support the businesses there already are?
They don’t employ very many people, either, do they? How are they the “job creators”?
We are now living in an America where we should feel nostalgic for the days when the masses were exploited. Better exploited than marginalized.
You MAY get more jobs. There are a few exceptions.
If demand increases but productivity increases as well, new jobs will not be created. This is the case with the U.S. manufacturing sector where we manufacture more than ever with fewer people - but more machines. The problem with employment in the U.S. car market isn’t that we don’t make cars, its that it takes very little human labor to manufacture a car. At Target, they can sell more stuff, but if people are willing to use the self check out lanes, Target will hire more stockers, but their cashier headcount will remain stable.
More business MAY be created to compete with existing business - if there is enough potential return on investment and if the barriers to entry are low enough for the investment to occur. You’d be stupid to go into the DVD by Mail business right now - even Netflix is apparently trying to get out of it. Significant costs to enter the market, very little profit, limited investment horizon while the market moves to streaming.
Both of these thing are “jobs only” - the third fly in the ointment of our jobless recovery is globalization. My company laid off about 1/5 of its workforce in 2009. Its now hired all those jobs back plus. But while most of those jobs were cut in the U.S., most of the hiring has been overseas - where we can get the same quality of employee (often better) for less than half the cost. And we aren’t talking about unskilled labor - we are talking developers and engineers. Our unskilled labor pool has continued to shrink - we continue to replace people with machines.
Because there’s a lot of them, and they grow, sometimes very big and very quickly. Many will fail; some get up to 40 or 50 people and stick around. Some get huge.
I’m kind of shocked I have to explain this stuff. Do people not take a drive through industrial parks now and then and see the size of most businesses? Walmart or GE are not typical businesses; typical businesses are SmithCo Fabrications or Jones Plastics Inc, some place started up a few years ago that now employs 19 people and hopes to employ 25. If you want the government to help job creators, have them help people start and grow those businesses.
But they won’t, because it doesn’t get them votes. If you bail out General Motors you get praise for all the jobs you “saved.” If you bail out 5,000 small businesses, nobody gives a crap because nobody knows their names.
[QUOTE=Buck Godot]
- Why will demand increase, if no one has any money to buy anything?
[/QUOTE]
Consumer confidence will creep back up with time. Foreign demand will creep up. We’ve had recessions before, you know, and the damndest thing; they always ended, even though people asked the same question you’re asking.
Because they think they can do it better, or see a particular type of demand that isn’t being filled, or they have a better mousetrap to sell. People are starting new businesses right now. Some will succeed.
An acquaintance of mine started a new business this year. He’s up to $25,000 in revenue a month despite the alleged lack of demand. He’s hired one person and needs another. More will follow. How? He’s got a product nobody else has and he does it really, really well.
Yes of course, this is exactly why recessions and depressions happen. It’s a vicious cycle, there’s less demand for goods and services, business cut back on workers, workers have less money and can’t afford as many goods and services, so businesses cut back on workers, so workers have less money. The Great Depression lasted over a decade because of this problem, then along came World War II.
This isn’t anything mysterious. The feeback loop nature of economic contraction has been understood for a long time.
Nope, I woke up and found myself unemployed, and therefore with no money. So I stopped buying a lot of stuff. Even with some employment now my finances are so crappy that if it isn’t rent or food or toilet paper I pretty much don’t have the money to buy it.
The vast majority of the small businesses the Republicans are defending as “job creators” have never created a single job, have never had any intention of creating any jobs, and if you cut their taxes they will never create any jobs in the future. That is because the vast majority of small businesses are corporate entities formed by individuals, as individuals, specifically to receive preferential tax status:
This “job creators” nonesense is another act of class warfare by the investor class to protect their wealth from any impact by the economic downturn, and ensure that any austerity measures are borne by the working class.
Not quite. Although I don’t like the term “job creator”, in the context of this tax discussion, it’s people making over $250K per year. For your analysis (well, his analysis, but you brought it here) to be correct, we’d need to weed out all of those small businesses with taxable income < $250K.
But still, there can be no disagreement that job growth comes from small businesses primarily. That is, as they try to become “big” businesses. Most won’t, but you can’t know in advance which ones those will be.
You know we could just give a tax break to anybody who actually creates jobs in this country. If you create enough jobs, I don’t care if you pay taxes at all.
One hopes those are not the only two choices.
I wonder if some form of public shaming would be helpful. I’d love to see a website that just puts together publicly available information (for any corporation) that shows:
Income
Revenue
Federal Income Taxes Paid
Number of US Workers Added / Dropped in the Last Quarter
And let the public outrage take root. If MegaCorp shows up with a spectacular amount of revenue, pitiful tax load and net layoff of workers, perhaps their CEO should be made to sweat a little.
Other choices are fast disappearing.
That’s the solution! Don’t let unemployment stop you from doing your bit for America! Take a gun down to the store and make some demands! 
Tempting as that might be, I don’t think we should use the tax code to set up some companies to be at a competitive advantage to others. Companies that grow get their own reward through increased revenue. No need to kill a company just because it isn’t growing at the “proper” rate.
I would agree with you if that was the structure. But I think companies are not the problem, individuals are. Any way that companies reinvest (domestically) in real capital, will in the end create jobs. So I wouldn’t limit the tax breaks to simply employment, but to provide an incentive for investment instead of the current incentive to take the money out of the business, or invest it overseas, or use it to make more money gambling in the financial markets.
Besides that, most of the current tax law is designed to provide specific companies with tax advantages to reward them. A general method any business can take advantage of would be an improvement. And I would rather cover our bills through economic growth instead of charging everyone enough to cover the current debt levels.
Paying welfare to companies to create make-work jobs is just stupid. Why not hand the welfare check directly to the unemployable slob who doesn’t have a job? At least then he can sit at home and watch TV rather than pretend to work at a useless “job” that doesn’t produce anything useful.
If there truly is no useful work that a person can do, we should at least give him the dignity of an honest welfare check, rather than make him dance like a goddam monkey on a stick. Of course, even better would be to pay the slobs to pick up trash along the highways and paint over graffitti and so on. If the taxpayers are going to pay corporations to create jobs, why not cut out the middleman?
First of all I didn’t suggest paying welfare to companies to create make work. I didn’t suggest paying anything to companies. I suggested giving companies tax breaks for creating jobs. Which is something they want to do, but are having a hard time making it economically practical (in their terms). So a tax break is just an incentive to create jobs. It’s not going to be enough of a break to pay the entire cost of an employee, so companies won’t do it unless they can get some level of productivity from the employee. And there’s nothing wrong with having the government pay people to perform useful work, even work of minor importance. But everybody can’t work for the government, somebody has to be producing to grow the economy. And without economic growth we are on a downward spiral towards economic collapse.
Why would they hire people without demand.?If you gave them 20 workers for free, what would they have them do, stand around all day? If they do not have sufficient demand, they do not need more workers. Workers help them produce more product. If you are not selling enough, you just do not need more workers.