As inspired by this thread.
Are CEOs “Job Creators?” If you give them a personal tax break, do they use that to create more jobs?
Even the right know this is in part a myth. It’s certainly not the “economic law” they pretend to believe in. Some of a corporate tax-rate cut would go to new jobs. But a hell of a lot would go to CEO annual bonuses, to dividends, and to a bigger, fancier office tower with a big fountain in front.
They don’t care, because they want the money.
Even “jobs” are becoming a myth.
Current economic thought was formulated by economists when there was more work than men, who never dreamed the opposite would ever be the case. Now, make-believe do-nothing jobs have to be invented from whole cloth, in order to force unneeded labor to spend time at a workplace, to justify the Calvinist principle of no-work-no-eat.
A century ago, one man contributed enough work to support the consumption of an extended family of five. Today, a childless couple, both working, can barely contribute enough work to support the consumption of the two of them, even after automation, digital efficiency, and off-shore labor adding a share.
It takes more bank employees today to do the “make work” of banking, than when it was done with quill pens by men on high stools wearing green visors.
Can you provide examples of such jobs?
I just did. Banking. In the 1950s, it took 2 or 3 minutes to open a bank account, and never more than a minute to deposit or withdraw. Now, my bank is in a 40-story building full of people conforming with government-imposed regulations. None of which really need to be done to accomplish the transactions of banking. They are jobs that add zero to the national productivity.
I could pick up the phone, wait for the operator to say “Number please”, give my bank’s number, tell SUsue my name, and she could confirm a transaction. In less time than it now takes to log on to my online account on my laptop., even if I don’t have to have a verification code texted to my cellphone. As we speak, supernumerary nerds are busy at work re-confusing the menu with new incomprehensible icons.
Here’s another. When I was in high school, there were 40 teacher, two janitors and two women working in the office. Today, less than half the employees of school boards are teachers. Another. My town had a four-man police department with a car and a motorcycle. Town now twice as big, PD now has 30 employees and a dozen vehicles.
I thought that “everyone” knew that jobs are provided by poor people. And you don’t even have to give poor people a “personal” tax break to encourage job creation because poor people don’t pay “personal” taxes.
Well, that would provide jobs to a lot of construction workers and at least one fountain builder. I think it’s better for the economy that they spend their millions rather than lock it in a vault and roll around in it.
Leaving aside the laughable comparison between 2017 and a 1917 lifestyle with 1917 housing, healthcare (good luck with that strep infection), vehicles, food quality, etc., etc., everyone who checks the census before posting knows that families with two earners have been flat since 1990. This amidst the steady quality of life improvements and increasing household income. Two adults living together is cheaper than two adults living separately, yet we see more adults choosing to live alone over time. Must not be so hard to get by.
As for banks, US banks employed 2.1 million as of June of this year. In 1992? 1.8 million. A 17% increase over a 25 year period where the US population increased 26%. And we haven’t even looked at number of branches or revenue per employee yet, if those numbers are even available. I can deposit checks or transfer funds without even leaving the house or god forbid having to actually call someone.
Do CEOs create jobs because they got to keep more money? No. Not directly.
But considering no CEO has a Scrooge McDuck money vault that they store their money in so they can swim around in it and laugh at the peons, it has to go somewhere.
From a personal perspective, said CEO might do a number of things with extra cash.
- buy stuff
- invest money
- save money
- give money to charity
- other
The point is the extra money ends up in the economy when stuff is bought, or invested or even saved (banks need savings to lend money).
If it is a corporate tax cut, then that money has to go somewhere as well.
New buildings employ people to built those buildings.
New equipment needs people to make, install, maintain, operate.
Investments
Stock dividends (those go to people that then move into the economy)
Expansion (more workers, buildings, equipment, etc)
My point is, it seems to be assumed that if there is less money going to the government, the evil CEOs and Board of Directors are going to hoard that money and it will not be used for anything that grows the economy, but in reality, that money even invested grows the economy.
Especially the part of the economy supporting off-shore tax havens and empty shell corporations. I’m sure the employees of those banks and law firms appreciate the paychecks.
I can’t easily find the numbers, but I also suspect the amount of money sloshing around the system is far greater now than then. If you had to have people to enter these transactions manually, there would be a lot more bank employees.
Not that this has anything to do with the subject.
Oh, the money goes somewhere, all right.
CEO makes $50 million after his tax cut rather than his measly $45 million. Does he now say, “wow, I can finally afford that car!” Give 10,000 poor people $5,000 each, and you’ll see a lot more spending.
Same thing at that level. If there was a shortage of money for new production, this could actually be useful. Today there is tons of cash, in rich hands and in corporate hands. But, if the consumers are not buying, why invest in new production for them? I’ve never gotten a good answer to that one.
You also need to make sure that the new production is in the US and is not in automated factories which do not create lots of jobs. US manufacturing is up - US manufacturing jobs are down.
Would be nice. Left wing billionaires give money to help the deserving, right wing billionaires like the Kochs give money to get their taxes cut some more.
Hope you have some, since the other things you list don’t do it.
If banks were short on money to lend, they would raise interest rates on savings. Notice any of that? When they are paying under 1%, under the inflation rate, low as that is, we can conclude that they don’t need our money all that badly.
Yeah. Bonuses for execs, and the shareholders. Who, on average, are rich enough that the points above apply. Some people are trying to get corporations to promise to either hire or raise salaries with their windfalls. Sound of crickets.
Don’t need new buildings if you are not hiring anyone to put into them.
Don’t need new equipment (except replacements) when your production volume is not going up.
Rich people. My stock dividends (and I’ve moved a lot of my investments into dividend stocks) go right back into my investments, which aren’t moving much. I’ve got enough that I don’t need any more. There are plenty of Dopers without a lot of money - give the money to them, and the economy will do better than if I get it. So tax increases for me, and especially for the rich, will do a lot more for the economy than tax cuts. Especially if they go into needed infrastructure improvements which do employ people and which makes the life of lots of people better.
So, Ms. CEO has a company with enough people to meet her needs, and enough capacity to meet the needs of their customers. Give her more money. Is she supposed to hire people and buy machines which will go idle? She’ll look at you and say “do you think I’m stupid?” She’ll give herself a nice raise, and maybe buy back stock which makes her shareholders happy.
Check sometime on how much they are hoarding now. It isn’t because they are evil, it is because they are smart enough to invest only in high return opportunities. Give money to the people who are likely to spend it and then they will invest in more capacity.
BTW, thanks for giving what I think is an accurate view of the right wing position. It is bullshit, but it is accurate.
Nah,there’s already plenty of money just sitting around in the hands of rich people and big corporations. (It’s not the main story at the link; search for “Merrill” once you’re there.)
The problem is, if you are going to profitably invest in something, where does the ‘profitably’ come from? Your investment has to produce goods or services that someone’s going to buy.
If all the buying capacity of all those someones is already fully utilized, and there’s still plenty of money sloshing around at the tip, looking for an investment with a decent rate of return, that money isn’t doing any good. It’s just useless in terms of economic growth.
A tax cut for the rich and the corporations will just result in a larger pile of useless money, and less money in the hands of the consumers, reducing the buying capacity side of the equation. Things will be even more out of whack than they already are.
This tax cut would make sense if we had too many dollars in the hands of consumers, chasing too few goods and services, with little investment capital available to create more goods and services. But that’s exactly the opposite of where we’re at.
Growth comes from innovation, using science, machines, or organization to produce more with less inputs. Innovation comes from investment which is risking money by giving it to potential innovators. The higher the rewards the more investment and innovation there will be.
There still needs to be consumers to purchase the end result of investment and innovation.
The conservative argument on economic growth:
Economic growth requires investment of capital. But you need to have enough capital to invest. Poor people and middle class people don’t have this kind of excess capital. They spend the money they receive on fulfilling their own living expenses. The only people who have enough capital to do things like start a new business or finance technological research are rich people. So set up a tax system that lets them keep more of their money and they will invest more money. The result will be economic growth. The rich people will benefit by receiving a profit from their investments and everyone else will benefit by receiving access to the goods or services that now exist because of their investments.
In the real world, growth does come from innovation, but innovation doesn’t come from investment. Largely, it comes from graduate students. You know, the folks who won’t be able to afford to exist, under the Republican tax plan.
This is because while that couple now produces twice as much per labor hour as in the 1970s (and since both are working, the family productivity is 4x), their income is about the same per labor hour.
The medical cartel and education cartel then have greatly increased their costs. You now basically have to go to college and get a master’s degree in the right majors or your job prospects will be…not amazing. This in turn means the credible institutions have jacked their tuition rates into the stratosphere.
Same story with healthcare. Oh, and real estate has also jumped up in cost.
So that’s why a couple without kids can feel like they are barely getting by.
Innovation often creates its own new markets.
However, innovation is risky. In the old days it came from two places - labs set up by big monopolies and near monopolies, like AT&T and IBM, and the government. While Microsoft and Google have labs also now, they don’t do the kind of pure research Bell Labs did. Government funding for technology isn’t what it used to be, and requires the taxes the Republicans hate.
There is innovation from VCs, but not for the kind of very risky research that the monopolies funded.
(This last is really to puddleglum.
I used to review grants for NSF. I quit when they went from innovative research to small business grants on totally useless topics, most from companies which specialized more in getting grants and less in actually selling something.
And graduate students get paid for out of government research money, something else the Republicans are not fond of.