# Who's buying into the "job creators" angle? **URL:** \ **Category:** Great Debates\ **Created:** [July 15, 2012, 10:21pm UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354 "2012-07-15T22:21:15Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [July 16, 2012, 1:57am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/21 "2012-07-16T01:57:34Z")
> [@greenslime1951](#): > > You didn’t seem to understand what I meant so I’ll restate it more simply. > > We don’t know if the last decade’s tax policies helped or hurt job creation. There is no way to go back in the past, change those policies, and see if it would have made any difference. > > You seem to view increased corporate profits as an inherently bad thing, and the existence of the rich as likewise an evil. I submit that there have been times in our history when corporate profits reached record lows, and those time weren’t much fun for _anybody_. When did I say being rich was evil? And corporate profits would be fine if they actually led to job creation. But there is no evidence. here is your argument from what I can tell: Supply side tax cuts occur at the same time jobs are created = supply side tax cuts create jobs Supply side tax cuts occur at the same time as miserable job growth = supply side tax cuts prevent jobs from being eliminated It is all theoretical win/win. If the economy does well it is because of supply side economics. If it does bad then it would be worse if not for supply side economics. As for your statement that times when corporate profits reached record lows were not fun for anyone isn’t true. Corporate profits were much much lower in the 90s, and the economy was doing much better. [![](https://static.seekingalpha.com/uploads/2010/5/27/162115-12749832060334-Tom-Armistead_origin.JPG) ](https://static.seekingalpha.com/uploads/2010/5/27/162115-12749832060334-Tom-Armistead_origin.JPG) Does that mean low corporate profits = a better economy? Not necessarily. But you can’t claim that high corporate profits lead to a better economy for people. There is no evidence for that. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [July 16, 2012, 2:02am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/22 "2012-07-16T02:02:04Z")
> [@greenslime1951](#): > > Wages and benefits are _expenses_, and so are figured into the company’s profit and loss statement before taxes are ever calculated. As with any other companies, taxes are paid on the _net_ profit, not the gross profit. And when people say ‘you need to keep taxes low so companies will have money to hire people’ I don’t get it because the wages aren’t taxed, they are deducted before the tax is calculated. The implication being presented is that higher taxes means less money to hire people. I understand the difference between gross and net profit. But the rhetoric on the right implies that they don’t (in actuality I’m sure they do understand that, but half-true rhetoric that wages and benefits for working class jobs are taxed at 35% can get the working class to support supply side economics). ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 2:23am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/23 "2012-07-16T02:23:12Z")
> [@Wesley\_Clark](#): > > When did I say being rich was evil? And corporate profits would be fine if they actually led to job creation. But there is no evidence. A basic economics course would be of great benefit to you. I’ll restate one more time: there is no way to _empirically_ test either the premise that increased corporate profits _do_, or that they _don’t_, lead directly to job creation–not without a time machine. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 16, 2012, 2:34am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/24 "2012-07-16T02:34:06Z")
> [@greenslime1951](#): > > A basic economics course would be of great benefit to you. In the absence of demand for products, corporate profits do not create jobs. Why would they? That’s why the jobs disappeared in the first place; corporations laid them of because demand for products dried up, not because they lacked capital. They have trillions of dollars in capital, waiting for the market to change. Sounds like basic economics to me. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [July 16, 2012, 2:46am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/25 "2012-07-16T02:46:00Z")
> [@greenslime1951](#): > > I’ll restate one more time: there is no way to _empirically_ test either the premise that increased corporate profits _do_, or that they _don’t_, lead directly to job creation–not without a time machine. So it’d be okay with you if we raised taxes on the rich and corporations? And you didn’t answer the rest of **Wesley** ’s question. When did he (or anyone in this thread, for that matter) say that being rich was evil? ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 2:52am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/26 "2012-07-16T02:52:26Z")
> [@Fear\_Itself](#): > > In the absence of demand for products, corporate profits do not create jobs. Why would they? That’s why the jobs disappeared in the first place; corporations laid them of because demand for products dried up, not because they lacked capital. They have trillions of dollars in capital, waiting for the market to change. > > Sounds like basic economics to me. I’m sorry that that sounds like basic economics to you. You should reexamine what you just said: “_In the absence of demand for products…_” In the absence of demand for products, _nothing_ is going to create jobs. So to answer the question meaningfully, you would have to stipulate that there is, in fact, consumer demand which could be satisifed by the expansion of capital, the resultant marketplace, and yes, jobs. _All others things being equal, capital creates jobs_. The fact that many corporations are stockpiling **CASH** (_not_ capital), does nothing to disprove that basic axiom. ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 3:02am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/27 "2012-07-16T03:02:18Z")
> [@Robot\_Arm](#): > > So it’d be okay with you if we raised taxes on the rich and corporations? > > And you didn’t answer the rest of **Wesley** ’s question. When did he (or anyone in this thread, for that matter) say that being rich was evil? His painting of (increased) corporate profits as an inherently bad thing could have had no rational justification other than the populist view that businesses, corporations, rich people, etc. are themselves inherently undesirable. I was more deriding the overall populist POV than that of Wesley, though, so if that isn’t his true outlook, I apologize for implying that it was. His somewhat shaky logic kind of impelled me to see his posts as just another anti-big business diatribe. To answer your question, no, it wouldn’t be okay in a vacuum. There would have to be some demonstrable benefit from doing so. Sometimes, in fact, the tactic can backfire, in that increased taxation of the rich and corporations can actually _decrease_ revenue. In Oregon, we recently passed a soak-the-rich bill that increased the marginal tax rate of the highest earners. The revenues collected from that portion of the tax dropped by $150 million in the next year. Three major companies that were going to build major operations in the Portland area decided not to after the tax was implemented–if you want to talk about the relationship between taxing the rich/corporations and jobs. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 16, 2012, 3:04am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/28 "2012-07-16T03:04:05Z")
> [@greenslime1951](#): > > You should reexamine what you just said: “_In the absence of demand for products…_” In the absence of demand for products, _nothing_ is going to create jobs. That is just fundamentally wrong. We increase the debt, start spending on infrastructure, get some paychecks flowing, before you know it, people start spending again. It is how we have always gotten out of recessions; at least, for the last 100 years or so, since the Federal Reserve was formed. > [@](#): > > _All others things being equal, capital creates jobs_. If you learned that in college, you should ask for your money back. ---
**Author:** ![fumster](https://avatars.discourse-cdn.com/v4/letter/f/e9c0ed/32.png) [@fumster](https://boards.straightdope.com/u/fumster)\ **Post date:** [July 16, 2012, 3:07am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/29 "2012-07-16T03:07:26Z")
> [@greenslime1951](#): > > I’m sorry that that sounds like basic economics to you. > > You should reexamine what you just said: “_In the absence of demand for products…_” In the absence of demand for products, _nothing_ is going to create jobs. > > So to answer the question meaningfully, you would have to stipulate that there is, in fact, consumer demand which could be satisifed by the expansion of capital, the resultant marketplace, and yes, jobs. _All others things being equal, capital creates jobs_. The fact that many corporations are stockpiling **CASH** (_not_ capital), does nothing to disprove that basic axiom. God, those stupid CEOs. All they have to do is convert all that cash to capital; maybe they should be fired. They are so stupid they probably think that they should fully utilize their current capital investments until demand increases. I don’t understand why people just don’t buy more stuff though. What difference does it make if you max out one credit card or two? I think that the 99% is basically unpatriotic for not spending more money. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [July 16, 2012, 3:08am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/30 "2012-07-16T03:08:56Z")
> [@greenslime1951](#): > > To answer your question, no, it wouldn’t be okay in a vacuum. There would have to be some demonstrable benefit from doing so. Sometimes, in fact, the tactic can backfire, in that increased taxation of the rich and corporations can actually _decrease_ revenue. In Oregon, we recently passed a soak-the-rich bill that increased the marginal tax rate of the highest earners. The revenues collected from that portion of the tax dropped by $150 million in the next year. But without a time machine we’ll never really know what the revenue would have been without the tax increase, will we? ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 3:14am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/31 "2012-07-16T03:14:00Z")
> [@Robot\_Arm](#): > > But without a time machine we’ll never really know what the revenue would have been without the tax increase, will we? Sorry, you don’t get to employ the internet kiddie tactic of sneering at a person’s argument in one breath and “adopting” it in another. In this instance, we had an almost constant adjusted-for-inflation revenue stream from the top marginal earners from 1995 to 2009 (1995 being the last year the top marginal rate was adjusted). After the soak-the-rich bill was enacted, revenue from the top marginal earners dropped by 60%, while revenues from the remaining earners dropped by 5%. Pretty strong cause-effect correlation. ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 3:16am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/32 "2012-07-16T03:16:21Z")
> [@fumster](#): > > God, those stupid CEOs. All they have to do is convert all that cash to capital; maybe they should be fired. They are so stupid they probably think that they should fully utilize their current capital investments until demand increases. I don’t understand why people just don’t buy more stuff though. What difference does it make if you max out one credit card or two? I think that the 99% is basically unpatriotic for not spending more money. I can’t tell whether you’re being sarcastic or not, but the fact that corporations are stockpiling cash and _not_ using it for investments or capital improvements, and that job creation is stagnant, would seem to suggest that a lack of capital investment at least _correlates_ with a lack of job creation. ---
**Author:** ![greenslime1951](https://avatars.discourse-cdn.com/v4/letter/g/e9bcb4/32.png) [@greenslime1951](https://boards.straightdope.com/u/greenslime1951)\ **Post date:** [July 16, 2012, 3:21am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/33 "2012-07-16T03:21:25Z")
> [@Fear\_Itself](#): > > That is just fundamentally wrong. We increase the debt, start spending on infrastructure, get some paychecks flowing, before you know it, people start spending again. It is how we have always gotten out of recessions; at least, for the last 100 years or so, since the Federal Reserve was formed.If you learned that in college, you should ask for your money back. If “we” (I presume you mean the government) started spending on infrastructure, wouldn’t that be creating demand for products and labor? You’re not seeing how circular your arguments are, so I should probably give up on you. You will believe what you want to believe. Spending our way out of a recession is by no means universally regarded as the magic solution. Doing so either increases debt (if we decide not to pay for it) or decreases productivity (if we do, by taxation).\* \*And if you think that increasing taxes increases productivity, well, then, we should tax them rich 100% to maximize productivity! ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [July 16, 2012, 3:25am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/34 "2012-07-16T03:25:30Z")
> [@greenslime1951](#): > > Sorry, you don’t get to employ the internet kiddie tactic of sneering at a person’s argument in one breath and “adopting” it in another. When did I sneer at it? You, on the other hand, dismiss statistics you don’t like because there’s no basis for comparison, and then happily cite others. > [@](#): > > In this instance, we had an almost constant adjusted-for-inflation revenue stream from the top marginal earners from 1995 to 2009 (1995 being the last year the top marginal rate was adjusted). After the soak-the-rich bill was enacted, revenue from the top marginal earners dropped by 60%, while revenues from the remaining earners dropped by 5%. Pretty strong cause-effect correlation. Yes. Certainly nothing else happened to the economy in 2009 that could account for it. ---
**Author:** ![drewder](https://avatars.discourse-cdn.com/v4/letter/d/57b2e6/32.png) [@drewder](https://boards.straightdope.com/u/drewder)\ **Post date:** [July 16, 2012, 3:37am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/35 "2012-07-16T03:37:41Z")
> [@Fear\_Itself](#): > > That is just fundamentally wrong. We increase the debt, start spending on infrastructure, get some paychecks flowing, before you know it, people start spending again. It is how we have always gotten out of recessions; at least, for the last 100 years or so, since the Federal Reserve was formed.If you learned that in college, you should ask for your money back. yeah that works so well every time its tried. It has been shown that FDR’s make work programs lengthened the depression. Keynesism was almost universally rejected in the 70s era stagflation. How well have all of our current spending and trillion dollar stimuluses / bailouts been working for you? Government spending does not create prosperity. It screws with price and other economic indicators and causes inefficiency in the market and wasted resources. ---
**Author:** ![Victor\_Charlie](https://avatars.discourse-cdn.com/v4/letter/v/7ea924/32.png) [@Victor\_Charlie](https://boards.straightdope.com/u/Victor_Charlie)\ **Post date:** [July 16, 2012, 3:51am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/36 "2012-07-16T03:51:56Z")
> [@Robot\_Arm](#): > > A decade? Republicans have been cutting taxes since Reagan. They are the cure for everything from economic uncertainty to gout. The whole Job Creators[sup]TM[/sup] thing may be recent, but for 30 years they’ve been saying that tax cuts lead to increased economic activity, which certainly suggests increased jobs. > > If it actually worked, we’d be up to our eyeballs in jobs by now. I was limiting my reference to Bush Jr’s tax cut. Remember, both Reagan and Bush Sr. raised taxes. ---
**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\ **Post date:** [July 16, 2012, 4:02am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/37 "2012-07-16T04:02:17Z")
> [@Victor\_Charlie](#): > > I was limiting my reference to Bush Jr’s tax cut. Remember, both Reagan and Bush Sr. raised taxes. I know. It’s rather complicated, with multiple brackets, and the definitions of those brackets changing. And is it a tax cut if someone lowers rates a lot and then raises them a little? But this thread is about who’s buying the argument about tax cuts. Regardless of the actual rates (and who changed them), the argument (under different phraseology) goes back more than 10 years. ---
**Author:** ![Victor\_Charlie](https://avatars.discourse-cdn.com/v4/letter/v/7ea924/32.png) [@Victor\_Charlie](https://boards.straightdope.com/u/Victor_Charlie)\ **Post date:** [July 16, 2012, 4:09am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/38 "2012-07-16T04:09:41Z")
> [@greenslime1951](#): > > In order to answer this question meaningfully in terms of the past decade, we’d have to get in a time machine, go back to the year 2000 or so, cancel the tax cuts on the eeeeeevil rich, and then see how things play out. The same could be said for any policy. What would’ve happened if we hadn’t waged what now looks like a disastrous war in Iraq? What if we hadn’t supported the mujahadin in the '80s. Here’s what we know: Since the tax cuts, unemployment has been on a fairly consistent rise and the 2% are wealthier than ever. We can’t know exactly what unemployment would be otherwise, but I’m not buying the argument that it would be even worse if the obscenely wealthy were slightly less obscenely wealthy. > [@](#): > > Let’s set aside the populist anti-rich rhetoric for juuuuust a moment. Taxing the rich reduces the supply of capital; whether you love or hate the rich, this is a basic truth. Taxing earnings–whether corporate or personal–increases the risk/reward ratio for capital investment, because it reduces the potential reward while doing nothing to reduce the risk. An eeeeevil rich person is less likely to open up a business if we raise his tax rate, because he’ll make less money if he succeeds, but lose the same amount if he fails. That’s great in theory, but they’re not spending their capital. How long does the hording have to continue before you give up on this rubbish? You want to see them create jobs with their capital? Tax them at a fair amount and use that money on much needed infrastructure. Voila! Jobs. ---
**Author:** ![Victor\_Charlie](https://avatars.discourse-cdn.com/v4/letter/v/7ea924/32.png) [@Victor\_Charlie](https://boards.straightdope.com/u/Victor_Charlie)\ **Post date:** [July 16, 2012, 4:23am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/39 "2012-07-16T04:23:57Z")
> [@drewder](#): > > yeah that works so well every time its tried. It has been shown that FDR’s make work programs lengthened the depression. Really? Care to cite that one? > [@](#): > > How well have all of our current spending and trillion dollar stimuluses / bailouts been working for you? Ask the U.S. Auto industry. The banking sector would’ve experienced a disastrous collapse. The recession would’ve turned into a full-fledged depression. Stimulus kept a hemhorrhage from becoming a bloodbath. Taking the Palin rhetoric won’t get you far. ---
**Author:** ![Victor\_Charlie](https://avatars.discourse-cdn.com/v4/letter/v/7ea924/32.png) [@Victor\_Charlie](https://boards.straightdope.com/u/Victor_Charlie)\ **Post date:** [July 16, 2012, 4:31am UTC](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354/40 "2012-07-16T04:31:25Z")
> [@greenslime1951](#): > > if you want to talk about the relationship between taxing the rich/corporations and jobs. Nobody’s talking about raising taxes on corporations. [Previous page](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354.md?page=1) [Next page](https://boards.straightdope.com/t/whos-buying-into-the-job-creators-angle/628354.md?page=3)