Taxing the rich

The argument always being made by conservatives that if you lower taxes on the rich and corporations it will help to create jobs is absolutely absurd!  To be fair, it certainly makes sense that if you RAISED taxes on businesses that MAY cause them to attempt to make up for the loss by cutting labor costs, but I say MAY because they would have to calculate if getting rid of workers would be the best strategy to counteract the effect of the higher taxes.  So though they might cut the labor force, it would depend on the specific circumstances and other possible solutions would certainly be considered, and in some cases other cost saving alternatives to laying off workers might make more sense.  On the other hand, if you LOWER taxes on such businesses they have NO incentive to hire more workers EVER.  Let's use a simple hypothetical example.  Say you own a small electronics store that sells flat screen t.v.'s, stereo equipment, etc., and during economic good times you need 10 workers (not all there at one time) to keep up with the necessary work to be done (waiting on customers, ringing up sales, getting merchandise from the storeroom, etc.).  But when a recession hits your store has far fewer customers because more people are out of work and don't have the buying power so you no longer need 10 employees, because 7 is more than enough to take care of the reduced flow of customers (plus the fact that your profits have gone down so you can save money by paying fewer workers), so you regrettably feel you need to let 3 of them go.  Three years into the recession your sales are still in the same anemic condition, so you still have 7 workers, which has worked out to be the right number considering how much work needs to get done on a daily/weekly basis.  That year, the federal government passes a law that lowers your business tax rate by say 15%.   Why on earth would any business owner with a brain use that tax savings to hire new workers  at that point? The answer: THEY WOULDN'T.  Why? Because if you went back to 10 workers (the number you employed during good times) you would have employees with nothing to do because your business is still being victimized by the recession and you don't need them.  Do businesses hire people even when they don't need them, just because they feel sorry for them, and have no problem giving them a paycheck for standing around? NEVER!  So lowering taxes does NOTHING to stimulate job growth because (here's where the economics comes in) it is consumer DEMAND that stimulates the economy, production, and employment, not a glut of money given to employers.  My example (simple as it may be) illustrates the faulty logic behind supply-side economics, which has been around a long time, is still being peddled, and has never made sense.  Consumer DEMAND drives the economy!  Look at what's happening right now. Corporations are sitting on trillions in cash, and unemployment is either going up or staying where it is (high!).  So if they're not hiring when they are already overflowing with capital (which is just smart business because they KNOW there is little DEMAND out there) why would they do so with even more cash acquired through tax cuts?  They would not!  THIS COMMON AND OLD AND TIRED ARGUMENT MAKES ABSOLUTELY NO SENSE!

Confessions of a beginning blogger

I begin this endeavor hoping that I may eventually reach many people, but also with an admission that even if no one reads my words but me, it will bring me some sense of satisfaction.  I don't claim to have all the answers to the multitude of issues our country and world face, but I do have years of experience studying social phenomena through the prism of historical study and teaching.  I believe I have something necessary and important to add to the serious issues now confronting us (even if no one else agrees with me).  As I sit here writing this our country is in a frightening place, the likes of which I have never seen in my lifetime.  We have a huge economic crisis (that may be getting bigger), political paralysis that makes it unlikely that Americans can expect help from Washington anytime soon, two incredibly destructive wars (both in terms of human life and economic cost), and a whole host of other major problems.  This blog was started because I must speak out on these issues even if I am the only one that listens.  I will make no pretense to neutrality (not a requirement for bloggers), though I will try to be fair.  To give an example just as a starter, with plenty more to come, I think it is quite clear that though President Obama has offered poor leadership in his term in office to date, what I find truly terrifying and astonishing is how the Republican extreme right (especially the self-proclaimed Tea Party) is promoting ideas and policies that will not only fail to solve our problems, but that actually make those problems worse.  A clear and informed reading of history (which the Tea Party claims to know so much about) should make that readily apparent.  Much more to come as the days progress.  WAKE UP AMERICANS.  THIS IS YOUR COUNTRY. YOU HAVE ACCESS TO INFORMATION AND YOU HAVE A VOICE.  All OF OUR FUTURES HANG IN THE BALANCE. EDUCATE YOURSELVES AND MAKE THAT VOICE HEARD!