Monday, June 18, 2012

The Job Creation Myth

It suddenly became clear. I heard it watching to Melissa Harris Perry on yesterday. One of her guests, Keith Boykin of CNBC said it so plainly, I don't know why the truth has eluded me until now:

"Business doesn't exist to create jobs; business exists to create profit"!


Now of course anyone else reading this is probably amazed that it's taken me this long to realize what a dummy I've been. But in my defense (and I do indeed think I've been a bit of a dummy when it comes to this), it's something I've known, but there's something about it that just didn't sink in.

So now that I've been 'enlightened' something else becomes clearer: if business exists to create profit, not jobs, then businessmen can only collaterally be considered 'job creators'. It is neither a direct intent and is only of a necessity a direct consequence. Businesses will only create the jobs they need and if necessary will create as few jobs as possible in order to maintain, if not maximize profits.

So how can a businessman - or more specifically a capitalist - seek elective office with the claim to be a job creator?! The fact is, if he (or she) is honest can't.

This video by capitalist Nick Hanauer provides a more - even blinding clarity - on the subject. And he explains the irrationality of insisting on believing they myth of 'business as job creator' in the excerpt from his Bloomberg op-ed below...

"It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again."

"Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system."

"Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high."

Aggressive cost cutting, including cuts in labor have led to great corporate profits. The job of business. However, in a country in which what passes for 'business' is paper shuffling and gambling on debt - nearly any one's debt - the absence of a strong manufacturing base is shutting out (and has shut out for years), the real American job creators. The consumer. So far, that's not been a significant part of the political and economic conversation.

Interestingly enough, we've met the job creator and he is us! Now whom are we trying to elect? If that's clear, then we can have a sane conversation about increased taxes on the rich, the income and wealth gap and economic recovery.

 But only if that's clear...

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