Saturday, September 27, 2008

Republican Lies I'm Sick Of...

Over the course of the next few weeks, I'll be porting related entries from my other (personal) 'blog... Some in order, but some, I'm sure, not. I'll try to date them with the same publication date as they held there. "Current" posts will probably be just mixed in.

With any luck, though, it won't be a bad mess. It's all related, even if not as topical as when it was first posted.

So... The economy sucks, and we're hemorrhaging jobs - If I remember correctly, population growth and other factors give us an estimate that we need to grow about 600,000 jobs a year to keep the economy (and the people it's composed of) well fed, but we're losing about 50,000 jobs per month.

So what's the solution? Why, lower taxes on business, of course!

Republican politicians will tell you, and their parrots will echo, at the drop of a hat, that lowering taxes on business is the only way to grow jobs.

This. Is. Retarded.

Lowering business taxes does not create jobs. Lowering taxes on the general population creates jobs.

Let's see...

Business taxes are levied on profits. Profits are a function of sales. Sales are a function of production and demand. Demand is a function of brand/quality, availability (supply), and price. Price is, generally, a function of the balance of supply and demand.

It's all a big push-me-pull-you. If demand increases, you either increase production or price. If demand decreases, you reduce price, reduce production, or try to increase brand/quality, usually by means of advertising. And so on, and so on.

So... What are the reasons you might hire more people...? There's only one. You're not able to meet current or projected demand for your product. That's it.

So what if there's a higher profit margin because they're not paying as much in taxes...? How likely is it that they'll hold a company meeting and announce "It looks like we've made about 10% more in profits than we were expecting, so here's what we're going to do. We're going to hire more full-time workers, at the same wages, and everyone can just work about 10% less hard. Everyone please remember to leave ten minutes early from now on, and I don't want to see anyone stroll in before 9.15 in the morning."

Republicans expect us to believe that, if corporate owners find some extra money in the till at the end of the day, they're going to do something with it besides smile and take it home.

Lowering taxes on business increases the net income of business owners. "What?!?" you say, "Republican politicians pushing policies that will increase the wealth of the wealthy...? Why, that's shocking!"

"No, no, no!" they tell us. "You're missing the whole point!"

"If we give these poor, poor business owners - crushed under the weight of the largest business taxes in the world - a small tax break, they'll invest that money into expanding their business! That's how they'll create more jobs!"

Wait... Let's look again. You can't expand without demand. If there's not someone 'over there' who's willing and able (and, preferably, desiring) to buy your product or service, it'll do you no good to expand 'over there'.

And, believe me... If there are people 'over there' who are willing and able and desiring (or not) to buy a product, neither hell nor high water nor business taxes are going to stop a business from expanding. Doubt it? Go to outer Mongolia and buy yourself a Coke and a Big Mac.

If they want to expand... They will. They can already afford it. They're rich*. If they don't have the cash on hand, they'll borrow it. Happens every day. What's not going to prove a make-or-break difference on whether or not they expand into a new market is certainly not a few percentage points of profit paid or not paid in taxes.

Any taxes they have to pay will be figured into the cost of the expansion, and into the price of the product. They're good at this kind of stuff. They're businesses. They have accountant homeboys who can figure it all out without breaking a sweat.

You can't expand without demand.

So, how do we create more demand in the marketplace? Reduce the tax burden of workers... Lower and middle classes. Give a rich person a tax break, and they'll phone the broker, buy some real estate, maybe spend another week in Paris every year. Give a poor person a tax break, and they'll spend every penny of it in the domestic marketplace**. Which means higher demand for retail level goods and services... Which means more jobs in production, retail, transportation, and myriad other connected markets and industries.

Wealth never ever trickles down... It only 'evaporates' up.

History shows us, quite clearly, that under "Democratic" economic and domestic policies, the working classes do much, much, much better than they do under "Republican" policies, and, with all those working class folks spending their paychecks, the "rich" do quite well under "Democratic" policies as well.

While it's true that the "rich" do even better - amazingly, astoundingly so*** - under "Republican" policies, the poor do catastrophically worse, and the middle classes slowly dissolve into new poor. Worse, the Republicans - and the wealthy who support them financially - seem unable to see that, without a middle class to feed on, they'll soon be left to eating their own young.

Or, perhaps, the concept just doesn't much bother them.

After all... Once you've got a really nice level of wealth, there's hardly any such thing as "bad times"... Especially in the modern market. Short selling sub-prime mortgages netted savvy wall Streeters hundreds of billions... And, if the housing market really crashes, those with massive liquid assets will simply be in a position to bulk up on real estate holdings at bargain basement prices.

That's all an economic crash really means, usually... The poor starve, the middle become poor, and the very wealthy pick up the morsels that the upper middle drop on their way down.

Perhaps the reason this particular Republican lie bothers me so much is not simply because it's a lie... Both parties do plenty of that. It's that it's such an obvious lie, so easy to see around, and yet so few people bother to even look.

Saying that tax breaks for corporations create jobs is like saying that charging those who eat the most less for meals creates food.

* Yes. Of course, there are 'business owners' who aren't rich. I'm sorry to have to say it, but business taxes or no business taxes, they're probably not going to be the ones expanding. If they have a fantastic idea, but don't have the credit or capital to really expand on it, it won't be long at all until you see someone who is rich creating and expanding a knock-off in another market. Welcome to capitalism.

** Never mind that most of the product in the domestic marketplace came from Mexico and China... That's another subject.

*** The US "Wealth Gap" - the average economic distance between the rich and the poor - has skyrocketed under the current administration, even more than it always does under Republican rule. In 2007, 10 Americans earned a combined income of over $16 billion - more than the GDP of some countries - while most jobs paid less than $10/hr and the economy was beginning to grind to a halt. I can't find the reference now, but if I remember correctly, the wealth of the top one half or one tenth of one percent has grown over 600% while the bottom fifty (?) percent have enjoyed a net decrease of something like 45%. Naturally, if anyone has the reference I can't find, I'd appreciate a link.