Thursday, May 24, 2012

Making Stuff Up

The notion that if you give a Capitalist some free money, say, in the form of a tax break, that he will use the money to hire people who will make a bunch of stuff that the Capitalist then hopes he can sell, is a stupid idea on its face.

Nick Hanauer
If you've ever had a business, or worked at one, or listened to the news for more than five minutes, or have more common sense than a snail, you know that only when a Capitalist determines that he can sell more stuff, i.e. when he has orders in hand, or when a market surveys says he can sell more stuff, or when he sees other businesses selling more stuff, only then will he hire and train more workers and spend the money for the related expenses of expanding his factory, buying more machines and raw materials, increasing his packing and shipping and distribution capabilities and so forth.

Republicans peddle this garbage, that tax breaks create jobs, all the time, and I've never heard a Democrat refute it, in fact, they go right along with it, which means either they are stupider than a snail or are in cahoots with Republicans when it comes to supply side, Reaganomics, trickle down economics, which of course they are.

If you give a Capitalist free money, whether it's in the form of tax breaks, or if he finds the money laying on the street, which is the same thing, it's going straight into his pocket -- he's not going to waste it producing goods for which there is no demand, no "market" -- and if you do that, give free money, our money, to Capitalists and if you let them attack unions and pit workers against each other by moving factories around the world, it's going to increase inequality, as it has been doing since Ronald Reagan and his daddy Margaret Thatcher and their public relations men first popularized the faux economics of supply side, trickle down, Neoliberal economics, which has never increased prosperity anywhere it's ever been tried except for the few at the top.

Demand is what creates jobs. Our demand. Consumer demand. Putting money in the hands of working people creates jobs. The more money, the more jobs. Stopping this practice of letting the rich confiscate more of the money our labor creates, and this practice of making us pay for government while the rich extort money from government, creates jobs. Equitable redistribution of wealth, putting money in the hands of mothers with children instead of slashing welfare and unemployment benefits and retirement benefits, creates jobs.

There's a video going around in which a "Venture Capitalist" named Nick Hanauer makes the same point I do but from the point of view of the Capitalist. It's brief and can be seen here, or you can read it here. There's been some controversy and charges of censorship over why the non-profit where he gave the speech isn't releasing it on its web site, like it does other speeches presented at its conferences.

As Hanauer points out, if giving Capitalists more money meant more jobs, we should be swimming in jobs, but we're not. Capitalist have more money, our money, money our labor created, than at any other time in history, and yet unemployment is very high and has been for a long time.

At least one program at Pacifica Radio, Background Briefing with Ian Masters at KPFK in Los Angeles, is using the speech to raise money. Pacifica Radio is all listener sponsored. No ads, no corporate underwriters like at National Public Radio. For certain sized donations you can get the speech on a DVD and/or a book by Hanauer that contains this and other similar ideas.

I've made the argument before, at more length, about the fact that giving free money to a Capitalist is not going to create any jobs. Others, including Hanauer, make the argument that the opposite is true. If you read or listen to his speech you'll see where he's coming from. Tom Hartman and others have made the case that lowering income taxes on the rich has hurt the economy. Before, the rich would avoid income taxes by spending their profits on business related expenses, like making their factories more efficient. Remember deductible expenses? Now, they just pocket the money.

Anti BS Blowback

In this column at Forbes Magazine, a guy refutes the argument Hanauer makes by quoting slogans from Reaganomics as his proof. He says over and over, in various ways, that yes, if you give a Capitalist free money, he will use it to create jobs. It's somewhat amusing, but also it shows how thoroughly indoctrinated we are by Reagonomics.

If you listen to the BBC, you begin to see how widespread is this indoctrination. In their business reports, it's all they talk about. You get no alternative viewpoint to Neoliberalism, not even of the mildly Liberal type of a Paul Krugman you get in the New York Times.

The recent elections in France and Greece in which Reaganomics has been refuted has the BBC tisking and wringing their hands and rounding up all the Reaganomics experts they can find to come on the radio and tell the French and Greeks how stupidly they are behaving.

What they seem to be most concerned about at the BBC is that the Greeks might avoid further "austerity measures," more pain and suffering. The British are sadistic bastards, at least the ones at the BBC.

The more I listen to the BBC the more it's apparent, judging by what they devote air time to, and where their bureaus and correspondents are, that its main function is to point out how badly things have gone in their former colonies since the colonists no longer have the British to help them rise out of their ignorance and barbarity. A favorite practice at BBC is to get a native from a former colony to record the introduction to a segment. They always find a native who speaks English in a childlike voice. They also like to find guests to interview who can barely speak English. The more unintelligible the English, the more air time the guest gets. Five minutes of gibberish is just fine for British. The longer it goes on the more vivid are the fantasies of their former imperial glories.

The other main function they have at the BBC, judging by the same things, is to look after their own personal investment portfolios.

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