More On Job Creation

So, according to the news today, last quarter (2012Q3), American corporations had their highest profits, even adjusted for inflation, ever.

So can we finally put to bed the claim that trickle down economics works, or that by giving tax breaks and otherwise putting more money into the pockets of the rich and the corporate "creates jobs"?

If this claim were true, we should right now have a record number of jobs, along with the record profits.  We should be SWIMMING in jobs.  There should be so many jobs, everyone in the country that needs to be (adults of working age) should be able to have one, with more waiting to be filled.

Instead, we're sitting here in a poor economy, with rich and corporations telling us that the way to resolve the problem is to slant things so they can make MORE money, dangling the stick of more jobs in front of us.  Oh, poor us, if you only let us have a little bit MORE, we'll solve all of your problems.

I've said it many times, jobs are not created by wealthy and corporations.  Jobs are created by market demand.  If a company makes widgets, and there is a daily demand for 500 widgets, the most that company is ever going to try to make is 500 widgets per day, and that assumes they're the only manufacturer of widgets.  It doesn't matter if that company makes a tiny profit or a huge one on those 500 widgets, they're not going to hire more people and create more widgets if they can't sell them.

On the other hand, if the daily demand is for 1500 widgets and they're currently making only 500, THEN they will hire more people ("create more jobs") in order to capitalize on that untapped market.

Stimulus can not and should not be spent on the rich.  This is not a matter of fairness or anything else, it is simply a matter of effectiveness.  If you want to spur the economy, you need to get money flowing.  Putting it into the hands of people who will spend it does that.  Putting more of it into the hands of people who already have a surplus just means more will go into their savings accounts, and will do almost nothing to spur the economy.

Now, we can discuss the ways in which to put more money into the hands of the poor.  I, personally, like the idea of infrastructure spending.  Not pork barrel stuff like bridges to nowhere, but real, needed repairs to our bridges and roads and other aging infrastructure.  Stuff that according to Republicans "we can't afford right now", but which would stimulate the economy by putting more money into the hands of people who are currently unemployed but would then NOT be, which would increase revenues (again by the Republicans' own argument, and common wisdom, that a strong economy creates more revenue for the government).

But the fact is that cutting taxes on the rich from their historically-low levels right now to even LOWER levels will do NOTHING to stimulate the economy, only make some rich people even richer... and give the selfish Tea Party that much more ammo in their panties-in-a-wad concerns that we simply can't afford the basic social safety net that we've all enjoyed.

Get money and jobs to the poor and (to a lesser extent) middle class, and you'll stimulate the economy.  Get it to the rich, you'll just further increase the already huge gap between the "haves" and the "have nots".