A quick thought on economics

Conservatives keep trying to claim that we can't increase taxes on rich people, because Obama shouldn't tax "job creators."

Can we have a moratorium on the use of the term "job creators" for rich people? Because, at the moment, they are verifiably not creating any fucking jobs. That's like calling somebody a "stamp collector" when they don't buy, sell, or keep any stamps. It's just stupid.

In fact, I'll go one step further. I'll support a tax cut for anybody who creates new jobs, in America, which are held by American citizens. Now, this has to be a net jobs increase - if you fire fifty thousand people, and then hire forty thousand, you don't get congratulated for creating forty thousand jobs - you get yelled at for losing ten thousand.

(Also, any jobs you ship overseas? Yeah, that counts as a job loss.)

And by the way, that whole idea that "lower taxes equal more jobs"? It's stupid. Reagan experienced job growth while he was in office. But only after he raised taxes. Three times.

So, can we have a little honesty up in this bitch? For once?

THE BOOK OF JOBS – Revised Global Edition

Earlier this week, Robert Reich posted this article, The Great Decoupling of Corporate Profits from Jobs. His observations and conclusions: Corporate profits are up; the largest 500 companies have stashed away an estimated $1 trillion in cash; but the winnings are not translating into jobs at home. Why?

American corporations are investing in regions where the profits are coming from: Overseas. They are investing in low-wage markets, investing in laborsaving technologies, paying dividends to shareholders or buying back equity, and rewarding themselves with fat bonuses.  Forget trickle-down economics, Reich says:  No amount of profits or tax cuts will create more jobs.

Reich offers a grim but accurate assessment of the current situation, but he hardly scratches the surface.

"Start-Ups, Not Bailouts,” says the eminently more-opinionated-than-informed columnist for the New York Times, Thomas Friedman, who is still stuck in the skunkwork days of garage start-ups that turned Apple Computer into a household name. What Friedman and others do not grasp is that the bristling days of Silicon Valley are forever gone.

In this BusinessWeek article How America Can Create Jobs, Andrew Groves, who served as Intel’s CEO from 1987 to 2005, knows what blunderbuss pundits do not; he knows his business:

American companies discovered that they could have their manufacturing and even their engineering done more cheaply overseas (…) The largest of these companies is Hon Hai Precision Industry, also known as Foxconn (…) Some 250,000 Foxconn employees in Southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S., there are 10 people in China working on iMacs, iPods, and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology, and other U.S. companies [such as Dell, Microsoft, HP, and Intel as examples].

When Apple sells an iPhone, is it considered an American product or an import? How much of our so-called Gross Domestic Product is actually domestic?

Here’s an inconvenient truth. The next generation of whiz-bang products will also be made in Asia, and the high-tech sector that drove the American economy in the 1980s and 90s will no longer generate jobs at home. With 90% of the work force located overseas, a rose may still be a rose, but American products are no longer American products. For every consumer dollar spent, most of the revenue stream will support overseas economies and an overseas workforce.

Want more bad news? Alternative energy technologies – the so-called job-driving engines of the future (which include advanced batteries, photovoltaics, and wind power) – will most likely be outsourced too. For instance, all commercially produced photovoltaic panels, originally invented in America, come from China.  Lithium-ion batteries, the all-important component of the electric cars of the future, will most likely come from Asia:

(Click on graph to enlarge)

Yes, everyone knows Asian labor is cheap.  How cheap, you ask?  If it takes 10 overseas jobs for every domestic one to bring an American product to market, there is an inverse relationship in worker compensation.  For every dollar spent in America, you can always find someone somewhere who can do the same job for ten cents or less. An M.D. in Mumbai, for example, can read your MRI scan for one-tenth the cost of an American expert.  Yes, this is no exaggeration.  Every American job that can be exported WILL be exported … even M.D. and Ph.D. level jobs in the medical and pharmaceutical industries (which also means your highly sensitive financial and medical records, including your social security number and other personal data, are also going abroad). Why bother studying for an advanced degree when the only jobs left will be those that cannot be exported … flipping hamburgers or waiting on tables.

Why should American corporations give a damn about American workers when their customers are no longer on Main Street but worldwide.  Globalization has freed them from the encumbrances of citizenship.

Greed, Health Care Reform and the American Recovery Act

Middle America needs to get a grasp on corporate greed, and recognize it as the modern day King George. Two of President Obama’s major initiatives, Health Care Reform and the American Recovery and Reinvestment Act will fare much better if the working class skeptics see the role corporate greed plays in both issues.

Right wing media fear mongers have convinced Joe Sixpack and his buddies that their enemy in health care is the public option. They believe it will raise costs and lead to socialism, which will take away all of their money and freedom. They fail to look at the fact that their health care benefits have cost more and provided less at the hands of greedy private monopolistic insurance companies for years. Even with the threat of a public option on the table, the insurers are still unsympathetic to small businesses that would like to but cannot afford to supply their employees with decent health insurance. Greed has prompted insurance companies to favor their own profits over the services they provide to small businesses and consumers.

Similarly, polls indicate that Middle America feels the Recovery Act is failing to produce jobs, that it is costing money for no gain. Yet, there is gain; businesses are doing better. But the businesses are keeping the better for themselves. Despite the recent paths to economic recovery, employers are not willing to hire new employees. Current employees are often working longer for less in order to keep the jobs they have. The gloomy outlook in the job market is a result of reluctant employers rather than a failed stimulus package. Greed once again prompts businesses to favor their own corporate security over the well being of their employees and the people of America.

It is naïve to think we can rely on business to rescue us out of the mess they put us in to begin with. We need tea parties that put blame where blame is due: tea parties aimed at right wing legislators and their business cronies who exert their tyranny against the American public. Tell them we want a public option now, one that will reign in corporate greed in the health insurance industry. Tell them we want sanctions now against businesses and banks that have failed to use Recovery Act money to provide jobs and loans to small businesses. This is our time, our chance to legislate against corporate greed and for some financial fairness in our society. Let’s not lose it.