Saturday, October 8, 2011

Debunking The Myth Of The Wealthy Job Creator

Back in July, I think, Avedon Carol pointed me to Thom Hartmann and a great discussion of the myth of the wealthy job creator.

The conservatives keep reciting--to me, reminiscent of the mob of zombies chanting "Imhotep" in the first Mummy movie--that tax cuts for the wealthy are the best way to create jobs and stimulate the economy.  In fact, I think they actually believe it.

But it makes no sense.  The cart is not only before the horse, there seems to be no horse.  Let's try this for some logic:

The way jobs are created is through demand for goods and services.  I need my car worked on, so I take it to a garage.  If enough additional people like that particular garage, eventually the owner will need to hire another mechanic to meet the increased demand.  Merely giving more money to the owner via tax cuts--in the absence of increased demand--will not cause him suddenly to say "Aha!  Now I can hire that mechanic!" The new mechanic will be sitting on his hands because the cars are not lining up outside.  Why? People in a fiscal crunch are doing more of their own auto maintenance or deferring it.

Nope, it's D-E-M-A-N-D, in the form of spendable money in people's pockets, that will create jobs.  It's always been a bottom-driven process, never a top-down, trickle-down effect, despite all the lockstep chanting.



1 comment:

  1. really very good and informative blog i really very impressed.Hartmann also cites a recent Gallup poll which shows that deficits and debt are a distant third in American’s economic priorities.
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