No Mr. Romney, Rich People Do Not Create Jobs

I was talking to this with a friend of mine who doesn't know anything about economics. Here is what he said:

"Wait, so the plan is for us to take our money, throw it at rich people that already have money and expect that overnight they will magically use it to make everything all better? Sounds like some kind of sick and twisted scam to make themselves more rich. I mean, someone can give me a $50 bill, that dosen't mean im going to buy sandwiches for the poor does it? I have other things I'd rather spend that $50 on some guy on a street corner."

reply to post by MystikMushroom


Very good point, I am a huge believer in doing what you love, so you will always love what you do.

I hae only ever had 1 job I really liked a lot though, so I can't really speak too much to this. But it seems to me, no matter how much you like your job, if it doesn't keep the food on the table and the lights on, you won't be happy with it. As I don't live to work, I work to live.

So I can see that being a huge factor for some, but most of us only do it for the money, as I can find plenty of things to keep me busy, and fill my idol time. I only want the job to pay well enough to support my family, as I haven't had one of those, since my self employment opertunities dried up with the construction industry.

I have loved that job many times, liked the hours( I set them most of the time), loved the people( myself, and those I employed to help with the labor), liked the boss( me), liked the work( I only took jobs I wanted to do, avoiding the crap paying, and more trouble than they were worth jobs), but at the end of the day, I really only did it for the money, not because I wanted to spend half my life building things for others to enjoy.

My help always loved the job also, I was a pretty easy going boss, and paid well. If the job paid $2,000 I would pay 2 peoople between $250 and $500 each depending on the job, as I still had to pay the accountant and the taxes out of my share, as well as insurance, and fuel/ equipment expenses. But the help was always happy, as $250 to $500 in a single day of work was quite good.

Of course not to mention, my long running jokes of the day moments, and voting for the douchebag move of the day( usually me unfortunately), as well as buying their lunch a lot, and beer at night, for their great work done.

It was a great time overall, bujt not likely to be repeated in the near future. I fear by the time things turn around I will be too old to go back to construction work, so I will be stuck in some walmart greeters position or somthing.

reply to post by inverslyproportional


Your comment instantly made me think of this:

Originally posted by inverslyproportional
reply to post by tomten

 

I had commented a couple pages back, about how the employees would be motivated to reinvest in the company. As when it does better they do better, which would only reinforce the cycle again and again.

Unlike the modern system where when the companie does well only the owner(s) and investors profit, the employees get jack. Which is why they slack off and don't do as well as they could, as their only motivation, is keeping their job, so it only requires as little effort as necessary to retain it.

The problem is the people at the top fail to understand the same principles that drive them, when someone works hard and gets rewarded, they will work even harder for a bigger reward. When someone works hard and gets nothing but to keep their crap pay another day, well they will be motivated to work no harder than necessary.

I agree with that.
People don't work for more value than they get payed for.

reply to post by inverslyproportional


This all hit home with me yesterday.

I had lunch with my former boss. That job was the most "awesome" job I have ever had. It was fun, egaging, flexible, and it taught me quite a bit and helped me grow.

I had to quit, as it was only 8am-1pm -- and I needed a full time job. It was the only job that I have ever had that made me get teary-eyed when I left. And I am not a man that ever cries.

I had to keep food on the table, pay bills and afford my modest lifestyle. I knew I could take my experience and training and get a better paying full time job, so I did.

I worked very hard for that boss, and I feel proud that I made it a better place by the time I left.

We all can't have jobs like that (mine didn't last!) -- We all have obligations, some of us more than others.

I'm a firm believer that people need to be realistic and live within their means. There is a reason I don't have any children yet. I want my child to have a similar or better quality of life that I had/have. I don't see that as a realistic possibility without food stamps or government assistance. Additionally, I don't crave bipedal spawn that badly.


What I see happening is that the rich elite are eventually going to marginalize the middle/lower class to such a point, that their own businesses will begin to fail. This is one of the reasons companies are now outsourcing. They have to lower their costs because the consumer base cannot afford an iPod made in America, by Americans. The darn phone would cost over a thousand dollars if it was made with USA labor!

So what the rich elite are doing is propping up this economy like a house of cards. As the middle/lower class shrinks and has less to spend, companies need to lower their cost to keep us buying their products and services. In order to do this, they have to outsource jobs. This in turn makes the economy weaker, us poorer, and leads to more outsourcing.

Can anyone here SEE the cycle that we are now trapped in?

reply to post by MystikMushroom


I know I see it quite clearly, and have for a long time now, which is why after much thought over the years, I came to the conclusion of the system I spoke about.

By guaranteeing a percentage of a companies profits always go to the workers, it reinforces the ecomonmy continually, so all these problems can be avoided in the future.

As workers will always have competitive wages, businesses will always have willing and competent workers, and an continuous customer base, that can always afford its products, as wages would always riseand lower in proportion to market factors. Always keeping the workers in the loop, instead of out in the cold.

Originally posted by inverslyproportional
reply to post by MystikMushroom

 

I know I see it quite clearly, and have for a long time now, which is why after much thought over the years, I came to the conclusion of the system I spoke about.

By guaranteeing a percentage of a companies profits always go to the workers, it reinforces the ecomonmy continually, so all these problems can be avoided in the future.

As workers will always have competitive wages, businesses will always have willing and competent workers, and an continuous customer base, that can always afford its products, as wages would always riseand lower in proportion to market factors. Always keeping the workers in the loop, instead of out in the cold.

I see where you're going...

I suppose in a way, what you are proposing is that the rich business owners "invest" back into their consumer base, instead of shrinking it.

I like your idea, but my spidey senses tell me that there will be people who argue agains such a plan.

I'd like to know what are the disadvantages to it? I certainly do not see immediatley on the surface?

reply to post by MystikMushroom


Then do tell us who does create jobs if people with capital do not?

Do you think higher taxes and government programs create jobs? They create dependency and economic disaster such as we are currently experiencing. Where do all the private sector jobs come from then if people with capital or access to it do not create them?

People have demonized the rich because of the few politically connected that dominate by cheating the system using their political connection however the vast majority of so called rich people EARNED THEIR MONEY precisely by creating business that creates jobs.

It never ceases to amaze me that people look to their abuser to solve the problems of abuse. In this case the government has abused its powers and led us to financial disaster and people a clamoring for more government intervention, amazing... Sigh!

So much for your 6 hour education on so called supply side economics. Sounds to me more like you just looked for articles that support your anti-rich bias.

And to the trolls I do not support the liar Romney so save it...

reply to post by MystikMushroom


I also recognise there could be many unforseen consequences to the plan I proposed, which is why I submitted it for eveyones comment.

Instead of any real discussion though, it was simply called "communism" etc. And dismissed without any actual discussion or thought on the matter.

All I know is, 1) the system now always favors everyone but the worker, and the consumer, as they are one in the same. 2) the worker always loses and the company always wins. 3) the worker always losing is what causes the financial problems in the first place, as they are the first to be left out in the cold, eroding the customer base, leading to more job losses and pay cuts, leading to worse economic conditions.

If my plan were ever tried, it would solve all these problems, and several others I have yet to mention, as most won't even consider it, as they are to indoctrinated into the current system, which doesn't work. Which should be obvious to anyone. As any person that goes to work everyday at any company making billions in profits should need welfare to feed their families, they should make enough already.

Instead, many corporations litterally make billions by short changing and over working their employees, all the while, putting tax payers on the hook to feed their employees. As they don't pay enough, and somehow nobody even recognizes this, or complains about it but me on these boards, as far as I have noticed.

We might as well just have to government write a check to every billion dollar corporation in the country, as that is what food stamps are, paying a super rich company, to not pay their employees enough to live on.

It is utter and complete lunacy IMHO, but once again, I am obviously the minority on this subject.

Double posted, cause I am a douche like that

reply to post by hawkiye


I really did try and read one article for trickle down, and another article against it.

Higher taxes yes, but on those that make the most. When companies short-change their employees, those people go onto goverment assistance.

I think it's very short-sighted to see things the way you do. The economy can help both the middle/working class and the rich at the top, if we circulate the money!

There have been some really good ideas tossed around, and quite a bit of personal attacking/two-line trolls here.

What gets me about your comment about looking to the "abuser" -- why are you defending the abuser?

reply to post by Dragoon01


Thank you for the effort with the analogy. I appreciate it.

So I understand you feel the customer/business/free market are all that is needed. I guess I can agree to a point with that. However, I am not sure if that would ever reach an optimal state because it never exists in a vacuum. In our analogy, there are many elements messing with our game. So perhaps a fence around our game is not completely a bad thing or a sponsored crew to work the field smooth is OK.

However, a government does not exist to optimize business but to optimize a plethora of things for the citizens governed. It only steps in with our game as it is the largest and probably best suited to aid in certain aspects. Can this go over board? Sure. Can the effort fall short? Yes. Is the effort always in good concert with the other things government is supposed to do? Not always.

In your opinion, is the government falling short, in too deep, or out of balance supporting our game? How does that get repaired?

Originally posted by ABNARTY
reply to post by Dragoon01

 

Thank you for the effort with the analogy. I appreciate it.

So I understand you feel the customer/business/free market are all that is needed. I guess I can agree to a point with that. However, I am not sure if that would ever reach an optimal state because it never exists in a vacuum. In our analogy, there are many elements messing with our game. So perhaps a fence around our game is not completely a bad thing or a sponsored crew to work the field smooth is OK.

However, a government does not exist to optimize business but to optimize a plethora of things for the citizens governed. It only steps in with our game as it is the largest and probably best suited to aid in certain aspects. Can this go over board? Sure. Can the effort fall short? Yes. Is the effort always in good concert with the other things government is supposed to do? Not always.

In your opinion, is the government falling short, in too deep, or out of balance supporting our game? How does that get repaired?

edit on 19-10-2012 by ABNARTY because: sp

This is where the two opposing sides of my brain fight.

One one hand, I think smaller government is a good thing, however I understand that in today's world with globalization of trade, we can't just go back to the 1800's in respect to our federal government. We would be going backwards, and not progressing.

We don't have an agrarian society anymore, people abandoned the farms and moved to the industrial centers to make money. Now those industrial centers are being shipped overseas.

One would theorize that the market would "correct" itself. In that the companies shipping jobs over seas would realize that they are hurting the very consumers they need to stay in business. Maybe this will still happen, but I foresee it getting much worse before it gets better. The reason? Emerging markets in places like India an China. As the GDP in these countries continues to grow, it creates a new customer base for American companies to peddle their wares.

I did some "light" research into this guy "Garry Johnson" and looked at his "Fair Tax" system. On the surface it seems like it might have some merit. Get rid of income taxes and the IRS. Go with a Value Added Tax (VAT) on goods. You get your entire paycheck, and only are taxed on what you consume.

Overall I decided that such a radical shift in the tax code would probably be unwise. Perhaps we could lower the people's taxes, and put into place a small VAT to offset the revenue lost.

This is a slipperly slope. I'm sure anyone that has a sales tax in their area will agree that tax rates never go down, or even stay constant. This is why for this to work, the VAT would be only be adjust upwards in response to inflation.

I also think it's time to raise the minimum wage. Now, the minimum wage is a hot topic for ultra-conservatives. I on the other hand think of it as a progressive step forward in advancing a civlized society. As the USA, other countries look to us. We should be once again that shining beacon on the hill. We should look after our people and give them opportunities to go far. This does not mean that I have to pay for some woman on welfare to have "litters of kids" that I have to pay for. This doesn't mean people should be allowed to live off the government subsidies via foster children (that one pisses me off!)

I think safey nets are fine if that is all they are. I would rather work 3 fast food jobs at the same time than go on government/state assistance. That, however, is not the mindset of some people in this country. We need to be educating kids in such a way that they see themselves as just as responsible for this country as the people we elect.

There isn't one sector or group of people that caused this mess, and I don't think that it's going to be able to be fixed by one group of people (in my case many people assume I mean the rich). If my company offers to help me pay tuition so I can get that accounting job upstairs, I'm going to take it! We need to increase the *value* of our citizens, and at the same time put emphasis on changing the mentality of our people.

Thank you for your reply!

reply to post by MystikMushroom


A very quick and lengthy response.

I agree there are multiple factors rendering the economy in the state we see today. To blame one player only is rather unwise or unobservant.

With regards to the government and taxes, I am not sure if you could find a single American who believes their tax dollars are being spent wisely, including me. With that being said, I am not sure if we can accurately look at raising/lowering taxes absent better controlled/transparent/productive government spending.

reply to post by MystikMushroom


The problem with raising the minimum wage is that it really doesn't help anyone, and actually hurts those making more than the minimum wage.

Businesses just raise the price on their goods to offset the loss from higher pay for their employees, which just offsets the raise and makes it basically nonexistant.

While simultaneously adding to the number at the bottom of the ladder, by raising the poverty level to include people who were former to raised rate, not on it. Their businesses will not pay them any more to offset the fact they are now at the minimum wage, so in effect, it just simply puts more people at the bottom of the stack, it doesn't really raise anyone out of povverty.

Which is the reason I proposed a system where pay is based off of a percentage of a companies profits, instead of a minimum wage type system. As it has been known for a very long time to hurt more people than it helps, and also the raises only ever come long after a need has existed.

In the system I proposed, the pay raises would be on track with a companies revenues in real time, as the longest possible wait for a needed raise would be 1 fiscal year, no longer. Also if the company simply raised prices to compensate for the loss by paying more, it would simply result in workers also making more to offset the raise in prices.

So there wouldn't be a way to game the system, the workers/customer base would always remain in the loop, as they would now be a part of the equation instead of an outside obstacle to overcome.

So it would always reinforce the worker/customer base, so that products could be priced out of range of people who work, as they would always see an increase in pay, proportionally to the companies profits.

reply to post by ABNARTY


Perhaps if our House and Senate were allowed to get fiesty like the Parliment in the UK -- more people would take notice? I know I'd watch CSPAN more if people were insulting each other's mothers.

I think we need to take a look at what we are spending and why. An area I would like to see cut is defense spending. I think we have the technology at our disposal to create a leaner, meaner, more efficient fighting force. The old addage of, "work smarter, not faster". Getting us out of the "world police" role would save us quite a bit of money as well.

I think cutting taxes across the board, and making up the revenue via a nation-wide VAT tax might be helpfull. People might feel more empowered in regards to their taxes. They would have more money in their pockets, and think twice about wasteful spending on soon-to-be obsolete goods. This might also spur the manufacting sector to raise quality standards and *gasp* bring production back to the USA?

I'm not sure that idea has to much merit -- I'll let the people here tear it appart

reply to post by inverslyproportional


I don't have the time to really reply point for point to your idea, but I like it.

It gives incentive to the workers to work harder for the company, if the company succeeds they do too.

It also puts pressure on the employers to hire the best people that they can, and puts pressure on the citizens to be more competative in regards to education.

This idea has merit!

Originally posted by MystikMushroom
reply to post by hawkiye

 

I really did try and read one article for trickle down, and another article against it.

Higher taxes yes, but on those that make the most. When companies short-change their employees, those people go onto goverment assistance.

I think it's very short-sighted to see things the way you do. The economy can help both the middle/working class and the rich at the top, if we circulate the money!

There have been some really good ideas tossed around, and quite a bit of personal attacking/two-line trolls here.

What gets me about your comment about looking to the "abuser" -- why are you defending the abuser?

You failed to answer the questions: Who creates jobs if the people with captial do not?

So you think the rich are the abusers and caused these problems and not government?... Sigh! you people will never get it till there are no more jobs and you are living under a bridge....

The welfare state /government intervention is what has caused all this not people who start businesses and employ all the numb nuts that think they are entitled to the fruits of everyone else's labor. Wealth redistribution has been tried before and failed miserably its called communism.

Your beef is with the few politically connected crony corps in bed with government not the vast majority of business owners who are the backbone of the country and provide the jobs... The reason they are contracting their businesses is because of government intervention debasing the currency and over regulation. not because they are all greedy rich people...

Originally posted by AwakeinNM

Click here for more information.

Aww, poor libbies can't take it? Enjoy this last two weeks.

My god, i made it through only 2 pages before I decided my pain threshold for poor understanding and loose logic was reached.

Rich people create jobs. If you dispute this, you are doing it by just making stuff up. I know 4 rich people right now who are opening 4 separate hotels that have been mothballed for 20+ years each. They do this by leveraging their net worth for loans that allow them to create the cash flow needed to open a business (each costing in the 30mil + range).

Added in are a bunch of tax credits, etc. An example are the historic tax credits that can be recieved if you follow historic guidelines while restoring. THIS is a "good" tax break for the rich. It creates an ability to create cash flow (by selling the credits on the open market, like you would carbon credits) that allows a recapitalization in the business, or a tax break once opened that allows you to operate more functionally in the first year.

"Bad" tax breaks are income tax deviations. For the life of me i cannot understand two things: why we still have the electoral college, and why we have not instituted a flat tax or a consumption tax.