Businesses and jobs
To the Editor:
If I hear on another talk show, or read in another magazine or newspaper article the bogus notion that businesses create jobs, so the solution to our national economic recovery is to just cut or reduce all taxes and regulations on businesses, I am going to become apoplectic. Businesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can.
A job is created in a business when demand for goods or services is greater than the existing ability of that business to provide them. When there is a demand, people will see the need and fill it. Either a business owner will start filling the demand alone, or form a new business to fill it, or an existing provider of the goods or services will add employees as needed.
Actually, a job can be created by a business, a government at any level, a non-profit organization or just an entrepreneur starting to do the job, depending on the nature of the good or service that is required. So a demand creates a job.
In Coon Rapids, many homeowners find individuals going door to door asking to be hired to trim trees in this late fall season. Last year I hired a crew to do just that. My demand created a job for them.
Businesses in general want to kill jobs, not create them! Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business “created” the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money and will automatically use it to create additional jobs.
But an efficiently-run business will already have the right number of employees. When a business sees that not enough people are coming in the front door to make purchases, and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts. The key question is, “How do businesses get customers?”
Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost.
They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing, or finding other ways to reduce the payroll. This is the natural business cost-cutting measure that leads to higher profits.
The same incentive also pushes the business to pay as little as possible when they do hire. It may also push businesses to cut worker safety protections, cut product quality, cut customer service, externalize costs by polluting, moving product assembly to third world countries, etc.
This all works against the interests of our larger society, which wants lots of good jobs with good pay.
And businesses, while working to cut jobs and pay less, need other businesses to hire lots of people and pay well, because that is what creates the demand that makes all the businesses work better.
All businesses do well when people have disposable cash left over at the end of the month when all their “survival bills” have been paid (like food, gasoline, heat and electricity). That’s how businesses of all kinds get paying customers that have demands.
This is where government comes in. Government is “We, the People,” working for that larger societal interest. This is what the Tea Party activists are fundamentally forgetting. They proclaim their disdain for government and taxes and regulations.
But in our current system – when it works and we’re smart enough to use it – we use government to come up with ways to balance the effects of the profit motive, which pushes for fewer jobs at lower pay, with our larger need for more jobs at higher pay, to sustain a middle class, and for the good of all businesses.
We, through our government, create and regulate the “playing field” on which businesses operate. We set minimum wages, limits on working hours, worker safety rules and other rules designed to keep that balance between profit incentive and demand, and keep that playing field level.
We also provide the infrastructure of roads, schools, courts, etc., that is what makes our businesses competitive with businesses in other countries.
The individual and business interest in paying less taxes for this infrastructure has to be balanced with the larger societal interest that we all pay more for this in order to maintain a civil society with a middle class that is capable of paying its bills and having just a little extra to create the demand for other goods and services, which is the true creator of jobs in America.
Tax cuts for businesses are, in and of themselves, actually a theft of the very conditions that keep an entire society vibrant and fully employed.
It should be obvious, then, that businesses in our economic system must be kept from having any ability whatsoever to influence government decision-making in any way, or the system breaks down.
Unfortunately, that is exactly what has happened in the recent past, and is exacerbated further by the advent of the recent Citizens United Supreme Court case in which corporations are now designated the rights of individual citizens.
When businesses are able to influence government, they will influence government in ways that provide themselves – and only themselves – with more profits, meaning lower costs, meaning fewer jobs at worsening pay, and not protecting workers, the environment or other businesses.
And, they will fight to keep their ability to influence government, using the resulting wealth gains to increase their power over the government which increases their wealth even further, which increases their power over the government, which increases their wealth, which increases their power over the government, etc., etc., in a never-ending spiral in which the once-common middle class breadwinners disappear and our once vibrant, idealist capitalist economy has been abused to the point of disappearance, and replaced with a corporate state run entirely by a relatively few mega-wealthy plutocrats, which is not far away from the system we have today.
Our Congress is so hamstrung by corporate greed that it has been virtually brought to a halt. Americans now give Congress a 9 percent approval rating. It can go lower.
If the Tea Party wants to worry about something, they ought to worry about what life in America will become when all the rules, regulations and taxes imposed by government on businesses, to level the playing field, have been surreptitiously wiped away. If you think “Occupy Wall Street” is a big deal, just wait until hardly anyone has a job good enough to sustain his family’s needs.
To the Editor
In your newspapers Dec. 23, Sen. Benson and Reps. Scott and Petersen took President Obama to task for issuing too many executive orders.
I think the record ought to made straight. President Obama has issued 105 executive orders in his first three years, whereas President George W. Bush issued 171 in a comparable time frame.
President Reagan, who they have indicated many times they think was a great president, issued 381.
I am sure they would feel very comfortable with President Coolidge, who probably represents their political philosophy better then any other president, issued 1,253.
Historically most executive orders have been executive decisions like order of succession in governmental agencies, establishing White House offices on particular topics and one they would like enforcing and implementing restrictions on abortion: EO 13535, which was needed because of Congressional action.
We can argue about the use of executive orders but they have been used by every president since Washington and to call out President Obama for abuse is just not the truth.
District 49 DFL Chairman