Sales create jobs, not the rich

[Eighty Deuce]

Ya, thats right. And the 13 Reagan tax increases plue the first Bush tax increase, and the tax increases under Clinton helped keep us out of a depression.

Dude, we have been in near depression like conditions for 5 years now. I don't see ANY good that the Bush tax cuts for the wealthy created. Unless you think that a huge federal deficit is good.

At first I thought you were kidding, until I noticed that you listed your lean as "conservative".

"Dude" ... the 'Bush tax cuts for the wealthy' amounted to about 20% of the total Bush tax cuts. Did the other 80% do any good ?

Our problem is not tax cuts, pro-or-con.

 

[Kushinator]

Demand, with money. And not funny money. Not free money.

Without productivity, its one giant house of cards. Like we got. Like much of Europe has.

Please note that I had answered my own question already in my post

But you did not actually address it. The U.S. is of the most productive economies, so i am not really sure where you are going. Demand exists because people have real needs and desires. Demand without money causes Say's Law to become relevant. The notion that supply dictates demand was dismissed after The General Theory of Employment, Interest, and Money for precisely that reason.

 

[Eighty Deuce]

Slavery was a byproduct of mercantilism and colonialism (not to mention hypocrisy in regards to human rights). Just taking into consideration efficiency wages, slavery was a major profit blunder just in terms of opportunity costs.

Its not that simple. We saw slavery not sustain, much less succeed, in the North for precisely what you cite.

But in the South, and especially after the development of the cotton gin, it was hugely profitable. There is no doubt that it does not fit usual merchantile business models, but it had a huge niche in the South precisely because of cotton.

 

[Kushinator]

"Dude" ... the 'Bush tax cuts for the wealthy' amounted to about 20% of the total Bush tax cuts. Did the other 80% do any good ?

Our problem is not tax cuts, pro-or-con.

Depends on whether they were spent (on American goods) or saved (paying debt).

 

[Kushinator]

there is no doubt that it does not fit usual mercantile business models, but it had a huge niche in the South precisely because of cotton.

You are not getting my point. Slavery (in economic sense) requires mercantilism and colonialism to exists in the first place.

 

[Eighty Deuce]

But you did not actually address it. The U.S. is of the most productive economies, so i am not really sure where you are going. Demand exists because people have real needs and desires. Demand without money causes Say's Law to become relevant. The notion that supply dictates demand was dismissed after The General Theory of Employment, Interest, and Money for precisely that reason.

I have not advocated that supply creates demand. Productivity is at the heart of it all. The more productive that one is, the more one can improve their standard of living. The key is to produce things that others want. That jump is made by taking risk. That risk costs money to take.

Just "sales" is nonsense. Nothing begins or ends with "sales". To just give folks money is to create artificial demand, artificial sales, and is unsustainable, as I believe you noted earlier.

Regardless, the job creators are the folks who likely have more money, who know what it is to earn money, and who ar prone to treat it like it is their money. Call them what you will, but its not the poor folks creating the jobs.

 

[Eighty Deuce]

You are not getting my point. Slavery (in economic sense) requires mercantilism and colonialism to exists in the first place.

Agreed, But you made a claim that slavery was economically inefficient. It often is. But it was not in the South. Unfortunately, it fit pretty well.

 

[Eighty Deuce]

Depends on whether they were spent (on American goods) or saved (paying debt).

And it also depends on whether or not the government reduced spending commensurate with the cuts. As Harding did. As no modern President has.

It also strays from the basis of such as Stimulus, which is to create artificial demand by too often just giving money away. This last point is what the liberals argue for. "Free-stuff", under some misguided notion that it will create real demand, and eventually fix everything. It does not, and will not.

 

[Kushinator]

And it also depends on whether or not the government reduced spending commensurate with the cuts. As Harding did. As no modern President has.

?????

Such an action can in no way be thought of as stimulative.

It also strays from the basis of such as Stimulus, which is to create artificial demand by too often just giving money away. This last point is what the liberals argue for. "Free-stuff", under some misguided notion that it will create real demand, and eventually fix everything. It does not, and will not.

Public works projects and grants for both health care and education that are financed by deficits during periods of high unemployment are certainly stimulative from a demand perspective. Not sure what you are arguing here.

 

[Kushinator]

Agreed, But you made a claim that slavery was economically inefficient. It often is. But it was not in the South. Unfortunately, it fit pretty well.

Of course it was inefficient when we take into consideration opportunity costs; just as it is inefficient for most manufacturing facilities to maximize both production and revenue. Do you understand why?

 

[Kushinator]

job creators are the folks who likely have more money, who know what it is to earn money, and who ar prone to treat it like it is their money. Call them what you will, but its not the poor folks creating the jobs.

Sustainable job creation begins and ends with innovation. Whether or not the innovator is wealthy has nothing to do with it.

 

[imagep]

What creates sales throug product development and marketing that costs money to bankroll so rich do creat jobs!

You don't have to be rich to do product development or marketing, although it can help. I'm not rich and I do product development and marketing, I just do the best I can with what I have, and usually without having to borrow. Even when I do borrow, I could care less whether that money came from the personal savings of 100 middle class people or just one rich guy. So while some capital may be needed to create jobs, it doesn't have to come from rich people.

 

[Eighty Deuce]

?????

Such an action can in no way be thought of as stimulative.

Again, "stimulation", if defined as just spending, is a farce. The Obama model is a farce. An economy is not just "spending". It is not repaving a road that does not need repaving. It is not "makework". Economies are investment. As in the Keystone Pipeline. They are business start-ups. More so now than ever before, as we want an environment where a "rich person" will invest in job creation here, rather than overseas.

Public works projects and grants for both health care and education that are financed by deficits during periods of high unemployment are certainly stimulative from a demand perspective. Not sure what you are arguing here.

They are part of a developed economy. But unto themselves are ineffective as a Stimulus. What Reagan understood, as did Harding, was that true Stimulus was private money becoming more robust in the economy. Not expanding government. Both coaxed private money into the markets, and the risk taking.

Obama has driven private money to the sidelines.

 

[Eighty Deuce]

Sustainable job creation begins and ends with innovation. Whether or not the innovator is wealthy has nothing to do with it.

It has a heck of a lot more to do with it than being poor ! Small business is your primary job-creating market. Stifle those folks, either through taxes or added regulation, and you stifle job creation.

Government has warped capitalism to where it is almost FUBAR here.

 

[Kushinator]

They are part of a developed economy. But unto themselves are ineffective as a Stimulus. What Reagan understood, as did Harding, was that true Stimulus was private money becoming more robust in the economy. Not expanding government. Both coaxed private money into the markets, and the risk taking.

Reagan engaged in an aspect of Military Keynesianism as budgetary deficits continued to persist throughout his presidency. rof

 

[Eighty Deuce]

Reagan engaged in an aspect of Military Keynesianism as budgetary deficits continued to persist throughout his presidency. rof

Yes. He did. But he still coaxed private money back into the economy. A good argument can be had that his military investments paid us back in spades as well. Further, as a percent of the total budget, military spending as a percent of GDP has decreased over the decades. Social spending has gone up.

Reagan got results. He was a far better steward of the Country than Obama.

 

[imagep]

I have not advocated that supply creates demand. Productivity is at the heart of it all. The more productive that one is, the more one can improve their standard of living. The key is to produce things that others want. That jump is made by taking risk. That risk costs money to take.

Just "sales" is nonsense. Nothing begins or ends with "sales". To just give folks money is to create artificial demand, artificial sales, and is unsustainable, as I believe you noted earlier.

Regardless, the job creators are the folks who likely have more money, who know what it is to earn money, and who ar prone to treat it like it is their money. Call them what you will, but its not the poor folks creating the jobs.

I understand exactly what you are saying, but you are looking at things in a different way than human (business) behavior actually operates. Yes, if all businesses were to simulatiniously increase their production, they would hire people, and those people would spend (more) money, and thus the simultanious but unilateraleral production increase may be economically justified. Most of conservative economic theory is 100% correct - from a macroeconomic theoretical point of view.

But in reality, no business is going to just randomly crank up production without the realistic expectation of an increase in orders (sales). From the standpoint of the individual business (micro-economics), that doesn't make any sense. I, as a business owner/manager have absolutely no reason to believe that just because I independantly increase my production, that my sales are going to increase. The only way that I would make such an assumption is if sales were trending upward over a long period of time with no chance of a decline seeable on the horizon. But of course there is ALWAYS a very likely chance that sales will either decline or quit increasing, so any business manager who expands faster than actual real life current conditions warrent, with the expectation that every other businesses is also going to expand, would be a fool.

Besides, many businesses, like mine, cannot produce until there is an order. Everything I make is custom. I make custom signs, custom commercial printing, custom screen printing, custom advertising specialty items. I can not produce a custom product without an order for a custom product. Think about it. You think I would just randomly make some signs hoping that a business with that particular name and address and phone number in that particular industry with that particular logo and corporate colors would just happen to place an order for the sign? I'd be much better off "investing" in the lottery than investing in speculative production.

While conservatives have cornered the market in unproven (and unprovable) macro economic theory, they don't have a clue about individual business and consumer microeconomic behavior. The practical application of macroeconomic theory depends on the aggregate of microeconomic reality.

 

[Eighty Deuce]

I understand exactly what you are saying, but you are looking at things in a different way than human (business) behavior actually operates. Yes, if all businesses were to simulatiniously increase their production, they would hire people, and those people would spend (more) money, and thus the simultanious but unilateraleral production increase may be economically justified. Most of conservative economic theory is 100% correct - from a macroeconomic theoretical point of view.

But in reality, no business is going to just randomly crank up production without the realistic expectation of an increase in orders (sales). From the standpoint of the individual business (micro-economics), that doesn't make any sense. I, as a business owner/manager have absolutely no reason to believe that just because I independantly increase my production, that my sales are going to increase. The only way that I would make such an assumption is if sales were trending upward over a long period of time with no chance of a decline seeable on the horizon. But of course there is ALWAYS a very likely chance that sales will either decline or quit increasing, so any business manager who expands faster than actual real life current conditions warrent, with the expectation that every other businesses is also going to expand, would be a fool.

Besides, many businesses, like mine, cannot produce until there is an order. Everything I make is custom. I make custom signs, custom commercial printing, custom screen printing, custom advertising specialty items. I can not produce a custom product without an order for a custom product. Think about it. You think I would just randomly make some signs hoping that a business with that particular name and address and phone number in that particular industry with that particular logo and corporate colors would just happen to place an order for the sign? I'd be much better off "investing" in the lottery than investing in speculative production.

While conservatives have cornered the market in unproven (and unprovable) macro economic theory, they don't have a clue about individual business and consumer microeconomic behavior. The practical application of macroeconomic theory depends on the aggregate of microeconomic reality.

Not disagreeing. I understand that a restaurant is not going to cook another hamburger until they have an order for it.

But your post seems to ignore the entire concept of entrepeneurism. That is to undertake the costs (and risk) of opening a restaurant that makes better hamburgers. Or better widgets. Or a better mousetrap. Or a new video game that folks will want to buy because it is better than other products. Or maybe you can make widgets of equal quality, but for less, and gain market that way.

It is not the same old sign already ordered. It is investing in being able to produce a new type of sign, based on your knowledge, experience, work-ethic, and then making that sale.

Risk.

FYI, I do understand business micro-economics. I own my own business. I took enormous risks getting it started 11 years ago. The majority of small business owners are Conservatives.

And I export to China And a half-dozen other countries.

 

[imagep]

Again, "stimulation", if defined as just spending, is a farce. The Obama model is a farce. An economy is not just "spending". It is not repaving a road that does not need repaving. It is not "makework". Economies are investment. As in the Keystone Pipeline. They are business start-ups. More so now than ever before, as we want an environment where a "rich person" will invest in job creation here, rather than overseas.

While I don't disagree with you that the spendulous was a "farce", gov spending can most definately be stimulative. It is stimulative when it directly or indirectly creates jobs and puts money into the hands of consumers who then spend more creating even more jobs. It's a very simple concept, and just because you don't like a particular ideology doesn't make it incorrect. I think that you are missing the fact that there is lots of public works type work that needs to be done - there are lots of roads that DO need to be repaved, lots of bridges that need to be rebuilt, public buildings that need to be renovated, sea walls that need to be upgraded, damms and dikes that need to br replaced. An increase in public spending does not equate to "busy work", its a matter of choosing to maintain and create our public infrastructure during times of high unemployment and low demand - as opposed to what conservative presidents have historically done.

They are part of a developed economy. But unto themselves are ineffective as a Stimulus. What Reagan understood, as did Harding, was that true Stimulus was private money becoming more robust in the economy. Not expanding government. Both coaxed private money into the markets, and the risk taking.

Thats funny, Reagan ran HUGE budget deficits, much much higher than Clinton or even Carter did, and many economists attribute the economic growth under Reagan mostly to his spending "stimulous".

Obama has driven private money to the sidelines.

Private money was sidelined before Obama came into office. You do realize that the Great Recession started nearly a year before Obama was elected and over a year before he took office dont you? I'm not trying to defend Obama, I did not vote for him and will not vote for him, he has been a disaster in some regards, but for the most part all he did was to continue the terrible Bush policies. Blaiming Obama for our bad economy is bunk.

 

[NolaMan]

Employment increased every time we increased the minimum wage

Did it go up because of the increase -- or in spite of the increase?

 

[imagep]

Yes. He did. But he still coaxed private money back into the economy. A good argument can be had that his military investments paid us back in spades as well. Further, as a percent of the total budget, military spending as a percent of GDP has decreased over the decades. Social spending has gone up.

Reagan got results. He was a far better steward of the Country than Obama.

Reagan also got 18% inflation, the highest unemployment up to the time since the great depression, and a huge increase in the federal debt. When I graduated from high school in 1983 our economy was a disaster. Now look up and see who the prez was.

 

[imagep]

Not disagreeing. I understand that a restaurant is not going to cook another hamburger until they have an order for it.

But your post seems to ignore the entire concept of entrepeneurism. That is to undertake the costs (and risk) of opening a restaurant that makes better hamburgers. Or better widgets. Or a better mousetrap. Or a new video game that folks will want to buy because it is better than other products. Or maybe you can make widgets of equal quality, but for less, and gain market that way.

It is not the same old sign already ordered. It is investing in being able to produce a new type of sign, based on your knowledge, experience, work-ethic, and then making that sale.

Risk.

FYI, I do understand business micro-economics. I own my own business. I took enormous risks getting it started 11 years ago. The majority of small business owners are Conservatives.

And I export to China And a half-dozen other countries.

So do you produce more than you have orders for?

 

[imagep]

Did it go up because of the increase -- or in spite of the increase?

After something happens over and over and over again with the same results, you would think people would figure out that there is a connection.

 

[Eighty Deuce]

Reagan also got 18% inflation, the highest unemployment up to the time since the great depression, and a huge increase in the federal debt. When I graduated from high school in 1983 our economy was a disaster. Now look up and see who the prez was.

At this point you are going off a bit wildly. Reagan inherited a mess, and had to ride out some tough government policies in order to get things back under control. But you better look up 1983 again, as things were not only getting better in every economic category that year, but just one year later, Reagan carried 49 states.

Now look it up ...... ;0

 

[NolaMan]

After something happens over and over and over again with the same results, you would think people would figure out that there is a connection.

But you have offered no connection...it is irrelevant to say "after something happens over and again with the same results" -- I can just as easily say "since the sky is blue -- XYZ occured." I want to see real data.

From what I have seen (and here is some of it briefly) -- there is a direct negative impact on seasonal workers with the wage hike.

Attack of the Minimum-Wage Increase - NYTimes.com

Did the Minimum Wage Increase Destroy Jobs? - NYTimes.com