Friday, December 30, 2011

Rant: Class warfare, tax cuts and deregulation

I'm frustrated. You're frustrated. Everyone is frustrated. Don't believe me? Just read a poll. Any poll. The Tea Party is tired of big government and waste. Occupy [insert location of choice] is tired of big business and big money. The right wants more cuts in spending. The left wants more spending. The young want jobs. The old want more security. Throw a dart and you are guaranteed to hit something that ails this country.
Gas prices are rising, incomes are shrinking and jobs are hard to find. Business isn't hiring and consumers aren't buying (might have something to do with the lack of jobs and shrinking incomes, but that's just me).
And what are the solutions our elected officials offering? Tax cuts and deregulation. If I hear one more candidate claim that tax cuts and deregulation will create jobs I just might have to Occupy something. Either that or become a raving Marxist.
Let's start with deregulation. Its inconvenient to "job creators". It stifles their ability to do the best for their business. You shouldn't tell the job creators how to create. They're the best qualified to know. It kills jobs, etc.
The criminal code is inconvenient as well. My next door neighbor has a really nice car. I would really, really like that car. I am younger, stronger and a better driver and I could use it to get to work that much more efficiently. Too bad about that anti auto theft regulation.
But what  really gets my shorts in a knot is the tax cut argument. Basically, if you cut taxes businesses would create more jobs. Huh? Ask any business person and they will tell you that if you cut their taxes that does not mean that they will hire a single new employee. They'll thank you profusely for the additional income, but no one will be rushing out to put out the help wanted signs.
Demand drives hiring and that's the crux of the problem. No matter how much you cut taxes we aren't necessarily going to consume more. We will not be buying more food. We will not be buying more cars or more clothes. You might buy better food, a nicer car or nicer clothes, but all that means is that Whole Foods, BMW and Prada will gain, Aldis, Hyundai and KMart will lose.
And the ultimate irony is that even if we were, that will not create that many additional jobs. Even if demand rises, business will look to two places. Automation or offshoring since labor costs are lower (and guess what regulation much laxer). Neither of which will make any real dent in job creation. And as to those increased profits due to tax cuts? Businesses will more than likely invest those gains in stocks or sit on the money and not put that money back in the economy.

I love America. I believe its a great country. I believe that America's emphasis on the rights of the individual is what makes it great. To put it crudely looking out for number one is what makes this place tick. But its long time past that this was a country which looks out for number 1. Its now the country which looks out for Number 1%. In many ways economies are zero sum. In order for someone to gain, someone has to lose. Its well documented that the 1% have gained, but does it always have to be at the expense of 99%?
And the solution our leaders have to offer is lower taxes and deregulation? I don't see it.

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