"A poor person never gave me a job!"

[Moonlight Graham]

If I recall, Bill, you used to play live music in bars. When you looked out at the audience, how many rich guys did you see, and how many average joes did you see? Are you sure a poor person never gave you a job? Was the guy who hired you for the gig a rich guy? Was he hiring you to play for an empty room, or did he assume there'd be customers?

Exactly.

[Moonlight Graham]

I don't think it's to convince people that tax cuts for the upper class are good for everybody.

Of course it is! The ones who come out with this argument are often politicians who are making the tax cuts to the rich, so they have to sell it to the majority public (who are middle/lower class) somehow.

"Tickle-down" economics is bullcrap, but it's still advertised by some as if it's a valid theory. Since Reagan went into power in the US, and he tried selling the "trickle-down" concept to the public amid tax cuts for the wealthy and general economic liberalization, after-tax income (adjusted for inflation) has gone up exponentially for the wealthy, ie: the top 1%. In this same period the average after-tax income for the other 99% has barely seen any increase: http://globalpublicsquare.blogs.cnn.com/2011/11/05/lindsay-tracking-the-one-percent/

So where is this "trickle-down" effect? The world is still waiting 30 years later...because wealth doesn't trickle down, it trickles up. Rising profits don't go to workers, they go to the owners. If Walmart has a fantastic year in profits the workers in the stores aren't going to see raises, nope that money is going back to the shareholders.

"A rising tide lifts all boats"...what another crock. Sorry, economics isn't analogous to oceanography lol.

[Wild Bill]

If you believe that then you simply dont believe in the law of supply and demand. Labor and materials get combined into goods because theres demand for those goods. Ford hires workers when demand for their automobiles is increasing and they lay them off when demand is decreasing. So its a complete fallacy to attribute the creation of those jobs to Ford. The marketplace is the causative factor in the existance of those jobs.

I think we have a misunderstanding here about context. Yes, I would agree that consumers create a demand. Factories respond to this by hiring workers to produce products.

However, who specifically gives ME a job? Not some faceless group of statistics but jobs for INDIVIDUALS?

Does a poor person have the hiring authority to give me or you or any other individual a job?

To me, that is all that is important. I don't care about the statistics. I don't live in an academic ivory tower where I can survive on a diet of group stats.

My next door neighbour and many like him might create demand for Ford products but still, if I knock on his door and ask him for a job I am just being an idiot!

Edited September 2, 2012 by Wild Bill

[Canuckistani]

I think we have a misunderstanding here about context. Yes, I would agree that consumers create a demand. Factories respond to this by hiring workers to produce products.

However, who specifically gives ME a job? Not some faceless group of statistics but jobs for INDIVIDUALS?

Does a poor person have the hiring authority to give me or you or any other individual a job?

To me, that is all that is important. I don't care about the statistics. I don't live in an academic ivory tower where I can survive on a diet of group stats.

My next door neighbour and many like him might create demand for Ford products but still, if I knock on his door and ask him for a job I am just being an idiot!

Well, the person actually hiring you at Ford, unless you're a top executive, may not be poor, but they certainly will be a long way from rich too. Pretty silly argument you're making here by being so literal. And totally irrelevant to the meaning of the original statement. I mean the "person" giving you the job at Ford is the Ford Motor Corporation. The rich CEO and board of directors are cogs in that Corporation same as all the other workers. The corporation is owned by many people, some rich, some not.

Edited September 2, 2012 by Canuckistani

[cybercoma]

I dunno. Some HR managers can make some serious coin. Not Romney coin. But coin nonetheless.

[bleeding heart]

I think we have a misunderstanding here about context. Yes, I would agree that consumers create a demand. Factories respond to this by hiring workers to produce products.

However, who specifically gives ME a job? Not some faceless group of statistics but jobs for INDIVIDUALS?

Does a poor person have the hiring authority to give me or you or any other individual a job?

To me, that is all that is important. I don't care about the statistics. I don't live in an academic ivory tower where I can survive on a diet of group stats.

It has nothing to do with the ivory tower, academics, or statistics.

And no one ever "gave" you a job, Wild Bill. They rent out your time, so long as your labour is cheaper than the profit extracted from your labour.

(And no, that's not "Marxism," but basic capitalism.)

[cybercoma]

And you're rarely given a job, you qualify for a job.

Edited September 2, 2012 by cybercoma

[kimmy]

Mixing owners and their customers together is not fair to the argument, Kimmy. It could be said that most rich people own companies that produce goods bought by consumers. That doesn't mean that consumer directly gave the workers in those companies jobs. The owner did.

The point, Bill, is that the owner's ongoing success depends on having customers who can afford to buy his product.

There is this argument going around that if rich-guys paid lower taxes, they would create more jobs. That is why people are going around saying "a poor person never gave me a job!" right now. They are arguing that rich-guys create jobs, and that if we cut taxes for rich-guys, they will create more jobs.

And I am saying, no they won't. They'll find some other way to invest their money.

Rich-guys won't go start businesses that hire people to produce goods and services, because right now the customers don't have money to buy goods and services.

You accidentally hit the nail on the head here:

As for the bar scene, when I was there things were much different. Club owners made money! Patrons had enough disposable income to go drinking and dancing 7 nights a week. Those days are long gone.

That captures the whole point so perfectly.

If you're running a businessman, it is great for you when people have money to buy your stuff!

Somebody ran the numbers on Mitt Romney's 2010 tax return, and he paid 13.9%... something like $3 million. Under the tax plan that Paul Ryan proposed, he would have paid about $200,000, less than 1%.

(not to pick on Mitt in particular, but he's one rich guy whose tax return has been studied.)

And the thinking is this: give Mitt an extra $2.8 million a year, and he will use it to hire people.

I call B.S. on that, because Mitt's a smart businessman. He's not going to hire people to produce a bunch of goods and services that there are no customers for.

Don't give that $2.8 million tax cut to Mitt and pay for it by taking $2.8 million out of regular peoples' pockets. Leave the $2.8 million dollars in regular peoples' pockets so that they can afford to spend it at the struggling businesses in their communities.

As for the bar scene, when I was there things were much different. Club owners made money! Patrons had enough disposable income to go drinking and dancing 7 nights a week. Those days are long gone.

I love it.

-k

[kimmy]

You mean Walmart? The biggest employer in many US towns. 25% of its sales and most of its growth come from outside the US.

Boy, Tim, you sure picked a turd of an example to make your case with.

Wal-Mart's success in Sao Paulo or Amritsar or Prince George is very exciting news for the Walton family, of course, but it doesn't make one whit of difference to the people working in the stores or the warehouses in America.

If you're working at the Walmart in Tweedleburg Iowa, rest assured that your job depends on Walmart's sales in Tweedleburg Iowa. If the Tweedleburg location becomes a money-losing store, they will close it regardless of how well the store in Sao Paulo is doing. Walmart's success as a corporation doesn't provide anybody in Tweedleburg a job. Sales in Tweedleburg provide workers in Tweedleburg a job.

Small businesses owners are usually middle class themselves.

Which further undermines the case that giving tax cuts to the wealthy are going to fuel "small business- the engine that drives our economy."

The reality is most companies need cheap labour to produce their goods and a well off client base to buy them. In international trade provides this for them and as trade makes countries like China wealthy the increased middle class in China and elsewhere can easily make up for reduced growth in the US.

That's great news for "companies". But keep in mind that this bill of goods isn't being sold as something that's good for "companies", it's being sold as something that is going to put Americans back to work.

My point was and remains: corporations are no longer tied to the welfare of the middle class in any single country. They need a market to sell their products but don't really care where this market is. If that markets shifts to another country then they will follow and profits will grow as long as the global economy is growing.

And what's good for "corporations" and what's good for the average American voter are increasingly different things.

-k

[TimG]

And what's good for "corporations" and what's good for the average American voter are increasingly different things.

What the average American voter needs is a competitive advantage that allows companies that employ workers in the US to sell products abroad and compete against imports. There are many ways to get achieve this goal (lower taxes are only one). However, if a politician does not put developing this competitive advantage as the top priority then the politician is working against the best interests of the American voter. Edited September 2, 2012 by TimG

[kimmy]

People get too wrapped up thinking in terms of manufactured consumer goods.

China can't re-shingle your roof, or fix your plumbing or renovate your basement. Your neighbors in Tweedleburg can do those things. Except not this year, because you haven't got the cash. This year, you decide to hold off for another year on fixing the roof, and try and do the basement one weekend at a time, and try and fix the plumbing yourself using some dubious advice you saw in a Youtube video.

Tweedleburg can't build your iPad as cheap as China can, but it's not like if they cut taxes enough there are going to be new leading-edge electronics plants springing up around America either.

-k

[dre]

People get too wrapped up thinking in terms of manufactured consumer goods.

China can't re-shingle your roof, or fix your plumbing or renovate your basement. Your neighbors in Tweedleburg can do those things. Except not this year, because you haven't got the cash. This year, you decide to hold off for another year on fixing the roof, and try and do the basement one weekend at a time, and try and fix the plumbing yourself using some dubious advice you saw in a Youtube video.

Tweedleburg can't build your iPad as cheap as China can, but it's not like if they cut taxes enough there are going to be new leading-edge electronics plants springing up around America either.

-k

Not only that but in many cases the costs between manufacturing something in the developing world are so much lower than here that tweaking tax rates isnt going to make any difference at all.

In fact tax rates and corporate tax rates have been getting consistantly slashed over the last couple of decades and most western countries have HIGHER unemployment now. Most manufacturing companies simply take those savings and use them to set up shops off shore.

To really become competitive we would basically need to dismantle our entire system, and BECOME a third world country. Wages would need to come down about 75%. Environmental regulations would have to dissappear, and we would need to get rid of things like social security, etc.

[dre]

People get too wrapped up thinking in terms of manufactured consumer goods.

China can't re-shingle your roof, or fix your plumbing or renovate your basement. Your neighbors in Tweedleburg can do those things. Except not this year, because you haven't got the cash. This year, you decide to hold off for another year on fixing the roof, and try and do the basement one weekend at a time, and try and fix the plumbing yourself using some dubious advice you saw in a Youtube video.

Tweedleburg can't build your iPad as cheap as China can, but it's not like if they cut taxes enough there are going to be new leading-edge electronics plants springing up around America either.

-k

China can't re-shingle your roof, or fix your plumbing or renovate your basement.

Ahhhhh yes. So domestic services are safe for NOW. But they will find a way to marry up those jobs with the cheap labor. We could make special visas for dirt cheap temp laborers from china, india, and elsewhere. In fact Iv already heard talk about that.

[Guest Derek L]

Ahhhhh yes. So domestic services are safe for NOW. But they will find a way to marry up those jobs with the cheap labor. We could make special visas for dirt cheap temp laborers from china, india, and elsewhere. In fact Iv already heard talk about that.

And what’s wrong with being able to pay a cheaper Indian or Chinese roofer or plumber? Christ have you called a plumber lately, they’ll want $150-200 just to show up at your door………You bet I’d be willing to pay a fraction of that for a immigrant worker………..

[TimG]

China can't re-shingle your roof, or fix your plumbing or renovate your basement. Your neighbors in Tweedleburg can do those things.

Except that shingling your roof requires shingles - where are those made? And the cost of getting a roof re-shingled affects the cost of living which, in turn, affects what wages the people making the shingles would be looking for. If these wages are too high the shingle makers go to places where the cost of living is lower.

That is why minimizing the cost of living should be a priority for governments.

[TimG]

You bet I’d be willing to pay a fraction of that for a immigrant worker…

He would likely pay cash to cheat the government out of the taxes that he thinks other people should pay...

[Guest Derek L]

He would likely pay cash to cheat the government out of the taxes that he thinks other people should pay...

What's that based on?

Just a couple of weeks ago my idiot kid put down half a roll of paper towel down the toilet and plugged up our sewer line…………normally I’d just go rent a snake machine myself, but the rental stores were closing, so we had to call a plumber………I’d already taken the toilet off prior to him arriving and put the toilet back……he came, pulled a big snake from his truck, put a couple of good scuffs on the floor and kickboard, put the snake through the pipe and cleared the block………With tax, the bill was $201.60, and he told me I was lucky not to be paying overtime……….

Now quite obviously, he offered a service, that under the circumstances I wasn’t able to provide myself, (If it wasn’t for my wife’s urging, I’d have just used the gas station down the road and waited until morning!!!) but at the same token, the plumber was hardly launching the Space Shuttle………..

If someone, for the sake of argument, from Indian or China can would do the same job for $50-75, why wouldn’t I pay less?

[TimG]

If someone, for the sake of argument, from Indian or China can would do the same job for $50-75, why wouldn’t I pay less?

The issue is they likely can't because they would need to pay the cost of living in Canada which is not cheap. You think the plumber is expensive but look at the cost base: the cost of the equipment including the truck, the cost of travel to and from your place, the cost of gaps work (i.e. a company may only have 5 hours of work spread out over 8 hours but has to pay the plumber do the work 8 hours), the cost of liability insurance, the cost of training.

The real question is why you think it could be done for any less?

Edited September 2, 2012 by TimG

[Guest Derek L]

The issue is they likely can't because they would need to pay the cost of living in Canada which is not cheap. You think the plumber is expensive but look at the cost base: the cost of the equipment including the truck, the cost of travel to and from your place, the cost of gaps work (i.e. a company may only have 5 hours of work spread out over 8 hours but has to pay the plumber do the work 8 hours), the cost of liability insurance, the cost of training.

The real question is why you think it could be done for any less?

The Walmart model? Volume of consumers…………..One company charging $200 for an hours work versus a company charging say $50 bucks………….I can afford to pay $200 for a service, but could a little old lady on a fixed income or a young family mortgaged to the hilt?

[cybercoma]

Don't give that $2.8 million tax cut to Mitt and pay for it by taking $2.8 million out of regular peoples' pockets. Leave the $2.8 million dollars in regular peoples' pockets so that they can afford to spend it at the struggling businesses in their communities.

I've been making this argument since the collapse of 2008 and all the talk of bailouts. It's insane to me that our governments are not reacting this way.

Edited September 2, 2012 by cybercoma

[cybercoma]

Except that shingling your roof requires shingles - where are those made? And the cost of getting a roof re-shingled affects the cost of living which, in turn, affects what wages the people making the shingles would be looking for. If these wages are too high the shingle makers go to places where the cost of living is lower.

That is why minimizing the cost of living should be a priority for governments.

Are you really advocating for government to take money from the middle class and give it to the rich so they give foreign workers jobs?

[TimG]

Are you really advocating for government to take money from the middle class and give it to the rich so they give foreign workers jobs?

I proposed no solutions. Only stated the problem. If a government wants to reduce the cost of living they need to start with their own unions. The private sector simply cannot afford to support the insane benefit packages and work rules that are given to government unions by short sighted governments. They can also look at red tape - regulations that may have a hypothetical purpose but the cost of implementing them exceeds the benefits.

[TimG]

The Walmart model? Volume of consumers…………..One company charging $200 for an hours work versus a company charging say $50 bucks………….I can afford to pay $200 for a service, but could a little old lady on a fixed income or a young family mortgaged to the hilt?

If it was so easy then why don't you see it already? Labor intensive work done in this country will always be expensive because labour is not cheap. The only way to reduce cost is use technology to speed up the work buy technology comes with a capital cost that must be recovered as well.

Do you have any basis other than blind belief that a plumbing services could be provided for less?

Edited September 2, 2012 by TimG

[Guest Derek L]

If it was so easy then why don't you see it already? Labor intensive work done in this country will always be expensive because labour is not cheap. The only way to reduce cost is use technology to speed up the work buy technology comes with a capital cost that must be recovered as well.

Do you have any basis other than blind belief that a plumbing services could be provided for less?

Immigration laws?

Would an Indian plumber in Canada making $15 bucks an hour, delivering a more fiscally attainable service for many, not have a better life than living in India? Wouldn’t lower income Canadians be “better off” too?

I don’t see a difference between the “unwashed masses” being able to purchase cheap goods made in the third world or having their toilets unplugged by a person, now living in Canada, from the third world.

[TimG]

Would an Indian plumber in Canada making $15 bucks an hour, delivering a more fiscally attainable service for many, not have a better life than living in India? Wouldn’t lower income Canadians be “better off” too?

An Indian plumber could not afford to live here and work for $15/hour.

Also, as long as living here entitles people to a huge stream of legal and social benefits it is not reasonable to expect unlimited immigration.

Edited September 2, 2012 by TimG