Tuesday, September 4, 2012


We live in a cause and effect universe. Things don't just happen by themselves. For every effect, there is a cause and without that cause no effect will occur. This is a basic law of physics. Why is this blinding flash of the obvious important, you ask? Because  it seems to me that the Republican Party, and Mitt Romney want to repeal this physical law of the universe. Let me explain.

We have been told, time and again, that the only way out of our current post recession economic doldrums is to cut taxes on the well off and rich, the so called job creators, and eliminate strangling regulations from business. Do that, the GOP says, and the economy will perk right up. Why Mr. Romney has even said that such a course will create 12 million jobs in the next four years! It sounds good, doesn't it? But the same problem keeps nagging at me. How does it work? What is the cause that leads to the 12 million job effect?

For the life of me I can't find one. If the idea is that companies will have more money because they will be paying a lower tax rate and, thus, will use that money for hiring, I remain unconvinced. Look around. Businesses in the USA are posting record profits. And they're not spending much of it either. The last number I heard was $3 trillion. That is, businesses in this country are sitting on $3 trillion in cash money. So seriously now, how much more cash do they need from tax cuts before they start hiring? Will another trillion do it? How about $2 trillion more? See the problem. There doesn't seem to be any particular amount that will cause the effect of more hiring.

We do know that the other guys also have a plan for increasing hiring and creating jobs. They may call it investing in infrastructure, but we all know that means government spending. But guess what? There really is a cause and effect relationship between spending and job creation. One can yell from the top of the highest mountain that "government can't create jobs," but there's no question that government can create demand and that leads directly to...jobs! If government needs 20,000 new hammers you can best believe that some business person will try to sell those hammers to the government. They might be over priced. They might be horribly delayed. But somebody will make said hammers and will sell them to the government. And since hammers don't just grow on trees, somebody will need to be hired to do the making. Government creates a demand that is then filled by the creation of new jobs. Thus, one step removed, government created new jobs.

But the tax and regulation cutting method doesn't have that same connection. What makes Mr. Businessman add workers? Because if what the government does under a Romney Presidency can't cause the desired result, can't make the effect happen after the cause, then Mr. Romney and friends really don't have a plan at all. What they have is Magical Thinking. They believe that a causal link exists, in this case between lowering taxes and job creation, when in fact there is no such connection. But they sure do believe it to be so.

But has anyone actually thought about how this might work in the real world? Because it seems to me that what has to happen is as follows:

First, government cuts taxes on the job creators.
Then, the job creators, having more money than they had before the tax cuts, open wide the factory gates to the hoards of job seekers who will then have jobs, will pay taxes and the country will be back on the road to prosperity. You can almost see the CEOs standing at their penthouse office windows looking down on the masses as they line up to be hired. He, or she, may spread their arms wide in a gesture of welcome, even if the soon to be new workers can't see such a gesture from the ground. That looks to me like the entire Republican job creation plan, at least from the vantage point of the "Job Creators." Because remember, there's no actual cause for the desired effect.

But what does this look like from the people at the gate? It looks like they line up and beg the job creators to grant them a job, doesn't it? Should one approach on bended knee, perhaps? Should one be careful to not look the "Job Creator," in the eye, in case that might offend? Since nothing the government did in cutting taxes actually made a company start hiring, I think some variation on begging for a job may be the only solution.

And if that's the case, would someone please explain how begging rich folks for work offers more freedom than being dependent on government to send out a Social Security check or pay the doctor that you just had to see. Anyone? I didn't think so.

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