Once again.. There is NO REASON to "create" jobs

[SoCalDem]

A company making 100 "whatevers" a week, that no one has money to buy, will NOT hire more people to make 200 "whatevers", until people want to BUY 200 "whatevers".

Real "small businesses" will not hire people until they HAVE to. They are not in business to provide jobs.. they are in business to make money for themselves & their families.

DEMAND has to come first.

[RKP5637]

1. Exactly! n/t

[vi5]

2. So simple isn't it.

It really is.

We are a country run by a bunch of dopes and cowards.

[FiveGoodMen]

23. "We are a country run by a bunch of dopes and cowards"

We are a country run by evil men and women who get voted into office by a bunch of dopes and cowards.

[leftstreet]

3. Are there any Made In America pitchforks? n/t

[EOTE]

4. Isn't this common sense? Will any legitimate economist say otherwise? NT

[SoCalDem]

5. Nope..because they all have their "formulas"

and their books & degrees.

In the real world, business people do what they do...to MAKE MONEY..

It's how we "keep score".

If you can only sell 50 "whatevers" and you have 6 people on payroll who make those 50 "whatevers" , why on earth would you hire 3 more people?

But as soon as you get an order for 500 "whatevers", you will hire people.

[whosinpower]

6. Someone has money

I hear what you are saying. But, there is tons of money around....it just isn't in the hands of those who circulate it around.....

A company that makes 100 somethings per week will offshore their production sooner than hiring here to make 200 somethings if demand doubles. And I will go one step further and suggest that a company that enjoys such an increase in demand will be PRESSURED by venture capitalists to move their production overseas where they can profit more from less costs of production. If they need to finance or borrow.....those "partners" will want to maximize their profit potential.

Where is the incentive to stop the race to the bottom - I wonder.

I own a small business. Have operated it for over 20 years. You are right - I am not going to hire unless I have to. But, my own personal philosophy has evolved over the years. It is a small semantic change, but also quite transforming. I am not in business to make money. I am in business to make a life - and not only that, but to provide a service to my community.

[PassingFair]

17. Family businesses sometime exist to provide jobs for ALL family members, plus...

employees that have skills that family members
may not have.

I grew up working in a family business, the
whole family worked there at one time or another.

Providing employment for the family and employees
WAS the reason for the business.

[SoCalDem]

21. Exactly.. a small/family business is ALL about FAMILY

It's a way to ensure that employees won't be all that eager to embezzle/steal/etc from their own family business and to make sure that all members of the family have a job..and "outsiders" are seldom allowed in..unless they marry into the family or the business grows too fast for them to keep up.

The family-farm is the ultimate "family.small business". It's about trust and maintaining resources close to home.

Lots of small businesses are also born from the inability to FIND a job. There are lots of people who start their own businesses because they are desperately trying to make a living, and are trying to market an idea or themselves. Some of these catch on, but most probably die a horrible "death" after further depleting what few resources a person may have left..

[glitch]

7. Governments can and do create jobs all the time, especially when the private sector won't.

The belief that only the private sector can/should create jobs is BAD and based on Milton Friedman's economic ideology.

[SoCalDem]

8. Government is probably the only "real" job creator

Most other entities create jobs because & when they HAVE to, and are always looking for ways to downsize..

This whole nonsense about how "small" businesses create most of the jobs, is nutty.

Ask anyone you know if they would rather work for Mom & Pop donut shop or IBM or get a GM union job and see how many choose the donut shop..

[Write Left]

9. Yep. Nobody hires for the sake of hiring.

Everybody seems to have forgotten what the Republicans used to say about fiscal policy and the White House. Remember? They'd insist that the president, any president, had no influence on the economy because the economy was influenced only by the ebb and flow of free-market capitalism.

Before George W. Bush came along, they all walked around with that talking point in their back pockets.

Those were the days.

[DefenseLawyer]

10. It's a little more complicated than that.

Yes businesses are in business to make money. Unfortunately, the best way to make money in the short term is to cut labor costs. Businesses have been raising their profit margins by cutting labor costs for 40 years. Wages have continued to drop and demand was fueled mostly by credit. In the long term, however, this practice leads to what we have now. The credit is gone and the wages can't fuel demand. You can't have long term growth in demand until wages get back to where they should be. Demand doesn't just fall from the sky, it comes from having disposable income.

[Wounded Bear]

16. I'll give you a "Ding! Ding! Ding!"

The way I put it is this:

You can't drive prices low enough through trade policy to support an economy with double digit unemployment.

[WCGreen]

11. there is an incentive in the package...

It is to entice companied to buy assets by allowing the companies to write off the whole cost of the purchase in 2011. This should stimulate the manufacturing sector and so create jobs.

[SoCalDem]

22. If they use it to replace "old" stuff with new stuff, but there is still no demand

why would they make more "stuff"?

Since our economy is all about "us" buying things, until we have money & confidence that our jobs are secure, people will not buy things..

people have been paying down their credit cards (a good thing for their families), and are reluctant to spend spend spend like before.

I think a lot of people had a financial near-death experience, and are now being more cautious than ever before.

[Lex]

12. I hire someone today at least part-time IF

my health insurance monthly payment wasn't about the same amount I'd pay for an employee

[Statistical]

13. 100% true.

Any company (at least any long term profitable company) sees employees as production assets.

You wouldn't build a new factory to have it sit vacant while your current factory is running half shifts due to low demand.
By the same topic you don't "build" an expanded workforce without demand to justify that expenditure.

Employees are a very expensive business expenditure. Salary + benefits + taxes + workmans comp + unemployment fee + training + paid time off + per worker equipment/supplies/computer/etc = lots of $$$$ often 2x to 3x the actual salary amount.

No company expends that kind of money without a plan to show a return on that investment. Say a company who hires a Statistician wants that Statistian to work for 4+ years. That is a $250K+ expenditure (over 4 years). After all other costs involved that may easily be a cool million. The company wants a return on the million. Period.

It really is that simple. Companies hire people because it would be MORE expensive not to hire people. More expensive in terms of lost business, reduced margins, excess cost (damaged product, missed deadlines, etc).

[LooseWilly]

14. But statistical probabilities are handy tools...

for obfuscating the bullshit that one is trying to sell— when one is a politician.

It wouldn't do for the president to go on the air and say—

"Well folks, the economy sucks right about now, and knowing that you've got nowhere else to turn, you should all expect your bosses to make you work harder for the same, or less, pay... or you'll lose that job to someone more desperate than you.

"There won't be any new hiring except at lower wages than those currently holding those jobs... and once the new-hires get the hang of it you'll probably be gone along with all those pesky pay hikes you've earned over the years.

"The pressure will only increase as "globalization" makes it easier and easier to outsource jobs, leading to drops in employment, spending, and demand. Get used to it— and for God's Sake, don't consider attempts at banding together throughout neighborhoods to demand better wages for the work that's left, at Starbuck's and whatnot... because we all need to be nice to corporations making record profits or the whole company will leave."

"That's right folks... all the CEOs will move to India and go to offices in Mumbai and New Dehli, if we don't do as they say."

No one will say it... but legislating in that direction seems to be ok.

(Hmmm... imagine the bonus that will be given to the first CEO who outsources all other executive positions in the company, saving the corporation millions of dollars a year by hiring Indian, Chinese, Mexican, and Malay CIOs, CFOs, and VPs in general...)

[SoCalDem]

15. It always makes me smile when I hear their implied threats

Someone needs to call their bluff. They especially like to warn us & scare us about what would "happen" if they pulled their money from the US and put it somewhere else.. hahahaha.. rich people from all over the world put their money HERE because their taxes are WORSE where they come from..

and how exactly would those foreign places like it when their own companies were undermined when the US-ies showed up wanting to run things..?

They are perfectly happy to have their "unwashed masses" earning a pittance from US corps, because it eliminates the need for their governments to actually support these people.

It's very helpful to the upper crusties to have the media doing all their work by scaring people and obfuscating what's really going on here..

[LooseWilly]

19. Yeah, when I hear that line I just laugh...

and think back on an afternoon a couple years back with a millionaire friend of mine in Tijuana. He was afraid to drink tequila because the ice might be bad... I can just imagine the millionaires and billionaires and CEOs and CFOs and the lot going and paying EU tax rates (well, maybe the Irish 10% corporate rate... but the personal rate for all the officers would be distasteful for them)... and I don't see them going to Mexico... and Canadian tax rates aren't much kinder than EU... so—where? South Africa? India? Singapore?... Brazil?

The government just needs to call that bluff already... and tax the fuckers.
Irony.

[AdHocSolver]

18. K & R. Great post and thread. nt

[Dont_Bogart_the_Pretzel]

20. +1000

[neverforget]

24. Too late to rec but not too late to give it a KICK!