Let's get something straight. Demand creates jobs

[ThomWV]

The cycle is well understood. Nature abhors a vacuum and demand will be filled. To fill demand you must have workers. Notice that if we believe that demand creates jobs, then business has little control over job creation. No matter how many people a capitalist might wish to hire they have no compulsion to do so. Only if their product or service can be sold do they have any reason to employ anyone. As a consequence of this it follows that if potential consumers have both a willingness and the money or credit to buy products or services that it is the driver behind hiring. That seems easy enough to understand, its how many of us believe the economy works.

Then there was Reagan. He professed that it was supply that created demand; if you build it they will come. In this case it is the employer who creates jobs and the people who are employed will make goods and presumably sell services which in turn will bring in money to the employer. The income will then be used to pay employees and to cover other expenses (which include taxes and funds set aside for maintenance and expansion) and the remaining money will be used to repeat the cycle (or operate it as a continuum) . And just as in the days of Whaling, the owners will divide the remaining funds in proportion to their ownership stake..

To believe the second explanation of job creation one has to first accept the premiss that 'if you build it they will come' whereas in the first you have to believe that if someone demands it and is willing to pay some one else will dam sure make it. Ask yourself, which one of these two explanations represents the world as you know it? And let me ask this too, what happens when you reduce taxes? Where does that money go? Where do all 'excess' funds go? To the owner's of course. And how does that create so much as a single job? Its a trick question, cutting taxes never created any jobs at all.

[salvorhardin]

1. "To fill demand you must have workers."

Not necessarily. In 2008 the world robot population, including industrial and service robots, was estimated to be about 8.7 million. That's just about equal to the entire population of New Jersey. In 2010, shipments of robots in the U.S. was up 87% in the Americas over the previous year; 127% in Asia and 45% in Europe.

[Betty Karlson]

16. You may have missed the quintessence of the remark

What is meant is that through encouraging consumer spending, demand is created both directly (the consumer spends something) and indirectly (the person s/he spends pays will also spend it at some point). Give lots of little people some money and it will go round and round, robotic revolution or not. And with demand restored, the rest of the economy will recover as well.

Demand-side politics instead of supply-side nonsense. It worked in the 1930-ies. It is what won the day in Denmark (yesterday's election), where Ms Thorning-Schmidt and her left-wing coalition defeated the incumbent right-wing cabinet of Mr Rasmussen. If Denmark can do it, so can the United States.

[sabrina 1]

2. You only have to look at this chart to know that tax cuts

do not create jobs:



From Paul Krugman via DUer Prosense in another thread.

We know that the Bush Tax Cuts did not create jobs, which is why it is so incomprehensible that they were extended.

Especially at a time when the country is in the condition it is in.

Firing public sector workers makes no sense either. Why do that now?

[Boojatta]

3. Yet, money can't buy you love.

[exboyfil]

4. I would expand on this point

further. What sort of demand will create the most jobs in the U.S. An immediate example would be to allow the sale of prepared food with foodstamps. Significant value added can be had in prepared food thus creating more jobs in the U.S. (granted we are talking McDonalds here but you get the idea).

An argument against raising the cap on Social Security is taking those additional dollars out of the economy (the demand), but how about a revenue neutral approach (decrease withholding on the lower income while increasing it on the higher income). Will the lower income be more likely to fuel demand produced by American workers with those additional dollars or will the higher income?

We currently give a huge chunk of our business subsidies to farmers, and, while this generates a positive trade surplus in this area, very few jobs are created because of the efficiency of our farmers. Would targeted subsidies in other areas make more sense? We actually have lots of dollars available for this approach when you consider transfer payments to the poor. No reason that labor which has already been purchased can't be used to generate additional jobs (I am thinking about some sort of set up where products not currently made in the U.S. are made by this workforce). A sane industrial policy would take this into consideration.

[B Calm]

18. Excellent points. Most of the farmers around me are

huge factory farms that get millions of dollars in subsidies and create very few jobs. The few jobs that they do create are low paying too.

[FarLeftFist]

5. Higher wages creates demand.

If you build it they WON'T come, if you build it without demand it creates a recession, industry grinds to a halt, inventory lays waste. The ONLY thing that creates demand is higher wages and wealth.

[B Calm]

11. Amen

[sam11111]

6. WPA does also. with no drive to cut wages to a dollar a day

Any private sector jobs created will soon have wages pushed down.

We will end as a copy of impoverished india.
****************
----------------
Co op
WPA
Government service jobs
***************

are what we should create.

Not jobs that make some Republican owner a billionaire, out to buy elections.

Haven't we learned that making the GOP rich
is a bad idea?
We should stop doing it.

[FarLeftFist]

7. I like it. Permanent WPA=ZERO unemployment forever.

No one able to work should be unemployed, there is so many jobs needed to be filled in order to Invest in America.

[sam11111]

8. why, thank you fLf. that phrase about the WPA gets lots of cheers here

Moore and R Reich have called for a WPA now

Talk it up

It has a chance.

[FarLeftFist]

9. That would be a win/win because

It would give unemployed people a chance to work and acquire new skills while receiving a paycheck and would also cut down drastically on welfare and food stamps. Maybe we could then implement a National healthcare system that operates with a surplus or at least deficit neutral. End some wars, everyone back to work, money in everyones pocket, demand for products at an all time high, a reformed tax code and voila, 90% of our country's problems solved.

[sam11111]

24. GREAT plan! Like to see you run for some office

Your plan would work.

Keep posting it!

[B Calm]

10. So sick of hearing right wingers saying I never got a job from a poor man,

the truth is without customers there wouldn't be any jobs. A lot of those customers are the working poor!

[HughBeaumont]

20. One of the dumbest statements ever made.

It's an empty statement. Poor people make, buy, market and sell your products. Without labor, your company doesn't exist.

I'd like to see a CEO earn his 400-times-greater salary by doing all of that. Then I'll consider them worth something.

[True Earthling]

12. There was no demand for personal computers, laser surgery, Snuggies,

microwave ovens, Teflon and post-it notes until they were invented and marketed. The inventors and marketers of such products had the vision to see the need and took the risk that there would be demand once the value of the product proved itself in the market place. The usefulness of these innovations are what created the demand... not the other way around. The product or service came first... then the demand.

[JHB]

14. The producy or service was introduced...

...into an economy where capacity for demand for them to be built up because people had money to spend on them.

[True Earthling]

15. Most successful products invented and mass marketed in the U.S. are exported

around the world. If a product that is manufactured in the U.S. creates demand in other countries then it will create jobs here. If people are given money to shore up demand and all they spend it on is pizza, beer and clothes.. it won't create many jobs here. Inventions and innovation create jobs exponentially...giving money to people will increase demand but only temporarily until the money is spent. The government is not like a free energy device where you get unlimited output with no input. Every dime that is spent or borrowed has to have corresponding revenue eventually.

[JHB]

23. What does that have to do with what I was saying?

Where there is demand (in the sense of money available for discretionary spending), then people will provide or create goods and services to draw upon that discretionary spending.

Government stimulus during a downtime (like the present) is only oe aspect. There are definitely others, like funding basic research. that funding can be public and private. Back when taxes on high incomes was very high, funding research was one of the loopholes used to shelter income from those high taxes. Let's also work against continued outsourcing and offshoring, so that the people with the skills to do the innovation and exploit it are here, not across an ocean. Not to mention enough people with high enough disposable incomes to afford the results of that innovation.

[ThomWV]

19. Nonsense

Every thing you mentioned was just an improvement on something that already existed and the demand was for an improved product. So just as the gas range was just an improvement over the old wood cook stove the micorwave is just an improvement over the gas range. Its not a new product. There were plenty of computers before personal computers, but there was a demand for small ones for personal use - the computer wasn't new and it was demand that drove the manufacturers to come up with what the people wanted.

This is no chicken and egg game, Demand nearly invariably comes first. There are certainly rare exceptions, but the world does not operate based on the assumption that rare exceptions are anything but rare and should be considered the norm.

[L0oniX]

13. ...creates jobs over in China.

[Betty Karlson]

17. some of them, certainly, will be over there

But most will stay at home. Because that's where the money is being spend. You don't go to a Chinese supermarket, you go to one near your house. The jobs you support by doing so are numerous (manager, cashiers, stock fillers, the trucker delivering the cans and bottles you bought...) You like reading? Buy a book - chances are the printer (a few jobs), the book store (at least two more jobs) and who-ever brought the book from printer to store, all rely on you having money to spend on that book. And so on.

Our cars and TVs may come from abroad, but small spending stays at home. As do things like rent. Just making sure that people don't get behind on rent is a good way of securing a part of the economy, as it increases the circulation speed of the dollars.

[hifiguy]

21. Money is much like blood circulating throughout the body

When it is moving freely, without impediment, all of the body's systems are capable of operating at peak efficiency. When large amounts coagulate on one or two places, the entire system fails, rapidly and totally. We are at the point of system failure because too few people have too much money and too many people have far too little.

Robert Reich has been saying this, using a different analogy, for years, as have Paul Krugman, James Galbraith and many others.

Supply-siders all must have failed Econ 101.

[DrunkenBoat]

22. And demand comes from people with money. Right now the top 10% have most of the money.

So that's the demand the "job creation" caters to. Which is why domestic laborers & personal assistants are a growing job category.

What do the rich care about "jobs" so long as their own needs are satisfied?

That's plenty of jobs so far as they're concerned.

[annabanana]

25. Kicking because there can never be too many eyes for this basic fact. . . n/t