The Walmart near my home is a huge facility with 30 check-out stations. But, they only keep 3 or 4 lines open at any one time. How many times have I waited in line and thought, "Why don't they open more check-out lines?" The answer, of course, is demand determines the number of open lines. No business is going hire more workers than they need.
To hear Mitt Romney and Paul Ryan talk about pro-growth tax policy, you'd think that reducing corporate taxes is going to cause businesses to hire people. News Flash: Reducing corporate tax rates is not about increasing employment - it's about increasing profit and shareholder value.
But, wait! Maybe Romney is talking about cutting individual tax rates. Well, Romney says his plan for individual tax rates is a flatter and fairer system. That should offer no comfort to the middle class. But, Romney believes Obama is vulnerable on the unemployment issue, so he has been pushing pro-growth tax policy as a means to create jobs.
Here's what Ben Stein (noted economist and speech writer for Richard
Nixon and Gerald Ford) had to say about Mitt Romney's position on the
economy, "He has bought into what I think is a bit of nonsense about
supply-side
economics. He has bought into the idea that by cutting taxes, you
automatically spur the economy. That would be wonderful if true, and it
may be true, but there's no data that it's true,” he said. "And it
certainly isn't true that by cutting taxes you spur the economy enough
so you make up the lost tax revenue." (from Politico 8/31/12)
Economic growth is something of a chicken or the egg argument. Which comes first, do jobs create growth or does growth creates jobs? I'd like to talk about jobs - Steve Jobs. Let me use Apple, Inc., Wall Street's highest priced stock, as an example of how problematic the question of jobs actually is.
Apple employs 43,000 workers in the United States, but over 700,000 overseas. (Robert Reich in Salon 7/19/12). When you buy an iPhone, only 6% of the purchase price of an iPhone goes to American workers. The other 94% goes overseas where the iPhone is actually produced. What does Apple have to say about this: “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” as an Apple executive told the New York Times. (Robert Reich in Salon 7/19/12) In other words, Apple's corporate responsibility extends only to it's shareholders.
In today's economy, it is new technology, like the iPhone for example, that produces growth. But, unless that technology results in increased jobs here at home, the only growth possible is shareholder value. It's education, research and development, producing new products and services in the United States, creating jobs up and down the supply chain - that's what creates growth. Romney's business experience is in eliminating jobs, not creating them. His ideas increase corporate profits at the expense of labor and do nothing to address long term, chronic unemployment.
The Obama administration created The Bring Jobs Home Act, which provided tax breaks for companies that bring jobs back to the United States and eliminated tax deductions for companies that move jobs overseas. Sponsored in the Senate by Debbie Stabenow (D- Michigan), it was a brilliant bill designed to promote jobs for American workers. Republicans, however, through a filibuster in the Senate, blocked the bill. Why? Mitch McConnell, the Republican Senate Minority leader, said it would threaten economic growth. Economic growth for whom? Executives and shareholders? The richest 1% of Americans?
As you can see, I have plenty of time to think while I'm in line at Walmart. On the way home the other day, I decided to call it Walmart Logic; the idea that tax cuts are going to increase employment. Republican tax cuts are designed to increase shareholder value and put more money in the pockets of the wealthiest among us.
And, that is a view from Missouri.
