Employers debunk Republican “job creator” myth
Can the myth of “certainty” be far behind?
Employers don’t create jobs, customers do. This week, business owners themselves exploded the myth that they are the job creators.
Previously we’d offered the argument that businesses don’t create jobs. “Customers are the engine of capitalism and of jobs,” we wrote. “Employees are hired when a willing buyer shows up at the door. Jobs are not created for any other reason.” Now business owners have weighed in to provide corroboration.
Reporting this week in the New York Times, Mokoto Rich interviewed Jeffery Braverman, owner of Nutsonline, in Cranford, N.J.. Even a $4,000 tax cut would not cause him to hire anyone. “You still need to have the business need to hire,” says Braverman. “Business demand is what drives hiring.”
In the same piece Michael Kehs, CEO of Chesapeake Energy, said a tax advantage “does not drive our hiring.” Jen-Hsun Huang, CEO of the high-tech company Nvidia concurred that tax breaks don’t affect his hiring decisions. Like many tech companies, he expects to increase his workforce “by twenty percent this year” based on customer demand.
When businesses are under-taxed, owners take the savings as extra profits. Under taxing doesn’t drive owners—or anyone else—to do civic good. It simply provides unearned income at another taxpayer’s expense.
Business blogger (and small business owner) Jay Goltz puts the final nail in the job-creator coffin. Noting that the people complaining about taxes are the same people who always complain about them, in good times or bad, he writes:
“Right now, my picture-frame and home-furnishing businesses employ 110 people, and they have certainly felt the effects of the recession and the housing meltdown, but if I have a problem it’s not with taxes and regulation. It is that I don’t have enough customers with money to spend. That’s why the most important aspect of the president’s plan is that it would inject $450 billion into the economy.”
Which brings us to part two of the phony right-wing jobs argument. It’s the myth that “certainty” is required for a strong business sector. Any entrepreneur will tell you that just the opposite is true.
World English Dictionary defines “entrepreneur” as someone who “by risk and initiative, attempts to make profits.” Not all business owners are entrepreneurs, sadly, but the most successful are. The highest profits are made when success is uncertain. The most profitable industries rely on uncertainty to give them the “win.” Obvious examples are the fear mongers who pitch gold on talk radio. They rely on economic uncertainty to scare you into buying. They profit from your uncertainty.
When a market segment functions with a high level of certainty, both customers and products are interchangeable. If that happens, vendors can only compete on price. Certainty lowers profits.
Republicans like to blame the bad economy on things they made up—like this myth of “certainty.” However, if they really believed it themselves, they’d compromise to get legislation settled. Yet they choose to obstruct even though obstruction itself is the primary reason for less certainty. It doesn’t pass the smell test.
Glen Greenwald writes eloquently about how business has enjoyed the certainty of low taxes and lax regulation for thirty years. Those years include two major recessions and two major bank bailouts. During the period, the boom came during the Clinton years, when taxes were reasonable and billions were made in our most volatile sector, technology. Technology continues to be one of the few bright spots in our economy (see Nvidia, above.) America’s most valuable company today, Apple, was near bankruptcy just a dozen years ago.
The only certainty in business is that certainty inhibits profits. But if Republicans really thought certainty was so important, they’d stop obstructing everything, wouldn’t they? If certainty was so necessary, wouldn’t it be worth compromising to get it? No, they’re simply arguing about something that doesn’t exist so they can avoid fixing something that does.
In doing so, Republicans conclusively debunk the claim that they are patriots.
TIP:
Enter the amount, and click "Tip" to submit!
Jeanette DeMain
Cap'n Parrotdead
Jack Blackshear
Bob Calhoun
Steven Rockford
Kate Flannery
Salon.com
Comments
Thank you.
Nice to see you call certainty exactly what it is: a myth.
Why is it so difficult for the nominally "best and brightest" to understand what is truly self-evident: If your goal is a consumer economy, the first requirement is consumers. No less a devout capitalist than Henry Ford understood this, and so does Warren Buffet.
Flat-lined wages, displaced jobs and rising prices are a prescription for exactly the sort of economy we now suffer under. Not surprisingly, the country enjoyed a real boom under Clinton, when both taxes and wages went up.
Unfortunately, the Reactionary Right never lets FACTS get in the way of BELIEF.
grover norquist is the perfect example. inherited wealth from a company made obsolete by technology. he has no talent, so since he can't get more, he asserts he shouldn't have to pay taxes. he was born rich, but can only stay rich if he keeps it all.
The only uncertainty that effects the economy is the uncertainty of the consumers whether they are going to have a job tomorrow, or be forced into bankruptsy because of illness and lack of health insurance, undermining of social safety net programs, and the undermining of the middle class, unions, and job security. Bring back job security, social security, healthcare security, and environmental security (from degradation and exploitation), and you'll bring back a thriving, green economy!!!
All with customers, and without them of course nothing. So how does stating the obvious in different terms make employers, or businesses not creators of jobs?
Oh, Nvidia will increase its workforce everywhere but here in the U.S.A.
Finally, Greenwald and thou have a penchant for head-fakes. The boom under Clinton came mostly ( I genuflect ) under Gingrich-led intiatives. The same cannot be said for Pelosi's reign of terror. The two major recessions is an overstatement aimed at disillusioning the readers. The first was pasted directly upon 9-11 and the second came when Pelosi swung the gavel in glee 2007.
People are disillusioned with Obama not for what he has done wrong, but for the nothing he has done to make anything right. Which is why he is left, and so are you. Be proud, there would be no discussion if everyone were on the same side.
Buba,
Gingrich had as much to do with the tech boom and resulting explosive job growth as Clinton did, which is so close to nothing we might as well call it that. The idea Pelosi had anything to do with this current megamess is laughable, and is not something one says if there is even a remote hope of being taken seriously.
We can't all be on the same side on many issues, but there's no real argument in reality versus surreality.
Koch knows. Those two know. Repros are a machine party. Not going to shake them to be patriotic by this...money talks...money for their various campaigns.
However, I liked your piece. Smart! Duh! Look forward to your next piece.
Marketers precede the customers and those who design precede the marketers....which brings us back to employers again. If I place an order for three hundred moss covered family gradunzas and stir up a might crowd of followers who want the same it will still not create a single minute of employment for anyone. So your premise is only partially correct. I find that by and large the least creative segment of society is the consumer. By all means however continue to punish American employers whilst China subsidizes theirs and see what happens to your theory.
Thanks for the perspective.
Glenn Greenwald does not "write eloquently" and never has. He is a Libertarian hack and not worth the time it takes to read him nor the pixels involved in debunking his drivel.
@ Justin Offalius: Without a perceived need in the marketplace, it doesn't matter what you design or manufacture, it won't sell. No serious business enterprise is launched with the determination of what market exists for it. My great-uncle, a man who had some successes of his own, had in his time interviewed Edison, Fermi and Tesla and was a friend of Charles Revson and consulted for him before he became rich, used to tell me that the Hebrew definition of success was "The time, the place and the wherewithal" and that would always be true.
Take note of the fact that two out of three of those represent the consumer, not the supplier side of the equation. Edison didn't end up employing all those people because he invented an electric turtle that did the rumba; he invented something for which a clear, known universal desire and need existed.
You can design and manufacture anything you want (in China or elsewhere) and if people don't want it, there will be no employment.
By the way, it's not so much that "China subsidizes theirs" as that WE subsidize them and have allowed so many of our production jobs to be moved out of the country so those "job creators" could pocket more money and leave the jobless or with just enough to income for some of their crap at Walmart.
Give someone who's greedy an inch and they will not use it to make room for someone else who's about to fall off a cliff. They'll just order a bigger lounge chair to take advantage of it.
I would direct you to my post "The Wealthy and TTTTTTaxes" in which point out that tax cuts don't make jobs....tax increases do that.