No No No, it's the consumers' fault

[d-ray657]

So the reason employers are sitting on mountains of cash from high profits instead of hiring is that they don't trust consumers to spend enough. It's not enough that consumers are scared to death that they are going to be among the 9.5% who don't have jobs, consumers are actually looking to reduce their debt. People aren't spending enough money because the the unemployment is high, and companies aren't hiring because they don't think consumers will spend enough. "As long as we're getting richer, why worry about bringing anyone else in to share in the success."

So what are companies doing - buying machines that replace humans; hoarding their cash, and arguing that letting the Bush tax cuts expire would be unfair to corporate executives.

Now to be consistent, I need to acknowledge that one thing holding back the employers from hiring is that people are starting to do what I have argued they should do. They are making do more with what they have, consuming fewer resources, and reducing debt. Granted reduction of debt slows consumer spending, but as the consumers' debt load decreases, they will eventually have more available cash.

I think one reason employers are enjoying such cash accumulation is that corporate taxes are far too low. If they have benefited so greatly from the government investment in the economy, they should share some of the benefit by helping address the budget deficit. But if that happened, someone making a million dollars a year would have to scrape by on 600 grand. The companies might just be able to put 700 million in the bank instead of a billion. That must be too much of a hardship to bear.

Regards,

D-Ray

[merrylander]

Not to mention that most of the clowns on Mahogany Row are Republicans who do not want to see unemployment drop, at least not until after November.

[merrylander]

I am now beginning to view all economic news in the papers with some degree of scepticism. Yestrday's WaPo put the $CDN at $0.96 against the $US. So how come I got $0.9980 against a check drawn on RBC? Have we gotten so jingoistic that we must lie about the value of the dollar.

[finnbow]

Corporations are not going to hire until consumer demand outstrips their ability to produce with their existing workforce - simple as that. Whether we like it or not, they are not incorporated to produce jobs, but to produce goods and services and make money from selling said goods and services (which requires jobs to fulfill). They would not be fulfilling their fiduciary responsibilities if they were to go out and hire, willy-nilly, out of some altruistic motivation to decrease unemployment. It just doesn't work that way.

As for corporate taxes, the US is among the highest among the countries we compete with. What's driving the train now is economic uncertainty - nothing more, nothing less. There are no silver bullets for this economic mess were in, I'm afraid.

[BlueStreak]

I'd have to agree with Finn. Although it does seem to be a bit of a "chicken and egg" scenario. The economy won't improve until people start buying things again. People won't start buying things until they go back to work. Or at least feel more confident, if they are still working.

No, no magic bullet. But I still say that when/if the GOP regains power in November, there will be a bit of a jump, even though realistically, not much of anything will have changed. The average wingnut consumer will think it's okay to spend now that his guys are back in the saddle. Some employers will be less reluctant to hire people that they already need, but have been holding off. You watch. The GOP won't do anything but win, (initially). If the numbers go positive even by the slightest amount, you will hear about it ad nauseum. Then the rich will get even richer and the poor will, once again, go back to work, but at lower wages than before.

"No, the game never ends, when your whole world depends on the Turn of a Friendly Card."---Alan Parsons Project.

Dave

[d-ray657]

Originally Posted by finnbow

Corporations are not going to hire until consumer demand outstrips their ability to produce with their existing workforce - simple as that. Whether we like it or not, they are not incorporated to produce jobs, but to produce goods and services and make money from selling said goods and services (which requires jobs to fulfill). They would not be fulfilling their fiduciary responsibilities if they were to go out and hire, willy-nilly, out of some altruistic motivation to decrease unemployment. It just doesn't work that way.

As for corporate taxes, the US is among the highest among the countries we compete with. What's driving the train now is economic uncertainty - nothing more, nothing less. There are no silver bullets for this economic mess were in, I'm afraid.

What I see as the problem, then, is that most of the investment in the stimulus has gone toward increasing capital. programs that were supposed to spur job growth has ended up in the hands of the corporate powers instead of being passed on to the workers. Perhaps more of the stimulus should have been directed toward building and repairing infrastructure. Funds appropriated toward that would have to be spent on putting people to work fixing roads, rebuilding crumbling bridges, etc.

With the emphasis of making green investments with the stimulus money, a considerable amount of it should be directed to building the infrastructure for expanded mass transit in the cities. Viable mass trasit would reduce the miles driven by commuters, shoppers, vacationers, etc. It would create jobs for drivers, attendants, maintenance workers, mechanics, ticket agents, not to mention the enormous number of construction jobs. But, of course, the oil companies would not like it, so never mind.

Regards,

D-Ray

[davidb]

We can spend every last dime we have but if it's not on american made products nothing will change.

[d-ray657]

Originally Posted by davidb

We can spend every last dime we have but if it's not on american made products nothing will change.

Yeah, but it will keep Wal-Mart in business.

You have a very good point. One of the initiatives the President is pushing is a program to encourage and support American manufacturing capacity. Somehow, I don't think the things that create financial health for Wal-Mart are particularly good for the rest of the economy, but that's a topic for another thread.

Regards,

D-Ray

[davidb]

Government programs will not fix it. I think that has been established. Not throwing stones. Just sayin.

[noonereal]

Originally Posted by davidb

Government programs will not fix it. I think that has been established. .

i would certainly trust government before i would trust private industry to fix anything and i am not sure what you mean by "Government programs will not fix it. I think that has been established."