Wednesday, January 19, 2011

Jobs policy

We are ruled by myth and assertions. One of the most troublesome is the iidea that we must kow-tow to buiness because they create jobs. David Johnson of Campaign for America's Future sets us straight.
"A job is created when demand for goods or services is greater than the exisitng ability to provide them.... So demand creates jobs. Business want to kill jobs, not to create them. Many people wrongly think that busineses create jobs. They see that a job is usually at a business, so they think that therefore the business "created" the job. The thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, becauae businesses will have more money. But an efficiently-run business will already have the right number of employees."
The botom line is that businesses need customers first of all, not tax cuts. And, how do we get more customers with more money to spend? This is a theme of several of my previous posts, but the essence is for the government to be the meployer of last resort, make public goods and services, and with the income that the now unemployed would receive, consumer demand will increase. The Federal Reserve should be creating money for the Treasury to spend for hospistals, schools, roads, trains, etc.

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