The 1 percent are parasites: Debunking the lies about free enterprise, trickle-down, capitalism and

[Ichingcarpenter]

Excerpted from "Why We Can't Afford The Rich"
‘When did you last get a job from a poor person?’ So goes my favorite Tea Party slogan. The Americans are good at slogans but the Tea Party specializes in discombobulatingly daft ones. Of course you won’t get a job from a poor person, we wearily concede, but it doesn’t follow that the rich create jobs, as if they have special powers that turn their gains into a gift of jobs to the rest of us. U.S. billionaire Nick Hanauer is refreshingly honest about this: ‘If it was true that lower taxes for the rich and more wealth for the wealthy led to job creation, today we would be drowning in jobs.’ So why hasn’t the spectacular shift in income and financial wealth to the rich over the last four decades led to unprecedented jobs growth?

First of all, we need to ask what the rich and super-rich do with their spare money. They generally use it to try to get even more, through either real investment or financial ‘investment.’ In the latter case, whether by betting on market movements or buying income-yielding assets, or the many other ways unearned income can be extracted, their actions are unlikely to result in net job creation. Some ‘investment’ is used to buy up firms in order to sell off parts of them – to asset-strip them, in other words. This is likely to result in job losses, and indeed may reduce the ability of the firm to produce in the long run. Many companies have boosted their profits by cutting jobs.

But even if the rich do fund real investment in productive businesses – in equipment, training, new infrastructures or whatever – this may or may not result in job creation. Some businesses need to employ more people if they are to expand, but some do not: they may make more profit by reducing the number of workers they employ, whether by intensifying work for the remaining workers or automating their jobs. Either way, as Nick Hanauer makes clear, hiring more workers ‘is a course of last resort for the capitalist.’ Extra workers may enable more output, but if firms can find other ways of expanding output that are cheaper, they will.

So, even productive investment may be either job-increasing or job-decreasing. The last few decades have seen plenty of ‘jobless growth’ in advanced industrial economies. Contrast that with the post-war boom of the 1950s and 1960s, when the rich controlled a much smaller percentage of wealth than now: then growth was job-creating overall and real wages grew


more................ http://www.salon.com/2015/04/11/the_1_percent_are_parasites_debunking_the_lies_about_free_enterprise_trickle_down_capitalism_and_celebrity_entrepreneurs/

[TreasonousBastard]

1. This used to be mentioned in Eco 102 and just about every...

economist and businessman knew that employees were just a troublesome necessity. Technological developments were often enough simply means to replace unreliable employees with cheaper reliable machines. Sorry-- disagree with the premiss as you will, but that is the reality we have to deal with.

Sometimes, inventions like the automobile or personal computer create entire new industries and mass employment-- for a while. Eventually, they fall prey to cheaper outsourcing and/or robotic manufacture. Toyota has long had a factory with no lights because robots do all the work. And we know where computer components are now made.

If the wealthy did indeed create new industries, they would be useful. Unfortunately, the two prongs of the problem are that there are precious few new industries around capable of hiring enough people and there are too few wealthy interested in seeking them out.

Dealing with all this is tough enough, but there is one thing we can do immediately, although it's the one thing we won't do-- raise the estate tax. Actually, eliminate the "estate" tax and simply have inheritances declared as ordinary income.

Lady Gaga, after a year exceeding her wildest expectations, was shocked at her tax bill-- she hadn't had time to shelter her income. Paris Hilton, I believe, paid less than Gaga to just cash the check.

[bemildred]

2. +1. nt

[orpupilofnature57]

3. How about an ' Ill got gains Tax ' it wouldn't be hard to argue, but impossible to prove .

[Liberalynn]

4. Plus it's a vicious cycle

Why produce more supply when your customer base, the 99 percent doesn't have enough money to keep buying what you are producing?

[blackspade]

5. Excellent OP.

[1StrongBlackMan]

6. Posted to for later.