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Musicmystery -> RE: The True Job Creators (5/24/2012 10:38:55 AM)
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quote:
The Industrial Revolution in America was not triggered by a bunch of consumers but by men and women with vision who took huge risks with their money to build the very expensive plants and warehouses and transportation networks. They then opened those plants at even more risk by employing new workers who would then make a product that might not sale.
The impact of the tax code is huge. The tax code is tailored to reward those capitalists who risk their money in doing this. The reward is another carrot to stimulate investement. Removing this reward then encreases the risk of investment and therefore removing this reward is clearly anti-jobs because investment drives "industry" and "Industry" employs. Consumers do not employ.
The reason there is captial sitting on the sidelines is Obama. The uncertainty that Obama brings to the table or rather the certainty that Obama brings an anti-industry agenda to the table keeps investment captial on the sideline waiting for Obama to go away. Soon.
The tax code had top brackets as high as 90%. Personally--I think that's too high, just as I think 35% is too low. But regardless, industry flourished just the same. And with mass production came the need for consumers to buy those products, something that wasn't as important in a largely agrarian society.
Exactly, the problem with current investment isn't capital gains rates, but parked capital. Several reasons for this. One is uncertainty that started with the mortgage bundling fiasco and was compounded by record low interest rates from buying our way out of two previous recessions with monetary policy while leaving a flawed structural fiscal policy (tax cuts with increased spending and new long-term military obligations). All that is pre-Obama (though you could argue he hasn't done enough to fix it--but that mess so far came with the job). So banks are tight on credit; businesses are sitting on cash. Nothing but the time to unravel that mess finally will change this, because being certain any given bank is immune has been masked by the bundled deals. What Obama has added is the Health Care element. We could debate whether that's a good idea (I'd argue it's a crisis that needs attention, and this is a long overdue start, as double digit health care increases were strangling businesses), but the uncertainty is shared--will these provisions move forward in 2014, or no? Once that debate is settled--in either direction--that part of the uncertainty will be lifted, and businesses will move forward accordingly. They certainly have the cash to do so, and GDP has continued growing around 3% since mid-2009, while productivity has soared. Business certainly hasn't stopped...it just isn't creating many new jobs, as the "cut taxes and jobs will follow" dogma blindly believes. That's because consumers are 2/3 of the economy, and if they don't buy, or feel uncertainly about buying, the economy will be stagnate, and new jobs won't be created--which is exactly what's happening now.
Incidentally, net exports are up, and have been steadily climbing, under Obama's "anti-industry" agenda--an agenda that is frankly almost a carbon copy of Bush's. Where do you get this crap?
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