JOBS, JOBS, JOBS
(To the tune of "Where Have All the Flowers Gone?")
Where have all the good jobs gone . . . . Long time passing. Where have all the good jobs gone . . . .
Dec. 2, 2007 (From SAWYER2008.com): Conservatives, notably Rush Limbaugh, Bill Kristol, the Wall Street Journal, will justify tax cuts for capital gains on the specious argument that those entrepreneurs who are risking everything to start a new business, are providing new jobs. Capitalism and good old fashion entrepreneurship is what made this country, say they. Not so fast, say I.
America has had entrepreneurs for over three centuries. A few lived in stately manors or large prairie ranch houses while most ordinary citizens lived in hovels, rented houses or sod huts. We had "entrepreneurs" during the Great Depression, but most Americans barely scraped by. Until 1945, this country did not have a middle class. After World War II, the American Economy was one of the few left intact. The demand for U.S. goods created a demand for U. S. workers. Previously scorned, labor unions were allowed to organize the workforce, and wages soared. The standard of living for the working class greatly improved. For the first time in our long (entrepreneurial) history, the people who manufactured consumer products actually could afford to own those products. For the first time, an American middle class came into existence. Workers bought cars and built houses away from their rented homes in the core cities. Suburban shopping centers sprang up. Interstate highways populated with motels and fast food restaurants were constructed. People could afford vacations, and weekend homes. Most importantly, ordinary folks, who never dreamed that they could own their own businesses, opened restaurants, started up retail stores, became builders, and sent their kids to college. Airplane travel became affordable and common. The new middle class became the new entrepreneurs, only there were a lot more of them. (more about "entrepreneurs and risk takers below)
SO WHAT HAPPENED?
Starting in the 1970's American manufacturers started moving their operations overseas where labor was cheaper, taxes lower, and regulation less obtrusive. Good manufacturing jobs began to disappear. While our politicians, Republican AND Democrat, and our political pundits, like Limbaugh, Hannity, Cavuto, those two Fox business analysts (the one with the big ears and the big guy named Charles (who reminds of my cousin Bobby) assure us that "free trade is good for everybody," I have to wonder where they got their Economics Degrees. Basic Economics: People grow food and manufacture products for their own needs. Anything grown or produced above their personal needs is called surplus. Surplus is then traded with other people and other countries in exchange for their surpluses. That is the simple basics of free trade. It is called reciprocity - the basics of which most of us learned during the first week of College - Economics 101. In recent years, America has experienced a trade deficit of over $800 Billion. (2006, 2007, 2008).(http://www.census.gov/foreign-trade/balance/c0004.html#1991) Republican, Democrats, Mssrs. Limbaugh, Hannity, Cavuto, big ears and Cousin Bobby, just what part of reciprocity do you not understand? Where did you get the idea that $800 Billion in deficits is a good idea? Free trade my ass. Do the math: A manufacturing job pays, what, $50,000 per year? At $500 Billion in trade deficits (2006), that comes to 10 Million good jobs we have shipped overseas. This is free trade? We have a trade deficit with China of about $400 Billion per year (2006). Wow ! ! With that much money, will China eventually own the Earth? Well maybe. First let me tell you something that you (and the smart people above) don't know. Well, maybe Cavuto knows. China runs a trade DEFICIT with the rest of the world. Uh huh. We ship our jobs and spending money, to China and they buy THEIR stuff from someone else. Why? Mr. Cavuto? Mr. Hannity? Big Ears? Bobby?
Your concept of free trade sucks !!
Indebted to the labor unions, the Obama administration has threatened a tariff on Chinese Steelmakers. In retaliation, China has threatened higher tariffs on several American products. Can you say Smoot-Hawley ? Tariff wars prolonged the Great Depression and they have no place in today's world.
SO, knowitall, WHAT NEEDS TO BE DONE?
Glad you asked. In the last twenty years, during a time of stagnation in the European Union, there has been one success story to report; One European Nation leads the EU in per capita industrial output; and is second (to Luxembourg) in per-capita income. Industrious Germany? Nein. France? Non. Switzerland? Non, nein, and no (ask someone)? Nope . . .
What are you smoking, Sawyer ?!? Yes Ireland. In just over a generation, Ireland has evolved from one of the poorest countries in Western Europe to one of the most successful. It has reversed the persistent emigration of its best and brightest and achieved an enviable reputation as a thriving, knowledge-driven economy. Living standards and economic stagnation has been left behind. Ireland now has the second highest gross domestic product (GDP) per capita within the European Union (after Luxembourg), one-third higher than the EU-25 http://www.heritage.org/Research/WorldwideFreedom/bg1945.cfm" \l "_ftn1#_ftn1" \o average, and has achieved exceptional growth. In the past 20 years every major world corporation has located facilities here. Nicknamed the Celtic Tiger, the Irish Economy is booming.
Recent data suggest Ireland has a higher gross domestic product per capita than Denmark, Canada, the Netherlands, Japan and Britain. How in the world did Ireland do it? Many explanations have been offered for Ireland’s exceptional economic performance:
1. Macro-economic stability resulting from the decision to attack the debt by controlling public spending, rather than by increasing taxes: For a small, open economy, curbing public spending proved to be the productive way forward. It created room for tax cuts while simultaneously lowering the debt ratio. Lower taxes and a more stable macro-economic background translated into a huge burst of private sector activity, employment, and confidence in the government. After the cessation of civil war in the Eighties, the newly-elected conservative government did three things: (A) They acquired a line of credit from the European Union (can you say stimulus package?). (B) They slashed pension benefits, and (C) They reduced corporation taxes from 22% to 15%. Always obsessive about education, Ireland then could provide good workers and lower taxes. Then after prospering for the ensuing 9 years, what did the Irish do (Barack? Barney? Nancy? Harry? Karl? Vladimir?) Raise taxes? Nooooooooo.
THEY CUT TAXES AGAIN
Ireland cut its corporate taxes - yet again - to 12%.
2. Social partnership through a unique model of wage determination, involving extensive consultation and agreement among the social partners: The two key elements were wage restraint in return for income tax cuts and ongoing participation in economic decision-making through social partnership committees.
Domestic interest rates plunged as investor confidence grew, triggering a rare occurrence in modern economics: an expansionary fiscal contraction.
3. Foreign investment: Favourable corporate taxation is the main fiscal incentive for foreign direct investment. Ireland offered a preferential tax rate of 10 per cent on corporate profits from export-oriented manufacturing and services.
By the way, when you heard John McCain and Fred Thompson discuss Ireland's success during the 2008 election, know that they got their information from my website (Sawyer2008.com)
(October 6, 2009) With unemployment hovering around 10% and the deficit at a record high of nearly $1.5 Trillion (three times the "unacceptable" standard set by the Bush deficit last fiscal year), what does the Speaker of the House suggest as a cure? The Value Added Tax (VAT). This tax is used in all European Union countries, as well as many other countries.
Simply put, VAT is a charge on various stages of production of goods or commodities. In most countries, VAT is a tax in lieu of a sales tax. The "value added tax" has been criticized because the burden of it relies on personal end-consumers of products and is therefore a regressive tax (the poor pay more, as a percentage of their income, than the rich). Just like the corporate tax on my MAXX SS.
Defenders claim that excising taxation through income is an arbitrary standard, and that the value-added tax is in fact a proportional tax in that people with higher income pay more at the same rate that they consume more. Classes of goods are taxed at different rates. Therefore VAT is at most a flat tax. Baloney ! ! The VAT effects younger people more. Older people are more likely to have big ticket items, cars, refrigerators, houses, etc. already paid for. Younger people aremore likely to be purchasingthese items in the near future.
So, I suppose Nancy Pelosi wants to eliminate the sales tax altogether and impose the VAT tax sort of like the 'fair' flat tax? I can live with that. Ahh, ye of faith. VAT would be assessed - but all of the existing taxes would remain.
In the United States, only Michigan used a form of VAT known as the "Single Business Tax" (SBT) adopted in 1975, as its form of general business taxation. It is the only state in the U.S. to have used a VAT. I owned 17 retail stores in Michigan, and that tax put me out of business. VAT really worked well for MIchigan, didn't it Nancy?
The top federal corporate tax rate in the United States is 35% - the highest in the world now that Japan in September 2009 finally dropped its top rate to 32%. Anyway, our individual states add an additional minimum of 4% state corporation taxes to the tax burden. And with the proposed increase in the Obama tax plan, our top rate will go to 40%. Wow ! ! Is that incentive to attract more business to the USA, or not Mr. Obama?
I had lunch the other day with Harry Reid and Michael Moore and as they handed me the check. they told me that corporations aren't paying their fair share of taxes.
I used to drink that Kool-aid too, but one day I had an epiphany. I had driven 1288 miles to NW Arkansas to buy a 2006 Chevrolet Malibu Maxx SS, a car no longer manufactured (morons), from Steve Smith GM. After I left the dealership, I noticed that I had left my credit card behind. Rushing back, I was surprised to find my Salesman reading a newspaper; the receptionist eating lunch; the Sales Manager picking his nose.
Me: What's going on here?
Salesman: What do you mean?
Me: Shouldn't you be passing the hat?
Salesman (dialing security): for what ?
Me: To pay the corporate taxes on the car you just sold me.
Salesman (waiving off the security guard): The tax is figured in the sticker price.
Security Guard (holstering his weapon): Everyone, except liberals, knows that.
Then I had an epiphany - Corporations don't pay taxes, people do - their 'fair share' is figured in the price of the products we buy. Huh.
WHAT WOULD I DO?
(No 2,700 page bill needed here, Congressmen)
First of all, I'll tell you what IS NOT working: Every day (or so it seems), Fox News runs a story featuring some woman with an apron, standing behind the counter of her artsy-craftsy specialty shoppe (funded by her husband's dental practice) telling us how small businesses are creating all the new jobs in this country (implying that hers is one of them), and (by implication) extolling the virtues of giving small businesses (meaning her) tax breaks so they can expand and create more jobs . . . don't you see? So I'm absently contemplating this economic miracle while driving up the street to get a slice at my neighborhood Uno Pizza place. What's this? They tore down the Fina Gas Station and replaced it with ? WALGREENS ? Wonderful. Now I won't have to drive six blocks to that other Walgreens. Noting with irony that that intersection (Fiddlesticks and Daniels) now has a Walgreens pharmacy, a CVS pharmacy, a Publix with a pharmacy, and a 7-Eleven (where I have it on good authority, the night clerk also sells drugs), I proceed to get that slice of pizza. There are no cars in the parking lot. Rats ! They aren't open for lunch. There's a sign on the door; I'll just see what their hours are. Hastily scrawled on the paper sign are these words: "Sorry, out of business." A National pizza chain, open TWO YEARS is out of business? Next door to Uno, I see they just opened a new restaurant (Sam Snead's Pub). So maybe the Uno employees found new work. Wait a minute, said I, stomach growling. A drug store on all corners ? One restaurant closes, another opens? How does this scenario remotely contribute to a creation of new jobs?
In Ft. Myers, in the last year alone, 13 new restaurants opened - 14 existing restaurants closed. Did Walgreens create new jobs? No it didn't. They will take jobs away from CVS across the street, or Publix, kitty-corner (but I'm betting the night clerk keeps going). So, even if it is true that capital gains tax breaks creates jobs, what kind of jobs are we creating with this largesse? Congress renewed the tax breaks and unemployment went UP 10% in April (2011). For argument's sake, would that smug lady with the apron think it marvelous job creation if a small artsy-craftsy business just like hers opened across the street (like Walgreens) or right next door (like Slammin' Sammy's). I think not. If the competition put her out of business (I speak from experince, here), would a new job be created or would an old job just be lost - or both.
Either way, how many more Walgreens do we need? Or Starbucks? Or Office Depots; Best Buy's; Borders; Circuit City's; Blockbuster Videos; Robert Hall's; Western Auto's; Acme (catch-a-roadrunner) Company's ? When one goes under, another takes its place. But we just move sideways - no jobs are created. What would President Sawyer do?
CREATE NEW JOBS
During the 70's and 80's we became a "Service Economy." Who says so? The new educated elite liberal says so. With their long-standing fear of carrying a lunchbox to work, these elites made the computer their future. Sitting on one's ass in front of a computer monitor sure sounds better than rolling tar on a 110 degree roof, and because the educated elites comprise almost all of the makeup of the political class, they make the rules. So a college degree became all important, and skilled and semi-skilled jobs became obsolete in their way of thinking. Trade classes were cut back in public education, and college curriculum courses were emphasized. Those who were not necessarily cut out for academia or just preferred to work with or create something with their hands were discarded. The elites looked down their noses at them. A prime example of this is the way a Sean Hannity sneers at the $100,000 compensation that the UAW has gained for some of its workers, while rationalizing the millions that they make for talking into a microphone three hours a day. Another is the Clintons' proposal for a high "vice tax" on "Joe Six-Pack's" beer and cigarettes, while eschewing any taxes on the elites' cigars and chablais. Manufacturing jobs were sent overseas with merely a whimper from either the liberal elites, or the conservative business owners who stood to gain, including those sent to Mexico vis Bill Clinton's NAFTA Treaty. Now those jobs are gone. While campaigning for President in 2008, John McCain "candidly" told the people of Detroit that those jobs were gone forever.
JOHN MCCAIN WAS MISTAKEN
We CAN BRING MANUFACTURING JOBS BACK TO THE USA, As I explained in my letter to Detroit's Mayor Dave Bing (to which he couldn't be bothered to reply) (click here), How??
ELIMINATE CORPORATION INCOME TAXES ! !
Corporation income taxes amount to 9% * OF OUR TOTAL FEDERAL REVENUE. The taxes we get from our manufacturing amounted to 4% of our budget. 4% !! Our deficits are infinitely higher. And, I just told you corporations don't pay taxes anyway. Corporation taxes are a tax on the people who buy their products - you and me. If Ireland can attract manufacturing with 12% taxes (10% on favored exports), manufacturers will flock to the USA with 0 taxes. No tariff wars, no unfair competition, no huge deficits, no 2,000 page legislation. Just doin' business in the freest country on the planet. Just the return of those well-paying jobs to the good ole U.S.A. Where have all the good jobs gone . . . . Long time passing. Where have all the good jobs gone . . . . Where have all the good jobs gone . . . . Gone to the U. S. everyone . . . Someday, we'll ever learn . . . someday we'll eeeeeeeevvverrr learrrrrrrrrrrrn.
* This just in - 9% in 2010