Monthly Archives: December 2012

NeoCon Papers #3 The Job Creators Myth

One of the errors in the neocon movement centers on the idea of “job creators”. One of the key rationales for reducing taxes on the wealthy is that they are job creators.  If they have more  money they will create more jobs. More people will be working. The economy will boom. On the surface it seems reasonable. On the surface.

Who are the “job creators’?  Does reducing taxes create jobs? Are “jobs” what we need to create in the first place? What evidence supports the neocon hypothesis?

First. According to conventional neocon thought the job creators are the wealthy. Through their largesse, hard work and superior knowledge of economics they create jobs for the less intelligent, less  capable and less competent American workers. Without them there would be no jobs. All would starve. Bill O’Reilly , for example, proudly takes credit for “creating jobs” for all the folks associated with his show. But is that how economic systems really work? Do a few create jobs for the many?

No. Modern society has activities that must be carried out, functions that must be filled. Work that must be done. No one “creates” these needs.  They are simply necessary to the functioning of modern society. Food, shelter, clothing, education, transportation systems and energy production are all needs that must be filled. They are not “created” by the wealthy.  For example,before the multinational agribusiness industry developed the need for food was met by family farms.  What the neocons label  as job “creators” are really labor managers. They do not create jobs, they fulfill the management function. If Bill O’Reilly went off the air today another entertainer would fill his slot tomorrow. No jobs lost. The idea of “job creation” itself is an illusion.

Second. Let us, for a moment , accept the illusion that folks with more money do have the ability to “create” more jobs.  Does reducing their taxes lead to an increase in American jobs? That is an intuitive leap. The neocons are experts at intuitive leaps when it comes to economic theory. It makes sense. More money should be freed up so the wealthiest can create more American jobs. The sun rises in the east and sets in the west. The sun orbits the earth. It makes sense. The sun must be traveling around the Earth. But empirical evidence contradicts that common sense.

What is the empirical evidence regarding job creation in the US and reducing tax rates for the wealthiest citizens and wealthiest corporations? Answer. There is none. Zero. Zilch. No causal relationship has ever been established between lower taxes for the wealthiest and increased jobs in America. It is just as likely that lowering tax rates and freeing up money for the wealthiest have lead them to invest those dollars in cheaper labor markets abroad. That, in turn, has lead to lowering wage scales and more job losses within the US.  The newest tax breaks for the wealthiest have been in place at least since 2002. Yet, in 2007 and 2008, just at the time you would expect increased investment to start paying dividends,  the opposite happened. Massive unemployment. Depressed wages. Economic downturn. The job creators, given billions of tax dollars in subsidies,  failed to create jobs. The opposite of what the neocons would predict.

Third. Do we even need “jobs”? Is that the need in the modern world? The attitude among (career) neocons seems to be that any job is better than none. Any job. Any pay. Any benefits or lack thereof. But short term, no benefit, low wage jobs are not better than nothing. Not in the long term. They may provide an illusion of employment and success and productivity. But we do not need more jobs. We need more careers. We need to develop long term, stable careers with good benefits. We need scientists, engineers, teachers, police, mechanics, doctors and so on.  We don’t need to create more low wage, day labor jobs. It is easy to create low wage jobs. It is difficult and expensive to develop careers. That is where our focus should be.

So, there is no  evidence supporting the claim of the neocons that giving more tax dollars to the wealthiest somehow translates into good jobs or careers in the US. The job “creators” is just another delusion. As I discussed in NeoCon #1 delusion is one of the foundations of the neocon movement. They require no evidence. In fact,  they reject the notion of evidence.

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