Wednesday, August 1, 2012

What does any of this have to do with the economy?

I listen to the news quite a bit. I've come to the conclusion that neither political party is really interested in creating jobs. I'm not actually sure just what the Democrats are interested in, but it's not jobs. The GOP is easier to figure out - they're just against. Doesn't really matter what it is, they're against it. Especially if it's being offered up by that foreign president in the White House.

The GOP is also all about fighting a culture war. They are anti-Gay Rights, anti-abortion (though I won't call them pro-life), anti-tax, anti-healthcare reform and anti-Obama. None of the things they are actually for will create jobs for anyone but bankers, lobbyists and lawyers. The wave of abortion legislation sweeping across the country has only created jobs for lawyers. The marriage bills, likewise sweeping the nation, have only created jobs for lawyers and lobbyists. Their complete obstinacy (shared by almost as many Democrats) against any meaningful banking reform or consumer protection has, again, only created jobs for bankers, lobbyists and lawyers.

Where are the bills that would put actual people to work? Cutting the taxes for the rich isn't going to put the 19 million unemployed back to work. If that was the case, the unemployment rate would be much lower. Cutting corporate taxes isn't going to work. Businesses aren't hiring for a variety of reasons, but taxes aren't it. Putting hundreds of thousands of Federal, State, County and Municipal workers on unemployment isn't going to revive the economy. Playing chicken with the Federal budget isn't putting anyone to work either - unless you're a lobbyist.

What all the politicians are overlooking is that the middle class is what drives the economy. It's not the poor, though they probably do more than the rich do. Good paying jobs, jobs that pay more than subsistence rates, enable the middle class to drive the economy by buying goods. Goods that factories make. Goods that require more people to operate said factories. When people can't afford to buy the goods they make, the goods they stock on shelves or the goods they distribute, the economy grinds to a halt.

There is no way that Wal Mart's model is sustainable. There is not way Wal Mart can continue to pay it's employees subsistence wages or less, fail to provide adequate healthcare for it's employees and expect to stay in business. Eventually their goods, no matter how much  they squeeze suppliers and buy from Third World manufactures, will be just too expensive for their employees to buy. What happens then? Well, Wal Mart lays off more people and forces more employees to go part-time while increasing the pay of those that remain to enough to buy goods for a while before the cycle repeats itself.

In a race to the bottom, everyone loses. The rich can only buy so many cars and yachts and televisions and microwaves before they run out of space. Just as there aren't enough of the rich to cover the deficits the Government is running, there aren't enough of them to drive the economy either. A strong, vibrant middle class is what does that. There ARE enough (or there used to be) of the middle class to drive the economy. These are the people that replace their cars every 5 years (or sooner), that buy new homes, new durable goods and new gadgets at a pace that ensures more factories will need to employ more people to keep up with demand.

When the executives forget this we wind up where we are now. The people who can drive the economy are worried about whether they'll be able to pay their mortgage or their rent and don't have enough money left over to go buy new stuff. When they don't buy new stuff, business needs less stuff. When business buys less stuff, factories need fewer workers. When factories need fewer workers they lay them off. Then the cycle starts anew with the workers that are left.

Going back to the beginning, I don't see what the abortion bills and marriage bills have to do with creating jobs for real people.