Saturday, September 29, 2012

Econ 101

The Republicans are still talking about jobs, as if none of this was their fault. They are even claiming that fewer people are working now than when Obama became President, as if they weren't to blame for all of this.

Here is one simple economic fact. The answer to the question, 'what creates jobs'? It's a one word answer and an incredibly simple concept that should be a requirement to graduate fifth grade. Demand. Demand creates jobs. Nobody, no matter how rich, no matter how little they pay in taxes will create a single job without a demand for the goods or service that they sell. 'Demand' of course requires somebody to 'want', and be able to 'pay'. 

If you want to create 'demand' out of thin air, the only entity that can do that is government. Government can print money or borrow from people who have it in order to buy goods and services at anytime. The Egyptians had this down, why do you think they built pyramids? The Romans mostly built useful stuff, like roads, viaducts, harbors, and on and on. The United States has done this from the beginning.

The other way to put money into peoples hands is to pass out money to the poor. Ancient kings did this all the time, 'alms for the poor' wasn't just to be nice or please the gods. Increasing payments to the needy and raising the minimum wage to historical levels (about $12-14/hour) would do wonders for the economy.

There is the problem of imports to deal with or the money simply drains away to China. Hamilton had this all figured out in 1790, and it worked fine until 1980. We can learn from history, we aren't Republicans.


Anonymous said...

All I can say to this blog post is NO SH$T SHERLOCK. What is so hard to understand about this concept, why do so many not think this through?
Are they: watching football to get the sense of hope in an otherwise near hopeless existence, working too damn hard for too damn little and getting hammered by A$$hole governors (the rust belt clan) such as walker, daniels, kasich, corbett and even fat christie, and all the other knob gobbling along for the ride with no thought of their own politician whores or even better being the above said whores beholden to those that they get their marching orders from thou up above (the big funders of their re-election campaigns).
I hope all get off the couch and get to the polls, talk to their neighbors, get active.
I'm going to try!