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Skipping the Step of Commerce
Supply side economics and why it is failing the American People.
I have been very intrigued by the debates lately over tax cuts, jobs, unemployment and our dwindling economy. I have not heard very many plain concise explanations for WHY the Rights, Supply Side Economic theories are failing the American people and simply do not work. So I figured I would try to explain what I believe is the cause of this failing belief system.
1st. Premise on the Right: If you give money in either tax breaks, or incentives, they will hire more people with this money thereby producing more goods and stimulating the economy. The failure of this premise, is that Employers do NOT hire new employees simply because they have the means to, they hire new employees when demand for their product or services reach a level that makes it fiscally feasible to pay for that new employee with revenue generated by the business itself. Typically an employer would like to see 3 times the cost. So if you hire an employee at 50k a year you would hope that the revenue generated would be at least 150k a year. Makes sense, with all of the liability of an employee, you must cover your bases. Conclusion of this is that jobs will not be created unless demand for the products being produced is high enough to cause for need of new employees (liabilities). I have heard over and over again on Fox’s O’Reilly Factor and Glen Becks show and so on how you just can’t tax the rich like that because they won’t create more jobs if you do. In this case Mr. O’Reilly, You are an economic PINHEAD not a Patriot…
2nd. Premise on the Right: If you cut unemployment benefits that will incentivize people to go back to work instead of paying them for doing nothing incentivizing them to sit on the couch eating bon bon’s. (some editorializing on this premise). Fact is, Unemployment insurance is just that, INSURANCE. It has been paid into by the people receiving it because they WORKED for it. They had money taken away from them each and every pay period so that in times of economic distress such as this moment in time, they would have some steady income to help them pay bills and feed their families thus helping to keep the economy moving… When you cutoff people from this kind of relief you stop people from having the ability to buy even the most essential items thereby cutting into the economy. People cannot afford to buy things and the economy can stagnate further and dip into recessions and depressions. There is one thing for absolute certain though. This is the money of the people that it is going back to, and if the RIGHT were true to their own thinking, they would be all for the government giving money BACK to the people from whom it was taken from…
3rd. Premise on the Right: You cannot take from the rich because the rich drive the economy. They are the philanthropists, they pay the most and get the least out of the government in the way of social programs and by helping the poor and middle class with all of these social programs it is a kin to Robin Hood stealing from the Rich and Giving to the poor. Wealth redistribution is BAD. This premise falls off the mark in many many ways. First of all, the deregulation that happened in the government during the Reagan years marked the largest lean toward wealth redistribution in history. By making it possible for the wealthy corporations to completely out class the middle and poor classes with fraud deceit and chicanery, the stage was set to completely wipe out the middle class and drive them into the working poor. The average income in America is UNDER 40,000 Dollars. People who are earning 250,000 Dollars considered RICH are earning on average the amount of 6+ other households in 2010. As inflation rises and products and services become more expensive the dollar does not go as far and therefore quality of life is diminished tremendously. $40,000.00 in 2010 has the same buying power as $14,207.06 in 1980. Annual inflation over this period was 3.51%. reference http://www.dollartimes.com/calculators/inflation.htm This income redistribution is much worse than any taxes could ever be. The tax of income vs buying dollar on the average US household has become completely debilitating to the middle and poor classes thereby creating an even larger divide between the Wealthy and the average US citizen. This was a deliberate, pre-calculated, pre meditated divide that needed government institution along with the wealthy to create. It was is and always has been a form of income redistribution that the RIGHT absolutely went along with. So the idea that Wealth Redistribution is a bad idea is a completely hypocritical bias on the side of the RIGHT. The LEFT’s idea of income redistribution is more a way to bring balance back to the situation that was unbalanced by bad government intervention on the side of the RIGHT Supply Side economic theory.
By bailing out big banks and big business, and tax incentivizing these companies rather than bailing out individuals, you are Skipping the Step of Commerce in this equation of economics. Had we taken the 700 billion dollars and given it individuals that were in distress, they would have taken that money, paid off their bills paid the mortgage, maybe bought a toy or two and put the rest in a savings account if any was left over. This would have stimulated the economy provided and saved millions of jobs, and these big businesses would not have needed to have been saved because they would have had their debts paid by the consumer… At some point it all goes back into the hands of the wealthy corporations anyway. The difference is that by skipping the step of commerce, you still have solid big corporations on Wall Street, but you also have created an even larger divide between the now 2 classes of people and stunted economic growth. Business only provides money for consumers in the form of jobs and jobs can only be created when demand for the products and services are in place and that can ONLY be done by putting more money in the hands of the individuals. The more people that have money the more consuming is done, the better the economy. This is a simple and easy to understand concept. The fewer the people who have money to spend the fewer items get purchased the more products and services sit unused. Supply Side economics is a completely and totally provably incoherent concept. Demand economics is the only kind of system that works in the long run and it can only work by putting money in the hands of the masses.
When you starve and vilify the middle class and poor by saying that they are just seeking to be lazy, you are promoting a rhetoric that has no basis in reality most of the middle class and poor people work 2 or 3 jobs at slave labor wages with no real benefits, if they can even find a job because no one is hiring, while the person or corporate HEADS are earning 20 Times as much money as they are and working much less. The spread between the Wealthy and the Poor is HUGE. Wages have become diminished for the working class, while the salaries and bonuses for the upper management have been outrageously raised. Thus separating the haves from the have not’s by the widest margin in history. As this spread grows, you begin to have a virtual slave labor or serf society where the money holders control at will everything that happens to the people. This kind of a society can only lead to one conclusion and that is an all out revolution. If you want to actually do something to make this economy a better place, put your money in the hands of the masses of people. It will trickle up to the top faster than you think, but at the same time stimulating growth of the economy and growth and progress in the world. This is the ONLY feasible solution to the economic environment we see ourselves in today. Avoid the Rhetoric and place your faith in reality and common sense. Supporting the step of Commerce is the true means of turning our countries fiscal climate around.
OH… Just one last thing to remember, Corruption must be stopped by the people. Our government has proven to be unwilling to address corruption and the only other means by which this can be tackled is for the people to rise up. Whistle blowers and employees, that are unwilling to sacrifice truth for a job. Strong courageous individuals that will not stand by and watch as those that hold control over them manipulate and pollute the systems. It is the honest silent individuals that must rise up and put themselves on the line to expose those that would and do corrupt.
Written by Ari Gronich…
Ari Gronich is highly trained and certified in many disciplines within the fields of bodywork, emotional release, energy work, nutrition, health, and kinesiology and sports therapy. For the last 17 years, he has helped transform his client’s bodies and lives through increased performance, enhancing physical, mental and emotional health.
Ari has led ergonomics and productivity seminars, as well as created corporate wellness programs for top companies all across America. He has been a successful business man within the health and fitness field utilizing his unique combination of expertise related to body posture, public speaking and facilitating trainings which gives him the capability of guiding people to create their most powerful presence and taking companies to the next level in productivity and employee benefits.
Ari is an “Outside of the Box” thinker and has a way of taking ANY situation and finding the holes that need to be filled thus creating WIN WIN relationships and powerful programs that serve to enhance everyone involved.
To work with Ari, or for a Consultation Appointment you can email email@example.com or call
310-363-0FIT (0348) or visit him at: http://www.performancetherapist.com