creating jobs without government spending?

[Anonymous]

Can someone please explain to me how Americans expect the government to focus on creating jobs and improving the economy, all while cutting spending? I just can't understand how the two ideas can coexist in one political philosophy. Seriously. Help me understand this.

[Anonymous]

How about by giving tax credits to businesses?

[Anonymous]

But that still costs something.

[jsteele]

Anonymous wrote:How about by giving tax credits to businesses?

Companies don't hire people to do nothing, regardless of the available credits. You have to stimulate demand so that companies will hire to fill that demand.

[jsteele]

Anonymous wrote:But that still costs something.

Republican Economics 101: Tax cuts and wars are free.

[Anonymous]

Not exactly. They estimated the Iraq war to cost 80 billion. They were only off by a few trillion. Maybe they were just talking about the Halliburton contracts. Maybe Halliburton can plow some of that money into better cement for their offshore oil wells.

[Anonymous]

I'd argue that the demand's there, it's dampened by cash and credit contraction. Obama should court Corporate America, get CEOs to start hiring. Many companies have the cash. They're hording it.

[Anonymous]

Anonymous wrote:I'd argue that the demand's there, it's dampened by cash and credit contraction. Obama should court Corporate America, get CEOs to start hiring. Many companies have the cash. They're hording it.

I agree there's cash and credit contraction, but why would companies hire additional people if nobody's buying their products or services? What are they going to sit around and do?

[Anonymous]

Make further tax cuts contingent on the unemployment rate.

We have been a welfare state, like it or not, since the 1930s. It's just that corporations have done much of the welfare state.

[Anonymous]

Anonymous wrote:I'd argue that the demand's there, it's dampened by cash and credit contraction. Obama should court Corporate America, get CEOs to start hiring. Many companies have the cash. They're hording it.

And...there's the GOP philosophy in a nutshell.

CEOs aren't hiring because there's no private demand so...

1) Obama courts Corporate America.
2) ????
3) Profit!

The Party of Children.

[Anonymous]

In my humble opinion, the current chaos reflects the divergence of interests between top executives and the thousands of worker bees. Top executives are incentived through bonuses and options to fire people when demand is down. It is not because these businesses are about to go out of business. But top executives are bonused on net profits and stock prices. Corporate America has been hoarding cash, and stock prices have returned in substantial part. Now, of course, future profits depend on demand, and no one wants to spend due to the economic anxiety that these same top executives created. Look at law firms. Firm management fired thousands of associates not because they were about to go out of business but because they did not want to reduce the pay of heavy hitters. So, large law firms now are a very undesirable place to be. I have no idea how to fix these distorted incentives but they are there. And I am not talking about loay

[Anonymous]

And I am not talking about laying off people when there is clear permanent reduction in demand. But much of the current anxiety is created by the corporations themselves, and the executives at these same places are so focused on nd encouraged through incentives to keep up profits and stock pricess.

[Anonymous]

Anonymous wrote:I'd argue that the demand's there, it's dampened by cash and credit contraction. Obama should court Corporate America, get CEOs to start hiring. Many companies have the cash. They're hording it.

You don't talk sweet to CEO's and get them to hire because they like you. How innocent.

CEO's are paid to drive earnings. You do that through increasing revenues or cutting costs. When there is no demand for extra product, all you are left with is cutting cost.

Cash is for financing worthwhile business activity, not paying people who are not needed. The reason that companies are hoarding cash is because (1) they have nothing good to do with it now, (2) when the economy starts ticking up they will have lots of things they can do with it, and (3) because if they end up in dire straights, they will need it because they can't borrow like they used to.

I'm a die hard democrat, but these are business basics. The people who feel like Obama made them feel bad and so therefore they stopped spending must be riding on a herd of unicorns. CEO's get criticized, even yelled at all the time - by employees, investors, competitors, shareholder activists, journalists, customers, lawyers, the courts, and occasionally congress -- you name it. It does not change how they run their companies.

[Anonymous]

I disagree. CEO's are partisan and would change their behavior if a Republican were in the White House.

[Anonymous]

I agree. Many CEOs are hyper partisan and are completely focused on pleasing Wall Street and getting their bonuses. The hyper and short-term orientation of the current US market economy is substantially responsible for the mess we are in. Many of the larger companies did not have to layoff so many people so quickly. They were NOT a risk of folding up. By being so aggressive with the layoffs, they contributed to the anxiety felt by most Americans. That anxiety has reduced consumer demand and, in my opinion, that demand will not return for many many years. None of us really needs all of the junk we were so encouraged to consume.