Yesterday Representative James Sensenbrenner (R-WI) blogged about his upcoming Job Creators Roundtable in Brookfield on Nov. 7, 2011.
Giving potential ‘job creators’ just 2 days to adjust their busy schedules — or five days for those of you who follow the congressmen’s official press releases — and offering up exactly ZERO novel ideas, it is clear that finding creative solutions to the persistently high unemployment in this country was the last thing Mr. Sensenbrenner was trying to accomplish.
Rather, the fluff piece serves simply as a vehicle to parrot the standard GOP talking points regarding the President and the ‘do-nothing Senate’ which enjoys a slim democratic margin.
Mr. Sensenbrenner, apparently ignorant to the historically low approval ratings that congress now enjoys, actually has the gall to suggest to his constituents that he, or rather House Republicans, are actually pushing forward a progressive jobs agenda.
And what does Sensenbrenner offer up as proof for such a ridiculous claim? Simply the following sound bite:
“...the House has passed legislation to reform costly regulations and save hundreds of thousands of jobs. We have passed legislation to reform our tax code and enable small businesses to gain access to capital.”
In other words, tax cuts to businesses and less regulation. This mantra should sound familiar as the GOP overlords make all congressmen pledge this type of nonsense.
I won’t go into Mr. Sensenbrenners’ motives for such a Pavlovian response to commands from party whips, but let’s be clear on the facts.
First, when tax rates are high, companies are motivated to invest in their business rather than pay the high taxes on the profits.
One of the best ways to do this is to HIRE EMPLOYEES so their salaries can be written off as expenses.
On the other hand, when taxes are low, the incentive is to cut costs, fire workers and pull out the profits. This is especially true of publicly-traded companies whose boards can be pressured by investors to maximize profits.
There is plenty of evidence to support this notion. When Presidents Reagan and W. Bush cut taxes, non-farm payrolls dropped significantly. When Reagan and Clinton raised taxes (yes, President Reagan raised taxes!), the trend reversed.
Frankly, the myth that that jobs are created when taxes are cut is ignorant at best and irresponsibly dishonest at worst.
Secondly, the notion that businesses do not require regulation belies all available evidence. Perhaps the best example is the financial sector that, following decades of deregulation by both Democratic and Republican congresses, nearly crashed the global economy.
In contrast, the most successful societies around the world are tightly-regulated capitalist economies.
If Mr. Sensenbrenner is truly sincere about finding ways to stimulate the economy, he should drop the talk-radio spin and get his facts straight.
If he is serious about incentivizing private sector hiring, he should look for models around the country and around the world that work.
And if he is serious about meeting with the public, be damn sure to give more than a few days notice.
Anything short of this and Mr. Sensenbrenner is just another beltway crony looking to keep his job and curry the favor of the GOP, and with unemployment at or above 9%, it is clear how well that strategy is helping the American worker.
DJ Bradley
11:13 am on Tuesday, November 8, 2011
Couldn't agree more Victor!
Randy1949
12:36 pm on Tuesday, November 8, 2011
Seconded. You make some excellent points.
Victoria
1:27 pm on Tuesday, November 8, 2011
If what you say is true why aren't businesses screaming for more taxes and regulations?
Victor Drover
1:46 pm on Tuesday, November 8, 2011
Because companies exist create wealth, not jobs.
DJ Bradley
1:54 pm on Tuesday, November 8, 2011
Right again! This guy is good.
Victor Drover
2:08 pm on Tuesday, November 8, 2011
LOL. My last comment came out snarky. I was not my intent :)
Jay Sykes
3:11 pm on Tuesday, November 8, 2011
So, do you raise tax rates forever, or only until the economy hits some pre-determined benchmarks? Where is the 'sweet-spot' in the tax code;the exact rates that generate the most tax revenue without any negative consequences to the economy?
Victor Drover
3:35 pm on Tuesday, November 8, 2011
The way I see it, the employment rate will set the tax rate. As one goes up the other goes down, and vice versa. This is of course affected by the GDP and such, but in short its not unlike your personal budget. When income is good and expenses are low, you can afford the luxuries. When income drops and/or expenses go up, you tighten your belt. Eventually, you fall into a "sweet spot" with fewer fluctuations and less stress.
What appears to have happened federally is that tax rates have continued to drop and loopholes expanded such that federal revenues are at levels not seen since before World War II. It's only natural then then a shift in the opposite direction has to occur.
However, please note that my article above is not a call for higher taxes. Rather, I wanted to make the point that continued tax cuts certainly can not be the answer, and some in the GOP are now realizing this.
The real point I wanted to make was that Mr. Sensenbrenner has an opportunity to lead, not to simply follow the party line. Maybe there is a way out of the employment crisis without increasing corporate taxes but I have yet to hear any originality from the representative.
Jay Sykes
4:28 pm on Tuesday, November 8, 2011
@Victor... You are correct, we did not hear anything original. I guess, even Sensenbrenner is in election mode too.
Victoria
4:04 pm on Tuesday, November 8, 2011
So are you saying that a company cannot create both wealth and jobs? Only one or the other?
Victor Drover
4:15 pm on Tuesday, November 8, 2011
Yes, companies can do both. But sometimes they need incentives, and historically those incentives have been corporate taxes. In other cases, companies do not have the choice as the boards are pressured to make cuts by the shareholders. It's certainly not a one-size fits all description.
I really like modern examples here in the US, but also in Argentina, Chile, etc..., where companies were closed down, and re-opened by the workers who were all now the owners. In these cases, the corporation actually operates more like a co-op, and the goal is not profit but productivity and employment.
The other great part of this example is that the workers have a vested interest in working hard as they share in the success.
DJ Bradley
4:10 pm on Tuesday, November 8, 2011
Victoria, the fact that companies create jobs is incidental to their mission in its purest form. Companies form to earn profits. The people hired actually eat into the profit margin, which is why companies flee to cheaper labor markets like China or Mexico where they can significantly reduce their labor costs.
Victoria
4:22 pm on Tuesday, November 8, 2011
Well then maybe the goal of government should be to help people form co-ops where jobs are the primary goal and not profits. Wouldn't they have more influence in that?
Victor Drover
5:11 pm on Tuesday, November 8, 2011
I believe there are tax incentives for cooperatives, certainly for agricultural co-ops. I think the problem is having a coop compete against a corporation that has lower expenses. I think there is room for many types of businesses, but unbridled capitalism unfortunately leads to a massive transfer of public wealth (toll booths, parking meters, electrical infrastructure, to give a few examples) to privately held corporations. Thus the need for regulation.
Lyle Ruble
4:51 pm on Tuesday, November 8, 2011
@Victor Drover... Well stated and on the mark. I'll be following.
Victor Drover
5:08 pm on Tuesday, November 8, 2011
Thanks Lyle.
Victor Drover
9:28 pm on Tuesday, November 8, 2011
A quick summary of the roundtable can be found here: http://www.fox6now.com/news/witi-20111108-sensenbrenner-jobs,0,5026835.story : "Another participant complainted about companies with off-shore divisions paying no corporate taxes while other companies, like his, have to pay the 35%. Sensenbrenner says corporate tax relief may be on the way."
Rather than criticize the free ride some corporations are getting, he's still pushing tax cuts. Sad to say the least.
Victor Drover
11:17 pm on Tuesday, November 8, 2011
Here's a more complete summary of the round table: http://portwashington-wi.patch.com/articles/job-creators-tell-sensenbrenner-to-get-the-government-out-of-their-way
Ms. Latina Renee
7:58 am on Friday, November 11, 2011
I swear, I'm demanding the federal government to create me a job!
Robert Naatz
12:14 pm on Thursday, November 17, 2011
I agree. The WI legislature and governor gave a good pay raise to the highest earners, basically for doing nothing. If more money comes your way without risk why not just accept it and sit back. More tax cuts equal more raises in income without further job creation.
Victor Drover
8:19 pm on Sunday, November 20, 2011
Ho Robert. Did u see Rep. Gabrielle Giffords suggest a pay cut for congress? http://www.washingtonpost.com/blogs/2chambers/post/giffords-office-urges-supercommittee-to-give-congress-a-pay-cut/2011/11/18/gIQAeYRvYN_blog.html
Victor Drover
11:38 am on Wednesday, January 18, 2012
Sensenbrenner turned the propaganda machine back on this week. Here's my response: http://sussex.patch.com/blog_posts/what-have-i-done-for-you-lately-blocked-consumer-protection-thats-what-8da0bb4a