The Good Economy

By: David Cox
Submitted: 2007-01-17 16:25:28
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Our President has assured us we are in a good economy that his tax cuts are working, unemployment is down to 4.4% that President Bushes action created 92,00 new jobs in October. Wow 92,000 new jobs in an economy that requires 150,000 a month just to stay even, because you see high school graduates aren’t unemployed and college graduates aren’t unemployed, you must first have a job before you can be unemployed. The President proudly proclaims 6.8 million new jobs since August 2003, forty months at a 150,000 new jobs a month to keep up with growth, that means we are 800,000 ahead of growth in employees, but wait wasn’t that the sole purpose of the tax cuts? To stimulate the economy?

The Presidents tax cuts have cost the US treasury 2001 to 2006 one trillion dollars for 800,000 new jobs, so lets figure a trillion is one thousand times a billion. If we were to give one million dollars tax free at random to 800,000 high school graduates or newly unemployed on the condition they could never ask for government assistance again during their life time the cost would be eighty billion dollars thus we could achieve the same results as the Presidents tax cuts with a savings to the treasury of 920 billion dollars! Could the economic performance of 800,000 new millionaires be any worse? True they would have little experience and might make some mistakes handling the money but hey we saved 920 billion dollars and if it works we could expand the program.

In my minds eye I can see some of you pulling at your hair screaming this is insanity! You can’t just give money away! Why not? Government does it all the time. The state of Georgia recently gave Kia motor company of Korea a tax waver of ten million dollars a year for the next ten years to build a new plant in Georgia, the debts incurred by the state of Georgia will continue and will increase during those ten years that will have to be paid back by the taxes of every man woman and child in Georgia, one hundred million dollars just given away. You say that’s jobs industry and growth! At the same time Kia was announcing their new auto plant Ford and GM were shutting down their assembly at plants in Atlanta, what ever happened to a bird in the hand? The Kia plant will be non-union and will pay lower wages than the two union American plants, thus less tax revenue for the state to recover their hundred million dollar give away.

You see its all part of the game; Georgia can proclaim new jobs and growth in the state while plant closings are rarely mentioned even during an election year. The government throws up their hands and says we have no control over decisions made in Detroit. But now Korea let me tell you about the good news! These unemployed are but a blip on the radar a government statistic for sixteen weeks, they are invisible men that will vanish from our sight an after sixteen weeks into purgatory then they will become discouraged workers not unemployed at all but only phantoms of the once employed

Well it can’t be helped its globalization you say, after all we have a good economy the stock markets up, corporate profits are up those are the indicators we use to judge a good economy right? It reminds me of the farmer who only planted his crops outside the windows of his house every time he looked out the window all he could see was he was how good he was doing. I went to buy a new crescent wrench the other day, made in China of course like every thing else. $9.95 less the store mark up of 15 to 20% $7.96 net to the wholesaler the cost to the importer $2.00 plus a 1% import duty $2.02 net cost plus transportation $2.06 maybe, profit to the importer $5.90 his expenses a warehouse and warehouse staff if he sells one million wrenches the duty paid to the government 200,000 dollars. On a corporate level things are great! His profit on those million wrenches almost 6 million dollars.

But if he pays an average of $30,000 in wages and benefits to a staff of twelve that cuts his profit to 5.6 million less overhead, expenses and the profit is down to the five million dollar range. Say he wanted to pay his staff $60,000 that would cut his profit down to 4.5 million. Anyone seen any 60 K warehouse jobs out there? Kind of hard to learn a trade working in a warehouse isn’t it? Ah but your screaming again, I hear you! He’s paying taxes on his income and his profits! Yes that’s very true! But aren’t those exactly the taxes we cut? Corporate profits and upper level wage earners? But he’s creating jobs you shout, is he? Is he creating jobs or are the jobs facilitating his wealth? Is it enough to just create jobs? Plantation owners in the old south created jobs but the plantation owner was the only one who benefited, is that how you build America?

Lets say I wanted to manufacture those wrenches in this country, I would need a foundry, I would have to have raw materials, I would need steel, chromium, coal and they would all have to be transported by truck or rail to my foundry. I would need castings and metal workers to pour the product into the molds and of course quality control. Then after I had manufactured the components of the crescent wrench I would have to hire people to assemble and package the wrenches then off to the warehouse. You remember the warehouse? Boy, it gets all complicated doesn’t it? All those people trucks trains and supplies, coal mines steel mills just to make a crescent wrench. But if I were successful the mines the railroads the trucking companies would all need new equipment and more workers. You see, when you import goods your not creating anything any more than when you go to Burger King and buy a whopper you can say see what I made!

Stop pulling at your hair, I know we can’t compete globally, you want to play globally? I’m ready, my house payment with taxes is about eleven hundred a month in China twenty five dollars a month, a plant manger will earn $7800 per year, an executive $12 to 15,000 You talk with my bank about rolling back my payments and the government about the taxes. Now calm down because you won’t like this part, you’re going to have to feel our pain as well, your salary will be cut back from 4.5 million to $50,000. I know calm down don’t hyperventilate, it sounds bad but it’s really its a princely sum when you consider your workers make twenty-five dollars a week. And besides what are you mad at me for? You wanted to compete globally. The goal was to create jobs just think how many jobs we could create at $25 a week of course you would have to cut the price of your wrench from $9.95 to $3.95 but that’s globalization for you! Why are you looking at me like that for? What do you mean you don’t have to do that? Oh I see, you like it the way it is. But what about Job creation? Don’t you want a good economy? Or just a good economy for you? Have I hit a nerve? Swing low sweet chariot coming for to carry me home.

I knew you’d say that, if it’s so easy why doesn’t everyone doing it? Anybody can, go on the Internet and put in your browser Chinese tool manufacturing and watch, almost as easy as porn dozens of sites just as nice as can be, all wanting to sell you tools. One catch, you will have to buy ten thousand wrenches at a time, $20.000 for the wrenches $2000 for the import duty plus the freight to your warehouse roughly five or six hundred dollars And then in six or seven weeks the wrenches appear at your door. Not the sort of thing mom and pop can handle but some can and do a quick check of E bay can confirm it. But to corporate America no sweat.

You import hordes of this stuff and you fill your warehouses then you open dollar stores A bowl costs 33 cents you sell it for a dollar, toothbrushes, shoe polish flower pots with mark ups ranging from 50 to 65% a couple of minimum wage employees and a manager how can you lose, Sure we lost three million manufacturing jobs but if we open nine million dollar stores were even. Or maybe we could open a huge gigantic dollar stores coast to coast and bring in boat loads of these items of all kinds and hire thousands of low paid employees to work there and we’ll call it Wal-Mart. Boy I tell you that’s a good economy. You go right ahead ask anyone from the Walton family they’ll tell you this is a good economy.

I know I know you’re correct, real wages are up real after tax income according to the administration is up 9.8 % or $2600. per person, did everyone else get their check? Mine must still be in the mail. You know it’s funny I was standing in line at Starbucks with Bill Gates one time and while I stood there next to him the average income of everyone in that line was a hundred million dollars annually but when he walked away with his latte, I was poor again. Some one remind me did he make his fortune importing Windows? No wait he created windows didn’t he? That’s kind of like manufacturing a product isn’t it? And we export it, don’t we? And it brings great wealth into our country doesn’t it? Hmmm maybe were on to something here.

The blood in our veins carries oxygen and nutrients to keep our bodies healthy and alive; if we are deprived of these things or fall short of our needs we become sick even though we may feel good. If we injure ourselves and see the blood flowing from our bodies, we know instinctively that this is serious and must be repaired for if not corrected we might perish. Jobs and gainful employment are the oxygen and nutrients of our collective economic bodies; money is our economies life’s blood. To hemorrhage jobs and incomes, to replace well paying manufacturing jobs with service sector jobs is by far a more insane policy than giving the unemployed a million dollars apiece tax-free.

Why if we were to try it for ten years it would take 8 million unemployed people off the rolls permanently and still save the treasury 200 billion dollars besides. I know it’s a daring plan and completely unconventional, without precedent. A nation giving its unemployed wealth without special interest or influence, sure it sounds crazy but what if it would work! We now give millions to those at the top of the economy for only a promise of assistance to those at the bottom and anticipated good. With my plan I can guarantee the improvement in the station of no less than eight millions. Throw your calculator in the trash the benefits are incalculatable and manifold. What other plan could guarantee 8 million millionaires in ten years. I know many of you would be too frightened to try such a scheme, so just to prove it’s safe I’ll go first!

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