Both Presidential candidates are convinced that getting people back to work is the most essential ingredient in improving the American economy. This is, of course, true; more people working means more money consumption, more taxes to be collected, and more profits to be earned. The folly in this, however, is making it happen requires more than incantations, waving magic wands, Romney’s business experience or Obama’s devotion to the middle class.
Our jobs problem is a by-product of classic capitalism, which at the moment is working just fine. Simply put, capital is not invested in creating jobs to produce inventory unless the consumer has money to buy it, and given the housing collapse, tight credit, reduced incomes, and lost wages of the middle and lower classes, the money just ain’t available.
Republicans advocate lowering taxes which, they say, puts money in the pockets of consumers to spend. Deprived of funds, government programs and payrolls will shrink, helping to balance the budget. Entitlement program reduction will further reduce government costs and associated taxpayer expense. Sounds tidy, but its folly.
Democrats advocate lowering taxes on lower incomes, raising taxes on the wealthy, and stimulating the economy with government jobs and incentives. Such talk is folly, too. They talk about job creation, but like Republicans ignore the reality that jobs are connected with consumption, consumption requires money, and right now the middle and lower classes don’t have much money. The wealthy are spending but a job-driven economy can’t depend on multi-millionaries alone to fuel its growth. U.S. manufacturing has been outsourced to the lowest foreign bidder and most American manufacturing jobs are gone for good.
Global capitalism is also working just fine, just ask Mitt’s Bain Capital. Tax-free offshore earnings of American companies are so huge corporations are blackmailing the government into granting them massive tax exemptions to bring the money home.
Capitalism makes winners and losers, requires winners and losers, actually. The bigger the winners, the larger the number of losers. Like Archimedes discovered in his bathtub, for water to rise, something must sink; billionaires are rising and the middle class is sinking. The unparalleled concentration of wealth accumulated by a small number of people is the result of money taken from the wallets of a large number of people. Be it housing equity, social security, money for medicare, 401K assets, usurious credit card interest rates, pay-day loans, or good old-fashioned fraud, big money finds ways to grow itself, ethics be damned.
Capitalism requires significant unemployment or the cost of labor gets too high; now that global capitalism is in full swing, American labor is competing with Chinese, Indian, and Malaysian workers. Are Americans ready to accept $1 an hour? Get ready.
Both parties are ignoring the unpleasant fact about capitalism; it is not fundamentally about creating good jobs for workers, it is about transferring the wealth of many into a small number of hands. The union movement, now viewed as Socialism, was the only effective hedge against the worst abuses of capitalism; collective bargaining by labor unions forced wage and benefit demands on shareholders and CEOs. Accordingly, the successful effort to destroy the union movement is highly responsible for much of the unemployment in America today.
Ultimately, in a country as large and complex as America, only a balanced combination of Socialism and Capitalism provides what’s necessary for a decent and ethical society. Enough arguing, already.