Our economic policy should be good for workers
Something is not right in this prosperous nation when people who are qualified and want jobs cannot find jobs to feed, clothe, shelter, and educate their family.
We are told our economy has expanded greatly, but informed observers show us that Workers are worse off since President Reagan introduced "trickle down" economics. CNN reported on August 18th, 2016 that between 1989 and 2013:
Our nation is burdened with a fantastic growth in our national debt starting under President Reagan's "Trickle Down" economic theory. The figure at the right shows our national debt since 1940. "Trickle Down" promised that tax cuts would spur econmic growth, but it has injured ordinary people and taken us into crippling debt. The super rich used tax savings to build factories over seas and send American jobs away. We must hope that President Trump will make good on his promise to protect American jobs.
We should pay attention to the problem of national debt. Every year our government spends more money than it collects in taxes. Is this not destructive to our well being? I read that the US has the greatest gap between the wealth and the poor of any nation on earth. Who can deny that our economic system needs to be changed?
The super-rich are doing very well, and have gained a much larger share of the nation's wealth, aided by large tax cuts.
We should note there are several "think tanks" funded by the super-rich that grind out studies that are widely publicized in the media, telling us we need to scrap regulations, reduce taxes, and cut aid to the poor. We ought to suspect funding "think tanks" is not for charitable purposes, but that it is an investment that gives large returns to the donors, besides being tax deductible.
Republicans tell us Social Security Insurance cannot be continued and must be "privatized".
Working people pay Social Security taxes throughout their lives with the promise of a pension when they are old, while the income of high income people is largely exempt from these taxes.
Republicans complain that Social Security is an entitlement and plan to cut it. We should understand that Social Security is an insurance plan and that Americans pay into it until retirement, so I object to those who call it an "entitlement" as if it is not earned. We must also note that the government has spent our Social Security payments to pay for other things along the way.
At least part of the solution for Social Security is to stop bombing other nations and maintaining military bases all around the world, and raise taxes on those whos incomes have increased 70% or 192% while ordinary Americans have prospered much less. I read that America has the greatest gap between wealthy and poor of any nation in the world. Something is radically wrong with our economic system if the super rich get richer and ordinary people cannot get jobs and feed and clothe and educate their children.
But we'll fix this on Election Day, won't we?
Well, we might think surely the voters will see these things and fix them on election day. But, it seems like the people we elect are heavily influenced by political contributions and things do not get fixed.
Adam Smith and "The Invisible Hand"
In high school economic class I learned about Adam Smith, a Scotsman, wrote a book titled "The Wealth of Nations" in 1776 which Wikipedia says is the first modern work on economics. Smith wrote that while an entrepreneur makes an investment for personal gain, he benefits the whole society.
So, the entrepreneur deserves to get rich if he can. This is because he takes a lot of risk - most new businesses don't last long. His efforts benefit his customers who choose his product or service because it is better, and his employees get wages for their work, and his landlord or suppliers get profit from what they sell or rent to him. Businesses spend about a dollar before getting back a dollar and a nickel of profit. I think we all can agree the entrepreneur earns his profit by his innovation and investment and risk taking.
Communism has generally failed around the world because people don't work very hard without incentive. Profit incentive produces innovation. We can all agree that innovation and investment can make better lives for our society.
But, multi-billionaires do not affect the society the way the small entrepreneur does. They do not like competition, so they drive competitors out by price cuts or buy out their innovative competitors. The resulting bigger business does not need as many managers and workers as the separate businesses did, so the the bigger company discards employees it does not need. All over America, and especially in smaller towns, we see small businesses closed up and empty buildings in formerly prosperous areas.
I tell my small-business friends they should stop drinking the "Kool-Aid" from the "Trickle Down" proponents. Profits to the super rich largely do not circulate back into the economy. But, money in the worker's pockets is largely spent and spent here at home. When the workers do not have jobs and income, businesses such as theirs do not have customers. We continually see super large businesses buying up competitors - and this usually means workers losing their jobs.
In the endless search for greater profit, the mega businesses send jobs that Americans had overseas where labor is cheaper. American workers often cannot compete against labor in foreign nations that do not protect their environment and their workers like America tries to do.
And mega businesses bring foreign workers to America because they cost less than American workers. They bring not only unskilled workers to harvest crops but higly skilled and highly educated technical workers here to displace American workers.
Bigger companies endlessly seek wider markets, so they spend huge sums of money to develop their business in foreign nations. In order to penetrate foreign markets, they press our government to open our markets to foreign imports. We know how most things at Walmart are not made in America. Do Americans drive more foreign built cars than cars made here?
Stay Tuned for Coming Attractions!