The Myth of the Job Creator

[Editor’s Note: Not only is increased demand in the form of increased purchase orders the real spur to new hiring, it’s also important that the demand be targeted. Increasing demand for goods produced in China at Walmart, for example, will create jobs in China. But if we increase demand for domestic goods and services by building local infrastructure such as the ‘Smart Grid’ and other clean and green energy projects, then much of the demand will be for increased local labor and local goods.]

By RP Watkins
Beaver County Blue via Daily Kos

The popular notion of the so-called “Job Creator” is a myth. Yet the very idea of Job Creators represents the most basic argument in the Supply Side story, a concept which postulates that economic growth requires expanding the means of production. The term Job Creator has been repeated and spun so frequently on Capitol Hill and across America, almost exclusively from Conservatives, that it has become accepted wisdom that job growth is determined by the means of production, the supply-side of the economy. It is not.

The reason is so stunningly simple and basic that it’s almost entirely invisible by politicians and pundits alike. This is because contrary to the supply-side mantra, most businesses are unwilling to expand hiring unless the new jobs are justified by sufficient Market Demand. It is for this reason that the popular supply-side policies of tax cuts and credits have done little to stimulate domestic hiring. If anything businesses have converted the government largesse of lower taxes into enhanced profitability, with little in the way of new jobs materializing.

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