The Job Creators, Part I

Last April I signed a petition telling my representatives to pass "The People's Budget", an alternative budget proposal developed by the Congressional Progressive Caucus. I added the following personal note:


"The words "bold" and "courageous" have been used to describe Representative Ryan and his "Roadmap for America's Future" but the words "unmitigated" and "gall" would be much more accurate. The shameless vehemence with which the Republicans pursue tax cuts for the wealthy, at a time when the country faces an enormous debt/deficit crisis and desperately needs revenue, is repugnant. This audacity is fueled by the libertarian notion that the wealthy deserve everything they get and owe nothing to society because they earned everything they got and society had absolutely nothing to do with it.
Rush Limbag said on his show yesterday that in our society only "5% pull the wagon, the rest get a free ride".
In reality, the wealthy's riches come from the labor and spending of the rest of society. Before wealth trickles down, it gushes up. This is one reason why progressive taxes are both fair and just. Tax reform is needed. The Democrats should counter the Republican's flat tax with the "progressive consumption tax" proposed by economist Robert Frank. It has all of the advantages of the consumption tax while maintaining progressivity.
Even the wealthy should like this tax because only their spending is taxed, not income or investments."


Conservatives and libertarians have a view of how the world works that, while it appeals to their emotional biases, bears little resemblance to reality.
Of course the same thing can be said of liberals, but when it comes to explaining who creates jobs and how they are created, the "conservatarian" view is so warped that it bends reality like a pretzel.

Rush Limbag is the voice of the angry and hateful side of the conservative brain. He gives full vent to the emotions that cause this warped view of reality. That's why he says things like "only 5% pull the wagon, the rest get a free ride".

So who are these "job creators" and how do they do what they do?
Rush implies that it is the top 5% wealthiest in our society.
Believe it or not, the Republicans are even more extreme than Mr. Dimbulb. They say it's the top 2%.
These are the same people who Obama wants the deficit-causing Bush tax cuts to expire on, like it was supposed to at the end of last year.

And how do these fortunate few, as the right would have us believe, single handedly "create" all of the jobs?
Basically, they do it by investing in the economy.
They invest their effort, drive, initiative, knowledge, hard work, talent, ideas, ambition, greed, inherited wealth, swindled wealth, illegally gotten wealth, lawsuit won wealth, lottery won wealth or hard earned capital.
They can do it by performing a service, starting or buying a business, pulling off a scam or just taking advantage of being in a privileged position.

But what exactly is the economy?
That would be the other 98% of us.

It's easy to depict that top 2% as being the only thing responsible for "creating" jobs when you view the economy as something that exists in, of and by itself, without any effort from anyone besides the wealthy.
That's how conservatives and libertarians like to look at it because it's the only way their arguments work.

But the economy is the sum total of the efforts of all of us and all who came before us.
The economy is society itself.
And it is society that creates jobs. By creating demand.

By supplying a workforce and performing all of the jobs that are required to make a vibrant economy, society provides the opportunity for individuals to be or become rich. Society builds and maintains the infrastucture that the economy requires to operate in and provides the fuel that powers the economy.
That fuel is the money earned from labor.
That money is then spent and gushes up to the top 2%.
I call this the "gushes up" theory of economics.

The wealthy are totally dependant on society and government for their wealth.
By forming governments, society protects the rights of individuals that allow them to be or become rich ( the court systems, property rights, patent laws, contract laws, etc.).
The Police and Fire Departments protect their property and businesses.
The Military protects their assests at home and abroad.
The roads and bridges transport their products.

Without government there would be no wealthy individuals.
Without government, society, if you could call it that, would not be able to advance. Those individuals would be living in anarchy, like the rest of us, with every man poor and every man for himself. True, pure libertarianism.

The top 2% don't create jobs because they didn't create society.
It is society that creates the top 2%.
The top 2% are just one part of the machinery that is the economy.
Yes, a very important part. Because they can be crucial to expanding the size of the economy, thus increasing wealth for all of us.
As Reggie Jackson once put it, they are the straw that stirs the drink.
They deserve to be rewarded. But they owe a portion of that wealth, that manages to find its way into their bank accounts, to society because society is, by far, mostly responsible for the creation of that wealth.

That is why progressive taxes are both fair and just.