If basic economics were a requirement in every high school in the U.S., the GOP would probably go the way of the Whig party. Seriously. The rich and their bitches in Congress don’t want us to understand the basic principles of economics. Otherwise, they would never be able to sell something as silly as trickle-down economics.
Some lying sack-of-shit mythmaker in the Republican party came up with this beauty: if we give tax breaks to the uber-wealthy and corporations, it will benefit us all.
How? Well, the lie goes, ‘because the wealthy and corporations are job creators.’
You don’t even really need to study economics to know how much a load of liquid crap that is. You only have to have a little bit of business understanding to know this: Only one thing creates jobs.
Here’s a couple short Econ lessons for people who hate Econ.
Let’s say I own the Condom Corporation of North America that employs two thousand people. Business is down because everybody’s depressed and nobody wants to screw. If President Fuckface von Clownstick stays in office and people’s libidos continue to decline, then demand is going to decline further. If that happens, there’s no point keeping employees to make condoms nobody’s buying so I lay off a bunch of workers.
But, let’s say something wonderful happens and there’s a Dem sweep in 2018. President Shitface is impeached and goes to jail for obstruction of justice. The Dem-controlled congress won’t let Mike Pence pass any legislation. Then the Dems take back the White House in 2020! People are ecstatic.
The mood of the country is sheer elation. Everyone’s fucking like it’s going out of style.
Demand for condoms skyrockets. Orders are flooding in from distributors. Now I need to hire people, and lots of them. See how that worked? Demand creates jobs.
Now, what happens when there’s no demand and President Numbnuts gives me a big tax break? Well, without the demand, there’s no point in my hiring more people with all my excess cash. Why would I? To sit around and pull their puds? No, no corporation hires people just because they have excess cash on their books. That would go against the free-market principle of ‘rational self-interest.’ It simply wouldn’t be the best use of resources for either me or my business. So instead I take my excess cash and buy up my competitors. With less competition, I can start jacking up my prices because consumers have fewer brands to choose from. I become the fucking Time Warner Cable of Condoms. I can sell cheaper quality product at higher prices! Fun! Please! Give me more tax breaks. I love where this is going!
That’s one way corporations spend the proceeds of tax breaks. Another way is what AT&T did. They engaged in a clever little Wall Street practice called ‘stock buybacks.’ Between 2008 and 2015, AT&T had the most profitable period in the history of their company. Had a shit-ton of extra cash laying around. Did they take their extra cash and hire some out-of-work fellow Americans? Of course not. The company bought up a fuck-ton of AT&T shares, and thus artificially drove up the price of the stock. They then they sold off their shares and made a pretty profit for themselves. The stock market is so much fun when you have enough money to manipulate it!
F. Scott Fitzgerald said that the rich are not like you and me. How true. The rich don’t consume like you and me either. Their manner of consumption does not help the American economy the way middle-class consumption does.
Let’s take my wealthy brother, for instance. He’s a Wall Street guy who’s got millions in the bank. When he gets tax breaks and has more money to spend, he doesn’t go out and buy 20 computers or 40 pairs of jeans. Rather, he’ll buy a bottle of a very expensive French wine, a Lafite Rothschild, say, for $1000. Or he’ll buy a 2nd home in New Zealand. Last I spoke to him, he was thinking of buying a third home somewhere in South America. He was also thinking about taking a month-long biking vacation through Italy. It’s the same with all his wealthy friends and clients. The rich in America have so much money they literally don’t know what to do with it.
But the middle class uses tax breaks differently. They buy consumer goods. A fuck ton. They are the primary consumers in the economy because they comprise vast numbers of people buying on a huge scale. In other words, middle-class spending drives the production of a butt-load of consumer retail— TVs, computers, jeans, cars, apples, Apples, aspirins. And that means a ton of jobs for all that product that needs to be made. See? Those of us in the middle class are the real job creators.
And what is the effect on the rest of us of the rich paying less in taxes? Either the middle class picks up the tab, or we become a third-world country with a rotting infrastructure.
America is already dying from the inside out as a result of the decline in what corporations and the rich pay in taxes that started with Reagan. And now the GOP wants to lower their taxes even more. They’ll offset the revenue loss by defunding our schools further, denying us health care, taking away Medicaid and Medicare. And for what? A $1000 bottle of Lafite Rothschild.
I hope they choke on it.