The quickest, surest way to end the recession

[jmowreader]

This is so fucking simple, even a Republican can figure this out.

Start with these assumptions:

Assumption 1: The kind of economy the United States must have to thrive is a wealth-creating economy. This is one where the four wealth-creating industries, specifically mining, forestry, agriculture and manufacturing, are predominant and wealth-transferring economies like casino banking, mergers & acquisitions, and retail are secondary.

Assumption 2: Our wealth-creating economy has been boarded up, clearcut, turned into golf courses and shipped to China.

Assumption 3: Unless we restore the wealth-creating economy America is dependent on, we're always going to be in a recession.

Therefore, we must do SOMETHING to restore said wealth-creating economy, and tax cuts don't work. We give the rich a tax cut and they bury it in the back yard because "there is no demand." Oh, trust me, there's demand. There is 1944-level demand. The problem is there is no fucking money in the bank accounts of the people who have this demand, and there won't be until you morons shit some fucking JOBS!

The carrot didn't work. Let's get us a stick--preferably one carved out of a 6x6.

How the stick works:
This is a five-year program in which we simply say, "screw the deficit, we can't afford to worry about that now."

We then raise the corporate income tax rate to 90 percent. We then create a new bracket for personal income tax of 90 percent of everything over $1 million. And finally, we install a loophole big enough to drive...



this dump truck through: a 200 percent deduction for every dollar spent to create jobs in wealth-creating industries. You spend $1 million on creating new jobs in wealth-creating industries and we'll let you subtract $2 million from your taxable income.

To create demand for the American goods, we could also invent a sales tax holiday for them--the retailer reports the total value of American goods sold to the feds, who send them 10 percent of the total; the customer will not be charged tax. (Since no jurisdiction that charges sales tax charges 10 percent, retailers could be sent ten percent of the state take without hurting anything...the money would motivate stores to train their employees to really push those American goods.)

And we explain: this is temporary. We should also build a hard end to the program--make it illegal to extend it after the five years is up. This way, the Republicans won't be sitting there going "we have to extend it to eliminate uncertainty...companies can't plan if they don't know what taxes are going to do."

You don't really think a rich person is going to pay 90 percent tax, do you? Oh fuck no: there are going to be so many fucking jobs created in those five years, they'll have to import people from Bangladesh or somewhere just to keep up with the demand for warm bodies with operable hands.

[RandomThoughts]

1. The answers are easy to figure out.

Some don't want to do it.

People are arguing false arguments, meant to suck up news cycles and have disingenuous arguments.


The reason to tax the rich higher is provable and obvious, unless you think 1% should rule the world by authoritarian edict.

[dkf]

2. How does this fit into environmental concerns? And are you talking about letting private corps run

wild on federal lands?

Also will these be good paying jobs? Agriculture pays very poorly and indeed it is classified as a job Americans don't want. I'm not sure how many will want to mine either. Maybe all you will be doing is creating more demand for migrant workers.

Very thought provoking post though and much more food for thought than usual.

[jmowreader]

3. The obvious solution is manufacturing, not the other three

There are barriers to entry in the other three that make manufacturing the only suitable choice:

Mining? You need something to mine, for one thing, and commercially-viable mineral deposits aren't found everywhere. (This could, however, encourage the reopening of closed mines--Idaho is full of them.)

Forestry's right out too: no tree will grow fast enough.

Agriculture is also out for one real good reason: unless we are talking about opening a marijuana farm (which is, at this writing, only legal for prescription-drug production in certain enlightened states--the flipside is, if you're willing to shell out for some metal halide lighting you can grow commercial quantities of weed in any building) you ALREADY need to own enough land to open a farm before you can do it. With land prices the way they are, no one could afford to start a new commercial farm.

Hence, manufacturing: there are plenty of abandoned factories, plenty of things that need to be made and plenty of people to do the work. And it pays decent.

[dkf]

4. If you move iPhone manufacturing here what will it pay?

Why will it pay more than minimum wage when it took much less to build in China? Hasn't the act of having these workers do the jobs so cheaply turned them into low wage jobs?

[jmowreader]

5. Because we won't build them the same way

I've seen pictures of the Foxconn factory. Because automation is expensive and Chinese manual labor is cheap, they have these big long tables with fifty or sixty people sitting at them. Each person has a box of one kind of part. An iPhone PC board is put in a little tray and handed to the first person. She glues the parts she's got to the board and hands it to the next person. When it gets to the end of the table, the boards are taken to a wave soldering machine. Afterwards, the populated boards are taken to another table where they become the "one part" for the team that assembles the PCBs into cases to make the finished phones.

In the US, we would install a robot that populates the board and sticks it into the soldering machine, and another robot that pulls it out and makes a phone out of it. The thing is, you don't need a lot of people to run such a plant, but they need lots of skills--and they get paid well.

Example I'm familiar with: Fuji's printing plate factory in South Carolina. One shift consists of three people--one person at the head end of the machines, one person at the tail and one to drive the forklift and count the boxes--and and they get paid very well.

[joshcryer]

6. That doesn't produce labor, though.

I'm all for it, but unions have historically been against automation and high tech industrialization for the very reason that it takes less people with more higher skill sets to get a given job done. You have robots making everything costs would certainly drop, but we'd move more and more toward a service sector.

[dkf]

7. So we take jobs that used to employ 20 Chinese and replace it with one American job?

Does the process of having offshored the job and bringing it back then mean that we can't possibly replicate the number of jobs we lost because every say 10 jobs that used to exist comes back as one?

[jmowreader]

8. Okay, then there's Plan B

Which is, we forget about forcing The Rich to create jobs, and just give them more and more tax cuts like the Republicans like. We do this because a plan that will create jobs--and you KNOW it will do that--won't create as many jobs as someone who's more ideologically pure than I am would like. This of course will not end the recession, which will not be over while the unemployment rate is as high as it is, and will in fact cause America to slip farther behind. But taxes will at least be low.

My paper's business columnist told this story in today's paper: Harry Truman was trying to get a program passed that his opposition didn't like. They asked him if he'd be happy with half a loaf; he said he'd take one slice at a time. That's where we're at right now: Once we get a few slices--we get people out there working and spending money--the business community will start hiring on its own. But until the business community gets reminded it's better to spend a buck in such a way that it makes two or three rather than sitting on the buck so it makes four percent in some kind of job-destroying investment, we're screwed. And you know it.