The Internet is full of Posts dealing with the Jobs Reports. It is the old ‘glass half full, half empty" paradigm, where going nowhere seems rosy to Some, bad to Others. The Business world needs about 5 Weeks to get most occupational New Hires up to competitive production. It is clear that Business expects no sudden new growth in Consumer Demand. Most in the Business world finally understand that a cheaper Dollar will not get massive new foreign Sales. Importers know that Consumer Demand is going down, and more so with declining value to the Dollar. The rigid Costs–Utilities, Transportation, and Property Taxes–are all destined to rise, and Consumer Discretionary Income is vaporizing. Consumer refusal to sell their Soul to the Credit Devil leaves Finance with a declining sector Profit. The economy may seem like a highly-tooled engine, but it truly lacks fuel.
This Post is exactly what I fear the Most. I am probably the sole advocate of raising Taxes to stimulate the economy. I will make the general overall Statement that Business Tax Cuts will not stimulate the economy in the face of declining Consumer Demand; it will simply provide Business a Profit when said Business needs to change its business format to acquire Profitability. Elimination of the Bush Tax Cuts and even the introduction of a Draft Tax on financial transactions would raise a immense amount of revenue, stop the Investment programs of Business into Treasuries, and create increased Demand for higher Wages. Business will engage in the practice of Hiring cheaper labor wherever possible, to conserve higher-priced labor while devoting such labor to the proficiencies for which they were hired and retained. Politicians, though, will bow to Business demands, and conditions will only worsen.
We are in the midst of a Capital misallocation recession. We are where We are because Business leadership entered in a finance and investment mode which was poorly devised, and artificially implemented; it was a bad business judgement call. Now Business insists on being paid a Profit from the bad business decisions, and Tax Cuts are the only venue that they can adopt for such a Business return. Both Business and Finance must be forced to adopt alternate strategies, which they will not do if Government will pay them for previous mal-alignment. It does not matter How Much Government gives to Business, nothing will improve until Business practice does change; it never will with the Politicians being such Whores. lgl