Friday, December 03, 2010

Tough Love

I would first like to say that I don’t agree with this assessment at all. There is absolutely no drag upon Employment from the last Recession, nor will there be: it is all a question of development of Consumer Demand. It gets my goat that people imagine that the losses of a previous busted Boom will forestall a new regeneration. People have been losing Money in Business ventures to greater or lesser degree since the dawn of Mankind. Such losses produce Hunger and Risk-Taking by Those without Wealth, and the Wealthy hate the lack of Return to keep their pile growing. Economic Busts do not dampen Incentive, it enhances it! One has only to examine Germany and Japan after World War II; they starting from a bombed-out nothing to return to major economic powers in the World once more.

The second element I would stipulate consists of the statement that Tax incentives do not operate in the presence of reduced Consumption Demand. Business will not invest without solid Demand and Traffic. Consumers will not purchase if they possess capacity Products which are already paid for and working. There has to be an enlargement of the Consumer population, not a pursuit of a fed Consumer already reliably supplied with older Product. One needs Government Spending to expand that Consumption market, and it will not come from Tax incentives; especially when Government insists on deficits which serve no one, and drain private Capital markets. It is also a Truism that Exports will never replace a domestic market, no matter how rigorously sought.

I want the uniform Tariff of 6%; something which aids domestic production, while not costing the end-Consumers much more than they will pay anyway. I want the repeal of the Bush Tax Cuts as being ineffective–Past, Present, and Future. I want the Fed to stop destroying the Constant Consumer–who are millions of Elderly who cannot get a decent Return on their chosen investment instruments–Bank accounts. I want the Unemployment Benefits cut off after 60 days, forcing Labor to take what Jobs are available. I want the Government to supply those Jobs which the Private Sector will not–through massive restoration projects at every level. I would finish by passage of a federal law forbidding discrimination between Property holders to attract new Business to the area; local and State revenue coffers must themselves be replenished. Government must supply Jobs, but lower Income jobs acclimating American Consumers to a lower Income, but one where the purchasing pattern is maintained. We need to get the pretension out the economy, and the real hard work reintroduced. lgl

3 comments:

rashid1891 said...

the second element I would stipulate consists of the statement that Tax incentives do not operate in the presence of reduced Consumption Demand. Business will not invest without solid Demand and Traffic. Consumers will not purchase if they possess capacity Products which are already paid for and working.

rashid1891 said...

I would first like to say that I don’t agree with this assessment at all. There is absolutely no drag upon Employment from the last Recession, nor will there be: it is all a question of development of Consumer Demand. It gets my goat that people imagine that the losses of a previous busted Boom will forestall a new regeneration. People have been losing Money in Busines

Lawrance George Lux said...

rashid1891,
You are howling that there is no Wolf Pack in the midst of the Siberian forest. The Unemployment rate is almost 10%, and new Hires would take years at current rate to even get back to 7% Unemployment. What I was trying to get at was the lack of incentive of business to capitalize new investment, when the current Production schedule is handling Orders. I said nothing about losses from the last Recession, though I could provide a Comment or Two, basically stating that Corporations closed Marginal Production down, and will not restart until there is Product shortage. I do not say this is Employment drag from the last Recession, but from the next one. lgl