Burch: Much ado about voodoo?



Friday, August 19, 2011 at 4:31pm
By Michael R. Burch

Nashvillians, like Americans everywhere, are rightfully concerned about the current stock market plunge, our $14.3 trillion national debt, stubbornly high unemployment rates and the mule-headed impasse in Washington.

The Tea Party has a simple (or simplistic) solution: preserve tax cuts for the people and businesses with the most money while slashing spending on what they call “entitlements.” The idea is that as the rich get richer some of the profits will “trickle down” to the middle- and lower-income classes.

A big problem with this pie-in-the-sky “plan” is that we have been trying it for decades and it isn’t working. Why? Because cash-flush people and businesses are sitting on their wealth, rather than using it to create new jobs. MarketWatch recently explained the problem in easily understandable terms: “As economists and policy makers tear their hair out over ways to get money flowing through a stagnant economy, the nation's biggest corporations are clinging ever tighter to their cash.”

Many of those corporations are, of course, primarily owned and/or managed by super-rich individuals like Steve Jobs and Bill Gates, or by other rich people trying to keep up with the Joneses.

According to a FactSet Research review of second-quarter regulatory filings, the accumulated cash and short-term investments for 24 of the 30 companies that make up the Dow Jones surged 18 percent to $256 billion from the previous year. Companies like Apple, Caterpillar, Microsoft, Coca-Cola and Chevron are sitting on tons of cash.

Rather than creating new jobs, major American corporations often raise cash reserves by closing plants, moving jobs offshore and otherwise shrinking payrolls. The people who manage to keep their jobs often end up working longer and harder hours, without commensurate raises in pay.

While cash-rich corporate chickens sit on their golden eggs, U.S. unemployment, currently 9.1 percent, has barely budged since April.

In other words, the Tea Party is off its rocker. Slashing “entitlements” may shrink the national debt, but it will also shrink the economy, because most people on Social Security, Medicare and unemployment spend the bulk of what they receive. Corporate fat cats and well-to-do individuals have extra money, so we need to either tax it or get them to spend it.

Our government should give profitable businesses a choice: either create jobs here at home or pay higher taxes so that the government can stimulate the economy. This can be done through a simple formula: Subtract all executive pay and benefits from the total payroll and give companies that actually paid higher wages to regular workers a tax break. Then companies will face a simple decision: Is it better to pay higher taxes and get nothing in return or to create jobs and/or reward hardworking employees with higher wages?

It remains to be seen whether the Tea Party really wants to help all Americans. Wild anger, temper tantrums and voodoo economics are not going to help the majority. But a simple plan that rewards companies for paying higher wages and raises taxes only on profitable companies that don’t just might work.

Michael R. Burch is a Nashville-based editor and publisher of Holocaust poetry and other “things literary” at www.thehypertexts.com.

11 Comments on this post:

By: dargent7 on 8/20/11 at 5:26

Great piece. It's so true that everyone on Social Security spends it all, every month, to make ends meet. Just barely.
And the unemployment stat of 9.1 or 9.8 is too low.
I bet it's closer to 15%.
Ever been to a job fair? It's too pathetic.
70% of the attendees will never get hired.
Dress like slobs, way overweight, take a call and talk on the cell phone DURING THE INTERVIEW....
Unemployment will be stuck at 10% for the next decade.

By: serr8d on 8/20/11 at 10:19

I think what's easy enough to see is the huge, Sovereign-dinging massive mountain of debt we owe to others; debt that this little Republic can no longer afford to continue to accrue (if you want to argue, debt we should never have allowed Democrats to create; Social Security, Medicaid, Medicare and other general welfare-for-votes schemes). A simple fact: the only way to contain this debt and stop a fiscal and physical collapse (if it's not already too late) would be the TEA Party's suggestion to Cut, Cap and Balance, and try to restore what we should never have abandoned: fiscal sanity.

If you want to save this Republic, the TEA Party is the only way; eventually it must come to severe cutting, capping the debt ceiling and balancing the Federal budget every year. Austerity programs may be necessary; in other flat-broke countries those programs lead to riots and outbursts. Here, such outbursts (likely to occur first in the Democratically-controlled overpopulation centers: NYC, LA, Chicago, Philadelphia &c.) will be more violent, unfortunately. From that violence could spring government tyranny.

We are in the end game of this, the next step may well be an upheaval you'll wish you hadn't hoped for.

By: Captain Nemo on 8/20/11 at 2:57

The Tea Party saves the Republic, from the poor? Get real serr8d, the only thing the Tea Party wants to save his Hitler’s dream of world take-over.

If the Tea Party really wanted to save the Republic, then it would get off its Holier-than-thou platform and pay up the back taxes it owes America.

By: serr8d on 8/21/11 at 11:54

Nemo, 'poor people' are not enemies of the TEA Party. Many of us are 'poor' people. What we want is for this nation to remain as free as possible, and not give any more ground to LeftLibProggs who USE poor people to turn this Republic into their idea of a Social State.

Sorry, we are not all Socialists now.

And your analogy is pretty pathetic on the surface. Hate to point this out, but 'Hitler' was an individual who wrested control of Germany post-WWI; the TEA Party is a loose conglomeration of 'people' who oppose the direction of one of the principle parties that are in control of this Republic. How can a disparate group of people who have no announced leaders have the mindset of any one individual, especially one as heinous as was Hitler?

You are on better meds than I am, methinks... )

By: serr8d on 8/21/11 at 11:57

Here's the comment I left for 'Wesley Mouch', editor of the New York Times, who today posted crying that businesses were not coming out and saving the Government...

http://www.nytimes.com/2011/08/21/opinion/sunday/surely-they-can-read-a-spreadsheet.html?_r=1

One doesn't get to read an editorial that is this steeped in cluelessness and is as disconnected as is this one very often. 'Wesley Mouch', you've exceeded your own limitations!

Firstly, there is no business who should willingly come riding to the aid of Leftists. Your policies, collectively, are anathema to this nation's success; your actions (including the over-regulating of industry, embedding your Party with corrupt Unions, your meme-speak that demonizes Corporations as 'not even people' and demonizes the 'rich' as 'not paying their fair share') are plain-spoken enough: Leftists who now control the once-proud Democratic party desire only to buy votes and support from community-organized Moochers using Other People's Money. There's no consideration given to the needs of businesses or corporations until you 'want' more from them, to wrench away more taxes used to expedite your causes.

Secondly, the policies you are begging monies for are doomed anyway. The various social welfare programs won't last: Social Security is, as all realize, doomed to fail. Medicare and Medicaid, and this newly-created monstrously damaging program ObamaCare, will drain this Republic's treasury dry (wait..they already have).

Mr. Koch responds to Mr. Buffet, and indirectly, to you:

“Much of what the government spends money on does more harm than good; this is particularly true over the past several years with the massive uncontrolled increase in government spending. I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington. — Charles G. Koch, Chairman and CEO, Koch Industries, Inc.

So, that for your pipe. Enjoy your smoke!

By: Captain Nemo on 8/21/11 at 1:01

Now I know you get all a flutter when the truth slaps you in the face serr8d, but the similarity between the Tea Party and The Third Reich is frighteningly a like. As you pointed out the Tea Party is a loosely conglomeration of frighten people and in search of a leader. Hitler came to power using fear as a tool to gain control over a frighten German population and came very close to world domination.

Now who will be your Hitler; Perry, Bachman, Palin or is your devil still lurking in the shadows?

Wearing a Mask Of Tea & Freedom Third Reich Values Slink Into America
http://www.politicususa.com/en/america-republican-reich

By: yogiman on 8/21/11 at 2:58

Well, dumba..,

It sure won't be your 'boy': Barry Soetoro, or Barack Hussein Obama, whatever his name is. If you could see beyond your nose you might, just night, be able to see the attempt government is attempting to do to our nation now.

And I'm not 'talking' about democrat or republicans. Because right now, I can't see much difference between them.

The parties have changed before because of the people becoming displeased with their control attempt, just as they are doing today,

Don't you wonder why the republican party is letting Soetoro pull his social attempt off? Why have they not put the pressure on him to prove whom he is? Because they are in the middle of it with him.

By: Captain Nemo on 8/22/11 at 5:30

Old fogi, you can't see much of anything with your head in you ass.

By: localboy on 8/23/11 at 10:03

"And I'm not 'talking' about democrat or republicans. Because right now, I can't see much difference between them. "
Yes, both have created this mess and both have too many sacred cows that will get gored before this is over. Rather than democrat vs republican, it seems to be more like incumbent vs challenger.

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