bureaucracybusters

WANT A JOB? TAKE THE EXCUSES OUT OF THE EMPLOYER: PART ONE (OF THREE)

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on November 14, 2019 at 12:08 am

During the 2016 Presidential campaign, Donald Trump assumed a role that utterly confounded his Democratic opponent, Hillary Clinton.

He adopted the role of a populist, appealing to blue-collar voters. He visited “Rustbelt” states like Michigan and Pennsylvania and vowed to “bring back” jobs that had been lost to China, such as those in coal mining and manufacturing

Clinton, on the other hand, made two deadly mistakes:

First, she offered a “love-your-CEO” economic plan to the unemployed—and suffered for it. 

And, second, she didn’t deign to visit those “Rustbelt” states, assuming she had them “locked up.”

Most economists agree that, in a globalized economy, such jobs are not coming back, no matter who becomes President.

Even so, voters backed the man who came to promise them a better future, and shunned the woman who didn’t come to promise them any future at all.

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Hillary Clinton (Gage Skidmore photo)

In May, 2016, Democratic pollster CeLinda Lake had warned Clinton to revamp her economic platform. Clinton ignored the advice.

“Democrats simply have to come up with a more robust economic frame and message,” Lake said after the election. “We’re never going to win those white, blue-collar voters if we’re not better on the economy. And 27 policy papers and a list of positions is not a frame. We can laugh about it all we want, but Trump had one.” 

Had Clinton offered struggling or unemployed workers a realistic plan for turning their lives around, the 2016 election might well have had a different ending. 

But, since winning the White House, Trump has not been able to “bring back jobs” lost to corporations’ “outsourcing” to countries like China and Mexico.  

Nor have huge tax cuts for corporations resulted in large-scale hiring. He claimed that, with this extra income, CEOs would invest in their businesses and create tens of thousands of new jobs. And through his Tax Cuts and Jobs Act of 2017, which Republicans rammed through Congress, the corporate income tax rate has been slashed from 35% to 21%. 

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Donald Trump

But that’s not what some of the biggest S&P 500 companies predicted they would do if they got those tax cuts. The people they wanted to please were investors, not workers.  And, least of all, those seeking work but unable to find employers willing to hire.

Darius Adamczyk, CEO of Honeywell International Inc., said “tax reform” would “offer greater flexibility for Honeywell.”  He added that the corporation would invest more cash in the United States to pay for mergers and acquisitions, share buybacks and paying down debt. 

He didn’t say anything about hiring more workers.

According to Moody’s Investors Service, American corporations have stockpiled nearly $1.8 trillion in cash overseas. 

Apple has more than $240 billion of that total.

Apple’s CEO Tim Cook said the company wanted to bring back offshore cash if tax rates for doing so were lower: “What we would do with it, let’s wait and see exactly what it is, but as I’ve said before we are always looking at acquisitions.”

Apple expected a tax windfall if Trump’s tax-cutting plan passed Congress. And analysts openly expected Apple to use those monies to boost its capital return program via buybacks, dividends and perhaps making a big acquisition.

What analysts didn’t expect Apple to do with its tax cut monies was create new American jobs.

Most of the offshore cash brought home by U.S. companies in past tax holidays was used to buy back shares or make acquisitions, not to fund investments in production capacity or jobs.

Corporations were not legally required to use those tax cut savings to hire more workers.  And Trump’s tax cut legislation has no such requirement, either.

According to John Divine, staff writer for U.S. News & World Report‘s Money section: “As long as there are no strings attached on how or where companies spend these savings, taxpayers get a raw deal.”

Tax cuts for the wealthy have been a favorite—perhaps the favorite—Republican mantra since 1980, when former California Governor Ronald Reagan ran for and became President.

Ronald Reagan

Reagan, like every major Republican Presidential candidate since, promised that giving tax cuts to the wealthy would prove highly beneficial to ordinary workers.

The official name for this policy was “supply side economics.” In reality, it was known—and functioned—as “trickle down economics.” 

“A rising tide lifts all boats,” claimed Reagan. A more realistic slogan for the results of his economics policies would have been: “A rising tide lifts some yachts.”

Among those charting Reagan’s economics legacy as President was former CBS Correspondent David Schoenbrun. In his bestselling autobiography, America Inside Out: At Home and Abroad from Roosevelt to Reagan, he wrote: 

“[According to Republicans] welfare for the rich is good for America. But welfare for the poor is bad for America, even for the poor themselves, for it encourages them to be shiftless and lazy.

“Somehow, loans to the inefficient management of American corporations would not similarly encourage them in their inefficient methods.”

To be unemployed in America is considered by most Americans—including the unemployed—the same as being a bum.  

And Republicans are quick to point accusing fingers at those willing-to-work Americans who can’t find willing-to-hire employers.

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