Politics and Money

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Straight from GM’s mouth: It's demand (and not tax cuts) that creates jobs

By now most folks have seen the announcement from General Motors that they’re planning on closing three plants and cutting 14,000 jobs.

Let’s focus on what we hear from corporations and corporate special interests at a couple of different times—first, when they’re making changes to their organization, and second, when they want something from government.

When corporations like GM are closing factories and cutting jobs, they say things like:

With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year.

What they’re saying is that they’re responding to weakening demand in the small and mid-size car business as gas prices have fallen. Last year, two-thirds of all new vehicles sold were trucks or SUVs.

Ford has previously announced that they will cut all car production except for two models to focus on trucks and SUVs.

This may not come as a surprise. Supply and demand is a pretty well understood model when it comes to business decisions.

One thing you might notice is that there’s no mention of taxes having any impact on the decision. If you research this and look at any decisions about hiring or laying people off, you will always hear the same thing: supply and demand.

So why would we believe anything different when someone tells us something other than demand creates jobs?

Here’s AT&T CEO Randall Stephenson in 2017 repeating the talking point that tax cuts create jobs:
https://www.cnbc.com/video/2017/05/04/att-ceo-tax-cuts-means-more-jobs-for-hard-hat-workers.html

He claimed he’d invest $22 billion in the U.S. if Trump could give him his tax cuts. AT&T reported a $20 billion fourth-quarter windfall from Trump’s tax cuts.

People have heard of supply and demand even if they haven’t taken Econ 101.

Since then, AT&T has outsourced 7,000 jobs to low-wage and overseas contractors.

What are companies like AT&T doing with the billions they received from Trump? They’re buying back stock to boost its share price.

Demand creates jobs

If we had spent $1.5 trillion to upgrade our infrastructure, it would have led to far more jobs.

Why? Because it would have created additional demand. It would have boosted spending and we would have invested in our communities at the same time.

If we want a better economy that works for everyone, talk to people about how demand is the only thing that really creates jobs.
https://www.dailykos.com/stories/2018/12/2/1815950/-Straight-from-GM-s-mouth-It-s-demand-and-not-tax-cuts-that-creates-jobs