e_moon60 (e_moon60) wrote,
e_moon60
e_moon60

Theory v. fact

In a good education, especially but not exclusively in a science, you learn how to formulate a testable hypothesis and then test it.   Before a hypothesis can be considered proven, it must be tested, and tested rigorously.  What makes science inconveniently slow to come to hard conclusions is this need to test, test, test...check the first fact, check its relationship to the next, and so on, down a chain of logic that itself must be correct. 

This is a part of education eschewed by those who think they know it all, already.   They prefer the quick, easy answer to the right answer (and yes, there's a right answer, though it may be a long time coming...if you've formulated a testable hypothesis and you've tested it correctly.)  They also prefer the answer that accords with what they've always thought.  This is partly hard-wired--people mostly see and hear what they expect to see and hear, which is why new traffic lights initially cause accidents and why camouflage works.   But also it takes effort to notice, and assess, new information and test the old ideas against it.    It's easier to deny reality, if accepting it means an uncomfortable or effortful change.

However, for a government of the people, by the people, and for the people to long endure, the people must be willing to make some effort to think...to learn how to think, if they don't know...to learn what the facts are...to apply the facts to the opinions they've long held and see if those opinions still hold up.   If the people don't do this, they will easily fall prey to those who want a government of the few, by the few, for the few.   Every population contains some who want power more than anything else, and who will seize it if they can.

I get email from lots of people, of course (hundreds a day, usually)  and some of them are perfect examples of the non-thinking citizen, almost willfully ignorant, who is reciting what a power-seeker told him without relating it to the available data.   (This type also usually can't read, and misrepresents what it was I wrote that they don't like, but that's another issue for another post someday.)

Take for instance the familiar statement that lowering corporate taxes will increase jobs, because corporations will be able to pay more employees.

Corporate taxes were lowered in 2001.   The immediate result was a leap in corporate profits and an increased rate of job loss in the United States.   Low corporate taxes for the past 7 1/2 years have been accompanied by a steady loss of jobs and (just as important) manufacturing capacity.  (Dell just decided to close all manufacturing plants in the US.)  So, on the basis of the facts, lowering corporate taxes in the US does not lead to more jobs in the US.   Why would it?  It's much more profitable to take the tax cut and either keep it or hire cheap labor abroad.  

What  drives job creation in this country is disposable income in this country...the disposable income of people who start new, small businesses and hire a few people...and whose businesses thrive because other people have money to spend on those goods and services.  Small businesses are the fastest growing business segment for job creation...but it takes disposable income to start one and the disposable income of customers to keep those businesses alive.

So what creates disposable income?  Jobs that pay enough to make possible spending beyond immediate needs.  A well-paid workforce supports a healthy economy (as well as paying most of the taxes from which government services come.)   It can afford to pay more for goods produced in this country--and thus can afford to support a manufacturing sector that (in turn) provides some of the jobs, the backbone jobs.

Several myths about rich people usually get involved about now.  "Rich people create jobs."  No, not necessarily, and certainly not necessarily in this country...creating jobs for US citizens is seldom a top priority for the rich.   Their interest is in protecting and usually increasing their own wealth...if there's an investment that creates jobs in India or China instead of here--and pays more--they'll go for it.  In fact, the investment industry heaps scorn (in the form of falling stock prices) on companies that do not go international and move jobs abroad, so the investor is prodded to follow along.    If they already own a large corporation (or a part of it, or are one of those multi-million-dollar/year CEOs) they're not going to start another business just to make jobs for US citizens...they have to see a profit potential, and the rich are inclined to view US workers as too demanding. 

"Rich people work longer and harder and that's why they're rich."   Longer and harder than a telephone lineman out in the storm, working double shifts to help a region recover from a natural disaster?   Longer and harder than the mother working two full-shift jobs of minimum-wage scutwork and also cooking and cleaning for her kids?  I don't think so and neither does anyone who thinks about it and looks at the evidence.   Of course, in this country,  the smart rich insist that they work harder...it's better press...but they're not out there sweating on a bulldozer,  nailing shingles to roofs,  bucking haybales, or caring for a roomful of three-year-olds in a daycare.  No--working longer and harder may, in the right economic climate, keep your head above water and even get you into the middle class from poverty...in good economic times, it's done that for a lot of people, including my grandfather.   But it's not how you get rich or stay rich.   One way to get rich is to inherit wealth, and a lot of the very wealthy got a good chunk of inheritance to start with.   The connections that come with inherited wealth mean that you don't have to start with a minimum wage job and work your way up--you will get that college education, and your inherited network  will provide a suitable (higher paying) job when you get out.  Or, if the inheritance is large enough, you can just loaf.  Some people do.   To get rich without a large inheritance, you need some additional ingredients: education, extraordinary talent at something people will pay for, connections, and/or opportunity (which may be a moderate inheritance, or the right job opening at the right time, etc.)   You need at least one, and two are more common in those who make it.  To stay rich, you need to understand how to leverage what you  have to get more...and have the self-control (not the work ethic, just the self control) not to stray from your plan.  

It's as ridiculous to believe that the rich are rich because they work longer and harder as to believe Laura Bush when she claimed that she and George have suffered more because of the Iraq war than anyone else.  Tell that to the mothers of the dead.  Tell that to the families of those permanently disabled. 

So, bottom line: lowering the tax rate on corporations does not create jobs.   If it did, our unemployment rate would be lower.   Continuing the lower tax rate when it became obvious that companies were laying off US workers anyway, and shipping jobs overseas, merely rewarded companies for not creating jobs.   To get the larger, established companies with international branches to create jobs in the US would require a positive incentive....so if  a lower tax rate had been coupled to job retention and job creation, that might have had an effect.  We need jobs everyone who can work, jobs that pay enough so that 40-50 hours of work a week will cover the basics and provide enough disposable income to create demands that, in turn create more jobs.  
Tags: politics
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