Four Republican Senators — Thune, Toomey, Hutchison, and Brown — held a press conference today, to remind Americans about their job creation legislation. Wait. Republicans have jobs bills? Oh! That’s why they had to remind us. Sen. John Thune, in the YouTube video below call on Sen. Harry Reid to stop blocking what he called bills “that deal with capital the issue of capital formation for our job creators.” Huh?
“Capital formation for our job creators?” Ooookay. What’s that mean? And what does it have to do with jobs? Thune goes on to explain, after telling us that the bills in question all passed with bipartisan support in the House, that these bills were “designed to help that are designed to help our small businesses create capital.”
Didja catch that? It happened so fast that if you blinked you may have missed it. Thirty-eight seconds into the video we’ve gone from job creation to “capital formation” to helping businesses “create capital.” At one minute and four seconds in, Thune explains that the bills in question are intended to “help our small businesses get access to the capital they need to create jobs.”
The bills in question are:
- S.1831 – Access to Capital for Job Creators Act: Thune’s bill would “direct the Securities and Exchange Commission to eliminate the prohibition against general solicitation as a requirement for a certain exemption under Regulation D.”
- S.1824 – Private Company Flexibility and Growth Act: Toomey’s bill would “amend the securities laws to establish certain thresholds for shareholder registration under that Act, and for other purposes.”
- S.18 – Small Business Paperwork Mandate Elimination Act: Brown’s bill would “repeal the expansion of information reporting requirements for payments of $600 or more to corporations and for other purposes.”
- S.556: Hutchison’s unnamed bill would: “amend the securities laws to establish certain thresholds for shareholder registration, and for other purposes.”
The Senators each go on to explain their bills, and why “capital formation” really is job creation. But Media Matters recently included Thune’s and Hutchison’s bills in a list of 27 Republican bills that aren’t about jobs.
From the House Republican Conference and House Speaker John Boehner (R-OH) to U.S. Chamber of Commerce President Tom Donahue, congressional Republicans and their conservative allies have touted 27 measures passed by the House of Representatives that they claim are “bipartisan jobs bills awaiting Senate action.” But the bills are mostly highly partisan attempts to slash regulations that protect, among other things, public health, consumer rights, workplace safety and the environment. The GOP has also dishonestly included in its count a few viable measures with popular bipartisan support; one of these is being held up in the Senate by a Republican, and the others have been placed on the Senate calendar.
“Access to capital,” says Thune, “is absolutely essential” to the objective of creating jobs. If that doesn’t sound familiar to you, it should. Because when conservatives start talking about “capital formation” and “capital creation” they aren’t really talking about job creation. They’re talking about the same old trickle down they’ve been talking about for 30 years.
For three decades, we have been told that “trickle-down” economics that benefit the wealthy is the key to creating jobs. But that’s baloney. The evidence shows that ordinary people, not the rich, are the real job creators.
Conservatives like to promote a simplistic view that all you need are capital (cash or goods that produce income) and entrepreneurship in order to create wealth. They maintain that wealth, in turn, spurs rich people to do productive things, like creating jobs, and so the more concentrated wealth is, the more jobs are created. If you tax the rich, they argue, then jobs will be destroyed. Mitt Romney frequently echoes this line of thought by promoting economic programs that would give enormous tax breaks to the wealthiest 1% and concentrate wealth in their hands. Romney, who paid 13.9% in taxes in 2010 and likes to tout himself as a job creator, has just announced a plan that calls for preserving the Bush tax cuts for the wealthy, lowering the corporate tax rate, and repealing the estate tax.
Turns out, this ‘trickle-down’ mythology it is horribly wrong, and the 99 percent has paid for it. There’s a reason why the Wall Street Journal acknowledged that George W. Bush, the last trickle-down president, had the worst job creation record in U.S. history. So before we consider having another trickle-downer in the White House, let’s talk about the failure of this idea and why if you want to see a real job creator, you should look in the mirror.
Look in the mirror because, as Lynn Parramore writes above, ” job creation is related to demand. When regular people have spending power, they demand products and services, which leads to more jobs for others to make the things they want.”
Look in the mirror because, small business owners who demanded the repeal of the Bush tax cuts put it, “we’re fed by our customers” not “capital formation.”
Tax cuts for the wealthy, according to Teahan, will do nothing to bolster his firm. They won’t affect his hiring decisions, they won’t encourage him to buy new equipment or help him move into a bigger warehouse. He says all of those decisions — the nuts and bolts of actually running a small company — depend on the his customers’ economic conditions, not his personal tax rate.
“What we do in business, how we spend our money, how we allocate our resources — that has very little to do with tax policy,” Teahan says. “I map my business based on my customers, and what my customers want to buy, and what they can afford to buy.”
It’s a common complaint from small business owners. While congressional Republicans and entrenched corporate lobbying groups like the U.S. Chamber of Commerce — which is holding a Wednesday meeting on small business priorities — and the National Federation of Independent Business (NFIB) have been pushing hard to preserve the Bush tax cuts for the wealthy by touting the interests of small firms, much of the small business community is demanding that those very tax cuts be repealed. The tax breaks for the wealthy will add $700 billion to the debt over the next 10 years, according to the White House’s Office of Management and Budget. And many small firms say that money would be better spent on direct aid to the middle class.
“We are fed by our consumers, not by our tax breaks,” says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. “If you drive more people to my business, I will hire more people. It’s as simple as that. If you give me a tax break, I’ll just take the wife to the Bahamas.”
Wanna create jobs? Put more people to work, so they’ll have more money to spend, and businesses will have to hire more people to meet the increased demand.
Four Republican Senators held a press conference about job creation legislation today, but only ended up talking about “capital formation.” Again.