Job Creators – CivilMechanics

Mitch McConnellYesterday, despite having support from a majority of the Senate, the $60 billion Rebuild America Jobs Act was blocked from even being debated on the floor of the Senate by Kentucky’s own Mitch McConnell and Rand Paul – along with every other Republican senator.

The Act included $50 billion in direct spending for roads, bridges, and other infrastructure, as well as $10 billion towards starting the National Infrastructure Bank. Both ideas have traditionally enjoyed bipartisan support.

The bill would be paid for by a 0.7% surtax on incomes over $1 million.

The Department of Transportation estimated that the Act would create about 800,000 new jobs.

McConnell was unapologetic for blocking debate on the bill:

“The truth is, Democrats are more interested in building a campaign message than in rebuilding roads and bridges,” said Senate GOP Leader Mitch McConnell of Kentucky. “And frankly, the American people deserve a lot better than that.“

800,000 jobs seems like more than a campaign message.

But these national numbers are a bit hard to get our arms around.

It’s worth evaluating the impacts of this bill on a more local level. What would the Act do here in Kentucky?

Over 200,000 Kentuckians are out of work. That’s nearly 10% of the labor force.

And since September, one of two major bridges crossing the Ohio River in McConnell’s hometown of Louisville has been shut down after inspectors found cracks. Another bridge between Kentucky and Cincinnati has been deemed “structurally deficient”.

Rand PaulThe bill McConnell and Paul voted against would have spent over $450 million on roads and bridges in Kentucky, and would have created 5,900 jobs.

Why would Mitch McConnell and Rand Paul reject 5,900 jobs for Kentucky? Why would they oppose fixing Kentucky’s infrastructure?

Maybe they’re concerned with raising taxes. As McConnell said on Meet the Press, “We don’t want to stagnate this economy by raising taxes” on those who make over $1,000,000, who Republicans are fond of calling “job creators” and “small business owners”.

So let’s take a look at who makes over $1,000,000 in Kentucky. According to Citizens for Tax Justice [PDF Link via Greg Sargent] out of Kentucky’s 4.3 million citizens, there are 1345 Kentuckians who would be affected by such a tax, and they make an average of nearly $3.5 million.

And it’s worth noting that The 1345 are folks who don’t just have $3.5 million – enough to qualify them as multi-millionaires. These are people who clear $3.5 million per year.

The 1345 are the ultra-wealthy. And businesses which help their owners reap $3.5 million per year are not ordinarily considered “small”.

And what is the onerous burden the “millionaire’s tax” would place on The 1345?

Out of their $3.5 million in income, The 1345 would pay $17,409 more to fix Kentucky’s roads and bridges which they undoubtedly benefit from more than Kentucky’s other 4,338,000 citizens.

So: McConnell and Paul blocked the creation of 5,900 jobs and the improvment of roads and bridges for all Kentuckians in order to protect The 1345, a tiny group of ultra-wealthy Kentuckians who would pay only $17,409 to rebuild the infrastructure they use more than anyone else.

McConnell claims he doesn’t want to “stagnate the economy” by taxing The 1345, which raises the question: What have these ultra-wealthy “job creators” been doing with this money while they’ve kept it?

Because they certainly haven’t been creating jobs.

Mitch McConnell and Rand Paul chose to protect The 1345 at the expense putting 5,900 Kentuckians back to work. At the expense of our crumbling roads and bridges. At the expense of the other 4,338,000 Kentuckians.

And frankly, the American people – and Kentuckians – deserve a lot better than that.

Confessions of a Job Creator

I’m a job creator. And job creators are important.

At least that’s what we’ve been hearing from Republicans lately.

House Speaker John Boehner cited “job creators” and “job creation” 26 times in a speech about the economy last week.

And in that speech, the Speaker invoked us job creators to attack the Republicans’ Unholy Trinity: taxes, regulation, and government spending:

Private-sector job creators of all sizes have been pummeled by decisions made in Washington.

They’ve been slammed by uncertainty from the constant threat of new taxes, out-of-control spending, and unnecessary regulation from a government that is always micromanaging, meddling, and manipulating.

To hear Boehner’s version of events, the government stands as the sole obstacle to us job creators as we valiantly attempt to create more jobs.

Indeed, the entire Republican establishment keeps talking about the special role we job creators play in our fragile economic recovery.

In their “House Republican Plan for America’s Job Creators” – a 10-page, large-type tome [PDF link] about the same length as this blog post – the House Republican leadership repeatedly promise to slash the Unholy Trinity of tax, regulation, and spending. On Sunday talk shows, more of the same.

If only we job creators paid less money in taxes, Republicans say, we would hire more.

If only we were free from government regulation, we would hire more.

If only we were less concerned about government spending, we would hire more.

As much as I appreciate Republicans’ apparent concern – their willingness to dump money in my pocket, their longing for my freedom to pollute with abandon, their eagerness to drive the nation to the edge of default to keep government spending in check – here’s the thing:

Their efforts won’t help me create a single job.

Not one.

In fact, Republican attacks on taxes, regulation, and spending do quite the opposite, because Republicans are thoroughly wrong on the mechanics of hiring.

I don’t hire because I have extra jingle in my pocket. I don’t hire because I can avoid complying with some regulation or tax. I don’t hire because the government is spending less. I hire because there’s more work to do.

No responsible businessperson is going to hire simply because they have extra money lying around or because they can dump motor oil in the sewer. As generous as I might be, I won’t hire out of charity.

Entrepreneurs hire because they have work to do, and a new employee can help them get that work done. They hire to help meet demand. And demand is fueled by customers who have money to spend.

And that’s the fallacy of the Republican job creator mythos: Job creators don’t “create” jobs. Our customers do.

And the evidence proves the Republican fallacy. Taxes are at historic lows [PDF link]. Corporate profits are at record highs. Government spending has collapsed. These are the very conditions under which, according to Republicans, we job creators should be creating jobs.

But we aren’t.

Despite these supposedly wonderful conditions for job creators, one in six Americans remain unemployed or underemployed. Income and household wealth has stagnated for over a decade. Instead of hiring in this environment, corporations are hoarding record stockpiles of cash in the face of weak demand.

No demand, no jobs.

That’s not to say that we entrepreneurs – let’s just drop the “job creator” garbage – are powerless. We can foster conditions which promote growth (the right business model, the right service, the right people); but we need customers with a willingness to spend to make our businesses grow and to create an environment where hiring is possible and profitable for us.

Bottom line: Give me money, and I’ll sock it away in the bank. Give me customers, and I’ll give you jobs.