General Discussion

xchrom

(108,903 posts) Wed Jul 11, 2012, 05:58 AM Jul 2012

Restoring Trust in the American Economy: The Real World v. The Confidence Fairy

http://www.alternet.org/economy/156171/restoring_trust_in_the_american_economy%3A_the_real_world_v._the_confidence_fairy/

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Recently I went to a well-known restaurant in Evanston, Illinois. This restaurant has a reputation for providing excellent food and service. But the night I was there, it was less than half full. I asked the manager if he would he hire more waiters and chefs if his taxes were reduced and/or government removed the existing regulations controlling the way his restaurant could operate. His answer was that even if his taxes were reduced and regulations eliminated, he would only hire more staff if more customers came in for dinner. On the other hand, if there were twice as many customers for dinners than there were on this night (and there were many more customers before the recession began in 2007) he would gladly double the number of workers he employed even if his taxes were not reduced or regulations changed.

That’'s how things work in the Real World. This simple case illustrates clearly that entrepreneurs will have confidence to expand and hire more workers only if they find the market demand for their products and services strong and growing.

There are plenty of other things that would do wonders just now to help restore trust and confidence in the American economy: a well-regulated financial sector; smart government investment in the things we need, like jobs and infrastructure; and fair taxation that asks the rich to pay their share. You wouldn't know this listening to conservative economists stuck in Neverland --– a place where the government must never function and corporations must never be regulated.

Conservative economists and their friends like to trot out a mythical being whenever they want to make arguments that favor an economy built for the wealthy at the expense of ordinary people. This imaginary being, known as the Confidence Fairy, is only happy when capitalists are given free rein to do whatever they want – even if it brings us to the brink of a global economic meltdown.