The tea baggers and right wingers are irrational and illogical most of the time. But one of the more obvious issues that prove it is ignored by almost everyone.
Corporations and the free market are seen as the saviors of the nation. They will swoop into the country when they don't have to pay taxes or worry about regulations. Then we will build things and buy things. Heaven!
Corporate charters demand two things: "shareholder value" and "growth". But to grow and sell things, a corporation needs one vital ingredient - customers.
Corporations are not going to come to America to manufacture or design or anything else. There is no growth possible here. The economy is on an unstoppable path downward until the spoils of vicious class warfare are re-distributed in a fashion similar to that of the nation's most successful eras, 1940s-1960s.
Income is dropping and many key costs are rising - some almost uncontrollably. Those things rising include pesky little things like oil, gas, heat, electricity, health care, education, and food. Not much on that list that are really "optional" items.
Prices for homes are going down, but the ability for people to afford them is going down, too. Reduced collateral based on home ownership reduces borrowing capability, as well. So there is little, if any, upside to that.
So the power of the American consumer is taking a nose dive. The only feasible growth options are innovations that cut the costs of expensive things dramatically. This is why the spineless President cravenly says that "innovation" is the only thing that will bring us out of the recession. But what he ignores is that we are continuing to fall and contract (because he is too much of a coward to have started the path toward actual tax and income fairness and let the taxes on the rich revert to Clinton levels). So if these magical innovations don't spring from the ether soon, there will be even fewer and fewer viable customers.
Since there are no innovations that will free us of some other massive financial burden on the horizon, we can be assured that there is no reason to expect the recession to end any time soon. But even if one did, what then of the corporation(s) that will suffer the loss of
their revenue? How many people on the streets then?
Well, no need to worry about that because their is nothing in the offing.
Back to the point. There are no customers. This is also why corporations have mountains of cash on hand and won't spend it. The shortage of customers isn't just in the US, it's everywhere. At some point, the cash will be used to buy back stock as there is no reason to hold onto the cash and eventually, the organization will likely see a shrinkage in sales. The other use for the cash will be to buy other corporations who might have slightly more short term promise.
In other words, there will be no worker benefit as the corporate cash is spent. And in the meanwhile, none of it will enter the market.
Finance companies will continue to wheel and deal and crash and burn. The mountains of cash in the mattresses of the wealthy 1% will just churn through the wall street scam casinos because the odds of making more money out of their already excessive fortunes by investing in startups when there are no customers is insanely low. So the cash goes round and round the roulette wheel, alternately landing on the number of an already insanely rich person.
So how do the neocon-tea bagger mutants get away with laying out slashing of taxes and other incentives to "attract" corporations as a plausible "plan" to improve the economy? It's beyond absurd - unless the libertarian utopia is realized, in which case, a temporary flood of scumbags will storm in, hire some folks for peanuts (or import H1B workers), churn business until the owners make the money they wanted, then they are gone. Gone most likely to a nation where they can enjoy their riches without their rivers catching on fire or gun-toting citizens storming their castle.
Rand Paul and the rest of the libertarian intelligentsia will be dumbfounded when the reality of no central authority comes, the most sleazy of the masses will rise to decimate the nation.
But I digress.
Luring businesses is pointless. There is a race to the bottom and even though we are deteriorating quickly, there are still plenty of other places more willing and able to deliver slave labor and utilities to corporations.
If this was a "chicken or the egg" argument about the economy, the neo-bag answer is a bucket of rocks. And our brilliant, yet totally, horrifyingly spineless President can muster nothing more than "win the future with innovation." Almost as patently stupid.
Fingers for you, Mr. President.
