Friday, August 5, 2011

More evidence that nonsense supply-side mantras like "corporate tax cuts" aren't going to move the economy

Clearly the problem driving a weak recovery - in serious danger of a "double-dip" - isn't that corporations don't have enough capital to make the sorely needed investments in jobs:

Source: BEA

Economist Jared Bernstein:
How is this picture consistent with an economy and job market hovering at stall speed? A lot of these firms are able to sell into (and create jobs in) foreign, emerging markets, where growth has been reliably solid in recent years. Others have found ways to squeeze productivity gains out of their incumbent workforce, able to meet current levels of weak demand without adding workers.
The only thing that will get these guys off of their piles of cash is a steady increase in domestic demand - and I don't see that coming soon without the government doing a major jump-start. An infrastructure bank that could begin to green-light immediate repairs and large-scale new initiatives - something that both the labor unions and the Chamber of Commerce have come to agree on - is the only politically feasible proposal in this direction I've seen to date.

1 comment:

  1. IT's too bad that the Tea Party controlled GOP will never allow the government to jump start the economy. They've just jammed austerity down our throats.

    The sad thing is that the Democrats don't have the balls to stand up to them. The GOP know that if they just wait long enough, the Obama will cave in.

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