One More Time
Badtux has posted on this point multiple times. I have hammered it home too. So let’s try it again from someone else.
The Agonist has the TED video embedded that features venture capitalist Nick Hanauer making the point that: Consumers Are The Real Job Creators.
This point is part of the American mythology. Everyone should have heard that Henry Ford paid his workers well, above the prevailing rate, so they could afford to buy the cars they were building.
It is really simple – laying people off reduces demand. People without jobs have no money to spend, so there is a reduction in the demand for goods and services. Markets are where buyers and sellers meet. If there are no buyers, there is no market.
High unemployment is the biggest problem in the US and Europe. It reduces the revenues of business and government. Business is not going to start spending money until it sees an improvement in demand, and demand isn’t going to improve until people get back to work.
Governments are the only entities with the resources to break this cycle.
