The iPhone 5 and the 99ers

From Paul Krugman in today's NY Times - The iPhone Stimulus

"We don’t have high unemployment because Americans don’t want to work, and we don’t have high unemployment because workers lack the right skills. Instead, willing and able workers can’t find jobs because employers can’t sell enough to justify hiring them. And the solution is to find some way to increase overall spending so that the nation can get back to work."

It's why we want the American Jobs Act. It's why we want infrastructure bills. It's why we want businesses to use the trillions of dollars of cash they're hoarding. We want - we need - to get back to work.

Comments

  1. But according to the democrats they don't believe in the trickle down theory, therefore it wouldn't do any good for said businesses to use the trillions of dollars of cash they're hoarding.

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    1. A few points:

      Trickle down economics is: "An economic theory which states that investing money in companies and giving them tax breaks is the best way to stimulate the economy." (source: Investopedia)

      If businesses are already holding on to trillions of dollars (and they are), giving them even more money (in the form of additional investments and/or tax breaks) would be a waste: they're not doing anything with the money they already have. What companies lack is demand for their goods and services. They can make all the stuff they want, but it'll sit gathering dust in a warehouse, because no one's buying.

      Krugman's point is one we've made in the past: we're caught in a vicious cycle: businesses aren't hiring because their chief concern is poor sales, and people aren't buying because they've lost their jobs.

      Trickle-down economics would put more money in corporate hands, which is exactly the wrong place for it to be, if the goal is to fix the economy. The problem relates to demand, not to supply. The example of iPhone sales growing GDP is a perfect example of Keynesian (demand-side) economics. Apple has to ramp up their production to meet demand: that means more work, and that means more jobs.

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  2. RebublicanVictoryParty2012`September 22, 2012 at 6:22 AM

    The real problem here is that these lazy Americans don't want to go to work. They sit and complain about how society owes them a living. When in actuality, they're quite capable and refuse to get their sorry fat butts off of the coach.

    There are plenty of jobs in fast food restaurants, shoveling shit at horse stables, and for the women, topless dancing. These jobs aren't the most desirable but the issue here is that work is available. Americans choosing not to go to work because they don't want to lower their standards deserve nothing, let them starve....

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