This is a tale of two stories, of separate idiocy, but, contains some governmental and economic truisms. Will these people learn from these mistakes? Of course, not.
One story is about Japan’s futility and idiotic “stimulus”, and the other is about California’s idiocy, but, then, that’s redundant.
Japan has slipped back down to negative GDP growth. Cali taxed the crap out of corporations which had the audacity to expand to other US states. Both governments, Japan’s and the state of California had promised to create jobs and wealth untold by their intervention. They’re both failing miserably.
TOKYO (AP) — Japan’s recovery stalled in the April-June quarter, with the world’s third-largest economy contracting at a 1.6 percent annual pace thanks to feeble consumer and corporate demand and slowing exports. ….
…. But heavy rains in the spring and early summer are thought to have discouraged shoppers. Demand for autos has also slumped following a tax hike for smaller cars. As China’s economy has slowed, its demand for exports has also lagged.
Economy minister Akira Amari, however, acknowledged inadequate progress toward getting companies to use their surging corporate profits to raise wages and domestic investment — a priority seen as vital to a sustainable recovery.
“Improving private consumption is crucial,” he said.
Yes, a whole quarter of bad weather prevented people from buying stuff. But, other than that major factor, this demonstrates an incredible lack of understanding of how jobs are created or why wages increase. I don’t know how many times a corporate profit is unrelated to wages before people understand they’re not related to wages. Wages increase when a demand for a particular worker, or workers in general, exceed the supply of workers. When there are excesses of workers, then, the wages won’t rise. It’s that simple. Why would I pay a worker $100 when I could pay another worker $50 to do the same thing? Now, when I need a worker, and have none who would do what I need for $50, then, I’ll have to bump the pay in order to get the task done.
But, that’s a side note, here’s what I’d like people to read ….
The Bank of Japan, whose lavish monetary easing is pumping trillions of yen (hundreds of billions of dollars) of cash into the economy through purchases of government bonds and other assets, has persisted in forecasting a rebound later in the year. ….
… The economy got a boost from public investment, which rose almost 11 percent from a year earlier, as spending was “front-loaded” at the beginning of the fiscal year, which starts April 1.
If you read the whole story, you see that consumer demand was down, wages are down, and hours worked is flat. It’s weird that printing money didn’t fix that. But, most importantly, the 11% increase in government spending didn’t seem to help the quarter, either.
And, then, there’s this story …….
SACRAMENTO, Calif. – Three years after California voters passed a ballot measure to raise taxes on corporations and generate clean energy jobs by funding energy-efficiency projects in schools, barely one-tenth of the promised jobs have been created, and the state has no comprehensive list to show how much work has been done or how much energy has been saved.
Money is trickling in at a slower-than-anticipated rate, and more than half of the $297 million given to schools so far has gone to consultants and energy auditors. The board created to oversee the project and submit annual progress reports to the Legislature has never met, according to a review by The Associated Press.
Voters in 2012 approved the Clean Energy Jobs Act by a large margin, closing a tax loophole for multistate corporations. The Legislature decided to send half the money to fund clean energy projects in schools, promising to generate more than 11,000 jobs each year. …
.. Instead, only 1,700 jobs have been created in three years, raising concerns about whether the money is accomplishing what voters were promised. ….
.. The office of Senate President Pro Tem Kevin de Leon, D-Los Angeles, previously estimated LAUSD would save up to $27 million a year on energy costs; projects proposed by the district so far would save only $1.4 million….
… The proposition is also bringing in millions less each year than initially projected. Proponents such as de Leon and billionaire investor and philanthropist Tom Steyer, who funded the ballot measure with a personal $30 million, told voters in 2012 that it would send up to $550 million annually to the Clean Jobs Energy Fund. But it brought in just $381 million in 2013, $279 million in 2014 and $313 million in 2015. ….
Well, although the amount brought in is significantly less than the $1.65 billion promised, it did take in nearly $1 billion from the private sector. It has thus far created 1,700 jobs. That comes to ~ 570,000/job. You would create more jobs if you took the money and shoveled out of the back of a dump truck down random streets.
I don’t know how many times economic and governmental truisms have to be shown before some semi-intelligent people understand it doesn’t work! What were the job losses from Cali’s idiocy? Well, we’ll never get the figures for that, but, you can be assured there were some corporations which packed up and left, and took all of their jobs with them, including janitors, housekeepers, book keepers, receptionists, office managers, IT people, etc ….. I bet it was a damned sight more than 1700 jobs.
But, then, if you can’t tax yourself to more jobs, why can’t you just print money to gain more jobs?
Taxing and printing (which is a form of taxation) doesn’t address the fundamental reason as to why there is a lack of jobs to begin with.
Japan can double their printing and it won’t create on job. If any of the printed money actually hits the Japanese economy (and there is no proof it has) it would simply be inflationary. Cali could double their taxation, and it won’t increase their revenues nor increase jobs.
Here’s how to create jobs …. ensure all costs associated with the endeavor are less than the benefits. Then, and only then, can jobs be created. Our governments have consistently demonstrated their lack of an ability to properly gauge benefits and costs.