Shock News!!!! Government Intervention Doesn’t Create Jobs!!!! Even When They’re Trying!!!

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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.

Japan’s economy contracts in April-June quarter

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 …….

Taxing corporations in California fails to create green jobs

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. 

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8 Responses to Shock News!!!! Government Intervention Doesn’t Create Jobs!!!! Even When They’re Trying!!!

  1. Latitude says:

    You’re batting 1000 tonight!

  2. DirkH says:

    “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,”

    Japanese politicians are even more under control of the US than German ones. CIA has a deal with the Yakuza to have them killed if they disobey orders. As QE by the Fed stopped, the BOJ took over. Under orders from the USA the BOJ to this day buys the govt deficit of the US.

    The currencies USD + Yen + Euro form one big Western imperial money supply that must be kept inflating.

    Japan buys US debt hand over fist and is literally thrown into the fire to keep the ovens warm. Once the implosion comes they’ll be totally impoverished. An interest rate hike from say 0.25% to 0.5% means that the value of the 0.25% bonds you hold HALFS! As their price is proportional to the interest income they gain.

    Buying US treasuries OR Japs treasuries at these rates is suicide.
    -any rate hike will kill you
    -no rate hike ever can only be achieved by QE4EVER, inevitably ending with hyperinflation.

    • suyts says:

      Dirk, your comment has taken me on a journey of sorts! ….. for the most part, the Japanese holdings of US debt has stabilized, as has China’s. But, your sentiment about holding US notes is entirely correct. I’ve no idea why someone would buy them. But, then, that got me to thinking about the foreign debt the US holds. I’ve been able to find the US residents’ holdings of foreign debt, but, not the Federal holdings. Did you know the US residents hold $1.3 trillion + of UK debt? At any rate, you might like to wander here … http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/fpis.aspx#usclaims for some interesting, yet, entirely incomplete information if one is looking for a total.

      • DirkH says:

        From 2013 to 2014 Japan increased their US debt holdings by 200bn the report says. No newer numbers. As long as the Dollar rises, fine.
        The Dollar doesn’t even have to fall. It suffices that it is REJECTED globally. Well basically that’s exactly the confidence loss incident that will drive it into hyperinflation instantly. Hyperinflation always sets in when the CONFIDENCE vanishes.
        At the moment everybody’s still smiling and waving, and the US MSM never even mentions the ongoing govt debt explosion. Remember the debt ceiling, ah those were the days. Let’s not talk about it shall we. The rampant inflation of LYING is everywhere.
        German police reports are already FORGED. Rapes and murders commited by asylum seekers are not published. We have evidence. There are internal orders to not publish them to not increase the unrest in the German population.
        As the lying becomes ubiquitious, the confidence in the system collapses. The last snowflake causes the avalanche and poof goes the monetary system.

        • suyts says:

          I agree, it will happen. But, to the specifics of Japan, I do blog on Japan’s and China’s holdings from time to time because the newly released data is much more current. Over the last several months China and Japan have traded places as the #1 foreign holder of US debt. Sometimes it’s because they’re buying, other times its because they’re selling. But, the numbers don’t change significantly, even though, they should have. In the previous few years the #1 buyer of US debt was our Federal Bank with our QE. So it does beg the question as to who is buying it now. I think the answer is the reason why it’s difficult to find.

          Personally, I believe it’s a huge circle jerk. Who is buying the China debt? Who is buying the Japanese debt? Who is buying the US debt? They’re all buying each others and then selling most of it to a 3rd party, who then sells it back. But, who cares? It’s bought back by the printed money we all just printed or are printing! But, no one cares, it’s just the peasant peons who get hurt by it. How many are doing this? I don’t know. I don’t think Russia is involved, but, the ECB is. Perhaps the UK, as well.

  3. Ted G says:

    Obama and Bernie Sanders do not agree. Big Government intervention is always a good thing?

  4. Bruce of Newcastle says:

    Banzai becomes bonsai.

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