Transcript: Thom Hartmann riffs on the question, where does demand come from? 09 Dec '09.

Let me just lay this out, just in as simple and straightforward terms as I can and I’ll give you, you know, my twelve point solution for all things.

But, you know, just basically demand comes from wages. Demand does not come from the rich trickling down. It comes from wages. Average working people having money in their pockets and spending that money, particularly people who spend virtually all the money they make. So, if you want to increase the number of jobs out there, you want to increase demand. Because when you increase demand then entrepreneurs and businesses will increase supply. And by increasing supply, in order to increase supply, they have to hire people to make things or to, goods or services, or do things. So if we want to increase demand we want to put more money in people’s pockets.

If the way that you do that is by cutting taxes you have two problems. One is when you cut taxes you cut government revenues which means that the government goes in debt, it has to pay more money to the banks and to other foreign countries in terms of interest, things like that, pardon me. And over the long term that’s a bad thing for the country.

And secondly, when you give people “more money” by cutting taxes right across the board, generally speaking, over time their wages will go down. So instead, like I said, for working people taxes are irrelevant.

When I was in Copenhagen, when we did this program from Denmark a year ago in June, we talked with one of the top politicians in the country and I said how is it that your working people are not revolting because they’re paying 56% tax on their income, on somebody making the equivalent in the United States of, or taking home in the United States an equivalent of around $40,000 a year? And he said the reason they’re not revolting is because A: they’re getting services for their money and B: they know it doesn’t matter. If taxes go up, wages go up. I said, "what do you mean?" And he said, "what’s your minimum wage in the United States?" I said $6.25. He said our minimum wage is $16. Because people have to pay so much more tax on it. So it’s just, it doesn’t matter for working people.

So this whole tax thing is something that’s manufactured by the very wealthy people who fund the right wing think tanks and put out the right wing talking points. It’s got nothing to do with taxes. It has everything to do with the amount of money people have in their pocket at the end of the day which means that you want to strengthen labor unions because they tighten the labor supply, they drive up the cost of labor, you drive up the cost of labor, you put more money in working people’s pockets. Yes, Wal-Mart may have to pay more because they may have to buy things from factories here in the United States rather than China so they don’t get to use chemicals that are toxic any longer.

And, but see, my point is if, you know, look back 30 years ago, look back to the time when Woolworth’s and Sears and the pre-Wal-Marts, when everything they sold was made in America, yeah as, it was more expensive, but people had more money to pay for it because they had good jobs in manufacturing. They were making the equivalent in today’s dollars of $20 an hour. So we had a stronger economy because we had a stronger middle class because people were making more money.

So, number one, increase wages and there’s a variety of ways to increase wages. You can increase the minimum wage. You can strengthen labor with card check, you can decrease legal immigration into the United States as Bay Buchanan was talking about in the first hour of our program, where you say, "sorry, no more H1B visas, if we don’t have enough nurses, build another nursing school". If we don’t have enough software engineers, you know, give some scholarships. In fact, let’s make college free. Let’s build our intellectual infrastructure in the United States so we don’t have to import intelligence into this country. We have plenty of intelligence, so we don’t have to import educated intelligence into this country. Let’s do like the countries of Europe do and in Denmark people actually are paid a stipend to go to college for their living expenses and for their books.

So, you know, let’s go back to protectionism, let’s go back to pre-Clinton when we actually charged a tariff on imported goods. Let’s, so that American manufacturers are actually operating on a level playing field with manufacturers in other countries who have advantages of cheap work forces and they don’t have to worry about externalized costs, things like whether or not they’re producing toxic pollution as Ross Perot so brilliantly pointed out. Yesterday on this program we played the clip back in 1993, back in 19 whatever it was, '82, the election, or ’92 I guess it was.

So, number one, bring our jobs home. And there’s a variety of ways to do this. Here’s one other way to do it. About 20% of our GDP is government purchasing. Simply require, and this is something that could be done so easily, simply require that anything bought by the US Government has come from a company, has to be manufactured in the United States and has to come from a company that is more than 50% stock held in the United States, in other words an American company, that’s domiciled in the United States, that is incorporated in the United States. So Halliburton, sorry, that’s a Dubai company. Can’t buy from Halliburton anymore. Domiciled in the United States, more than 50% of their stock is owned inside the United States so the profits are going to go to people in the United States. If we’re gonna have a capitalist system and we’re gonna be giving money to shareholders, let’s make sure that they’re American shareholders and that it’s manufactured in the United States.

That in and of itself, that one step, that buy American provision that was put into the stimulus bill just for the 800 billion dollars of stimulus, that the Chinese put into their 800 billion dollar stimulus bill and they’re actually holding to. 100% of everything bought by the Chinese military or the Chinese government, which is about 70% of purchasing in the government in the GDP in China. 100% has to be made in China. So here in the United States they were saying, you know, 100% of 800 billion dollars, not even a fraction of a percentage of GDP in the United States, has to be made in America, the Republicans made them strip it out of the bill. I mean, come on.

Transcribed by Suzanne Roberts, Portland Psychology Clinic.

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