Transcript: Thom Hartmann says to Dan Gainor, demand creates jobs...how to we create demand? 09 Dec '09.
Thom Hartmann: In the two years since the second Republican Great Depression began, over 7 million American jobs have vanished. Gone. Now, you can add this on top of the roughly 14 million American manufacturing jobs that have left this country since Bill Clinton signed to NAFTA in 1993 and you can add to that the fact that since 1981 when Ronald Reagan came into office until today the average wage of working people in the United States has gone up in inflation adjusted dollars about $43 whereas the average income of the top .1 percent of Americans has gone up well over a million dollars. I don’t remember the number, 1 point something million dollars. But bottom line is we’re not making jobs. So this gets down to a really fundamental debate here about what does make jobs. How, what is the cause of jobs in an economy? Why does anybody hire anybody? Dan Gainor is with me, the vice President and T. Boone Pickens Free Market Fellow at the Business and Media Institute, BusinessAndMedia.org. Dan, welcome back.
Dan Gainor: Oh it’s a pleasure to be back. It would be a little more pleasure if you would A: not claim that it’s a great depression, it’s not. No economist would go around claiming that.
Thom Hartmann: Yet. I am.
Dan Gainor: And that’s fine but you’re not an economist.
Thom Hartmann: Nope, I’m not.
Dan Gainor: And you don’t play one on TV or radio in this case. And then the…
Thom Hartmann: I hope I’m wrong, Dan, I hope I’m wrong.
Dan Gainor: Well, so far you are. I mean, I just, flat out you are. And so, but in getting to the point of jobs. Obama doesn’t really want to create jobs. He wants, I mean this is such a political…
Thom Hartmann: Come on, you’re telling me that a politician doesn’t want to create jobs?
Dan Gainor: If he really wanted to, this would have been the focus of his administration all along. He waited until unemployment was 10% and we got into an election year, before he capped. And look at what he’s done now. He had a job summit. The number one creator of jobs in this country is small business. He froze out the NFIB, the National Federation for Independent Businesses, the organization for small businesses, he didn’t even invite them to his job summit. Trying to seize TARP money. And now look at the ending dates of, he wants to extend the TARP money from instead of running out now, he wants to extend it to October of 2010. So it ends October 31st, two days later we have the mid term election.
Thom Hartmann: Yep.
Dan Gainor: Come on, you’re taking 200 billion dollars for a democratic election slush fund when people are out of work.
Thom Hartmann: You know Dan I don’t disagree with you that there’s political timing going on here, it’s always happened in every election, it always happens with every politician. However, the argument that, actually, let’s get back to the fundamentals here. You just went through the long string of you know basically, oh my god Barack Obama is behaving like a politician. So what.
Dan Gainor: He’s not trying to create jobs, that’s my big thing.
Thom Hartmann: I think you said he hasn’t done, he didn’t make creating jobs a priority. I believe that he did and he got screwed by the financial services industry because the stimulus bill, here’s the problem. They put 800 billion dollars into the stimulus bill and they required, and this is still part of the law, they required that all that money go through financial institutions. So even though he’s got a couple hundred billion dollars left in TARP, that money, or not the financial stimulus bill excuse me. The TARP bill. That money cannot be used to directly create jobs. That money can’t be used to hire people to do things, like FDR did. It can’t be used, it has to go through financial institutions so that they can make a profit on that money. So at the very least then let’s start, if it has to go through banks, let’s require them to start funding for example small businesses. I agree with you on this. But the thing is that all these banks, they took all this money, they took these bailouts and where are they making their money? And you know this as well as I do, Dan Gainor, the, where Goldman Sachs is making it’s money right now and where JP Morgan is making it’s money right now and where Wells Fargo is making it’s money right now is on proprietary trading. Taking money that, bail out money, TARP money and money borrowed from the Fed at zero interest, gambling with that money in the stock markets or in currency markets or in commodities markets, making a profit on those gambles and then putting that on their balance sheet. And as a consequence they’re not loaning…
Dan Gainor: Actually I wouldn’t even say they’re gambling in some cases. They’re, if you buy, if you take money that someone gives you for zero percent and then you’re able to turn around and buy something that’s got a guaranteed 5%, which is what many of them are doing..
Thom Hartmann: Sure, yeah in many cases it’s not even gambling, you’re right, it’s just buying bonds and foreign currencies.
Dan Gainor: Pretty much.
Thom Hartmann: But this should be wrong, this should be illegal and yet you’ve got the, you’ve got people within the Democratic Party. Elizabeth Warren is the most outspoken person, the overseer for the TARP program, saying let’s use this money appropriately, let’s force the banks, let’s regulate the banks more tightly and force them to actually loan money to people rather than do proprietary trading. Let’s outlaw proprietary trading. And you’ve got every single Republican saying, "oh my god big government, you want to regulate the banks, what are you talking about, they’re our donors!"
Dan Gainor: Well, actually, in many cases they’re not. But if they were all the donors, Republicans would probably be doing better.
Thom Hartmann: Name one. Name one Republican who’s not in the pocket of the big banks.
Dan Gainor: All these financial institutions gave more money to Democrats last time. So…
Thom Hartmann: No, I’m right with you, the Democrats are in their pockets too. But I’m saying, outside of Ron Paul, name one Republican that’s not in the pockets of the big banks.
Dan Gainor: Well, I mean, you know, I’d have to go through and find…
Thom Hartmann: I have a hard time finding Democrats who aren’t, by the way, Dan. I’ll start with Bernie Sanders, he’s not even a Democrat, so, but…
Dan Gainor: But let’s get back to jobs ‘cause you mentioned FDR. And the problem with the FDR plan of jobs, go back to 1930s, FDR created jobs, FDR had a net decrease in private industry. So you can grow government and then when the economy gets better you’ve got this massive monolith of government you’ve gotta fund which we’re already having at a state and federal level. I mean you look at…
Thom Hartmann: You’re talking about the consequence of the great depression, you’re talking about deflation, you’re talking about currency policy by the Fed that certainly didn’t help matters at all. That’s a fairly complex situation. But here’s the thing Dan. What creates jobs is demand for good and services. Can we agree on that?
Dan Gainor: Yeah.
Thom Hartmann: OK. What creates demand for goods and services is money in people's pockets, can we agree on that?
Dan Gainor: And could we agree then that what the government should have done instead of a lot of the TARP or the stimulus money is give people money back in their payroll checks. You know, take a payroll tax holiday. Not that either party would have really liked to see that because then they lose control of our ordinary lives.
Thom Hartmann: Well, here’s the problem with cutting taxes. And I think you and I have had this conversation before, but, you know, if you’re working for me for 75,000 bucks a year and 25 of that’s going to taxes, so you’re taking home 50 a year and I know that you’re willing to work for that 50, and all of a sudden your taxes are cut so you’re taking home 60, what am I gonna do as your employer? I know you’ll work for 50. I’m gonna cut your wages by ten grand.
Dan Gainor: Well, I think more appropriately what really would have happened is that if politicians realized that suddenly people knew how big the bite is that comes out of their paycheck every week and then…
Thom Hartmann: No. People already know, Dan, but the reality is, and you have to know this. I mean, look at a hundred years of tax policy in the United States. Whenever taxes on working people go up, wages go up within the following, in the next 3 years so that net income is equalized. Now that’s not true for the rich. The people who are paying the people who are paying you, the really rich in the United States, that’s not true for them. When taxes go up it takes a bite out of them. But for average working people, when taxes go up it doesn’t matter because wages will eventually go up. Very quickly.
Dan Gainor: If you want to create jobs, the number one way to create jobs is to make a business climate for the companies like small business.
Thom Hartmann: No, it’s to increase the money in people’s pockets, increase the minimum wage.
Dan Gainor: No because then you raise the cost of labor.
Thom Hartmann: Exactly. I would gladly pay 10% more for something at Wal-Mart if it was made in the United States by somebody down the street making $25 an hour.
Dan Gainor: That’s you and a lot of people who are not quite making so much money as you won’t, don’t have that…
Thom Hartmann: Those people who aren’t making as much money as me would be making the $25 an hour at a factory providing things for Wal-Mart.
Dan Gainor: So then lower for being the second worst tax rate country in the world for small business.
Thom Hartmann: But we’re not. We actually have one of the lowest… Well, we’re running out of time here Dan, we’ll just leave it at that. BusinessAndMedia.org, thanks Dan.
Dan Gainor: Thanks, bye.
Transcribed by Suzanne Roberts, Portland Psychology Clinic.
