If you needed any more proof that tax incentives to big business don’t and will never solve the unemployment crisis, the NYT shows us how current tax policy is a disincentive for hiring. In fact, it doesn’t even encourage domestic spending on capital goods.
Two years into the recovery, hiring is still painfully slow. The economy is producing as much as it was before the downturn, but with seven million fewer jobs. Since the recovery began, businesses’ spending on employees has grown 2 percent as equipment and software spending has swelled 26 percent, according to the Commerce Department. A capital rebound that sharp and a labor rebound that slow have been recorded only once before — after the 1982 recession.[...]
To add insult to injury, much of the equipment used to replace American workers is made by workers abroad, meaning that capital spending is going overseas. Of the four pieces of equipment Vista bought last year, one was made domestically. The others came from Israel, Switzerland and Germany. …
It’s not that finding ways to automate routine functions is necessarily a bad thing. Or it wouldn’t be if the corporations actually passed on the savings to the consumer instead of pocketing the additional profits. But what’s good for big business, isn’t good for America right now. The millions of “on the verge of retirement” Americans need immediate jobs to recoup their losses from the Bush era. Private sector isn’t going to step up to provide them.
If the Bush era taught us anything, it’s that an economy that only booms for the owners and investors is neither humane, nor sustainable. Wondering when the White House is going to learn that lesson?