Obama’s solution for the Depression is supply-side economics, whose champions claim that if the government cuts taxes on the wealthy, then the wealthy will invest in new factories, and hire new workers, thereby producing tax revenue.
Supply-side "theory" is a lie. It is based on the false claim that if you give money to a person, then the person will invest it in productive ways. Nothing forces a person to do that, and the wealthy have never really done that anyway, since the function of business is not to create jobs, but to make money. A business will only create jobs if there is no other way to get money. A business will not create jobs if it can get money via government handouts and bailouts.
Thus, handouts and bailouts prolong depressions. And businesses will never reform as long as they are considered “too big to fail,” and are rewarded for not reforming.
Whenever a business can accumulate capital without the use of employees, it will do so. The U.S. government assists this by rewarding businesses for automating, for moving overseas, or otherwise firing Americans.
Today’s politicians claim that businesses, not governments, create jobs. Bullshit! Did businesses create the politicians’ jobs? Anyway, no business will create jobs in this market unless the government forces it to.
When a politician claims that tax breaks to businesses will create jobs, he is lying. He is providing businesses with another means to extract money from the masses without having to deal with the masses. The capital acquired by businesses in this way will be added to the pile already collected. Why would a business want to jeopardize that pile by spending it to create jobs?
Business do not acquire capital in order to spend it. Business acquire capital to accumulate it, and will only spend capital if there is no other way to accumulate more capital.
Capitalists go to where they can acquire more capital, not to where they can hire more workers. During the California Gold Rush, merchants went to the camps when gold was discovered, and vanished when the gold petered out. They did not use the capital they had acquired from the miners to open productive businesses to provide jobs to the now jobless prospectors.
This is the nature of our capitalist system. The horrors of England's 17th Century economy are the horrors of today. In the 1600s most people were impoverished. Most of the wealth was held by the few. There was homelessness, hunger, unemployment, underemployment, and degrading employment. Human dignity was crushed. Common people fought wars to enrich the plutocracy. Government served only the wealthy.
Since those days there have been short-lived periods when the people were led to believe that their prospects were improving, but these periods have regularly ended in economic collapses that wiped out any gains the common people had acquired.
The history of Western capitalism is exemplified by the following historical vignette…
On January 24, 1848, James W. Marshall discovered gold at Sutter's Mill in Coloma, California. Vast numbers of people rushed to California, put up a camp and staked claims. Merchants flocked to the camps and set up business to sell everything imaginable. Miners lived in tents, shanties, and deck cabins they had removed from abandoned ships. Each camp had its own saloon and gambling house / brothel.
Hydraulicking became the prevalent means of extracting gold. This caused large amounts of gravel, silt, heavy metals, and so on to pollute streams and rivers. (Many areas still bear the scars of hydraulic mining, since the resulting exposed earth and downstream gravel deposits are unable to support plant life.)
Half the prospectors made a modest profit. The other half made little, or ended up losing money. Merchants made far more money than did miners. The wealthiest man in California during the early years of the Gold Rush was Samuel Brannan, a tireless self-promoter, shopkeeper and newspaper publisher.
By 1855 the economic climate had changed. Gold could no longer be profitably retrieved except by medium-to-large groups of workers, either in partnerships or as employees. The people who made money were those that owned these gold-mining companies. When the gold petered-out, the merchants abandoned the sites faster than the miners. The gold rush was over.
At first, the gold was simply "free for the taking." Disputes were often handled personally and violently. Later, when gold became increasingly difficult to retrieve, Whites blamed non-Whites for everything. They banded together to attack non-Whites, and drive them out, particularly Latin Americans and Chinese.. The CA State Legislature passed a foreign miners tax of twenty dollars per month.
Whites also drove Native Americans out of their traditional hunting, fishing and gathering areas. Some Natives responded by attacking miners, who retaliated with genocidal counter-attacks. Natives who escaped were unable to survive, and starved to death. Natives also succumbed to smallpox, influenza, and measles in large numbers. The Act for the Government and Protection of Indians, passed by the California Legislature, allowed settlers to capture and use Natives as slaves, particularly young women and children. This was carried on as a legal business enterprise. Native American villages were regularly raided to supply the demand, and young women and children were carried off to be sold.
The toll on the White American immigrants was also severe. One in twelve people of the Gold Rush perished from accidents, crime, and vigilantism.
The point here is that capitalism is fundamentally immoral. When we champion capitalism to the exclusion of all other systems, we champion immorality. Our God becomes Satan, and our role models become Jews.
~~~ Adapted and paraphrased from an article by Prof. John Kozy
Capitalism, cannot be “reformed,” since it is incorrigibly avaricious. It is based on the need to maximize profit at all costs. It compels us to be greedy and petty. It takes what the Greeks called pleonexia—an endless hunger for more and more—and transforms it from a tawdry and dangerous vice into the central virtue of the system.
Conscripting us into an economic war, capitalism turns us into soldiers of fortune, indifferent to casualties and collateral damage, ransacking the earth to fill banks with plunder. Capitalism make us value money more than people. It systematically cultivates injustice and predation. No amount of goods can compensate for this deliberate indulgence of our vilest qualities.
Even those who have opposed capitalism have often fallen for its illusions: the ideal of “growth,” the mythology of “progress,” the cipher of “innovation.”
What needs reinvention is not capitalism, but our moral and spiritual imagination.