Creators or Killers

If Boehner, Cantor, McConnell, and company keep referring to CEOs and others of the top 2% of income earners as job creators, who do they think are responsible for firing people, laying off employees, closing factories, or moving manufacturing out of the country? What do they call these people? In their minds, where do these “job killers” fall in the continuum of income earners? Is it possible that the job killers are also the job creators? In addition to insisting that Boehner and company answer this question it would also be interesting to look at a possible reason why 54,000 manufacturing concerns are no longer operating in the United States. In many cases companies like Bain Capital (the same Bain Capital that employed Mitt) bought domestic companies, stripped them of their assets, sold off much of what was left, and shipped manufacturing off shore. In other cases, the companies moved their own operations off shore without outside assistance. In either of these cases much of this movement out of the country was made necessary by the increase in executive compensation that was being paid to the job creators/killers. As top executive compensation increased from 40 times the lowest paid employee to over 500 times the lowest paid employee, additional funds had to come from somewhere. Employee compensation is a finite part of the gross domestic product (GDP) and, when at 40 times, executive compensation share of GDP was 3%. At 500 times, executive compensation share is 10%, over three times greater. It should be obvious that the explosive growth came from reducing compensation for those other than executives in order to provide the funds for those who were executives. There are others points that should be made. For one thing, at the same time executives were receiving a larger share of the compensation pie, corporate profits were increasing but corporate compensation has stayed at the same level of GDP. Additionally, productivity per employee has been steadily increasing but non-executive compensation has been declining, keeping in step offsetting, in part, the increase in executive compensation not offset by the jobs shipped offshore. The reason all of this is important is the reality that while executives ride around in limousines, Porsches, and Jaguars; Chevys, Toyotas, and Fords buy most of the gas and the other products that fuel the economy. When workers make less, workers buy less, and when workers buy less, the economy goes into the tank. Welcome to the world of 2012. Job Creators not only fail to create jobs but they also fail to grow the economy. Contrary to the preaching’s of Boehner & co, job creators haven’t created jobs nor have reduced capital gains nor have other tax cuts nor has deregulation.