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Consumers drive an economy



Published: Mon, July 30, 2012 @ 12:00 a.m.

Consumers drive an economy

A letter last Sunday re- marked on partial quote of President Obama’s, “if you got a business, you didn’t build it.” I was reminded of an article I recently read in which a business owner commented that he never considers himself to be a job creator, the real job creators are the American consumers — they were the ones who built his business up.

How true that is considering that 70 percent of the American economy is driven by the American consumer. It doesn’t matter how many tax cuts or how much deregulation you do, if a business does not have demand for its product or services, it is not going to prosper and grow and be able to hire employees.

Our economy is a combination between private and public sectors. The private sector has added 4 million new jobs. Bank failures, housing crisis,consumers paying off credit card debt, loss of 600,000 government jobs are all keeping unemployment high.

No president including Reagan, Clinton, nor Romney could have brought jobs back any faster. Romney would have let the auto industry go bankrupt. Reagan after lowering taxes, raised them and also increased spending. Clinton raised taxes and increased spending on infrastructure, police, firemen, schools, and also had the advantage of the high tech bubble. All of the above would have been unacceptable to today’s Republican Congress.

Interest rates are low, corporations are sitting on lots of cash, the auto industry is back, housing is showing some improvement, so it’s going to be up to the American consumers, the real job creators to keep this recovery going.

Becky Neal, New Castle, Pa.


Comments

1chuck_carney(499 comments)posted 2 years, 4 months ago

Henry Ford knew that providing good jobs to his workers provided them with the ability to purchase cars which they built, Simply saying it is consumer driven is fallacious reasoning. The companies must have the confidence to begin producing (yest, take risk and build their businesses) which will increase the number of jobs.

Also, we don't need another stimulus or QE redux. There is over $1 trillion of American money overseas and over $1 trillion of money sitting on the sidelines here in the US. Where is timmie ryan and sherrod brown to develop an amnesty program or reduce regulations to get this money back into the US economy.

Rather the ROB triumvirate (Ryan, Obama & Brown) would rather take money from the successful business people

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2300(562 comments)posted 2 years, 4 months ago

^ Another non-economist who tries to sound like he knows what he's talking about.

When a certain activity makes up well more than half of something larger, we can say that that activity is what drives the larger something. Consumer spending makes up the vast majority of our market-based economy, therefore it most certainly does drive our economy. To say otherwise is either ignorance or willful deception.

Also, I thought "amnesty" was a bad word for Republicans.

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3AnotherAverageCitizen(1175 comments)posted 2 years, 4 months ago

Chuck,

You point the finger at Ryan, Obama & Brown. Amazing. And do you really think Willard would change the situation? Its his money that is overseas. Voting for Willard would only make matters worse. All Williard wants to do is give more protection to the extremely wealthy.

Remember repubs. When you point the finger, three fingers are pointing right back at yourself.

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4jojuggie(1471 comments)posted 2 years, 4 months ago

300 can't agree to disagree. He must get nasty and demean anyone who he doesn't agree with.
Chuck is stating that many companies are loaded with cash and are afraid to expand, or hire new employees, for fear of new taxes & Obamacare. They have no idea what the future holds under this adm, so rather than let the funds rot, in their general fund, they are buying back their stock by the millions. This often increases the price of their stock.
I'm sure that's what he meant "1T of money sitting on the sidelines," and ROB doing nothing about this situation.
"When a certain activity.....................
larger something." Whew, what economics course is that from?

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5300(562 comments)posted 2 years, 4 months ago

Jojuggie, you've already made it clear that you've never run a business, and that your reading skills are minimal. I don't apologize for calling out the ignorant when they choose voluntarily to pretend to know what they're talking about.

As for which econ course that's from, that's econ 101. And I'm not just using the ambiguous "101" to mean it's something simple that everyone should know. Economic systems (traditional, market, centralized) really is taught at the 101 level. I know because as a grad student I taught that course. Market systems are driven by consumption, and that's not an opinion, but a fact. Though, there are some fringe exceptions, but I'm positive that he wasn't referring to any of those.

Ignorant people shouldn't be tolerated. No one forced him to pretend to know what he was talking about, he chose to post that.

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6jojuggie(1471 comments)posted 2 years, 4 months ago

I had Econ 101, in 1948, at Kent State.
Let's assume the headlines, in tomorrows Vindy, exclaimed that an unnamed company is relocating to the Youngstown area this Fall that will employ 2000 workers making widgets. This co. is not a job creator. Of course not.
Being a teach, I know where you're coming from.

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7DwightK(1300 comments)posted 2 years, 4 months ago

I've never been able to reconcile the Republican's idea of small government with their belief that the President is somehow responsible for a high unemployment rate. Taxes have never been so low and incentives to hire have never been so plentiful.

What's wrong with the economy is companies building their products for pennies in China and then selling them in America for prices that assume we're all making $20 / hour.

Henry Ford had it right. Pay your employees enough to afford your products. After all, who else is going to buy them?

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8300(562 comments)posted 2 years, 4 months ago

I'm not a teacher or full time professor, I taught econ 101 while in grad school. Though I have taught as an adjunct in the past (I actually did enjoy teaching), I haven't had time the last few years to do so.

To answer your analogy, no they are not "job creators" since if demand didn't exist they would have no one to sell to. When there is demand, though, they provide services or units to them at a price. "Job Creator" simply doesn't exist in a free-market system, since it isn't centrally controlled (in which demand is artificially created by the state).

"Job Creator" is a PR campaign intended to get people to ignore that fact that our economy's malaise is partially due to the executive class' irresponsible behavior. Basically, short term gain is incentivized, long term outlooks are punished (which is 1 of the main reasons for middle class incomes to have stayed stagnant or even decreased while executive/financials pay has skyrocketed). This is all an organized attempt to get people to look the other, or even start to praise the executives behavior rather than picking up the pitch forks.

Demand, aggregate demand, livable wages, those are the job creators. Consumers are job creators, not business owners who take advantage of the opportunity to make a profit.

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9jojuggie(1471 comments)posted 2 years, 4 months ago

WOW, it took you a long time to prepare that treatise.
"Our economy's malaise is partially due to executive class' irresponsible behavior."
Not true. Many largr corps are making much money. So much so that because, of the irresponsible behavoir, in the Whitehouse, with a president that is in over his head, these corps are in fear of future taxes & Obamacare. So, what are they doing, they are using these vast profits and buying back their stock - just like ATT. The other day, I learned that ATT is buying back 3M shares. They will put this in their treasurey, and what's the result? Their profit per outstanding share will rise. Stock buyers love this.
So, there you have it. Corps are flush with cash. When the horizon clears, there will be a mass exansion of our economy.

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10jojuggie(1471 comments)posted 2 years, 4 months ago

WOW! A huge error in the above post.
ATT bought back 300M shares, not 3M.
SORRY.

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11jojuggie(1471 comments)posted 2 years, 4 months ago

Hey 300. You're pretty good at SUGGEST REMOVAL. Can't take the heat, huh? But you like to dish it out.
Sleep well, friend.

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12300(562 comments)posted 2 years, 4 months ago

I never suggested any removal.

You don't understand how the economy works. You may be able to understand bits and pieces, but it's a superficial knowledge. Not to mention, there's very little chance of me being able to educate you via a public forum. I'm also not all that interested if you fully understand corporate finance and where it fits into the macro/micro economy. Though I do like your "stock buyers love this" part. You might want to rethink that bit again.

You think that you made me angry, but that's not the case. I don't post out of anger, but out of servitude. I've been very lucky in life, and I see it as a small giving-back of sorts to enlighten the unenlightened.

Sometimes during the day, I tire of my work. I check out the local newsites, but when I see something that's incorrect I try to correct it.

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13tnmartin(305 comments)posted 2 years, 4 months ago

It takes more than consuming, It takes producing as well.
Right now, the US economy consists largely of borrowing money from the ChiComs, in order to then buy container loads of crap from those same ChiComs.
Congratulations. You have consumption.
You also have a massive and growing debt.
And no production to earn the money to pay off the debt, nor really to pay the interest.
And you think this is A Good Thing?
is there something in the water around here?

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