Rubio: Corporations aren't investing tax cuts

[Thebobo]

I see the problem here the rich aren't rich enough. Let's get together and work on that, ok?

 

[soulcougher73]

I for one, am getting tired of golden showers from all the trickle down.

 

[ch33zw1z]

I see the problem here the rich aren't rich enough. Let's get together and work on that, ok?

It's more than just the rich. It's the scrooge-mcduck-swimming-in-a-money-bin wealthy that are basically getting a funnel now.

 

[K1052]

The GOP really needs to be stripped of it's image as fiscally responsible. They're not at all and lie like rugs trying to maintain that facade.

 

[Ventanni]

No shit because workers aren't an investment, they're an expense. Or in place of investment you could make an argument that employees are an asset to their employer although that sorta depersonalizes them in a way as well (the line between "asset" and "property" can be a fine one and perhaps not worth straying near when some of those workers may have ancestry who lived in slavery). Just because your side likes to use the word "investment" to mean any sort of spending you like and think might serve a policy position you support, that still doesn't change the actual definition of the word.

Definitely not.

In the world of business, one of the most important assets you need to be successful is culture. Products don't make culture. Advertising doesn't create culture. People create culture. It's culture that allows for work forces to grow, create new products, be nimble and responsive, and tackle problems with a high level of energy. When Hewlett Packard gutted its work force and outsourced most everything, it threw away its culture along with it. They are still a huge company, but when's the last time you heard of anything exciting come out of them? Yep, can't remember.

I am, in no way, about giving people the farm and rewarding workers for things they haven't worked for, but when businesses throw away their culture, they fade into obscurity every time.

 

[glenn1]

Definitely not.

In the world of business, one of the most important assets you need to be successful is culture. Products don't make culture. Advertising doesn't create culture. People create culture. It's culture that allows for work forces to grow, create new products, be nimble and responsive, and tackle problems with a high level of energy. When Hewlett Packard gutted its work force and outsourced most everything, it threw away its culture along with it. They are still a huge company, but when's the last time you heard of anything exciting come out of them? Yep, can't remember.

I am, in no way, about giving people the farm and rewarding workers for things they haven't worked for, but when businesses throw away their culture, they fade into obscurity every time.

Culture isn't an investment either. People are getting hung up on a word they like to use ("investment") and when corrected are being all huffy. Saying workers aren't an investment isn't saying the workers aren't important, it's correcting a misuse of a word. Workers enable almost every capability a business has to create value and that makes them hugely important, but that doesn't change them from being expenses to investments any more than calling your pet dog (who you love and cherish) a reptile makes him one instead of a mammal.

And going back to the OP about why businesses aren't "investing" tax cuts, many of them are in sectors where overcapacity is the biggest constraint and investing more would only worsen their situation. The answer to every economic problem isn't "give more tax money away so people can go on a Keynesian spending binge" because the larger structural problem in the U.S. economy today is the large levels of debt being carried by many households, some companies, and pretty much every government.

 

[Puffnstuff]

The GOP really needs to be stripped of it's image as fiscally responsible. They're not at all and lie like rugs trying to maintain that facade.

They remind me of the T1000 by trying to emulate things they are not.😛

 

[dank69]

Culture isn't an investment either. People are getting hung up on a word they like to use ("investment") and when corrected are being all huffy. Saying workers aren't an investment isn't saying the workers aren't important, it's correcting a misuse of a word. Workers enable almost every capability a business has to create value and that makes them hugely important, but that doesn't change them from being expenses to investments any more than calling your pet dog (who you love and cherish) a reptile makes him one instead of a mammal.

And going back to the OP about why businesses aren't "investing" tax cuts, many of them are in sectors where overcapacity is the biggest constraint and investing more would only worsen their situation. The answer to every economic problem isn't "give more tax money away so people can go on a Keynesian spending binge" because the larger structural problem in the U.S. economy today is the large levels of debt being carried by many households, some companies, and pretty much every government.

Since when are the terms investment and expense mutually exclusive? If a company invests in a new factory, and they have to lease it, is it no longer and investment because it's an expense? That doesn't make sense.

An investment is anything you spend money on in the hopes that you will end up with more money than you started with. So yes, you can invest in better workers hoping that they will be more productive. And yes, you can invest money into changing a company's culture.

 

[glenn1]

Since when are the terms investment and expense mutually exclusive? If a company invests in a new factory, and they have to lease it, is it no longer and investment because it's an expense? That doesn't make sense.

An investment is anything you spend money on in the hopes that you will end up with more money than you started with. So yes, you can invest in better workers hoping that they will be more productive. And yes, you can invest money into changing a company's culture.

How would you "invest" in a worker? We don't sell equity shares of Bob from engineering. You can invest in training for workers, equipment or physical plant for workers, even perhaps argue that raising salaries might increase retention rates which is a business outcome we want to achieve. But we don't say raising the salary of Bob from engineering is an "investment" any more than you say you're making an "investment" when the daycare center raises its rates; no one says "I'm increasing my investment in the Happy Orchard childcare staff."

 

[Thebobo]

How would you "invest" in a worker?"

I hear that term all the time.

5 Reasons You Should Be Investing in Employee Development | Inc.com

Employee development benefitsinvesting in employees pays offhow to invest in employees

When you should invest – and when you should fire – a worker | News ...

5 Major Benefits of Investing in Employee Development - Humanity.com

To Get More Out of Workers, Invest More in Them - The New York Times

The Case for Investing More in People - Harvard Business Review

 

[ivwshane]

How would you "invest" in a worker? We don't sell equity shares of Bob from engineering. You can invest in training for workers, equipment or physical plant for workers, even perhaps argue that raising salaries might increase retention rates which is a business outcome we want to achieve. But we don't say raising the salary of Bob from engineering is an "investment" any more than you say you're making an "investment" when the daycare center raises its rates; no one says "I'm increasing my investment in the Happy Orchard childcare staff."

You do realize that when you take care of workers (via things like pay raises, time off, better/more health care, etc) productivity and quality tends to go up.

I'm guessing you've never ran a business.

 

[Ventanni]

How would you "invest" in a worker? We don't sell equity shares of Bob from engineering. You can invest in training for workers, equipment or physical plant for workers, even perhaps argue that raising salaries might increase retention rates which is a business outcome we want to achieve. But we don't say raising the salary of Bob from engineering is an "investment" any more than you say you're making an "investment" when the daycare center raises its rates; no one says "I'm increasing my investment in the Happy Orchard childcare staff."

You kinda answered your own question though. You can invest in a worker by providing additional training, increasing salaries to improve retention rates (something Walmart did not long ago), or by investing in excellent leadership training for managers that helps create a safer and emotionally healthier work environment. There are lots and lots of ways to do this. You can't look at people like they're machines. People are people, and when you invest in people in various ways, it helps create workplace loyalty, reduce work place toxicity, improve long term commitment, and improve productivity. It doesn't mean you give them the farm, but you have to invest in people to make them feel valuable and integral to the success of the company.

 

[dank69]

How would you "invest" in a worker? We don't sell equity shares of Bob from engineering. You can invest in training for workers, equipment or physical plant for workers, even perhaps argue that raising salaries might increase retention rates which is a business outcome we want to achieve. But we don't say raising the salary of Bob from engineering is an "investment" any more than you say you're making an "investment" when the daycare center raises its rates; no one says "I'm increasing my investment in the Happy Orchard childcare staff."

Raising Bob's salary would absolutely be an investment. When the daycare raises its rates, you are technically increasing your investment in your children. You are not increasing your investment in the Happy Orchard childcare staff, especially since you don't even know if a single cent of the rate increase is even going to any of them.

You seem to be using a very narrow definition of the term invest, and adding a heaping pile of tortured logic on top.

 

[JohnShadows]

Looks like America drank the supply-side Kool Aid again, same as under 43 and Reagan. Trillion dollar deficits, welcome home!

 

[Bitek]

No shit because workers aren't an investment, they're an expense. Or in place of investment you could make an argument that employees are an asset to their employer although that sorta depersonalizes them in a way as well (the line between "asset" and "property" can be a fine one and perhaps not worth straying near when some of those workers may have ancestry who lived in slavery). Just because your side likes to use the word "investment" to mean any sort of spending you like and think might serve a policy position you support, that still doesn't change the actual definition of the word.

Just when I thought you couldn't get any dumber.

Carry on water boy.

I'll say glenn actually made a good point here, except for the last sentence as it's so ironic.

Workers are expenses. Even factories and equipment are expenses, unless there is sufficient demand to justify the capital expenditure to build and acquire them.

That's the fundamental flaw of supply side economics. There is a fundamental assumption that creating additional capital through lower tax rates will automatically be invested in productive assets.

There had been a complete and predictable misread by conservatives of what the current economic situation is. Everyone who wasn't a hack was very explicit that we have a glut of free cash, but weak demand, and the largess of the tax cuts will be poured back into paying down debt, buying back shares, or returned to investors.

Basically saving up for when/if demand ever shows up.

Also, as the US deficit is now so high (thanks to bush and Trump tax cuts for rich ppl) interest rates are moving up, which will counteract any stimulus the tax cuts may provide in limited areas where it's actually addressing a root problem.

Good job guys. Another bright idea from the party that brought you the Iraq war and banking deregulation.

 

[Stokely]

LOL what a shocker!

"The greatest trick the devil ever pulled was convincing the world he didn't exist"....I almost respect the GOP Congress for their amazing brass balls...they literally piss on their own base (and the rest of us working schlubs) and call it trickle-down, and make no attempt to hide it...meanwhile, those people continue to blame whatever boogeymen get paraded in front of them.

 

[hal2kilo]

In the no shit category.

https://www.cbsnews.com/news/marco-rubio-corporations-arent-investing-tax-cuts/

Wonder how soon he will be run out on a rail by his own party. Truth is dangerous.

 

[Bitek]

Raising Bob's salary would absolutely be an investment. When the daycare raises its rates, you are technically increasing your investment in your children. You are not increasing your investment in the Happy Orchard childcare staff, especially since you don't even know if a single cent of the rate increase is even going to any of them.

You seem to be using a very narrow definition of the term invest, and adding a heaping pile of tortured logic on top.

You expect returns for investments. If you just raise someone's salary, you are not guaranteed better results or quality. It's quite possible you are just paying more for the same output and making your company less flexible and competive.

Investing in workers would be spending for training and tools (provided it increases value proportionally) or being able to hire higher quality workers (eg NFL teams managing a roster.)

It's always a tension. You want to spend enough that you have a quality workforce to be efficient, but minimize the cost of doing so. Salaries are usually the biggest cost component, so any successful company had to manage that carefully.

 

[dank69]

You expect returns for investments. If you just raise someone's salary, you are not guaranteed better results or quality. It's quite possible you are just paying more for the same output and making your company less flexible and competive.

Investing in workers would be spending for training and tools (provided it increases value proportionally) or being able to hire higher quality workers (eg NFL teams managing a roster.)

It's always a tension. You want to spend enough that you have a quality workforce to be efficient, but minimize the cost of doing so. Salaries are usually the biggest cost component, so any successful company had to manage that carefully.

Investments have risk associated with them. I suppose if I buy some stock and the stock price goes down, I haven't invested in that stock?

Seriously guys. Labor is a fucking investment no matter how you look at it.

 

[Bitek]

Investments have risk associated with them. I suppose if I buy a stock and the stock price goes down, I haven't invested in that stock?

Seriously guys. Labor is a fucking investment no matter how you look at it.

Using that logic, it's an investment with a very questionable and risky rate of return.

Company A knows it can take it's tax cut and buy a bond with a say 3% rate of return.

If i take that same cash and give it as a salary increase (which has now raised that employees cost in perpetuity...) what's my IRR?

Better be a clear benefit or no way I'm putting cash towards it.

Perhaps I'll just spend my cash on automation to remove the need for the worker and all the expenses and commitment that goes along with them. I can calculate that IRR pretty easy.

 

[hal2kilo]

Using that logic, it's an investment with a very questionable and risky rate of return.

Company A knows it can take it's tax cut and buy a bond with a say 3% rate of return.

If i take that same cash and give it as a salary increase (which has now raised that employees cost in perpetuity...) what's my IRR?

Better be a clear benefit or no way I'm putting cash towards it.

Perhaps I'll just spend my cash on automation to remove the need for the worker and all the expenses and commitment that goes along with them. I can calculate that IRR pretty easy.

So the gest of what you are saying is that tax cuts probably won't create any more jobs. Hope it's worth all of the deficits for years to come.

 

[fleshconsumed]

Say, didn't Rubio vote for the tax cut? /s

What a difference four months makes... Does it mean that if the same vote was to be held again Rubio would vote against it this time? Don't think so. He's just a hack. The only reason this should be news is to highlight the hypocrisy.

 

[glenn1]

So the gest of what you are saying is that tax cuts probably won't create any more jobs. Hope it's worth all of the deficits for years to come.

Necessity and sufficiency. Lowering tax rates isn't going to be the primary causal factor for "creating any more jobs" but it may be a necessary condition in some cases. I'm not arguing it's true in this particular case but I'm establishing the principle. What level of taxation is proper at any given moment is an entirely proper subject for debate, but arguing against a particular tax change on the basis of "it didn't create jobs!" is bad logic. Senator Rubio's lament is akin to saying "I got the haircut you suggested before going to the job interview yet I still didn't get hired!" In this case, good grooming standards may be a necessary condition of gaining employment but not sufficient (the company may not be hiring); with the OP example having a favorable tax environment may be a necessary condition for increasing employment but not sufficient to ensure it.

I don't support this particular tax cut but do believe absolutely the GOP could have supported it using their baseline political argument that lower taxes are political policy worth pursuing regardless of impacts on employment or whatever. It's up to the voters to decide whether that's a good platform to vote for. That someone like Rubio might have drank his own Kool-Aid to believe that "of course lower taxes will result in higher employment" just shows he's not that smart, just like those on the left before who thought that giving 99 weeks of unemployment would be the savior of our economy. Partisans are very adept at using motivated reasoning and imagined benefits (on a very fanciful causal mechanism) to argue for whatever policy they want instead of just honestly saying "I support this policy because I think it's a good idea."

 

[nOOky]

LOL what a shocker!

"The greatest trick the devil ever pulled was convincing the world he didn't exist"....I almost respect the GOP Congress for their amazing brass balls...they literally piss on their own base (and the rest of us working schlubs) and call it trickle-down, and make no attempt to hide it...meanwhile, those people continue to blame whatever boogeymen get paraded in front of them.

LOL what a shocker!

"The greatest trick the devil ever pulled was convincing the world he didn't exist"....I almost respect the GOP Congress for their amazing brass balls...they literally piss on their own base (and the rest of us working schlubs) and call it trickle-down, and make no attempt to hide it...meanwhile, those people continue to blame whatever boogeymen get paraded in front of them.

Those people would fight you in a bar to defend the "right" for those rich folk to keep sticking it to them up their poopers. It's incredibly ironic how they will defend those that screw them over so passionately.

A worker sees his boss drive up in a fancy new BMW. The worker whistles and says "nice car boss!" The boss tells him "that's right, and if you work and set goals for yourself, I can get a better one next year".

 

[Jhhnn]

Necessity and sufficiency. Lowering tax rates isn't going to be the primary causal factor for "creating any more jobs" but it may be a necessary condition in some cases. I'm not arguing it's true in this particular case but I'm establishing the principle. What level of taxation is proper at any given moment is an entirely proper subject for debate, but arguing against a particular tax change on the basis of "it didn't create jobs!" is bad logic. Senator Rubio's lament is akin to saying "I got the haircut you suggested before going to the job interview yet I still didn't get hired!" In this case, good grooming standards may be a necessary condition of gaining employment but not sufficient (the company may not be hiring); with the OP example having a favorable tax environment may be a necessary condition for increasing employment but not sufficient to ensure it.

I don't support this particular tax cut but do believe absolutely the GOP could have supported it using their baseline political argument that lower taxes are political policy worth pursuing regardless of impacts on employment or whatever. It's up to the voters to decide whether that's a good platform to vote for. That someone like Rubio might have drank his own Kool-Aid to believe that "of course lower taxes will result in higher employment" just shows he's not that smart, just like those on the left before who thought that giving 99 weeks of unemployment would be the savior of our economy. Partisans are very adept at using motivated reasoning and imagined benefits (on a very fanciful causal mechanism) to argue for whatever policy they want instead of just honestly saying "I support this policy because I think it's a good idea."

Please. Repubs' basic pitch to the voters has been that tax cuts at the top create jobs & enable higher wages. Otherwise nobody would vote for it. When it doesn't work out that way you claim that the GOP never said it would, which is bullshit.