Business will not and can not save us.

Forgive me, some of what you are about to read I have written before. I felt the need to consolidate it though as I think it will make more sense if presented all at once.

We hear, on a regular basis, that the private sector has to pull us out of the economic mess we are in. This, I am afraid, is a massive load of fly covered, warm, stinking, crap. Let's take a look as to why business can't save us.

Businesses exist to make a profit, plain and simple. Businesses do not exist to create or provide jobs. Businesses do not exist to promote the health of the economy. Businesses exist for one reason and one reason only, to make a profit. Sure, some businesses claim they exist for other reasons but if they aren't making a profit they go away pretty quickly, so, businesses exist to make a profit. Now that we have that out of the way let's take a look at what that means today.

Many people are waiting for businesses to start creating jobs so that we can begin pulling ourselves out the economic hole we are in. This isn't going to happen. Businesses hate hiring, employees cut into profit margins as labor tends to be the largest expense for almost any business that involves more than 2 people working for the company. Hiring is a last resort for companies, they would rather push their current employees to produce more or install robots or other machinery than to hire additional workers. Businesses only hire when demand for their goods and services exceeds the company's ability to meet the demand and they can safely recoup the expense of additional employees by meeting the excessive demand.

But there is a problem inherent in this system. Demand is linked to income. If you lose your job your ability to spend is going to drop and you will not be adding to the demand side of the equation. So while it is in a company's best interest to keep its workforce as small as possible this leads to a serious problem for the economy as a whole. On top of this it is in a business' best interest to stockpile cash so that in a downturn it can continue to hang on in hopes that things will turn around. Of course taking this cash out of the economy makes less cash available to the people who generate the demand for a company's goods and services, and the people who generate that demand are quite often the same people the company laid off to help reduce its costs. So while we are waiting for the business community to save us they are simply acting in their own best interests which also happens to be one of the worst things that could happen to the economy as a whole.

The first economist to recognize this inherent contradiction of capitalism was Karl Marx. Being one of Karl Marx's theories would on its own make the idea dismiss-able to many people in our country, except some pretty well known economists are starting to pay attention to this theory. Economist Nouriel Roubini is one of these economists. Dr. Roubini predicted the current global financial crisis 4 years ago and his prediction seems to be pretty darn spot on. So now he is recognizing one of the biggest challenges we face, what makes the most sense for business makes the least sense for our economy.

So what do we do? President Obama has proposed that we put people back to work by repairing and improving our nation's infrastructure. This would involve raising taxes on the wealthy to pay for the program and then giving this money to the companies who will do the work so that they can hire individuals to actually perform the work which will create the jobs and provide the pay checks we need to jump-start demand and get us all back to work. But there is a flaw in this concept. If the government channels the money through businesses the businesses will do exactly what they are supposed to do and maximize their profits. How will they do this? By hiring as few people as they possibly can which puts a bit of a kink in this jobs program. Business will be doing exactly what it should do but it won't be doing as much as possible to use the tax payer dollars it will be receiving to create jobs.

We have a demand problem in this country which is caused by a lack of jobs and the fear and uncertainty unemployment causes in the poor and middle class who are the primary consumers in our economy. The wealthy have been called "job creators" recently when they do almost nothing to create jobs, it is the spending of the poor and middle class who create the demand we need to force businesses into hiring, the poor and the middle class create jobs, the wealthy just profit off their labor.

Some will say that the reason businesses aren't hiring is because they are over burdened with taxes and regulations. This is simply not true. Lets say we eliminated all taxes and regulations on businesses of all types in the US. This would save these businesses a tremendous amount of money, there is no doubt about that. But if you ran a business today and suddenly had a mass of cash dropped on you would you A. save that money and wait for things to get better? or B. go out and start hiring new employees when you don't need them because there is little or no demand for your good and services? Taxes and regulations aren't keeping any businesses from hiring, they just try to blame the lay offs and lack of hiring on them in hopes that it will save them some money and increase their profits, profits they won't waste by hiring additional workers.

So, it won't be the business community that pulls us out of this hole, in fact it would go against their best interests to really help our current economic situation. We can start off by increasing taxes on the wealthy, but instead of turning that money over to a collection of companies the government should do the work itself and hire the workers needed to do the work itself. This will make our country a better place to do business because of improved infrastructure and create the maximum number of jobs which will also help out the business community.

Getting our economy back on track is something that the private sector simply can not do at this point and there is no other organization that can tackle a problem of this size besides the government. The private sector has brainwashed the country into thinking that only the private sector can get things done. It is time we realized there are things the private sector simply can not do. If we don't come to this realization and act on it the private sector's self serving attempt at mind control will back fire on them. I just hope it isn't too late already.