Why do politicians keep saying business owners have to have confidence to start hiring?

Because they do not know anything.
They seem to instead believe that companies are just itching to hire people, if the oh so evil government would just lower the taxes so they can pay for them. (completely ignoring the fact that corporations that make massive profits still do massive layoffs and move jobs to china).
I had one of these deluded people tell me that companies would hire people because these new employees (together with the new employees from other companies) would then buy their products. (ignoring the fact that no company would think like that).
“Hey, there is no additional demand for my products right now, but I am going to hire new people anyway to make products no one is going to buy and incur costs that are not covered on the off chance that other companies think the same way I do, and that in the future, these people who were hired by all those companies who were more interested in gambling than sound business strategy, will eventually buy the products that have been lying around in my warehouses, incurring costs sitting there.”

Actually, without some ability to predict the future accurately many companies will hold off on investing until revenue pressures force them to do otherwise.

If companies can estimate their costs and returns with greater accuracy over time they’re more willing to invest and stretch their funds because they feel more confident in the state of the market.

That is part of what’s wrong with the climate today, though consumer spending in my opinion is a much greater issue.

They say that since, indeed, a lot of business owners say the same thing. Whether it’s a sorry excuse for manipulating the world to rid themselves of taxes or just a simple cold and calculating way of doing business in a pragmatic way, all of it is subject to speculation.

@mazingerz88 Don’t you think business owners just want to pay less tax, and that is why they say it? That if sales went up they would be hiring no matter how unsure they are about future tax increases?

Last night my six-year-old told me that he would not clean up his room and brush his teeth unless I let him have some candy.

@JLeslie To be frank, I know next to nothing in how to do a business. Much less see through the real intent of business people when they express what they need from entities like our government. I seem to be learning a lot though from Fluther. Thanks to jellies like @Qingu, @Jaxk and @ETpro and of course to all jellies who had the knack of asking substantially brilliant questions.

To formulate a seemingly qualified opinion, I’m trying to put myself in the same shoes as a business owner and always end up wanting. Sorry that I don’t even have a good enough opinion right now that I feel confident in expressing. : )

@Tom_g LOL.

@JLeslie If you’re taxing my profit, I don’t care what the rate is so long as I have insight into how long that rate will apply and know it is applied pretty evenly across my industry. Such taxes are just another expense and one that can be avoided with careful effort at that. Though being an expense they are a deciding factor in entering/leaving the business for greener pastures.

@wonderingwhy I actually agree with what you wrote on your first answer, but I think the expense and fear of future taxes is very overblown by businessmen and mostly a selfish pursuit. I think, as you said, increasing sales is the real way to increase hiring. I think Americans were living on so much credit, that those who finallt cracked down and started paying their debt and living within their means have much less to spend, it is the downside of living beyond our means for so long, as debt goes down (I hope it is going down) and eventually gets paid off, it will free up discretionary income again. That’t my feeling anyway. This is just a sucky time at the bottom of the roller coaster.

Consumers need to have confidence that if they start buying, they will have the income to support that buying. When business sees people are buying, they increase capacity and eventually start hiring. When they start hiring, people have jobs and they start buying more.

If government is going to intervene, they have to support consumption. They can either put money in people’s pockets and let people buy, or they can buy stuff themselves, like new roads and bridges and schools and a space program and who knows what all else.

Another way of putting money in people’s pockets is to lower taxes. Of course, you have to put the money in the right people’s pockets—the pockets of the people who will spend—that is, people who have lower incomes. If you put the money in the pockets of business, nothing happens because they won’t spend on increased capacity until the orders start coming in. You can’t put the money in the hands of the rich, because they, too, won’t spend until the orders start coming in, and there is only so much they can spend personally.

So you must put money in the hands of the poor and the middle class, which is what Democrats want to do. Republicans, on the other hand, don’t get it. They want to give money to business and rich people. In fact, they seem to want the bulk of their tax cuts to go to business and rich people—the so-called “job creators.” We already know the job creators won’t create jobs until people start spending.

But the Republicans also want to cut government. Thus government loses its ability to create consumption. So there is not only no demand from government, but there is also very little money in the hands of consumers, and the rich people bulk up, but just keep their money in cash.

Only it’s worse than that. With no opportunity to make money in the US, rich people will start looking overseas, to Brazil and China and the other booming economies and they will start investing there. Start? They are probably already over there, having given up on the US. So the Republican’s policies not only don’t help the US, they actually actively help foreign countries. It’s ironic, because they are the anti-immigrant party and anti foreign aid and yet they are doing more to support the expatriation of US dollars than any other force on earth.

I agree with you that people having more money in their pockets will give them more discretionary income, but hopefully people will have learned their lesson and use it to save or invest, rather than spend. I think that we need to create more jobs by fixing what is wrong with the infrastructure of the country rather than looking to retail as the creator of jobs and services.

Politicians think it sounds good on the ears. They think the public believes the politicians know something the public doesn’t. The politicians believe they can convey and deliver a sense of confidence where there isn’t any warranted. Meh.

It’s not quite a simple as most here want to make it. The economy is sluggish and there is little optimism that it will improve soon. Businesses view this much the same as consumers. If your worried about your job, or that things could be tight for quite a while, you tend to put off that new car, stick the money in the bank instead or maybe pay off a credit card. Making a major purchase or taking that vacation to Rome, may wait til next year.

Business has the same motivation. Hiring is expensive and letting people go difficult. So if you can get away with just providing overtime, or maybe hiring a temp, it is safer and easier if you have no confidence that things will improve. If you have three people working to handle rush hour but the rest of the time they’re really not that busy, you may keep only two and let the lines get a little longer during rush hour. Right now is a great time to upgrade that old freezer (it breaks down too often). Interest rates are dirt cheap and labor is cheap. But if you think things will get tighter (higher taxes, more regulation) you may just put it off and fix the old one again. Save the money in case things get even tougher.

When times are tough, business tends to hunker down just like everyone else. Businesses are always looking forward. If things look like they’ll improve, they prepare for it. If things look like they’ll deteriorate, they’ll prepare fort that as well. It’s amazing how many tasks can be put on the back burner when the future looks grim. And it’s equally amazing how much of this will be brought up to the forefront when things look better.

Think about what you might do yourself. If your raise is in jeopardy or minimal at best and your spouse may lose thier job, or your transportation costs are skyrocketing and they don’t appear to be coming back down anytime soon. Maybe you decide to let the gardener go and mow your own lawn. Or maybe you choose to change you own oil instead of taking it to the shop. It all depends on your outlook. Not just for today but what tomorrow will bring as well.

@Jaxk Even if the economy is thriving, and people are spending, when an owner or senior executive looks at their own business, if they can get away with a little OT during very busy times, and stretch employees they do it. Business, especially public companies, are always looking at the bottom line, amd people are just numbers from the ivory tower view.

It doesn’t all depend on outlook. Some does, but not all. I have a lot of muscle trouble, so I am still hiring the gardner, I can’t do that job function.

@JLeslie

I don’t discount your point, not everyone can change their own oil either. But some that can, will. I recently changed my garbage pick up to twice and week, down from three times. Yes, sometime the dumpster overflows and that can be messy but it saves me some money. Not as desirable as I would like. Of course, the garbage company takes a hit for that. I had my sprinkler system break for the lawn in front of the store. Some broke in the line under the parking lot. It’s not an easy or cheap fix. So my morning guy now has the duty to turn the sprinklers on when he opens the store. I’ll fix that if/when we get out of this recession.

The bottom line is that yes, companies are always looking to reduce costs but the corners you cut when things are bad are bigger than would be done otherwise. Not everything is dependent on sales. I’ve been in the Ivory Tower, on the front line, and a small business owner. I’m fairly conversant with how it works. An optimistic forecast vs a pessimistic one, will have dramatic differences in how you operate. Even though your sales haven’t changed a dollar.

It’s an attempt to break the double bind: businesses won’t start hiring people until they’re sure people will buy their product or services, and consumers won’t buy products or services until they’re sure they have a stable and steady job.

@Jaxk garbage pick up three times a week for a residence or business?

@JLeslie

Business. Even I can’t generate that much garbage all by myself.

@Jaxk Ok, good.

Way to go @wundayatta ! I don’t think I have ever seen this thought process expressed better.

Business does need confidence that if they hire more poeple and ramp up production, consumers will buy what they produce. If they are unsure that will happen, they can’t risk investing in added production and getting caught with alll the added costs and with warehouses full of unsaleable goods. It may bankrupt them.

That said, Republicans mischaracterize this thought as an argument for even more trickle down economics. US corporations are currently sitting on $2 trillion in excess cash. Taking another $1 or $2 trillion form the consumers (almost entirely the middle class) and shifting it up to the 1% is NOT going to cause them to hire. It’s going to cause the middle class to have even less disposable income to spend, so consumer confidence and consumer spending will drop and businesses will lay off, not hire.

We face a demand sde problem, and certain sold-out politicians keep trying to solve it with demand side solutions which cannot possible work. The truth is these lackey politicians could care less about putting ordinary people to work. They care about enriching the people that lobby them, bribe them, and fund their election campaigns. They just have to dream up some smoke and mirrors to convince 51% of the people that their policy favoring the 1% is really meant to support the 99%.