Monday, January 30, 2006

THE TAX CUTS WERE SUPPOSED TO KEEP PEOPLE EMPLOYED

So much for the tax cut for the wealthy keeping the working class working.

After showing a 23% increase in profits in the forth quarter of '05 over the same quarter of '04, Kraft has decided to cut 8,000 jobs...that comes to 10% of it's workforce. Is that greed or what?

From Reuters via Yahoo News:

CHICAGO (Reuters) - Kraft Foods Inc. (NYSE:KFT - news) on Monday said it would cut up to 8,000 more jobs, or 10 percent of its work force, through 2008 as the food company, hammered by higher commodity costs and sluggish sales volume, looks to save more money.

The announcement came as the maker of Oreo cookies, Jell-O gelatin and a host of other well-known brands, posted a 23 percent increase in net income.

Kraft, like many packaged food companies, has been struggling with a range of commodity cost increases in recent years and is still being pressured by high fuel and packaging costs.

The company posted a profit of $773 million, or 46 cents a share, for the fourth quarter, compared with $628 million, or 37 cents a share, a year earlier.


Wasn't it George W. Bush who said that the tax cuts he wanted would keep people working?

5 comments:

karena said...

High fuel costs. Blame that on Bush tool. Exxon just recorded the highest quarterly profit in any company's history. Meanwhile, Americans got no jobs.

granny said...
This comment has been removed by a blog administrator.
granny said...

We have negative savings as well. I was reading that we have what amounts to negative job growth in the private sector at (?)Maxspeak.

Sunnyside isn't the only one with scrambled brains, granny's got them too.

BadTux said...

Employers will hire the least number of people needed to do the job. Period. If you give an employer more money via tax cuts, he isn't going to hire more people -- he's going to either distribute it as a dividend to shareholders, use it to pay down debt, or sock it away for later. They have a fudiciary duty to their stock holders to maximize profits, after all.

Same deal with minimum wage. McDonalds already has the least # of people working at a restaurant necessary to keep the restaurant open. If the minimum wage goes up, they can't fire people, because then they can't operate the restaurant. The notion that minimum wage hikes cost jobs just doesn't match reality. Employers have a duty to the pocketbook to keep the # of people on payroll as low as possible in order to maximize profits, and if they could lay off people, they already would have done so, minimum wage or no.

In other words, tax cuts of the scale done by the Bushies have no effect, positive or negative, upon employment. They do, however, fatten up a lot of rich people's investment portfolios... investment portfolios which, at the moment, are not doing a lot for employment because there's more money in those portfolios than there are potentially profitable businesses to invest in.

- Badtux the Economics Penguin

Grandpa Eddie said...

Karena,
Bush is an enabeler for his oil buddies and the rest of the wealthy.

Here's a question for brainless leader...What health care?

Granny,
I've heard the same thing about the negative job growth, that is.

Scrambled brains are a real downer, aren't they.

Badtux,
I don't know why I didn't think of that earlier. You are soooo correct about tax cuts NOT being connected to jobs and job growth, they are all looking out for their big investors.

The Economics Penguin? Just how many of you are there?