The Laws of Supply and Demand

"Profits don't create jobs, demand creates jobs!" is the mantra I've been hearing lately to justify Keyensian intervention in the market. The flaw of course is that in a market free of political meddling, the two are inseperable.
Profits are the signal and incentive to increase production to meet demand. Profit indicates consumer preference for using scarce resources in one manner verses alternatives. People will enter or reinvest in a market so long as they see a profit opportunity. Eventually demand is met, prices and profits decrease and the niche stablizes (it matures from a "growth" industry to a "value" industry).
Interfering with those signals leads to distortions that hurt the consumer. If you artificially depress profits, there is no incentive to increase production and you end up with shortages, which then leads to calls for gov't incentives (witness the effect of Medicare price controls on people's willingness to become doctors).
If you artificially increase profits, you end up with surpluses of the wrong things, thus diverting scarce resources from other things that you or I would really want (for example, the Volt which was artificially incented yet isn't any better than other much more efficiently made and cheaper "green" cars; and now it looks like Uncle Sam will have to buy the excess with our taxes).
As Adam Smith pointed out, profits in a free market are transitory but vital hints about what to produce (or what degree to major in). Government depressing profits hurts us, and government protecting profits hurts us. As in many cases, the best approach would be one of laisse faire. You and I should make the decisions that affect our own lives, not politicians in Washington.

Marx vs. Smith

Key to Marxism is the argument that the laborer has always been forced to work for the bourgeoisie. Although true in the days of slavery and serfdom, when those in power used violence to extract labor, it is a stretch to believe this is true today. The “force” supposedly compelling today’s laborer is the threat of unemployment. However, as Adam Smith points out in Wealth of Nations, man in his natural state works only for himself. Therefore, the alternative to employment is not death by starvation as the Marxists claim, but rather that which man naturally possesses: self-employment. Ironically, those in power are willing to raise taxes on the self-employed Americans that make up 70% of the “businesses” in the United States. At least they have generously offered to return some of those tax dollars, for a small fee; in the form of small business loans.