The GOP’s Mubarak Mistake – Ignoring the Need for Jobs

Without skipping a beat, as soon as the GOP regained control of at least one house in the U.S. Congress and numerous state governorships and legislatures, private corporate interests have taken precedence over public issues again.

Illinois wants Wisconsin's rejected stimulus funds - Chicago Tribune

THE PEOPLE STRIKE BACK

At the core of any social unrest is the failure of government to meet the needs of most people.  Economic interests lie at the top of any list that can spur protests and even riots from a country’s population.  So when jobs become scarce and the cost of goods and services start getting out of hand, the government that’s seen as ignoring these or just poorly managing the efforts to correct them are likely to experience what is going on in the Mideast now and what we’re beginning to see here, in Madison, Wisconsin.

In Egypt for example, political repression was definitely a factor there and the one we are most likely to think that Egyptians railed against primarily.  But for people who have studied this closer and who are more familiar with the Egyptian culture and economy, that popular uprising was a reaction to the corruption in their government over the last three decades that had focused most of its energy on those well-healed few to the detriment of the majority.  Too many were unemployed and hungry from serious food shortages while the friends of Mubarak lived relatively comfortable lives.

Two to three years ago here in the states, as the economy reached its fever pitch with high unemployment rates while government leaders bailed out large financial institutions, the majority of us were losing our jobs, homes and any future plans we had been saving up for.  The efforts of the Obama administration with the Democrats to deal with the crisis that was left from the previous administration only partially succeeded to ameliorate the job losses with its stimulus package.  Their efforts were viewed by many as going too far while others, like me, felt it did too little.  Again, too many in the lower socio-economic strata were suffering while those in the upper-income sectors were not, and who in fact soon bounced back better than before.

Today’s reality is that the economic gains on Wall Street are not being matched on Main Street.  Corporate profits are at record levels while more people now are unemployed than they have been since the 1980’s under Reagan.  But the factors that allowed the economy to grow quickly before Reagan left office are not in place here to spur on a similar recovery.  And to make matters worse we have a political Party in some positions now that has been pushed further to the right by a Libertarian element.  Yet this reconfigured Republican Party seems as oblivious as it did under Bush/Cheney to the plight of most people as they fix their sites on the deficit by cutting jobs in the public sector.  This is being done with cavalier disregard too as expressed by one of their leaders who flippantly declared, “so be it”.

“Over the last two years since President Obama has taken office, the federal government has added 200,000 new federal jobs,” [House speaker John]Boehner said. “And if some of those jobs are lost in this, so be it. We’re broke.” As usual the Speaker of the House was being deceptive and disingenuous.  According to FactCheck.org, the  “actual number of federal jobs that have been created from January 2009 to January 2011 is nowhere near 200,000.”  And declaring that we’re broke is true enough but how we got there is worth noting since the weight of our debt lies largely on those who have dismissed the needs of the general public over the last 10 years.

SOWING THE SEEDS OF DISCONTENT

While pushing us into two wars and spending billions on tax cuts for the wealthiest 2%, an economy that struggled for eight years under George Bush finally collapsed in his final year from his and the GOP’s failure to restrain greedy financial institutions.  These factors along with a spend-and-borrow funding policy and a housing bubble that burst from lax regulatory standards on lenders wiped out a trillion-dollar surplus in those eight years and left the incoming administration with a huge record deficit at the time; putting a huge hole in our economy that would not be repairable anytime soon.

Angry voters, apparently with very short memories, bought in to the straw man arguments two years later that the GOP and their Tea Party allies put out there, blaming all this on Democrats and making many of them scapegoats in the 2010 elections.  For that achievement of theirs we are now left with the FOX in the henhouse to wreck even further havoc to the general working population.

Their plan is to perpetuate the myth that spending cuts in the public sector will be our main salvation  from economic devastation and that more tax cuts (especially from the top 2%) that rob the treasury of needed revenue to pay down the deficit will miraculously turn our sinking ship around.  It is once again the neo-conservative Grover Norquist’s wet dream of reducing the federal government “down to the size where we can drown it in the bathtub.”

Believing as they do that when the wealthiest of us prosper, we all do, through the naive theory of supply side economics or as it’s better known, “trickle down economics”.  Trickle down economics relies on low marginal tax rates so entrepreneurs can put more of their profits back into their businesses; in so doing this should create more jobs.  Most small businesses do this.  However, what we are seeing instead is reinvestment of profits by many large corporations into high yield financial products, like derivatives and the profits on these are going more back into stock holder dividends and executive bonuses rather than new job creation.

By killing off public sector jobs then you have a means of reducing the taxes that help pay for these jobs; taxes that when eliminated can now lower those marginal rates for businesses.  So now we’ve come full circle where government leaders are more bent on meeting the needs of a well-healed contingent – corporate special interests.

Projected as a means for reducing the deficit, the sum effect here is actually intended to increase the wealth of a few.  If the GOP were seriously focused on reducing the deficit you would see reasonable tax increases, realistic policies to reduce health care costs, federal subsidies to large corporations being axed and bloated Defense Department budgets shrunk.  But that is NOT what we are seeing.

The social unrest occurring with teachers in Wisconsin is just the beginning of a public outcry on what were the results of mismanaged budgeting by conservative governors and legislators.   The next battle ground for similar disruptions could be in Texas where teachers, parents and students plan to rally in front of the state capital March 12th in Austin to decry the legislature’s attempt to correct a budget shortfall of anywhere from $15 to $27 billion.  This shortfall resulted from lowering property taxes back in 2007, hoping newly increased cigarette & gas taxes along with a small business tax would compensate for this take away in revenue.  It failed miserably.

THE VALUE OF PUBLIC EMPLOYEES

Public sector workers are those people who keep our communities safe, orderly, educated and clean like police officers, fire fighters, teachers, sanitation workers, street and utilities maintenance workers, county court and records employees and many others.  These are all important services needed to promote the general welfare of this country and its economy.

Despite the claims made by corporate-friendly wags, a recent study by University of Wisconsin-Milwaukee economist John S. Heywood shows that “U.S. averages were 11 percent less pay for state employees than for their private-sector counterparts and 12 percent less for local government workers”.”  Heywood doubts that lower levels of union membership explain much if any of the public-private sector pay differences here.  “Now is not the time for a large-scale rollback in the compensation of state and local workers”, Heywood noted as “states face huge budget gaps [and] federal stimulus money recedes [while] the economy recovers slowly from a deep slump.” (Texas public sector pay 17% lower than private, report says by Robert T. Garrett, Dallas Morning News, 4/29/10)

The Tea Party-friendly Republican governors in both Wisconsin and Texas have vowed to consider only cutting spending on public sector jobs as a means to reduce their budget shortfalls.  Creating revenue through taxes is out of the question.  Other states who have recently elected politicians sympathetic with Tea Party values like Minnesota, Ohio and Indiana will be watching these two states closely to see if the outcomes are in favor of deep public sector cuts.  If that does indeed turn out to be the result we may well be able to hear the $$$ cha-ching $$$ sounds going off in corporate boardrooms around the country.

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