In one of the recent daily meetings between the White House and the House and Senate leaders focusing on getting past a threat by the GOP-led House to hold back on raising the national debt ceiling, Speaker Boehner explained, “Our disagreement with the president is not about closing loopholes, none of us are fond of loopholes; our disagreement is over the idea of raising taxes on the very people that we’re asking to create jobs in our country.” This idea of job creation by eliminating taxes for businesses has been around for a while and proven to be a straw man argument in recent years.
As Pulitzer-prize winning economist Paul Krugman pointed out recently “Over the last two years profits have soared while unemployment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?”
I have pointed out also in a recent article that high taxes are not an issue here an if low tax rates are supposed to generate job creation then the GOP needs to seriously look elsewhere for a talking point that has a modicum of credibility. Other bogus excuses handed to us by political pundits are also used to justify not doing anything.
The ideological belief that businesses will significantly reinvest their profits to create jobs is a whitewash for a couple of reasons. From what few jobs are generated as a result of profits, many companies are creating them outside the U.S. labor market. The other monkey wrench thrown into this perceptual fantasy is that much of the wealth generated isn’t being made by businesses, especially manufacturers, but by investment income earners who only indirectly may allow some of their money to be invested in businesses that create jobs while a lot more of it goes into future investments that sit in financial institutions with the intent of increasing their own personal wealth.
Republicans, who, in this writer’s view, are responsible for the worst economic recession since the Great One back in 1929 have tried to lay this crisis on the back of President Obama and the Democrats. By utilizing half-truths and tweaking the numbers to their advantage supporters of the GOP are receiving bile from the bowels of those who should know better.
Last month alone the GOP has posted three blatant falsehoods about the economy and the recovery, something many have yet to experience. All have been researched by the Pulitzer prize-winning Politifacts team. It is this apparent incessant distortion by those who voters are expected to trust that creates the gridlock amongst us.
In a June 3rd press release from the national Republican Senatorial Committee stating that “President Obama and liberal former DNC Chairman Tim Kaine’s $787 billion stimulus failed to create jobs”. This false claim would dispute the findings below of the CBO and 3 private economic analysis companies. Here’s what the groups found:
*CBO: Between 1.3 million and 3.6 million jobs saved or created.
*IHS/Global Insight: 2.45 million jobs saved or created.
*Macroeconomic Advisers: 2.3 million jobs saved or created.
*Moody’s Economy.com: 2.5 million jobs saved or created.
A little over a week later on June 12th, the new RNC Chairman Reince Priebus, on NBC’s Meet The Press, compared the unemployment situation since the start of the past recent recession to what the nation faced during the Great Depression. The first part of a two-fold yarn came as Priebus was trying to avoid the question about his failure to call for Senator David Vitter’s involvement in a prostitution ring but was among many Republicans clamoring over Anthony Weiner’s pitiful sexual foray on social media. Priebus said, in part, “Look, I’m not defending these guys, but the fact of the matter is, we have big issues here to tackle in this country. We have unemployment that rivals the Great Depression.”
Without even running to google search on this bit of contrivance I knew from history lessons in high school that the Great Depression was far worse than the current recession. A simple look at the annual unemployment rates during an eleven year period following the stock market crash in 1929 attests to this:
1930: 8.7 percent
1931: 15.9 percent
1932: 23.6 percent
1933: 24.9 percent
1934: 21.7 percent
1935: 20.1 percent
1936: 16.9 percent
1937: 14.3 percent
1938: 19.0 percent
1939: 17.2 percent
1940: 14.6 percent
1941: 9.9 percent
Priebus’ second far-fetched claim was that “almost 45 percent of (the unemployed) have been out of work for six months,” a number that “rivals the Great Depression”. This assumption was loosely based partly on an earlier CBS news story that was later found to have “an error … due to some garbled relaying of information and that a corrected version of the story had been ordered.” Though unemployment rates were close in Roosevelt’s and Obama’s second year as President – 12.8% vs. 13.9% – Politifact notes the absurdity of this number “since the population of the United States was 123 million then, compared to nearly 309 million today. More actual people were looking for jobs then than are actually looking by twice as many.
Less than week later, on June 16th, Presidential candidate Mitt Romney, stated the 3rd false claim. On a campaign spot in Tampa, Fla., he told a small audience that “It’s been a failure in the last several years to get America back on track again. It’s taken longer to get Americans back to work than it took during the Great Depression. This is the slowest job recovery since Hoover.”
Taking Romney at his literal word, that this is “the slowest job recovery,” following the declared end by economist of the recession/depression, Politifact found, based on available data from the National Bureau of Economic Research, that there were as many as four recoveries “that were weaker than the current one.” Those occurred under the presidencies of Richard Nixon, George W. Bush, George H.W. Bush and Carter/Reagan). It is clear why Romney would not want to point out the failure of his fellow Republicans to generate any significant job growth following serious previous recessions.
All of this information coincides with the continued failure of the Party of NO to offer anything resembling a serious plan for job growth that they haven’t tried in the past, as well as threatening a greater recession by refusing to raise the debt ceiling. Current headlines reflect the effect of an unwilling GOP to raise the debt ceiling as businesses hesitate to hire new people for fear of the uncertainty this moronic action will have. The credit default of the U.S. dollar would have a tremendous impact on not only jobs here but global markets as well. especially many of the faltering Euro economies of Greece, Italy and Ireland.
Some major figures in the Democratic Party along with some reputable economists, most notably Paul Krugman, have accused the GOP of sabotaging efforts to create jobs in hopes that the voting public will see this recession more as a failure by Democrats than Republicans. This notion is not totally far-fetched when you remember Rush Limbaugh’s broadcast that hoped Obama’s efforts would fail.
The diagram below demonstrates the tactics the GOP and their supporters have taken to undermine a recovery.
I would be remiss if I failed to include the Democrats and the President himself in the overall failure of doing what the government can and should do to simulate jobs. The amount and extent of stimulus money was seen early on as being too little for having a significant impact. At almost every turn the Party of Jackson looked more like wimps as they battled Republican posturing on the important issues of health care, financial reform and raising taxes on the most economically sound and comfortable wealthiest Americans.
On researching Michael Moore’s claims that the 400 wealthiest Americans make more than the lower half of all American workers. Politifact found that to be essentially a true claim. Poll after poll has found that Americans are in favor of a tax increase, especially for the wealthiest 2% to help stimulate job recovery rather than take away benefits from Social Security and Medicare/Medicaid.
Yet the President and many in his Party seem oblivious of the polls and react instead to the vitriol of extremist within the Republican party who hardly represent mainstream Americans. Their lack of backbone to take the majorities the voters gave them in 2008 and push through a universal health care plan and a bolder economic stimulus plan that reflected more of what Franklin Roosevelt did in the 1930’s shows that the American worker really doesn’t have a true ally within the Washington Beltway.
- Obama Sings Tea-GOP Song to Unemployed: La, La, La, We Can’t Hear You! (my.firedoglake.com)
- To the Limit (Paul Krugman, NY Times)