“Job Creators” & “Investors”: The Disconnect Between Republican Policies & Economic Stimulus
The Republican Party’s latest economic policy proposals are nothing short of pure unadulterated neo-liberalism — the radical merciless ideology foisted upon the world by economist Milton Freedman. Recent events throughout the country have been playing out like a chapter straight out of Naomi Klein’s hugely important bestseller, The Shock Doctrine.
First the tax cuts for the wealthiest 2%, then the calls for deregulation, union-busting, and privatization; followed by — surprise! — severe austerity measures. These policies, if fully enacted, will accomplish little more than transferring trillions of dollars to the wealthiest individuals and corporations, and in doing so crushing the lives of average Americans.
Any ‘trickle down’ effects yielded from extending Bush tax cuts for the wealthy — which added nearly a trillion dollars to our national debt — would have been negligible at best. But they will literally be jack-hammered to oblivion if followed by the Republican-proposed Draconian measures.
Their calls for deep spending cuts in the public sector (both at Federal and State levels) will translate into whittling away all safety nets for America’s elderly and most vulnerable, while issuing pink slips for teachers, cops, firemen, postal employees, librarians, etc.
Instead of paying teachers to educate our children, and cops to fight crime, taxpayers will instead be writing their unemployment checks. That is, until Republicans can finally figure out a way to terminate unemployment insurance as well. Meanwhile, our national infrastructure continues to crumble beneath our feet.
And their proposals do absolutely nothing to stimulate the economy. Unless you believe that sacking public workers will magically reduce unemployment, and somehow stimulate consumer demand (the driver for economic expansion).
Rather than subjecting lower and middle-income Americans to severe austerity measures, our economy would be best served by doing the very opposite. Policies that help to improve the financial bottom-line for struggling Americans guarantees an economic spark, if only because these Americans have little choice, but to spend every last dollar they make on necessities (i.e. they put ALL of it right back into the economy).
Unlike lower and middle-income Americans, the wealthy have the luxury to hoard each and every penny netted from their tax cuts. And few of them will be enticed to invest in a recessionary environment where risks are abnormally high.
How many millionaires are out stimulating the economy right now by purchasing third or fourth homes here in the U.S., when economists are now forecasting a double dip in home prices? How many are considering starting up new businesses, dependent upon consumer spending, when consumer bankruptcies just hit a 5-year high?
For wealthy individuals who do choose to invest, many will wisely target foreign companies, foreign mutual funds, foreign real estate, and multinationals who do business where economies are still growing. In other words, the ‘trickle-down’ part of Republican economic policies will actually occur in China, India, and elsewhere.
The supply-side ideology is based upon a faulty and outdated model that conveniently ignores competition for investment dollars overseas, and is largely dependent upon exaggerating the discretionary spending behavior of the wealthy.
As for corporate tax laws, two-thirds of all U.S. corporations dodged paying a single penny in taxes between 1998 and 2005. And how did these corporations repay the favor? By shifting their labor investments overseas, to countries where the cost of labor is extremely low, and where few if any environmental protection laws exist.
Cisco just released their international salary report showing that the average annual salary of their technical professionals in India ($14,508) is just 1/4 of what their American counterparts make ($62,993). And yet their Indian employees work 56 hours per week, on average — that’s 25% more hours than their American counterparts (45 hrs).
To rub some serious salt into the wounds, the Wall Street Journal recently reported that U.S. corporations (not even including Wall Street Banks) were sitting on close to $2 trillion in cash — the highest corporate cash reserves in over 50 years! — and still refuse to hire in the United States:
Rather than pouring their money into building plants or hiring workers, nonfinancial companies in the U.S. were sitting on $1.93 trillion in cash and other liquid assets at the end of September, up from $1.8 trillion at the end of June, the Federal Reserve said Thursday. Cash accounted for 7.4% of the companies’ total assets—the largest share since 1959.
The cash buildup shows the deep caution many companies feel about investing in expansion while the economic recovery remains painfully slow and high unemployment and battered household finances continue to limit consumers’ ability to spend.
Yet, Republicans contend we must deregulate our industries further to help corporations cut their costs — at the expense of the environment and consumer protections — and desist from demanding they pay their fair share in taxes — all so that they will have the money they need to “create jobs”.
NO informed American — outside of wealthy individuals and corporate profiteers — could possibly support the Republican Party’s economic policies.
Which begs the question: how does a political party, which serves only the interests of its wealthiest contributors, continue to successfully legislate policies that work against the very interests of the American people?
Since their ideology is unsupported by the facts, they hire “word doctors” who coin misleading phrases to be repeated over and over again. Phrases that are both simplistic and somehow ‘intuitive’ to a non-discerning public.
This has remained their tried and true method for selling destructive economic policies to the American people. Take Frank Luntz, probably the most famous of all conservative “word doctors”. He coined the phrase “government takeover of healthcare”, which became the talking point for the Republican Party during the health care reform debate. It helped spur the Tea Party into storming Democratic town hall meetings during that period — terrified that “Marxists” were coming after their Medicare.
Their current economic play-script is inundated with two phrases: “job creators” and “investors” — to be used in place of “corporations” and “wealthy individuals”. These phrases — more or less the equivalents of “fair and balanced” being used to describe Fox News ‘reporting’ — are now the cornerstone of the entire Republican economic policy narrative.
Take Rep. Darrell Issa (R-CA), the Chairman of the House Committee on Oversight and Government Reform. Virtually every sentence that comes out of his mouth includes the phrase “job creators”. Check out his Twitter account and count the tweets where he reiterates the phrase “job creators”. In fact, he created a website called AmericanJobCreators.com where he asks “job creators” to tell him what kinds of consumer protection regulations he should dismantle on their behalf.
The guy is a corporate lobbyist’s wet dream.
And our obsequious President — instead of showing leadership on this issue and dismantling this fictitious narrative — first capitulated on extending Bush tax cuts for the wealthiest 2%, then capitulated to Issa back in January on the argument that deregulation helps create jobs. In doing so, he legitimized what he knows to be untrue, making it next to impossible for his party to now push for MORE regulation and RAISE taxes on wealthy corporations and individuals without immediately being branded as hostile to “job creators”.
The Conservative Party in Canada, having noticed the success their Republican counterparts across the border were having with this “job creators” phrase, quickly employed it as their own anti-tax slogan.
But make no mistake about it. Our current economic plight was created by:
- Bush’s deregulatory policies leading to a financial meltdown, and the ensuing AIG and TARP bailouts.
- Bush’s misleading us into unnecessary & expensive wars.
- Bush’s granting the wealthiest 2% nearly $3 trillion in tax cuts over the last decade.
- Two-thirds of all corporations having evaded paying a single penny in taxes from their trillions in profits over the last decade.
- Corporations having moved our higher paying jobs overseas to low-cost labor countries.
It is not due to a lack of investing capital by cash-hoarding, tax-evading corporations and the wealthiest 2% (the so called “job creators”) — which remains the Republican rationale for cutting taxes and deregulation.
Yet, somehow the lives of the rich and powerful keep getting easier — more comfortable — while the burden for the reckless calamity they unleashed on this country slowly, but surely — thanks to a combination of an emboldened right-wing and a compliant, timid President — gets shifted onto the backs of the American people in the form of harsh austerity measures.
Milton Friedman’s legacy continues to haunt us.
War Of Words: Why Failed Theories, Like Reaganomics, Continue To Linger
The Republicans have long engaged in historic revisionism as a means of covering up a long record of failed policies and blunders. Some of their most disastrous ideological experiments over the years, like Reaganomics, have been successfully re-framed into mythological successes. Democrats have no one to blame for this, but themselves. They’ve done next to nothing in setting the record straight on their own accomplishments, much less in casting Republican failures in stone. Though the Democrats have a far superior governing record, many Americans today would never know it.
Democrats have lacked a coherent rhetorical strategy in defining their opposition. The Republican Party’s two core ideological imperatives: Supply-Side economic policies, and neo-con foreign policies should now both ring synonymous with ‘abysmal failure’ in the American psyche. The calamity inflicted upon this country over the last eight years by a Republican President and a Republican Congress is — politically speaking — something akin to a perfectly lobbed volleyball — set up for a game-winning spike — only to find no Democrat there to slam it home. Democrats contend they are looking forward, not backwards.
The problem is there is a missed lesson here. By neglecting to set the record straight (i.e. targeting failed Republican strategies) our country is bound to repeat these mistakes. They are granting Republicans an opportunity to re-impose their failed policies on us at a later time. Democrats MUST provide a ‘moral’ to the end of this failed Republican ‘story’. They need to put together simple, memorable, talking points to brand the opposition in a way that conjures up their failures. Not only would this help to provide some governing longevity for the Left, it would more importantly force Republicans to come up with new (and hopefully better) ideas.
Republicans are famous for spinning themselves away from their failures. They are a well-oiled misinformation machine (lie, spin, repeat; lie spin, repeat; everyone on message — from Fox News to Talk Radio to political pundits). Their greatest political achievement to date has been to sell main stream America on one of the most disingenuous branding campaigns in modern history: namely, that Republicans advocate for fiscally-sound policies (i.e. “fiscal conservatism”), and Democrats are fiscal misfits (i.e. “tax and spend liberals”). This branding effort was so successful that Democrats were eventually forced to distance themselves from the ‘liberal’ tag in favor of the new ‘progressive’ tag.
But when you look at the historic record — and actually compare the fiscal performances (as measured by the increases in national debt) of the last five U.S. Presidents — you see these stereotypes are clearly unfounded:
Democrats (in blue), Republicans (in red)
% Increase in Debt
|% Increase in Debt
Per Each 4-Year Term
|Jimmy Carter||4||$706 billion||$994 billion||41%||41%|
|Ronald Reagan||8||$994 billion||$2867 billion||189%||94.5%|
|George H.W. Bush||4||$2867 billion||$4351 billion||52%||52%|
|Bill Clinton||8||$4351 billion||$5769 billion||33%||16.5%|
|George W. Bush||8||$5769 billion||$10413 billion||81%||40.5%|
Over the last 30+ years, Democrats have clearly demonstrated sounder fiscal policies than Republicans. In fact, Republicans have proven to be so fiscally irresponsible (Ronald Reagan, in particular ) that they can almost resoundingly be blamed for the lion’s share of our entire national debt.
The two Democratic Presidents (Carter and Clinton) created $1.706 trillion in national debt over a 12 year period, or $142 billion in debt added per year, on average.
The three Republican Presidents (Reagan, and the two Bushes) created $8.001 trillion in national debt — 80% of our entire national debt — over a 20 year period, or $400.1 billion in debt added per year, on average.
On average, Republican Presidents add between two to three times more debt per year than Democratic Presidents.
The evidence is a resounding indictment of the Republican Party’s prized economic theory — Supply-Side Economics, AKA “Trickle Down Theory,” AKA “Reaganomics.” And yet, there’s been no concerted effort by the Left to vocalize this fact to the public; to ensure this failed theory gets its proper cremation — its ashes tossed to the wind.
Ushered in by Ronald Reagan in 1980 to stimulate the broken economy, and abandoned by George H.W. Bush during his Presidency (he astutely labeled it “Voodoo economics” ), Supply-Side policies were given a new lease on life eight years later by George W. Bush (who pushed trillions in tax cuts for the wealthiest Americans at a time of increased federal spending). And once again — second time around now — it resulted in MASSIVE, STAGGERING, UNMANAGEABLE DEBT!
And yet, ‘Conservatism’ as a brand, and ‘Reagonomics’ as a theory, are still somehow portrayed by the media as the the ultimate in fiscal responsibility — a depiction which barely gets challenged, even by Democrats. Consider this: when you hear Republican pundits and politicians refer to themselves as “Reagan Republicans” how often do you hear the Democrats or media pundits call Reagan out as the fiscal disaster he actually was — a President who tripled our national debt in eight years? It never happens. Democrats sheepishly cede the Reagan point, as if they themselves have bought into it. In doing this, they have given the Republicans a mythical figurehead — one they can reliably rally around, even after a disastrous calamity, like George W. Bush’s tenure.
Why didn’t the Democrats chisel out the epitaph onto the ‘Reaganomics’ hedge stone years ago? Reagan’s tripling of the national debt should have been a key talking point after his Presidency — repeated over and over again — until it became figuratively branded onto the hide of the Republican elephant; until the real Ronald Reagan (instead of the mythical one) was etched forever into the public consciousness. This may very well have prevented George W. Bush from vigorously reinstating the very same failed economic policies, some twelve years later.
When Paul O’Neil, George W. Bush’s Treasury Secretary, argued against a second round of tax cuts for the wealthy (the first round had been over $1 trillion dollars, ultimately added onto the national debt), Dick Cheney was quoted as having responded:
“You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due.”
Cheney was, essentially, correct in pointing out that Reagan paid no political price (not even after the fact) for running huge deficits. Reagan proved to Dick Cheney that there would be little if any political backlash (as engineered by the opposition) for writing such fiscally irresponsible — though politically popular — economic policies.
In fact, it could be said that Ronald Reagan paid no price for any of his Presidential failures. Here was a President who deployed American troops into a Lebanese Civil War against the advice of most of his military leaders. Then on October 23, 1983, the U.S. Marine barracks in Lebanon was bombed, and 243 U.S. servicemen immediately lost their lives. Within a few months after that, Reagan ordered all U.S. troops to make a hasty retreat. (Note: can you even imagine how the neo-cons would portray a Democratic President who ordered troops to flee under fire? He’d be caricatured as spinelessly weak on defense; one who humiliated the country by choosing flight over fight, in a way that displayed cowardice and could only embolden the enemy). And yet, Jimmy Carter is the one who is ostracized to this day by the Right as weak on defense, because 53 American embassy workers were taken hostage during the Iranian revolution; never mind the fact Carter eventually secured their safe release!
Furthermore, Reagan illegally sold arms to Iran (the same regime that had just taken our 53 embassy workers hostage), laundered the money, and diverted it to the Contra terrorist group in Nicaragua. Each of these covert operations were felonious — in clear violation of U.S. law. The scandal resulted in 14 indictments and 11 convictions of high-ranking members of his administration. Not only did Reagan’s administration violate numerous U.S. criminal laws, but also international laws — as ruled by the International Court of Justice
And yet Republicans routinely tout Reagan’s Presidency as one defined by fiscal responsibility, strength, fearlessness, and of high-moral clarity. They successfully changed the name of Washington-National Airport to Ronald Reagan Airport, and then named a newly constructed federal building in our nation’s capitol after him — the most expensive building ever constructed at the time. The Ronald Reagan Building today remains the second largest federal building, in size, after the Pentagon.
Somehow Republicans have managed to elevate this leader — a leader who had failed so dramatically on every front — to a near mythical status. Count the number of times Republican politicians, conservative talk show hosts, Fox News pundits, Joe Scarborough, George Will, etc. evoke Ronald Reagan as the very pinnacle of conservative greatness.
The Right is already laying the groundwork to shift the blame for much of the calamity they themselves unleashed over the last eight years. On April 15, 2009 — not even three months into Barack Obama’s first term — Republicans took to the streets in their so called ‘Tea Parties,’ laying blame for all our country’s fiscal woes at his feet. Their vitriol bypassed their beloved George W. Bush — and instead leveled its scope directly at Obama, whom they claimed stole their country, destroyed its fiscal health, and ruined their children’s futures — all within two plus months of being sworn in. They hope to conflate Obama’s spending to clean up Bush’s catastrophic messes with Bush’s actual catastrophic messes so that one day, they might be able to peg the Bush disaster, at least in dollar terms, on Obama. And when confronted about George W. Bush actually deserving these honors, these Tea Partiers — while waving signs of President Obama donning a Hitler mustache — claim they are actually apolitical; just frustrated ‘fiscal conservatives,’ and add, “Bush was not a true conservative.”
This is a blatant attempt by the Republican Party to salvage its ‘fiscal conservative’ brand, after their fiscal ‘train wreck’ policies over the last eight years. The fact of the matter is Republicans and Conservatives alike supported each and every one of Bush’s spending bills and ‘trickle down’ tax cuts for the rich. In fact they STILL advocate for the EXACT same failed policies whenever they’re asked what policies should be implemented. It’s all “tax cuts,” “stay in Iraq and Afghanistan,” “attack Iran,” and kill “Obama care.”
Democrats can no longer afford to let dishonest Republican rhetoric go uncontested. The Left needs to control the narrative on the Bush years, to ensure the truth doesn’t slowly get propagandized into another work of fiction. The Left must formulate a rhetorical strategy that targets key failed Republican ideologies: namely, supply-side economics and neo-con ideology. These are the ideologies that created the Bush disaster, and these ideologies are still fanatically embraced by everyone on the right (outside of Ron Paul): Republicans, ‘Tea Partiers,’ and ‘Conservatives.’
Labeling and setting the record straight on failed economic theories and foreign policies is crucial to our country’s future. As our economy continues to tank, and the Left continues to become disenchanted with President Obama as a change agent, I fear Republicans may actually get a chance at returning to power in 2012. There will never be a more perfect time to define the opposition by its failed ideologies. The Left must win the war of words, or else …