Economic Recovery Requires Facing Facts
Economic recovery requires facing facts
By William W. Wade
Don’t raise taxes on the job-creators” is Republican code for “Maintain the Bush tax cuts for the wealthy and subsidies for oil companies.” Corporate profits are soaring, yet they aren’t creating jobs.The debate over raising the debt ceiling is a war of political priorities — priorities like getting re-elected (by kissing Tea Party patootie) and making wealthy political donors happy.
Let’s separate fact from fiction.
The notion of “not raising taxes on the job-creators” really means “don’t raise taxes on my political donors.”
The stock market has rebounded. That’s not creating jobs. Executive salaries are at record highs, yet real worker wages have declined consistently since “trickle down” came back with Bush.
That — together with the end of easy credit with the financial market debacle — is mainly why recovery is so slow.
The purchasing power of the wage-earner drives the economy, not the luxury spending of the uber-rich. Manufacturers only make more goods when you and I buy them. If enough goods are sold, jobs are created.
But because real incomes have declined, demand for goods and services has lagged, and businesses have not put people to work (in the U.S.) to make them.
“We must cut government jobs.”
Fact — government jobs have decreased 500,000 since Mr. Obama became president. Fact — G.W. Bush is the first president to increase the number of federal government jobs more quickly than the private-sector jobs.
Manufacturing jobs were 13 percent when Bush took office. It fell below 10 percent for the first time ever in 2008.
Demonizing government jobs and employees is a diversion. These people are wage-earners. They buy goods and services with those wages. Careful cutting of duplication and waste in government is good, but draconian slashing of government jobs hurts, not helps.
Republican speechifying has created government employees as an enemy — someone to blame — for the angry, scared, and confused voter.
Trickle-down economics, the idea that anything that increases corporate profits is good for the country, has never worked. It didn’t during Ronald Reagan (renamed “Voodoo Economics”) and it didn’t during G.W. Bush. It’s not working now. Luxury stocks, like Tiffany’s, are up; Wal-Mart and Penny’s are down. Corporations are not creating jobs with their profits. Profits are going to bonuses.
They are running lean and using cheap labor overseas. They are sitting on huge cash reserves — trillions of dollars.
Fact — some oil company subsidies were created when oil was under $20 a barrel. Time to stop the gravy train.Why? Because consumer spending is down twice as much as during any prior recession. The drop in, and poor outlook for, consumer spending has whacked business investment.
Average Americans with declining income are afraid and not spending and companies are not expanding.
When the country turns around, better educated workers with higher skills will be needed. Congressional cuts to education and job re-training are exactly the wrong policy to reduce unemployment. Does cutting $2 billion from job training programs make sense when we will need trained workers?
The Republican-controlled House voted to cut funding for a food program for close to 450,000 eligible low-income women, children and infants (WIC).
One in five children in Tennessee goes hungry. Some of those children live here, in Columbia.
Rep. Eric Cantor, R-Va., stormed out of talks because the president suggested corporate jet tax deductions of $3 billion might be removed. Even $2 billion is almost three times the amount to be cut from WIC!
Slashing Medicare and Medicaid while the Republicans block the debt ceiling to save tax breaks for hedge fund managers, owners of corporate jets and energy companies is wrongheaded economic policy.
With consumer spending in the tank and corporate investment sitting in the bank, the economy needs direct job creation by government investments in infrastructure. Republicans have stalled infrastructure bills in Congress to foil job creation.
They have also blocked a Trade Bill that will put Tennesseans (and others) to work.
The Tea Party and New Wave Republicans count on us to be uninformed and afraid. They lure frightened people with the vague concept of “family values.” Whose family? What values?
The current Bush era tax cuts provide the wealthy with $860 million every week. That’s more than the total amount being cut from WIC for a year.
Whose values and priorities are these? Not mine.
William W. Wade is a Ph.D. economist living in Maury County who consults to companies, agencies and lawyers on issues related to energy, water and environmental policy and business valuations.
