Conservative leaders in the House have promised “innovative solutions” to help the Obama administration revive the economy, but what they actually offered on Thursday on Capitol Hill was the intellectual equivalent of well-used stuff put up for bid on eBay in a desperate bid for pocket change.
And who would know better about auctioning virtually useless stuff on eBay than Meg Whitman, the founder of the online selling site who was one of the star witnesses at a forum sponsored by the House Republicans. She, along with former Massachusetts Gov. Mitt Romney, brought recycled conservative talking points that talked past the current economic problems that are being confronted, however imperfectly, by President-elect Barack Obama’s economic recovery plan.
It was the same old song: Tax cuts will be what will save the economy. Public sector spending to create jobs and enhance the public commons is largely wasteful. But when dollars are put into the hands of the corporate sector, prosperity always trickles down.
Worse, the same old deceptions keep being used to sell these worn-out, and increasingly rejected, nostrums.
Whitman said that American corporations pay “the highest tax rates in the world … We take over a third of business profits” even though no less august a body than the World Bank says that is manifestly untrue. (This Making Sense fact sheet has the details on where we actually stand on the taxes corporations actually pay compared to the rest of the world: 76th, not first. One reason: Two-thirds of American corporations and foreign corporations doing business in the United States pay absolutely no federal income taxes at all.)
The notion that lowered corporate tax rates automatically spurs job creation is belied by the results of the last eight years. In spite of more than $2 trillion worth of tax cuts enacted since 2001, the best “recovery” that the economy could muster featured the weakest job production of any period since World War II. And then that feeble recovery fell so far off the cliff that there are actually 84 percent more unemployed people to day than at the start of the Bush administration.
Romney made a laughably disingenuous comparison of last year’s rebates to this year’s far more comprehensive recovery plan. It’s obvious that the predictable failure of those rebate checks to stabilize the economy—we all knew they would be used to pay off credit card bills, cover the fuel prices that spiked over the summer, or just simply socked away in a bank account—is not worth mentioning in the same sentence with a recovery plan that will put Americans to work addressing long-neglected public needs and laying the foundation for a greener, more broadly shared economic prosperity.
Finally, there’s that fuzzy math that conservatives always use when they talk about public spending and job creation, such as when Whitman lamented that the Obama recovery proposal worked out to “$225,000 for each job created.” (But, hey, as they would say in those informercials, you’d get better transportation, repaired schools and public facilities, protected social services and a greener environment absolutely free!) Unmentioned, of course, was the efficiency with which the Bush administration created jobs: Economist Charles McMillion estimates that by trying to grow the economy on an $11 trillion combination of public and private debt, the Bush administration spent $2.2 million per job. We’ll be paying that off for decades.
If, as Whitman said during the forum, that “creating jobs is the No. 1 lens through which we should view the economic package,” then there is no contest what works: not broad-based corporate tax cuts, but, as a chart in this report by the Center for Budget and Policy Priorities points out, it’s actually state fiscal relief—federal dollars used to keep teachers and other public servants from losing their jobs as states struggle to keep their budgets balanced. The second most important element? “Protecting the vulnerable”—dollars used to protect the poor and jobless from falling further into poverty. Business tax cuts ranked fourth on the list of job-creating measures.
Those were the very facts that were ignored by conservatives at Thursday’s forum. And, frankly, if that forum exemplifies the quality of ideas that conservatives intend to bring to the table as Obama solicits ideas for turning the economy around, Obama would be best advised not to waste his time. He’d do better hunting on eBay.
