I’m going to write something more extensive about this when I get the chance, but for now, let me say that as the Republican’s jobs plans are dribbling out, I don’t see much that could actually help on…you know…jobs.
What I see instead is rehashed, discredited trickle down, supply-side ideas…such measures have a terrible jobs track record, though they have been effective in redistributing wealth upwards. What we have here is a thinly disguised effort to map their permanent tax cut and deregulatory agenda onto “jobs programs,” hoping no one will notice where that map led us when we followed it during the Bush years.
As noted, their ideas seem to fall into two categories: tax reform and deregulation. And neither will move the needle on jobs one bit.
Tax Reform: I’ll all for cleaning up the code, closing loopholes, and if I have to trade some points on the corporate rate for some loophole revenue, I’m in (though don’t be talkin’ to me about “revenue neutral”—i.e., lowering the rate so much that there’s no new revs).
But in the R’s plans, the connection between tax reform and jobs looks like nothing more than warmed-over trickle down. Unleash corporations from their tax burdens and they’ll start hiring in droves!
That never works—just look at the lousy jobs record in the Bush years. And we especially shouldn’t be surprised that it wouldn’t work now. Corporate profits as a share of GDP, after tax, were the highest last quarter of any quarter in the history of these data going back to 1947. Yet they’re not hiring. Why should we believe that even higher after-tax profits would make a difference?
They’re doing well selling into expanding economies, which doesn’t right now include the US. If we were to get this economy back on track, which would take actually getting people back to work, creating more domestic demand, then firms will start hiring here. All these supply-side tax cuts will do is boost their already high bottom lines.
Deregulation: Puh-lease. Cut all the rules you want, that’s not what’s holding back hiring.
Here again, I actually think it is important and would be beneficial to streamline say, some of the requirements that must be met before a firm can build a factory, e.g. During the Recovery Act, I remember how some of these delays slowed down job creation.
But firms don’t expand or contract on the basis of environmental or workplace safety rules. They do so because there’s enough demand—there’s that D word again—for what they’re producing.
And here’s another thing that’s workin’ my nerves about these plans. The R’s promote them in good times and bad. When the economy is zipping along, it’s time to cut taxes and red tape. When the economy is stuck in the mud, same thing!
All they’re doing here is dressing up their permanent tax cut and deregulatory agenda as a jobs program. It’s cynical and it should not be taken seriously.