“Theirs is a magical world in which the gulf oil spill and the Japanese nuclear disaster never happened and there was never a problem with smog, polluted rivers or contaminated hamburger. It is a world where Enron and Worldcom did not collapse and shoddy underwriting by bankers did not bring the financial system to the brink of a meltdown. It is a world where the unemployed can always find a job if they really want one and businesses never, ever ship jobs overseas.”
The piece is a must read, but I want to focus in on some important points Pearlstein makes about a bad idea that I expect you’ll hear more about in coming days and weeks: tax repatriation. I’ve written critically about this idea for a while—it’s where you give multinational corporations a big, temporary tax break on their foreign earnings.
After documenting their unending hostility to stimulus measures (or as they call them, “discredited” stimulus measures), they argue that this tax break really will lead to job growth:
“It’s a lovely economic argument, and it might even be right. But for Republican presidential candidates, it presents a little problem. You can’t argue, at one moment, that putting $1 trillion of money in the hands of households and business failed to create even a single job, and at the next moment argue that putting an extra $1 trillion in repatriated profit into their hands will magically generate jobs for millions.”
I can’t tell you how many debates I’ve had in recent weeks where anti-Keynesians inveigh viciously against temporary measures like those in the President’s new jobs plan, which they assert can’t possibly work, and in the next breath, argue that temporary corporate tax repatriation must be part of a “long-term plan for confidence and certainty.”
And remember, if high after-tax corporate profits were how jobs got created in this country, we wouldn’t be in this mess.