“The GOP Sounds Of Silence”: From ‘Where Are The Jobs?’ To ‘Where Are Republicans On Jobs?’
The economic news on Friday was even better than optimists expected: the United States added nearly 300,000 jobs in December, wrapping up the second best year for the American job market in over a decade. In fact, looking at the last two years combined, 2014 and 2015 were the best back-to-back years for job creation since 1998 and 1999, at the height of the dot-com boom.
While no mainstream American politicians publicly root against the U.S. economy, the fact remains that this strong job growth must be baffling to Republicans. GOP orthodoxy, repeated ad nauseam, is that President Obama’s domestic agenda – the Affordable Care Act, higher taxes on the wealthy, Wall Street regulations, environmental safeguards, et al – is crushing the economy and stifling the American job market.
The only way to put Americans back to work, Republicans insist, is to do the exact opposite of the policies that cut the unemployment rate from 10% to 5%.
Obviously, that’s a tough sell for anyone with even a passing familiarity with the facts, but it got me wondering: how exactly did Republican officials and candidates respond to Friday’s good news?
When I say they reacted to jobs report with silence, it’s important to stress that I’m being quite literal. For years, the Republicans’ economic line was, “Where are the jobs?” With over 14 million new private-sector jobs created in the last 70 months, the new, more salient question has become, “Where are the Republicans on jobs?”
Over the weekend, for example, I checked House Speaker Paul Ryan’s (R-Wis.) official blog, which used to publish a statement with the release of every new jobs report. Friday, however, featured plenty of new content, none of which referenced the job numbers.
The Republican National Committee’s official blog also used to issue once-a-month press releases on unemployment, but on Friday it said nothing. The same is true of RNC Chairman Reince Priebus’ Twitter feed.
There was similar silence from Senate Majority Leader Mitch McConnell (R-Ky.) and the Senate Republican leadership team.
How about the presidential candidates? Nothing from Donald Trump. Or Ted Cruz. Or Marco Rubio. Or Jeb Bush. Or Chris Christie.
Look, I don’t expect GOP presidential candidates to issue a statement celebrating President Obama’s successes in putting Americans back to work after the Great Recession. And I certainly don’t imagine Republicans are going to announce a plan to reevaluate all of their bogus assumptions about Obama’s agenda and the economy.
But we’ve reached the point at which Republicans no longer seem interested in talking about job creation at all. It’s as if they hope ignoring the issue altogether will keep people from noticing one of the most remarkable turnarounds in the job market in a generation – which might even work, since much of the political world barely stopped to notice Friday’s jobs report.
Republicans could say the good news will be even better if they’re elected. They could celebrate strong job growth and make the case that Obama deserves no credit. They could say something about the issue that, up until quite recently, dominated the political debate like no other.
But for now, it seems the GOP has decided the easiest course of action is to pretend the good news on jobs simply doesn’t exist. Up until fairly recently, such a scenario would have been hard to even imagine.
By: Steve Benen, The Maddow Blog, January 11, 2016
“Elections Have Consequences”: Don’t Let Anyone Tell You Otherwise
You have to be seriously geeky to get excited when the Internal Revenue Service releases a new batch of statistics. Well, I’m a big geek; like quite a few other people who work on policy issues, I was eagerly awaiting the I.R.S.’s tax tables for 2013, which were released last week.
And what these tables show is that elections really do have consequences.
You might think that this is obvious. But on the left, in particular, there are some people who, disappointed by the limits of what President Obama has accomplished, minimize the differences between the parties. Whoever the next president is, they assert — or at least, whoever it is if it’s not Bernie Sanders — things will remain pretty much the same, with the wealthy continuing to dominate the scene. And it’s true that if you were expecting Mr. Obama to preside over a complete transformation of America’s political and economic scene, what he’s actually achieved can seem like a big letdown.
But the truth is that Mr. Obama’s election in 2008 and re-election in 2012 had some real, quantifiable consequences. Which brings me to those I.R.S. tables.
For one of the important consequences of the 2012 election was that Mr. Obama was able to go through with a significant rise in taxes on high incomes. Partly this was achieved by allowing the upper end of the Bush tax cuts to expire; there were also new taxes on high incomes passed along with the Affordable Care Act, a.k.a. Obamacare.
If Mitt Romney had won, we can be sure that Republicans would have found a way to prevent these tax hikes. And we can now see what happened because he didn’t. According to the new tables, the average income tax rate for 99 percent of Americans barely changed from 2012 to 2013, but the tax rate for the top 1 percent rose by more than four percentage points. The tax rise was even bigger for very high incomes: 6.5 percentage points for the top 0.01 percent.
These numbers aren’t enough to give us a full picture of taxes at the top, which requires taking account of other taxes, especially taxes on corporate profits that indirectly affect the income of stockholders. But the available numbers are consistent with Congressional Budget Office projections of the effects of the 2013 tax increases — projections which said that the effective federal tax rate on the 1 percent would rise roughly back to its pre-Reagan level. No, really: for top incomes, Mr. Obama has effectively rolled back not just the Bush tax cuts but Ronald Reagan’s as well.
The point, of course, was not to punish the rich but to raise money for progressive priorities, and while the 2013 tax hike wasn’t gigantic, it was significant. Those higher rates on the 1 percent correspond to about $70 billion a year in revenue. This happens to be in the same ballpark as both food stamps and budget office estimates of this year’s net outlays on Obamacare. So we’re not talking about something trivial.
Speaking of Obamacare, that’s another thing Republicans would surely have killed if 2012 had gone the other way. Instead, the program went into effect at the beginning of 2014. And the effect on health care has been huge: according to estimates from the Centers for Disease Control and Prevention, the number of uninsured Americans fell 17 million between 2012 and the first half of 2015, with further declines most likely ahead.
So the 2012 election had major consequences. America would look very different today if it had gone the other way.
Now, to be fair, some widely predicted consequences of Mr. Obama’s re-election — predicted by his opponents — didn’t happen. Gasoline prices didn’t soar. Stocks didn’t plunge. The economy didn’t collapse — in fact, the U.S. economy has now added more than twice as many private-sector jobs under Mr. Obama as it did over the same period of the George W. Bush administration, and the unemployment rate is a full point lower than the rate Mr. Romney promised to achieve by the end of 2016.
In other words, the 2012 election didn’t just allow progressives to achieve some important goals. It also gave them an opportunity to show that achieving these goals is feasible. No, asking the rich to pay somewhat more in taxes while helping the less fortunate won’t destroy the economy.
So now we’re heading for another presidential election. And once again the stakes are high. Whoever the Republicans nominate will be committed to destroying Obamacare and slashing taxes on the wealthy — in fact, the current G.O.P. tax-cut plans make the Bush cuts look puny. Whoever the Democrats nominate will, first and foremost, be committed to defending the achievements of the past seven years.
The bottom line is that presidential elections matter, a lot, even if the people on the ballot aren’t as fiery as you might like. Don’t let anyone tell you otherwise.
By: Paul Krugman, Op-Ed Columnist; Opinion Pages, The Conscience of a Liberal, The New York Times, January 4, 2015
“Marco Rubio Has An Arithmetic Problem”: Anyone With Access To A Calculator Should Recognize Just What A Joke This Scheme Is
At first blush, it’s tempting to see Marco Rubio’s economic plan as a dog-bites-man story: Republican presidential campaign proposes massive tax breaks for millionaires and billionaires, even while saying the opposite. The Florida senator isn’t alone on this front, and it all seems sadly predictable.
But in this case, there’s more to it. Even if you’re unmoved by Rubio’s odd inability to handle his own personal finances in a responsible way, the way he intends to deal with the nation’s finances as president is arguably a national disqualifier.
The trouble started in earnest at the last debate for Republicans presidential candidates – the one pundits decided was a triumph for Rubio – when CNBC’s John Harwood pressed the Florida senator on his tax-cut plan.
HARWOOD: The Tax Foundation, which was alluded to earlier, scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale. Since you’re the champion of Americans living paycheck-to- paycheck, don’t you have that backward?
RUBIO: No, that’s – you’re wrong.
It turns out, analysis from both the left and right scrutinized Rubio’s plan and found that he was completely wrong. I can’t say whether he was deliberately trying to deceive viewers or simply unaware of the details of his own policy, but in either case, the senator’s claims were false.
In the days that followed, scrutiny of Rubio’s plan intensified. Vox’s Dylan Matthews talked directly to Rubio staffers and discovered that the senator’s plan includes even more generous tax breaks for the top 1% than Jeb Bush’s and Donald Trump’s plans. An analysis for Citizens for Tax Justice also found that the bulk of the benefits in the Rubio plan would go to the very, very wealthy.
Indeed, New York’s Jon Chait added, “Rubio’s proposal deliberately provides some benefits to Americans of modest income, which means that its enormous tax cuts for the very rich come alongside some pretty decent-size tax cuts for the rest of us. All told, Rubio’s plan would reduce federal revenue by $11.8 trillion over the next decade. The entire Bush tax cuts cost about $3.4 trillion over a decade, making the Rubio tax cuts more than three times as costly.”
It’s against this backdrop that Rubio has also proposed a vast expansion of the U.S. military, while leaving Social Security and Medicare benefits for current retirees untouched.
In any version of reality in which arithmetic exists, Rubio’s plan is simply indefensible. Massive tax breaks for the rich, coupled with significant increases in military spending, leads to ballooning budget deficits. It’s not theoretical – we tried this in the Bush/Cheney era and it led to predictable results that we’re still trying to address.
The difference is, Rubio wants tax cuts that are triple the size of the ones created by George W. Bush and Dick “Deficits Don’t Matter” Cheney.
As this relates to the 2016 race, the central problem relates to policy: Rubio’s numbers don’t, and can’t, add up. Anyone with access to a calculator should recognize just what a joke this scheme is.
But the other problem is what we’re learning about Rubio as a candidate. There is, like it or not, a character aspect to presidential hopefuls’ platforms – because they offer Americans an opportunity to learn about candidates’ honesty, priorities, values, and candor. The Florida senator who talks about his ability to appeal to maids and bartenders has gone to almost comical lengths to craft a plan that benefits CEOs and hedge-fund managers, all while pretending to be an expert on fiscal responsibility.
Marco Rubio’s economic plan tells us something important about his candidacy, and it’s not flattering.
By: Steve Benen, The Maddow Blog, November 9, 2015
“Voodoo Never Dies”: Never Forget That What It’s Really About Is Top-Down Class Warfare
So Donald Trump has unveiled his tax plan. It would, it turns out, lavish huge cuts on the wealthy while blowing up the deficit.
This is in contrast to Jeb Bush’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit, and Marco Rubio’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit.
For what it’s worth, it looks as if Trump’s plan would make an even bigger hole in the budget than Jeb’s. Jeb justifies his plan by claiming that it would double America’s rate of growth; The Donald, ahem, trumps this by claiming that he would triple the rate of growth. But really, why sweat the details? It’s all voodoo. The interesting question is why every Republican candidate feels compelled to go down this path.
You might think that there was a defensible economic case for the obsession with cutting taxes on the rich. That is, you might think that if you’d spent the past 20 years in a cave (or a conservative think tank). Otherwise, you’d be aware that tax-cut enthusiasts have a remarkable track record: They’ve been wrong about everything, year after year.
Some readers may remember the forecasts of economic doom back in 1993, when Bill Clinton raised the top tax rate. What happened instead was a sustained boom, surpassing the Reagan years by every measure.
Undaunted, the same people predicted great things as a result of George W. Bush’s tax cuts. What happened instead was a sluggish recovery followed by a catastrophic economic crash.
Most recently, the usual suspects once again predicted doom in 2013, when taxes on the 1 percent rose sharply due to the expiration of some of the Bush tax cuts and new taxes that help pay for health reform. What happened instead was job growth at rates not seen since the 1990s.
Then there’s the recent state-level evidence. Kansas slashed taxes, in what its right-wing governor described as a “real live experiment” in economic policy; the state’s growth has lagged ever since. California moved in the opposite direction, raising taxes; it has recently led the nation in job growth.
True, you can find self-proclaimed economic experts claiming to find overall evidence that low tax rates spur economic growth, but such experts invariably turn out to be on the payroll of right-wing pressure groups (and have an interesting habit of getting their numbers wrong). Independent studies of the correlation between tax rates and economic growth, for example by the Congressional Research Service, consistently find no relationship at all. There is no serious economic case for the tax-cut obsession.
Still, tax cuts are politically popular, right? Actually, no, at least when it comes to tax cuts for the wealthy. According to Gallup, only 13 percent of Americans believe that upper-income individuals pay too much in taxes, while 61 percent believe that they pay too little. Even among self-identified Republicans, those who say that the rich should pay more outnumber those who say they should pay less by two to one.
Well, consider the trajectory of Marco Rubio, who may at this point be the most likely Republican nominee. Last year he supported a tax-cut plan devised by Senator Mike Lee that purported to be aimed at the poor and the middle class. In reality, its benefits were strongly tilted toward high incomes — but it still drew harsh criticism from the right for giving too much to ordinary families while not cutting taxes on top incomes enough.
So Mr. Rubio came back with a plan that eliminated taxes on dividends, capital gains, and inherited wealth, providing a huge windfall to the very wealthy. And suddenly he was gaining a lot of buzz among Republican donors. The new plan would add trillions to the deficit, which conservatives claim to care about, but never mind.
In other words, it’s straightforward and quite stark: Republicans support big tax cuts for the wealthy because that’s what wealthy donors want. No doubt most of those donors have managed to convince themselves that what’s good for them is good for America. But at root it’s about rich people supporting politicians who will make them richer. Everything else is just rationalization.
Of course, once the Republicans settle on a nominee, an army of hired guns will be mobilized to obscure this stark truth. We’ll see claims that it’s really a middle-class tax cut, that it will too do great things for economic growth, and look over there — emails! And given the conventions of he-said-she-said journalism, this campaign of obfuscation may work.
But never forget that what it’s really about is top-down class warfare. That may sound simplistic, but it’s the way the world works.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 2, 2015
“A Rerun Of What His Brother Tried”: Jeb Bush’s Tax Plan Shows Republicans Can’t Learn From Economic History
Jeb Bush released the first details of his tax plan today in a Wall Street Journal op-ed, so we finally learn the secret that will produce spectacular growth, great jobs for all who want them, and a new dawn of prosperity and happiness for all Americans. Are you ready?
It’s…tax cuts for the wealthy! If only we had known that this amazingly powerful tool was available to us all along!
To be fair, not everything in Bush’s tax plan is targeted at the rich — there are some goodies in there for other people as well. But it’s pretty clear that in addition to wanting to revive the Bush Doctrine in foreign affairs, Jeb is looking to his brother’s tax policies as a model for how we can make the economy hum, I suppose because they worked so well the first time.
While many of the details are still vague, here are the basics of what Bush wants to do. He would reduce the number of tax brackets from its current seven down to three, of 10 percent, 25 percent, and 28 percent. This would represent a huge tax cut for people at the top, who currently pay a marginal rate of 39.6 percent. He also wants to eliminate the inheritance tax and the alternative minimum tax (both paid almost entirely by wealthy people), and slash corporate taxes. On the other end, he’d raise the standard deduction and expand the Earned Income Tax Credit, which helps the working poor. He would also eliminate the carried interest loophole, which allows hedge fund managers to pay lower rates on their income.
“We will treat all noninvestment income the same,” he says, which is a reminder that investment income, which is mostly gained by wealthy people, would still be treated more favorably than wage income, which is what working people make.
As Dylan Matthews notes, Bush’s plan is something of a compromise between the supply-siders and flat-taxers who think that cutting taxes on the wealthy is literally the only thing necessary to spur the economy, and the “reform conservatives” who would give the wealthy some breaks but put more of their effort toward changes affecting the middle class. But the biggest problem with Bush’s plan may not so much the particulars, but the fact that he believes that making these changes will “unleash” the American economy.
We’ve had this debate again and again in recent years, and every time, events in the real world prove Republicans wrong, yet they never seem to change their tune. When Bill Clinton’s first budget passed in 1993 and raised taxes on the wealthy, Republicans said it would cause a “job-killing recession”; what ensued was a rather extraordinary economic boom and the first budget surpluses in decades. When George W. Bush cut taxes in 2001 and 2003, primarily for the wealthy, they said that not only would the economy rocket forward into hyperspace, but there would be little or no increase in the deficit because of all that increased economic activity. What actually happened was anemic growth and dramatically increased deficits, culminating in the economic catastrophe of 2008. When Barack Obama raised taxes, Republicans said the economy would grind to a halt; instead we’ve seen sustained job creation (despite weak income gains).
The lesson of all this, to any sane person, is that changing tax rates, particularly the top marginal income tax rate, has little or no effect on the economy. Yet Jeb Bush wants us to believe that his plan will produce sustained growth of 4 percent or more — something no president since Lyndon Johnson has managed — with what is essentially a rerun of what his brother tried.
He’s hardly alone in this belief. Indeed, with the bizarre exception of Donald Trump, all the Republican candidates put tax cuts that would benefit the wealthy at the center of the their ideas for helping the American economy. So why can’t they learn from history?
The answer is that for conservatives, cutting taxes on the wealthy is less a practical instrument to produce a healthy economy than it is a moral imperative. When they talk passionately about the crushing burden taxation imposes on the “job creators,” those noble and virtuous Americans whose hard work and initiative (even when it comes in the form of waiting for their monthly dividend checks) provide the engine that moves the nation forward, you can tell they believe it deep in their hearts. If cutting the top marginal rate hasn’t delivered us to economic nirvana before, well they’re sure it will eventually. And even if it doesn’t, it’s still the right thing to do.
There are some cases where partisans will alter their philosophical beliefs in response to real-world evidence; for instance, right now, many Republicans are reexamining what they used to think about criminal justice and the utility of get-tough policies. But taxes occupy a singular place in the conservative philosophical hierarchy, so much so that many elected Republicans literally take an oath swearing never to raise them for any reason. Fourteen of the seventeen Republican presidential candidates have sworn that oath (though Bush is one of the three who hasn’t).
After all that has happened in the last couple of decades, it’s clear that there is literally no conceivable economic event or development that would dent the Republican conviction that cutting taxes for the wealthy is, if not the only thing that can help the economy, the sine qua non of economic revival. Maybe it’s too much to expect them to learn from history.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, September 9, 2015
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