Stunt Of The Week: Heritage Foundation Plays A Foolish Game
I’ve grown increasingly concerned about the poor quality of the Heritage Foundation’s scholarship, but this week’s stunt is awful, even by Heritage standards.
The conservative think tank published an item yesterday purporting to show that passage of the Affordable Care Act immediately stalled private-sector job growth. Conditions were quickly improving, Heritage argues, right up until those rascally Democrats felt the need to overhaul the health care system.
This is deeply foolish, both as an exercise and as an attempt to manipulate data. Here, for example, is a chart showing private-sector job growth in the 12 months after implementation of the ACA began.
Note, three of those months reflect the strongest private-sector monthly totals in the last five years. One might also mention that private-sector employment bottomed out shortly before the Affordable Care Act passed, and has been on an upwards trajectory ever since.
To clarify, I’m not saying the successful passage of health care reform necessarily caused private-sector job growth to improve. There are all kinds of other facts that gave the economy a boost, most notably the Recovery Act (which, incidentally, the Heritage Foundation also dislikes).
But to argue that the ACA was somehow responsible for undermining the economy is unbecoming an institution that claims to be a “think” tank. I know the right hates the reform law — despite the fact that it includes several provisions, including the individual mandate, which had been endorsed by the Heritage Foundation — but this just reeks of desperation.
As Matt Yglesias explained, referring to the Heritage piece, “Clearly … no fair-minded person actually interested in the subject is going to be persuaded by this kind of nonsense. I think it’s really too bad that conservative institutions spend a fair amount of time and energy on projects whose only possible effect can be to mislead their own constituency.”
By: Steve Benen, Contributing Writer, Political Animal-Washington Monthly, July 21, 2011
A Politician-Created Crisis: Why Did Congress Waste Six Months?
The House Republican strategy to link a normally routine increase in the nation’s debt limit with a crusade to slash spending has already had a high cost, threatening the nation’s credit rating and making the United States look dysfunctional and incompetent to the rest of the world.
But that’s not the most awful thing about it.
What’s even worse is that this entirely artificial, politician-created crisis has kept government from doing what taxpayers expect it to do: Solve the problems citizens care about.
The most obvious problem is unemployment. The best way, short term, to drive the deficit down is to spur growth and get Americans back to work. Has anyone noticed that Americans with jobs can provide for their families, put money into the economy — and, oh yes, pay taxes that increase revenue and thus cut the deficit?
There is no mystery about the steps government could take. Ramping up public works spending is a twofer: It creates jobs upfront and provides the nation’s businesses and workers the ways and means to boost their own productivity down the road.
Wise infrastructure spending can save energy. And when public works investments are part of metropolitan plans for smarter growth, they can also ease congestion and reduce commuter times, giving our citizens back valuable minutes or hours they waste in traffic. If you want a pro-family policy, this is it.
State and local budgets all across the country are a shambles. Teachers, police, firefighters, librarians and other public servants are being laid off. As the New York Times’ David Leonhardt pointed out recently, even as the private economy has been adding jobs, if too slowly, state and local governments have hemorrhaged about half a million jobs in two years.
President Obama knows this. “As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector,” he said in his July 11 news conference. “So my strong preference would be for us to figure out ways that we can continue to provide help across the board.”
So why not do it? “I’m operating within some political constraints here,” Obama explained, “because whatever I do has to go through the House of Representatives.”
Excuse me, Mr. President, but if you believe in this policy, why not propose it and fight for it? Leadership on jobs is your central job right now. Let the Republicans explain why they want more cops and teachers let go, or local taxes to rise.
We should also extend the payroll tax reduction instituted last year and unemployment insurance. Why so little discussion of how balky Republicans have been on this Obama tax cut proposal, or how resistant they have been to further help those out of work? They won’t raise taxes on the rich to balance the budget but are utterly bored by relief for the middle class or the jobless. Isn’t that instructive?
And while we have been parsing the Rube Goldberg complexities of Senate Republican leader Mitch McConnell’s procedural contortions to get us out of a battle we should never have gotten into, we haven’t been discussing how to reform the No Child Left Behind law.
It’s true that some good people in Congress are trying to figure out a way forward on education reform. That’s a far more important national conversation than whether Tea Party Republicans understand the elementary laws of economics. But you wouldn’t know it because those who care about the substance of governing never get into the media. You get a lot of attention — and are sometimes proclaimed a hero — if you say something really dumb about the debt ceiling.
Then there is the coming debate over a “balanced budget” amendment to the Constitution that would limit government spending to 18 percent of gross domestic product and require a two-thirds vote to raise taxes. It’s an outrageous way for members of Congress to vote to slash Medicare, Medicaid, Social Security, aid to education and a slew of other things, to lock in low taxes on the rich — and never have to admit they’re doing it. It’s one of the most dishonest proposals ever to come before Congress, and I realize that’s saying something.
Every member of Congress who got us into this debt-ceiling fight should be docked six months’ pay. They wasted our time on political posturing instead of solving problems. Better yet, the voters might ponder firing them next year. This could do wonders for national productivity.
By: E. J. Dionne, Opinion Writer, The Washington Post, July 17, 2011
On Debt Impasse, GOP Full Of Contradictions
Sen. Mitch McConnell has a clever plan to resolve the federal debt impasse. Congressional Republicans would invite President Barack Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.
Hmm. Just a bit contradictory?
Meanwhile, the impasse arose because congressional Republicans thunder against government red ink, yet refuse to raise revenue by ending tax breaks that help Warren Buffett pay a lower tax rate than his receptionist (which he agrees is preposterous). Another contradiction? Of course.
McConnell’s plan – a pragmatic way to avert a catastrophic default – may be torpedoed by more extremist House Republicans, such as Michele Bachmann. They seem to fear that ending tax loopholes for billionaire fund managers would damage a fragile economy. Yet they seem to think that this invalid of an economy would be unperturbed by the risk of a default on our debts.
A contra- . . . yes, you got it!
What about this one? Republicans have historically been more focused on national security threats than Democrats. Yet what would do more damage to America’s national security than a default that might halt paychecks for American military families?
This game of “spot the contradiction” is just too easy with extremist Republicans; it’s like spotting snowflakes in a blizzard. Congressional Republicans have taken a sensible and important concern – alarm about long-term debt levels, a genuine problem – and turned it into a brittle and urgent ideology.
Politicians in both parties have historically been irresponsible with money, but President Bill Clinton changed that. He imposed a stunning fiscal discipline and set the United States on a course of budget surpluses, job growth and diminishing federal debt – until the Republicans took over in 2001.
In the Bush years, Republicans proved themselves reckless both on the spending side (unfunded wars and a prescription drug benefit) and on the revenue side (the Bush tax cuts). Their view then was, as former Treasury Secretary Paul O’Neill quoted Vice President Dick Cheney as saying, “Reagan proved deficits don’t matter.”
It may seem odd that Republicans were so blithe about debt in the Bush years, yet now insist on addressing the problem in the middle of a downturn – even though basic economics dictates that a downturn is the one time when red ink is advisable. Well, just another of those contradictions.
Then there’s the rise of health care costs, a huge burden on our economy. It’s pretty clear what doesn’t work: the existing, dysfunctional system. A forthcoming book on health care by Paul Starr, “Remedy and Reaction,” notes that in 1970 the United States spent a smaller fraction of income on health care than Denmark and the same share as Canada.
Today, in dollar terms, we spend 21/2 times the average per capita of other rich countries.
When congressional Republicans do talk about health care, they have one useful suggestion – tort reform – and it was foolish for Democrats (in bed with trial lawyers) to stiff them on it. But research suggests that curbing malpractice suits, while helpful, would reduce health costs only modestly.
Beyond that, the serious Republican idea is to dismantle Medicare in its present form. That would indeed reduce government spending but would increase private spending by even more, according to the CBO.
The Obama health care plan could have done better on cost control, but it does promote evidence-based medicine, so that less money is squandered on expensive procedures that don’t work. And the Independent Payment Advisory Board will recommend steps to curb excess spending in Medicare.
Yet congressional Republicans are trying to kill the Obama health plan. Yes, of course: another contradiction.
A final puzzle concerns not just the Republican Party but us as a nation. For all their flaws, congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts – and most voters say in polls that they’re against raising the debt ceiling. I fear that instead of banishing contradictions, we as a nation may be embracing them.
By: Nicholas Kristof, Columnist, The New York Times, Published in the Milwaukee Journal Sentinel, July 14, 2011
Why The GOP’s ‘Job Creators’ Are Hard to Find
If you’re a “job creator,” raise your hand. It would be nice to know who you are, exactly.
Republicans negotiating with President Obama over a fix for the nation’s debt problems have been rolling out the heavy buzzwords lately, and there must have been a fresh memo about the sonorous ring of “job creators.” House Speaker John Boehner repeatedly decries tax hikes on job creators, with congressional colleagues such as Paul Ryan and Jeb Hensarling forming a job-creators chorus behind him. House Republicans recently published a “Plan for America’s Job Creators” (but not for everybody else, presumably) and if you’re an aggrieved job creator, you can let House Majority Leader Eric Cantor know what’s bugging you by filling out a brief form at http://jobs.majorityleader.gov/.
The trouble is, job creators are an endangered species these days. The biggest problem in the U.S. economy, in fact, is a shortage of job creators to reward and protect. Companies are barely hiring, and there are about 7 million fewer jobs now than there were at the end of 2007, when the Great Recession began. Part of the Republicans’ plan is to lower taxes, streamline regulation, open more trade and take other steps that will stimulate job creation. But we’ve already tried some of that, including several rounds of tax cuts since 2008. Most job creators are still hiding.
Big companies employ a lot of Americans, but over the last few years they’ve been better at job destruction than job creation. Between 2007 and 2010, companies with more than 1,000 employees shed about 2.6 million jobs, according to the latest data from the Labor Department. Many big companies have rebounded sharply from the recession, with impressive profits and a lot of cash on hand. But even some of the most successful big companies aren’t doing much job creation–not in the United States, anyway. Here are a few examples:
General Electric, which is run by the same Jeffrey Immelt who chairs President Obama’s Council on Jobs and Competitiveness, axed 32,000 jobs worldwide between 2007 and 2010, according to information from GE’s annual reports. About 22,000 of those lost jobs were in the United States. No job creation there, even though GE earned about $12 billion in profits in 2010.
Exxon Mobil has added about 2,800 jobs worldwide since 2007, but the giant oil firm doesn’t break out how many of those new hires work in the United States. Since Exxon earns nearly 70 percent of its revenue from overseas, it’s a good bet that’s where most of the new jobs are, too.
Wal-Mart has added about 40,000 jobs in the United States since 2007, largely because the discount retailer has been a beneficiary of pinched consumers desperate to save money. But it has added about 150,000 jobs overseas during the same time–nearly four times the U.S. tally. Still, Wal-Mart seems to be one company that can legitimately call itself a job creator.
IBM has added about 40,000 employees since 2007, but like Exxon, it doesn’t say where. About 65 percent of IBM’s revenue comes from abroad, and that’s where almost all of its revenue growth has come from since 2007. IBM’s U.S. business is actually down from 2007 levels, so it’s possible that most or all of IBM’s new hires have been overseas.
Big companies, in fact, aren’t considered a big source of new jobs. While they generate a lot of profits, they also tend to be mature enterprises more likely to swallow other companies and consolidate market share, which tends to eliminate jobs, not create them. “It’s the job of big firms to shed jobs,” says Carl Schramm, CEO of the Kauffmann Foundation, which promotes entrepreneurship. “Big firms want to lower costs, which means lowering labor costs.”
Young firms, Schramm says, account for virtually all net job creation in the U.S. economy over the last 30 years. That’s because startups that survive their first couple of years tend to be vibrant, fast-growing companies that create new industries and hire a lot of new workers. Think Microsoft and Oracle in the 1980s, and Amazon, eBay, and Google in the 1990s. Today, new technology-based firms like Facebook, Twitter, Groupon, Zynga, and LinkedIn represent one of the fastest-growing sectors of the U.S. economy. However, they’re the last companies that need any kind of tax relief–and they’re not about to ask for special treatment from Washington, either. They became transformative companies without Washington’s help, and they’d like to keep it that way.
Politicians routinely extol the virtues of “small business,” but that’s not really where the job creators are, either. Conventional small businesses–dry cleaners, nail salons, delicatessens, independent professionals like lawyers and doctors–tend to be important pillars of their communities, but they also come and go without generating a lot of new jobs, on balance. During the third quarter of 2010 (the most recent quarter for which there’s data), firms with fewer than 20 employees eliminated 34,000 jobs, according to the Labor Department. The biggest gains were among firms with 500 to 999 employees, which created 37,000 jobs.
So if Republicans want to modify the tax code to reward and encourage job creators, they need to come up with a scheme that offers the lowest tax rates to fast-growing startups, some medium-sized firms, and a few select multinationals. Of course, they might prefer to lower taxes on everybody who could be a job creator–because that includes almost everybody. If you ever spend money, that makes you a job creator, in the most expansive sense of the phrase, since somebody gets paid to provide whatever you buy. But then we’d have to figure out whether to reward American consumers for helping create jobs in China, Japan, Sri Lanka, or wherever the imported goods they purchase come from, or to reward people who spend money that helps create American jobs. So if you buy a Lexus made in Japan or Gucci loafers made in Italy, you’re not really a creator of American jobs and you shouldn’t be eligible for favorable tax treatement. But if you have your kitchen remodeled by a local contractor or go to a chiropractor for back pain, you qualify. It’s not so easy being a job creator. Or locating one.
By: Rick Newman, U. S. News and World Report, July 13, 2011
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