PrintAugust 21, 2010
The Ride Down
Revised numbers from the Labor Department show negative job growth during June 2010. For each job opening, there were five persons looking for work, and 300,000 fewer workers were hired in June than in May. The ride down continues.
Meanwhile, Treasury Secretary Geithner, erstwhile cheerleader for the Obama economic team, announces that unemployment rates could rise "for a couple of months." "Of course we want to do what we can," says Geithner, but what we're doing is just not working.
Still, "large parts of the private sector continue to strengthen," Geithner wrote in the New York Times on August 3. Maybe Geithner wasn't looking at the same data as the Federal Reserve, which one week later reported that the economy was weakening. Not only that, but the Fed backed up its opinion with a commitment to new monetary stimulus. Come to think of it, Geithner's boss was not hesitant to sign a $26-billion stimulus bill designed to bail out teachers' unions and state Medicaid programs. If Geithner is so sure the economy is expanding, why is he supporting another stimulus bill?
The truth is that Geithner knows, as does every reputable economist out there, that the U.S. economy is not recovering as it should following the severe recession of 2008-2009. The Obama economic policies are just not working, and no one in the administration seems to have a clue about what to do.
As for Geithner, he thinks that Americans haven't been taxed enough. In an August 4 speech, Geithner suggested that the tax cuts that began during the Reagan administration and continued through the presidency of George W. Bush actually slowed the growth of the economy. Geithner is perhaps the only economist in the universe to believe that employment rates did not increase during the period from 1983 to 2008, following reductions in marginal rates, capital gains, and other taxes during the Reagan, Clinton, and Bush II administrations. The Secretary is apparently incapable of reading a line chart, or of comprehending that the percentage of Americans employed rose from 57% in 1983 to 63% in 2008.
Geithner, of course, is saying these things only to defend the president. It is the president who plans to raise taxes on the rich, as he likes to call everyone earning more than $200,000 -- even those who reinvest that money in small businesses and create new jobs. Somehow the president believes that robbing small businesses of every dime of profit is going to kick-start the economy. Once again, just about every economist except Paul Krugman disagrees with him. As Sen. Mitch McConnell pointed out on Aug. 4, the tax increases scheduled for Jan. 1, 2011 "will have a devastating impact" on the economy.
If the President really thinks that raising taxes will promote growth, why not raise taxes on everyone? More taxes, more growth. Why not let government take everything, as it already has, almost, in California and New York? If higher taxes produce jobs, where are the jobs in California and New York? Why were more new jobs created in low-tax Texas in 2009 than in the other 49 states combined?
Maybe it's just that the Democrats have a different definition of "jobs" from most people's. For Democrats, a job is not a job unless it's "green." A job need not be real -- it can be "created or saved" or bought with stimulus spending. For Nancy Pelosi, collecting unemployment benefits is a job in itself. And for Tim Geithner, raising taxes on some is the precondition for putting others back to work.
The fact is that Obama's economic policies have always been laughable. The $862-billion stimulus spending of 2009 distributed massive funding to welfare recipients, alternative energy boondoggles, environmental regulation enforcement, unionized education, and public service workers. But the spending bonanza was never intended to create jobs. It was designed to buy votes, as was the latest stimulus bill signed by the president on August 10.
Meanwhile, the economy overall has lost six million jobs since the recession began, most of them since the inauguration of Barack Obama; 14.6 million Americans are now out of work. Millions of ordinary Americans have been sacrificed so that the Democratic Party can retain the votes of welfare recipients, teachers, public service unions, and environmentalists -- and what's more important, the campaign contributions of unions, environmental groups, and trial lawyers.
If the president really wished to create jobs, he could do so in several ways. He could reduce marginal tax rates across the board, thereby returning billions of dollars to their rightful owners. He could cut capital gain, dividend, and interest taxes, thus increasing business investment and spurring expansion. He could promote tort reform and eliminate unnecessary environmental regulation. Most importantly, he could lower taxes on businesses and corporations.
Obama has done none of these things. The only "solution" he has proposed is raising taxes and distributing more stimulus funds to his key constituencies.
There are 14.6 million unemployed, and the president's solution is to raise taxes so as to distribute more taxpayer money to his political supporters. Apparently Obama is so callous or so blind that he cannot comprehend what it means for 14.6 million families to lose a breadwinner. Everything that he has done, and that he continues to do, serves only his own interest. He appears to be ruthlessly intent on a single objective: securing his political base in advance of the 2012 election. No matter if fourteen or twenty or fifty million Americans go hungry.
Dr. Jeffrey Folks taught for thirty years in universities in Europe, America, and Japan. He has published many books and articles on American culture and politics.
