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Sunday, June 17, 2012

Who’s Really to Blame for the Sputtering Economy?

It is truly amazing that the Right-wing Republican propaganda machine can lead so many astray to the extent that over 50% of likely voters have believed that the Obama administration is either anti-business, socialist, or has done nothing to improve the economy.  Above all, the GOP’s presumptive presidential nominee spouts the untruth that this administration has done nothing to spur the economy and is failing in its efforts. 

The complete irony is this:  this administration has (because of Republican intransigence) had to continue some of the very solutions for the economy that were promulgated, and are still, by the GOP.  Unfortunately, those very policies got us into financial problems of dire consequences, and continue to slow down the recovery.  Let us count the ways:

1)    Most of the Bush administration’s  tax cuts are still in effect and have been since they were promulgated.  Have you forgotten that the income tax cuts for the richest 1% were extended for two years by the Obama administration in 2010 as part of a budget deal?  They are still at 35% as opposed to 39% under the Clinton administration.  Oh yes, and certain long-term gains are still being taxed at 15% (Mr. Romney has personally taken advantage of this), and certain tax loopholes remain in place as well, including the total depreciation able to be taken on new equipment in the first year for certain business purposes.  I almost forgot: the so-called “death tax” was also reduced under Bush and has continued under Obama.  These tax cuts for the rich are continuing to slow the recovery because revenue enhancement is being stifled.

2)    Have you also forgotten that stimulus legislation began under the Bush administration when Treasury Secretary Paulsen bailed out Wall Street with the legislative package called TARP?  By the way, both presidential candidates, McCain and Obama, voted for the bill in the Senate.  So, stimulus for the economy from government is not unknown, even for Republicans.

    The much maligned Stimulus Bill (American Recovery & Reinvestment Act), a pared-down $819 billion economic stimulus package (signed into law February 2009 less than a month after Barack Obama became president) included tax cuts, as well as new spending for public works, education, clean energy, technology, and health care, targeted more toward Main Street than Wall Street.  Is that why Republican radicals have maligned it so vigorously: because it saved the jobs of millions of teachers, firefighters, police and other first responders, instead of the fat cats of Wall Street? 

Opposition from Republicans (and some blue-dog Democrats) in the form of restrictions and limitations on an inadequate stimulus for Main Street has led to an economy that is sputtering, instead of growing substantially.  Subsequent attempts at stimulus ((Jobs bill, Infrastructure repair, transportation bill),  have been entirely thwarted by the radical Republicans, who have thereby held back on growing the economy.  

    Romney proposes a “stimulus” plan of his own, hidden behind the concept of providing “job creators” with further tax cuts, tax incentives, and tax loopholes, so his rich friends and colleagues can personally prosper even more while the rest of us struggle to hold on to what we have.  Besides lowering the individual tax rates for the rich, Romney proposes to reduce the corporate income rate initially from 35% to 25% and then to reduce it further.  He also wants to eliminate the estate tax.  He even wants to establish a “robust” investment tax credit, extending the write-off for capital expenditures for an additional year.  Romney truly believes that all these tax cuts and write-offs for the rich will somehow “trickle-down” to the rest of us, but current and past experience shows only that the rich have kept their gains for themselves while the rest of us are lucky to see any gains at all.  The so-called “job creators” have prospered under the worst of conditions, and in business circles are sitting on about $2 trillion that are NOT being used to expand jobs or benefits for workers.  The job-creators are keeping their profits in limbo, earning even more money in off-shore accounts and Treasury bills. 

3)    Regulation reform is a GOP (and Romney) cornerstone concept.  In fact, Republican conservatives have touted the idea for many years, and the Reagan administration, and George W. Bush administration, gave us some of the most radical de-regulation (and regulation with the help of Wall Street and Big Oil) yet devised.  Every time the Republicans get their hands on power, the first thing they do is to re-write or undo regulations that tend to protect consumers and labor, so that businesses and corporations can thrive without being fettered and bound by untidy rules.
    Mitt Romney points his ire at the Dodd-Frank legislation (regulates Wall Street firms), “Obamacare” (regulates the health insurance industry), the Credit Card Accountability Act (regulates credit card companies), and most vehemently, the EPA as the highest profile regulator (protection of the environment) and the most detrimental to businesses by driving up costs and hindering investment.
    Let us not forget that the concept of regulation goes back to our founding fathers., and the objection to too much regulation is of patriarchal origin as well.  There is good reason to be cautious in the promulgation of rules and regulations; they do, after all, have the force of law, and thus must not be onerous in their intent or effect.  With that said, it is important to understand that the Obama administration has ordered and undertaken one of the most comprehensive reviews of current regulations ever attempted in our political history.
    On July 11, 2011, President Obama issued an Executive Order asking the independent regulatory agencies, including the Consumer Product Safety Commission, the Federal Trade Commission, the Federal Communications Commission, and the Securities and Exchange Commission, to take new steps to ensure smart, cost-effective regulations, designed to promote economic growth and job creation. He also requested the independent agencies to produce plans to reassess and to streamline their existing regulations, and to disclose those plans for public scrutiny. In addition, the President has asked the independent agencies to follow the cost-saving, burden-reducing principles in his January Executive Order on improving regulation.

    According to a report on the website:
    “With full respect for the independence of the independent agencies and for their impressive efforts in the recent past, the President has asked for their collaboration in the creation of a twenty-first century regulatory system, using state-of-the-art tools and smart approaches to protect public welfare while promoting economic growth and job creation.”

    And finally, the President has asked several times (including in the State of the Union speech) for Congressional authorization to re-structure government.  It has been rejected.

    Once again, a basic concept of the GOP has been addressed by the Obama administration, yet it is not acknowledged or supported by that party, and certainly not supported by Congressional Republicans who have yet to provide that statutory authority for re-structuring the Executive branch.

4)     Finally, and perhaps above all, is the Republican mantra that we must cut spending and reduce the deficit immediately.  This includes cutting discretionary spending, possibly capping spending and/or passing a balanced budget constitutional amendment, reducing the federal workforce, and entitlement reform.
    Once again, the Obama administration has taken actions to speak to each of these concepts.
    They offered a big package of cuts and revenue that would have trimmed $4 trillion from the debt over ten years. Rejected.  His Affordable Health Care bill reduced spending on Medicare Advantage plans.  Repeal, they cry.  Obama offered spending cuts that would trim departments and agencies, and that did not spare entitlements.  Rejected.  He capped salaries in the Executive branch.  The federal workforce under Obama has been trimmed far more than under G. W. Bush or even under Reagan. 

Once again, Obama is already doing what the Republicans say must be done to create an environment favorable to job creation, but the economy continues to sputter, and job creation continues to be anemic because Republicans continue to reject the very policies they espouse, just because the President wants to carry them through to fruition, and might get credit for doing so.

So, what’s my point?  Well, it’s not hard to figure out.  President Obama has either inherited certain Bush policies or, he has attempted to put in place some of the things Republicans desire, or he has proposed other ways to promote jobs, reduce the debt over a decade, plan for the future and move the economy toward rejuvenation.  Not only have Republicans tried to stop every measure that Obama has proposed, they have criticized him for every move he makes, and ended up saying that it is his policies that have failed to move the economy ahead. 

BUT, here’s the rub.  It is essentially Bush Republican policies that are still in place that continue to negatively affect economic recovery: tax cuts for the rich, stimulus for Wall Street, tax loopholes, cuts in programs and personnel, war in Afghanistan.  It is their policies that are at fault, not Obama’s policies.  It is their approach that has not brought a better recovery, not Obama’s.  Congressional Republicans have, for all practical purposes, blocked his proposals for change, for reform, for job creation, except what he was able to institute on his own or that passed a Democratic House and Senate between 2009-2010. 

Republican obstructionism and their leftover policies are exactly why we are not seeing a steady recovery, because their policies do not  work.  Without the jobs program, without the infrastructure repair program, without the balanced approach of raising revenue and making responsible program cuts, without responsible re-structuring of government, without more stimulus, we cannot expect to have a robust economy. 

Recovery of jobs, manufacturing, and services  that has occurred in the past few years, has been due to President Obama’s initiative, because the GOP has blocked every attempt at further stimulus or debt reduction, even refusing a deal of $10 in debt reduction for every $1 of enhanced revenue.  President Obama has had to weather the storm of the Great Recession with one hand tied behind his back.  Even then, he has succeeded in showing jobs returning (26 straight months of job growth), housing market up, stock market increase, an auto industry turned around and back in the driver’s seat ( forgive the pun).  Republican policies have not increased jobs, but have kept job growth and growth of the economy to a minimum by giving our  richest 1% a 17% boost during the worst of times, while wage earners have suffered stagnant wages and a greater burden in total taxes.

Giving Republicans any chance to control government is the gateway to austerity, to tax cuts and incentives for the rich, to another era of a failing economy, to the diminution of wage earners and the middle class. 

So, do you get it yet?  Republican policies and obstructionism are the problem.  They are the ones who have failed us, and they continue to fail to help rejuvenate this economy.