Deregulation disguised as jobs plans
I鈥檓 going to write something more extensive about this when I get the chance, but for now, let me say that as the Republican鈥檚 jobs plans are dribbling out, I don鈥檛 see much that could actually help on鈥ou know鈥obs.
What I see instead is rehashed, discredited trickle down, supply-side ideas鈥uch measures have a terrible jobs track record, though they have been effective in redistributing wealth upwards. What we have here is a thinly disguised effort to map their permanent tax cut and deregulatory agenda onto 鈥渏obs programs,鈥� hoping no one will notice where that map led us when we followed it during the Bush years.
As noted, their ideas seem to fall into two categories: tax reform and deregulation. And neither will move the needle on jobs one bit.
Tax Reform: I鈥檒l all for cleaning up the code, closing loopholes, and if I have to trade some points on the corporate rate for some loophole revenue, I鈥檓 in (though don鈥檛 be talkin鈥� to me about 鈥渞evenue neutral鈥濃�攊.e., lowering the rate so much that there鈥檚 no new revs).
But in the R鈥檚 plans, the connection between tax reform and jobs looks like nothing more than warmed-over trickle down. Unleash corporations from their tax burdens and they鈥檒l start hiring in droves!
That never works鈥攋ust look at the lousy jobs record in the Bush years. And we especially shouldn鈥檛 be surprised that it wouldn鈥檛 work now. Corporate profits as a share of GDP, after tax, were the highest last quarter of any quarter in the history of these data going back to 1947. Yet they鈥檙e not hiring. Why should we believe that even higher after-tax profits would make a difference?
They鈥檙e doing well selling into expanding economies, which doesn鈥檛 right now include the US. If we were to get this economy back on track, which would take actually getting people back to work, creating more domestic demand, then firms will start hiring here. All these supply-side tax cuts will do is boost their already high bottom lines.
Deregulation: Puh-lease. Cut all the rules you want, that鈥檚 not what鈥檚 holding back hiring.
Here again, I actually think it is important and would be beneficial to streamline say, some of the requirements that must be met before a firm can build a factory, e.g. During the Recovery Act, I remember how some of these delays slowed down job creation.
But firms don鈥檛 expand or contract on the basis of environmental or workplace safety rules. They do so because there鈥檚 enough demand鈥攖here鈥檚 that D word again鈥攆or what they鈥檙e producing.
And here鈥檚 another thing that鈥檚 workin鈥� my nerves about these plans. The R鈥檚 promote them in good times and bad. When the economy is zipping along, it鈥檚 time to cut taxes and red tape. When the economy is stuck in the mud, same thing!
All they鈥檙e doing here is dressing up their permanent tax cut and deregulatory agenda as a jobs program. It鈥檚 cynical and it should not be taken seriously.
