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Can Republicans Cure the Jobs Crisis?

Steve Hochstadt: Republicans believe that continuing high unemployment will bring Obama down, so they want to preserve what they feel is their winning card: a bad economy.

Polls show that the greatest political concern of Americans is jobs. Gallup found in September that 39% said jobs and unemployment were the nation’s most important problem, and another 28% mentioned the economy in general. Far behind was the federal debt (12%) and taxes (2%).

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The near depression beginning in late 2007 hammered all sectors of the economy. Since then corporate profits have returned to record levels. The stock market, although volatile, has regained most of its losses. The demand for luxury goods has reportedly returned to pre-crisis levels, so the rich must be doing just fine.

But jobs have not come back. Unemployment remains at 9.1%. The long-term unemployed are having great difficulties finding jobs. To protect their profits, global corporations are still slashing their work forces or sending jobs overseas. While the economic situations of corporate managers, hedge fund brokers, and major stockholders have stabilized, the incomes of millions of middle- and working-class Americans are still missing.

Republican candidates for President talk incessantly about how many jobs they have created in the past. Mitt Romney claims to have personally created jobs when he was in the private sector, although he never mentions how many jobs he helped get rid of when Bain Capital was buying and selling distressed companies. Rick Perry claims credit for all the growth in employment in Texas since he has been Governor.

Do Republican politicians offer solutions to our jobs crisis? Mitt Romney released his jobs plan last month. He proposes to cut federal domestic spending by 5%, reduce the corporate income tax rate, increase oil drilling, implement free trade agreements with Columbia, Panama, and South Korea, and eliminate estate taxes on inheritances. In the most optimistic projections, assuming that tax cuts really do stimulate the economy, this would create no new jobs besides a few in oil exploration until these measures work their way through the economy. Meanwhile cutting spending means cutting public sector jobs, such as teachers and firefighters.

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My own Illinois Congressman, Aaron Schock, is similarly uninterested in any proposal that might create jobs now. He sent out a “Your Opinion Matters” card to constituents, asking us to let him know which topics concern us. The card lists 10 subjects, but no mention of jobs. His three-page letter on economic issues is about the debt ceiling and cutting domestic spending, but not a word about jobs. On his website “Jobs and the Economy” is listed under “Issues”, but there, too, all we see are the familiar Republican proposals to cut domestic spending, reduce taxes, and repeal regulations. No new jobs.

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Republican spokesmen have been clear about why they have adopted this position. Right after the 2008 election, Rush Limbaugh expressed his hope that Obama would fail to improve the economy. Senate Minority Leader Mitch McConnell confirmed the highest legislative priority of his party in October 2010: “The single most important thing we want to achieve is for President Obama to be a one-term president.”

Congressional Republicans have opposed the two proposals by the Obama administration which offer some relief to the unemployed – extension of unemployment benefits and creation of construction jobs in the latest jobs proposal.

What does this mean? It appears that Republicans do not want the economy to recover over the next 12 months. They do not want unemployment to come down and more Americans to get jobs. They believe that continuing high unemployment will bring Obama down, so they want to preserve what they feel is their winning card: a bad economy. None of their prescriptions would go into effect until after their presumed election victory in November 2012. Then these proposals, taking the most optimistic view, would percolate slowly through the economy, as the rich, with lower taxes and bigger inheritances, allow their vast wealth to trickle down to the middle and working classes.

So the Republican prescription for the jobs crisis in America is – wait. Wait for another year, while we prevent the Democrats from reducing unemployment and improving their chances of election. Wait for another year, even if your unemployment benefits run out.

Pay your mortgage or rent, but don’t expect any additional help with heating costs. Buy food, but expect less help through food stamps, as we demand further cuts in federal spending. Just muddle through somehow.

Steve Hochstadt

Then elect us and we’ll cut corporate taxes, reduce environmental and safety regulations, and boost the fortunes of the wealthiest Americans. Then wait again until the promised economic recovery finally lifts your little dinghy. Bon voyage!

Steve Hochstadt
Taking Back Our Lives
Kyoto, Japan