3 Reasons Why Republicans Like High Unemployment

Obama for itJob-growth is sputtering. So why, exactly, do regressive Republicans continue to say “no” to every idea for boosting it — even last week’s almost absurdly modest proposal by President Obama to combine corporate tax cuts with increased spending on roads and other public works?

It can’t be because Republicans don’t know what’s happening. The data are indisputable. July’s job growth of 162,000 jobs was the weakest in four months. The average workweek was the shortest in six months. The Bureau of Labor Statistics has also lowered its estimates of hiring during May and June.

It can’t be Republicans really believe further spending cuts will help. They’ve seen the effects of austerity economics on Europe. They know the study they relied on by Carmen Reinhart and Kenneth Rogoff has been debunked. They’re no longer even trying to make the case for austerity.

It could be they just want to continue opposing anything Obama proposes, but that’s beginning to seem like a stretch. Republican leaders and aspiring 2016 presidential candidates are warning against being the “party of ‘no.’” Public support for the GOP continues to plummet.

The real answer, I think, is they and their patrons want unemployment to remain high and job-growth to sputter. Why? Three reasons:

First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy.

Second, high unemployment fuels the bull market on Wall Street. That’s because the Fed is committed to buying long-term bonds as long as unemployment remains high. This keeps bond yields low and pushes investors into equities — which helps boosts executive pay and Wall Street commissions, thereby keeping regressives’ financial sponsors happy.

Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government” will tax away the little they have and give it to “undeserving” minorities; that they should support low taxes on corporations and wealthy “job creators;” and that new immigrants threaten their jobs.

It’s important for Obama and the Democrats to recognize this cynical strategy for what it is, and help the rest of America to see it.

And to counter with three basic truths:

robert reichFirst, the real job creators are consumers, and if average people don’t have jobs or good wages this economy can’t have a vigorous recovery.

Second, the rich would do better with a smaller share of a rapidly-growing economy than their current big share of an economy that’s hardly moving.

Third, therefore everyone would benefit from higher taxes on the wealthy to finance public investments in roads, bridges, public transit, better schools, affordable higher education, and healthcare — all of which will help the middle class and the poor, and generate more and better jobs.

Robert Reich

Robert Reich

Monday, 5 August 2013


  1. Ryder says

    “First, the real job creators are consumers, and if average people don’t have jobs or good wages this economy can’t have a vigorous recovery.”

    This is about as twisted a notion as has ever been sold to gullible masses.

    Imagine Robert Reich has landed on a deserted island with 4 other castaways, and it’s a good thing he knows what to do. He tells the first chap to find wood to build a fire, he instructs another to scour the island for food, and another to catch what fish he can. For the woman in the group, he explains she should cook whatever is brought back…

    They then ask Mr. Reich about his job.

    “I’m the guy that makes all this possible. I’ll be here, warmed by the fire, and fed well… my job to consume the fire and the wood that fuels it, and to eat the food you’ve labored to bring, and you should thank me for it, because I am the job creator of this island of ours. What would become of you I ask, if I were not here to create this impressive economy, and provide you with jobs!”

    Mr. Reich supports a government that makes employment all the more impossible… ever increasing minimum wages, which prevent youth from getting hired… leading them into idle, unskilled existence… he supports a government that will pay people to stay home and NOT work, for over a year… he supports a government that pays people to invent claims of “disability”… which is about the only thing on the rise today.

    He supports a government that requires that businesses provide expensive yet sub par medical “insurance” for every full time employee… driving employers to end full time employment to help assure their survival.

    Time and time again, I hear from people that started businesses 20 or so years ago, saying they would NEVER try to start a business today… because of the mandates and hounding and uncertainties of ever changing and ever more harsh political realities of just trying to run a shop.

    This government got all it wanted… from endless stimulus spending, shovel ready jobs programs… cash for “clunkers”, unlimited raising of the debt ceiling… and on and on and on. Half a decade of this… all promised to have “fixed” everything long ago.

    Yet here we are.

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