June 5, 2011
One of the Republicans rhetorical devices in the battle over national economic policy is to proclaim their devotion to the “job creators”. “Job creators” is the latest euphemism for capitalists and capitalism, a.k.a. the free enterprise system. House Speaker John Boehner urged reporters (New York Times, June 3, 2011) to “talk to job creators around the country like we have” who complain about “overtaxing, overregulating, and overspending”. Texas Republican Jeb Hensarling claimed that the administration “is threatening our job creators”. This term certainly is ironic since American businesses are not creating jobs even though their profits have recovered from the Great Recession, the effective tax rate on corporations is the lowest since 1950 and lowest among the OECD (according to the Congressional Budget Office and the Office of Management and Budget), unions have been all but destroyed, there is an enormous pool of cheap labor, and the last ten years were marked by deliberate deregulation of finance and industry.
Workers on the other hand are being held up: they are clamoring for jobs that are not being created. Some 11 million jobs are needed to return to the pre-recession unemployment rate (according to Heidi Shierholz, Economic Policy Institute, June 3, 2011), which itself was too high. The rate of job creation this year is far below the rate needed to put people back to work, not to mention create additional jobs for the young people entering the job market for the first time.
The administration’s tepid gestures toward economic stimulation have been met with scorn. After a meeting with President Obama, House Majority Leader Eric Cantor complained that “the president talked about a need for us to continue to quote-unquote invest … and for a lot of us that’s code for more Washington spending”. (New York Times, June 1, 2011) Obama has proposed investments in education, training, industrial research, and infrastructure, all of which are part of his proposal for long-term fiscal health.
Yet the President offers only a tepid defense that his plan for government action is consistent with the American tradition. He has not pushed back. One might argue that Americans have learned the hard way that corporations will not save them: it’s the federal government that has always stepped in to prop up the corporate economy and mitigate the inequalities that are part of the structure of a privately-owned economy. This lesson is easy to teach because all Americans just witnessed the government saving the auto companies and banks.
If they President and the Democrats cannot make a stronger case, the Republicans’ austerity drive will be a self-fulfilling action in two ways: without government spending and public job creation and without regulations to keep capitalists on the high road, the economy will head toward a double-dip recession, just in time for the presidential election, which will provide the perfect conditions for a Republican victory.