Posts tagged ‘Unemployment’

05/30/2012

Jobs: Republicans Deserve No Credit

It always amusing when Republicans like Wisconsin Gov. Walker take credit for job increases, as if they personally interviewed the unemployed, one by one, and told them they were hired. While Democrats have historically helped those out of work by creating public sector jobs, Republicans don’t even budget enough money to meet the current government payroll, and they certainly are not entitled to take credit for any new government employment.

As to the private sector, governments can only indirectly stimulate economic activity through Fiscal Policies, which increase government spending. Since Republicans again routinely vote against job stimulus bills, they cannot legitimately take credit for any employment the government may trigger in the private sector.

When politicians like Republican Gov. Perry claim they added 1 million new jobs in Texas, they try to take credit for something they did not do, since they added no public sector jobs, and stimulated no private employment, through state budgeting.

While Gov. Romney argued jobs are established in the private sector, and not in Washington, he repeatedly failed to explain his theory that only those who understand “how the economy works” can create employment. The truth is merely understanding “how the economy works” is not a formula for job creation. Slogans like: “to create jobs, you have to have had one,” sound great, but insult our intelligence, since they explain nothing.

What is funny is when politicians like Romney, Perry, Huntsman, Bachmann, Ron Paul, Gingrich, and all the others, repeat the standard Republican talking points that jobs can be created by eliminating regulation, lowering taxes, and repealing Health Care.

Just how would the elimination of regulations create jobs? Have you ever thought about it? The right wing repeatedly makes this argument, but nobody pauses to think about what they are saying? If we repealed food safety rules made by the Food and Drug Administration, our health would be endangered for sure, but how would that create jobs, except perhaps in emergency rooms? If we eliminated air safety rules promulgated by the Federal Aviation Administration, we may have more plane crashes, but explain the job creation theory, because the connection is not at all obvious.

Lowering taxes to create jobs is another interesting theory. President George W. Bush tried it in a big way, as he dramatically cut taxes for the wealthy, and what happened? 4 million lost their jobs in 2008, in the six months before President Obama took office. Bush’s cuts sounded good to the wealthy, but if the policy had worked for all of us, the rich would have used their new wealth to invest in job creation, but they obviously did not do that.

How would the repeal of the new Health Care law increase jobs? If the nation will be adding health coverage for 40 million people, one need not be a rocket scientist to understand that a countless number of jobs will necessarily be created to take care of them. The right wing theory that repealing the law would somehow add jobs is totally baseless and illogical.

While Republicans pay lip service to unemployment, saying it is a tragedy that affects millions, they avoid direct solutions like public works hiring projects, and oppose government stimulus plans. Reducing taxes for the rich, eliminating unspecific regulations, and making other reforms not even remotely related to jobs, is no answer. The very least the right wingers and Republicans could do is avoid taking credit for jobs, since they certainly have no right to claim credit for them.

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05/09/2012

Obama Inherited the Great Recession

The way many Republicans and right-wingers talk about the American economy, one might think the Great Recession of 2008 was somehow single-handedly caused by President Obama, but in case we have forgotten, the crash occurred under the watch of President George W. Bush, and when he vacated the White House in Jan. 2009, he left behind several major economic problems.

OBAMA NOT TO BLAME: While Gov. Romney repeatedly said during the Republican debates, he did not blame Obama for the Great Recession, he dishonesty suggested Obama’s policies were somehow responsible for making it deeper, and causing it to go on longer than it should have.

WHAT WOULD ROMNEY HAVE DONE? But what would Romney have done if he had been President in Jan. 2009? What if he had inherited the Great Recession?

HOUSING CRISIS: The housing market had collapsed, as the value of millions upon millions of homes, all across the country, had dropped to roughly half their previous values. Many suddenly realized they owed far more on their mortgages than their homes were worth. Their residences were considered “underwater.” As the Fed used Monetary Policy to keep lending interest rates low, Obama instituted a homeowners program to allow refinancing at lower rates. If Romney would have been President, he would have taken no action to get private homeowners out from their underwater status. It is just wrong to suggest millions of homes could have recovered from their depressed values in just 4 years.

BANKING MELTDOWN: Banks and some insurance companies were collapsing as the Bush Administration, followed by Obama, did everything they could to shore them up with government bailout loans. While it is now easy to say we should have just let them go bankrupt, the ripple effect of a free market free-fall would have been catastrophic. A hands-off policy would have triggered another Great Depression, with major economic failures in all economic sectors, bringing record levels of unemployment.

AUTO BANKRUPTCY: The recession caused General Motors and Chrysler to lose so many sales, they faced bankruptcy, and no private bank was able to lend them any money. The only option was a federal bailout loan, but Romney repeatedly opposed any financial help whatsoever for the beleaguered auto industry. If he had been President, these major industrial employers would have gone bankrupt, and the ripple effect would have killed thousands upon thousands of additional jobs at component part factories throughout the industrial Midwest. Once again, inaction would have turned the Great Recession into another Great Depression.

WALL STREET CRASH: Obama inherited a stock market that had crashed, and a Wall Street trading system that was dealing in unregulated derivatives, contributing greatly to the problem. While Democrats took action by passing the Dodd-Frank bill to eliminate financial abuses, the Republicans held firm to a hands-off business as usual approach. What would Romney have done?

HIGH UNEMPLOYMENT: When Obama took office, the level of unemployment was literally sky-rocking by the hour. Obama did what any reasonable President would have done, by signing a job stimulus bill, designed to help people get back to work. While the federal government used Keynesian economics through deficit spending to prime the pump, Republican Governors in nearly 30 states did exactly the opposite, which was counterproductive, by laying off people, and making the recession worse.

A pure capitalist total free market response to the Great Recession would have triggered a Great Depression. The history of the 1929 Stock Market crash, and the subsequent four years of inaction under President Hoover, proved that point. Governments must do what they can to help the nation out of a deep recession, and it appears Obama did as good a job as any President could have.

01/19/2012

Republican Debate: S. Carolina (1-16-12)

DEFENSE SPENDING: When Ron Paul was asked if his policies would eliminate military jobs in South Carolina, he said he wants to cut spending overseas. Spending 1 billion on an embassy in Iraq, he said, is not defense, it is waste. He would follow Eisenhower’s admonition about the military-industrial complex, as he said, we don’t need 900 bases in 130 countries. Romney wants a military so strong no one would test it. He apparently believes our navy is now smaller than it was in 1917, and our air force is smaller than it was in 1947. (Does he really think this?)

FOREIGN POLICY: We should declare war before getting into one, Paul lectured. We no longer declare war. We now use the doctrine of “pre-emptive war” to start them. We don’ t even have enemies. We bomb countries and then wonder why they get upset with us. Paul was booed as he said we wouldn’t like it if other countries did to us, what we do to them. Paul was also booed when he said we should follow the Golden Rule in foreign policy.

AFGHAN: Paul wants to bring our troops home. His support is from military personnel, sick and tired of war. We are not leaving Afghanistan, even though 80% of America wants out. When Paul was in the Air Force (1962-68), he served in the Afghan-Pakistan region, and remembers the Taliban were our allies, when we opposed the Russian intervention. He warned us not to mix the Taliban, who oppose foreign intervention, with al Qaeda, who seek to kill us. Romney would not negotiate with the Taliban, because he thinks they declared war on us. He said Obama’s announcement of a withdrawal, weakened our ability to negotiate.

IRAQ: Paul said we are still in Iraq. Romney believes incorrectly we “had to” go to war “in the case of Iraq.”

IRAN: Paul said regarding Iran, they are building up for another war we don’t need.

PAKISTAN: Paul believes we have a flawed Pakistan policy.

SYRIA: Santorum said Syria is a threat to Israel. He wants to bring about the removal of Assad, but opposes U.S. intervention.

TURKEY: Perry, who lived in Turkey while in the Air Force in the 1970s, made the ridiculous and stupid argument they have been taken over by Islamic terrorists. He said their membership in NATO should be re-evaluated, and their foreign aid should go to zero. He lumped Turkey in the same category with Iran and Syria, even though these countries are vastly different.

RULE OF LAW: Paul denied he opposed the operation that killed Osama bin Laden. He in fact voted for the authority to go after him, following 911. He asked: What is so bad about capturing people? We captured Saddam Hussein, tried him, and hung him. Adolf Eichmann was also captured, given a trial, and executed. Why didn’t we try to get information from bin Laden? Gingrich said we need to just kill America’s enemies, not capture them. Romney also said the right thing for Osama bin Laden was a bullet in the head. He said we have a right to detain al Qaeda in prison, as enemy combatants, and deny them due process of law. Paul said the Patriot Act eliminated the 4th Amendment. The Defense Appropriation Act allows us to take citizens under suspicion, and hold them indefinitely, without a lawyer, or the right of habeas corpus. 260 al Qaeda have been tried and convicted Paul said, and we don’t need to give up on the judicial system. Perry said terrorists who cut off heads and hang contractors from bridges, commit despicable acts, not the Marines who urinated on corpses.

IMMIGRATION: Romney opposes favoritism or special routes to citizenship. We have to stop the flood of illegal immigration, he said. Perry would secure the borders.

JOBS: Gingrich claims he and Reagan created 16 million jobs and he and Bill Clinton added another 11 million. He wants to find ways to help the poor learn how to get a job and someday own it.

UNEMPLOYMENT: Santorum thinks it’s wrong for the federal government to uproot state unemployment programs by extending benefits. Gingrich would connect UC to job training.

LABOR: Santorum admitted voting against a right-to-work law, saying he is from a non-right-to-work state. Perry claimed the NLRB is telling South Carolina, a right to work state, what to do.

FINANCE: Perry advocates repealing the Dodd-Frank financial regulations. Romney vowed if Europe has a financial crisis, he won’t give a blank check or go over there to save their banks.

VULTURE CAPITALISM: Gingrich asked Romney to respond to questions about taking money out of companies, walking off with profits, and letting them go bankrupt. Bain invested in over 100 companies, Romney said. Four created 120,000 jobs, while others lost jobs. He said Staples, Bright Horizons, the Sports Authority and a steel company in Indiana added 120,000 jobs. He was asked about American Pad and Paper, which after being purchased for 5 million, borrowed money, took 100 million in profit, and then went bankrupt. Romney said people who lost jobs were offered new ones in other plants. Perry accused Romney of picking a company apart in Georgetown, SC and causing people to lose jobs. Romney said the SC steel mill closed down, because of dumping from abroad.

ENERGY: Romney would take advantage of our natural resources and would use oil, coal, gas, and nuclear.

HOUSING: Perry thinks the federal government via Freddie and Fannie should get out of the housing market.

SOCIAL SECURITY: Romney would make no changes for those 55 or older, but he would add a year or two to the retirement age. Gingrich said Chile has a system that yields 2 to 3 times the government payment. He would make all Americans investors.

HEALTH: Romney wants a premium support program for Medicare. He would send Medicaid back to the states. He would repeal Obamacare.

BUDGET: Romney claimed to have balanced the Mass. budget every year. Perry wants a Balanced Budget Amendment.

TAXES: Romney claimed to have reduced taxes 19 times in Mass. He said tax rates are too high. He would reduce the top rate from 35% to 25% and eliminate taxes on interest, dividends and capital gains. When asked if he would release his tax returns, he said he had not planned on it, but maybe in April, if he becomes the nominee. Perry said the highest federal income tax rate should be 7%. He would have a flat tax of 20%, but would allow home mortgage, local taxes, and charitable deductions. He would get rid of capital gains taxes. Santorum wants just a 10% and a 28% rate. He would cut corporate taxes from 35% to 17.5%. Manufacturing would be treated differently, because they are in competition with the rest of the world. Gingrich wants a flat tax rate of 15%. Paul would reduce income taxes to zero.

DISCRIMINATION IN LEGAL SYSTEM: Paul said blacks are imprisoned at a rate four times greater than whites for victimless drug-related offenses.

VOTING RIGHTS: Santorum asked Romney if X-felons who have done their time should be allowed to vote. When Romney said he didn’t think former felons should be allowed to vote, Santorum reminded him that Mass allowed even those who still on probation or parole to vote, and asked Romeny why he did not try to change that law. Perry said South Carolina is at war with the federal government over their voter ID law.

CAMPAIGN ADS: Romney hoped super-PACs would run accurate ads. He favors getting rid of campaign finance laws. He wants campaigns to run their own ads, and take responsibility for them. He said he could not talk to Super-PACs running his ads.

EDUCATION: Gingrich said No Child Left Behind is a failure, as teachers teach to the test. He would eliminate Dept. of Education

ENTITLEMENTS: Romney thinks Obama is making the U.S. an entitlement society, another European social welfare state.

POVERTY/FOOD STAMPS: Santorum believes three things are need to avoid poverty: a job, high school diploma, and marriage before having children. He claims Obama no longer promotes marriage as a way of avoiding poverty. Gingrich claims 185 different federal bureaucracies deal with low income Americans. He thinks Obama wants to maximize dependency. He called him “the best food stamp president in American history.” When he was asked if it was insulting to suggest black kids should work as school janitors, and blacks should demand jobs, not food stamps, he said no, to wild applause from a white audience of prejudiced South Carolina Republicans. He believes NY pays their janitors an absurd amount of money. The crowd booed Juan Williams as he asked Gingrich if he was belittling racial minorities about a lack of a work ethic, and by saying Obama was a food stamp president. Gingrich said more people than ever went on food stamps during the past three years of the Obama administration.

RELIGION: Perry thinks Obama is at war against organized religion. He claimed the Catholic Church cannot receive federal funds, because of their position on abortion.

GAYS: Romney said he supports equal rights regardless of sexual orientation, but he has always opposed gay marriage.

GUNS: Gingrich accused Romney of signing a ban on assault weapons and of increasing fees on gun owners by 400%.  Romney said the Mass law was supported by both sides. Santorum said his support for trigger locks and background checks was backed by the NRA. He banned lawsuits against gun manufacturers, where injuries were sustained despite proper use of a firearm. Paul said we should not have national tort law, since these issues should be dealt with by the states. Santorum said lawsuits would have gone forward in liberal states, if there was not a national ban.

ABORTION: Gingrich opposes abortion and China’s one-child policy.

09/30/2011

Immigration Affects Jobs and SS Funding

Although the U.S. Constitution expressly delegates to the national government the power to legislate over Naturalization, states such as Arizona and Alabama, have been writing their own laws to deal with immigrants, which are being challenged in the federal courts.

On Sept. 28, 2011, a federal judge in Alabama upheld part of a state immigration statute that checks the status of public school students, but threw out other parts, since a state may not override the federal government on naturalization topics.

The judge has not yet ruled on whether Alabama can make it unlawful for an illegal alien to: 1) solicit work; 2) attend public colleges; or 3) prove legality by any means other than federal verification. She has yet to decide on whether anyone may: 1) transport or harbor illegal immigrants; or 2) stop on a road to hire temporary workers. She has yet not addressed whether businesses may: 1) hire illegal immigrants in place of legal workers; or 2) deduct their wages from corporate tax returns.

In any event, from the issues raised, it is clear lawmakers in Alabama are opposed to illegal immigration. A more interesting question however is whether they would support an increase in legal immigration, since the flow of foreign workers to America profoundly affects our economy, one way or the other.

On the one hand, increasing barriers to illegal and legal immigration shrinks the work force, and reduces unemployment. In the roaring 1920s, the door on immigration was slammed shut, and almost any American who wanted a job, was able to get one.

On the other hand, when the Social Security System began in 1935, most families had seven children paying in for every recipient taking money out. Since Americans now have only one or two children, the number of above-board workers paying taxes into the Social Security Trust Fund must be increased, by welcoming more legal immigrants in our work force.

We have a choice. Block all illegal immigration, and also refuse to increase legal immigration, hoping this will put Americans back to work, without contracting the economy; or we can increase legal immigration, expand the economy, and shore up the future of Social Security. There is no neutral position, for no matter which path we take, there are economic consequences.

09/13/2011

Republican Debate Tampa (9-12-11)

Since the Republicans debated less than a week ago, CNN hyped up this one by introducing the candidates like starting players in a sporting event, and a woman sang the National Anthem, as if a game was about to start. If tax dollars could have been wasted on flying jets overhead, they would have done that too. But the big opening did not save the debate from becoming the usual bashing of President Obama, filled with generalized political philosophy.

FOREIGN POLICY: Ron Paul said he was tired of all the militarism and waste associated with it. We have 900 bases around the globe in 130 nations, he said, and we cannot be the world’s policeman. It angers foreigners, Paul said, when we occupy their lands. Santorum accused Paul of blaming 911 on the U.S., while the former Senator seriously thought the hijackers only wanted to kill us because we stood for freedom. Paul had to educate Santorum, saying we were attacked on 911, because we had troops in Saudi Arabia, and allowed the Palestinians to be harmed, comments that triggered boos from an obviously uninformed audience. Perry declared it is time to bring the troops home, but contradicted himself saying, we needed to maintain a presence. Huntsman said it’s time to get out of Afghanistan. Gingrich was concerned with North Korea, trade with China, Iran, and a civil war in Mexico.

SOCIAL SECURITY: Ron Paul said Social Security retirement funds should not have been used to fight wars. Social Security is an essential program, Romney said, and taking funds from it for other purposes was criminal. Perry said it must be saved for seniors and transformed for future recipients, even though in his book he wrote it should not be a federal program. Cain wants young workers to have options. Bachmann said Medicare is bankrupt and retirement must be reformed. Gingrich said more than 70 billion of Medicare is paid to crooks, no changes should be made as to seniors, but young workers need a right to choose. Santorum said older voters just want truth. Huntsman claimed to have the answers.

PRESCRIPTION DRUGS: As to prescription drugs, Perry and Romney would not repeal the program which was started under George Bush. Paul said we first need other reforms, like stopping wars overseas. Bachmann said we cannot provide everything for everybody.

HEALTH CARE: Romney tried to distinguish the Massachusetts plan from the federal approach. He said patients do not know how much their care costs, and showed how out-of-touch he is with average people, as he advocated co-insurance payments, which most Americans unfortunately already have. When the candidates were asked if they want people with no health insurance to die, physician Ron Paul said no one was turned away when he was a doctor, as churches took care of them. Bachmann said we should not force people to buy insurance. Cain wanted Obamacare repealed, saying we need market reforms.

UNEMPLOYMENT & JOBS: Regarding employment, Huntsman said it is a tragedy affecting millions, and we need to create jobs through regulatory reform, repealing Obamacare, changes in the tax code, energy independence, and an end to corporate welfare. Romney put the audience to sleep as he rattled off seven things he would do as to taxes, trade, energy, the budget, and so on. Perry claimed Obama created zero jobs, and he should not spend money we do not have. Perry claimed to have created jobs in Texas, while the nation lost them. He thinks people will risk capital and create jobs, if regulations and taxes were lowered. Bachmann thinks more free trade will create jobs. Gingrich correctly said most jobs are created by the American people and not the government. Paul said we are wasting money overseas, noting it cost 1 billion to build an embassy in Baghdad. Huntsman claimed to have had the best managed state as he said we must create an environment favorable to business.

IMMIGRATION: Texas Gov. Perry, whose state has a 1,200 mile Mexican border, said the federal government must secure it, but it is not realistic to maintain a wall from Brownsville to El Paso. Perry, who opposes amnesty and the Dream Act, had to defend his decision to allow illegal aliens to receive in-state tuition, as the Tea Party audience booed. He said he wanted them in college instead of doing nothing on welfare. Former Utah Gov. Huntsman would secure the border, but gave Drivers Licenses to illegal aliens. Romney said build a fence, but enforce the law and give no tuition breaks or Drivers Licenses to illegal aliens. Santorum wants more fences and security, more legal immigration, and English spoken by everyone. Although Bachmann wants aliens to learn English and History, no one suggested she learn history. Huntsman said Homeland Security needed to be fixed.

FEDERAL RESERVE: Cain apparently served on the Kansas City Federal Reserve and said we need to focus on sound money. Bachmann would not re-appoint the Fed chair, saying he should not use his unlimited power to make loans to private businesses and foreign countries. Perry said we need a strong dollar and the Fed should not be used to cover up bad federal policies. Romney wants a strong currency, Fed oversight, but he did not want Congress in charge of the currency.

TAXES: Cain would throw out the entire tax code and replace it with a flat 9% tax on businesses and sales. Santorum would attract manufacturing by relieving taxes on new manufacturers. When a young man asked how much of his paycheck he should be allowed to keep, Huntsman said the tax brackets should be 8%, 14%, and 22%. Gingrich wants people to keep more of what they earn, saying GE paid no taxes whatsoever. Romney actually thought he would help the Middle Class by eliminating taxes on dividends, interest, and capital gains.

ENERGY: Cain said energy independence requires the EPA to get out of the way. He would appoint those abused by the agency.

TORT REFORM: Perry showed deep hatred of trial lawyers, as he thought tort reform would actually make a difference federally. Cain wanted the loser of lawsuits to pay the winner’s costs, not realizing the insurance industry routinely opposes such proposals.

EXECUTIVE ORDERS: Paul said Executive Orders are only appropriate when moving troops and they should never be used to legislate. Perry admitted he used an Executive Order in Texas to require a vaccine, and he should have run it by the legislature. Bachmann accused him of issuing the order, because he received campaign contributions from a drug company. She and Santorum both said government should never force people to have vaccines.

05/13/2011

Unemployment: Republicans No Help

The Republican-controlled Florida House and Senate voted to increase unemployment by cutting 4,492 state jobs. They also plan to spend 700 million less than last year. They did exactly the opposite of what most economists would do, and of course their rookie Tea Party Gov. Scott, approved of their misguided policies.

Florida Republicans should certainly know we are not out of the Great Recession, which started in 2008, when George Bush was President. What is unclear is whether they have any clue as to how to get out of it, or worse yet, whether they care. While no one expects all of them to have a college degree in economics, they should at least have studied the subject, before taking office.

When a local economy is stagnant, as ours is, state government can apply Keynesian economics, to stop high unemployment from becoming chronic. Florida could have created employment by spending more, not less. They could have used fiscal policy to grow the economy out of the recession, by creating jobs.

It is almost like the right hand does not know what the left hand is doing. While President Obama and the federal government are doing the right thing by spending for the purpose of stimulating the economy, the Florida Republicans are doing the wrong thing by budgeting less and causing more unemployment in a recession.

Unemployment not only hurts the unemployed, it harms the entire local economy. When unemployment remains high, buying and selling declines. One ripple effect is a decrease in state sales taxes. If the Republicans had increased spending, through fiscal policy, jobs would have increased. This in turn would have stimulated buying and selling, and would have increased sales tax revenues.

While the Republicans gave away 60 million in tax cuts to businesses, and forfeited another 37 million, by raising corporate income tax exemptions, from $5,000 to $25,000, there is no guarantee any of this will increase investment, or generate jobs. If wealthy taxpayers remain timid on new investments, and instead save money, there will be no resulting increase in employment.

There would have been no better public works investment project, to cure the ill effects of the recession, than the high-speed rail plan our governor foolishly rejected. Florida could have used federal dollars to construct a railroad, and could have stimulated all kinds of jobs. It’s sad, but Scott just doesn’t understand economics.

Public works projects are a much more direct and certain way of stimulating employment. During the Great Depression that started in 1929, the government provided public sector employment that stimulated the economy. Unemployment dropped from 23.6% (1932), to 16.9% (1936), and down to 14.6% (1940), before WWII itself finally brought about a full employment economy.

Next year, when the Republican Party is in Tampa for their National Convention, I am sure they will complain about Obama. When they say the President did not create enough jobs, I hope the St. Petersburg Times will remember to ask why they voted to directly eliminate state jobs, spent millions less during the Great Recession, and thwarted Obama’s efforts to turn things around.