Losing Jobs, The Conservative Way

Bouncing around from subject to subject, Rush Limbaugh Fridaycharged

We have a federal government out of control. We have demonstrated that sending all this money to the federal government bankrupts and ruins and destroys the economics of this country.

This nation is being held hostage by a small band of ideological radicals who have contempt for the American people and our economic system. Every single policy that pops out of this president's mouth, every single policy that pops out of his mind involves the federal government, federal control, federal spending, federal subsidies, federal this, and federal that.

What to make of this silliness? One website gives two definitions of "bankruptcy" which are fairly typical:

1- a federal law whereby a person's assets are turned over to a trustee and used to pay off outstanding debts; this usually occurs when someone owes more than they have the ability to repay.

2- The condition of a legal entity that does not have the financial means to pay their incurred debts as they come due.

Both definitions infer that bankruptcy occurs only as an entity (such as the U.S. government) lacks the ability to pay its debts. The federal government now can pay its debts and was able to pay its debts prior to the debate on the debt ceiling. It is Rush Limbaugh, Michele Bachmann, and their pals who, opposing raising the ceiling, attempted to render Uncle Sam unable to pay its bills and turn it into a deadbeat. A country with its own currency cannot go bankrupt unless it chooses to. Thus, "sending all this money to the federal government bankrupts" the nation represents either a monumental failure of understanding of basic macroeconomics or another Limbaugh lie. At $50 million a year, utter ignorance is no option.

But the thrust of Rush's tirade lies in his charge that government regulation, the ARRA, and public spending generally prevent economic growth, especially job creation. He claims "Ladies and gentlemen, the only thing standing in the way of economic recovery, economic opportunity, job growth, wealth creation, the only thing standing in the way is Barack Obama himself."

Except- no. The employment picture, as the graph above from DailyKos indicates, had been improving- until this year's spending cuts took effect, and job creation took a nosedive. It was precisely the GOP's demand (admittedly joined by President Obama) which turned an apparent, albeit modest, recovery around.

It doesn't end there. Intentionally deceiving his audience, Rush argues "When we can't produce a single job in the month of August....." Except that jobs were created (Bureau of Labor Statistics table, here) -17,000 of them. Given, however, that 17,000 were lost, there was a net gain of zero.

That might seem to be merely a technical point, but isn't. "When we can't produce a single net job....." is more accurate but does not as effectively grab the attention of the listeners. In addition, reference to "net" jobs might open a Pandora's box for a conservative talk show host. And in that box is a startling fact: 17,000 jobs were produced- in the private sector- while 17,000 government jobs were lost. And that kills the charge "every single policy that pops out of his mind involves the federal government, federal control, federal spending, federal subsidies, federal this, and federal that." Matt Yglesias explains

The striking zero result should galvanize minds, but it’s worth noting that this has been the trend all year. The public sector has been steadily shrinking. According to the conservative theory of the economy, when the public sector shrinks that should super-charge the private sector. What’s happened in the real world has been that public sector shrinkage has simply been paired with anemic private sector growth. This is what I’ve called “The Conservative Recovery.” Conservatives complain about the results because the President is a Democrat named Barack Obama. But the policy result is what conservatives say they want. Steady cuts to the government sector, offset somewhat by private sector growth.

Quite a socialist, that community organizer- destroying public jobs, creating private ones.

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Corporate America, Victims

It's a charge made frequently by Rush Limbaugh. "This nation," he bloviated Friday, "is being held hostage by a small band of ideological radicals who have contempt for the American people and our economic system."

Rush did not specify who constitute this "small band of ideological radicals" because no such group is running anything these days. Tax cuts extended for the wealthy, a raise in the debt limit conditioned on domestic spending cuts, a health care bill based on a proposal by Rush's favorite think tank, the Heritage Foundation. If these are "ideological radicals" in Washington, they're ones embarrassingly conservative.

More interesting, though, is the "contempt for the American people" this band has. Because it is the self-identified "El Rushbo" who on Friday (as he does ad nauseum) complained that President Obama "takes money from some people and some industries, redistributes that money to those who do not create, who do not work, and have not earned it, because he believes they are the ones who have been screwed."

Limbaugh on previous occasion(s) has made clear who comprise that second group: anyone (except corporations) who receive a subsidy from any branch of the government, whether they be poor children benefiting from a food stamp program, the poor receiving services through Medicaid, the elderly obtaining health care through Medicare, or Americans lacking a job receiving unemployment compensation. And he made clear on Friday who his favored "some people and some industries" are: "Now, corporations pay a 35% tax rate in this country," Rush claimed. "It's the highest in the world. They pay a ridiculously high federal corporate tax for the most part based on what other countries tax their companies."

If Rush had said "their statutory tax rate" or even "their tax rate," it would have been pretty slick. Instead, he decided to claim "corporations pay a 35% tax rate," which is identical with the statutory tax rate. Surely, even if Limbaugh believed that corporations pay a lot compared to their counterparts in other industrialized nations, he would know that it is not the full 35%. After all, he is fond of their loopholes and and will defend to 3:00 p.m. eastern time their right to keep them.

It is a lie that won't die, despite heavy evidence. As the table above indicates, the effective tax rate for American corporations, while higher than in Russia, France, and the United Kingdom, is lower than that paid in Germany, Canada, India, China, Brazil, Japan, and Italy. And as a percentage of GDP, corporate taxes are lower in the U.S.A. than in 24 of these other 25 nations of the Organization for Economic Cooperation and Development (OECD), exceeding those only in Iceland (Figure 2.7 here).

"Contempt for the American people?" It's a trait Rush Limbaugh is intimately familiar with.

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Almost A Record For Limbaugh

It can pass unnoticed, this attack on "excessive regulation" which characterizes the modern Repub Party. Rush Limbaugh on Friday:

The triple threat is higher taxes, more stimulus spending, and federal regulations. All three undermine the creation of jobs.

Let's ask McClatchy about the impact of federal regulations- they "canvassed" small business owners and found

Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

"Government regulations are not 'choking' our business, the hospitality business," Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. "In order to do business in today's environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order"....

McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.

Their response was surprising.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

During the Clinton Administration, which featured high taxes Republicans cried would prompt a recession, 22.7 million (net) jobs were created; during the Bush administration, while the President. repeatedly cut the income tax rate, 1.08 million (net) jobs were created. Estimates vary, but apparently the stimulus created 1-3 million jobs, net Now, we learn that small business, the primary engine of job creation in the modern economy, is not severely hampered by government regulation.

That puts America's favorite radio talk show host at 0-3 in one sentence. Even for Rush Limbaugh, that's quite impressive.

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Hating Jobs

Rush Limbaugh exclaimed

Well, we are a nation of individuals; we are a nation of entrepreneurs; we are a nation of wealth creators; we are a nation of hard workers.

This makes him sad- not the part of individuals, entrepreneurs, or wealth creators- the part of "hard workers." In a different rant on the same day, Limbaugh said

Jobs, stimulus spending, federal regulations, those are the three things that are killing this country.

That's right. Along with two of the three things Rush (and most of the party he leads) regularly condemns (the other being "taxes"), there is another evil: "jobs."

Admittedly, Rush continued, "Those are the three things that every Republican needs to focus on." But if placed into this context, the statement about jobs ought to be put into the context of everything Limbaugh says about employment- opposition to economic stimulus, support for offshoring, contempt for public sector jobs and everyone holding them, and more. And it's clear, then, that when Rush Limbaugh says "jobs" are "among the three things that are killing this country," it's no mistake.

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Another Year, Another Attack

Jennifer Gonnerman of The New York Times writes of a New Yorker who is not dissimilar from many workers during this prolonged economic slump:

On June 25, 2010, Frederick Deare punched out for the last time from his job driving a forklift at the Old London factory in the Bronx. That summer, everyone at the plant was being laid off: the oven operators, the assembly-line packers, the forklift drivers, the sanitation workers. Total jobs lost: 228. Old London, the snack manufacturer that invented the Cheez Doodle, wasmoving its operations to North Carolina. At 53, Mr. Deare, known as Freddy or Teddy Bear to his co-workers, would have to find a new job.

After a period of unemployment, Deare found a new job, and got laid off again. But then he heard about a job opening: forklift driver at a coffee warehouse in Yonkers.

He got an interview, and the supervisor he met with sounded optimistic about his chances of being hired. But there was no formal offer. Day after day went by. For three weeks the wait stretched on. This time, however, he got the job. And it was a union job, with benefits. He started on April 11 — 290 days after Old London laid him off.

“You’re speaking to a happy man,” he said after his first day. “I am in my glory. I mean, today was wonderful.”

There was only one downside: The work paid $10 an hour, 40 percent less than he had made at Old London. After taxes, his paycheck was even less than the unemployment benefits he had been collecting. But he tried not to dwell on this. “I don’t let it bother me that I’m getting less, because of the simple fact I have something, and a lot of people have nothing,” he said. “You have to crawl before you can walk.” Four and a half months later, he is still on the job.

There are a lot of lessons here. Digby, for instance, comments

Everybody sees this, whether they're employed or not. And it's made working people very accommodating. Being scared you might never find a decent job again will do that to a person.

It's great for employers, though.

That might be one of the reasons there was no net job creation in August while corporate profits continue to soar. However, it also brings to mind comments of various Republicans during the debate last year over extension of unemployment benefits. Then-New Hampshire Senator Judd Gregg contended unemployment compensation "encourages people to, rather than go out and look for work, to stay on unemployment" while to Sharron Angle, who would be defeated by Harry Reid, it was "this system of entitlement (which) has caused us to have a spoilage with our ability to go out and get a job."

Running, successfully, for a Senate seat from Kentucky, Rand Paul patronizingly remarked "As bad as it sounds, ultimately we do have to sometimes accept a wage that's less than we had at our previous job in order to get back to work and allow the economy to get started again. Nobody likes that, but it may be one of the tough love things that has to happen. Wisconsin's Ron Johnson, who would go on to be elected to the U.S. Senate, former House Speaker Newt Gingrich, and former House Majority Leader and criminal Tom DeLay all maintained that unemployment benefits discourage work. The last even claimed "in fact there are some studies that have been done that show people stay on unemployment compensation and they don’t look for a job until two or three weeks before they know the benefits are going to run out.”

These "some studies" appear to be one 1990 study, largely debunked by a 2007 study (The Spike at Benefit Exhaustion: Leaving the Unemployment System or Starting a New Job?"), as Jonathan Chait explains here. Researchers David Card, Raj Chetty, and Andrea Weber found that when unemployment benefits ran out, individuals would discontinue submitting to the government the information which would have qualified them prior to expiration of benefits. No longer part of the unemployment compensation system, they would appear to have obtained work.

Most unemployment can be explained far more simply- more available workers than jobs, a 4.7:1 ratio at last accounting. Attention, however, has shifted to the tax, with many conservatives, posing as opponents of high taxation and sometimes even provoked to righteous indignation at mere mention of the word "tax," whining that too few Americans pay income taxes. Corporate loopholes remain sacrosanct in the drive to make the tax system "flatter." No one, they imply, should be spared having to pay income tax because of the child tax credit, earned income tax, 0r because they're elderly with Social Security their only source of income.

Republicans helpfully remind us that everywhere there are Americans collecting unemployment to avoid work or working without contributing to the "shared sacrifice" endured by those long-suffering "job creators."

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Boosting the Presidency, Again

When hedge fund executive turned CNBC reporter Rick Santelli delivered his famous rant of elitism from the floor of the Chicago Board of Trade in 2009, it marked the beginning of the modern tea party movement. Although Republican politicians- most notably presidential candidate George Herbert Walker Bush- had supported altering the United States Constitution for almost anything, Santelli's rant prompted the mistaken idea that the far right of the Republican Party is especially fond of the United States Constitution.

Santelli claimed "I'll tell you what, if you read our Founding Fathers, people like Benjamin Franklin and Jefferson..... What we're doing in this country now is making them roll over in their graves." In March, 2010 The New York Times would summarize "the Tea Party movement has already added something distinctive to contemporary political discourse. It has made the Constitution central to the national conversation." The movement gave rise to losers such as Sharron Angle and Christine O'Donnell, but also to winners such as Mike Lee, who, after state conventioneers ditched incumbent Bob Bennett, eventually became the GOP's U.S. Senate nominee and was elected in November 2010..

Lee was representative of the victorious candidates actively supported by the tea party movement. As a candidate, he had supported amending the Constitution to mandate a balanced budget, impose term limits on members of Congress, and overturning the 14th and 17th Amendments (though conceding that the latter wouldn't be scrapped). When the 112th Congress convened in January, 2011, House Republicans, now in charge, began by reading the text of a constitution they found in so many ways lacking.

And now, this. Todd J. Gilman of the Dallas Morning News reports that GOP presidential candidate Rick Perry, onetime supporter of secession, wants to end lifetime tenure for Supreme Court justices. It would entail a measure so favored by the party of limited government, an amendment to the United States Constitution.

It may not be the worst idea for altering the Constitution. The Repub Party still is hot for a balanced budget amendment (a vote on which was guaranteed by the recent debt limit agreement), which in one of its incarnations former President Reagan domestic policy adviser Bruce Bartlett termed "quite possibly the stupidest constitutional amendment I think I have ever seen."

The real danger to an amendment limiting the terms of judges on the highest court in the land, however, might lie in what it would portend otherwise for a Perry presidency.

Soon after Barack Obama assumed the presidency, then-White House counsel David Craig, addressed what the NYT described as "an executive-privilege dispute over Congressional subpoenas of former White House aides to Mr. Bush over the firing of United States attorneys." "The president is very sympathetic to those who want to find out what happened," Craig explained. "But he is also mindful as president of the United States not to do anything that would undermine or weaken the institution of the presidency.".

True to the word of his aide, Obama has, Glenn Greenwald noted in July, "continued Bush/Cheney terrorism policies- once viciously denounced by Democrats- of indefinite detention, renditions, secret prisons by proxy, and sweeping secrecy doctrines." He has expanded that power "by waging an unprecedented war on whistleblowers, seizing the power to assassinate U.S. citizens without due process far from any battlefield, massively escalating drone attacks in multiple nations, and asserting the authority to unilaterally prosecute a war (in Libya) even in defiance of a Congressional vote against authorizing the war."

Support any or all of those policies- I have not been offended by most of the drone attacks nor the Libyan intervention (though the War Powers Act should have been invoked)- but is undeniably not only an expansion of the national security state but also of the powers of the Executive Branch, absolutely and relative to the other two branches of government. And now, witnessing an enlargement of presidential power neither anticipated, nor envisioned, by the Founders, Rick Perry argues "we should take steps to restrict the unlimited power of the courts to rule over us with no accountability."

The unaccountable Courts! It's as if Rick Perry, eager to be the standard-bearer of the party which ignores also the dominant role of the financial industry in nearly bringing this country to it knees, has not lived through the past twelve years.

It is all to easy to conclude that this is not about reverence for the Constitution, which Rick Perry supports dramatically altering with a balanced budget amendment, but about magnifying the power of an Executive Branch he hopes to lead in seventeen months.

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The Usual Leadership

President Obama's speech on job creation will not conflict with the GOP presidential debate to be held on Wednesday, September 7. After Speaker of the House John Boehner complained about the President addressing a joint session of Congress at the same time as the debate, Obama moved his speech to the following night, Thursday.

September 8 is opening night for the National Football League. The President was loathe to place football fans, some of them voters, in the position of having to decide whether to watch a presidential address or a football game , or instead figured most would opt for the latter. Presidential press spokesman Jay Carney pledged "I can assure all you football fans that he will be completed before kick-off."

Good sense of priorities that, because sports are far more important than a 9.1% unemployment rate. Sarcasm aside, though, the Packers and the Saints face-off may be as important as the plan likely to be announced by the White House. Obama, determined to give the GOP the ball at the 50-yard line, Monday admitted stated "These are bipartisan ideas that ought to be the kind of proposals that everybody can get behind, no matter what your political affiliation might be." Republicans are in no mood to cooperate (a mood going on its 32nd consecutive month) even with a President who, before the plan even has been announced, already has begun to compromise. Or maybe because he already has given it up. Politico reports

Some members of Obama’s economic team are pushing for aggressive proposals that reach well beyond what Republicans might support, arguing that the president needs to convey a vision, not a tactical legislative strategy, according to sources familiar with White House deliberations.

But there’s competing pressure for the president to make an offer that Republicans can’t reasonably refuse — by stacking his jobs bill with ideas they have endorsed in the past, the sources said. It would allow Obama to position himself as he did during the debt ceiling negotiations, as a realist anxious for compromise.

It's not as if the White House is proposing real solutions which might reverse the economic slump and result in the creation of reasonably well-paying jobs. "Members of Obama's economic team" are conceding, going in, that the President is more interested in appearing centrist ("a realist") than in effective measures. With the benefit of hindsight, they couldn't possibly believe that Republicans will see a jobs bill "with ideas they have endorsed in the past," accept the victory, and go home. And there is little reason the GOP should, as described by Michael Tomasky:

I hope—alas, against hope—that the White House is keeping a scorecard of this year so far. That scorecard reads Republicans 2, Obama 0 (the threatened government shutdown and the debt deal), covering a period during which the president’s approval ratings have sagged by about 10 points, and this even though he iced Osama bin Laden. What the Republicans are doing is working.

The last Democratic President (or the last time there was a Democratic president) once famously noted "it's better to be strong and wrong, than weak and right." Barack Obama has had the chance to be strong and right; so far, weak and wrong has been his preferred style.

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