There is a great contrast today in the NYTimes Opinion Section. n one hand David Brooks speaks of the need for the audacious, Ayn Randian Job Creators championed by the Republican Party. In contrast, Paul Krugman argues that Republican policies are designed for the almost exclusive benefit of the wealthy with lower taxes on corporate profits, capital gains, and executive salaries being a key component of the Romney/Ryan economic policy for creating jobs. This is just a tired repeat of the Trickle Down Job Creation strategy that fails to take into account:
1)the disdain US Business increasingly has for its workforce.Labor cost are to be minimized by outsourcing to lower wage rate economies.Prime example, Apple’s Steve Jobs created 400,000 manufacturing jobs in China and Southeast Asia making his smartphone and tablets Steve declared Americans simply would not accept the low wages and willingness to work draconian shifts;
2)the hit or miss proposition in trickle down ventures where for every eBay or Paypal there are dozens of Pet.com busts;
3)high cost of finance as Too Big Too Fail financial institutions get lavish positive returns on risky bets that pay off; but pawn the bad times and failures on the public with increasing frequency as seen in the Saving Loans Disaster of the 1990’s, the rampant DOT.COM bankruptcies of the 2000-2002 eras and then the 2007-2009 Financial Debacle and Great Recession that has cost John Q. Public $3trillion and counting;
4)the executive suite where fairness in compensation is utterly lost as salaries 100 to 300 times the average wage in corporations amount $10s of millions in compensation continually growing and sprinkled with lavish perquisites and golden parachutes on failures;
5)the lack of targeted policy where paying jobs are the bottom line not increases in the $2trillion already salted away in corporate bank accounts.
This is the GOP cult of the Job Creators
David Brooks writes the Job Creator Mythic story:
Today, grandiosity is out of style. We’ve just been through a financial crisis fueled by people who got too big for their britches. We’ve got an online and media culture that specializes in ridiculing grand people.
Caution rules. The number of jobs created by business start-ups under President Obama is much lower than under the three previous presidents. The World Economic Forum ranks the competitiveness of nations, and the U.S. has lost ground in each of the last four years.
But, if growth is ever going to rebound, the U.S. will need a grandiosity rebound and the policies that encourage rich people with brass: immigration policies that attract people like Musk, tax rates that encourage risk and government policies that boost them along (SpaceX has benefited greatly from NASA, and Tesla received a big government loan).
Most of all, there has to be a culture that gives two cheers to grandiosity. Government can influence growth, but it’s people like Musk who create it.
Note the grandiose GOP Job Creators must be fed, coddled, and pampered – and maybe they will trickle down some jobs. And maybe not.
Paul Krugman catches the obverse. the growing GOP disdain for workers evidenced in Mitt Romney’s 47% moochers comment:
Needless to say, the G.O.P.’s disdain for workers goes deeper than rhetoric. It’s deeply embedded in the party’s policy priorities. Mr. Romney’s remarks spoke to a widespread belief on the right that taxes on working Americans are, if anything, too low. Indeed, The Wall Street Journal famously described low-income workers whose wages fall below the income-tax threshold as “lucky duckies.”
What really needs cutting, the right believes, are taxes on corporate profits, capital gains, dividends, and very high salaries — that is, taxes that fall on investors and executives, not ordinary workers. This despite the fact that people who derive their income from investments, not wages — people like, say, Willard Mitt Romney — already pay remarkably little in taxes.
Where does this disdain for workers come from? Some of it, obviously, reflects the influence of money in politics: big-money donors, like the ones Mr. Romney was speaking to when he went off on half the nation, don’t live paycheck to paycheck. But it also reflects the extent to which the G.O.P. has been taken over by an Ayn Rand-type vision of society, in which a handful of heroic businessmen are responsible for all economic good, while the rest of us are just along for the ride.
In the eyes of those who share this vision, the wealthy deserve special treatment, and not just in the form of low taxes. They must also receive respect, indeed deference, at all times. That’s why even the slightest hint from the president that the rich might not be all that — that, say, some bankers may have behaved badly, or that even “job creators” depend on government-built infrastructure — elicits frantic cries that Mr. Obama is a socialist. …
The point is that what people are now calling the Boca Moment wasn’t some trivial gaffe. It was a window into the true attitudes of what has become a party of the wealthy, by the wealthy, and for the wealthy, a party that considers the rest of us unworthy of even a pretense of respect.
The GOP disdain for workers has an enormous downside. For the past 50-60 years, the US Economy has been driven by 70% or greater Domestic Consumption. The strength and health of the US economy has not been business exports or investments nor government expenditures; but rather household consumption and spending. Now the GOP wants to cook the Golden Goose, cut the wealth and ability of a working middle class to continue to drive forward the US economy with healthy, wage supported spending.
Such is the folly of the GOP. But even more amazing is that GOP is able to adopt this policy and still get a sizable chunk of its base to continue to support its candidates and leadership. This occurs despite the fact that many of the GOP base supporters are among Romney’s 47% . Talk about super dupers and outright class warfare.