Popular Economics Weekly
Can the Republican Party survive the Iowa and New Hampshire primaries and either Donald Trump or Senator Cruz winning? Can the Grand Old Party survive and thrive on a platform that opposes every relevant issue today — whether it’s voting rights, women’s rights, immigrant rights, global warming, racial discrimination, greater income equality, health care for all — even hope to corral more votes than those of the extreme right wing of their party, which means standing for nothing that would boost productivity or growth?
Why are these issues so important? Because the economic “malaise”, or whatever pundits want to call the tepid growth since the Great Recession, is precisely due to the Party that only compromises when it has to, even on taxes. And now we have the just reported Q4 GDP of 0.7 percent, after 2.0 percent growth in the third quarter.
Their anti-everything positions and policies come out of an incredible ignorance of how government and economies work. Maybe it’s the willful ignorance of those presidential candidates wooing the Tea Party, but the tax cut mantra of conservatives has literally damaged those factors that make US more prosperous. Cutting spending on schools, infrastructure and the environment — much less opposing raising the minimum age — literally cuts into work efficiency, slowing down learning, transportation of goods and services, and the damage from environmental catastrophes. The Flint drinking water crisis is just the latest example of such ignorance.
It isn’t government workers that build the roads, bridges, schools, and repair environmental damage that’s paid for with our taxes. It’s private industry that profits. Caterpillar Industries, for instance, says that just passage of the $305B Fixing America’s Surface Transportation Act, or the FAST Act transportation bill will add some 4,000 workers to its payrolls and $millions in profits.
The ‘socialist’ Bernie Sanders is right in saying that tax cuts from President Reagan to Bush II have benefited the wealthiest, but he doesn’t explain the why of it very well. So much of the opposition to taxing the wealthiest and corporations that evade or pay no taxes comes from that ignorance of what generates economic growth, and how government is there to aid in that growth.
Bernie knows, for instance, that the current tepid economic growth still boosts the wealth of the wealthiest investor class, because they make most of their money speculating on Wall Street, but not the wages of 80 percent of the working force.
Whether it’s the massive hoarding of profits by corporations (more than $5 trillion in cash or cash equivalents at last count, according to the St. Louis Fed), or massive CEO salaries ($36 million in 2015 for JP Morgan’s Jamie Dimon), these profits aren’t being invested in productive enterprises for a reason.
Iowans that voted in the primary caucus are a fickle lot. And they seldom pick a president. So it may not matter. The Donald doesn’t so much oppose the most important issues as take both sides when it suits him. “I am malleable,” said Trump to Maureen Dowd in her latest New York Times Op-ed. “The head of Russian (Putin) calls me brilliant and you want me to disavow it? What are you smoking?”
“He rejects the idea that he’s too easily swayed by compliments or slights,” continues Dowd. “Maybe because Trump is so easily aggrieved himself, he had bonded with legions of aggrieved Americans.”
Senator Cruz prefers to carpet bomb (his term, not mine) his enemies, by simply ignoring the facts. He wants no path to citizenship for immigrants, even though he’s a Canadian born immigrant himself (and half of those 11 million ‘undocumented’ immigrants are actually here legally). Rather than decreasing income inequality, he opposes extending unemployment benefits and raising the minimum wage by “fiat”, which means by executive order. How would he raise it, then? He wouldn’t, in other words.
He led fight to shut down the federal government in 2010, which led to the spending sequester and downgrade of U.S. Treasury debt for the first time in history by the S&P rating agency to AA+. Senator Cruz is an anti-government bigot in every undemocratic way. It’s hard to say if he’s really for anything, other than carpet bombing the Middle East, until the “sands glow red”, in his words. He has read the Book of Revelation too many times with its end of the world prediction.
So it’s really hard to say what has caused such a massive ignorance of how and why our economy grows by one political party. But until the Grand Old Party realizes this, our economic growth ‘malaise’ will only continue.
Harlan Green © 2016
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