The left and right of the Beltway Consensus agree that we should do something about the depression level unemployment in the US. They just don’t want to do anything that might work, like, having the government create jobs. Bernstein recently wrote that we need to focus on job creation. But, he starts by saying we can’t have a program that creates jobs by rebuilding infrastructure so there is no point in talking about it.
Bernstein knows what we should do, but politicians aren’t going to do it. Therefore, he says, we should come up with some third or fourth best idea and try to sneak it past the Tea Party Congress and the political team at the White House. That isn’t going to happen either. This administration will refuse to do anything suggested by progressives, especially if it is smart, or good politics.
Republican Eric Cantor offers a plan that he cut and pasted from the Reagan era: cut regulations, cut individual and corporate taxes, and pass more treaties like NAFTA. Oh, and reform the patent process. The Republican obsession with tax cuts is reflected in this stunning article by Ramesh Ponnaru. He admits there won’t be any more tax cuts.
The huge deficit makes tax-cut promises seem impractical.
[Republicans] also worry that cutting middle-class taxes will leave high earners paying an even larger share of income taxes than they already do, and that increasing their burden will harm both economic growth and the cause of limited government.
That last clause sets a new level of craziness for the true believers. I’d love to see a link to evidence that taxing the rich will ruin either economic growth or the cause of tiny government. Note to Ponnaru: sensible people laugh at you if you can’t even find a link to The Corner to support your fantasies.
The beltway consensus, devoted to serving entrenched wealth, operates under specific constraints:
1. We can’t tax the rich.
2. Any structural change to the economy must not affect the profitability of any corporate person.
3. Government can only create jobs by giving money to corporate persons in the hope they will hire people.
Berntsein says progressives have to come up with a plan that will increase employment without falling afoul of those constraints. I’m not interested in plans that increase the amount of money corporations and rich people have in the silly hope that they’ll hire more people. I see no point in cutting taxes on people who still have jobs in the hope they spend the money, instead paying down debt or saving it to deal with the coming increases in the costs of retirement. This looks just like trickle-down economics. Maybe I need some help from the confidence fairy.
Both Bernstein and Cantor refuse to face reality, and ask me to ignore the obvious way to create jobs.
Have the government spend more money on infrastructure. Businesses get hired to build bridges and refurbish high schools. People get jobs repairing bridges and refurbishing high schools. Businesses get profits. We all get safe bridges, and our kids get decent high schools. It looks like a good deal to me.
Suppose we follow the Bernstein/Cantor plan: we give businesses and rich people more money. Maybe they feel better about hiring, but more likely they put it in the bank. Bernstein knows that big corporations have plenty of access to capital, so that isn’t the problem. But, maybe some Giant Corporation will build a new factory and hire a bunch of people. Giant Corporation now owns a factory built with money that otherwise would have paid taxes. That factory represents decrepit bridges and crumbling high schools for the rest of us.
Bernstein wants us to play by Washington consensus rules. Cantor sets those rules. Why is it that only those of us outside the warm confines of the beltway are able to see how utterly stupid that is?