While Karl Rove points, correctly, to “the messes Obama left behind”:
Slow economic growth will be at the top of the list of problems. The pattern of American history has been that the more severe the recession, the stronger the recovery. Until now. In Mr. Obama’s recovery, average annual growth has been the slowest since the U.S. began compiling reliable economic statistics near the 20th century’s beginning—a feeble 2.9%. This year is off to an even slower start, with GDP growing 0.2% in the first three months.
The number of jobs also will be on that list. It took from June 2009 to April 2014—nearly five full years—to get back to having the same number of people working as when the recession began in December 2007. That’s a longer period of time to return to the starting point than in any recession in U.S. history. Meantime, roughly 14.7 million people came of age without a job available. The last time the job participation rate was this low was 1978. A third of Americans between 18 and 31 last year were living with their parents, the highest percentage in at least four decades.
The quality of jobs available will be another topic on that list. The Bureau of Labor Statistics says 4.5 million Americans were working part time for economic reasons in December 2007, meaning they could not find full-time work. Last month the number was 6.6 million—a 46% increase. More part-time workers are getting fewer than 30 hours a week, in part probably because of ObamaCare.
Then there is the size of Americans’ paychecks. Inflation-adjusted median household income has dropped, from $54,059 in 2009 to $51,939 in 2013 (the latest year available), the only time this has happened during an economic recovery. The president who harps on inequality as a “defining issue of our time†has demonstrated that the middle class fares badly under progressive economic policies.
his remarks suffer from the same problems that afflict most of the punditry. He points out the problems but not to the solutions.
The modern Republican Party has only one domestic policy: tax cuts. There are members who espouse other policies but it’s the single point of consensus. Tax cuts of themselves will not increase the number of jobs, the quality of jobs, or income stagnation for most Americans. What other policies should be put into place? There is only silence.
There is a Congressional consensus favoring increased immigration. That is inconsistent with wage growth.
There are solutions to these problems but no one in a position to effectuate them is proposing them because they don’t bring in campaign contributions or put money into the Clintons’ foundation. If there is any justification whatever for political violence, the molotov cocktails are being thrown in the wrong direction.
I’m not sure I’d define the policy suite so narrowly and be as derisive of the posture on taxation. Taxes may be the most robust variable in fiscal policy. I know first hand how they affect capital formation and flow. I think we saw how payroll taxes can affect behavior after the 2008 recession. Before anyone starts, I’m not suggesting we are to the right of the inflection point on the Laffer curve. But the unintended consequences and attendant behaviors resultant from various luxury taxes, sin taxes near state borders, taxes on capital investment, consumption etc are pretty well worn empirical issues. It is hard to imagine that income retained in the hands of earners is more poorly allocated than income “relieved” from them and cycled and directed through the public sector.
I don’t know what the definition of “modern Republican Party” is, but regulatory reform, “corporate welfare/subsidy” reform, sensible immigration and trade policy, education reform, transfer payment reform etc are all additional arrows in the quiver that I think Republicans – I can certainly vouch for this Republican – would be far more supportive of than Democrats. And in my opinion better for the economic prospects of the country.
In fact, if we want to go with broad generalizations, the only domestic policy I’ve seen from Democrats is “we care,” the costs and efficacy of their policy prescriptions be damned.
I don’t know what the definition of “modern Republican Party†is, but regulatory reform, “corporate welfare/subsidy†reform, sensible immigration and trade policy, education reform, transfer payment reform etc are all additional arrows in the quiver that I think Republicans – I can certainly vouch for this Republican – would be far more supportive of than Democrats. And in my opinion better for the economic prospects of the country.
That's a concise summation, Drew — one which I think would be held by many who want something different than what the current administration has offered and implemented.
Tax reform, IMO, tops the list of changes needed to be made. Whatever that reform might look like, income tax should have everyone's skin "progressively" in the game. In this way people might become more aware of wasteful government expenditures that their dollars are supporting. Not far behind is reconfiguring the weight of rules and regulations which are oppressive in business creation — especially small ones. Just focusing on these two impediments of governmental control, IMO, would positively effect economic growth, giving way to providing remedies to job stagnation etc., that has been ailing our country for years.
Couple of things. First, it may be that I’m too exposed to people who are convinced that tax cuts inherently increase revenue. That is manifestly not the case and theory doesn’t support it.
Second, my point is that tax cuts alone make money available for investment but they don’t ensure that the investment is done here. There need to be steps taken beyond tax cuts but somehow that never seems to happen.
Finally, for 30 years regulatory reform has been a talking point rather than an action item. Is there pending legislation for regulatory reform? Republicans keep talking about shuttering departments but when the time comes it never seems to happen.
I’ve concentrated my fire on state and local regulatory reform because it seems to me that some standardization there is the low hanging fruit.
“Modern Republican Party” is easy. Now rather than when Reagan was president.
I don’t see a consensus Republican position on any of those. If there is, what is it? There’s a Congressional consensus on immigration in favor of open borders. I’d challenge the idea that’s sensible.
“Couple of things. First, it may be that I’m too exposed to people who are convinced that tax cuts inherently increase revenue. That is manifestly not the case and theory doesn’t support it.”
Well, we have an empirical test for the proposition: Kansas.
The Republican Party just signed on to Obama’s immigration policies a couple of months (or so) back. I mean completely, 100%. The fact that they did so in such a wormy manner is of no consequence. Is open borders really the sensible immigration reform plan of the Republican Party? Because that seems to be the position of Boehner & McConnell, the Bushes, Walker, Paul, Christie, Rubio (when he’s being honest), etc.
You want productive investment here, tell me our industrial policy. Cause we don’t have one and it’s worked out just swell as the high-tech industrial base which is our last edge is sabotaged by Apple and its quest to go from net income of $44 billion to $45 billion. And before anyone talks about profit maximization: what for? They don’t invest, they don’t distribute dividends and they sure as hell don’t need it for taxes. Regulation doesn’t explain it because the Chinese government takes a far greater role in all levels of the economy. And no one in either of these chowderhead parties has a single word to say about this.