January 06, 2015
Up, Up and Away!

In what wonderful new ways will 2015 lift America up, up, and away from the political morass and income stagnation of 2014? The New York Times is on the case:

“Among Democrats, that means greater government spending on education, infrastructure and even direct job creation. Among Republicans, it means far-reaching shifts in taxation and regulation.” [Question to ponder: in what ways are these strategies revisions of the Democratic and Republican playbooks?]


The Proposals

Democratic strategy starts with improved education and training to enhance workers’ skills and productivity:

More than $500 billion a year, “across as many dimensions as you could,” from early education to community college to vocational training matching worker skills to employers’ needs [Austan Goolsbee of the University of Chicago, formerly chairman of the Obama Council of Economic Advisors]…

“Direct government job creation to tighten labor markets, bid up wages, and enhance prospects for the long-term unemployed.” [Jared Bernstein, former chief economic advisor to vice president Joseph Biden]…

Support infrastructure spending to create short-term jobs and boost long-term potential with better seaports, airports and highways…

$200 billion annually in new public and private infrastructure spending for ten years [Lawrence Summers, former director of the National Economic Council and president of Harvard University]…

For Democrats especially, boosting economic growth is only part of the solution. Another part is countering economic trends that have most benefited the highest-earning families…

Expanding incentives for workers to acquire stock in their employers, and for employees to offer workers incentive pay tied to the firm’s profitability [Richard Freeman, Harvard labor economist; “We presented some of these things to the Obama administration and the Wall Street guys just killed them.”]…

The Republican debate consists largely of getting government out of the way:

Reducing occupational licensing for some industries, like cosmetology [Michael Strain “of the conservative YG Network”]…

Shorter copyright terms for books, movies and other intellectual property would spur fresh innovation and job creation [James Pethokoukis of the American Enterprise Institute]…

Lifting the long-standing ban on United States oil exports and relaxing restrictions on liquefied natural gas exports [Douglas Holtz-Eakin, director of the Congressional Budget Office under G. W. Bush]…

Moving away from taxing income toward taxing energy sources [Steve Bell, long-time Senate Republican aide now at the Bipartisan Policy Center]…

But the most popular conservative idea for boosting incomes is overhauling corporate taxation…Because loophole beneficiaries do not want to give them up, “revenue neutrality” makes cutting rates much harder [for Congressmen]. Casting off this constraint and simply lowering rates, said Kevin Hassett, and economist at the American Enterprise Institute, would cause corporations to rapidly bring overseas jobs home.


And so, dear friends … on to 2015!

The heart sinks. It is evident from the above that 2015 will be nothing more than a replay of the head-butting of past few years. Unless the Times, in an uncharacteristically playful mood, has concocted these two competing laundry lists just to make us clutch our heads in disbelief. Still, the contrast between the two to-do lists is humorous, whether intentionally or not.

The Democrats continue to propose direct government action to get Americans working — and of course that costs money. Many billions of dollars. Paul Krugman says that works, but what does he know? As for the Republican list (and here is where the rascals at the Times may have been intentionally wicked), it consists of such macroeconomic blockbuster initiatives – economic equivalents of electro-shock therapy – as:

¶ Making it easier to work as cosmetologists, or perhaps as salesmen of loose cigarettes.

¶ Shorter copyright terms for intellectual properties – those rapacious writers, choking our economy! (We have to wonder, though: did the Times people purposely leave off Jimmy Pethokoukis’ proposal also to reduce the terms for patents? Or did Jimmy maybe think the heads of the Republican supporters in the pharma and other manufacturing industries would explode if he added that to the list? Maybe he thought just socking it to writers would be enough to get Americans working again. Worth a try?)

¶ Freeing energy exports – wow … that will get machinists back at their machines in Akron and teachers back into the schools in Houston in the wink of an eye.

¶ Taxing “energy sources” so that personal income taxes can then be lowered. (Question for the Stevester, though: would industry simply add those energy taxes to the prices of their products that all Americans would then have to pay?)

¶ And last, the ever popular idea that reducing domestic corporate taxes would make our corporations say, “OK, guys, no more looking overseas for cheaper operating costs” – and all out-of-work Americans will in another wink of the eye be flushed out of their in-foreclosure homes and put to work again. Schadenfreude alert: those top executives and one-percenter rent-takers expecting that lower corporate taxes would instead to be paid out to them as dividends, well, will they be ever so disappointed.

Yes, dear friends, it’s going to be a Happy New Year indeed – for satirists and polemicists, anyway.

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Posted by A. David Tucker at January 06, 2015 05:26 PM
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