Rich Lowry asks: “Where are the jobs?”

Rich Lowry is the fellow who wrote the piece for National Review entitled “We’re Winning [in Iraq],” but he wrote it back in 2005 when the US was most certainly not winning.  Lowry writes a basically decent piece today that takes the Republican Party to task for forgetting about jobs. Lowry gives far too much credit to the Republican Party for being sincere in their desire to fix Medicare’s long-range difficulties (“If political life were fair, they’d be rewarded for their farsightedness”) but is absolutely correct is saying that:

If you are worried about the security of your job, if your personal income is stagnant, if the value of your home is still declining, and if you are paying more for food and fuel, the perilous state of a government program circa 2024 that you know, one way or the other, will never be permitted to go bankrupt is not a subject of proverbial kitchen-table conversation.

Unfortunately for the Republicans, Lowry is also correct when he says:

Retreat on Medicare isn’t an option now. Like Cortes in Mexico, Republicans have disabled their ships behind them.

I strongly endorse Lowry’s prescription here:

Deficit reduction should only be an element of a program for renewing the economy, which directly impacts people’s lives and also makes controlling the debt marginally easier. By a rough back-of-the-envelope calculation, every 1 percent of economic growth above the assumptions of the Congressional Budget Office knocks $2 trillion from the debt over the next 10 years.

My only revision to Lowry’s suggestion is that deficit reduction should be placed entirely on the back burner and that the government should concentrate entirely on economic growth. Any serious attempts to cut the budget should wait until the country is prosperous and citizens have plenty of jobs and our infrastructure is well on the way to getting fixed and America is well on the way to replacing fossil fuels with renewable energy. In other words, deficit reduction is not an “element” of economic recovery. Deficit reduction is a luxury we can’t afford for the next half-decade, at least.

The real problem I have with Lowry’s piece is in the next-to-last paragraph:

House Republicans just released a growth plan. Sen. Rob Portman of Ohio has been evangelizing for a growth agenda since his election last year. The elements are familiar — cutting taxes and reforming the tax code, reining in regulation, increasing energy production, passing free-trade agreements. It doesn’t have much chance of getting signed into law, but neither does Ryan’s Medicare plan.

This plan has the slight problem of having absolutely nothing to do with economic growth. G.W. Bush cut taxes back in 2001 and 2003 and growth has been anemic ever since. Not sure what “reforming the tax code” means, but it sounds like allowing the rich to keep even more of what they already have and preventing the government from making use of the money that’s sitting around in money market accounts and not going to much use. “[I]ncreasing energy production” sounds good, but I suspect it’s just code for “drill, baby, drill,” i.e., let’s use up our energy resources even faster without attempting to find  any replacement sources. Free-trade agreements simply allow corporations to outsource jobs to other countries and thus are in direct opposition to getting the economy at home moving. It means more pay for those who are already wealthy, but it’s far from clear that the non-rich will benefit in any way. Please note that with the passage of NAFTA (Activated back in 1994), the share of income from the five quintiles was

Year Share of aggregate income
Lowest fifth Second fifth Third fifth Fourth fifth Highest fifth Top 5 percent
1994 (24) 4.2 10.0 15.7 23.3 46.9 20.1
2001 4.2 9.7 15.4 22.9 47.7 21.0
2009 (36) 3.9 9.4 15.3 23.2 48.2 20.7

This is not simply the result of NAFTA, but of a whole series of political decisions to move money to the higher tax brackets and away from those who are making less to begin with.  No, Senator Portman doesn’t want economic growth, he just wants to continue the movemen of money upwards and to use up natural resources to the long-range detriment of the entire planet.

Lowry’s piece is essentially a good one, but his proposed plan for growth is a complete FAIL!

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