President Obama is making his big speech tonight to a joint session of Congress to put forth his new jobs ideas. Naturally, the Republicans have responded ahead of time and have all but said they’re not interested. This is really helpful.
I have a few questions, though, for the Republicans ahead of time, some things that have been bugging me for a while.
According to Senate Minority Leader Mitch McConnell, “we need to stop doing what we’ve been doing.” He goes on to enumerate those things. Stop spending, stop threatening tax increases, and roll back the “big wet blanket of this explosion of regulation” on the private sector. Nothing new here, it’s standard by now. Pull the string on a Republican’s back and you hear the same litany.
Cut spending, reduce taxes, eliminate regulation. Yadda yadda yadda.
Here’s my first question.
If you’re running a business and you’re faced with shrinking revenues, does it make sense to cut the price of your product?
Okay, I know there’s an answer to this that makes sense. If you see a trend toward reduced revenues, cutting the price can make the product more attractive and theoretically increase the volume of sales. You can make up the difference then by quantity.
That only works if the slide isn’t too severe. If you cut the price below your costs and volume doesn’t increase, then to continue that policy is a guarantee of bankruptcy.
Hm. Okay, regulation. Is everyone’s memory so short that we can’t remember back in 2008 when the financial markets crashed and burned and everyone knew it was because we had deregulated the industry so much that bubbles were allowed to grow uncontrolled and firms were pillaging their customers’ accounts on risky ventures that ought to have been illegal? It was the consistent roll back of regulations that put us in that position. So how is deregulating further supposed to be good for us?
Oh, they mentioned environmental regulations, right. Like it makes sense to use the environment as a toilet just to increase jobs. I forget, the GOP keeps expecting industry to behave morally if they take off the regulations. I would like to see evidence of that ever having worked.
What’s that? No answer?
Okay, then, tax cuts. Here we go again. We have to lower taxes on business in order to get them to…
What? Spend more money on reinvestment and hire more people?
We have been cutting taxes on business and wealth since Reagan was in office. There has been a steady decline in the corporate income tax rate for 30 years. The result has been the wholesale shipping of jobs overseas. Why? Because it’s cheaper and taxes have nothing to do with it. There is no quid pro quo. We have cut their taxes, they have promised to do more for the country, and less has been done.
I would like to know what you intend to do to make sure that the increased revenues business will enjoy as a result of those cuts will be spent here. How are you going to guarantee that cutting the taxes on, say, Exxon or Monsanto or GM or any of them will become reinvestment in this country and not simply go to increase the dividend payments of shareholders while the companies themselves build another new plant in Indonesia or India or somewhere else where labor goes for a dollar a day and no money is set aside for pensions or health care?
My simple questions are essentially the same ones Mitch McConnell is asking the president. Why are you still beating these dead horses and expecting a different outcome? There is clearly a disconnect. You’ve been passing legislation for 30 years now to benefit business and America has been gradually stripped of middle class jobs and the capacity to renew itself. But you keep harping on that same theme.
Not that what Obama has been proposing is much better, but at least his spending is aimed at Americans and not corporate entities. Well, some of it anyway, and it just seems that all GOP efforts are aimed at helping out business.
Excuse me? The Republicans are talking about citizens, too? Sorry, then explain to me the reversal of someone like Senator Lugar, who nine months ago was a big supporter of the payroll tax rollback but now is condemning is as a short term do nothing solution? Perhaps I am jaded, but when I hear that it sounds like he’s saying “But this tax cut doesn’t benefit the people who put me in office, it’s just…just…people.”
The Great Depression ended because of massively increased federal spending. There are no two ways about it. FDR spent and spent and spent and the economy sluggishly responded. It didn’t end until WWII started—but hey, all that money was federal spending. We were at war, we organized to win it, and the Depression ended. The sluggish recovery got supercharged. But it was still federal spending.
Because here’s the reality—there is a lot of money in the accounts of large businesses. They’ve pretty much recovered and we have helped them do that. Right or wrong, we bailed them out and now they’re whole. But they’re not spending any of it! So my last question.
If you take off all the regulations and end all the taxes on these entities, what makes you think they’ll spend that money here? There’s no law demanding that they do. What makes you think they won’t continue to do what they’ve been doing?
I’m just curious.