GOP Jobs Solution Is The Cause Of Job Losses

The Labor Department released its latest jobs report the other day and it was not good news. Unemployment is rising again and is now at least 9.2% (around 17% if all the people wanting full-time jobs are included). It is obvious that the government is not taking the joblessness seriously enough and doing enough to solve it. But the most amazing thing is that the Republicans think (or at least say) that they have a solution.

Almost every Republican presidential candidate has jumped on the new jobless numbers as evidence that Obama's policies are not working and a return to Republican policies is needed. This is echoed in Congress where Republican right-wingers are using the jobless numbers to say the deficit must be cut and social programs slashed (while giving more tax cuts to the rich).

If the Republicans had any new ideas it might be worth listening to them, but they don't. They are still pushing the same old failed "trickle-down" economic policies of Ronald Reagan and George Bush. In it's simplest terms, this is the belief that if the country formulates and follows policies that make sure the richest Americans get even richer, they will eventually share those riches with the rest of America through job creation and rising wages. The only real problem with the GOP economic policy is that it just doesn't work.

This policy has been followed since the presidency of Ronald Reagan, when business (especially financial institutions) began to be deregulated and taxes for corporations and the richest Americans began to be cut. During the presidency of George Bush this process was accelerated. Has it worked out like the Republicans told us it would? Not even close.

Since 1980 the income of the richest Americans has increased by about 270%, while the wages for workers has increased about 1% (which in terms of buying power means the wages have actually decreased). Nothing is trickling down. Instead it is just fattening the bank accounts of the rich. And it has done so to the extent that the rich now control the vast majority of the country's wealth and income, while the rest of America is increasingly left out. While the Republicans don't want to admit it, this was the real cause of the Great Recession (just like it caused the Great Depression) -- and the financial mess on Wall Street was just the trigger in both cases. It also caused the loss of millions of American jobs.

And what did the Republicans do to solve the recession? They doubled down on their failed policy. They took government money and gave it to Wall Street (and yes, too many Democrats went along with them on this). And once the rich were saved and again making record profits, they decided that the government was spending too much money. They began to demand cuts in all government programs that did not directly help the rich and corporate interests.

Anyone with half a brain (which evidently excludes too many Americans) could have told them they are doing the opposite of what needed to be done. Money should have been increased for social programs, because money given to the poor and hurting Americans has to be spent, and circulates throughout the economy helping everyone (including the rich) and creating jobs. But money given to the rich just lies in a bank account (because they already have enough to spend for their needs). And now the Republicans want to continue their disastrous policies.

On the surface, the GOP idea that lower taxes for the rich and corporations (which would necessitate slashing government programs) would result in more investment which would create more jobs seems to be a sensible idea. But there are two things wrong with that reasoning:

1. Most American corporations no longer have the long view that is necessary to build a company by increasing its size and creating jobs. They would rather put the extra money into ever-rising corporate executive salaries and bonuses. They would rather make money by investing in stocks for short-term gain rather than building up a company for long-term gain.

2. Cutting taxes has never resulted in a large growth of jobs (even back when companies and individuals were focused on long-term gains). That is because businesses are not in the business of doing social good. They are in the business of making money (as much as possible). And it simply doesn't make good business sense to hire employees that are not needed to produce or deliver the businesses goods or services. Hiring unneeded workers cuts into profits without benefitting the business. Businesses will always hire the workers they need (no more and no less) regardless of whether the tax rate is large or small.

The Republican economic policy has been a failure for all but the rich, and it has not been a job creator. In fact, as we have seen in both 1929 and 2007 it has been a job destroyer. Taxes do not have to be lowered. They are already at the lowest point since the early 1950's in the amount of revenue they are producing. They need to be raised, so the government can spend more and pump up the economy. Spending less will only restrict the economy and deepen the recession without creating jobs.

The Republican economic "solution" is no solution at all. It is the cause of our economic problems. That is why I say the Republican claim to have the solution to job creation is the height of hypocrisy. But they don't care. If the "solution" sounds good and gets them elected, that's all they really care about.