The Right Man For The Job(s)?

By Jason Leopold, AlterNet. Posted October 4, 2004.

In the battleground state of Wisconsin, more than 50,000 manufacturing jobs have been lost since George W. Bush took office, a bulk of them directly due to outsourcing, and the number of people unemployed in that state has increased by 40,000, according to the state’s labor department. In North Carolina, another battleground state, 71,300 jobs have been lost between March 2001 and June 2004, according to a report released this month by the North Carolina Justice Center. “This has led to an increase in the number of workers who are long-term unemployed (over six months), who run out of unemployment benefits before getting a new job or who take part-time work when they need full-time” the report says.

One of George W. Bush’s worst legacies as president, aside from the war in Iraq, will be that the United States lost almost one million jobs during his term. Moreover, 2.7 million jobs have been outsourced since Bush took office, largely due to the lucrative tax credits corporations receive for shipping jobs overseas under Bush’s tax plan. Meanwhile, the president has managed to turn a $125 billion surplus into a $400 billion deficit in just over three years.

In his defense, Bush cites the 1.7 million new jobs created over the past year as proof that the economy is turning a corner and that his tax cuts have made a difference. Still, that’s far less jobs created than in the worst year during President Clinton’s eight years in office, according to the U.S. Department of Labor.

What the jobs loss and deficit numbers reflect is that the Bush administration values working families a lot less than it values the wealthiest Americans and the largest corporations. In the Bush conservatives’ world view, if the largest corporations and the wealthiest Americans are taken care of, eventually it might trickle down to the rest of us, a policy clearly proven not to work during the Reagan years. In fact, Bush’s entire economic agenda is predicated on more tax cuts — which, of course, mainly benefit the richest families.

His Democratic challenger, John Kerry, has a record that stands in sharp contrast to Bush. Moreover, Kerry is proposing policy changes that will stem the flow of jobs overseas and create more jobs at home. Kerry’s policies clearly favor working families over corporate profits.

Tax Cut Mania

The Bush administration pushes cutting taxes with a religious zeal, despite evidence suggesting that they do little to create jobs or reduce the deficit. Indeed, as The New Yorker magazine pointed out in its Sept. 6 issue: “It is far from clear that cutting taxes leads to more saving in the economy as a whole. A tax cut that isn’t accompanied by spending cuts, such as Bush’s, forces the Treasury to borrow more, which lowers the national rate of saving. By the same logic, one sure way to increase national saving is for the government to raise taxes and run a budget surplus. For some reason, conservative economists rarely mention this option.”

Last month, 10 Nobel laureates in economics — including 1970 laureate Paul Samuelson from the Massachusetts Institute of Technology, and 2001 laureate Joseph Stiglitz from Columbia University, a former chief economist at the World Bank — wrote in a public letter that the Bush administration has “embarked on a reckless and extreme course that endangers the long-term economic health of our nation.”

Bush believes that the “tax cuts benefiting the most wealthy Americans are the answer to almost every economic problem,” the letter added. But the tax cut has not resulted in the creation of new jobs and has turned budget surpluses into enormous budget deficits. “President Bush’s fiscal irresponsibility threatens the long-term economic security and prosperity of our nation,” the letter said.

According to a study by the nonpartisan Congressional Budget Office, two-thirds of the benefits of Bush’s tax cuts went to households in the top fifth of the income distribution and a third went to households in the top one-hundredth of the distribution. “To put it another way, families earning $1.2 million a year—that is, the richest one percent in the country—received a tax break of roughly $78,500. Families earning $57,000 a year—middle income families—got a tax cut of about $1,100,” The New Yorker reported.

And those tax cuts are not helping the country’s revenue picture, and resulting in higher deficits. In a departure from precedent, the International Monetary Fund issued several warnings in recent years about America’s runaway deficit, cautioning foreign lenders about trading with the Treasury Department. Historically, the IMF issues such warnings about other nations; warnings about the U.S. deficit are a new phenomena.

Even dire warnings from the country’s top economist won’t sway the president.

Federal Reserve Chairman Alan Greenspan urged Congress recently to restore the budget rules — that were in effect during Bill Clinton’s presidency — which required tax cuts and spending increases to be offset either by tax boosts or spending cuts in other areas. Greenspan warned that if lawmakers don't change their fiscal policies, government borrowing eventually will crowd out private borrowing and drive interest rates higher.

Jason Leopold is the former Los Angeles bureau chief of Dow Jones Newswires where he spent two years covering the energy crisis and the Enron bankruptcy. He just finished writing a book about the crisis, due out in December through Rowman & Littlefield.

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