Did Republicans deliberately crash the U.S. economy?
Did Republicans deliberately crash the US economy?
Be it ideology or stratagem, the GOP has blocked pro-growth policy and backed job-killing austerity – all while blaming Obama
leadership (left to right): Senate Republican minority leader Mitch
McConnell, House majority leader Eric Cantor, and House speaker John
Boehner, after the 2010 midterms. Photograph: AP Photo/Alex Brandon
So why does the US economy stink?
has job creation in America slowed to a crawl? Why, after several
months of economic hope, are things suddenly turning sour? The culprits
might seem obvious – uncertainty in Europe, an uneven economic recovery,
fiscal and monetary policymakers immobilized and incapable of acting.
But increasingly, Democrats
are making the argument that the real culprit for the country's
economic woes lies in a more discrete location: with the Republican
In recent days, Democrats have started coming out and saying publicly what many have been mumbling privately for years – Republicans
are so intent on defeating President Obama for re-election that they
are purposely sabotaging the country's economic recovery. These charges
are now being levied by Democrats such as Senate majority leader Harry Reid and Obama's key political adviser, David Axelrod.
Democrats, perhaps the most obvious piece of evidence of GOP
premeditated malice is the 2010 quote from Senate minority leader, Mitch
"The single most important thing we want to achieve is for President Obama to be a one-term president."
words lead some to the conclusion that Republicans will do anything,
including short-circuiting the economy, in order to hurt Obama
politically. Considering that presidents – and rarely opposition parties
– are held electorally responsible for economic calamity, it's not a
bad political strategy.
Then again, it's a hard accusation to
prove: after all, one person's economic sabotage is another person's
principled anti-government conservatism.
words, though, there is circumstantial evidence to make the case.
Republicans have opposed a lion's share of stimulus measures that once
they supported, such as a payroll tax break, which they grudgingly
embraced earlier this year. Even unemployment insurance, a relatively
uncontroversial tool for helping those in an economic downturn, has been
consistently held up by Republicans or used as a bargaining chip for
more tax cuts. Ten years ago, prominent conservatives were loudly making
the case for fiscal stimulus to get the economy going; today, they treat such ideas like they're the plague.
during economic recessions, Republicans have been supportive of loose
monetary policy. Not this time. Rather, Republicans have upbraided Ben
Bernanke, head of the Federal Reserve, for even considering policies that focus on growing the economy and creating jobs.
then, there is the fact that since the original stimulus bill passed in
February of 2009, Republicans have made practically no effort to draft
comprehensive job creation legislation. Instead, they continue to pursue
austerity policies, which reams of historical data suggest harms
economic recovery and does little to create jobs. In fact, since taking
control of the House of Representatives in 2011, Republicans have
proposed hardly a single major jobs bill that didn't revolve, in some
way, around their one-stop solution for all the nation's economic
problems: more tax cuts.
Still, one can certainly argue – and
Republicans do – that these steps are all reflective of conservative
ideology. If you view government as a fundamentally bad actor, then
stopping government expansion is, on some level, consistent.
let's put aside the conspiracy theories for a moment, and look more
closely at how the country is faring under the GOP's economic
As Paul Krugman wrote earlier this week, in the New York Times, while a Democrat rests his head each night in the White House, the United States
is currently operating with a Republican economy. After winning the
House of Representatives in 2010, the GOP brokered a deal to keep the
Bush tax cuts in place, which has reduced the tax burden as a percentage
of GDP to its lowest point since Harry Truman sat in the White House.
At the insistence of the White House, Congress also agreed to extend
unemployment benefits and enact a payroll tax cut – measures that
provided a small but important stimulus to the economy, but above all,
maintained the key GOP position that taxes must never go up.
as Congress giveth, Congress also taketh. The GOP's zealotry on tax cuts
is only matched by its zealotry in pursuing austerity policies. In the
spring of 2011, federal spending cuts forced by Republican legislators
took much-needed money out of the economy: combined with the 2012
budget, it has largely counteracted the positive benefits provided by the 2009 stimulus.
the GOP's refusal to countenance legislation that would help states
with their own fiscal crises (largely, the result of declining tax
revenue) has led to massive public sector layoffs at the state and local
level. In fact, since Obama took office, state and local governments
have shed 611,000 jobs; and by some measures, if not for these jobs,
cuts the unemployment rate today would be closer to 7%,
not its current 8.2%. In 2010 and 2011, 457,00 public sector jobs were
excised; not coincidentally, at the same time, much of the federal
stimulus aid from 2009 ran out. And Republicans took over control of
These cuts have a larger societal impact. When teachers
are laid off, for example (and nearly 200,000 have lost their jobs), it
means larger class sizes, other teachers being overworked and
after-school classes being cancelled. So, ironically, a policy that is
intended to save "our children and grandchildren" from "crushing debt"
is leaving them worse-prepared for the actual economic and social
challenges they will face in the future. In addition, with states
operating under tighter fiscal budgets – and getting no hope relief from
Washington – it means less money for essential government services,
like help for the elderly, the poor and the disabled.
This is the
most obvious example of how austerity policies are not only harming
America's present, but also imperilling its future. And these spending
cuts on the state and local level are matched by a complete lack of
fiscal expansion on the federal level. In fact, fiscal policy is now a
drag on the recovery, which is the exact opposite of how it should work,
given a sluggish economy.
This collection of more-harm-than-good policies must also include last summer's debt limit debacle, which House speaker John Boehner
has threatened to renew this year. This was yet another GOP initiative
that undermined the economic recovery. According to economists Betsey Stevenson and Justin Wolfers,
"over the entire episode, confidence declined more than it did
following the collapse of Lehman Brothers Holdings Inc in 2008." Only
after the crisis did the consumer confidence stabilize, but employers
"held back on hiring, sapping momentum from a recovery that remains far
too fragile." In addition, the debt limit deal also forced more
unhelpful spending cuts on the country.
Since that national embarrassment, Republicans have refused to even allow votes on President Obama's jobs bill in the Senate; they dragged their feet on the aforementioned payroll tax and even now are holding up a transportation bill with poison-pill demands for the White House on environmental regulation.
with all these tales of economic ineptitude emanating from the GOP, it
is Obama who is bearing most of the blame for the country's continued
poor economic performance.
Whether you believe the Republicans
are engaging in purposely destructive fiscal behavior or are simply
fiscally incompetent, it almost doesn't matter. It most certainly is bad
economic policy and that should be part of any national debate not only
on who is to blame for the current economic mess, but also what steps
should be taken to get out from underneath it.
But don't hold your
breath on that happening. Presidents get blamed for a bad economy; and
certainly, Republicans are unlikely to take responsibility for the
country's economic woes. The obligation will be on Obama to make the
case that it is the Republicans, not he, who is to blame – a difficult,
but not impossible task.
In the end, that might be the worst part
of all – one of two major political parties in America is engaging in
scorched-earth economic policies that are undercutting the economic
recovery, possibly on purpose, and is forcing job-killing austerity
measures on the states. And they have paid absolutely no political price
for doing so. If anything, it won them control of the House in 2010,
and has kept win Obama's approval ratings in the political danger zone.
It might even help them get control of the White House.
or not, it's hard to argue with "success" – and it's hard to imagine
we've seen the last of it, whoever wins in November.
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