How big an idiot is Newt Gingrich?
Apparently, he’s a pretty big one. And trust me when I tell you, you do not want him running an economy. Although, the thought of him and Caribou Barbie (Sarah Palin) being the political face of the Republican Party makes me giggle.
In this morning’s Forbes, Newtie provides commentary on just what President Obama can do to get the economy moving and create jobs. The opinion piece, entitled “Job Killers vs. Job Creators, can be found here. Feel free to follow along.
I’m going to start at the beginning:
The National Bureau of Economic Research officially scored the recession as starting in December 2007. Since World War II, 65 years ago, the average duration of recessions has been 10 months, with the longest being 16 months. In April of this year, NBER issued a statement saying it could not yet determine an end to the recession, 28 months after it began.
What we do know is that in July 2010, 31 months after the recession started, the economy was still losing jobs. The Labor Department reported yet another 131,000 jobs lost in July. The department also revised the June report downward to show 221,000 jobs lost that month from 125,000. The unemployment rate remained at 9.5% only because 181,000 additional discouraged workers left the work force and so were not counted as unemployed.
Indeed, since April 1, 115,000 former workers have fled the work force in hopelessness and despair. Without that work force decline, the unemployment rate would be 10.4%.
Now, the first thing you should know is, the National Bureau of Economic Research (NBER) is an excellent, very credible organization, who try to report on economic issues without the BS. I have touted them before in my columns as being one of the few truly independent voices on the economy out there. So, no; I am not going to trash his alleged source.
And the NBER analysts did disagree with whether or not it’s possible to declare the last recession over, when they reported back in April. But like I said; NBER tends to take a contrarian view on economic issues, and does not even begin to represent the majority of economists on this issue. The fact of the matter is, by the strict definition of recession, we have been out of it for some time. If you don’t believe me, ask Fox Business:
The recession, which began in December 2007, has ended but the nation still faces a long slow recovery, according to economists surveyed by the National Association for Business Economics.
More than 80% of respondents to the quarterly NABE survey said they believe an expansion has begun. The survey was released Monday at the Association’s annual meeting here in St. Louis.
Note the date on the article above; October 12, 2009.
In other words, according to the vast majority of economists, the recession itself has been over for almost a year now. It’s the recovery that’s been slow. Technically speaking, a recession is over when the growth rate starts into positive territory. Do I agree with the numbers the government numbers? I tend to be somewhat skeptical, and I'm not convinced were completely out of the recession, but then, I've been convinced that we've been in a recession of sorts since at least early 2002. But I don't pick and choose economists based on what I want my argument to be. The consensus of people smarter than me is, this recession is over, and we're in a long recovery.
But let’s get back to what Newtie writes in his article. According to the above passage, the NBER study came out last April. And they didn’t say the recession wasn’t over; they said they couldn’t determine that the recession was over, based on their criteria. Here’s the actual report (don’t worry; it’s really short), so you can read it for yourself. This is what they said:
CAMBRIDGE, April 12 -- The Business Cycle Dating Committee of the National Bureau of Economic Research met at the organization’s headquarters in Cambridge, Massachusetts, on April 8, 2010. The committee reviewed the most recent data for all indicators relevant to the determination of a possible date of the trough in economic activity marking the end of the recession that began in December 2007. The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature. Many indicators are quite preliminary at this time and will be revised in coming months. The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity. The committee did review data relating to the date of the peak, previously determined to have occurred in December 2007, marking the onset of the recent recession. The committee reaffirmed that peak date.
Basically, Newtie uses NBER, which is admittedly a very independent organization, to imply to readers that the recession still isn’t over, because in April NBER, which uses only actual data and not forecasts, said that they couldn’t yet determine where the bottom of the economic trough was. Not a lie, exactly, but he’s trying to insinuate that the recession still isn’t over, because NBER says it isn’t, even though NBER is actually noncommittal on it. Meanwhile, in the largest organization of economists in the country, 80% declared the recession over about a year ago.
But then Newtie does a 180, and starts right into giving us phony job numbers. “What we do know is that in July 2010, 31 months after the recession started, the economy was still losing jobs.” is complete and utter bullshit. Has anyone noticed that, when the Bureau of Labor Statistics (note that Newtie just says “The Labor Department,” so that readers will be less likely to find the numbers) was announcing the job numbers and including Census Bureau jobs, righties like Newtie were busy decrying the numbers as complete crap. Now, they’re using the numbers to make the situation look more dire than it actually is. And that’s not to say the situation isn’t bad. If you’re one of the unemployed, the situation is horrible, to be sure.
His use of the word “still” is in itself a lie. When President Obama took office, and until the stimulus was passed, the economy was losing upwards of 700,000 jobs a month. Within a month or two after the stimulus package was passed, the job losses became a trickle, and in the last year, the private sector has created nearly a half million jobs. There hasn't been one month all year in which private sector job creation wasn't a positive. Job creation isn't huge, to be sure, but to even insinuate that the economy is “still” as bad as it was when Obama came into office is just plain crap.
But this column isn’t just about Newtie fudging the numbers. He does that for fully 1/3 of the column; a real snooze-fest. But in the eyes of wingnuts, spouting such numbers makes him look like “a inter-lec-choo-yall.” He ends the numbers recitation with the following:
Another 2.6 million were defined as marginally attached to the labor force, including discouraged workers who had given up looking for work. The BLS explains that these individuals "wanted and were available for work, and had looked for a job in the prior 12 months." But they were not counted as unemployed because they had given up looking for work during the prior four weeks.
The army of the unemployed and underemployed consequently totals nearly 26 million. This would add up to an unemployed and underemployed rate of close to 17%, 2.5 years after the recession started.
Now, I don’t argue with that assessment. But can you even imagine a right winger talking about the underemployment numbers with a straight face? WE (meaning those of us on the left who actually care about this country) have been complaining about the underemployment rate for years, and people like Newtie have been dismissing the concern and telling us to sit down and shut up. Are we supposed to believe that, suddenly, the far right gives a shit about the average working guy? For years, workers watched as Gingrich and the Republicans happily shipped their good-paying factory jobs to China, and even gave companies tax breaks to encourage them to do so. And when they expressed concern over the situation, Gingrich and the Republicans essentially called them whiners and told them to stop complaining, because they live in the “greatest country in the world,” and they should be grateful for that.
Now, we’re supposed to believe Gingrich now cares about those poor, underemployed folks whose jobs he shipped overseas? Really?
Well, of course not. This isn’t about being concerned about the unemployed and the underemployed. This is about Newtie trying to stick it to Obama:
We know how to restore economic prosperity. President Ronald Reagan did it in 1981, leading to a 25-year, generation long, economic boom that spread worldwide. This boom was aided and extended by the policies adopted by the Republican Congressional majorities of the 1990s, and by the 2001 and 2003 Bush tax cuts. This golden age of prosperity, as Steve Forbes has called it, was so successful that the American people have forgotten about the depredations of the business cycle, and the three steep recessions America suffered from 1969 to 1982, the last time Keynesian economics held sway in Washington.
But the ideologically stubborn and rigid President Obama and his liberal congressional majorities have not only refused to follow any of the proven policies and principles of economic prosperity. They have insisted on following just the opposite, to the criticism even of socialists in Europe and the now former Communists in China for economic policies that are too far to the left. Obama, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., nevertheless insist on following consistently job-killing economic policies, reaching back to the 1970s, and even to the 1930s, to restore the proven failures of Keynesian economics, rather than the proven job creating policies we know will work.
If the first line in the above doesn’t make you laugh, then you must be a right wing idiot.
The above is so classic, I’m thinking of doing a needlepoint and hanging it above the desk in my office.
Republicans know how to do WHAT? Economic prosperity? For whom? The richest 1% of the country? Because that’s the only segment of the population that has thrived under Republicans. All you have to do is look at their goddamn record! I mean, are you kidding me?
Ronald Reagan threw us into recession. Know how he got us out? By borrowing unprecedented amounts of money and throwing it at defense contractors. We weren’t “prosperous” during the first ReaganBush era; we more than tripled the national debt in that time; how properous could we have been? The national debt, which had slowly dropped from 120% of GDP at the end of World War II to about 33% of GDP in 1981 was back up to around 67% of GDP by 1993, when Bill Clinton took over.
See, here’s the thing. If I’m making $50,000 a year, and you give me a credit card with no limit and tell me all I have to do is pay the interest on it, and that I can even put the interest on the credit card, I can look pretty prosperous, too. THAT is what ReaganBush did from 1981-1993. Then, Clinton at least started us back to an economy that was beginning to create real jobs, and real wages finally started to rise for the first time since the early 1970s, but when Bush, Jr. was ascended to the throne, the same Republican policies led to disaster; a disaster that will take a while to recover from.
Do you really want to know what made this country prosperous? Really? Go read Tom Brokaw’s book, The Greatest Generation for a clue. We all worked for the same cause, folks. THAT is how you build a prosperous country. First, we all worked our asses off to build a war machine that defeated the Nazis and the Imperial Japanese, and then we put together a plan to help them rebuild, for a profit. That government spending made us enormously prosperous. To reward ourselves, we gave soldiers who came back free college educations and helped them buy a home. The key to any economically prosperous era has government spending as its linchpin. Which only makes sense, since it’s the government who makes the money in the first place.
After the war, we spent on infrastructure. We built schools, and new roads, and built up the utility infrastructure. In other words, WE, the taxpayer, build the foundation, and the economy is built on that foundation. A strong economy is one in which money freely circulates to everyone. That’s where the Republican scheme falls flat; they want to give the money to the rich, and let them distribute it. Of course, they don’t distribute it, they sit on it. We spend it, and circulate it through the economy; they sit on it and use it to make new wealth for themselves.
Am I the only one who laughed out loud when Newtie decried the “job-killing policies” of the 1930s and 1970s? Republicans are the champs when it comes to “job-killing policies.” Ever hear of Herbert Hoover, Newtie? How about Richard Nixon, who took an economy that had been booming for a quarter century under Democrats and liberal Republicans and watched it go to hell in the course of his first term. His response to high inflation was to freeze wages and prices for 90 days, thus ensuring even greater inflation when the 90 days was up. Ford’s response was to print buttons and ask people to wear them. Ronald Reagan’s Administration didn’t see any job growth until his last two years in office, and that was the result of adding $2 trillion to the national debt at a time when a dollar was worth about 1/3 what it is now. Who in their right mind would claim that Bush, Sr. was an economic force while he was in office? And certainly you can’t be claiming Bush and the Republican Congress demonstrated great job creation prowess during their six years in charge.
No one kills jobs like Republicans. In fact, in the last 40 years, the only period that saw significant job growth was when Bill Clinton was in charge, and he had to force Republicans to bend to his will. Then, as soon as they handed the presidency to Bush, Republicans worked to dismantle everything positive Clinton did. I don’t know if anyone’s noticed, but most of the shit you buy in the stores is no longer made here, and you can thank Gingrich’s Republican Party for that. Those great factory jobs that used to be plentiful back in the days when the economy was booming? Republicans are the ones who shipped those jobs out of here.
Oh, and just an FYI, Newtie; the deficit for this year – the first fiscal year for which President Obama and the Democrats can be blamed – is looking like it will be DOWN. Not that it’s a good thing, of course; the last thing this country should be worrying about at the moment is the deficit. In order to get money flowing through the economy, the government has to grease the skids. The Republicans already added $12 trillion to the debt; if we can borrow an extra $2-3 trillion to get the economy moving again, we’d be foolish not to.
But if you think that’s funny, read what comes next:
The top ten job killing policies of the Obama/Pelosi/Reid regime include the 2009 trillion dollar stimulus waste, which drained nearly a trillion dollars out of the private economy that would have been available instead for the private capital investment that creates jobs. Economic growth and prosperity is not created by government spending and deficits.
Another prominent job killer is the across the board increase in the top tax rates for every major federal tax now scheduled to begin next year. That has killed the incentive for the investment necessary to create jobs.
Also killing jobs today are President Obama's runaway federal spending, deficits and debt. President Obama is claiming both that the deficits saved the economy from the brink of depression and that the deficits were Bush's fault. If Obama did not want these deficits, he should not have increased federal spending by 25% in just his first two years in office. Instead, he should have slashed runaway spending as Gov. Chris Christie has done in New Jersey and Gov. Bob McDonnell has done in Virginia.
Obama's record-shattering deficits and debt are not only sucking trillions out of the economy that should go to private job creation instead. They threaten employers, investors, entrepreneurs, and risk takers with still more tax increases, which is stopping investment and the resulting job creation now. They sap long term confidence in the dollar, which is discouraging job creating investment from around the world. They threaten future interest rate spikes, further discouraging long-term investment.
Gotta give Newtie credit. I didn’t realize his comedy chops were so well-developed.
The above is HILARIOUS. I mean, seriously, how could anyone claim that Obama’s stimulus package “drained nearly a trillion dollars out of the private economy,” and that “Obama's record-shattering deficits and debt are not only sucking trillions out of the economy that should go to private job creation instead.”?
How is borrowing money “sucking” anything out of the “private economy?” I mean, I see no evidence that the Treasury Department is robbing people at gunpoint and demanding that they lend the government money. As for runaway spending, deficits and debt, where the hell was Newtie when the Republicans were in charge? He wasn’t exactly front and center when ReaganBush was borrowing money at record rates in order to hide the negative effects of tax cuts for the rich. For the 25 years he brags about in this article; – the “golden age of prosperity, as Steve Forbes has called it” – the United States added $10 trillion to the national debt. If the $1.4 trillion we have to borrow to get us through this recession is “killing jobs,” as Gingrich suggests, how many jobs were killed when Republicans, led by him, were exploding the debt?
And the only part of the Bush tax cuts that anyone is going to allow to expire are the tax cuts for those at the very top of the food chain; those making $200,000 a year or more. And it will trim nearly $800 billion from the deficit over the next ten years, which, according to Newtie’s own “logic,” should create a lot of jobs, right?
See, this is where assholes like Gingrich fall on their own little faces. On the one hand, they claim that deficits and debt are job killers. On the other hand, tax increases are job killers, too. Make up your minds, kiddies; if spending has been cut as far as it can be cut (and of course, it’s not, but Republicans spend more than Democrats, ironically), and you don’t want to go into massive deficit spending, then the only choice left is to figure out how to increase revenues. Cutting taxes does NOT increase revenue. If you don’t believe me, then show me one major tax cut that has ever caused an increase in revenue.
Now, you wanna read what Newtie thinks will make the economy recover? Yes, the piece gets even funnier…
First, of course, we need to get rid of health care reform, because some employers are allegedly “evading” hiring people so they won’t have to pay for their health care. Um, no. MOST employers already pay for health insurance for their employees; that’s why 85% of all Americans have health insurance in the first place. And a lot of the 15% of those without insurance don’t have it because no one will insure them. So, we’re talking about maybe 10% of working people who don’t have access to health insurance, because their employers are cheapskates and don’t give a shit about their employees. Health care for all will CREATE jobs, Newtie, because it puts virtually all employers on an equal footing. Are there a few cheapskates who refuse to hire new employees because of that? Probably a few, yes. But what kinds of jobs are these and what do they pay?
He then recommends freezing government spending at 2007 levels. Is he really that stupid? He himself just said that the economy was going gangbusters in 2007. That means fewer people in need of government services than are in need of government services now. But we should freeze spending at those much lower levels… for what purpose, exactly. Oh, wait – Social Security, Medicare and Medicaid should be exempt, according to Newtie. So, during the deepest recession since the Great Depression, with 26 million unemployed or underemployed, according to his own count, we should spend FAR LESS than we are spending now? Given that, until the 2009 stimulus package was passed, dozens of states were on the verge of laying off teachers, police and fire personnel , and other state and municipal workers by the hundreds of thousands, how does he propose such a proposal would actually lead to job creation?
Can you guess what Newtie recommends next? Seriously, do I even have to tell you?
Newtie then recommends tax cuts “to provide the necessary incentives for investment, job creation and a booming economy.” Specifically, he recommends cutting payroll taxes in half to help out small businesses. Because, well, you know – small businesses are the only ones who pay payroll taxes, you know.
Strangely, he doesn’t define “payroll taxes,” which is important, since the bulk of what most of us call “payroll taxes” are Social Security and Medicare taxes, and since he’s not recommending cutting spending in those programs, he’s likely to explode the deficit even further, by cutting the revenues to both programs, unless he is also recommending removing the cap on Social Security taxes. If he’s suggesting that, then the rate on Social Security taxes could be cut in half quite easily. But something tells me Newtie wouldn’t cotton to that idea.
Again; what is wrong with these people? They bitch about deficits, but they have absolutely no desire to do anything about them. How long are these people going to labor under the delusion that cutting taxes increases government revenue? And since when is the “private economy” so special, anyway? The “private economy” doesn’t give a rat’s ass about creating jobs; they only care about their bottom line. There is nothing wrong with that, of course, but people like Gingrich here seem to forget that the government often has to prod businesses into doing the right thing, like creating opportunities for people. They also seem all too happy to disregard the fact that most of our economic troubles are due to Republicans’ constant removal of those incentives from the equation. It used to be, if businesses wanted to cut their tax rate to 15-30%, they had to create economic benefits in order to do so. Now, they don’t have to do anything. Not that it matters, anyway; thanks to the Republicans, they can simply move their main office offshore and avoid taxes altogether.
By the way, it gets better. Newtie has no plans to take that 50% of payroll taxes and hand it back to you, in any case:
We should then allow a personal account option for younger workers for this portion of the payroll tax, with the accounts taking responsibility for paying an equivalent proportion of future Social Security benefits. Given historical capital market returns, workers would get much higher benefits than Social Security promises, let alone what it will actually be able to pay in the future. A continuing safety net would guarantee that workers would get at least as much as promised by Social Security.
This would provide a continuing gusher of new savings for capital investment, resulting in more jobs and higher wages. It would also dramatically reduce government spending and the unfunded liabilities of Social Security over the long run, as benefits paid by the fully funded, private market personal accounts replace federal spending. Over time, these personal accounts can and should be expanded to replace the payroll tax entirely, financing all of the benefits currently financed by the payroll tax through market savings, investment and insurance.
We should restore America's competitiveness in the world by reducing the federal business tax rate to match Ireland's 12.5 percent rate, which proved highly successful in promoting a boom in jobs and wages. We should abolish the capital gains tax because it effectively doubles taxes capital income. That is why 14 out of 30 OECD countries, plus China, Taiwan, Hong Kong, Singapore, and others, already enjoy zero capital gains taxes. We should also adopt a 15% optional flat tax, and abolish the death tax.
See the problem? This is Newtie’s way of putting Social Security privatization back on the table, which is a joke. It’s also proof that Republicans haven’t learned one goddamn thing from the latest economic disaster.
We all had “personal accounts,” remember? Remember what those manipulating the markets with our money did to us? And what about those “historical capital markets returns”? Historically, 4-6% was an exceptional return, but at least three times within the last thirty years, the market was manipulated up beyond where it should be, only to crash back to reality. And what sort of safety net does Newtie recommend for someone who loses their Social Security money in the market? I mean, not all stocks go up, even during a great market.
I’ll get back to this in a minute, but I want to move to that last paragraph for a second. I don’t have a problem with reducing the corporate tax rate, as long as it’s with incentives. If they want a 12.5% tax rate fine; but they have to earn it. A company that creates little to no economic benefit to the country – you know, like hiring the minimum number of people possible at minimum wage or just above, no benefits and importing most of the goods he sells – should not pay the same rate as a company that pays its employees well, gives them good benefits, plenty of vacation time, and builds and maintains plants and operations in the United States. So, how about a base tax rate of 50%, with incentives that could take it down to 12.5%, or even lower. In fact, during the period of our greatest growth – the 1950s and 1960s – the top corporate tax rate was between 48% and 52% (look here). The last time the rate was 15% or below, we were driven into the Great Depression.
As for all of the rest of that drivel – abolishing the capital gains tax, a 15% optional flat tax and abolishing the estate tax – just perpetuates a status quo in which people who work hard get taxed at a high rate and people who get free money get to keep it, virtually tax-free.
Think about it; Newtie’s not talking about cutting your taxes at all. In fact, he’s not even cutting your payroll taxes, really, because he’s forcing you to funnel the money into a “savings account” that may or may not be intact when you retire. See, this is the part of this whole thing that right wingers don’t actually get. The money that’s collected for Social Security goes to pay benefits for retirees now; when we retire, the people working then will pay our benefits; when they retire, the next generation will pay those benefits… and so on and so on…
But worse, the attitude inherent in the above is, if you work your ass off for your money, you pay what Newtie decides is your “fair share” of taxes. But if you make money by sitting on your couch and buying stocks on your computer, you should get that money free and clear. If you happened to be born of rich parents, you should get your money free and clear.
When are these idiots going to understand that their view of economy has been thoroughly discredited? What do they think CAUSED the recession that we’re still climbing out of?
Newt Gingrich. Still a moron after all these years.
He did save the best belly laugh for the end of the article, however. This is the last line:
This November the American people have a chance to replace the job killers with job creators.
He’s right, of course. We have the opportunity to replace even more Republicans with even more Democrats.
But I doubt that’s what he meant.
