Obama's Job Jig: Pin-Up to GOP Voodoo

If America's 14 million unemployed had their own state, The Economist tells us this week, they'd form the fifth-largest one in the union, right behind Florida and ahead of Illinois. If you include the underemployed and those who've dropped off the unemployment rolls altogether, that population would be bigger than that of Texas. You could call it the State of Flagler (hold the Perry sauce).

If America's 14 million unemployed had their own state, The Economist tells us this week, they'd form the fifth-largest one in the union, right behind Florida and ahead of Illinois. If you include the underemployed and those who've dropped off the unemployment rolls altogether, that population would be bigger than that of Texas. You could call it the State of Flagler (hold the Perry sauce).

Ten years ago it took an unemployed person an average of 17 weeks to find work. It now takes 40 weeks, assuming that person keeps looking. Florida has discovered an innovative way to kick people off the unemployment rolls. It requires workers to submit to interrogations first, docks them whatever meager pay they may be earning that month, puts them on hold for about four weeks if they have a question and are dumb enough to call, then leaves them with unemployment checks smaller than some sub-Saharan wages, if they make it that far. Tens of thousands don't, opting out along the way. Problem solved, and Rick Scott takes credit.

It's now clear that the first stimulus bill did not work as it should have--not because the stimulus wasn't needed, but because it was too small, too brief and too lopsidedly favoring tax cuts instead of actual stimulus. It stopped unemployment levels from heading toward the 1930s and brought down the rate a full point. But devoting a third of the stimulus to tax cuts was worse than useless: it added to the deficit instead of creating jobs, Giorgio Armani stores aside. And the frenzy of cost-cutting at every level of government in the last two years, state and local governments especially, has been plain mad: the stimulus was taken out back, shot and buried-then blamed for failing by its executioners as tea party hypocrites, a Social Security check in one hand and a Medicare card in the other, danced on its grave.

Yet here was Barack Obama again proposing more tax cuts Thursday evening, playing into the very dogma that's netted us colossal debt and zero return. Unless, that is, you're sharing in this nation's sacrifice from that top 5 percent bracket, the only bracket to reap a windfall from three decades of upper-class welfare, beginning with Ronald Reagan's hand-outs to the top.

George W. Bush peddled two of the country's largest tax cuts in history in 2001 and 2003 as job creators. His two terms created the fewest jobs since Herbert Hoover. Put another way, 10 times more jobs were created during Jimmy Carter's four years-yes, Jimmy Carter-when the top marginal tax rate was 70 percent, than the 1 million net jobs created during Bush's eight years, when the tax burden was lowered to the 1920s' insignificant levels. And the Republican priesthood still preaches tax cuts as a miracle cure.

Compare that to Bill Clinton, who was blamed early in his first term as a job assassin for pushing one of the largest tax increases in history. His tax package didn't get a single Republican vote when it barely passed Congress in August 1993. The change Clinton stood for, Dick Army, the Texas Republican congressman said at the time, is "change for the worse." Some worse. The nearly 23 million jobs created on his watch were a record, and Clinton left office with a budget surplus. Give me his stained blue dresses over Republicans' phony sanctimony any day.

Obama had the right idea when he proposed, on that yellow-brick campaign trail of his, that it was time to go back to Clinton-era taxes, if only for the richest 2 percent. Of course, even on that slither of a beachhead, he caved, signaling that he was all talk. Obama's first stimulus had $350 billion in tax cuts, a tax cut as large as Bush's in 2003. You see the results. He caved in December to another demand by Republicans to extend the Bush tax cuts yet again, and cut the payroll tax by two points, at a cost of nearly $1 trillion. That did nothing to the unemployment rate, because it isn't workers who need help, it's the unemployed.

Last night he proposed extending that payroll tax holiday to employers, a bottom-line padding gift that'll have virtually no effect as long as there's no demand for products--the real and only incentive for employers to hire anyone. Look at Palm Coast Data. It's had literally millions of dollars thrown at it in taxpayer-funded incentives, from the state of Florida and local governments, only to keep bleeding jobs because there's no demand for its product.

And that, in the end, is what's hurting the economy: not high taxes (not in the lowest-taxed, least regulated, most millionaire-stuffed western democracy on the planet), but demand and spending capabilities. Germany and France aren't facing depression-like conditions-their economies are growing-because their home-owners didn't turn their homes into credit cards. Their housing industry was better regulated than ours, which turned the keys over to bankers and developers until the crash, when homeowners discovered themselves much poorer, or homeless, overnight. With almost a quarter of the nation's homeowners owing more than their properties are worth (the proportion is much higher in Florida, and in Flagler) most consumers simply have no money to spend.

Businesses don't need cash incentives, either. American businesses are sitting on $1 trillion in cash, the result of record profits during the Bush years and continued sky-high profits despite the downturn-an obscene contradiction, considering on whose backs these businesses are profiting. They're not investing that cash because they're squeezing plenty from overworking existing employees while betting that demand won't increase in line with investments. Proof: Productivity has increased 80 percent in the last 30 years; average worker wage increase in the same time span? 8 percent. Not much math needed there to figure out who's been cashing in.

That cash pile is about to grow fatter with Obama cutting businesses' payroll taxes in half, while taking a shortcut to the Social Security trust fund's demise. It's a dream of a perfect storm, if you're a Republican more interested in defeating Democrats' legacy than in salvaging what's left of this country's rank-and-file economy.

The story goes that Obama's real interest has always been stimulus spending that puts money directly in people's hands in the form of unemployment compensation and immediate jobs for infrastructure and teachers and state and local government aid. There's some of that in his $447 billion stimulus proposed last night. If it was up to him, he'd skip the tax cuts altogether. He's no fool. But he's no leader, either.

Republicans won't let him have his version of stimulus without something of their own. That's a given. But Obama has capitulated every time instead of fighting back. He's the smart kid either too chicken or too arrogant to stand up to bullies. He's lost every time. The bullies know it. His former supporters, myself among them, know it. He's lost credibility. He's lost respect. He's losing the nation right along with him.

Thursday night he was back to spoiling what works with political pandering that doesn't. More tax cuts. More sacrifice to supply-side voodoo. More babble for bullies. Republicans have never had such an effective lackey. They'll surely miss him when his one and only term will be up in 14 months, and they'll again have only themselves to blame for the empire's slow-motion suicide. It started on Rev. Bush's watch. Obama did a fine imitation of hospice care. It'll soon be time to bring in Rev. Perry or his Mormon sidekick for the wake. You can order the sauce now.

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