The Guardian Unlimited, July 14, 2008
See article on original website
The Bush years prove that John McCain's plan to cut taxes on the wealthy won't promote economic growth.
President Bush has the worst record on job growth of any president since Herbert Hoover. The typical worker has seen her wages decline over the eight years of the Bush presidency, and she has seen none of the benefits of the period's productivity growth. In addition, tens of millions of homeowners are seeing the bulk of their wealth disappear in the housing crash.
This is the record senator John McCain has embraced by making Bush's tax cuts the centerpiece of his economic agenda. Choosing an economic policy that has been a proven failure is a bold and risky strategy in a presidential campaign, but McCain is betting that the media will be so incompetent that they will not notice. He may be right.
For example, last week National Public Radio (NPR) did a report on the tax cut proposals of McCain and senator Barack Obama. The report correctly told listeners that the McCain's proposals will give more money to the wealthy, while Obama's would give more money to the middle class.
However, after presenting a solid analysis of the distributional impact of the tax cut proposals, NPR decided to tell its listeners about the "big ideas" behind these two proposals. We were told that the big idea behind the Obama plan was "fairness", which could also be called "redistribution".
It was nice for NPR to tell its listeners what pejorative term can be used to describe the tax cut. I suppose it can also be called "socialism", "communism" or "Arthur", but NPR was good enough to stop at redistribution.
However, the reporting really got outrageous when NPR told us that the big idea behind the McCain plan was "growth". We could perhaps have an interesting debate about whether giving tax cuts to the wealthiest people in the country is a good way to promote growth, if we didn't already know the answer. We have had almost eight years of Bush tax cuts, and the record is as clear as it could possibly be. When it comes to producing economic growth that benefits the middle class, the tax cuts were dismal failures.
The economy is now in the process of sinking into the second recession of the Bush administration. At the current rate of job loss, it is entirely possible that Bush will have created fewer private sector jobs in his entire eight years in office than the 2.6 million jobs the Clinton administration created annually.
The average worker's wage will almost certainly be lower when Bush leaves office in January of 2009 than when he took office in January of 2001. This means that most workers will have seen nothing from the benefits of productivity growth over the last eight years.
Certainly Bush cannot be blamed for everything that went wrong, but it does not make sense to claim that his policies bear no responsibility for this economic failure. Bush was left in charge of the store (he also controlled both houses of Congress through most of his presidency), and we got cleaned out. Imagine if some big government Democrat had this track record.
This is why it is absurd for McCain to present himself as the candidate of jobs and growth. We are doing his policies now – and they don't work.
McCain should be embarrassed to push these policies given the huge failure sitting in front of our faces, but he is counting on the media to turn the issue into a he said/she said. McCain is betting that the media will treat the failure of the Bush-McCain economic policy as a matter of partisan contention, rather than as a fact, like gravity.
Thus far he has been right. He did a test run of media gullibility a couple of weeks ago when he proposed drilling for oil offshore in environmentally sensitive areas. He proposed this as a response to $4-a-gallon gas. This was McCain's way of showing that he cares for the working stiff.
Of course, McCain knows that the amount of oil potentially available offshore in environmentally sensitive areas is too small to have a noticeable impact on prices and that it will take a decade before we even see a drop. But, he wanted the media frame of being the guy who was willing to sacrifice the environment in order to help Joe Sixpack.
It worked like a charm. The media contrasted Obama's concern with the environment (portrayed as out of touch and elitist) with McCain's concern for jobs and growth.
If McCain could look good proposing a policy that jeopardises the environment for no visible economic benefit, why not push an economic policy that is a proven failure, as though the past eight years never happened? As PT Barnum should have said: "No one ever lost an election underestimating the gullibility of the US media."
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.