Do Cutting Taxes, Gutting Regulations Create Jobs?
Well, well. According to today’s (Thursday, March 10) NY Times, Republicans are becoming a bit sensitive at charges that they really have done virtually nothing to improve the employment situation in the US; especially after having run as jobs creators. Matthew Desmond at addictinginfo.org offers a pretty good list of what the US House has been doing instead of working on jobs for the un and underemployed but as I noted previously, a lot of their efforts have been primarily directed at destroying jobs related to government service. So what are they going to do? From the Times article:
Mr. Camp said Republicans were strongly encouraging the Obama administration to move forward with free trade pacts that could lead to 250,000 new hires. He noted that half of the eight hearings held by his panel this year were devoted to simplifying and overhauling the tax code to stimulate economic growth. He said he had been in touch with Senator Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, about moving forward with tax law changes.
“Fundamental tax reform is key,” Mr. Camp said. “It is a critical issue for us to work on.”
Mr. Upton said the chief job-creating focus of his panel had been to identify and move to block regulatory efforts by the Obama administration, and specifically the Environmental Protection Agency, that he said would strangle the economy.
Free trade agreements. Tax cuts. Blocking the EPA from protecting people and the earth. Yet there are people who will believe it against all the evidence otherwise. Just last week, Princeton Economics professor Uwe Reinhardt, used a post on the NY Times Economix blog to try to justify Free Trade as overall good for the world without addressing all the ways it is bad for the US. This post was in response to one he had written in February extolling global free trade. [cont’d.]
Many readers reminded me, properly, that the American worker who loses a good job would have paid taxes to the United States government that buys the myriad of services, including military defense, that people in our nation enjoy. If the worker who gained a job in Shanghai or Bangladesh pays taxes, they are not paid to our government.
Others mentioned that these displaced workers had contributed in many ways to local charities.
Surprisingly enough, he did admit that a true free trade system would also have free flowing of labor across borders as well.
One Canadian reader, in his comment, wondered why economists who advocate free trade in the flow of goods and capital do not also advocate the free movement of labor among countries.
That is a good question: how many card-carrying American economists would would sign an open letter to Congress advocating the removal of all barriers to immigration?
An article I saw in the Bowling Green, KY Daily News last week probably comes closer to reality than the Republicans in the US House or Professor Reinhardt.
While there might be general signs the economy is improving, that may not be the case for people in lower income levels – a situation which could be exacerbated further by rising gas prices.
“I’m not an economist and I’m not sure the economists even agree on how to answer (whether things are turning around or not), but we still see a lot of people struggling, and that includes our employees,” said Cheryl Allen, executive director of the Community Action Agency of Southern Kentucky.
Poor people being left behind. Then there’s the affect on older workers as well. From the NY Times You’re the Boss blog from last week:
In my last post, I noted that older workers face hiring discrimination because they increase health insurance costs. Which elicited this comment, from Lou in Boston:
Our Health insurance went up 17.75%. I asked what I could do to lower cost. BCBS (Blue Cross/Blue Shield) said if I fired my two oldest employees ( both 55 – one is my partner), hired two in their twenties, they would cut my cost more than half. I run a printing company with four other employees. All have been here over 10 years.
I’ve never heard explicitly from my insurers (Keystone HMO, in Philadelphia) that my costs are tied directly to the age of my workers, but now that I think about it, this scenario could explain the drop in my health costs this year (as I detailed in a previous post). What I didn’t mention then, because I hadn’t really thought about it, was that my oldest, and sickest, employee quit in September.
It almost seems like a license for age discrimination doesn’t it? But of course, apparently being a hero will cost you even that WalMart job (via MSNBC):
There was public outrage recently when four employees at a Walmart store in Utah lost their jobs for safely disarming a gun-toting shoplifter. But no one should be too surprised by the retail giant’s tough stance.
Walmart, the largest U.S. employer, has a long history of steadfastly enforcing its own rules and this recent example is no different. The retailer’s policy states that security personnel should step away from a thief if the individual has a gun, but in this instance the employees involved — including Justin Richins, Shawn Ray, Lori Poulsen, and Gabriel Stewart — felt compelled to subdue the gunman.
I have always hoped that if I were ever presented with a situation on my job that required me to do the proper, ethical, or even heroic action, that I would have the courage to do so. Here are four people being punished for doing the correct thing and the corporation being unyielding in adherence to their “rules.” And why do I believe that if/when these workers attempt to collect Unemployment, WalMart will contest it with a claim that the firings were for “cause?”
I have no answers but then again, it is increasingly apparent that no one has any answers, or at least no one in positions to directly affect things. The powers that be in Washington tinker around the edges. Initial Unemployment Claims for last week rose back up to 397K (economists surprised! of course).
In the United States, the Labor Department said that the applications for jobless benefits rose last week by 26,000 to a seasonally adjusted total of 397,000. The four-week average, a less volatile measure, rose to 392,250.
“The market is getting jittery about economic momentum globally,” Alan Gayle, a senior investment strategist at RidgeWorth Capital Management, said.
“That and the oil price basically made this market very nervous,” Mr. Gayle said, “so what we are seeing is a renewed rush to treasuries and better dollar strength.”
But heaven forbid that the Too Big to Fail banks actually be forced to follow even the limited regulations in the Dodd-Frank Bill. They seem like a mix of three year olds having temper tantrums and the sixteen year olds with new driver’s licenses trying to kill themselves with the family car.
And because I can:
Cross posted from Just A Small Town Country Boy