The Republicans have no credibility on deficits. The Republicans have no credibility on national security. For decades, both have been all but ceded as Republican strengths, despite plenty of evidence that they shouldn't be. On those issues, Democrats have often played on the Republican home field, to the detriment of everyone. The Republicans would like for the same dynamic to pertain on the economy and unemployment. At the end of last week, while President Obama was enjoying the early indications of what we now know is a substantial post-Convention bounce, Republicans rejoiced at the release of a lousy jobs report. They were sure that would deflate what they deluded themselves into believing was but a temporary Obama polling bubble. It's the economy, stupid—Republicans rejoiced. And it is the economy. And unemployment still will be one of the key issues in this election, up and down the ballot. But not in the way Republicans think.
President Obama and the Democrats have tried to pass jobs bills. The Republicans killed the American Jobs Act. The Republicans killed the jobs bill that would have repaired our badly crumbling national infrastructure. The Republicans killed the jobs bill that would have given tax cuts to small businesses that create jobs. They're even holding up a bill specifically designed to create jobs for military veterans. The Republicans don't care about creating jobs. Republicans do care about playing politics over jobs, obstructing bills that would actually create jobs so they can exploit the lack of jobs for political gain.
Last Sunday, in the wake of that Convention bounce and that lousy jobs report, the New York Times did us all the great service of providing a case study in how false narratives are framed and propagated, even by supposed journalists working for one of the best traditional media outlets. The culprit was Jackie Calmes, but the lesson is much larger than one person's incompetence or dishonesty. This exemplifies what is so wrong with our national political conversation:
With both parties’ conventions now concluded, what is clear is that each played to type — Republicans as the party of business, Democrats of the worker. For President Obama, however, the week here captured his tricky balancing act: a four-year struggle to show that pro-worker does not mean antibusiness.Of course, the basic facts prove otherwise, and the only reason anyone could be said to be playing to type is because people like Calmes are typecasting rather than reporting. President Obama's record on business is clear:
The U.S. economy may not be recovering as fast as President Obama likes, but at least he can make one claim: The stock market has done better under his watch than with any other recent president.And of course those numbers reflect the recovery from the economic meltdown President Obama inherited, and the Fed also gets some credit, but that meltdown occurred under those supposedly pro-business Republicans.
Since Obama's inauguration on Jan. 20 2009, all three major U.S. stock indexes are up more than 60 percent. The Nasdaq Composite alone has soared a whopping 105 percent.
Even so, the market has performed better during Obama's 43 1/2 months in office than in any of the five prior administrations. In fact, the S&P 500 has outperformed most of the major world indexes during his presidency.(Continue reading below the fold.)
Calmes would seem to be mistaken:
U.S. farmers are heading for their most profitable year on record despite the worst drought in half a century as high grain prices and payouts from a federal crop insurance program compensate for a smaller harvest.The standard political narrative that Democrats are bad for business would seem to be flat wrong:
The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy. The 2011 profits are outsized based on two key historical metrics. They represent 7% of total sales, vs. an average of 5.14% over the 58-year history of the Fortune 500. Companies are also garnering exceptional returns on their capital. The 500 achieved a return-on-equity of 14.3%, far above the historical norm of 12%.Calmes does include some of the positive economic news, but she buries it amidst more right-wing propaganda, where it can barely be found. But even worse is how she promotes the standard political narrative that what's best for business is best for workers, that job growth is tied to political success, and that the reason we don't have job growth is because businesses are over-regulated and over-taxed.
The challenge for the campaign was to counter Republican attacks at their Tampa, Fla., convention depicting Mr. Obama as the enemy of job creators when unemployment persists, while energizing his liberal base in the convention hall and beyond. The delicate juggling was most evident on Wednesday, during the brief daily window of network television coverage.Why that is a challenge, Calmes never explains. Because she seems to be tacitly accepting and promoting the Republican narrative, both that Obama is the enemy and that businesses are job creators rather than profit-making enterprises that don't care whether or not they create jobs, just so they create profits— and in many cases make profits by destroying jobs. You know, the way Bain Capital has done. Under Mitt Romney. The same Mitt Romney who would most benefit if anyone took seriously this dishonest and perhaps deliberately calculated Calmes' narrative.
Defining businesses as job creators may be the most essential aspect of the Republican disinformation campaign. Sure, some businesses create jobs, but businesses aren't in business to create jobs, and the facts on that are also readily available, if people like Calmes actually cared to report facts honestly. Because if creating jobs was as simple as keeping businesses highly profitable, those record profits businesses have been making would have resulted in the creation of lots of jobs. Instead, those record profits have created this:
At present, cash accounts for more than 6 per cent of the assets on the balance sheets of US non-financial companies. That is the highest in at least six decades, and represents the fruit of record high profit margins. Companies cut costs through redundancies during the post-Lehman economic swoon, while negligible interest rates reduced their borrowing costs. As a result, US corporate profits are higher, as a share of gross domestic product, than at any time since 1950.Record corporate profits. The largest piles of cash in six decades. The lowest dividend pay-out ratio in more than a century. Lagging job creation. Maybe businesses aren't, by definition, job creators. Maybe further greasing the skids for businesses isn't the way to create jobs. Maybe if corporate success meant the creation of jobs we would be seeing lots of jobs created. Which we aren't. But we are seeing this:
But as uncertainty persists, groups are reluctant to repay that cash to shareholders by buying back stock or – particularly – paying dividends. The pay-out ratio (the proportion of earnings that go in dividends) for the S&P 500 index is at its lowest since 1900.
Profits at big U.S. companies broke records last year, and so did pay for CEOs.Record corporate profits. The largest piles of cash in six decades. The lowest dividend pay-out ratio in more than a century. Record CEO pay. Lagging job creation. Maybe businesses aren't, by definition, job creators. Maybe further greasing the skids for businesses isn't the way to create jobs. Maybe if corporate success meant the creation of jobs we would be seeing lots of jobs created. Which we aren't. But I repeat myself. Because the facts bear repeating.
The head of a typical public company made $9.6 million in 2011, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.
That was up more than 6 percent from the previous year, and is the second year in a row of increases. The figure is also the highest since the AP began tracking executive compensation in 2006.
Maybe there is something fundamentally wrong with the narrative about job creation that is promoted by the Republicans and their propagandists, such as Calmes. Or maybe we're missing one final element of the Republican narrative that will make it all work. Like taxes. Like that the real problem is that these record profits and this record CEO pay and these alpine mounds of cash are getting so gobbled up by high taxes that there just isn't enough left for job creation. Or maybe not:
The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.I'm guessing $32,000,000,000,000 could create a lot of jobs, if the accumulation of staggering amounts of wealth by a very small number of people actually had anything to do with job creation. Which it clearly doesn't. Record corporate profits. The largest piles of cash in six decades. The lowest dividend pay-out ratio in more than a century. Record CEO pay. A staggering $32,000,000,000,000 squirreled away somewhere so it can't be taxed. So where are the jobs? And wouldn't it be nice just once to hear reporters ask that question of Republican leaders? Like maybe asking the Republican presidential nominee, like maybe at one of the televised debates?
James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system.
The Republican answer to pretty much any economic situation is to cut taxes. High inflation? Cut taxes. High unemployment? Cut taxes. Economy in danger of over-heating? Cut taxes. Economy imploding? Cut taxes. So maybe someone ought to ask Mitt Romney and the rest of the Republicans how exactly cutting taxes is supposed to create jobs. What is the mechanism? What is the rationale? If corporations are making record profits, if they're sitting on mountains of cash, if CEOs are making record pay, and if a staggering $32,000,000,000,000 is sitting somewhere already untaxed, then how is lowering taxes going to create jobs? The ostensible job creators are doing awfully damn well, but they're not creating anywhere close to enough jobs. Maybe that's because the ostensible job creators aren't actually interested in creating jobs.
Remember how President Bill Clinton raised taxes, without getting a single supporting vote from Congressional Republicans? Remember the economic boom that followed, with near full employment and low inflation? Remember how the Lesser Bush cut taxes and cut regulations and produced the worst economic crash since the Great Depression? That's the honest economic narrative. Cutting taxes doesn't create jobs. Allowing the wealthy to accumulate more wealth doesn't create jobs. And in case the Republicans trot out their other tired and dishonest rationale, the problem isn't over-regulation, either:
Labor Department data show that only a tiny percentage of companies that experience large layoffs cite government regulation as the reason. Since Barack Obama took office, just two-tenths of 1 percent of layoffs have been due to government regulation, the data show.Like every Republican excuse for cutting taxes, cutting regulation is just more factually dishonest false narrative:
Businesses frequently complain about regulation, but there is little evidence that it is any worse now than in the past or that it is costing significant numbers of jobs. Most economists believe there is a simpler explanation: Companies aren't hiring because there isn't enough consumer demand.
We asked experts, and most told us that while there is relatively little scholarship on the issue, the evidence so far is that the overall effect on jobs is minimal. Regulations do destroy some jobs, but they also create others. Mostly, they just shift jobs within the economy.Cutting taxes doesn't create jobs. Cutting regulations doesn't create jobs. The Republican proposals to cut taxes and regulations won't create jobs. But you know what would create jobs and create a full economic recovery? Keynesian stimulus would create jobs and create a full economic recovery. Government spending specifically focused on direct job creation. That was how the Great Depression was resolved. That was how President Obama stopped the economic freefall he inherited from the anti-tax, anti-regulation Republican Bush administration, which was such a friend of business that it created the worst economic collapse, both for businesses and jobs, since the Great Depression.
“The effects on jobs are negligible. They’re not job-creating or job-destroying on average,” said Richard Morgenstern, who served in the EPA from the Reagan to Clinton years and is now at Resources for the Future, a nonpartisan think tank.
Republicans want to blame President Obama for high unemployment, but their solution clearly doesn't work. And they do know that it doesn't work. Because they don't really care whether or not it works. Republicans don't care about creating jobs, they only care about allowing fewer and fewer people to accumulate more and more wealth and power. And the media won't call it class warfare, but they will call it class warfare when anyone calls attention to it.