Media finally takes a critical view of GOP economic policies

Posted by AzBlueMeanie:

Are the blinders that the media villagers have been wearing for 30 years finally coming off? The media finally takes a critical view of GOP economic policies in two reports.

The first report is by Charles Babbington of the AP (all propaganda) which remarkably gets the facts right for a change. Studies challenge plans GOP candidates tout:

Key proposals from the Republican presidential candidates might make for good campaign fodder. But independent analyses raise serious questions about those plans and their ability to cure the nation's ills in two vital areas, the economy and housing.

Consider proposed cuts in taxes and regulation, which nearly every GOP candidate is pushing in the name of creating jobs. The initiatives seem to ignore surveys in which employers cite far bigger impediments to increased hiring, chiefly slack consumer demand.

"Republicans favor tax cuts for the wealthy and corporations, but these had no stimulative effect during the George W. Bush administration, and there is no reason to believe that more of them will have any today," writes Bruce Bartlett, an economist who worked for Republican congressmen and in the administrations of Presidents Ronald Reagan and George H.W. Bush.

As for the idea that cutting regulations will lead to significant job growth, Bartlett said in an interview, "It's just nonsense. It's just made up."

The Bureau of Labor Statistics, which tracks companies' reasons for large layoffs, found that 1,119 layoffs were attributed to government regulations in the first half of this year, while 144,746 were attributed to poor "business demand."

Mainstream economic theory says governments can spur demand, at least somewhat, through stimulus spending. The Republican candidates, however, have labeled President Barack Obama's 2009 stimulus efforts a failure. Instead, most are calling for tax cuts that would primarily benefit high-income people, who are seen as the likeliest job creators.

* * *

To the degree the candidates addressed housing, they mainly took a hands-off approach. "We need to get government out of the way," Cain said. Romney told editors of the Las Vegas Review-Journal: "Don't try and stop the foreclosure process. Let it run its course and hit the bottom."

The second is an editorial opinion from the Neocon Washington Post which one would expect to support the "conventional wisdom" of this Republican idea because that's what the Post does. Not this time. No time for a corporate tax ‘holiday’ – The Washington Post:

A DEMONSTRABLY BAD idea in pursuit of a possibly worthy goal is still a bad idea. In this instance, the demonstrably bad idea is giving corporations a federal tax break — make that another tax break — on “repatriated profits,” money they earn overseas and bring home. The goal is an infrastructure bank to help build roads and other projects. Such an entity could help rationalize the hodgepodge of politically dictated projects and leverage private capital. But arithmetic’s basic laws must prevail: You can’t pay for an infrastructure bank with a tax break that costs money.

U.S. firms can now defer paying corporate tax on profits they earn overseas until the money is brought to the United States. The notion of a repatriation tax holiday is that the high U.S. tax rate, 35 percent, deters firms from reinvesting overseas profits and “traps” enormous sums, as much as $1.4 trillion, from being put to productive use in the United States. A temporary tax holiday — a reduced tax rate — would boost revenue in the short term as companies took advantage. But it would cost tens of billions in the longer run from lower taxes on income that would have been brought back eventually. The congressional Joint Committee on Taxation has estimated that cutting the tax rate to 5.25 percent would generate $25.5 billion in the first two years but end up costing $79 billion over 10 years.

Meanwhile, the holiday is not apt to create jobs. A Goldman Sachs analysis concluded that “the short-term economic benefit of such a policy would likely be minimal.” A tax holiday would not produce “a significant change in corporate hiring nor investment plans,” Goldman found, because “most firms with large amounts of overseas profits are likely to have adequate access to financing, so the availability of cash on hand is unlikely to be a constraint on investment.” It would reward companies that maneuvered to shift profits to tax havens. Finally, a tax holiday could have the perverse effect of encouraging companies to shift operations — and jobs — overseas in the expectation of another break down the road.

This is a provably bad idea. Congress passed a repatriation tax holiday in 2004. The Congress­ional Research Service reported “little evidence” that new investment was spurred. A recent study by the Democratic staff of a Senate subcommittee found that the 15 companies that repatriated the most profits, more than $150 billion, ended up cutting their U.S. workforces by nearly 21,000 jobs.

The Post's Greg Sargent asks the relevant question, Calling BS on GOP ideas for job creation – The Plum Line:

I continue to insist that the following question is absolutely central to understanding what’s happening in our politics right now: In the view of experts, are both parties making a serious and legitimate contribution to the debate over what to do about a severe national crisis that’s causing suffering among millions and millions of Americans? Or is only one party making a real contribution to that debate?

It is clear that Tea-Publicans are unserious about governing and are doubling-down on the disproven and discredited faith based supply-side "trickle down" GOP economics that have destroyed our economy. They have made it an article of faith in their socio-politico-economic religion, which means that they are unable to abandon demonstrably false ideas that caused great harm. And that represents a threat to this country.