Tax Cuts Create More Jobs Than Actually Creating Jobs?!?!?

By Big Tent Democrat, Section Other Politics
Posted on Tue Jun 14, 2011 at 09:13:08 AM EST
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Via Atrios, I discovered that Dem political lawyer Ron Klain "overs[aw] implementation" of the infrastructure spending in the 2009 stimulus:

When I worked in the Obama White House, one of my most important assignments was to help oversee implementation of the American Recovery and Reinvestment Act[.]

Why was Ron Klain charged with this task? What did he know about infrastructure projects? As Atrios points out he surely knows very little about economics and job creation. Atrios writes:

former admin official Ron Klain argues with imaginary hippies who told him all he had to do was build another Hoover Dam and the economy would be fixed, and then proceeds to ignore any multiplier effects for infrastructure projects while arguing that payroll tax cuts in the face of mass unemployment is the way to go. Also, too, subsidies for private industry! Or something.

Atrios is reacting to this bit from Klain:

In the short run, more jobs can be created with initiatives like the payroll tax cut the administration is reportedly considering.

This is just wrong. Indeed, how in Gawd's name can Klain make the claim that the stimulus created or preserved 3 million jobs while at the same time spouting this nonsense? The stimulus did not create 3 million direct jobs (would that it had.) It is by taking into account the multiplier effects of the stimulus that such a claim can even be seriously forwarded. Klain's column is simply ridiculous.

But the fascinating part of this is this economics claptrap is being forwarded by a Dem political operative. And that part is just depressing. We are doomed.

Speaking for me only

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Tax Cuts Create More Jobs Than Actually Creating Jobs?!?!? | 44 comments (44 topical)

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Obama is clueless on economics (5.00 / 5) (#1)
by BobTinKY on Tue Jun 14, 2011 at 09:26:08 AM EST

poly sci major & lawyer. Say what you want about the big money guys like Geithner, Rubin et al, they are always the smoothest talking and best dressed in the room. Like many a coprorate CEO who later regrets it, Obama equates this smoothness with know how.

Truth is all they know how to do is get themselves more money.

This lady could buy him a clue (5.00 / 4) (#25)
by MO Blue on Tue Jun 14, 2011 at 01:55:19 PM EST

"It's an employer's world," said Rebecca Penny, a 55-year-old widow who was laid off over a year ago from her job at a Chevrolet plant in Tennessee. "I lost my benefits the night I was laid off. Now I can't afford medicine. And I can only find minimum wage jobs that don't pay enough to keep up my house payments... My unemployment insurance runs out at the end of the year, and if I can't find something by then, I may lose my house... I don't understand this debate in Washington," she said. "Everyone's talking about deficits, but to me they are doing it backwards... Bring back the middle class first, that will take care of the deficits. Without the middle class, the economy isn't going to go anywhere." link

She is talking better sense than Obama and all of his advisors combined.


: Her scenario (none / 0) (#27)
by TeresaInSnow2 on Tue Jun 14, 2011 at 02:34:00 PM EST

Her scenario is exactly what the crooks at the top want, tho.

: And (none / 0) (#43)
by cal1942 on Tue Jun 14, 2011 at 11:41:40 PM EST

every other deadhead inside the Beltway.
In 213 years the Village has become more of a swamp than its original topography.
It's awfully hard to drain the swamp when you're up to your a$$ in alligators and god knows the Village has more alligators than the everglades.
Ron Klain was general council of the Gore Florida recount committee. We all know how that turned out.

I'm sure Obama has been getting (none / 0) (#6)
by observed on Tue Jun 14, 2011 at 09:51:28 AM EST

tutored. Geithner will get him up to speed.


They know how to get more money in the (none / 0) (#28)
by observed on Tue Jun 14, 2011 at 03:19:32 PM EST

short term, which is all they care about.

We have a bunch of "Chainsaw Al Dunlops" at the helm of the entire US economy.


What? (5.00 / 2) (#2)
by Ga6thDem on Tue Jun 14, 2011 at 09:29:20 AM EST

I guess you haven't got the message that qualifications and experience no longer matter.

The article (5.00 / 1) (#4)
by Warren Terrer on Tue Jun 14, 2011 at 09:45:59 AM EST

is one long apologia for why the administration has given up on stimulus via spending and opted for stimulus via tax cuts. Klain's points about the Hoover Dam are a straw man as I have never heard anyone say that another Hoover Dam project is all the economy needs. Stimulus could take the form of any number of infrastructure projects both large and small.

By way of one example, the admin could have committed to funding the renovation of every single one of America's public schools. The school system is a shambles and a renovation project is sorely needed. It could also be followed by a building project and teacher hiring project in order to get the student/teacher ration down to 25 or even 20 to 1.

There's really no end to the number of useful projects that the administration could have spent money on in order to stimulate the economy and improve the nation's well-being at the same time. But the idea has been long abandoned, the double dip is coming and the lost decade is only half over.

A twofer - even a threefer - might have been (5.00 / 2) (#18)
by oldpro on Tue Jun 14, 2011 at 11:57:40 AM EST

to put solar panels on every appropriate public building in the country, providing both jobs in installation and manufacturing while lowering costs of operations in every instance, saving schools, cities, counties, states and the federal government millions in operating costs.

At the same time, costs and R&D on solar would improve through demand and growth/competition in the alternative energy indstry.


Hey, maybe you can answer (none / 0) (#22)
by observed on Tue Jun 14, 2011 at 12:47:50 PM EST

a question I have about solar panels.
Are they available today in materials that are sufficiently plentiful for mass production, on the scale you mention?


Nope! Sorry, I can't answer. (5.00 / 1) (#29)
by oldpro on Tue Jun 14, 2011 at 03:21:48 PM EST

But I know this...big orders would ramp up production and manufacturing in no time across the spectrum of providers. Think WWII and airplane production. It happened.


elections matter (5.00 / 1) (#34)
by NYShooter on Tue Jun 14, 2011 at 05:40:23 PM EST

regardless of anything else one may think about Jimmy Carter, he had solar panels installed on the roof of the White House. Being, I believe a nuclear engineer, he was intensely interested in alternate energy research.

anyway, and of course, the first thing "Government is the Problem" Reagan did upon moving into the W.H. was have the panels removed.

and then came 30 wasted years,

and here came $4/gas

which led to huge trade deficits
which led to huge budget deficits
which led to our current dismal situation

which leads to my saying for the 1000th. time:

"We are too stupid to deserve a Democracy"


Sure, but if you need rare earths, for example (none / 0) (#30)
by observed on Tue Jun 14, 2011 at 03:23:22 PM EST

then there will be hard limits.


: If so, then R&D will matter (5.00 / 1) (#41)
by oldpro on Tue Jun 14, 2011 at 10:26:12 PM EST

even more, hmmm?
Guess we'd better find out!
There are no cheap and easy answers. Girding up now for the huge fights coming over Canadian oil sands as their delivery out of Canada will impact the US, from a proposed pipeline to Texas across the midwest to huge tankers proposed to pickup oil from a pipeline to Vancouver...tankers not allowed in NW waters on the US side, but the oil (if spilled) will not obey that law!
Are we having fun yet?

::banging head on desk:: (5.00 / 4) (#8)
by Anne on Tue Jun 14, 2011 at 10:13:45 AM EST

I mean, what else is there to do but engage in something physically painful to take one's mind off the worsening financial pain? Hard part is explaining the big red welt on my forehead...

What Klain expressed is the kind of thinking that is controlling the fiscal and economic policy of this administration, and while I think it is always possible to change course, there seems to be no indication of any kind that that is under consideration.

The president is making all the obligatory factory appearances, and declaring that he won't be satisfied until every person who needs a job is able to find one, but instead of appearing before people who already have jobs, he really ought to be facing large groups of people who don't, who haven't been able to find one in more than a year of actively looking, who haven't been able to cobble together a decent living through part-time work, who have lost their homes, and have slid into a financial abyss. Those are the people he needs to be looking in the eye - and they will not be satisfied by the usual platitudes being offered on factory floor and economic conferences.

Really, I would like to know if there is any endgame here other than to get Obama re-elected - not that policies and mindsets like these are really going to be of much help - but, seriously, with history as a guide, with countries around the world as an example, why is there still a sense within the administration of "this time" things that have never worked are magically going to?

It's clear no one is looking out for us, so it's time we looked out for ourselves, as much as we can, in whatever ways we can control.

I'm at the point where I think it behooves all of us to start planning, as much as we can, for the worst. If you can plant a garden and freeze or can food for the winter, do it. If you don't have garden space, stock up at farmer's markets and freeze or can. Get together with your family, friends and neighbors and buy a half a steer or lamb or pig - much cheaper than buying it at the store - divide up the meat, and freeze it. When non-perishable food goes on sale, stock up. Pay yourself first and save what you can; have money direct-deposited into savings so you never see it. Pay down as much debt as you can. Buy local whenever you can to help support the businesspeople in your community.

I was never a believer in the Obama 2008 mantra of Hope and Change, but never did I imagine how little hope so many would have, and how much for the worse the change would be.

He doesn't (5.00 / 1) (#10)
by TeresaInSnow2 on Tue Jun 14, 2011 at 10:27:17 AM EST

he really ought to be facing large groups of people who don't

He doesn't do this because the secret service doesn't have tools in their arsenal to deal with PITCHFORKS!


It's about (5.00 / 3) (#11)
by Warren Terrer on Tue Jun 14, 2011 at 10:30:49 AM EST

getting himself re-elected. America isn't a democracy but a system in which a multi-billion dollar PR campaign funded by the uber-wealthy decides who becomes president.

The idea that Obama's election in 2008 was funded mostly by donations from the little people is a myth. This time around the little people have no money to speak of and aren't all that enthused about Obama, so there isn't even a plausible attempt being made to pretend that the little guy will fund Obama's re-election.

Obama needs to make sure that he gets those banker billions instead of Mitt Romney. Under such a system it is inevitable that the president implements policies that help the bankers first and foremost. Obama rationalizes his policy choices by convincing himself that these economic policies are correct, and only coincidentally happen to help bankers and his re-election.


What you (none / 0) (#14)
by Ga6thDem on Tue Jun 14, 2011 at 10:53:01 AM EST

are saying is backed up by this article:link

The fact that money rules is only because the voters ALLOW it to rule largely.

Anyway, Obama might not be the big money person that he was in 2008 with anybody. I mean with Obama's numbers, if I were a banker I would be working on buying Romney. They can easily switch their money from one party to the next depending on who it looks like is going to win.


And I think that's exactly why Obama (none / 0) (#15)
by Anne on Tue Jun 14, 2011 at 10:59:30 AM EST

is hard at wooing Wall Street - I posted something about this yesterday from Glenn - because he knows that if Romney gets the nomination, that's where Wall Street is going to want to put some big money.

We know Wall Street - as with all corporate sectors - will play both sides, giving money to both eventual candidates, but I think Obama wants to sew them up now, which means, in my opinion, more Wall Street/Bankster-friendly policy for the remainder of this pre-election period.


: Sew up them up now? (none / 0) (#16)
by sj on Tue Jun 14, 2011 at 11:39:05 AM EST

That's a fool's errand. Oh, they may contribute, but no way will they limit their own options. Thanks to Obama, the banksters are flush with cash. They can afford to fund both candidates without blinking. Which also means Wall Street/Bankster-friendly policy in post-election period, too.

If voters are motivated to vote for (none / 0) (#17)
by oculus on Tue Jun 14, 2011 at 11:51:17 AM EST

a candidate for U.S. Pres. because the voter thinks that candidate will nominate to SCOTUS those who will uphold restrictions imposed by Congress on campaign funding, then yes, voters allow money to rule. But, I don't think that's the case, even after "Citizens United."


What I mean (none / 0) (#19)
by Ga6thDem on Tue Jun 14, 2011 at 12:04:54 PM EST

is largely that the media talks about how much money a candidate raises and then people think well, that must be a good candidate if so many people are giving that candidate money etc. The supreme court comes into people's thinking but not in the way that you are suggesting IMO. Supreme court voters tend to have a single issue like Roe v. Wade that makes them base their vote on that has been my experience.


: My experience also, hence my (none / 0) (#20)
by oculus on Tue Jun 14, 2011 at 12:09:03 PM EST

"DfaRv.W" mantra.

Love the headline of ... (none / 0) (#3)
by Robot Porter on Tue Jun 14, 2011 at 09:32:54 AM EST

this post. There's so much "?!?" in the current debate on economics.

Sad and bereft at this point (none / 0) (#5)
by Militarytracy on Tue Jun 14, 2011 at 09:50:58 AM EST

I guess our President and his administration never really did see the economic crisis as an emergency. Count me as shocked. Putting someone who is probably a great operative in charge of something so vital that they know nothing about is sort of like putting someone who knows about Arabian horses in charge of FEMA.

No, they didn't see it as a crisis ... (5.00 / 1) (#23)
by Robot Porter on Tue Jun 14, 2011 at 01:46:53 PM EST

but they did see it as a chance to give their buddies big stacks of cash.


I just went and read what Klain (none / 0) (#7)
by Militarytracy on Tue Jun 14, 2011 at 10:00:49 AM EST

wrote. He knows he screwed up. The whole piece is about him trying to avoid understanding that and hoping to prevent anyone else from understanding that. It is extremely sad and worthless all at the same time, and obviously he does understand that he was wrong and screwed up on some level.

Seems like what will follow now is a huge wave of such baloney from everyone who miscalculated, didn't understand, and screwed it up. And it fixes nothing, doesn't even start the debate that we must have to get us to where we will need to be to really do something about our economic crisis.


It's interesting to recall (5.00 / 1) (#9)
by lilburro on Tue Jun 14, 2011 at 10:18:12 AM EST

that in 2009 they really, really didn't think it would get to be this bad. I don't think it could all be predicted, but it sucks that instead of trying to change the political reality a little bit by arguing for better policy the Obama Administration seems content to jump into unreality and try to get whatever they can. And yes, now they look tone deaf at focusing on the deficit.


There were numbers out there (5.00 / 2) (#12)
by Militarytracy on Tue Jun 14, 2011 at 10:36:37 AM EST

that made it really clear that our financial sector had nuked itself to death, and when contrasting the estimation of toxic assets, insolvency, along with how much of our economy was made up of financial services, alongside an inflated stock market that is still inflated, and having very few healthy economic fundamentals....if they really did want to know that we were in deep $hit the truth was right there. They had to really not want to see it in order to not see it. Perhaps that is why people without economic expertise were put in charge of certain things, so that they wouldn't get immediately frustrated by looking at our economic fundamentals and then sounding alarms.


: or perhaps another example of (none / 0) (#42)
by BobTinKY on Tue Jun 14, 2011 at 11:27:55 PM EST

not letting a crisis go to waste. Seems like all efforts were to prop up the portfolios of Wall St & the well to do.
Good post, they had the info in front of them & were either stupid or interested in accomplishing other objectives.

Yes (none / 0) (#13)
by cal1942 on Tue Jun 14, 2011 at 10:43:07 AM EST

I recall the administration said the Recovery Act was just the right size. Then in the same breath saying the act was only designed to keep the economy from sliding deeper into a depression.

Short sighted from the start.


Ya know . . . . (none / 0) (#24)
by nycstray on Tue Jun 14, 2011 at 01:52:37 PM EST

it's beginning to smell a lot like spam . . .

: I don't mind the revolutionaries (none / 0) (#26)
by Militarytracy on Tue Jun 14, 2011 at 02:24:28 PM EST

Where would we be without them?

: Yeah I wondered about (none / 0) (#31)
by sj on Tue Jun 14, 2011 at 05:00:51 PM EST

pointing to this comment but in the end I agree with MT. :)

digby's Chart of the Day (none / 0) (#32)
by MO Blue on Tue Jun 14, 2011 at 05:18:09 PM EST

Workers' share of U.S, national income is collapsing:
That's a very scary chart for a country that has long had a pretty stable society and a thriving middle class. Even in the gilded age there was still something of a frontier and vast entrepreneurial opportunity. I don't know where this ends up.

With Obama between the pitchforks (none / 0) (#33)
by sj on Tue Jun 14, 2011 at 05:37:49 PM EST

and the banksters.

Of course there are too few family farms these days and so not nearly enough pitchforks extant. What's a suitable replacement? Expecially keeping in mind that it has to keep the "rubes" out of taser range.

Can't do anything about bullet range, though...

Are we prepared to take up our grandfathers' mantle and fight to keep what they fought to gain?

I see my own feet of clay. I can see me taking both actions: Fighting AND standing down. I think it will be a split second desicion. In advance, I don't know what I will do come the revolution.


There may be more pitchforks out (none / 0) (#35)
by nycstray on Tue Jun 14, 2011 at 06:09:39 PM EST

there than you think. Backyard food gardens are on a good upswing. Pitchforks are needed for turning compost ;) And I'm sure we'll have some tomatoes to bring to the party . . . .


We have (none / 0) (#39)
by Zorba on Tue Jun 14, 2011 at 07:59:40 PM EST

a hay fork, a manure fork, and a garden fork. Which one would you like to borrow?


: I think the manure fork (5.00 / 1) (#40)
by sj on Tue Jun 14, 2011 at 08:44:28 PM EST

would be the most appropriate. :)

There is no way to avoid (none / 0) (#37)
by Militarytracy on Tue Jun 14, 2011 at 06:59:03 PM EST

some serious deflation now. There just isn't any way.


Porkulus jobs created? (none / 0) (#36)
by diogenes on Tue Jun 14, 2011 at 06:25:56 PM EST

A well-run government stimulus program with jobs paying twenty thousand dollars a year (replacement level) might create a lot of jobs. I don't think that FDR paid prevailing union rates for those who worked in the civilian conservation corps. A stimulus program like the 2009 Porkulus program doesn't create many jobs.
Also, the best argument is to NEITHER cut taxes nor have a porkulus program, because the added public debt crowds out private debt/loans to business.

You're gonna have a hard time... (none / 0) (#38)
by Romberry on Tue Jun 14, 2011 at 07:25:52 PM EST

...making the case for "added public debt crowds out private debt/loans to business", 'cause in a fractional reserve banking system, it just ain't so. Money is loaned into existence. Really.


So let banks magically lend more (none / 0) (#44)
by diogenes on Wed Jun 15, 2011 at 09:35:39 PM EST

So just reduce capital requirements for banks and you can magically lend more without the need for tax cuts OR stimulus programs that increase the deficit. Easy?


: I hate disingenous replies... (none / 0) (#45)
by Romberry on Fri Jun 24, 2011 at 07:39:57 PM EST

...like yours. Follow the previously posted link. Nothing to do with capital requirements. Just an explanation of the fractional reserve banking system and how money is loaned into existence...which means that government (especially one that has its own reserve currency) simply can't crowd out private demand. Ain't possible in this system. Educate yourself.