Category: Politics

The Failure of Republican Economics

Those clinging to Bush-era ideologies and illusions show they simply do not understand economics.

Last Modified: 06 Aug 2012 18:51

Former US President George W Bush’s new book might be poorly timed [GALLO/GETTY]

What’s wrong with this picture? The George W Bush Institute has just released a book, The 4% Solution: Unleashing the Economic Growth America Needs with a foreword by former President George W Bush. A better question would be, what’s not wrong with this picture? It’s not just the matter of timing – the former Republican president releasing a book just as the current Republican nominee is struggling to establish his own identity and political bona fides. Nor is it simply the additional embarrassment that the book’s subject is economics, which Mitt Romney pretends to be an expert on. It’s not even just the fact that Bush had his chance at producing four per cent growth for eight long years and never once managed to even come close. In fact, he only managed three isolated quarters when the economy grew that rapidly.

It’s all that and much, much more. Because Republicans in general are downright terrible at producing four per cent growth, while Democrats are relatively good at it. In fact, since FDR took office in the depths of the Great Depression, Democratic presidents have produced four per cent annual growth an average of three out of every five years – 60.5 per cent of the time – while Republican presidents have only managed it a little more than one year out of every four – 27.8 per cent of the time. With figures like that, it’s a no-brainer: the best thing you can do to produce four per cent growth is to vote for a Democrat for president.

Fastest years of economic growth

The five fastest years of economic growth all took place under a Democratic president. His name was Franklin Delano Roosevelt. In fact, the 11 fastest years of economic growth all took place under Roosevelt or Truman. Democrats presided over 16 of the 20 fastest-growing years, 22 of the fastest-growing 30 years, and 28 of the fastest-growing 40 years. There have only been 36 years in which growth has actually topped four per cent, and Democrats were in charge during 26 of them.

“Republicans love to idolise Ronald Reagan – even though they’d never nominate him if he were running today.”

George W Bush was in charge during zero of them. His best year clocked in at 3.5 per cent growth – in 41st place.

Bill Clinton did it five times out of eight. And Clinton produced that better record while turning massive federal deficits into a surplus, while Reagan almost tripled the federal deficit during his two terms.

In fact, since Reagan took office in 1980, Republican presidents have only produced four per cent growth or better 20 per cent of the time, compared with 45.5 per cent of the time under Democrats.

Republicans like to argue that they are the party of business and therefore the party of economic growth. Democrats are the party of economic redistribution. Republicans grow the pie, Democrats cut it up. This is what Republicans argue, and the so-called “liberal media” largely echoes their message. But the facts simply don’t add up.

Since 1932, growth under Democrats has averaged 4.8 per cent annually, while growth under Republicans has averaged just 2.7 per cent. For a two-term presidency, this amounts to a growth rate almost double under the Democrat: 45.5 per cent growth, compared with 23.8 per cent growth under the Republican. And if it’s sustained growth, year after year that you’re looking for – the sort of growth that Bush is dishonestly promising, the results are even more lopsided.

When’s the last time since 1929 that a Republican president presided over four straight years of four per cent GDP growth? The answer is simple: Never. When’s the last time a Democrat did it? Bill Clinton, from 1997 through 2000. Democrats also put together four or more years of four per cent + GDP under Kennedy/Johnson (five years: 1962-66) and FDR – twice. First was a four-year stretch from 1934-1937, followed by a six-year stretch, 1939 to 1944.

The only year FDR missed four per cent + GDP growth over an 11-year span was 1938, the year he fell prey to the rhetoric of deficit hawks and cut back spending to try to balance the budget. It scared the bejesus out of folks, fearful that the Great Recession would return full force and Roosevelt never considered it again. But that budget-slashing disaster is exactly the same “solution” that Republicans are pushing today – and demonising Obama because he’s reluctant to go along with them.

Obama recently told CBS News that there was a significant difference between running a business and running an economy:

“When some people question why I would challenge his Bain record, the point I’ve made there in the past is, if you’re a head of a large private equity firm or hedge fund, your job is to make money. It’s not to create jobs. It’s not even to create a successful business – it’s to make sure that you’re maximising returns for your investor. Now that’s appropriate. That’s part of the American way. That’s part of the system. But that doesn’t necessarily make you qualified to think about the economy as a whole, because as president, my job is to think about the workers. My job is to think about communities, where jobs have been outsourced.”

Tax cuts for high earners

This is a valid point, and economist Paul Krugman justly backed him up, his point that “business is not economics” linking to a 1996 paper where he makes the larger argument about the systemic differences between a micro-economic and a macro-economic view of the economy – that is, that “a country is not a company”.

In fact, Democrats are so much better at growing the economy that even super-wealthy Republicans do better when a Democrat is in the White House. Attention has repeatedly been focused on the Bush tax cuts for high-income Americans. But those tax lower tax rates pale in comparison to the much stronger income growth under Clinton. So what if you’re paying four per cent more in taxes, if you’re earning way more than you otherwise would?

Paul Rosenberg is the senior editor of Random Lengths News, a bi-weekly alternative community newspaper.

Read more at Al Jazeera

Why the French Economy Works Surprisingly Well – SPIEGEL ONLINE

New French President François Hollande performs his patriotic duty.

The journalists’ visit to the Paris-based headquarters of French automaker Renault kicked off in a very French way: with an almost two-hour lunch. It was naturally not a simple affair in the company cafeteria. The meal at the nearby Cap Sequin restaurant boasted three artery-clogging courses, a bottle of white wine and a wonderful view of the Seine River followed by coffee and chocolates. At about half past two, it was finally time to get back to work, though it was somehow difficult to do so.

For decades, France’s economy has violated established laws of economics and not just because of the cholesterol-packed lunches. There’s also the fact that France is the world leader in terms of vacation days, has a nationwide 35-hour work week and allows its citizens to retire at 65, two years earlier than in Germany. On top of that, France has strict regulations regarding employee termination and a swollen public sector. Nearly 57 percent of France’s economic performance flows through state hands. That figure is about 10 percent higher than in Germany and a record level among industrialized nations.

Now France has elected François Hollande, a Socialist president whose most important pledge was “More of the same!” He has called for public-sector jobs financed with a 75 percent tax on top earners, and more time to enjoy retirement. Indeed, while Germany just boosted its retirement age to 67, its western neighbors might soon be able to leave the working world at 60 with a full pension.

Given these facts, it should come as no surprise that France is struggling with a few economic problems: major budget shortfalls, persistently low economic growth and a high youth-unemployment rate. Even more astounding, however, is just how good the French are doing despite their idiosyncratic economic model. Admittedly, per capita economic performance is 8 percent lower in France than Germany, after adjusting for differences in purchasing power. But considering that the French have been the world champions of savoir vivre for decades, while the Germans have been self-denying work horses, that 8 percent difference doesn’t really seem so big.

In other words, a country that according to established economic laws should be playing in the same league as Greece has defied the odds to keep pace with Germany. How did this happen?

Read more at Der Speigel

The West Must Not Appease Bashar al-Assad

No reasonable person, neither American nor Syrian, wishes to see the United States and its allies become deeply involved in the Syrian civil war, but for the western powers to fail to act now is tantamount to appeasement of a butcher of children. No one knows what will happen if we strike Syrian military targets; no one knows what will happen if we do not. That is not an argument. If the past is prologue, then Assad will continue to slaughter the people of Syria without discrimination. That much appears certain.

The confiscation of Assad’s chemical weapons arsenal does not look like a realistic proposal on its face, because the safe transfer of massive quantities of chemical weapons in a war zone would be risky and problematic at best. How will compliance be verified when it was difficult just for UN inspectors to reach a suburb of Damascus?

The French are correct to insist upon stringent preconditions before any negotiated deal with Assad on chemical weapons. The world has tolerated this monster long enough. Every person who detests war should take a hard look at the situation in the Middle East today, and then explain to themselves how a victory for Assad, Iran and Hezbollah reduces the probability of a Middle East war, one into which the United States would be inextricably drawn by its many alliances in the region. To those who believe that opposing military action against Syria is the path of peace, I respectfully ask that they think again of the likely consequences of doing nothing.

There are indeed shades of past conflicts evoked by the images of carnage in Syria. But the deja vu being experienced is not that of Iraq–which was completely different–but of another, similar atrocity that occurred at Guernica, Spain, in 1937, of another moral failure to respond, and of the results of a flawed strategy of trying to appease a monster.

On April 26,1937, bombers and fighters of the German Luftwaffe and the Italian air force attacked the small Basque village of Guernica in northern Spain. It was an outrageous assault on an unarmed civilian population. It was the blatant mass murder of hundreds of civilians, by some accounts over a thousand were killed, men, women and children.

For America in those days, neutrality was the dominant U.S. foreign policy model, enshrined in a series of congressional acts that had been designed to further and further remove the United States from the possibility of involvement in “foreign wars.” The prevailing American sentiment then, as today in regard to atrocities being committed in Syria, was that what had happened in Guernica was not our problem. It simply didn’t involve us.

Four years later, the relevance of Guernica to the security interests of the United States became more than apparent. On December 8, 1941, in the wake of a devastating attack on American naval forces at Pearl Harbor, the United States formerly declared war on imperial Japan. Three days later, war was declared on the United States by those same German and Italian fascist regimes who had bombed Guernica only four years earlier.

Palestinian in Kafkaesque battle over family’s hotel

Borders change, Israeli officials deny responsibility and confiscate and re-confiscate the property that Ali Ayad hasn’t been allowed to set foot on since 2004.

For all of his 59 years, Ali Ayad’s life has revolved around the 1-acre plot overlooking Jerusalem that is home to what used to be the Cliff Hotel. (Edmund Sanders / Los Angeles Times / August 27, 2013)

ABU DIS, West Bank — The year Ali Ayad was born, his father broke ground on a majestic home perched on a bluff overlooking Jerusalem, with views of the Dead Sea in one direction and the golden Dome of the Rock in the other.

For all of his 59 years, Ayad’s life has revolved around the 1-acre plot. He played under the olive trees as a boy and became manager after the home was converted into the Cliff Hotel.

He met his Norwegian wife from behind the reception desk, married her in the dining room and raised two daughters amid the daily bustle of visiting tourists and diplomats.

But the idyllic life turned into what he describes as a Kafkaesque nightmare a decade ago after Israel seized control of the hotel. Using a combination of military orders and a controversial absentee-owner law, the government kicked him off the property, banned him from returning and then confiscated it as abandoned.

Israel informed Ayad, who has always been identified by Israel as a West Bank resident, that his former home was inside the Jerusalem city limits, even though for decades the municipality refused to provide public services because it said the property was in the West Bank town of Abu Dis.

Read more at the Los Angeles Times.

Red Lines Matter – NYTimes.com

 

BERLIN — Europe knows, and this city in particular, about the importance of American “red lines.” West Berlin, caught for more than four decades 100 miles within the Soviet occupation zone, survived on the credibility of the U.S. commitment to it, demonstrated by the Allied airlift in response to the Soviet blockade of 1948.

A shattered Europe became whole, free and prosperous under the shield of U.S. credibility. Article 5 of the North Atlantic Treaty spelled out that an armed attack against one member “shall be considered an attack against them all.” This was believable enough to deter a Soviet attack on Western Europe.

American credibility in Asia has played a substantial part in the rapid but peaceful rise of China, a power shift of a kind that has seldom, if ever, occurred in world history without major conflict. China believes in the U.S. defense commitment to Japan, South Korea, the Philippines, Australia and New Zealand. America has been the offsetting power allaying the tensions of China’s emergence.

It is the credibility of the United States as a European and Asian and Middle Eastern power that underwrites global security.

Read more at The New York Times.

Air War in Kosovo Seen as Precedent in Possible Response to Syria Chemical Attack – NYTimes.com

WASHINGTON — As President Obama weighs options for responding to a suspected chemical weapons attack in Syria, his national security aides are studying the NATO air war in Kosovo as a possible blueprint for acting without a mandate from the United Nations.

With Russia still likely to veto any military action in the Security Council, the president appears to be wrestling with whether to bypass the United Nations, although he warned that doing so would require a robust international coalition and legal justification.

“If the U.S. goes in and attacks another country without a U.N. mandate and without clear evidence that can be presented, then there are questions in terms of whether international law supports it, do we have the coalition to make it work?” Mr. Obama said on Friday to CNN, in his first public comments after the deadly attack on Wednesday.

Mr. Obama described the attack as “clearly a big event of grave concern” and acknowledged that the United States had limited time to respond. But he said United Nations investigators needed to determine whether chemical weapons had been used.

Kosovo is an obvious precedent for Mr. Obama because, as in Syria, civilians were killed and Russia had longstanding ties to the government authorities accused of the abuses. In 1999, President Bill Clinton used the endorsement of NATO and the rationale of protecting a vulnerable population to justify 78 days of airstrikes.

Read more at The New York Times.

Rick Perry Quietly Lobbies The White House For $100 Million In Obamacare Funding | ThinkProgress

Gov. Rick Perry (R-TX)

Politico reported Tuesday evening that Texas Gov. Rick Perry’s (R) administration is in negotiations with the Obama White House to accept about $100 million in federal money to implement an Obamacare Medicaid program to help elderly and disabled Americans.

Perry has been a heated opponent of the health law. He refused to accept $100 billion in federal funding to expand Texas’ Medicaid program under Obamacare, which could have helped 1.5 million poor Texans afford basic health benefits. As recently as April, Perry essentially called the expansion a joke. “Seems to me April Fool’s Day is the perfect day to discuss something as foolish as Medicaid expansion, and to remind everyone that Texas will not be held hostage by the Obama administration’s attempt to force us into the fool’s errand of adding more than a million Texans to a broken system,” said Perry.

Now, Perry is seeking federal dollars for Texas’ Medicaid program anyway.

Read more at ThinkProgress

5 Terrifying Statements in the Leaked Climate Report | Mother Jones

In the long run, global sea level rise could easily exceed 5 meters. Brendan Howard/Shutterstock

Climate Desk has obtained a leaked copy of the draft Intergovernmental Panel on Climate Change’s 2013 Summary for Policymakers report, which other media outlets are also reporting on. The document is dated June 7, 2013. We recognize, as we’ve previously reported, that this document is not final, and is in fact certain to change.

Most media outlets are focusing on the document’s conclusion that it is now “extremely likely”—or, 95 percent certain—that humans are behind much of the global warming seen over the last six decades. But there is much more of note about the document—for instance, the way it doesn’t hold back. It says, very bluntly, just how bad global warming is going to be. It gives a sense of irreversibility, of scale…and, of direness.

In particular, here are five “holy crap” statements from the new draft report:

We’re on course to change the planet in a way “unprecedented in hundreds to thousands of years.” This is a general statement in the draft report about the consequences of continued greenhouse gas emissions “at or above current rates.” Unprecedented changes will sweep across planetary systems, ranging from sea level to the acidification of the ocean.

Read more at Mother Jones.

Did Racial Profiling Put an Unarmed Black Man in Jail in North Carolina? — The Nation

A rally in support of Carlos Riley Jr. (Courtesy of carlosrileyjr.weebly.com)

Activists in Durham, North Carolina, have come together in support of Carlos Riley Jr. and against the racial policing they believe has put him behind bars.

Carlos Riley Jr. was alone, black and unarmed when he was pulled over by a Durham, North Carolina police officer on the cold morning of December 18, 2012. In the altercation that followed the stop, Riley was badly beaten, the officer was shot in the leg and his gun went missing. More than seven months later, Carlos Riley Jr. sits in jail under $1 million bond, still waiting to face federal and state charges. He has spent Christmas, the New Year and most recently his twenty-second birthday behind bars. The cop who pulled his gun during the traffic stop hasn’t spent a day off the job.

At around ten in the morning on December 18, 2012, Carlos Riley Jr. was stopped for an alleged traffic violation by officer Kelly Stewart, who was wearing civilian clothes and driving an unmarked car. Riley maintains that the officer grabbed him through his open window after demanding to see registration, putting him in a chokehold and threatening to kill him. Riley says Stewart then shot himself in the leg as he drew his gun, an event with plenty of precedent among such encounters. Fearing for his life, Riley says he pulled the gun away from the officer and fled, tossing the weapon and turning himself over to the authorities within hours.

Read more at The Nation