Many Americans seem to realize what the Republicans are up to on the economy. According to a recent Daily Kos-SEIU poll, a plurality of citizens now believe the Republican Party is intentionally stalling the recovery. Most informed progressives would view this as an unstartling observation in light of the Republicans’ record of obstruction and their leaders’ expressed desire to discredit Obama. It is significant, nonetheless, that the idea of Republican sabotage has trickled down to the population at large.
Republicans would no doubt deny the assertion. They claim that their conservative principles rule out direct fiscal stimulation of the economy because of the danger of expanding the deficit. Moreover, they point to two of their proposals, unheeded by the Democrats, that would ostensibly give the economy a boost: a tax reform program that would put more money in the pockets of “job-creators”; and a proposal to reduce regulations, allowing employers to apparently concentrate more on hiring new employees.
But these claims and proposals raise obvious skepticism. First, why have the Republicans, who have long been fans of fiscal stimulus under Republican administrations (e.g. Reagan, Bush I, and Bush II), become so allergic to that idea under a Democratic administration, especially when economists overwhelmingly agree that stimulus is essential during hard times. Bruce Bartlett, a conservative economist under Reagan and Bush One who has recently avoided the political fray, expresses exasperation at the increasingly rigid Republican posture. In an article entitled “It’s the Aggregate Demand, Stupid,” he points out what the vast preponderance of economists have long held, namely, that stimulating aggregate demand, a catchall term for spending by households, businesses, and governments, is a basic prerequisite for getting an economy out from behind the eight-ball. Without stimulus in the midst of a depressed economy, a vicious circle of stagnation results. Some agent has to ignite the process, and government is usually that agent. It’s basic economics, and Bartlett’s frustration with what he politely calls “political gridlock” on the issue is palpable.
Second, emphasizing side issues like rejuggling the tax code (in favor of high earners, of course) and cutting regulations for businesses does not even vaguely address the economic problem of unemployment. Placing more after-tax money in the hands of so-called job-creators, who are already sitting on a mountain of liquid assets to the tune of nearly two trillion dollars, will not inspire them to hire more workers if consumers aren’t out there buying. And decreasing regulations, studies show, will not appreciably raise the employment rate even if in some cases it allows producers to perform more profitably.
In essence, the Republican Party is actively committing itself to an austerity program with parallels to the feckless policies of the European Union, where there has been an icy disregard for the problems of unemployment. A vivid example of this attitude in the American case is the stout refusal of Congressional Republicans to assist cash-strapped state governments, knowing full well that without such aid the states would be forced to fire their employees by the hundreds of thousands. Such firings currently come close to negating the otherwise encouraging employment figures coming out of the private sector.
The Republican approach clearly thwarts economic growth by prioritizing budget-balancing and austerity when the country can least afford them. Nonetheless, the stance serves Republican political interests in three ways: it allows them to portray themselves as responsible belt-tighteners; it serves to disemploy and disempower people who would normally identify as Democrats (public employees); and it discredits the economic record of a Democratic administration by slowing the economy.
The Republicans’ undeclared policy of economic sabotage could well succeed in electing Mitt Romney in November, relying as it apparently does on the inattention or indifference of the electorate. The good news is that voters are showing more awareness of Republican cynicism than might be expected. Now it is up to Democrats to keep talking about it.