Berkeley professor and former Secretary of Labor in President Clinton's cabinet, Robert Reich, drew a succinct distinction between Republicans and Democrats with regard to government assistance in this jobless recovery. This was on MSNBC's "All In With Chris Hayes" in a discussion about extending unemployment insurance:
Republicans believe that the way to create jobs is to give assistance to corporations, which will then invest in new equipment and hire new workers.
Democrats believe that the way to create jobs is to give assistance to people, both in the forms of tax cuts, subsidies, and unemployment benefits; and through policies that stimulate job growth, such as infrastructure construction projects, subsidies to local governments for hiring teachers, first responders, etc.
Another way of putting it: put money in the pockets of those who will spend it, thus creating demand, thus boosting production. Everybody wins.
Reich makes the point, as has Paul Krugman repeatedly, that we are not in an economic slowdown because of a lack of products to sell; we're in a slowdown because of a lack of demand for products -- because people do not have money to buy things.
So simply prodding companies to hire new workers, when they have no customers, is not the solution. But Republicans cling to the notion, despite the facts and the logic. Rand Paul either does not understand this -- or else he is being willfully dishonest to push a political ideology.
Ralph
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PS: It's a related, but slightly different topic; but Reich also scoffed at Rand Paul's assertion that unemployment benefiits beyond 26 weeks "is a disservice to those unemployed" because it locks them into the chronic unemployed. Not true.
ReplyDeleteCurrently there are 3 job seekers for every job available. Trying to deprive people so they will go out and try harder to get a job is just ludicrous -- and shows either gross ignorance or just plain lying for political purposes.