For two and a half years, state Republicans have been remaking Wisconsin in their own image, and their bets are in. With the Republican-dominated Joint Finance Committee’s decision last week to approve a $651 million tax cut, they’re laying all their chips on trickle-down economics. Unfortunately, they’re unlikely to be the ones who will lose their shirts if the bet doesn’t pay off.
There’s no longer any other way to interpret it. The recent tumultuous history of Wisconsin politics proves this: State Republicans believe taking money out of the hands of teachers and other middle-class public workers and putting it in the pockets of the already deep-pocketed is the way to move our economy forward.
The left-leaning Wisconsin Budget Project sums it up nicely:
“In addition to limiting Wisconsin’s economic opportunities in the future, the tax cut gives the biggest benefits to the best-off, while giving no benefit to many lower-income people. The tax cut for tax filers earning $50,000 a year or less will average $45 a year, while tax cuts for filers earning $300,000 and up will average $1,440.”
We’ve played this game before. Republicans propose a tax cut and Democrats, almost reflexively, denounce it. That tends to cast the Democrats as the Snidely Whiplash in this drama, and the Republicans inevitably come off as the Dudley Do-Right, bravely rescuing the innocent taxpayer from the path of the runaway tax locomotive. (Urban legend has it that we use just 5% of our brains. Unfortunately, I think at least that much of my cerebrum is permanently clogged with old Jay Ward cartoons.)
Of course, it’s fair to ask: Who doesn’t want a tax cut? That’s more money in your hands. Only a Marxist-Leninist Madisonian (and no, that’s not necessarily a redundancy) would oppose such a thing. But when folks at the bottom are getting enough to buy a couple of copies of Scott Walker’s upcoming book and the people at the top are getting enough to buy Scott Walker, you have to wonder what the true economic impact will be.
It’s an article of faith among most Republicans, a fair number of independents, and even, I suspect, some Democrats that the GOP is the party to support if you want to see businesses – and thus the economy – thrive.
Exhibit A in opposition to that theory is Scott Walker’s record. I and my liberal confederates have pointed out for months now that Walker is failing miserably in the one task he almost monomaniacally set out to accomplish the day he took office. He’s steered Wisconsin from 11th in the nation in private-sector job creation to 44th, has overseen a job-creation agency (the WEDC) that’s been both tragically and comically mismanaged, and has fallen so far behind on his job-creation pledge he looks like Rush Limbaugh running a double marathon after carbo-loading with a metric ton of cheese steak fries and deep-fried OxyContin. (That’s funny because Rush Limbaugh is an overweight drug addict. But in his defense, the government wasn’t paying for his illegally obtained stash like it wants insurance companies to pay for Sandra Fluke’s birth control. It was, however, paying for his Mr. Pibb and Funyuns when he was living off unemployment.)
Almost unbelievably, our state has also now sunk to 49th – 49th! – in the nation in the Federal Reserve Bank of Philadelphia’s index of leading economic growth indicators. Who’s worse? Does it really matter? When you’re 49th out of 50 in anything, you need to focus on who’s ahead of you, not who’s about to pass you. (Okay, if you really need to know, it’s Wyoming, which despite its enormous size is slightly less populated than the Madison Metro Area. And since Wyoming’s population density just barely clears the threshold at which a society typically stops using marriageable females as currency, it should be happy with whatever it gets. Not sure what our excuse is, though.)
But our state is not the only laboratory proving that the Republican approach is not pro-business. There’s a mountain of evidence to show that Democrats are better stewards of the economy, while Republicans are generally content to rest on their unearned laurels while spouting platitudes about “job killers” and “job creators.”
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For instance, check out this article (which I’ve linked to before) from the Bolshevik propaganda sheet Forbes. In the piece, titled “Want a Better Economy? History Says Vote Democrat!” contributor Adam Hartung reviews Bob Deitrick and Lew Godlfarb’s book Bulls, Bears and the Ballot Box and notes the outsized advantage Democratic presidents have had over Republicans in economic performance from the start of the Hoover administration through the golden age of G.W. Bush. A few startling conclusions from the authors’ analysis:
a) Personal disposable income grew nearly six times more under Democratic presidents.
b) GDP grew seven times more under Democratic presidents.
c) Republicans added 2.5 times more to the national debt than Democratic presidents.
d) Corporate profits grew 16% more per year under Democratic presidents.
How can this be? Leaving aside the natural ebb and flow of the business cycle for the moment (which, admittedly, can make some presidents lucky and others unlucky), it’s really not a mystery why Democrats might be superior economic stewards: Putting more money in the hands of a large number of people with modest means has a greater impact on the economy (and on businesses) than putting more money in the hands of a small minority of people who are already well off and simply don’t need to spend more. This needs to become the Democrat’s pro-business mantra: If you want businesses to thrive, allow money to flow to the bottom instead of to the top.
Unfortunately, that’s the opposite of what Scott Walker and Co. are doing. Cutting public workers’ compensation so we can give wealthy people more tax breaks is unlikely to get our economy back on track. Worse, it’s a solution in search of a problem. If there’s one thing this country doesn’t need, it’s more wealth inequality. Income inequality in the U.S. is high and rising fast. It was also unusually high in the Roaring 20s – you know, right before the Great Depression. Clearly, prescribing more of that harsh tonic is not the answer.
A tax cut sure sounds nice, and most Wisconsinites of modest means will certainly appreciate that 45-dollar windfall. But what will it cost us? And is this really the best way to grow our economy? Scott Walker and crew say yes. Economic reality will likely give a different answer.
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