We're All Economists Now

With the selection of Paul Ryan as Romney’s running mate, the “Ryan budget” will be the focus of debate for this election season. Ryan’s plan would turn Medicare into a voucher system, severely cut Medicaid spending, give enormous tax breaks to the wealthiest Americans, increase taxes on the middle class, and cut or eliminate unspecified non-defense federal programs such as education, research, parks, environmental protection, and food safety.

In short, if Americans elect Romney and give Republicans control of Congress, the Ryan budget would devastate many poor and middle class Americans and undo the progress that has been made toward recovery under President Obama. Ryan claims the lower taxes on corporations and the wealthy would spur an economic boom that will bring in revenue to decrease debt and deficit. Under Reagan, this was known as trickle down economics. It didn’t work then (he raised taxes to bring in needed revenue), it didn’t work under George W. Bush (the deficit and debt exploded and job creation was anemic), and it won’t work for Romney-Ryan.

 “It’s the economy, stupid!” as Democratic strategist James Carville famously pointed out about presidential elections. If the economy is good, people will vote for the incumbent or his party; if not, they’ll vote for the other party. Most people will judge the economy based on their situation. If they are prospering, have work, feel secure, their savings and investments are growing and their tax burden is reasonable, they judge the economy is doing okay. If not, they vote for a change in leadership.

When Barack Obama ran on a platform of “hope and change,” his hope was that in a time of a worldwide financial meltdown politicians of both parties would pull together to bring the economy out of the deepest recession since the 1930’s, keep it out of a depression, make changes to solve problems that created the mess. After that, he hoped that a growing economy would allow for investments in education and updating of our energy sector.

In the last months of George W. Bush’s term, with the stock market continuing to plummet, worldwide credit frozen and banks “too big to fail” being propped up by massive infusions of government money, it looked like Congress was ready to pull together to pass legislation to fix problems by stimulating growth to create jobs and improving regulation of Wall Street.

After the election, President Obama invited Republicans to participate in the process of shaping the stimulus package.  Obama agreed to extend tax cuts for wealthy Americans even though he had campaigned to end them, and to include new tax cuts, though he knew those tax cuts would not stimulate the economy as much as the infrastructure spending and investments in alternative energy he had proposed. When it came time for votes, despite his efforts to include their ideas and negotiate on ideas they had in many cases proposed, except for three Northeastern moderates, Republicans would not support it.

The Republican leadership made their top priority to “make Barack Obama a one term president,” even if it meant that the economy would suffer, dashing President Obama’s hopes for a new politics of compromise and consensus. They not only refuse to compromise on legislation, but incessantly use the Senate filibuster, once a rare procedure. Bills that would pass with a majority are tabled, since it requires not 51 Senators, but 60 to break a filibuster.

Mitt Romney criticizes the President because this is the “weakest recovery” since the Great Depression. At least it’s a recovery, despite Republicans tactics which have had severe impact on a slowly growing economy, such as the filibuster and threatening default on the national debt. Despite their intransigence, over four million private sector jobs have been added since October of 2009 when stimulus funding and census hiring reversed the downward slide in employment (public sector jobs have not fared so well, especially since stimulus funds to state and local government jobs have ended).

While some Americans are not better off than they were when Barack Obama became president, our economy is better off now that the stock market has recovered, the auto industry is booming, and Americans are protected from the worst abuses of the health insurance industry.

Implementing the Ryan budget, which the Republican controlled House has passed, and supporting the Romney-Ryan ticket would continue the country on the path it was on before Barack Obama intervened, with more wealth at the top, a shrinking middle class, and less of a safety net for the needy. Here in West Virginia, most of us stand to lose in such an economy. 

This essay was published in the Charleston (WV) Sunday Gazette-Mail, Sunday, Aug. 19, 2012