December 23, 2011
By John F. Di Leo
The December 2011 battle in Washington, D.C. -- a battle over continuing a Social Security tax-cut for another year, or even another two months -- demonstrates the differences between the parties in stark detail, both in terms of campaign methods and economic ideology.
Most commentators have focused on the campaign methods: brilliant, isn't it, how the Democrats have turned the tables on the GOP, making it look like the GOP is fighting a tax cut? Pundits laugh at the "tax cut party" being put in the position of opposing a tax cut that all workers' pay, while simultaneously opposing the tax increases on "the rich" that the Democrats are also (constantly) championing.
As political theater, perhaps, this is to be chalked up as a victory for Democrat strategists: at no cost to themselves, the Democrats have won debate points in public opinion. The Democrat message has carried the mainstream media; the reporters are repeating the DNC's talking points.
Question: when did the Democrat pundits decide to stop denying the accusation of media bias and embrace it instead? When did they become so proud of their bias that they now champion it as a brilliant strategic victory for the Democrats that their mouthpieces in the media shamelessly act as shills for the administration?
In fact, this is a deceptive and destructive political tactic...concentrating on an extension of a tiny tax reduction, as if it were the be-all and end-all of national economic policy. Shortening the time period from a single year -- bad enough already, since tax reductions must be permanent to have a stimulative effect -- to a lousy sixty days has robbed any seriousness -- that is, what little there was -- from their argument.
The politicization of the Democrats' approach is now undeniable; perhaps their new approach will be to propose another idiotic and unhelpful tax cut once a week, just so they can attack the GOP when they rightly oppose it. There once was a time when Democrats campaigned honestly and fairly. How far the party of Truman, Stevenson, and JFK has fallen.
Most telling about this battle, however, is the difference in economic visions between the two parties.
Throughout the Obama administration, the Democrats have focused on the first direct recipients of any action. This "Cash for Clunkers" check will go to this car-buyer; this stimulus bill will employ these road-paving crews. This loan to an American solar energy joke will keep the wolf from the door for another few months; this sale of Chrysler to an Italian joke will keep Detroit workers on the assembly line for a couple more years.
With every bill and every executive action, the concentration has been on the first recipient of the taxpayers' dollar, without a thought to the consequences to result from such reckless spending. Republicans screamed at the excesses in 2010 and won landslide victories at both the federal and state levels that midterm, but the Democrats haven't retreated from their economic approach. On the contrary, they've doubled down.
So today we see the Democrats making the most hay over an extension of a one-sixth reduction in the nation's Social Security collection for yet another year, or even just another two months. To the economy at large, a temporary increase in workers' salaries by two lousy percent has a minimal stimulative effect. Any tax cut helps a little, but so tepid an approach can be no more than a rounding error in the economy at large, and it's overshadowed anyway by its effect on the financial health of the Social Security program. This one-sixth reduction in Social Security receipts causes it to dip into the general fund -- or suck the money from the financial sector through borrowing -- by another couple hundred billion per year. How is this in anybody's best interest?
In contrast, the Republicans are proposing growth measures, such as permanent reductions in capital gains tax rates, permanent reductions in corporate income taxes, the permanent elimination of the death tax that destroys family businesses, the permanent repeal of Pelosireidian and Obamaczarist regulations that have shuttered factories and driven manufacturing abroad.
The Republican approach helps far fewer people in the first step -- only corporate CFOs and tax accountants will notice many of these changes at first. It doesn't win millions of votes at the polling places of Detroit, Chicago, New York, and San Francisco.
What these Republican proposals -- more correctly stated, these conservative, capitalist, free-market proposals -- would do is often completely invisible, except through the gathering of statistics over the years.
These proposals are the way to grow an economy.
With economic growth -- factory expansions, business start-ups, increases in sales and purchases -- comes greater employment. New jobs are created, both in new buildings and in existing ones. Instead of the employment retreat of the past several years, we will finally enjoy a growth in employment.
Now, what does that mean to the workers (i.e., the voters) themselves? It might mean that they keep their jobs rather than getting canned. It might mean that they get a raise rather than treading water for yet another year.
But most likely, it means a return to the way of the '80s and '90s, when general economic growth meant career growth to individuals. You don't stay a cog on an assembly line; you move up to foreman, to line manager, perhaps even to plant manager. You don't remain a clerk in a department; you move up to supervisor, then manager, then director.
With those promotions comes a raise -- not the tepid cost-of-living raises of staying in the same job, but the 15%, 20%, even 25% raises that accompany jobs with greater responsibility.
The path to the American dream can never be based on remaining in an entry-level job for an entire working career, however hard the Democrats have tried for a century to pretend that it could. Companies that give into union demands to overpay for low-level jobs must eventually fold up, or move overseas to more welcoming shores.
The only path to economic advancement for the vast majority of people is through career advancement, through promotions within the same company, or moves to better jobs at other companies. Such an explosion of new jobs of all kinds requires the kind of economic expansion that only the conservative proposals can enable...the kind of economic expansion that Democrat proposals can only frustrate and postpone.
So the choice between the Democrats and the Republicans of today is not a choice between a 2% tax cut and a 2% tax increase. It's really a choice between the continued economic stagnation of a Democratic Party zero-sum game and the opportunities for advancement of the free market championed by the right.
It's a choice between Democrats leaving you with two percent more in your pocket and conservatives enabling you to earn twenty percent more from a promotion.
And the conservative approach doesn't end there, because with the free market's expansion, there's another opportunity for yet another 20% raise a few years later, and yet another a few years after that. With the free market, the sky's the limit.
The right advocates the limitless opportunities enabled by limited government, while the left stubbornly advocates the ever-more bureaucratic distribution of the crumbs dropped by the leviathan and kicked in your direction by the jackboots of its handlers.
When the choice is two percent more for sixty days, or twenty percent more for years, it should be an easy call. Unfortunately, the news stories are controlled by the people who drank the leviathan's Kool-Aid and accepted the idea that two percent is all there is to discuss.
To win the argument and save the economy, the Republicans must somehow regain control of the debate.
John F. Di Leo is a Customs broker and international trade lecturer. His columns appear regularly in IllinoisReview.com.
By John F. Di Leo
The December 2011 battle in Washington, D.C. -- a battle over continuing a Social Security tax-cut for another year, or even another two months -- demonstrates the differences between the parties in stark detail, both in terms of campaign methods and economic ideology.
Most commentators have focused on the campaign methods: brilliant, isn't it, how the Democrats have turned the tables on the GOP, making it look like the GOP is fighting a tax cut? Pundits laugh at the "tax cut party" being put in the position of opposing a tax cut that all workers' pay, while simultaneously opposing the tax increases on "the rich" that the Democrats are also (constantly) championing.
As political theater, perhaps, this is to be chalked up as a victory for Democrat strategists: at no cost to themselves, the Democrats have won debate points in public opinion. The Democrat message has carried the mainstream media; the reporters are repeating the DNC's talking points.
Question: when did the Democrat pundits decide to stop denying the accusation of media bias and embrace it instead? When did they become so proud of their bias that they now champion it as a brilliant strategic victory for the Democrats that their mouthpieces in the media shamelessly act as shills for the administration?
In fact, this is a deceptive and destructive political tactic...concentrating on an extension of a tiny tax reduction, as if it were the be-all and end-all of national economic policy. Shortening the time period from a single year -- bad enough already, since tax reductions must be permanent to have a stimulative effect -- to a lousy sixty days has robbed any seriousness -- that is, what little there was -- from their argument.
The politicization of the Democrats' approach is now undeniable; perhaps their new approach will be to propose another idiotic and unhelpful tax cut once a week, just so they can attack the GOP when they rightly oppose it. There once was a time when Democrats campaigned honestly and fairly. How far the party of Truman, Stevenson, and JFK has fallen.
A difference in economic visions
Most telling about this battle, however, is the difference in economic visions between the two parties.
Throughout the Obama administration, the Democrats have focused on the first direct recipients of any action. This "Cash for Clunkers" check will go to this car-buyer; this stimulus bill will employ these road-paving crews. This loan to an American solar energy joke will keep the wolf from the door for another few months; this sale of Chrysler to an Italian joke will keep Detroit workers on the assembly line for a couple more years.
With every bill and every executive action, the concentration has been on the first recipient of the taxpayers' dollar, without a thought to the consequences to result from such reckless spending. Republicans screamed at the excesses in 2010 and won landslide victories at both the federal and state levels that midterm, but the Democrats haven't retreated from their economic approach. On the contrary, they've doubled down.
So today we see the Democrats making the most hay over an extension of a one-sixth reduction in the nation's Social Security collection for yet another year, or even just another two months. To the economy at large, a temporary increase in workers' salaries by two lousy percent has a minimal stimulative effect. Any tax cut helps a little, but so tepid an approach can be no more than a rounding error in the economy at large, and it's overshadowed anyway by its effect on the financial health of the Social Security program. This one-sixth reduction in Social Security receipts causes it to dip into the general fund -- or suck the money from the financial sector through borrowing -- by another couple hundred billion per year. How is this in anybody's best interest?
In contrast, the Republicans are proposing growth measures, such as permanent reductions in capital gains tax rates, permanent reductions in corporate income taxes, the permanent elimination of the death tax that destroys family businesses, the permanent repeal of Pelosireidian and Obamaczarist regulations that have shuttered factories and driven manufacturing abroad.
The Republican approach helps far fewer people in the first step -- only corporate CFOs and tax accountants will notice many of these changes at first. It doesn't win millions of votes at the polling places of Detroit, Chicago, New York, and San Francisco.
What these Republican proposals -- more correctly stated, these conservative, capitalist, free-market proposals -- would do is often completely invisible, except through the gathering of statistics over the years.
These proposals are the way to grow an economy.
With economic growth -- factory expansions, business start-ups, increases in sales and purchases -- comes greater employment. New jobs are created, both in new buildings and in existing ones. Instead of the employment retreat of the past several years, we will finally enjoy a growth in employment.
Now, what does that mean to the workers (i.e., the voters) themselves? It might mean that they keep their jobs rather than getting canned. It might mean that they get a raise rather than treading water for yet another year.
But most likely, it means a return to the way of the '80s and '90s, when general economic growth meant career growth to individuals. You don't stay a cog on an assembly line; you move up to foreman, to line manager, perhaps even to plant manager. You don't remain a clerk in a department; you move up to supervisor, then manager, then director.
With those promotions comes a raise -- not the tepid cost-of-living raises of staying in the same job, but the 15%, 20%, even 25% raises that accompany jobs with greater responsibility.
The path to the American dream can never be based on remaining in an entry-level job for an entire working career, however hard the Democrats have tried for a century to pretend that it could. Companies that give into union demands to overpay for low-level jobs must eventually fold up, or move overseas to more welcoming shores.
The only path to economic advancement for the vast majority of people is through career advancement, through promotions within the same company, or moves to better jobs at other companies. Such an explosion of new jobs of all kinds requires the kind of economic expansion that only the conservative proposals can enable...the kind of economic expansion that Democrat proposals can only frustrate and postpone.
So the choice between the Democrats and the Republicans of today is not a choice between a 2% tax cut and a 2% tax increase. It's really a choice between the continued economic stagnation of a Democratic Party zero-sum game and the opportunities for advancement of the free market championed by the right.
It's a choice between Democrats leaving you with two percent more in your pocket and conservatives enabling you to earn twenty percent more from a promotion.
And the conservative approach doesn't end there, because with the free market's expansion, there's another opportunity for yet another 20% raise a few years later, and yet another a few years after that. With the free market, the sky's the limit.
The right advocates the limitless opportunities enabled by limited government, while the left stubbornly advocates the ever-more bureaucratic distribution of the crumbs dropped by the leviathan and kicked in your direction by the jackboots of its handlers.
When the choice is two percent more for sixty days, or twenty percent more for years, it should be an easy call. Unfortunately, the news stories are controlled by the people who drank the leviathan's Kool-Aid and accepted the idea that two percent is all there is to discuss.
To win the argument and save the economy, the Republicans must somehow regain control of the debate.
John F. Di Leo is a Customs broker and international trade lecturer. His columns appear regularly in IllinoisReview.com.
American Thinker
