As the Economy Recovers, GOP Rushes to Stop its Growth

Over the last few months, there has been a slow but steady flow of good news on the American economic front. We have discussed many of those advances before on TPV. That recently GM turned its a profit for the first time since 2004 (and its largest in a decade) and that consumer confidence has hit a three-year high -- which is to say it's at its highest level since a before the beginning of the financial crisis. This shall not stand! We cannot have the President's policies actually helping the economy! That would suck for the Republicans' chances in 2012!

Not that we're surprised to see such an anti-jobs move from the GOP. After all, they are as aware of the jobs "bikini graph" as we are. Here's a corresponding graph - tracking GDP growth (or shrinkage) since the beginning of the of Bush depression:

GDP bikini graph as of q4 2010

If the American people catch on to the simple fact presented here, the GOP's  election victory in 2010 may prove short lived, indeed.

In the last two years, when Democrats were in control of Congress and the White House, the Republicans did their damnest to slow everything down and claw their way through any stimulative measures. They were successful, but as it turns out, only temporarily. Despite their obstructionism, President Obama's policies seem to be paying off, and the economy seems to be on an upward ride. So, naturally, the GOP is doing everything to stop economic progress. First, the House GOP blocks funding of a jobs retraining program. Then, a newly tanned minted Speaker Boehner (R) says "so be it" to eliminating hundreds of thousands of federal jobs while his party's budget cuts are expected to cost another 700,000 jobs. Mark Zandy of Moody's predicted the following:
The House Republicans' proposal would reduce 2011 real GDP growth by 0.5% and 2012 growth by 0.2 percentage points This would mean some 400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012.
Goldman Sachs predicts even a more dire outcome of the Republican budget - an economic slowdown of not just half a percent but of 2 percentage points off our GDP. So naturally, the "pro-growth" GOP is all for it. But I suppose it should be considered an improvement. After all, they have come a long way from causing 800,000 jobs to be eliminated per month during the great recession to now proposing the elimination of only slightly over a million jobs in the course of about two years. Phew.

The GOP's economic theory? Just cutting government spending (well, not all government spending, just the part that actually can be considered an investment in our infrastructure or our future) with a hatchet will create private sector jobs - automatically, by itself, like magic. What's the evidence behind it? Stop asking questions - this is a faith based economic theory! But of course, out here in the real world, real economists are pretty upset with the Republican plan to eliminate investments. Over 300 economists signed a letter rejecting the Republican Pledge to Eliminate the American Middle Class:
As economists, we believe it is short-sighted to make budget cuts that eliminate necessary investments in our human capital, our infrastructure, and the next generation of scientifi c and technological advances. These cuts threaten our economy’s long-term economic competitiveness and the strength of our current economic recovery.

Investment is the cornerstone of economic growth and the key to our long-run national prosperity. It creates jobs now and lays the foundation for long-term economic growth and a strong middle class. As Congress begins to debate the federal budget, it must be careful to sustain critical investments in the productive capacity of the United States.
Investment - yes, including public investment - is the most critical part of growing our economy. Investments in people and infrastructure - whether it be our transportation infrastructure, or Internet connectivity infrastructure or our educational infrastructure - are the most vibrant parts of economic growth, and an expanding and upwardly mobile middle class. Ahh, that might be the problem right there. It seems that the guiding principle of Republiconomics is that no policies that could assist in an expansion or the upward mobility of the middle class shall be tolerated. Although I do wonder just how Wal Mart trucks expect to travel carrying the goods to stock their shelves without the public highway system. I do wonder how we're supposed to do e-commerce without a publicly accessible Internet. But I digress. Thinking does not seem to be the GOP forte.

But the Republicans are not happy just disrupting job creation by the means of domestic policy disasters. The "free trade" party is also refusing to let the Korean Free Trade agreement advance in Congress because they are upset that the President has protected workers' rights in the agreement. The House GOP now wants a "package deal" that will bundle the Korean trade agreement along with ones with Colombia and Panama, with Colombia being a noted human rights abuser and union buster, which is what has been holding up the agreement with it. As far as I'm concerned, the Republican position on international trade should correctly be referred to as the globalized screw-the-worker movement.

Let's get serious for a second. Fossil fuels are on their way to become a thing of the past - it will happen with or without the US providing a helping hand. India, China, Japan, and Brazil are not playing for second place. I wonder what those places have in common. Oh, yes. College education is nearly free compared to our system in all of these countries. Well, it's not free. It's paid for as a public expense. We are trying to catch Hungary in Internet connectivity, for crying out loud. As China has massively expanded its investment in infrastructure, Republicans are hell bent on trying to eliminate America's, while we are receiving failing grades on our infrastructure by non-partisan assessment firms.
US infrastructure is not only inadequate to meet the needs of a dynamic, growing, and productive economy but its quality has been in relative decline. The United States today ranks 23rd in the quality of its infrastructure. There is major scope for the United States to identify and implement leading-edge practices from project selection to financing and delivery, sometimes through public-private partnerships.
The same reports notes that not only is our investment in infrastructure too little, so is our investment in human capital. While as an economy, we are experiencing severe pains in employment, decades of divestment from human capital is causing shortages - shortages - in many skilled areas of work:
The US talent pool is not growing fast enough to meet future demand. For example, MGI estimates that the United States may face a shortfall of almost two million technical and analytical workers and a shortage of several hundred thousand nurses and as many as 100,000 physicians over the next ten years.
We need a workforce for the jobs of today and tomorrow. For that we need critical public investment in our people and in our infrastructure. President Obama's budget protects those critical investments for our future. The GOP "budget" would have us eliminate that in the name of deficit reduction. We can follow their path and return to the 12th century. Or we can follow President Obama and take charge of the 21st century world. It's our choice.