Mitt Romney’s economic agenda is a disaster. And I’m not even going to talk about the distributional effects — the equity and justice dimensions of this.
On that score, as discussed yesterday, the Brookings Institution and the Tax Policy Center — nonpartisan, highly respected think tanks — made clear the middle class will be socked with $86 billion in tax increases to subsidize the tax breaks being given to the wealthiest 5 percent.
I’m talking today just about whether it will work. It won’t.
As explained by his senior adviser, Glenn Hubbard — who, as chairman of George W. Bush’s Council of Economic Advisers, brought us the 2008 cataclysm — and also as made evident in Gov. Romney’s own tax proposal, their idea is old-fashioned trickle-down economics: Cut tax rates on corporations and the wealthy because doing so, they claim, will increase wages and job creation.
That is exactly what the Romney campaign claimed yesterday in response to the Brookings analysis and what Hubbard and Gov. Romney have been saying throughout this campaign. It is the old claim that if only we take care of the “job creators,” all will be well.
But as we say, let’s go to the video — or in this case, the charts.
Point one: Corporate profits are already at an all-time high as a percentage of GDP. Higher than before the ’08 cataclysm. Higher than ever.
Point two: Wages are at an all-time low as a percentage of GDP, having declined almost consistently since 2000, when the Bush tax cuts were passed.
And point three: Job creation, as we know, is also stagnant at best, with unemployment stuck at 8.2 percent and the workforce participation rate — the percentage of working-age Americans who are holding a job or looking for one — drifting down and now stuck at 63.8 percent.
So the message is pretty clear: The types of tax policies Gov. Romney is recommending have led to huge corporate profits and skewed income distribution, but have not led to wage growth or job creation.
As President Obama said the other day, we’ve tried their approach — it has failed. This is no longer an ideological debate; it’s a matter of simply reading the data we have from past experience.
As they say, if you don’t learn from history, you’re bound to repeat it. Please, let’s avoid this rerun. It was rough enough the first time ’round.
That’s “My View.”