In a single statement before his meeting with corporate CEOs this morning, President Obama contradicted his own tortured message pushing the Bush tax cuts. Check this out:
I am absolutely convinced that this tax cut plan, while not perfect, will help grow our economy and create jobs in the private sector...
This morning, I hope to elicit ideas from these business leaders that will help us not only climb out of recession, but seize the promise of this moment -- ideas about tax reform; ideas about a balanced approach to regulation that will promote, rather than undermine, growth; ideas that will help encourage businesses to invest in America and American jobs at a time when they're holding nearly $2 trillion on their books.
In an interview last week with National Public Radio, of course, Obama admitted that the Bush tax cuts wouldn't create a single job. Well, you say, Obama's statement today isn't only referring to Bush's income tax cuts - he's referring to the whole package of tax cuts, including the so-called "accelerated depreciation" tax cuts for businesses. And that's where today's contradiction is most acute.
How can the president say that those kind of tax cuts will "create jobs in the private sector" when he also admits that corporations "are holding nearly $2 trillion on their books?" This makes no sense. If corporations are flush with cash, then additional cash in the form of tax cuts isn't going to prompt them to do anything other than what they're already doing - namely, hoarding cash and offshoring jobs to cheaper labor markets. As Paul Krugman recently wrote, these kids of tax cuts will "do hardly anything to spur investment given the excess capacity businesses already have."
In his statement, the president insisted that "for me, the most important question about an economic idea is not whether it's good short-term politics or meets somebody's litmus test - it's whether it will help spur businesses, jobs and growth." Clearly, the opposite is true, for if he was thinking about economics rather than "short term politics," he'd realize his own contradictory rationales were a sign that this tax cut package is all about expediency and padding corporate profits and nothing about growing our economy.
And if you believe its a coincidence that he's pushing Bush income-tax cuts and corporate tax cuts just before a meeting with the very corporate CEOs who will most benefits, then I've got some real estate to sell you...