That's what leading progressive economist Dean Baker calls it, noting:
Senator McCain is filling the airwaves with commercials telling the public that Obama's tax increases will slow growth and cost the economy jobs. It's pretty scary stuff to anyone who takes it seriously.
This chart alone is enough to show what a load of hooey it is:
That steep ascent from 1993 to 2001 is the Clinton Adminstration, adding over 22.7 non-farm jobs to the American economy--an increase of over 20%. And after that? That uneven landscape atop the sharp Clinton rise? That's GW "Taxcut" Bush territory, with a measely 5.53 million jobs added throuhg January of this year--an increase of just over 4%.
"But wait!" you might say, "That's only seven years. Clinton had eight." And you'd be right. But since the beginning of the year, the Bush "taxcut" economy has lost over 1/2 million jobs. And this is what we're supposed to be scared to death of losing???
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Baker goes on to talk about job growth--as I did above. But he talks only about private sector jobs, so the figures for both are lower. He then goes on to say:
While job growth is probably the most important measure of the economy's health, almost every other measure also showed that the economy performed better with the Clinton-Obama tax rate than the Bush-McCain tax rate. The real wage for the typical worker rose by 6.6 percent in the Clinton years. By contrast, wages have risen by just 1.0 percent in the Bush years and are now falling. At the current rate of decline, real wages will be lower in January of 2009 than when President Bush took office in 2001. The typical family's income rose by 15.3 percent under Clinton, it fell by 1.6 percent under Bush.
This is where it really bites. What good is a tax cut--even assuming you actually get one, if your income is falling by more than the amount of the tax cut?
Here's what the median family income growth looked like under Clinton compared to Bush, in constant 2006 dollars:
Median Income--2006 Dollars
Clinton v. Bush | | Year | Income | | 2006 | $58,407 | | 2005 | $58,036 | | 2004 | $57,705 | | 2003 | $57,751 | | 2002 | $57,920 | | 2001 | $58,545 | | 2000 | $59,398 | | 1999 | $59,088 | | 1998 | $57,734 | | 1997 | $55,823 | | 1996 | $54,127 | | 1995 | $53,349 | | 1994 | $52,173 | | 1993 | $50,782 | | 1992 | $51,494 |
Baker again:
In short, it is easy to show McCain's ad is utter nonsense. The economy had its most prosperous period in 30 years with the tax rates Obama is proposing. President Bush then cut taxes for the rich, and the economy turned in its worst performance since the Great Depression. While the tax rates are hardly the whole story behind the prosperity of the Clinton years or the economic deterioration of the Bush years, the record makes a mockery of the scare story in the McCain ad.
This is hardly surprising. Democrats are virtually always better for the economy--just about any way you want to slice it, as shown by eRipost's "Democrats v. Republicans on the U.S. economy" created just around this time four years ago. It collects a wide range of comparisons, to clearly demonstrate that however you look at it, Democratic governence--both in Congress and the presidency--is better for the economy.
More recently, in my diary, "Republicans Are BAD For The Economy", I used the average growth rates under Democratic and Republicn presidents from 1932 to 2006, and showed that the economy would be twice as large if we'd had only Democratic growth rates since 1932: a GDP of $23,446.78 billion in 2006, vs. our actual GDP of $11,319.40 billion. What's more, if we'd had only Republican growth rates, our economy would be less than half its actual size: $4,761.29. Indeed, the Democratic economy would be almost six times as large as the Republican economy. It's not even close to being close.
Baker continues:
So why would Senator McCain make an ad that is so obviously false? In Swift boat country, there is no place for truth. McCain knows he can say anything he wants, regardless of how untrue it is, and his claim will be treated seriously by the media.
Reporters will now treat it as a debatable point whether the tax rates proposed by Obama will stifle growth and cost jobs. They will act as though Senator McCain has raised a serious point - perhaps Obama's tax plan really will hurt the economy. Reporters would actually have to know something about the economy, or at least arithmetic, to know that McCain's claims are utter nonsense.
Baker's an excellent economist and commentator. But I've got to take issue with this last statement. They don't need to know anything about arithmetic. All they need to do is look at the fricken graph. |
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