Clinton Labor Secretary: GOP Wants to Keep Unemployment High

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Robert Reich
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While unemployment has backed off from its high point a few years ago, it's still high, depressing wages and dragging down the economy. Under the circumstances, it's not surprising that President Obama has been pushing for federal job creation to help ease the stress -- and pour some much-needed middle class spending into the economy. Last week, he put an interesting offer on the table: In return for simplifying the corporate income tax code and cutting the top corporate rate by 7 percent, he wanted Congress to agree to increase infrastructure spending, a move that would have increased construction jobs while performing some much-needed maintenance and improvement.

Despite the fact that the proposal acquiesced to one of the GOP's favorite demands -- a lower corporate tax rate -- Republican legislators, led by Senate Minority Leader Mitch McConnell (R-KY), were quick to turn it down. McConnell's stated reason was that the proposal was "Just a further-left version of a widely panned plan he already proposed two years ago." It's worth noting, however, that the GOP has shot down every major Democratic job-creation proposal of the past few years.

Arguments for killing job proposals have generally focused on the dangers of deficit spending and the need to slim down the budget -- a quixotic claim, given the fact that reputable economists tend to question the effectiveness of austerity cuts.
For that matter, the Republican case isn't helped by the fact that Carmen Reinhart and Kenneth Rogoff, the economists most often cited by the pro-austerity crowd, have been soundly discredited.

On Saturday, President Clinton's secretary of labor, Robert Reich, offered another explanation for Republican refusals to entertain job-creating legislation: He suggests that the Grand Old Party may actually want to keep unemployment high.

Reich's reasons are compelling (if a little cold-blooded). As he notes, high unemployment keeps wages low, keeps bond yields low, and keeps voters afraid -- three factors that directly help Republican politicians, as well as benefiting the bankers and corporations that fill their coffers.

On the one hand, it's a little extreme to assume that the Republican party is selling out tens of millions of voters for billions of dollars. On the other hand, this wouldn't be the first time that the Grand Old Party used questionable economic policies to support its patrons on Wall Street.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


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14 Comments

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betty_brock

Liar, liar, pantsuit on fire.

August 08 2013 at 9:19 PM Report abuse -1 rate up rate down Reply
Garfield Whittak

scorch_monster go read up on the many interconnected causes of both the Great Depression and the Great Recession........the private sector isn't that good at creating jobs during periods of economic crisis (which flow from increasing income inequality/weak consumer demand due to rising un and underemployment as a function in part of a drive for increased corporate efficiencies and profits/alongside rising debt and an inability of the masses to pay taxes etc.)!

August 06 2013 at 4:24 PM Report abuse +1 rate up rate down Reply
tjcnopops2

I agree with Sec. Reich, except for the reasons. The GOP has no interest in keeping the American people strong and happy. Scared and angry people vote for Republicans. It's that simple.

August 06 2013 at 1:20 PM Report abuse -2 rate up rate down Reply
coinman507

More liberal crap-ola, All the democrats know is tax and spend,and how to enlarge welfare !

August 06 2013 at 1:18 PM Report abuse +7 rate up rate down Reply
encjohn

"Job creation" claims from the Obama administration are really part time, low paying jobs. The "recovery" is not happening and will not happen until this Socialist administration is voted out of office. The Fed cannot continue spending money it does not have...this mentality will lead to severe damage to our economy, hyper inflation, etc. Did we mention that spending what you do not have is unsustainable ?
What this Country needs is a president who can rally the troops instead of DIVIDE the nation.

August 06 2013 at 1:01 PM Report abuse +3 rate up rate down Reply
progressivehoax

Liberal Democrats have produced Generation after generation of welfare slugs.

August 06 2013 at 12:56 PM Report abuse +2 rate up rate down Reply
linmarco

FOX board must be offline.

August 06 2013 at 12:17 PM Report abuse +1 rate up rate down Reply
nmmjmmgsds

Ha, the Gestaop AKA Pubs are at it again. They are about as low as they can get now

August 06 2013 at 12:11 PM Report abuse +1 rate up rate down Reply
Jim

Now come on. Yes Obama offered to cut the top corporate rate. But the plan also takes away all of the write offs and loopholes as some call them that allows corporations to cut what they pay in taxes. Actually its raises about 100 billion in new tax income for the feds. But some want to report that its a tax cut! This is all smoke and mirrors to pull of yet another tax hike! And give the feds more money to waste on green energy jobs that dont exist!

August 06 2013 at 11:54 AM Report abuse +1 rate up rate down Reply
jwm347

Obama's policies and over-regulations are killing this country. Some of you ill-informed out there, try talking to someone who owns a business and has to fork out money for the fees and regulations,,not to mention how obamacare will play into this all.
As for the clown's stimulus program in 2009. 90% of the money went to unions and their pensions so I hope the repubs keep voting against this clowns so-called jobs act!

August 06 2013 at 11:49 AM Report abuse +2 rate up rate down Reply