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Catherine Crier

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Mommy, Where Do Jobs Come From?

Posted: 01/13/12 09:30 AM ET

Yesterday morning, I listened as Romney surrogate Chris Chocola, Club for Growth, repeated the Republican mantra that government doesn't create a single job. Try shutting down our national security apparatus -- defense, homeland security, intelligence, all the support contractors right down to farmers, uniform suppliers, companies making those million dollar toilet seats... and you'll see just how many jobs the government creates. In fact, if this occurred, there would be a global depression. (I'll save the Adam Smith debate about warfare as the biggest misuse of national resources for another day.)

Given the enormity of this one area of government job creation, we don't have to argue about all those public employees outside the military-industrial complex that seem to be dispensable these days -- the cops, teachers and firefighters, or the scientists and engineers that, thanks to taxpayer R&D, gave us the Internet, GPS and countless life-saving drugs or, gasp, clean air and water. We won't even debate the valuable government subsidies for critical technology, like the microchip that spawned a global economic revolution and produced, literally, millions of jobs.

After the microchip was invented in 1958 by an engineer at Texas Instruments, 'the federal government bought virtually every microchip firms could produce.' NASA bought so many [microchips] that manufacturers were able to achieve huge improvements in the production process -- so much so, in fact, that the price of the Apollo microchip fell from $1,000 per unit to between $20 and $30 per unit in the span of a couple years.

Is America Losing Its Mojo? Fareed Zakaria, Newsweek, 1/14/09.

Every single GOP candidate regurgitates this anti-government talking point while, in the very next breath, asserting that as government officials they've created more jobs than anyone else in the race: Newt claims about 11 million jobs while Speaker of the House in the Clinton years; Perry touts his "one million jobs" Texas record while ignoring both the quality of those private sector jobs (most are minimum wage) and the very large number of public sector (government) jobs included in his figures; and Romney wants credit for his time as Governor (although Mass. was 4th lowest in new jobs in those years). As for his 15 years at Bain Capital, Mitt argues that 100,000 jobs were created through his company's investments and expertise, while ignoring analysis from the WSJ that it was a wash, at best, when Bain-related layoffs, bankruptcies and outsourcing are included.

Each Republican candidate says they will push through lower taxes and cut regulations -- a sure way to unleash the currently oppressed private economy. If this oft-repeated theory of domestic growth is correct, then why were the Bush years, with a Republican Congress cutting taxes and regulations in six of the eight years, such an abysmal time for job creation? According to the leftist rag, the WSJ, "The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton's administration and only slightly better than President George H.W. Bush did in his four years in office." And remember, GWB had two wars going and created the mammoth Dept. of Homeland Security to help with those job numbers.

In my new book, Patriot Acts, I look at the facts about tax cuts and job growth over the last century. As I ask in the book, please ignore current rhetoric and put your thinking cap on for a moment. The GOP argument is that we need tax cuts for 'job creators' to grow the economy. If the wealthy 'investor class' was impoverished, if they didn't have private capital to invest, this position might hold water, but those at the top (individuals and corporations) are sitting on a record pile of cash -- cash that has grown throughout the largest economic downturn since the Great depression; cash that is not being invested here at home.

Since the early '80s, as their rates have gone down, wealthy individuals have not reinvested much of their tax savings in domestic job growth. Instead, they've saved most of that money, spent it on luxury goods or invested it abroad. Even Reagan realized his 'trickle down theory' wasn't working. In 1986, he raised corporate tax rates and eliminated the special break for capital gains, demanding equal taxes on income from wealth and income from work. Today, Republicans bow to their hero but ignore his own realizations about the failings of supply side economics.

This week, the WSJ reported that, contrary to the insane propaganda we're hearing on the campaign trail, about 69 percent of U.S. corporations pass through their earnings and pay NO federal corporate income taxes. When companies do pay taxes, the average rate is 18.3 percent -- and this at a time when the federal debt is exploding and state budget shortfalls are rampant.

As for 'deregulation' creating significant job growth, former Reagan economic adviser Bruce Bartlett put it bluntly. "It's just nonsense. It's just made up." The Bureau of Labor Statistics tracks companies' reasons for large layoffs. It reported that corporations attributed 1,119 layoffs to government regulations in the first half of 2010, while 144,746 were attributed to poor "business demand." Simply put, American consumers didn't have money to buy goods.

Countless nonpartisan economists and rational policy-makers have explained the historic path to growth: investment in infrastructure, improved education, legal immigration for the best and brightest and a balanced approach to spending cuts and revenue growth. Because these recommendations do not respect rigid ideology, they get no traction on Capitol Hill.

I don't care about labels; I care about facts. Whether you're a liberal or conservative, you should demand honest information before making decisions. Supporting policies based on utter nonsense is insane, period. As you listen to the arguments and assertions from our various candidates, as you watch their incendiary attack ads, think about this statement (warning?) from a top Romney campaign adviser made to NYT's Tom Edsall: "We are in the persuasion business, the propaganda business... Ads are agitprop... Ads are about hyperbole, they are about editing... They are manipulative pieces of persuasive art."

Okay, so repeat after me: government doesn't create any jobs, tax cuts at the top and corporate deregulation does, and yes, dear, the stork delivers babies.