Clinton Labor Secretary: GOP Wants to Keep Unemployment High
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 everymajorDemocratic 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.
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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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