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Why Republicans fail at job creation 

Protesters at the General Assembly

Photo by Bob Geary

Protesters at the General Assembly

To evaluate what the Republicans did in the 2013 General Assembly session now ending, I suggest a thought exercise. Imagine that the North Carolina economy, currently suffering from 8.8 percent unemployment and at least as much underemployment, has come roaring back. Somehow we've turned into the most successful state in the country. How did we do it?

One answer might be that we adopted public policies favoring the "job creators," corporations and wealthy individuals who took our tax cuts and subsidies and used them to add jobs to their businesses in North Carolina. Call this the trickle-down economics approach.

Another, very different answer would be that we raised taxes and spent the revenues on projects that improved our state and created new jobs directly—such as bridge repairs and more teacher assistants. Call this the public investments approach.

Of course, you recognize the first approach is what the Republicans say they're for, and the second is standard Democratic Party orthodoxy.

And you see through them both.

Democrats always talked a good game about public investment and yes, they did some of it when they ran North Carolina.

But at heart, the Democrats were the party of trickle-down, or, as they called it, pro-business. They kept taxes low, especially on corporate earnings and very especially on banks—which helped Charlotte to become the banking capital of the South. Any company moving to North Carolina received generous incentives. Our personal taxes were—are—regressive, with low-income workers paying at higher rates than the rich.

As for the Republicans, trickle-down would be a step up for them.

Naturally, they'd like us to think they're for trickle-down, because it won a century's worth of elections for the Democrats—never by that name, of course.

But let's face it, we've heard so many times how cutting taxes for the rich will create jobs in our community that, even though the evidence tells us otherwise, it's like an old song that, when they play it, we can't help but hum the tune.

Well, the Republicans are playing that tax-cut song again. Their plan for the next two years cuts revenues by $524 million. They've reduced taxes on high incomes and corporate earnings. They've also repealed the estate tax, which applied only to the very rich (only to estates over $5 million; $10 million for couples). Meanwhile, the bottom 80 percent of taxpayers will pay more, according to the N.C. Justice Center.

But here's the thing about the Republicans: They don't believe that trickle-down creates jobs any more than I do. No, when they imagine a thriving North Carolina economy, it's because the jobless disappeared.

Theirs is a pull-up-the-lifeboats approach: As people fall overboard in the economy, Republicans don't throw out a raft. But they do make a note to get their own kids swimming lessons.

Republican leaders don't believe that the North Carolina economy can support everyone who wants to work—not if people want a living wage. They don't believe it or they don't know how to make it happen. But either way, their policies push away the jobless and working poor while adding layers of protection for those already making it.

How else to explain what the Republicans did with unemployment insurance? Not only did they slash benefits, they also cut them to the point that North Carolina is now the only state where the jobless are ineligible for extended benefits under the federal unemployment insurance program. If you haven't found another job after 20 weeks, you're screwed.

Rep. Julia Howard, the Davie County Republican who sponsored this monstrosity, says people will have to find work faster.

Oh? How are they supposed to do that, when the number of jobs in North Carolina grew by just 16,100 from January to June, according to the Department of Commerce, and the number of unemployed is stuck over 400,000?

This is after two years of Republican rule.

Indeed, the main reason our unemployment rate has fallen below 10 percent is that the labor force is shrinking—the jobless are retiring, working part-time off the books or moving to another state. Which is just the way the Republicans drew it up.

And it's not only jobless benefits. The Republicans rejected Medicaid for the working poor, a 100 percent federally funded program under Obamacare. They repealed the state's Earned Income Tax Credit (EITC), which functioned like a subsidy for employers paying low wages—their workers got a little boost from the EITC.

If you really wanted to help businesses create jobs, you'd add to the EITC, not eliminate it. You'd want health care—free—for their workers. And you certainly wouldn't cut corporate tax rates, which helps shareholders all over the world but not many in North Carolina.

Meanwhile, Republicans continued to cut aid to public schools, where we already rank 47th of 50 states in per-student spending. But they're now giving money to religious, private and quasi-private schools via charters and vouchers. The vouchers, up to $4,200 a year, won't pay for a poor child to attend a good private school. But they will subsidize the somewhat better-off child whose parents can afford the rest of the tuition.

Here, too, the Republican philosophy is that we can't afford good schools for every child, but we can have good schools for ours.

And even with their anti-abortion legislation, the Republicans aren't saying abortions should be impossible to get. They are saying that abortions shouldn't be readily available to folks who can't arrange things quietly or pay for one themselves—maybe in Europe?

Somebody said that a rising tide lifts all boats. But that was before the Republicans passed a law to keep the seas from rising—while preserving the tax breaks on yachts.

This article appeared in print with the headline "Brother, can you spare an economics lesson?"

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