HollandeDazed
Last July we wrote a squib titled “Seven New Reasons Not to Create Jobs in France” that ticked off seven tax hikes passed by Socialist Prime Minister Francois Holland and then offered:
“Our Prediction: The tax hikes will not generate the expected revenue because job creators will decamp to more capitalistic climes (Switzerland, the UK, the US and Canada). Economic growth in France will be even slower than expected and the budget deficit larger. Most of these tax hikes reduce the return on investment, so fewer investments will be made in France and fewer jobs will be created.”
It has all come to pass, leaving HollandeDazed and confused. The courts have thrown out some of his tax hikes. Incensed entrepreneurs have manned the barricades. Economic growth is near zero. The government’s popularity has plummeted. “The chief political threat facing the government,” avers The Financial Times, “is unemployment, which has risen abruptly to more than 10 percent of the workforce.” One thing we did get wrong is that, to protect his take-home pay, the truly immense French cinematic talent Gerard Depardieu did not decamp to Switzerland, the UK, the US or Canada, but rather to Russia, which has a low marginal tax rate.
O-Poverty
Unfortunately socialism does not work better in the U.S. than in France. Four years of “spreading the wealth” have made America’s poor poorer, along with just about everyone else except federal bureaucrats and the lawyers who fight them:
- In 2011, for the second year in a row, the poverty rate was 15.0% versus an average of 12.5% during the eight years’ of G.W. Bush’s administration (which included two recessions, one starting under Bill Clinton).
- In 2011 median household income was $50,054, 6% below the G.W. Bush average of $53,325. The last time we were below the current level was 1995.
- The unemployment rate is 11.7% for those without a high school diploma versus 3.9% for those with a college diploma.
- The unemployment rate is 14% for blacks, 9.6% for Hispanics, and 6.9% for Whites. Blacks’ unemployment rate is elevated even though their participation rate is low at 61.2%, versus 63.9% for whites and 65.9% for Hispanics. As we noted last August 28, these metrics have deteriorated more for Blacks than Whites since Obama became President.
The Anti-Poverty Party
These lamentable trends are not about to improve measurably. A two percentage point hike in the payroll tax in 2013 will cut take-home pay. Tax hikes on entrepreneurs, imminent Federal spending cuts, and implementation of Obamacare, Dodd Frank, and other regulations will inhibit job creation. So next September, when the Census Bureau publishes its annual study of poverty and household income, we will likely learn that the 2012 poverty rate was 15% for the third year in a row, even though we are supposedly in an economic recovery. Between 1966 and 2009 the poverty rate was that high in only three years, 1982, 1983, and 1993—all recession or post-recession years.
Against this dismal economic backdrop, how should the Republican Party position itself? In a nutshell, as the anti-poverty, pro-prosperity party. That is a two-step process:
- First, tirelessly remind the public that Obamanomics has failed. Go beyond abstract bromides like “Where are the jobs?” and “We need faster growth” to specific statistics such as the aforementioned – 14% black unemployment, 9.6% Hispanic unemployment, 15% poverty rate, declining household income. These numbers should be tirelessly (and tiresomely) repeated on every Sunday morning show. Note that Democrats want to “double down” on their failed policies with even more tax hikes on job creators, and contrast rising national poverty with DC prosperity – 5 of the 10 richest counties in the U.S. are near Washington.
- Second, position Republicans as the party of growth, job creation, and opportunity for all. In their different ways, Senators Marco Rubio and Ted Cruz have done a great job here, with Cruz coining the phrase “Opportunity conservatism.” But they need to put more “meat on the bones” with three (not 57) specific proposals: A) develop our energy resources, creating high-paid blue-collar jobs in the U.S., B) corporate tax reform that brings back to the U.S. over $1 trillion in corporate cash stranded overseas, C) repair Obamacare which is creating an army of part-time workers, and which will hit millions of workers with an “individual mandate” tax starting next year.
Make Republicans the anti-poverty Party in favor of growth and prosperity – not just the austerity party that wants to cut Federal spending, though that is important too.
Copyright Thomas Doerflinger 2013. All Rights Reserved.
