Who Knows Business After All?

There is something fundamentally disturbing encountering economic ignorance among Republicans. Time was when a self respecting progressive could rationalize being Republican through associations with like minded businessmen. The GOP held an aura of business minded, fiscal responsibility. Republicans scoffed at Democrats who stood for labor with arguments that ignored fiscal reality.

That was some time ago when it required an education and/or some success in business to establish your bona fides. Not so, now. Becoming a Republican apparently anoints experts on business and fiscal responsibility; sort of a born-again businessman/economist motif. This is all post supply side economics and the laugher curve. Now, there is a set of quaint bumper sticker slogans that replace analysis either in the classroom or the crucible of actually running a business. This came home today during the back and forth on Inside Scoop’s “The Road To.” On the one hand, there was a Republican strategist rattling off the party lines on taxes and the economy. On the other, there was a successful Democratic businessman, one who the Republicans would have lathered over when credentials mattered, laying out the facts. And there were other Democrats who admirably held their ground.

Here’s a problem for Bob McDonnell. Bob may be 4 jobs, but nowhere does he explain how that favor will generate any. Plus, apparently he and his minions don’t believe that governors can do a thing to improve prospects. Today, Jim Parmelee offered up the slogan: “Governors don’t create jobs, businesses do.” A problem for McDonnell on two fronts. First, that would make the quaint “Bob’s 4 Jobs” an empty slogan, relegating him to cheerleader status. Next, it would mean that his potential fellow member of the Republican Governors Association, Haley Barbour of Mississippi had no hand in the success Mississippi enjoys in attracting business to his state. Republicans always want to have it both ways.

On today’s program, Parmelee suggested that in place of the stimulus we could have just not raised sales taxes or the other taxes Democrats have been raising over the past eight years. Fine, now Mark Warner caused the national economic downturn. Democrats, according to him, have been operating off of fantasy budget numbers. According to Parmelee, Republicans as a whole raised the flag and objected to the projections saying the numbers were inaccurate. Going on he intimated that Democrats went along with the numbers simply because they wanted to grow government. This is a common charge.

Parmelee: …Republicans said hold on, these numbers are too high. The economy is not going to be as high in the next two years as you think it is. Let’s budget for the real numbers…the Republicans as a whole said the governor’s numbers were inaccurate…

Herring: I think it would be wrong to leave people with the misimpression that Virginia’s general fund budget is just skyrocketing. That is not the case…in the last few years the general fund budget is not been increasing, in fact it is getting smaller because of the economy we are in. It would be a wrong statement to suggest that now the Democrats have a majority in the Senate, we have a Democratic Governor that somehow the budget is out of control. Absolutely not. We made a lot of tough cuts. We made 1.7 billion dollars in programs and services cuts from the general fund budget, so I think there has been good fiscal stewardship. The second point to make is when it comes to looking at the numbers, you said Tim Kaine, Governor Kaine was using unrealistic numbers about the budget and the economy. There is a very good system in place of pulling together data from economists and leaders in business in Virginia. They meet, they discuss their impressions of the data they are receiving from the economists. There’s a process that pulls the leadership from both parties from both chambers together to meet to agree on the future of the government projections. So it’s not that the Governor just picks a wildly optimistic number. There is a very deliberate process to try and identify the most accurate revenue projections.

Parmelee: That happens to lead to a wildly optimistic number.

Parmelee suggested that the more accurate numbers could probably be found at the Virginia Republican Party’s website and that the Democrats had probably taken down the discredited numbers from their website. Right. Pitiful.

Parmelee: In Loudoun we have people whose housing values are going down while their tax bills are going up…

Randall: As a Loudoun citizen I feel compelled to defend the Loudoun Board of Supervisors. Right now, with a Democratic controlled Board of Supervisors, who for the first time in, I don’t know how many boards, actually lowered the tax rate. The tax rate rose under Republican Boards. To say that this Board didn’t do its job is just a restatement of facts that is almost shocking.

McAuliffe suggested that the voters want to know what you are going to do for them. No one likes to see these budget cuts going on. There are fundamental issues we have to deal with. He explained that we are 49th out of 50 states on Medicaid spending; 37th on per pupil spending. We just got an “F” the other day on college affordability; we’re 31st on teacher pay; and we may become the only state that does not qualify for federal matching funds for transportation. We can’t say things are working great; we are falling backwards. Although he says he hates to see the cuts, he doesn’t believe in raising taxes in a down economy. He thinks we need a governor who is going to come in, focus on job creation and bring in new revenue.

McAuliffe argues that if we don’t change the dynamic in Virginia, in two years time all we will have done is cut the budget or raise the taxes. We need a governor who is fiscally responsible, who knows how to create economic activity, and hasn’t been part of this partisan battling down in Richmond. That way, according to McAuliffe, we don’t have to have the budget battle because the revenue will be coming in.

Parmelee: Do Governors create jobs or do private businesses create jobs?

McAuliffe: Both. Let me tell you this, let’s be clear, as Governor, I will create jobs, Have no illusions about that. And I’ll promise you Jim, I’ll create more jobs than the other 49 governors of other states. I have relationships all over the world, I have done it. I will use those contacts. But in fairness the House of Delegates doesn’t give the governor any tools…

Parmelee: So you don’t think Tim Kaine has been doing a good job…

McAuliffe: I go back to my point...he has no tools.

For pop psychologists, Jim Parmelee provided a rich field to furrow with such observations as: “I think he’s (Obama’s) exaggerating what has happened in the past in order to make the future look better.” This is much the essence of the running anti-Obama theme these first 100 days: The situation looks worse than it really is. The administration is hyping crisis to justify an agenda to expand government. Everything would have settled out if we had done nothing and probably even more quickly and sustainably. Democrats are going to raise taxes.

Credible deniability is what the Republican and talking head line is all about. In their heart of hearts, they know how much damage the Bush years did to America and to the dream. They love to label Bush a liberal spender to deflect the association with the man they embraced wholeheartedly as a compassionate conservative. The accountability simply must be deflected, and so the story goes. President Obama has exaggerated the economic downturn to advance an (in some corners a Marxist) agenda. If and when he is successful, the rationalization will be that it never was really that bad and look at the burden of debt and expansion of government that has been foisted upon us. Plus, when we find ourselves out of this hole and feeling better about ourselves, the story will be that everything is fine and would have been fine anyway without the added burden of debt if we had simply done nothing. And, we will indeed have to pay the debt.

The fact is that at some point, revenues must increase to relieve the burden of this debt or our quality of life will diminish. Phyllis Randall was clear about this uncomfortable situation during the program. There are few ways to overcome the debt. One is to grow the economy. Another, deflate the dollar through inflation. And then there is the bogyman: raise taxes. Both the second and the third are the same thing, yet you get to hide from tax and spend accusations when you allow the dollar to diminish. Welcome to the world of Republican obfuscation.

Cross posted at Blue Commonwealth