BOSTON (CBS) – They’re all talking about job creation. But is anyone talking sense?
“This entire series of debates has been pandering. I haven’t heard any intelligent discussion,” Boston University Economic Professor Laurence Kotlikoff told WBZ-TV.READ MORE: Brookline teachers' strike ends, schools to be open Tuesday
Kotlikoff is a fellow of the American Academy of Arts and Sciences and a research associate at the National Bureau of Economic Research. He cringes at the mantra he hears from the Democrats.
“A tax on Wall Street speculation,” Bernie Sanders said at an NBC News debate.
“Closing corporate loopholes, deductions,” Hillary Clinton claimed at a CBS News debate.
While they’re both for raising the minimum wage, Clinton vows not to raise taxes on those earning less than $250,000 a year.
“The rich can take their money and move it to anywhere in the world. It’s hitting the workers, it’s really a tax on workers,” Kotlikoff said.
Meanwhile, the Republican job growth debate has increasingly focused on trade.
“We’ve lost anywhere between four and seven million jobs because of China,” Donald Trump proclaimed in a debate on Fox Business Channel.
“Somebody dumps their product in our country and take our people’s jobs,” John Kasich said in the same debate:
But Kotlikoff says the high tariffs Trump and others favor ignore the reality of global markets.
“I think China is trying to take our jobs and we’re trying to take China’s jobs, that’s the nature of competition,” he told WBZ.
“I think we need to be very careful with tariffs,” Marco Rubio said at the Fox debate.
Some of the Republicans agree.
“Do you think that the Chinese, if they had a 45 percent tariff imposed on all their imports wouldn’t retaliate? Of course, they would. This would be devastating for our economy,” Jeb Bush countered.
The controversial Trans-Pacific Partnership Free Trade Pact divides the GOP:
Bush, Kasich and Rubio back it.
Ben Carson, Chris Christie, Ted Cruz, and Carly Fiorina are on the fence.
Donald Trump opposes it.
“Wages haven’t gone up in the better part of a generation,” says WBZ NewsRadio 103’s Joe Mathieu, who sees an edge for Trump here.
People like the idea of getting tough with the people that have been taking our jobs, I asked him.
“That’s right, force them to bring jobs back here to the United States, and by the way, build that wall,” Mathieu said.
IN DEPTH: CANDIDATES’ POSITIONS
The first entry for each candidate deals with job creation; the second, free trade and the Trans Pacific Partnership.
“Hillary will invest in infrastructure, clean energy, and scientific and medical research to create jobs and strengthen our economy. And she’ll provide tax relief to working families and small businesses. That’s how we’ll move toward a full employment economy that creates jobs, pushes businesses to compete over workers, and raises incomes.”
“America worked to create a global economy. The current global trading system is distorted not only by barriers to entry in developing and emerging economies, but by the power of special interests in developed countries, including the US. To make trade fairer as well as freer, developing countries have to do a better job of improving productivity, raising labor conditions, and protecting the environment. In the US, we have to do a better job of providing good jobs to those displaced by trade. (Source: Hard Choices, by Hillary Clinton, p.509 , Jun 10, 2014)
“China benefits from WTO and should play by WTO rules. We should focus on ending currency manipulation, environmental destruction and miserable working conditions [in China]. I acknowledge the challenge of lifting millions of people out of poverty. China argued this outweighed any obligation to play by established rules. I countered that China and other emerging economies had benefited greatly from the system the US had helped create, including their membership in the World Trade Organization, and now they needed to take their share of responsibility.” (Source: Hard Choices, by Hillary Clinton, p.513 , Jun 10, 2014)
“I have proposed the Rebuild America Act, to invest $1 trillion over five years to modernize our infrastructure. It would be paid for by closing loopholes that allow profitable corporations to avoid paying taxes by, among other things, shifting their profits to the Cayman Islands and other offshore tax havens. Importantly, the Rebuild America Act will support more than thirteen million good-paying jobs – jobs that our economy desperately needs.”
“I voted against NAFTA, CAFTA, PNTR with China. I think they have been a disaster for the American worker. A lot of corporations that shut down here move abroad. Working people understand that after NAFTA, CAFTA, PNTR with China we have lost millions of decent paying jobs. Since 2001, 60,000 factories in America have been shut down. We’re in a race to the bottom, where our wages are going down. Is all of that attributable to trade? No. Is a lot of it? Yes. TPP was written by corporate America and the pharmaceutical industry and Wall Street. That’s what this trade agreement is about. I do not want American workers to competing against people in Vietnam who make 56 cents an hour for a minimum wage.”READ MORE: Massachusetts gas prices rise to new record high of $4.65 a gallon
“Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals: Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages; Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money; Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again. Doesn’t add to our debt and deficit, which are already too large.”
“The TPP is horrible deal. It is a deal that is going to lead to nothing but trouble. It’s a deal that was designed for China to come in, as they always do, through the back door and totally take advantage of everyone. It’s 5,600 pages long, so complex that nobody’s read it. This is one of the worst trade deals. And I would, yes, rather not have it. We’re losing now over $500 billion in terms of imbalance with China, $75 billion a year imbalance with Japan…. If you look at the way China in particular takes advantage of the US–it’s through currency manipulation. It’s not even discussed in the almost 6,000-page agreement.” (Source: Fox Business/WSJ First Tier debate , Nov 10, 2015)
“The American Dream — the idea that anyone, through hard work and determination, can achieve anything — is under assault like never before. Obamacare, an overreaching federal government, and out of control spending threaten the ability of small businesses and entrepreneurs to create jobs and innovate. This has to stop and Ted Cruz has led the way to bring back jobs, growth, and opportunity to America. [Cruz] authored the Obamacare Repeal Act as his first piece of legislation; Led the fight to defund Obamacare — the largest regulatory challenge facing our nation which has resulted in killing jobs, cutting workers’ hours, and causing millions of Americans to lose their doctors or health care; Authored legislation to end taxpayer dollars subsidizing corporate fat cats, including the Ex-Im Bank; Opposed the Renewable Fuel Standard ethanol subsidy.”
“On June 23, 2015, Cruz voted against Trade Promotion Authority, also known as TPA or fast-track authority, which has been debated in Congress amid efforts by the Obama administration to secure the pending Trans-Pacific Partnership trade deal with 11 other nations. The very same day as his no vote, Cruz published an op-ed to Breitbart explaining his decision. “TPA in this Congress has become enmeshed in corrupt Washington backroom dealings, along with serious concerns that it would open up the potential for sweeping changes in our laws that trade agreements do not typically include,” he said.” (Source: Politifact, Wednesday, July 8th, 2015)
“Marco supports comprehensive tax reform that will:
Cut taxes for small businesses to 25%;
Let businesses immediately expense new investments;
Permanently repeal the death tax.
Demand Full Repeal of ObamaCare and Its $1 Trillion of Tax Hikes
Repeal ObamaCare in full, including the $1 trillion of tax hikes on workers and employers, in particular the job-destroying employer mandate and obstacles to hiring full-time workers;
Support consumer-centered reforms that lower costs and provide flexibility to businesses.”
“Whether we like it or not, globalization is real and it is here to stay. Our challenge now is to position ourselves to take advantage of the opportunities it presents us, not simply suffer from the disruptions it creates. We are in competition with other nations for the investment, innovation, and talent that will create good, well-paying jobs.” (Source: American Dreams, by Marco Rubio, p. 24 , Jan 13, 2015)
“Governor Christie believes we need a tax system that lowers individual rates for every American while unleashing the nation’s growth potential. Governor Christie will reform the tax code by creating a flatter, fairer and simpler individual income tax system and keep returns simple by reducing deductions and giveaways. Governor Christie will also lower the Corporate Tax Rate to a more competitive 25% which S&P has suggested could help create as many as 10 million jobs, and allow companies a one-time opportunity to repatriate over two trillion dollars of profits currently sitting overseas at a much lower tax rate which would unleash a wave of new capital investment…. Regulation should be used to implement actions explicitly authorized by statute. Further, the next president should review every rule and executive order published under this administration during the transition, so that on day one, the most egregious and unlawful ones can be revoked. We should restore the principle that for any new regulatory change proposed that the benefits outweigh the costs. We should also impose a “Regulatory Zero” rule in which for each new rule that is imposed, one of equal cost must be sunsetted or removed. Additionally, we should impose a hard cap on what it can cost for employers to complying with all federal regulation.”
“I don’t trust this president to negotiate any deal. And that’s what my answer was, to say I don’t trust this president negotiating a deal. I wouldn’t let this president buy me a car, that’s how bad a negotiator he is. So, I will not support TPP as negotiated by this president, because I’m convinced it will be just as bad as the Iranian nuclear deal.” (Source: Fox News Sunday 2015 Coverage of 2016 presidential hopefuls, Nov 8, 2015)
“I have proposed pro-growth policies designed to achieve 4 percent growth, create 19 million new jobs and increase middle class incomes. I know these policies will work because I did it in Florida. We lowered taxes every year I was governor – totaling more than $19 billion. We reduced regulations and cut the state bureaucracy by over 10 percent. These pro-growth policies made Florida number one in small business creation, helped create 1.3 million new jobs and increased middle class incomes by $1,300. We can create similar job and income growth for the nation.”
“[TPP] would strengthen our ties to our allies throughout the Pacific region, including our close allies and partners in Australia, Mexico and Japan. We could use more friends, frankly. More than that, free trade is essential to creating the sustained, high rate of growth that we need to create well-paying jobs, new opportunities for American farmers and businesses, and even greater access to a global supply of goods and services.” (Source: Jeb Bush Apr 22, 2015)
“When John Kasich took office as governor of Ohio in 2011, Ohio had lost 351,000 private sector jobs and was 48th in the nation in job creation. Under his leadership, however, Ohio has enacted jobs-friendly policies that have helped Ohio job-creators get back on their feet and create hundreds of thousands of new private sector jobs. Additionally, Ohio has become a top-ten state for job creation and far outperformed its own historical job creation performance. Wages are growing faster than the national average, the unemployment rate is better than the national rate and under Governor Kasich the number of new businesses created in Ohio has increased every year and is now at record high levels…. Understanding that a more competitive tax environment is essential to job creation, Gov. John Kasich teamed up with Ohio’s legislature to cut taxes by $5 billion since 2011—the largest tax cut of any sitting governor. The elimination of the death tax, a 16 percent income tax cut and a complete phase out of income taxes for small businesses will free up more capital for growth and job creation.”
“During the sixth Republican presidential primary debate, on January 14, 2016, John Kasich discussed his support from trade: “I’m a free trader. I support NAFTA. I believe in the PTT [sic] because it’s important those countries in Asia are interfacing against China. And we do need China — Donald’s right about North Korea. I mean the fact is, is that they need to put the pressure on and frankly we need to intercepts ships coming out of North Korea so they don’t proliferate all these dangerous materials. But what he’s touching — talking about, I think has got merit. And I’ll allow putting that tariff or whatever he’s saying here…For too long — no, for too long, what happens is somebody dumps their product in our country and take our people’s jobs, and then we go to an international court and it takes them like a year or two to figure out whether they were cheating us. And guess what? The worker’s out of a job. So when they — be found against that country that’s selling products in here lower than the cost of what it takes to produce them, then what do we tell the worker? Oh, well, you know, it just didn’t work out for you. I think we should be for free trade but I think fair trade. And when countries violate trade agreements or dump product in this country, we need — we need to stand up against those countries that do that without making them into an enemy.” (Source: BallotPedia.org/John_Kasich)
JON KELLER’S ANALYSIS:
Prof. Kotlikoff is no fan of what he describes as the Democrats’ “command and control mentality” toward the federal role in manipulating the economy, an approach he says is “not going to work for our economy.” (In a future installment of our series focusing on income inequality, we’ll hear a decidedly more sympathetic take on what Clinton and Sanders are offering.)
But his indictment of what the Republicans are saying as well (“I don’t hear anybody talking facts or the realities; I hear them talking about getting elected”) speaks to a core problem with this campaign – decades after we first started suffering the impact of economic globalization in lost jobs, dormant wages and sluggish growth, we still don’t quite know what to do about it, any more than we’ve developed an accepted approach to deal with the $26 trillion unfunded liability in the Social Security Trust Fund.
Both apparent New Hampshire frontrunners – Trump and Sanders – are responding to voter anger over economic dislocation by vowing punitive action against their respective sets of villains.MORE NEWS: Coronavirus in Massachusetts: Today's developments
Look for the rest of the field, seeing the electoral success that such scapegoating yields, to edge away from any politically risky truth-telling about our profoundly complex economic problems.