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Thursday, September 06, 2012

Reality-Based Economics

It's obviously largely coincidental, but it seems like reality is trying to punctuate a point Bill Clinton made last night -- that Democratic presidents vastly outperform Republicans in terms of job creation. "Since 1961, for 52 years now, the Republicans have held the White House 28 years, the Democrats 24," Clinton said. "In those 52 years, our private economy has produced 66 million private-sector jobs. So what's the jobs score? Republicans 24 million, Democrats 42 [million]." PolitiFact rates the statement as true.

And today, the Department of Labor reports that "First-time claims for state unemployment benefits declined by the largest amount in more than a month in the latest week."

"The number of initial claims in the week ending Sept. 1 fell 12,000 to 365,000," MarketWatch reports. "The consensus forecast of Wall Street economists was for claims to fall a slight 1,000 to 373,000."

Steve Benen explains, "In terms of metrics, when jobless claims fall below the 400,000 threshold, it's considered evidence of an improving jobs landscape, and when the number drops below 370,000, it suggests jobs are being created rather quickly. We've only managed to dip below the 370,000 threshold seven times in the last 22 weeks, but the more encouraging news is that we've been below 370,000 in six of the last nine weeks."


As I say, it's largely coincidental that a marked improvement in employment seems to be happening at this moment, but it's not a coincidence that it's happening during a Democratic administration. Where Republicans go for a bass-ackward "trickle-down" economic theory where everyone's fate is supposedly tied to that of the very, very wealthy, Democrats believe in a long-proven economic policy based on a pretty common sense notion -- what lefty commentator Jim Hightower describes as "Everybody does better when everybody does better."

And that notion has been a common argument from the Democratic National Convention; that the "job creators" aren't employers, they're consumers. Republicans argue that employers hire as many people as they can afford, regardless of the number of employees they actually need. It's a stupid argument, which explains why they never put it exactly that way, but that is basically the argument. If you give rich people big, fat tax cuts, they'll go on a hiring binge because... Well, that's not extremely clear. Just because, I guess. For Republicans, everybody does better when the one percent does better. Not that it ever works out that way in the real world -- eight years of Bush pretty much proves the failure there.

But if -- as Democrats believe and history has proved -- consumer demand drives growth, then employers hire only the workers they need. And they need those workers because of demand. Those jobs exist because those jobs need to get done, not because some trust fund baby decided on a whim that they'd finally made enough profits to hire someone they may or may not need. If people are spending money, people are making money. If everyone's spending money, everyone's making money. Everybody does better when everybody does better.

So it's no surprise that Democrats are better at job creation. They know how it's done, while Republicans know how they wish it were done.


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