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Sunday, May 22, 2011

Austan Goolsbee: Leading the Charge in the Obama Administration’s War on Reality

Okay, so I watched what Colbert billed as his “unedited, extended interview” with Austan Goolsbee online, and not surprisingly, he continued to make specious claims, this time focusing much of his time on deceiving the audience about Republican policies. He pitched that favorite old saw of the Left: that high-income tax cuts don’t work. Let me make this about as clear as I possibly can while still relying on specific, objectively verifiable facts: under the rate structure that was in place from 1993-2001, we never collected more than $2.03 trillion in one fiscal year. Under George W. Bush, the top income tax rate was lowered from 39.6% to 38.6% in 2001, then to 35% in 2003. In 2007, federal receipts totaled $2.6 trillion. The government actually saw an increase in revenues in 2008, but it made the ill-advised decision to give about $150 billion back as part of the first misbegotten stimulus. So, clearly, the government took in more revenue per annum under George W. Bush than it did under Bill Clinton. That is beyond dispute. So, when Austan Goolsbee says “the high-income tax cuts did not work the first time we passed them,” I wondered what he was thinking. I wish I could ask him what he meant by that. Unfortunately, it’s not as much fun refuting someone when I’m not sure what he means. If he’s talking about the Bush tax cuts, then let’s remember that there were actually 2 separate tax acts passed and signed into law by President Bush. Ostensibly the purpose of these tax cuts was to stimulate an economy that was reeling from the impact of a dot-com bust, the 9/11 attacks and a series of corporate scandals. In that regard, the tax cuts were an enormous success: the unemployment rate never went above 6½%, our GDP increased from $10.1 trillion in 2001 to $14.4 trillion in 2008, and federal revenues increased by 44% (from a low of $1.78 trillion in 2003 to nearly $2.6 trillion in 2007). Now, as for jobs, there are different ways to measure employment, and the Labor Department changes the controls with some frequency. (You can see ten years’ worth of raw data on the BLS’s web site here.) The standard measure–the figure you usually hear people refer to when they say the economy added/lost so many jobs–is what the Bureau of Labor Statistics calls the “seasonally-adjusted” employment level. By that standard, not only did the economy add 10 million jobs after the end of the recession; it added jobs every month for 52 consecutive months, a first in recorded history. By contrast, using the same metric, our economy has lost a net of 2.5 million jobs since Obama took office. This is important because when Goolsbee boasted about the “2.1 million jobs” that he claims were created in the “last 14 months,” he’s neglecting to mention the 4.2 million jobs that were lost during Obama’s first year in office. Now, is it fair to blame Obama or his policies for the loss of all those jobs? Of course not. But nor is it fair to blame George W. Bush or his policies. Like Bush, Obama inherited a bad economy, but unlike Bush, Obama has made things worse.
I also heard Goolsbee say that, during the last decade, “middle-class incomes fell by $2,000.” I’m not sure what, if anything, he’s basing that claim on or how he defines “middle-class,” but nearly everyone I know who was gainfully employed (and is willing to discuss their salary openly) saw their incomes increase from 2001 to 2008. Also, this is another example of Goolsbee using vague, ambiguous language so that it’s difficult to prove or disprove his claims. Is he talking about household income or per capita income? Is he going by the mean or the median? Stay tuned; I have more to say on this matter.

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