The Republican talking points on our nation’s economic woes have been bothering me for some time now, and the effect that their policies have had on my family and on many whom I know has moved me to reactivate this blog and to write about what is wrong in that rhetoric.
If you listen to the Republican politicians and punditry, they will tell you that there is such high unemployment in our current economic climate because the United States has too high a level of debt causing businesses – they frequently cite small businesses – to be uncertain of their future tax burden and, thus, hoard their wealth rather than spend it on new hires. Without doubt the debt of the United States is too high and, I would concede, there are surely firms and corporations who are worried about a potential future tax burden when they make their decisions on hiring and firing. The vast majority of businesses, however, have no time to worry about a potential future tax burden because they are much too fearful of their current economic situation because they see their customer bases and clientele shrinking.
This is why the Republican recipe for the future that opposes increased revenue flows and favors government spending cuts is not only stupid, but utterly damning to the very business interests that they claim to be supporting. Yes, small businesses (especially the very small ones) are amongst the biggest victims of Republican policies along with, of course, the unemployed and their families.
My parents’ business – which, it makes me proud to say, has done its best to keep its employees employed to the detriment of my parents’ income – is an example of just the type of business that is most harmed by the Republican response to our hard economic times. Despite maintaining the same level of quality in both their many dishes (it is an Italian restaurant that makes my favorite food in the world) and customer service, the restaurant has seen is fortunes continuously decline since the crisis began.
And the responses of the Republicans who have held power in my home state of Florida for far too long now have only exacerbated the problems they’ve faced.
Each round of government cuts – with some the most horrifying coming from the states, though the numbers are hardly as egregious as those coming out of Washington – causes for a loss of government jobs. When politicians cut spending levels, they are not miraculously making the bills go down simply by ceasing the printing of certain manuals or decreasing the number of “unnecessary” personal working in the EPA; they are sending people from their desks or workstations and into the unemployment line.
The community in Florida that I am from and my parents’ business has been a part of for more than two decades is the northeast region of Volusia County, which has consistently had an unemployment rate higher than that of the national average – it is currently at 10.9% – since the beginning of the crisis. Volusia County has little industry, and largely subsists on the many members of the region’s service industry – it’s an area whose economic fortunes are rooted in tourism – patronizing (the polite kind) each other. One type of outside money coming in to Volusia County, however, is the state’s funding of education. Unfortunately, the cuts of the Conservative legislature and governor have sent teachers from their classrooms and retarded the progress of an already underfunded education system.
Each person newly out of the job is now substantially less likely to be a consumer of the same products or a customer of the same businesses that they were when they had a job; this is simple common sense, as they cannot enjoy the same things without the same income. With fewer consumers, small businesses that depend on local clientele become more and more cash-strapped, causing the owners to have to make the difficult decision of decreasing their own income or decreasing their biggest expenses: their employees. Either way, we still get fewer consumers in the broader economy of a small area like this, because those employees who were fired have no income and those bosses who chose to lower their own income, like my parents, now have less disposable income to be patrons of their fellow businesses.
Talk to any small business owner why they aren’t expanding their enterprise or hiring new employees, and the honest ones (read: those not parroting the Chamber of Commerce talking points) will not tell you the that either the massive government debt or the “threat” of looming regulations scares them, but rather that their lack of customers has them scrambling just to make ends meet for their businesses and their families. The problem we our nation currently faces is a deficit of consumption.
This is why the Republican “plans” to create jobs will not only not work, but cause our economy to further decline. Every effort that the Republican members in Congress have made has included an attempt to decrease the debt or deficits, meaning that every plan to “create” jobs actually eliminates Federal (or Federal contractor) jobs in the process. While the looming debt is a problem for our country, it is not the proper time to address it; even the President’s deficit commission mentioned this. For now we should focus on creating an appetite for consumption in our economy.
Ideally this would be done by the biggest corporations using the vast wealth they’re sitting on to build new factories or offices, hiring people to build them and run them, but three years into our crisis it is apparent that the corporate “persons” do, indeed, lack the humanity necessary to expand when they’ve increased the productivity of those employees they haven’t laid off. Since we cannot look to private wealth for the boost we need, we should focus on building a path towards future economic fortunes in ways that boost consumption right now. I’m talking about building new bridges and renewing old highways, expanding aged airports and laying the tracks to a faster rail system, and, above all else, affirming our commitment to educational excellence by introducing new innovations to the classroom.
All these things would not only get people back to work today, but they would lay a foundation for prosperity in the future. The influx of new money would whet the appetite of consumers in communities all across the nation, allowing small businesses relief from the consumer crunch.
In Volusia County, Florida, this would mean that construction workers who haven’t had a job since the housing bubble burst would get to go back to work building roads and schools. In Volusia County, this would mean would be looking over the long lines on the tests of their students, rather than the meager lines of job offerings in the community. And, when they get hungry, they could go to my parents’ restaurant for a slice of the best pizza outside of the Five Burroughs.
Author’s note – Yes, I am aware of my bias concerning my parents’ restaurant, but I’m okay with that.