There are viral emails going around containing lies about Obama that the right wing is continually making up. We've all heard the obvious ones: that Obama is a Muslim, that Obama is a socialist, that Obama wasn't born in the US. Yada yada yada. There are, however, a special group of lies about the economy, and these are the ones that are really more serious. These lies are amplified by the right wing noise machine consisting of talk radio (Rush Limpballs, Glenn Beck) and Fox News (Sean Hannity, Bill O'Reilly). Right wing talk radio is all that most people are exposed to since it represents 90% of all talk radio and 100% in many media markets. They are really in the business of making up and transmitting a bunch of lies about the Obama administration. And they get paid really well for doing so. Between them Rush Limpballs and Glenn Beck make some $80 million a year. Hannity and O'Reilly make somewhat less but still in the tens of millions. Right wing billionaires like the Koch brothers make sure that plenty of money is available for right wing bloggers, think tanks and other activities. There is no lack of money to saturate the airwaves and the internet with right wing lies and propaganda. I am indebted to Thom Hartmann for pointing out these eight lies about Obamanomics.
Here are eight lies about the economy.
1) Obama bailed out the banks. No, it was George Bush who started the TARP program. His Treasury Secretary, Hank Paulson, came to Congress and demanded $700. billion, no strings attached, to bail out the banks. On Oct. 3, 2008, The House of Representatives, after rejecting it the week before, approved Treasury's "Troubled Asset Relief Plan." The Senate had already approved the bill, so President Bush signed it into law pronto. On Oct. 14, 2008 Treasury announced that it was putting $250 billion into nine big banks. Lots more capital injections (to smaller banks and some other financial institutions) followed. On Nov. 4, 2008, The Wall Street Journal reported that Treasury was likely to scrap the whole toxic-asset-buying plan. All this happened under President Bush.
2) Obama raised taxes. No, Obama passed the largest tax cut in the history of country. 40% of the stimulus was in tax cuts.
President Barack Obama talked a lot about economic recovery during his State of the Union address on Jan. 27, 2010, including the benefits of the economic stimulus bill passed last year. The stimulus, formally known as the American Recovery and Reinvestment Act, included tax cuts for many Americans, Obama said.
"We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses," Obama said. "We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college." Democrats applauded, while Republicans were silent for the most part. In one of the unscripted moments of the night, Obama looked at the Republican side of the room, smiled and said, "I thought I'd get some applause on that one."
While Obama gave working families tax cuts, he didn't give them to those who made more than $200 K for a single or $250 K for a couple. Republicans, who are now in the process of demanding extending the Bush tax cuts for those making more than $250 K, were not too happy that Obama's largest tax cut in American history did not include the rich but went mostly to middle class families.
3) Obama tripled the deficit. Bush's last budget included a $1.4 trillion deficit while Obama's first budget included a $1.29 billion deficit so Obama actually reduced the deficit. $9 trillion of the national debt was run up by 3 Republicans: Reagan and the first President Bush who ran up the debt by $4 trillion and George W Bush who ran up the debt by $5 trillion. Obama inherited Bush's built-in deficits attributable to the two wars Bush started, the Bush tax cuts which the Republicans seek to extend not only for the middle class but for the rich as well and the drug benefit for seniors which was unpaid for. In addition Obama was faced with a financial catastrophe second only to the Great Depression which required additionl government spending to get the economy going again.
Only Jimmy Carter and Bill Clinton proposed balanced budgets in recent history. When George W Bush came to power, he had a surplus left over from the Clinton administration and proceeded to piss it away post haste. Republicans are enamored by Jude Wanniski's Two Santa Claus Theory which is that Republicans should spend like drunken sailors when Republicans are in power and then scream about the deficit once Democrats are elected. This is exactly what they have done and what they are doing today.
4) The stimulus didn't work. According to the nonpartisan Congressional Budget Office the stimulus created between 1.4 million and 3.3 million jobs. Republicans ran on bringing jobs into their districts which were created by the stimulus and then lost no time denouncing the stimulus. The stimulus saved many jobs at the local level including teachers, police and firemen. Now that Republicans hold the purse strings, expect massive layoffs at the local level as the Federal government will no longer come to their aid. Also expect a reduction in unemployment benefits. Under Obama and the Democratic controlled House, unemployment benefits were increased fom 26 to 99 weeks. You can kiss that extension bye bye.
5) Businesses will only hire if they get tax cuts. Business really hires to meet demand. They won't hire if there's no demand for their products. They will sit on their cash or buy back stock or invest in speculative investments which is what is happening today. Working people having money creates demand. They can only create demand if they have jobs. When there is more demand, businesses will hire although they might hire more Chinese, Koreans and Indians than Americans. So even if demand should increase, there is no guarantee that that will create more American jobs or put more money into American pockets. American companies today are just as likely to repond to increased demand by using technology or offshoring jobs. They will simply put tax cuts in their pockets. Most "American" corporations' only interest in America is selling into the American market. They are not interested in paying American taxes or providing American jobs. Major "American" corporations sell 50% or more of their products overseas, and most of their production facilities are now located overseas. They are "American" corporations only in the sense they they originated here and are registered here. But that registration can easily and quickly change as we saw when Halliburton moved to Dubai.
6) Obamacare, the health care reform bill, cost $1 trillion. Actually, the health care reform bill cut the projected budget deficit by $138 billion largely by cuts to Medicare Advantage which is the privatized form of Medicare. Medicare Advantage, created by Republicans, represents the stealth privatization of Medicare. The government pays private health care corporations to provide services equivalent to traditional Medicare. Under Bush they were also paying doctors more to see an Advantage patient than they were paying for a doctor to see a traditional Medicare patient. Private health care corporations are spending millions on advertising to lure away seniors from traditional Medicare. Eliminating that "advantage" to the private health care corporations saves the government $138 billion. Although the Medicare Advantage programs seem at first sight to be better than traditional Medicare, they require a gatekeeper doctor to approve a patient's seeing a specialist. This approval is often denied which is a distinct disadvantage over traditional Medicare in which the patient is free to see any doctor or specialist without a gatekeeper's approval. So the private health care corporations are still in the business of denying treatment so they can pay their CEOs hundreds of millions of dollars.
7) Government spending takes money out of the economy.
“Government spending does NOT take money out of the economy, unless it ships it off to fight wars in Iraq and Afghanistan. The vast majority of government spending stays in America. Be it for roads, bridges, technological advances -- like the computer and the Internet -- schools, disaster relief, Medicare, Social Security, etc. That money stays in this economy. It flows through this economy just as well, if not better, than any private sector transfer.
Do you think it disappears? Do you think that sending your tax dollars to DC somehow means the money disappears? It doesn't. It works its way through the economy every bit as well as a private sector purchase.
It also goes to pay salaries of government workers who spend the money here, in this economy.
If you send your money to the CEO of Apple to buy an Ipad, that money goes for his multi-million dollar salary, which he may spend overseas or hide it in offshore accounts. And Steve Jobs outsources 9 in 10 jobs making that Ipad. That money leaves the United States.
Citizens sending their tax dollars to DC creates at least as much economic activity as sending their dollars to CEOs in the private sector. There is no fundamental difference between the two kinds of exchanges. Both are payments for goods and services.
The key is what the money is spent on, who benefits, and if the purchase results in something that will last. The money flow is virtually the same.”
Actually, Obama has done a lot of good things regarding the economy. The one thing that he hasn't been able to accomplish is to bring down the unemployment rate. His failure to create jobs while saving the banks has not played well in middle America. He expected the economy to recove in a reasonable time from the Great Recession without realizing that there have been structural changes in the economy that prevent this from happening. The main structural change is globalization which makes it preferable for many corporations to outsource jobs to wherever in the world labor is cheapest. As consumers in those countries have more jobs and, therefore, more money to spend, corporate profits are increasingly derived from selling into those economies. From the corporation's point of view they will locate their production and marketing facilities wherever they can make the most profit. At this point in time that happens not to be in the US. Without American jobs, American demand for profucts and services will wither. This is what Obama and his economic team have failed to fully comprehend. They seemingly have a greater concern for Wall Street than they have for Main Street.
And the solution to the jobs conundrum may have more to do with increased rather than decreased government spending. This increased spending, however, does not have to be paid for with borrowed money. Corporations who used to pay 40% of government taxes now pay less than 10% putting the tax burden more on American workers. Perhaps, corporations should be taxed just for the privilege of selling into the American market which they are still very eager to do. One way of doing this is to tax the portion of value created by non-American labor. Since corporations have no allegiance to the US in terms of taxes or provision of jobs, they should be taxed on sales of products produced overseas. This will tend to bring jobs back home.
