Nevadans have a relatively clear choice in the 2012 election between two Senate candidates who are examples of two entirely different political and economic philosophies. Senator (By Appointment Only™) Dean Heller (R-NV), who has demonstrated a few precious moments of moderation, has more often illustrated the politics of the Senator Jim DeMint (R-SC) brand of ultra-right side of the aisle protection of corporate and financial interests. His opponent Rep. Shelley Berkley (D-NV1) has more often sided with the interests of middle class working families, consumers, and small business interests.
Our first clue that Double Dean Heller isn’t espousing a critical view of large corporate and financial institutions in America comes from his choice of buzz-words. He is pleased to tell us that he voted against “taxing small businesses and job creators.” [Heller]
It should be remembered at this point that Senator Heller supports the Republican expansive definition of what constitutes a “small business,” i.e. The differentiation between small business enterprises as they are commonly known, and small business enterprises as they are generously defined by the Republican Party has been discussed at some length previously; notably HERE, and here in a 2010 post. Cutting to the chase, the GOP definition includes K-Street lobby shops, some major law firms, and anyone else who can squeeze into the “small business” tent because they employ fewer than 500 people.
Secondly, Senator Heller’s use of the term “job creators,” is instructive. There’s nothing particularly original about the term, in fact if we climb in the political time capsule and return to 1993 we’ll find the Republican members of Congress balking at President Bill Clinton’s upper income tax hikes, calling them “job killing.” “At issue was President Bill Clinton’s $496 billion program of stimulus and upper income tax increases. And what Republicans then decried as disaster ushered in the longest economic expansion in modern American history, a period which produced 23 million new jobs and a balanced budget.” [Perrs]
Not only is there nothing new about the “job creators” term, if the object is to reduce the federal deficit and to create jobs in the United States, then the Clinton tax hikes and economic policies were Job Creating. Witness the following chart from the Center For American Progress:
This somewhat elderly tried and true graphic shows the marginal tax rates at the bottom — note what’s NOT happening in terms of job growth in the left hand side of the chart. While there may be several factors in play concerning tax rates and job growth, what cannot be demonstrated is a causal relationship between low marginal income tax rates and increased employment.
Additionally, IF balancing the federal budget is a desirable thing, and Senator Heller touts his votes for various balanced budget legislation, then one obvious way to do that is to follow the recent example of the Clinton Administration and raise the marginal rates on the wealthiest among us — the 0.1% — and seek to replicate the budget balancing accomplishment of the Clinton Administration which left office with a tidy surplus. [FactCheck]
There’s another graphic we should dust off and haul out of the vaults one more time, because it serves to illustrate the difference between Budget Deficit Hawks and Budget Deficit Chicken Hawks, a Chicken Hawk being one who squawks loudly about “OMG the sky is falling we have a no-good horrible terrible heinous humdinger of a deficit/debt” and then supports the very policies that created the aforementioned debt.
Again, what’s that wide swath of burnt orange comprising the largest portion of contributing factors to the current deficit? BUSH TAX CUTS. Who still supports extending the Bush Tax Cuts for the wealthiest Americans? Senator Dean Heller (R-NV).
The Case of the Small Business Jobs Act
One piece of legislation we can use as a touchstone to measure willingness to support the interests of small businesses is the 2010 Small Business Jobs Act.
On Sept. 27, 2010, President Obama signed into law the Small Business Jobs Act, the most significant piece of small business legislation in over a decade. The new law is providing critical resources to help small businesses continue to drive economic recovery and create jobs. The new law extended the successful SBA enhanced loan provisions while offering billions more in lending support, tax cuts, and other opportunities for entrepreneurs and small business owners. [SBA]
When the bill came up for a vote in the House of Representatives on June 17, 2010 one member of the Nevada Congressional delegation voted in favor of the bill — Rep. Shelley Berkley (D-NV1); Rep. Dean Heller (R-NV2) voted against it. [GovTrack]
The Case of the Economic Development Revitalization Act
Section Seven of the EDR Act in the 112th Congress would have boosted the U.S. economy, with specific attention on public works construction projects and planning:
“Modifies provisions regarding grants for planning and administrative expenses for public works and economic development to authorize funding for: (1) fostering regional collaboration among local jurisdictions and organizations, and (2) facilitating a stakeholder process that assists the community or region in creating an economic development vision that takes into account local and regional assets and global economic change. Requires any overall state economic development planning assisted to be part of a comprehensive planning process that considers the provision of public works to support practices that enhance energy and water efficiency, reduce U.S. dependence on foreign oil, and encourage efficient coordination and leveraging of public and private investments.”
However, this provision and others in the bill which might have boosted the lagging construction sector faced the usual Republican filibuster in the Senate. When a cloture vote was called on June 21, 2011 Senator Dean Heller (R-NV) voted to sustain the Republican filibuster. [roll call 94]
The vote is interesting given that in February 2011 the situation in the Nevada construction sector was pretty dismal:
About 70,000 of the 180,000 jobs lost in Nevada during the recession were construction related, said Bill Anderson, chief economist of the Nevada Department of Employment, Training & Rehabilitation.
Some of those workers told lawmakers that they are still out of work after being unemployed for two to three years. [RGJ]
The problem with the opposition logic to public works bills is that if a significant sector is experiencing high unemployment a drag is created on local economies because of lost wages and salaries. Lower wages or lost wages mean less demand, and less demand further depresses the local economy. For all the fretting about the perils of inflation, it’s the deflation cycle which puts the greatest strain on economies. If we’re truly worried about a long and tedious recovery from the Crash of 2008, then one way to speed up the process would be to relieve the drag created by long term unemployment in the construction sector. This would benefit construction companies and their employees.
The Case of the American Jobs Act
S. 1549, sponsored by Senator Harry Reid (D-NV), another attempt to move Congress off the dime and move on infrastructure needs and construction industry hiring, was introduced in the Senate on September 13, 2011 — and it’s still sitting there — locked in the logjam that has become the legislative process in Washington, D.C.
When a portion of the bill was brought forward to provide funds to hire teachers and first responders on October 20, 2011, Senator Heller voted against it. [TPG] Senator Heller castigated the bill as “another stimulus,” and pointed to the “failure” of the initial ARRA to put a dent in Nevada’s unemployment rate. Senator Heller was at some pains to posit a direct correlation between a bevy of legislation and the increase in Nevada unemployment rate. [YouTubeVideo] If anyone is looking for a classic presentation of post hoc ergo propter hoc this would be it.
That the ARRA failed is an article of faith among Republicans, and that’s all it is because the numbers don’t support the contention.
From the Congressional Budget Office: What did the Stimulus Bills do?
They raised real (inflation-adjusted) gross domestic product by between 1.1 percent and 3.1 percent, Lowered the unemployment rate by between 0.6 percentage points and 1.8 percentage points, Increased the number of people employed by between 1.2 million and 3.3 million, and Increased the number of full-time-equivalent (FTE) jobs by 1.6 million to 4.6 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers).
The Congressional Budget Office wasn’t the only source of optimism, “The End of the Great Recession,” authored by Mark Zandi (Moody’s) and Alan S. Blinder, Princeton University, (pdf) noted what Senator Heller failed to acknowledge — that without the ARRA (Stimulus) and other federal interventions the Recession could have been far worse. The Federal Reserve Bank of San Francisco (pdf) also weighed in making an astute observation that economic multipliers may have differing impact on national and regional numbers, but the effect was essentially the same — ARRA saved jobs.
Our first clue that Senator Heller is repeating Party talking points rather than offering substantive proposals for economic growth was the “jobs creator – small business” rhetoric. It sounds ever so much nicer to speak of those in the top 0.1% of American income earners as “job creators” than to describe them as hedge fund managers, financial sector executives, and merger & acquisition specialists.
Our second clue is that Senator Heller seems impervious to hard data on the source of our current federal deficit and debt, and the lack of a causal connection between marginal income tax rates and actual economic growth.
The third clue is that Senator Heller has voted against or refused to support bills that would relieve unemployment in the public sector (teachers, police, firefighters) and to create jobs in the hard pressed Nevada construction sector.
The fourth clue is that Senator Heller relies on the post hoc ergo propter hoc fallacy to justify his opposition to any legislation which might serve to enhance “economic multipliers” or to save or create jobs. Again, he espouses the GOP Article of Faith (All Stimulus Measures Were Failures — which the Republicans were announcing before the laws took full effect) rather than look to the actual numbers.
Doubling down on talking points doth not an economic vision make.