The GOP Plays With Fire, We All Get Burned

Why We Can’t Have Nice Things (Like Jobs)

Determining the precise reasons behind today’s extremely dismal jobs report (only 18,000 net jobs created, with unemployment inching up to 9.2 percent) is difficult, but there are at least a couple that seem pretty clear.

  • The GOP-Induced Default Crisis Is Creating Uncertainty for Businesses, Dragging Down the Economy: Republicans like to blame just about anything on “uncertainty,” usually attributed to President Obama and the Democrats. This is odd because it is the GOP who is creating uncertainty right now, since we are all uncertain as to whether or not the GOP is going to tank the economy next month in order to protect tax breaks for Big Oil, hedge fund billionaires, and millionaire horse breeders, among others. Michael Ettlinger, vice president for economic policy at the Center for American Progress, explains:

It’s more than a coincidence that this slowing pace began when the attention in Washington, financial markets, and the media turned from the 2011 budget to the debt limit — and when Republicans in Congress and their conservative allies started most pointedly digging in their heels on a debt limit increase, attaching extreme conditions for their votes. That’s a situation that would give any rational business pause.

It wouldn’t be at all surprising to see an economic impact given the potential effect of a failure to raise the debt limit and the chance that this scenario may play out. After all, even if one believes the chance of inaction is small, it’s a big risk. One would expect to see decisions on hiring and investment postponed until the uncertainty is relieved. That’s not to say every business and corporation has its eyes on the debt limit debate as it makes its decisions. But the doubts about the economy that the debate is creating are certainly causing greater caution.

Businesses in this country hire millions of people each month, and if that caution is causing just 100,000 or 200,000 fewer hires than would otherwise occur, that would show up as a large impact on net job creation. And that may be just what’s happening.

Defaulting on our obligations would be terrible for a lot of reasons, not the least of which would be its impact on GDP. A default would look something like this:

  • Draconian Budget Cuts Have Caused Massive Job Losses in the Public Sector: The American Recovery and Reinvestment Act (aka the Stimulus) provided tens of billions of dollars in aid to states to help stabilize their finances. Conservative senators, however, pared back the size of the help and it ultimately proved insufficient given the depth of the economic downturn, so states and localities started sharply cutting anyway. The GOP, of course, has steadfastly refused to extend any further aid. What this means is that more than 500,000 public sector workers have lost their jobs as a result. Matt Yglesias explains:

For a while, temporary Census-related jobs masked the underlying trend, but we’ve been steadily shedding government work. Maybe you think that’s a good thing. Certainly most of President Obama’s critics from the right claim to believe it’s a good thing. But what happens when you shed public sector jobs amidst an already weak economic climate is the sharply reduced incomes of the former teachers and whatnot lead to them spending less in their local communities. In total, we have about 500,000 fewer people working for the government since Obama’s inauguration even though the national population is larger than it used to be.


Evening Brief: Important Stories That You May Have Missed

According to the New York Times, Gov. Tim Pawlenty (R-MN), the first candidate to announce his intention to run for president, may be the first to drop out. Sinking poll numbers, difficulty fundraising, and an inability to connect with the GOP base are among the many problems encountered by the campaign.

As new revelations appear every day about the hacking scandal allegedly perpetrated by Rupert Murdoch’s News of the World publication, the Guardian reports that Scotland Yard now believes that News Corporation employees may have tried to delete evidence of information stolen by NOTW reporters.

Jason Linkins of Huffington Post has published a voicemail from Sen. Patty Murray (D-WA) to Koch Industries in which the senator solicits the company for campaign donations to the Democratic Senatorial Campaign Committee. Although Koch donates regularly to both parties, including the DSCC in the past, a top Koch lobbyist claims to be offended that Democrats have asked for a continued donation at a time when the party is now highlighting the threat of the Koch’s far right agenda.

Radley Balko reports that a woman in Michigan has been charged with a misdemeanor for the crime of planting a vegetable garden in her front yard.

Sen. Bernie Sanders (I-VT) says that he has received assurances from other senators that if Obama sends a “piece of crap” debt deal, it will be defeated.

Former BP CEO Tony Hayward can’t remember the names of the men who died on the Deepwater Horizon rig.

Kentucky Gov. Steve Beshear (D) has announced that “private companies will manage care for the vast majority of Kentucky’s 815,000 recipients of Medicaid.”

Sen. Orrin Hatch (R-UT) wants the poor to shoulder more responsibility for deficit reduction.

Steve Lacey wonders how many Republicans it takes to unscrew an (efficient) light bulb, a move that will cost consumers $12 BILLION.

2012 Watch: Bachmann Says She “Hopes” Higher Unemployment Will Help Her Campaign


The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.


Advocacy Team