Drilling Without Oil, Tax Cuts Without Growth

Monday, 21 July 2008 20:45 By Dean Baker, t r u t h o u t | Perspective | name.

Drilling Without Oil, Tax Cuts Without Growth
McCain proposed offshore drilling in environmentally sensitive areas, attempting to show he cares about lowering gas prices for everyday Americans. Despite the inability of this drilling to lower gas prices anytime soon, the media picked up on his posturing and promoted it, rather than offering a critique. (Photo/Illustration: Everett Bogue / Getty Images)

    Senator McCain is in the unenviable position of running on the track record of a president with the worst economic performance since Herbert Hoover. He has adopted the strategy of ignoring the record while embracing his predecessor's policies. McCain is betting the media will be so incompetent that they will not notice. He might be right.

    The basic story here is very simple. The centerpiece of Senator McCain's economic agenda is the continuation of the Bush tax cuts. Of course, he has tossed out a few other items, but impact of his other proposals, such as ending earmarks, is trivial. For all practical purposes, McCain's economic agenda is Bush's tax cuts.

    We could have an interesting debate about whether giving tax cuts to the wealthiest people in the country is good economic policy, if we didn't already know the answer. We have had almost eight years of President Bush's tax cuts and the record is as clear as it can possibly be. When it comes to producing economic growth that benefits the middle class, the tax cuts were dismal failures.

    The economy is now in the process of sinking into the second recession of the second Bush administration, and President Bush already has the worst record on job creation of any president since Herbert Hoover. At the current rate of job loss, it is entirely possible President Bush will have created fewer private sector jobs in his entire eight years in office than the 2.6 million annual average for the eight years of the Clinton administration.

    It is virtually certain the wage for the typical worker will be lower when President Bush leaves office in January of 2009 than when he took office in January of 2001. This means most workers will have seen nothing from the benefits of productivity growth over the last eight years.

    Certainly, President Bush cannot be blamed for everything that went wrong, but it certainly does not make sense to claim that his policies bear no responsibility for this economic failure. President Bush was left in charge of the store (he also controlled both houses of Congress through most of his presidency) and we got cleaned out. Imagine if some big government Democrat had this track record?

    This is why it is absurd for McCain to present himself as the candidate of jobs and growth. We are doing his policies now - they don't work.

    McCain should be embarrassed to be pushing these policies, given the huge transparent failure that is sitting in front of our face, but he is counting on the media to turn the issue into a he said, she said. McCain is betting the media will treat the failure of the Bush-McCain economic policy as a matter of partisan contention, rather than a fact, like gravity.

    Thus far, he has been right. He did a test run of media gullibility a couple of weeks ago when he proposed drilling for oil offshore in environmentally sensitive areas. He proposed this as a response to $4 a gallon of gas. This was Senator McCain's way of showing he cares for the working stiff.

    Of course, Senator McCain knows the amount of oil potentially available offshore in environmentally sensitive areas is too small to have a noticeable impact on prices and that it will take a decade before we even see a drop. But, he wanted the media frame of being the guy who was willing to sacrifice the environment in order to help Joe Six-Pack.

    It worked like a charm. The media contrasted Obama's concern with the environment (out-of-touch elitist) with McCain's concern for jobs and growth.

    If McCain could look good proposing a policy that jeopardizes the environment for no visible economic benefit, why not push an economic policy that is a proven failure as though the past eight years never happened? As P.T. Barnum should have said, "no one ever lost an election underestimating the gullibility of the US media."

Dean Baker

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

Last modified on Monday, 21 July 2008 20:45