“The fundamental problem in today’s economy is that there’s not enough demand,” says David Madland, an economist at the liberal Center for American Progress. In fact, our corporations are sitting on mountains of cash and corporate profits are near record levels, but they’re not hiring because they have no confidence that customers — you and me — feel economically secure enough to make purchases.
This is not some wild-eyed liberal theory. Conservative economists say it too.
“Businesses have responded negatively to the weakness of household demand,” Martin Feldstein, a former chairman of Reagan’s Council of Economic Advisers, recently wrote.
In other words, companies have the money to hire but aren’t going to because they see consumers who are out of work or nervously hoarding instead of spending.
So what does Romney propose? A cut in the corporate tax rate, naturally.
More corporate tax cuts? Really? Even though corporate tax rates are the lowest they've been in 60 years (lower than they were under "LIB'RUL!!!" Republican Presidents Eisenhower, Nixon, Ford, Reagan, and Bush, Sr.!), that has done nothing to stimulate the economy and create jobs. Even Romney himself hasn't had any success at implementing his own vision of "no taxes" and "no guv'mint", as Massachusetts government employment grew twice as quickly as private sector jobs while he was Governor.
So what was the whole point of this? It would cost at least $6.5 trillion, so it would drive up the deficit even further without creating any jobs to merit it. So why do this? Has teabagger madness overtaken Romney?
It's funny in a very sick way to see Romney do this in the state that's already tried this very policy prescription... AND FAILED! As I wrote back in May:
For far too long, we have been told to "suck it up" and "celebrate the free market". Look where that has taken us. Even though we have the cheapest state government and one of the lowest tax burdens in the nation, we have the highest unemployment rate in the nation and an economy unraveling due to casinos investing more offshore and the real estate bubble bursting. The Nevada "success story" of the past has been found to be just a mirage, an illusion, a trick.
So now Mitt Romney wants to take our "success" at economic failure, and make it federal policy? It's increasingly clear that "TEA Party Economics" just doesn't work. We've already seen the effects here in Nevada, and Romney's BFFs here have already been getting plenty of heat for it.
So what works? Infrastructure. And thankfully, President Obama and a few members of Congress understand this.
Our infrastructure is becoming woefully inadequate, and this may be a real opportunity for America to finally fix that while also creating jobs.
Back in January 2010, former Federal Communications Commission chairman and current Coalition for Green Capital CEO Reed Hundt spoke at our annual Clean-Tech Investor Summit.
For the past couple of years, Hundt has been working to forward the idea of a national green bank in the U. S. as well as at the state level. His ideas have influenced a host of energy, policy, and business stakeholders, including me.
"To get low cost of capital you can either have the U. S. government guarantee the debt, but no one wants to do that," Hundt explained in a recent phone interview, "or you can set up a public-private bank that has a public-private mission. It seeks to maximize the amount of money invested, not maximize its profit, and it can pursue long-term investments. "
A well-structured infrastructure bank would focus on project deployment, not equity-type investments, via low-cost loans that reward investors via a constant annuity stream (such as the sale of electrons from solar power or savings from energy-efficiency improvements).
And there are even more great ideas for job creation, such as the Jobs21! proposal to create more clean energy jobs throughout the country and reposition America for the 21st century economy.
Compare and contrast this to what we've been seeing from Obama's GOP rivals this week.
What else can I say? And what else do I really have to say?