Did the big March jobs report put President Obama back on the road to reelection? If so, he can thank the GOP, whose tax cuts saved him from himself.
You could hear cheering all the way from the West Wing when the Labor Department showed a 216,000 gain in nonfarm payrolls, the biggest number in quite some time. Plus, the unemployment rate continued its decline to 8.8 percent. Not so long ago it was nearly 10 percent.
Corporate payrolls have now increased by 478,000 for the first three months of the year. Over the past three months, the average payroll gain has been 159,000, which is more than twice the monthly gain in 2010. If payrolls stay on track, that would mean nearly 2 million jobs created in 2011.
So sure, the White House must be very happy. In fact, everybody should be happy at an improving jobs picture.
But here’s the sublime irony. The wake-up in job creation is a function of Republican policy. After all, for two years the Obama Democrats spent themselves into oblivion, with over $1 trillion of so-called big-government stimulus. Didn’t work. By the end of last year, that failed stimulus wore off, and it was replaced by Republican tax cuts.
Remember that in mid-December, after his election shellacking, President Obama signed a deal that extended the Bush tax rates across the board. The top marginal rate stayed at 35 percent. Investment tax rates for cap-gains and dividends held at 15 percent. Most business people I know — folks who work in both large and small companies — welcomed the tax-rate freeze as a sign that maybe the war against growth, capital formation, and small business was either coming to an end or at least a two-year truce.
So, presto, the jobs numbers start jumping in the new low-tax year.
The most important tell-tale sign for jobs is the household employment survey, which includes most of the nation’s small businesses. It’s the survey that signals real turning points in job creation since it’s the small-business owner-operators who are most sensitive to changing marginal tax rates.
And clearly, tax incentives matter: For March, the household survey jumped 291,000. Year-to-date, household employment is up 658,000, and is on track for a 2.6 million gain for the year. This small-business jobs push is also what’s driving down the unemployment rate.
So it looks like Republican tax cuts have saved Obama from himself. And the GOP ought to stay on this tax-cutting path as they move toward limiting the budget. Full-throated flat-tax reform to lower marginal rates and broaden the base will create brand new incentives for growth and jobs.
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5 comments:
Republicans have done nothing on jobs. Tax cuts don't create jobs. The Bush tax cuts resulted in a net zero job creation under his administration. We've had these same tax cuts for the wealthy since 2001, without a change, and now jobs are finally coming back. Therefore, with no change in the tax status, and jobs coming back, it's stupid to say that tax cuts are the reason. Do Conservatives even try to think critically?
..it's stupid to say that tax cuts are the reason..
Businesses were on hold, waiting to see what the dems were going to do-- when they finally succumbed to the pressure and kept the tax cuts, and REMOVED THE UNCERTAINTY for the business owners, they breathed a sigh of relief and started to slowly expand.
Jobs and the economy will crank right up, once conservatives get control of the Senate and the White House.
The stock market will take off almost immediately.
You just watch.
LOL, hilarious. I knew this is exactly what you would try to say. Thanks for some perspective 10:22. I guess they also forget that stocks have been looking pretty darn good over the last 1.5 year atleast. More investment means more cash on hand to create jobs, not to mention people start buying again as their retirement investments recover. The housing market has bottomed; we can only go up from here. But yeah, it was all the taxes for the small percent of the population (both business owners and average joes) who would have already kept their current tax rate under Obama's plan. lol
Using the stock market as an indicator of the popularity or effectiveness of economic policy is, for many reasons, quite silly. But the same conservatives who were very willing to cite falling markets in order to score political points have been silent on the market’s recent rebound of almost 84 percent since 2009 the greatest rebound since the great depression. Substantial personal losses I incurred under the Bush reign have nearly rectified themselves and divestment in new technologies to claim and extract precious metals have proven lucrative in the gold market. Whining about the stock market is like loosing to the house.....it is all gambling if you don't know your game you have no one to blame conservative or liberal and perhaps stick to the LOTTO if you want to throw money away and have someone to blame.
So let me get this straight. When the Dems were in control and the economy tanked it was President Bush's fault. When the economy starts to get better and the Republicans are in control it's because of Obama. Does anyone see the double standard there?
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