I can’t for the life of me understand how any Ameircan would trust liberals on economic matters. As we have chronicled for quite a while now on this blog and discussed on our radio show almost weekly, virtually every economic claim-argument that the liberal left has made has turned out to be wrong. We were told that the Bush Tax Cuts would lead to the “jobless recovery” and that we are “outsourcing” all jobs etc (4.5% unemployment now the lowest in our generation) and would “balloon the deficit” (it has shrunk significantly due to corporations and the “rich” shouldering disproportionately large portions of taxes flooding into the treasury).
Well now the current claim of the doom and gloom class warrior left is that “wages are stagnating.”
From today’s Wall St. Journal(subs req):
Over the past year, the real average wage for non-supervisory employees has risen 2.8%. That equates to about a $1,200 increase in purchasing power for the typical household this year. Last year, real median household income was also up 1.1% after inflation…a new Treasury Department analysis finds that, measuring from the start of the peak of each expansion, wages so far in this decade’s cycle are running ahead of the recovery pace during the 1990s.
For those who would like to see worker’s wages rise even more, the editors at the Journal have some suggestions:
…Make the Bush tax cuts permanent. If Congress lets them expire in 2010, as many Democrats are urging, the average family will suffer the equivalent of a $2,000 a year pay cut.
Second, slash the corporate income tax. A recent study for the American Enterprise Institute by economists Kevin Hassett and Aparna Mathur examined 72 nations over 22 years and found that “wages are significantly responsive to corporate taxation.” In today’s global economy, capital migrates across national borders away from high-tax nations to places where tax systems are less punitive. Workers suffer when capital flees, and job and wage growth slow.Many political leaders have adapted to this reality, which is why the average corporate tax rate across the globe has fallen over the past 25 years to an average of about 30% from 50%. The AEI study finds that, if the U.S. were to cut its 35% corporate tax to the OECD average of 30%, American manufacturing workers would gain nearly a 10% pay raise dividend within five years, which is the equivalent of roughly a $3,500 a year pay boost.
Bush and Congressional Republicans should argue stronly for making the tax cuts permanent and cutting hte corporate income tax. Make the case and dare Democrats to argue the same old same old- increasing taxes accross the board, increasing the min wage (i.e. govt wage and price controls), govt run health care (socialism), and more unions and trade protectionism (i.e. govt sponsered tarriffs). Make it a campaign issue for 08′ and let the chips fall where they may. I’ll put my money on the guys who are advocating pro-growth tax cutting every time.