Nobody’s figured out how to make this economy work

Vermont Republicans are fond of slamming the Shumlin Economy, cherrypicking statistics that make the Governor’s record look bad. They criticize his policies as crippling to economic growth and middle-class prosperity. (And now that Bernie Sanders is running for President, they try to blame all the ills of the last three decades on him, even though he hasn’t been running the place and would clearly have adopted very different policies if he had been. Protip to Republicans: correlation is not causation.)

And yes, in spite of very low unemployment, it’s inarguable that the recovery has been slow and spotty for most Vermonters. Their purchasing power has remained stagnant. But this isn’t just a Vermont phenomenon, and if you look at other states with conservative governments, they’re failing at least as badly as we are.

Last Friday, Talking Points Memo posted a piece about how four Republican governors are seeing their presidential aspirations undercut by severe budget problems back home — problems attributable to the failure of their policies to hotwire their economies.

The basic concept is as cartoonish as when it was first sketched on a napkin by Arthur Laffer: cut taxes and the economy will flourish. Revenues will rise, as government takes a smaller slice of a growing pie. Business, freed of its public-sector shackles, will lead us into a prosperous future.

Trouble is, it doesn’t work. In Louisiana, WIsconsin, Ohio and New Jersey, Republican tax-cutting policies have failed: all four states have sluggish economies and huge budget shortfalls. It’s worse on both sides than anything Peter Shumlin has inflicted on the state of Vermont.

Louisiana Gov. Bobby Jindal has enacted six tax cuts. The state’s economy has not responded, and he’s now facing a $1.6 billion budget gap. His proposed solution? Cut state funding for higher education by 82 percent. You signing up for that, Vermont?

In Wisconsin, Scott Walker enacted a half-billion dollars in tax cuts last year. Next year’s budget is $2 billion out of whack. Even fellow Republicans don’t like his plans for more spending cuts.

New Jersey’s Chris Christie faces a problem of his own making. In attempting to sidestep his way around a previous budget crunch, he slashed a billion and a half from the state’s pension fund. That move was struck down in court, and now he’s struggling to rebalance the books.

And in Ohio, John Kasich is pondering the unthinkable: responding to budget gaps of his own making by raising some taxes. Apostasy!

As for the vaunted wave of prosperity their tax cuts were supposed to trigger, let’s look at the numbers.

Louisiana: 6.7%
Wisconsin: 4.8%
New Jersey: 6.4%
Ohio: 5.1%

Vermont: 3.6%

I realize that the unemployment rate isn’t the be-all and end-all, but it is a meaningful barometer. In light of those numbers, it’s hard to conclude that Republican governance would fare better in Vermont than the Democratic version.

I have heard Republicans argue that their policies need more time to pay off. It’s too soon to judge, they say. Well, I don’t hear any of them offering to give Peter Shumlin more time.

Yes, Vermont’s economy is underperforming. But it’s doing better than many other states, including those with staunch Republican leadership.

Truth is, we have a national problem. The economy is primarily benefiting those at the top, with the middle and bottom being left behind. Tax policies, in vogue since Ronald Reagan, that favor businesses and high earners, have not led to growth; they’ve only fed more money to the rich.

I can’t say that Governor Shumlin is leading us out of the wilderness; he’s trying to overcome our national malaise, or at least minimize its worst effects. I don’t think he knows how to make this economy work for everyone; I don’t think anybody does. But what I can say is that the Republicans offer nothing better.

Our economy is not supply-side; it’s supply-and-demand. Wealth concentration doesn’t drive growth; demand does. If people don’t have money to buy stuff, the economy will suffer. The rich and corporate already own massive amounts of wealth; giving them even more won’t help anybody but themselves. If you don’t believe me, then explain the situations in Louisiana, Wisconsin, New Jersey and Ohio.

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