About 100 years ago, President Calvin Coolidge famously said, “The business of the American people is business.” Ever since, and probably even before, the American people, including most Democrats, have thought of the GOP as the business party. Business people have overwhelmingly supported Republicans with dollars and votes. A lot of that support has related to Republicans’ aversion to taxes and regulation, but there also seems to have been an assumption that Republican politicians are better economists than are Democrats.
Among the many things I have observed over my relatively long life is that there are several different kinds of economics. There are household economics, business economics, macroeconomics, theoretical economics, political economics and probably many other kinds. To a certain extent, they all intersect, or should intersect, in the United States Congress. In my 14 years in that Congress, I have concluded that Republicans there don’t understand any of them.
Case in point — why this is critically important now — is the Republican stubbornness, led by Senate Majority Leader Mitch McConnell, which now jeopardizes the lives of millions of Americans and the future of the American economy. This very week we should be enacting massive financial assistance to Americans, who are not only needlessly suffering through no fault of their own, but whose personal suffering will metastasize throughout the economy and limit our ability to grow. We may pass a slimmed down relief package, which most economists — real ones — deem woefully inadequate.
Instead, the American people and economy are being held hostage by one man, McConnell, who proves on a daily basis he has no idea what he’s talking about when it comes to economics. Unfortunately, he has Republican sheep in both the House and Senate, who won’t defy him. For months now, McConnell has said he wants to pass “targeted relief,” as if that really is a thing. It evokes something New York Times columnist Paul Krugman wrote this week: “What Republicans say they believe flows from what they want to do.” Or don’t want to do, as is the case here.
McConnell has not wanted to pass anything that House Democrats proposed. He hasn’t wanted to pass anything close to a trillion dollars, even though virtually everyone outside of Congress knows a trillion dollars in relief is still not enough. And he hasn’t wanted to have some of his members have to take a tough vote that might hurt their reelection chances in 2022.
But back to targeted relief. In May, House Democrats passed the Heroes Act, a $3.2 trillion dollar package that “targeted” Americans who lost their jobs due to the pandemic, state and local governments that have lost significant revenue due to the pandemic, schools that are trying to figure how to reopen safely and businesses that are suffering due to the pandemic, among others. Virtually everything passed by Congress can be characterized as targeting some people or organizations, including the massive tax cuts of 2017, which targeted the wealthiest Americans and largest corporations with massive benefits they didn’t need.
Republicans “believe” that tax cuts pay for themselves, even though every analysis shows that they do not, but they believe that because they want to cut taxes.
Republicans “believe” that large deficits and debt place a huge burden on future generations when they don’t want to pass measures that will help alleviate poverty, expand health care to our citizens, or more recently, to repair our deteriorating national infrastructure, but not when they want to cut taxes.
Republicans “believe” that the social safety net discourages work when they want to cut food stamp benefits, but not when they want to subsidize agri-business and oil drilling.
Republicans “believe” that investments are good for the economy when they want to give tax breaks to hedge funds, but not when they don’t want to invest in the education of our future workforce.
Republicans can be educated, however. One was my brother Bob, who runs the family’s barbecue business. He always voted Republican because he wanted to pay less tax. Back in 2008, he called to tell me he was contributing to and voting for Obama and all Democrats in that election.
“That’s great, Bob,” I said. “What was your epiphany?”
He answered, “I finally figured out that if no one can afford barbecue, it doesn’t matter what my tax rate is.”
Sometimes economics is really simple. McConnell should brush up.
U.S. Rep. John Yarmuth, founder of LEO, has represented Kentucky’s 3rd Congressional District since 2007 and is now chairman of the House Budget Committee.