Which Party Is Better for the Economy?

Yesterday’s papers came with a slew of depressing headlines.

“Earning Skid is Worse Since Crisis,” said the front page of the Wall Street Journal.

“Hiring Rises: Output Lags. It’s a Mystery,” said the front page of The New York Times.

“White House struggles to explain weak economy…” said the Drudge Report, followed by “First President Not To See Single Year 3% growth…”

“Warning signs are surfacing: Temp job numbers can indicate a recession is around the corner,” said Bloomberg news.

There is no doubt that our recovery from the Great Recession has been the slowest recovery in more than half a century. But why is that? Surely part of the reason is that the Obama administration has been more hostile to private sector job creators than any president in memory.

Virtually every program the president has proposed reduces the reward from working, saving and investing—from higher taxes to more regulations to more public policy uncertainty.

Take regulations. A new report from the Mercatus Center estimates that the growth of government regulation between 1977 and 2012 has shaved about 0.8 percent off the rate of growth, costing $4 trillion worth of GDP. And Obama has been the worst regulatory president in modern times—often appearing to exceed his constitutional authority in efforts to impose more and more burdens on US companies. President Obama, for example, has imposed twice as many new major regulations as President Bush.

Or take ObamaCare. University of Chicago economist Casey Mulligan estimates ObamaCare lowers the return from working by 10%. As Harvard economics professor Greg Mankiw explains, that implies a long term loss to the economy on the order of 5% of GDP—or more than $800 billion a year at current prices.

That equals about $8,000 per household per year!

You would think that all this would be obvious, but what is plain for all to see seems to be mystery to some columnists. New York Times columnist Paul Krugman for example became absolutely delusional in yesterday’s editorial.

According to Krugman, the Democratic Party defines itself as the protector of the poor and the middle class, and especially of nonwhite voters. That’s in an editorial written only a few days after Bill Clinton observed that middle class incomes have stagnated during the Obama presidency (with the black community suffering more than any other demographic group.)

Krugman’s column comes only a few weeks after New York Times columnist Nicholas Kristof wrote that “lead poisoning is more than twice as common among black children as among white children” and that “American schools are still separate and unequal” in part because of “an unjust school funding system that often directs the most resources to privileged students.”

What Kristof didn’t say, but should have said, is that the worst segregation and the worst schools for minorities and the worst environment degradation threatening children occurs in areas where almost all the decision makers are Democrats.

What about Republicans? According to Krugman, the Republicans Party “policy agenda is dedicated to serving the interests of the 1 percent, above all through tax cuts for the rich.” Earth to Krugman: the reason why almost all of the population has been thrown off the income tax rolls and why the richest Americans are shouldering an increasing share of the overall tax burden is because of Republican tax bills! As I wrote previously at Town Hall:

· The Bush tax cuts (so hated by almost every left-wing columnist) led to a more progressive tax system—with the top 1% of the income distribution now paying about one third of all income taxes, while those in the bottom half saw their share of the tax burden cut in half (falling from 6.3% of income taxes to 3.5%).

· Further, those in the top 1% now pay a greater share of their income in taxes, while those at the bottom are paying a smaller share.

· Over time, pre-tax income in the United States has become more unequal; but the share of taxes paid by the rich has increased by more than their share of national income.