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October 14, 2011 12:30 PM A thorough debunking

By Steve Benen

Credit where credit is due: several major media outlets have done a pretty good job of knocking down the top Republican talking point on economic policy. The latest is a good piece from CNN.

The story goes like this: Thanks to the Obama administration, a wave of new government regulations are strangling business to the detriment of hiring and economic growth.

But in an economy with serious structural problems, a crippled housing market and slack demand, is government regulation really holding back the labor market?

Not so much, according to government data and surveys of business owners and economists.

Only a small percentage of employers report regulation as a reason for laying off workers.

In the first two quarters of this year, only 2,085 new unemployment claims were attributed to government regulation, while 55,759 were tied to insufficient demand, according to Bureau of Labor Statistics data on mass layoffs.

The CNN report cited, among other things, BLS data, surveys from the National Federation of Independent Business, and Brookings Institution scholarship. They all said the same thing: government regulations are not responsible for holding back the economy.

The New York Times, the AP, the Economic Policy Institute, the Wall Street Journal, and McClatchy newspapers all did their own research and reporting on this in recent weeks, and all came to the exact same conclusion. At this point, it’s safe to say anyone insisting that regulations are the driving factor behind the weak economy is a fool or a hack.

What is holding back the economy? In every instances, all of the reporting pointed to a lack of demand. Republicans may not care for the rules of supply and demand, but they’re not subject to GOP filibusters.

And yet, Republicans simply do not believe the evidence. In fact, GOP officials consistently argue that reality is backwards — we don’t need to boost demand; we need to deal with the real problems like regulations, taxes, and some amorphous sense of uncertainty.

The problem, of course, is that the GOP agenda desperately hopes to make demand worse by taking capital out of the economy, laying off more public-sector workers, imposing austerity measures, and scaling back economic activity by cutting off unemployment benefits and food stamps.

And that, in a nutshell, is why the parties can’t have a sensible conversation about economic policy.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • whichwitch on October 14, 2011 12:39 PM:

    What is holding back the economy? Abortion, the wrong people voting, unions, brown people with accents...that's only a sampling. It's just the Republican flavor of the day.

  • c u n d gulag on October 14, 2011 12:43 PM:

    The GOP has a new 4-letter word:

    "F-A-C-T."

    And they don't need no f*cting f*cts, motherf*acters!

  • T2 on October 14, 2011 12:45 PM:

    Rick Perry unveiled his long awaited Economic Plan today - drill, drill, drill, deregulate, deregulate, deregulate. Sounds like a solid step forward.

  • martin on October 14, 2011 12:46 PM:

    And yet, Republicans simply do not believe the evidence.

    As Dean Baker would say, you don't know what they believe. They do things that are in their interests to do. Tanking the economy and holding its head underwater are in the interests of the Republicans and their financial backers (at least until Nov 2012).

  • DisgustedWithItAll on October 14, 2011 12:54 PM:

    "And yet, Republicans simply do not believe the evidence."

    Stop it. They believe the evidence. They deny it so that:

    - the useful idiots who vote for them don't have to run around with the thought in their heads that the TEAM they vote for is intentionally harming the country and its citizens.
    - the MSM -- clueless as it is -- has something they can write about
    - they have at least an ostensible reason to choke off any attempts at passing measures that WILL solve some of the problems

    But stop saying the Republicans assholes believe any of the shit coming out of their own mouths. Could they possibly be THAT stupid? No, only their fans are.

  • j on October 14, 2011 1:06 PM:

    OMG I just read Rick Perry's jobs plan on Think Progress, it is not a jobs plan it is a wet dream for big oil.

  • Daddy Love on October 14, 2011 2:51 PM:

    I think i'd put it that they reach their preferred solution FIRST, come up with what they think a plausible cause requiring that solution might be, and then begin insisting that THIS CAUSE is what the objective situation is. Their audience was never especially inclined toward independent research of clear and objective analysis of data, and in fact have been trained to reject all sources of objective data as hopelessly partisan. When Stephen Colbert pointed out that reality has a well-known liberal bias, I am sure he had no idea how seriously he would be taken.

  • exlibra on October 14, 2011 3:21 PM:

    Hey, Steve Benen. The sense of uncertainty is not something amorphous, it's for real. My husband is retired, I never worked (many reasons, including a suspicion that I might want to start unionising people in the heart of "right to work" state). One of his sons has been out of work for over a year... You think we're gonna spend? Go out and start creating demand? Like hell we will. We'll sit tight and hoard, against (possibly) worse tomorrow. Just like the banks, if on a smaller scale.

  • Larb on October 19, 2011 10:43 AM:

    Kinda making Steve's point there, exlibra.

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