Paul Krugman’s most recent blog post has a great chart highlighting Bush’s dismal record of job creation, comparing it to job creation during the Clinton administration:
This chart alone is striking. Job growth under Bush was abysmal, when compared to the eight previous years of steady increase. Taking Krugman’s chart a step further, David Madland of the Center for American Progress compares Bush’s performance on job creation not just to Clinton, but to the other 41 American presidents who have come before him. Madland concludes that aside from Herbert Hoover — the only American president to ever LOSE jobs during his term in office — Bush has the worst record on job creation in this country.Now going back to Krugman’s, and Dean Baker’s point, we agree that it is absurd to suggest that McCain’s economic plan is more committed to job creation than that of his competitor. If the Washington Post is going to discuss McCain’s “emphasis on job creation,” then it would be disingenuous to leave out the other hallmark of his proposal: a continuation of the Bush tax cuts with particular weight on reducing corporate taxation.
According to a study by the non-partisan Congressional Budget Office on policy responses to short-term economic weakness, the focal point of McCain’s plan, a cut in the corporate tax rate, is fundamentally flawed:
The most common form of a general cut in business taxes is a reduction in the corporate tax rate. This approach, however, is not a particularly cost-effective method of stimulating business spending: Increasing the after-tax income of businesses typically does not create an incentive for them to spend more on labor or to produce more, because production depends on the ability to sell output.
So let’s connect the dots. McCain wants to follow Bush’s lead on tax cuts — not only extend them past their 2010 expiration, but deepen them further by cutting the corporate rate from 35 percent down to 25 percent. A cut in the corporate tax rate is not only an inefficient means of creating jobs, but as Krugman and Madland point out, the Bush tax cuts for the wealthy have resulted in embarrassingly low levels of job creation.
So unless John McCain is running against Herbert Hoover in the fall, any competitor will find themselves with greater “emphasis on job creation” than the Maverick from Arizona.