The Biggest Lies About Jobs

by Robert B. Reich

And if all others accepted the lie which the party imposed -- if all records told the same tale -- then the lie passed into history and became the truth.

-- George Orwell, "1984" (published in 1949)

House Majority Leader Eric Cantor has been telling this whopper over and over again, in one form or another: "Cutting the federal deficit will create jobs."

It's not true. Cutting the deficit will create fewer jobs.

Less government spending reduces overall demand. This is particularly worrisome when, as now, consumers and businesses are still holding back. Fewer government workers have paychecks to buy stuff from other Americans, some of whom in turn will lose their jobs without enough customers.

But truth doesn't seem to matter.

Republicans apparently believe that if big lies like this are repeated often enough, people start to believe them. Unless, that is, those big lies are repudiated -- and big truths are told in their place.

What worries me almost as much as the Republicans' repeated big lies about jobs is the silence of President Obama and Democratic leaders in the face of them. The president has the bully pulpit. Republicans don't. But if he doesn't use it, the Republican big lies gain credibility.

Here are some other whoppers being repeated daily:

"Cutting taxes on the rich creates jobs."

Nope. Trickle-down economics has been tried for 30 years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised taxes in the 1990s.

To his credit, President Obama argued against Republican demands for extending the Bush tax cut for those making more than a quarter-million dollars a year. But as soon as Republicans pushed back, Obama caved. And the president hasn't even mentioned that the $61 billion of budget cuts Republicans are demanding this year is what richer Americans would have paid in taxes had he not caved.

"Cutting corporate income taxes creates jobs."

Baloney. American corporations don't need tax cuts. Many of them, like General Electric, manipulate the tax code so they don't pay any taxes at all. In fact, big companies are sitting on more than $1.5 trillion of cash right now. They won't invest it in additional capacity or jobs because they don't see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.

The president needs to point this out -- not just in Washington but across the nation, where governors are slashing corporate taxes and simultaneously cutting school budgets. President Obama says he wants to invest in American skills, but many states are doing the opposite. Florida Gov. Rick Scott, for example, says his proposed corporate tax cuts "will give Florida a competitive edge in attracting jobs." Florida will also require that education spending be reduced by $3 billion. Florida already ranks near the bottom in per-pupil spending and has one of nation's lowest graduation rates. If Scott's tax cuts create jobs, most will pay peanuts.

"Cuts in wages and benefits create jobs."

Congressional Republicans and their state counterparts repeat this howler incessantly. The same untruth is used to justify corporate America's incessant demands for wage and benefit concessions from average workers. And it's used to justify corporate and state battles against unions. But it's dead wrong. Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.

President Obama should be standing up for the wages and benefits of ordinary Americans and explaining why this claim is wrong. The president should be traveling to the Midwest -- taking aim at Republican governors in the heartland who are hell-bent on destroying the purchasing power of American workers. But he's doing nothing of the sort.

"Regulations kill jobs."

House Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination -- all of which we've sadly witnessed. Here again, we're hearing little from the president.

I know the president can't be everywhere, doing everything. There's tumult in the Middle East, we're suddenly at war in Libya, Japan is struggling with the aftermath of disaster, and surely Latin America is an important trading partner.

But nothing is more central to average Americans than jobs and wages. Unless the president forcefully rebuts these big lies, they'll soon become conventional wisdom.

Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of the book Aftershock: The Next Economy and America's Future.