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Dean Baker: Swift Boat Economics

Published: Tue 19 Aug 2008 12:32 AM
Swift Boat Economics
by Dean Baker,
t r u t h o u t | Perspective
In the last election, the Republicans invented their brilliant Swift boat strategy to get George W. Bush back in the White House. Challenged by a decorated Vietnam War veteran, President Bush, who couldn't be bothered in serve in a war that he supported, took the offensive. He enlisted a group of right-wingers to invent stories impugning Kerry's integrity and service record.
The media completely failed in their responsibility to the public and treated the lies invented by the Swift boaters with respect. The country was then treated to a he said, she said, in which Kerry had to defend himself against lies fabricated from whole cloth.
Senator McCain now faces a similar situation in this election. He is stuck running on the record of a president who is presiding over an economy that is sinking into recession and is facing the worst financial crisis since the Great Depression. By contrast, Senator Obama can claim the legacy of the strong economy of the Clinton years.
Tarred with the most dismal record of job creation and income growth of any president since the Great Depression, it would be reasonable to expect that Senator McCain would be defensive on the economy; but not in Swift boat America.
Instead Senator McCain is filling the airwaves with commercials telling the public that Obama's tax increases will slow growth and cost the economy jobs. It's pretty scary stuff to anyone who takes it seriously.
Of course, there's no truth to Senator McCain's Swift boat economics. During the eight years of the Clinton administration, when rich people paid the same tax rates proposed by Senator Obama, the private sector added 15.8 million jobs. By contrast, in the seven years and six months of the Bush administration, when rich people paid the Bush-McCain tax rates, the private sector has added just 3.5 million jobs. And, it is losing jobs at the rate of almost 100,000 a month as President Bush prepares for retirement.
While job growth is probably the most important measure of the economy's health, almost every other measure also showed that the economy performed better with the Clinton-Obama tax rate than the Bush-McCain tax rate. The real wage for the typical worker rose by 6.6 percent in the Clinton years. By contrast, wages have risen by just 1.0 percent in the Bush years and are now falling. At the current rate of decline, real wages will be lower In January of 2009 than when President Bush took office in 2001. The typical family's income rose by 15.3 percent under Clinton, it fell by 1.6 percent under Bush.
In short, it is easy to show McCain's ad is utter nonsense. The economy had its most prosperous period in 30 years with the tax rates Obama is proposing. President Bush then cut taxes for the rich, and the economy turned in its worst performance since the Great Depression. While the tax rates are hardly the whole story behind the prosperity of the Clinton years or the economic deterioration of the Bush years, the record makes a mockery of the scare story in the McCain ad.
So why would Senator McCain make an ad that is so obviously false? In Swift boat country, there is no place for truth. McCain knows he can say anything he wants, regardless of how untrue it is, and his claim will be treated seriously by the media.
Reporters will now treat it as a debatable point whether the tax rates proposed by Obama will stifle growth and cost jobs. They will act as though Senator McCain has raised a serious point - perhaps Obama's tax plan really will hurt the economy. Reporters would actually have to know something about the economy, or at least arithmetic, to know that McCain's claims are utter nonsense.
The public will have to teach the media. This is not a he said, she said. The economy has performed very well taxing rich people at the rates proposed by Senator Obama. Any reporter who suggests it is plausible to claim these tax rates will stifle growth and job creation is simply too ill-informed to be covering economic issues. Reporters should be telling the public Senator McCain's ads are contradicted by the facts, not pretending that they raise plausible concerns about the economy.
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Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer" (www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

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