Former Biden Advisor Critical Of Cain's Jobs Plan
MICHEL MARTIN, Host:
And now for another perspective, we turn to economist Jared Bernstein. He served in the Obama administration as chief economist and economic advisor to Vice President Joe Biden and executive director of the White House task force on the middle class. He's now a senior fellow at the Center on Budget and Policy Priorities. Welcome to you. Thank you so much for joining us.
JARED BERNSTEIN: My pleasure, thanks for inviting me.
MARTIN: Can I just ask you to respond briefly to Mr. Cain, and he, like a number of other conservatives, really believes that stimulus efforts need to be focused on steep tax cuts across the board. What do you say to that?
BERNSTEIN: I heard Mr. Cain, and while he definitely sounded reasonable, if you actually think about what he's proposing, I see no way it can help at all in the short run or the long run. By that I mean, if you think about the tax problem, which is something that obviously conservatives have been gunning for a long time - conservatives consistently say we should cut taxes and we should deregulate. They say that when the unemployment rate is low and when it's high.
Now, it's just being, I think, very opportunistically targeted at a jobs - it's called the jobs program. But look at the rate of corporate profitability right now. Their profits as a share of the economy after tax are the highest they've ever been by a long shot on record, going back to 1947 when the data begin. That's not because they're selling into this economy. This economy is kind of bumping along the bottom. It's because they're selling into other expanding economies elsewhere across the globe, and that's absolutely fine.
They should be profitable. But making them more profitable isn't going to trigger any more hires at all. They could hire now if they wanted to. They are highly profitable, borrowing costs are low, they're sitting on trillions in cash reserves so, these guys are once again scratching an itch that won't help at all. And in the short run, all they can do is criticize what they call stimulus measures. Well, in fact if you look at the impact of the Recovery Act or some of the kinds of measures the president has presented - so, for example, rehiring teachers, trying to help prevent layoffs of folks in that sector, rebuilding schools, highways - those are the only short term measures that have actually worked to get people back to work, so I just don't see any there there.
MARTIN: Well, you know, one of the things I was interested in talking to you about, was the sense of whether poverty matters to the public right now. And do you think that it does? Because the people who are in congress right now who don't agree with the president's approach - their argument is that the American people elected them to reduce the size of government and that that is a priority of the voting public right now.
BERNSTEIN: Okay. So...
MARTIN: I just wanted to ask you to assess that for me.
BERNSTEIN: Let me respond to both of those points. They're good points.
First of all, it may be the case that poverty doesn't excite voters, but the number that came out yesterday was also median family income, the income of families right in the middle of the scale. That fell 2.3 percent yesterday, over $1,000 for the middle income family right in the middle of the income scale.
And, in fact, if you just look at these numbers from, say, 1999, when household income for middle income families peaked, you can very quickly convince yourself that we have had a lost decade for the middle class. And I guarantee you voters care about that a lot.
And when they say, we want less government, that's this very broad kind of polling question that's pretty meaningless to people the minute you start drilling down. Because the next thing they'll say is, boy, we sure appreciate Social Security. We really like Medicare. Oh, yeah, unemployment insurance - very important when you're out of work. We think it'd be a great idea to fix schools and to make our infrastructure, highways, better.
So the minute you start drilling down into specifics, people not only are positive about government, they're even - and this may blow your mind, but it's true - they're even ready to say, yeah, we'd be willing to pay more taxes to make sure our schools are safe, our roads are drivable, that we have retirement security in terms of Social Security and Medicare.
MARTIN: Well, you heard Mr. Cain say that, from his perspective, particularly, as a former businessman, that he feels that the uncertainty and the regulatory burden are the reason that businesses are not ready to hire.
I'd like to ask in a minute, you know, so that we have a - what do you think is the biggest impediment to getting people back to work?
BERNSTEIN: Two things. I mean, first of all, when you hear folks talk about uncertainty, it's a very fuzzy word. I have talked to small business people and asked them what's troubling them. One guy recently said to me, uncertainty. I said, aha. What do you mean? And he said, I'm just uncertain about how many customers I'm going to have.
He's not talking about page 2,017 of the Affordable Care Act or the fact that the budget deficit is in red ink. He's talking about people coming through the door and that's what's really holding back businesses right now. As I said earlier - and this should be, I think, on top of everybody's mind. When you hear people talk about their long term agenda to cut corporate taxes and deregulate, and they're trying to opportunistically map that onto a jobs program, it should prick your ears up.
I mean, if your only tool is a hammer, then everything looks like a nail. And I think that's where a lot of this Cain-like and conservative agenda seems to be coming from.
MARTIN: Jared Bernstein is a senior fellow with the Center on Budget and Policy Priorities. He joined us from his office in Washington, D.C. Mr. Bernstein, thanks so much for joining us.
BERNSTEIN: My pleasure.
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