With the retreat of manufacturing over the last two months dimming what had been a rare bright spot in the economy, Democrats are desperate to be seen as responsive to the turndown. The Washington Post reports that Democrats now want to rush a manufacturing stimulus through Congress, but how do they propose to do it — tax credits, rolling back regulation, or suspending capital-gains taxes on the sector? Not exactly:
President Obama and congressional Democrats — out of options for another quick shot of stimulus spending to revive the sluggish economy — are shifting toward a longer-term strategy that promises to tackle persistently high unemployment by engineering a renaissance in American manufacturing.
That approach, heralded by Obama last week in Detroit and sketched out in a memo to House Democrats as they headed home for the August break, is still evolving and so far focuses primarily on raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas.
The strategy also repackages policies long pursued by the White House — such as investing in clean energy, roads, bridges and broadband service — with more than two dozen legislative proposals aimed at developing a plan for promoting domestic manufacturing.
Even the Post is unimpressed:
Many of the ideas being promoted by Democrats to stop the slide are hardly new. House Republican Whip Eric Cantor (Va.) called the strategy “more meaningless than harmful” after voting for one Democratic proposal, a resolution to encourage packers of domestic fruits and vegetables to display the American flag on their labels.
In other words, the “new” plan looks a lot like the same-old, same-old from Democrats — tax hikes and pork. It’s the same kind of thinking that went into last year’s stimulus package, only Porkulus at least had some tax credits in it.
Instead, Obama and the Democrats plan to take a page out of John Kerry’s playbook from 2004. Remember “Benedict Arnold CEOs,” the companies that moved out of US jurisdiction to save money on taxes and regulation? Even though Kerry did much the same thing with his yacht (and took money from the very same CEOs in that election), he railed against the companies when it was the taxes and regulation that created the situation. What will happen to multinationals that get hammered by the US for more taxes for taking manufacturing overseas to escape the high cost of labor, taxes, and regulation in the US? They will find greener pastures overseas and eliminate the necessity of paying the taxes at all.
And what of the rest of their plan? Well, building bridges and roads hasn’t exactly started a boom economy more than 16 months after passing Porkulus. A Porkulus Lite will only stimulate Congressional crowing over pork by incumbents desperate to cling to power. It’s nothing more than a bread-and-circuses act with a high price of admission, and one that will eventually leave Americans shoveling after the Democrats leave the big tent.