Sunday, November 27, 2011

U of M Economist: Hard to See Tax Cuts "Creating Hundreds of Thousands of Jobs"

Well good, we can kill that talking point now. The standard Republican ideology of "low taxes = jobs" should be a dead issue, and from now on will be laughed at by intelligent people everywhere, including the media reporting on those kind of statements when they are used as an explanation when pushing for more tax cuts.

Right? I mean, you guys are going to start dispelling this notion every time it's mentioned, aren't you?


Michigan likely will finish 2011 with 64,200 new jobs. Growth slows to 32,000 jobs during 2012 and picks up to 45,000 jobs during 2013, according to the U-M forecast.


(U-M economist Don) Grimes said he thinks the tax cuts will have a positive impact on jobs in the long run, but it will be difficult to measure. “Statistically, it’s hard to prove,” Grimes said.

Business taxes are “still a pretty small share of total costs."

“There’s no question in my mind that it’s a positive thing,” he said. “But it’s hard to see it creating hundreds of thousands of jobs.”

Oh. So. Now that we have shrunk the state government revenue to roughly half its previous size and still expect it to support around the same 10 million people...

The inflation-adjusted purchasing power of state general fund revenue will be 48 percent less in 2013 than in 2000, according to the U-M forecast.

... turns out we aren't guaranteed all those jobs the Republicans promised. Huh. Imagine that. And to really drive the point home (that's a Michigan pun!), it appears that we are once again relying on the auto industry for the majority of the job growth that we do see.

Tell me, um, how is this "reinventing" Michigan again? Anyone?

The state’s recovery is once again being led by the resurgent auto industry, which over the years has tossed Michigan around like a Jeep bouncing over a bumpy off-road trail.

Twenty-seven percent of all new jobs in the state over the next two years will be in manufacturing, according to the U-M forecast.

A third of those are “directly attributable to the auto industry, and many of the rest derive from auto-related industries,” Fulton said.

And, fearless prediction here, the next time a recession rolls around, and the auto and "related industries" tank our employment picture once again, you should fully expect everyone to question why we didn't continue to diversify our economy. When they do, remember this.

For now though, we are just going to ignore all the above, and push for even more business tax cuts that won't guarantee jobs, but will guarantee reduced education opportunities and other critical quality of life services.

Yeah. Like that.

Congratulations, Michigan, you've elected the Republicans. And you can't say you weren't warned.