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Yet more dubious promises from the Republican fantasist brigade

Romney and Ryan don’t have a credible economic plan.

The past few weeks have been pretty interesting in the US. We have had two party conventions, speeches from some rising stars, including a potential President Castro (no relation to the Cuban variety – this is the Hispanic mayor of San Antonio, Texas, whose twin brother is also standing for Congress), one hurricane and a set of not great but not dire jobs numbers.

First, to the Republican convention in Tampa, Florida. The most memorable thing about that gathering was Clint Eastwood’s conversation with an empty chair. The Republicans tried desperately not to talk about their economic plans in case the US public found out what they were, so most of the time they just played the man – that is, Barack Obama, who they seem to hate viscerally – rather than the ball. If the Dow had doubled under a Republican president as it has under Obama, who also took out Osama Bin Laden, presumably they would have been yelling his praises from the rooftops. For the past couple of years, the Republicans in Congress have had just one goal: to defeat Obama, no matter what the consequences are on the US economy. One rule for you, one rule for me.

The cheek of it

Paul Ryan’s budget appears to be a classic example of a Keynesian stimulus, although of an unusual kind. The Republican vice-presidential candidate is in favour of huge public spending cuts on Medicare, Medicaid, food stamps and student grants, to name but a few. Plus, huge tax cuts for the rich so that Mitt Romney and his various billionaire supporters would get richer while the poor would get poorer. Ryan wants a $2trn increase in unspecified defence spending that the Pentagon has made clear it doesn’t want. Romney and Ryan would not raise any taxes, but they say they would close unspecified tax loopholes. These could include mortgage and retirement tax relief, which would be hugely unpopular. So Romney not only refuses to release his tax returns, but won’t say how he’ll fund his tax cuts. This was all made clear by Bill Clinton, whose Democratic convention speech was an economics masterclass.

On 7 September, the Bureau of Labor Statistics produced its jobs report for August, which showed that numbers on non-farm payrolls ­increased by 96,000. Romney greeted this with this astonishing response: “After 43 straight months of unemployment above 8 per cent, it is clear that President Obama just hasn’t lived up to his promises and his policies haven’t worked. They aren’t better off than they were four years ago. My plan for a stronger middle class will create 12 million jobs by the end of my first term.” This was pretty cheeky, given the Republicans in Congress voted down Obama’s jobs bill and offered nothing in its place.

Are Americans better off than they were four years ago? Employment as measured by non-farm payrolls obtained from employer surveys has risen in each of the past 30 months and by a total of 4.1 million (see first chart). Since January 2009, when Obama became president, employment is down by just over a million, but this is because of the economy he inherited from George W Bush that was bleeding jobs. Job losses in the first six months of 2009 averaged 566,000 a month. Since July 2009, employment is up nearly 2.8 million. So the starting point matters – it takes a long while for policies to have an impact.

For comparison, I have included the equivalent chart of employment change in thousands for the UK, which has about a fifth as many workers as the US (29.5 million and 142 million, respectively). Since May 2010, UK employment is up 545,000, but only up 355,000 if we count six months forward as I did for Obama. Employment has grown in the UK since December 2010 by an average of 20,000 per month, compared with an average of 146,000 per month in the US.

Out of balance

Now to the claim that Romney would create 12 million jobs. That is more than was created in the nine-year period from 1999 to 2007. The last time three million jobs were created in one year was under Clinton, in each year between 1997 and 1999 (the only other years when that occurred was in 1983, 1984, 1987 and 1988). Clinton created 12 million jobs from 1996 to 2000. The last four-year period it was done was 1976-79, largely under Jimmy Carter.

Romney’s claim looks pretty bold, given that he hasn’t told us what measures he intends to take to create this almost unprecedented number of jobs. He seems unaware that there are major headwinds hitting the US economy, including concerns about the eurozone and a slowing down of the world economy. In addition, public-sector employment continues to fall: it is down 675,000 since the start of 2009.

There is little more the Federal Reserve can do to help, not least because Romney has said he is opposed to more monetary stimulus in general and more quantitative easing in particular (his adviser Glenn Hubbard calls the latter unmandated fiscal policy). Romney has also said that he would remove Ben Bernanke as chairman of the Fed. If Romney were to become president, he would likely sing from a rather different hymn book, as David Cameron and George Osborne have in relation to the need to have even looser monetary policy; what you say in opposition is often quite different from what you do when you have to make the decisions.

Romney and Ryan don’t have a credible economic plan. There’s no chance in heck they can generate 12 million jobs based on their policies. They could create these jobs with an unfunded $5trn fiscal stimulus, but that would explode the debt, if they didn’t close any loopholes or raise any taxes. So much for balanced budgets.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 17 September 2012 issue of the New Statesman, Who comes next?

Photo: Getty Images
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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.