The Washington Post Misses The Real Story on “Economic Distress”

Terrance Heath

In Charlie Daniels’ 1979 hit single, the Devil went down to Georgia looking for a soul to steal. The Washington Post went down to Georgia looking for a story about anger over economic distress in tea party districts. Like the Devil in Daniel’s song, the Post comes back empty-handed.

We know tea partiers are angry. We know tea partiers hate President Obama, and blame him for the sorry state of the economy. No one’s going to get a Pulitzer for telling us that. But would be asking too much for the Post to engage in a bit of journalism, and ask whether anger is justified?

The Post went down to Rome, Ga., and interviewed Tom Hackett on his last day in the meat business. A declining local economy, competition from a new chain grocery store, and a lack of credit caused Hackett to close up shop.

Hackett lives in Georgia’s 14th congressional district, represented by Tom Graves. Graves wrote the Republican budget resolution that defunded the Affordable Care Act, voted against the deal to end the shutdown, and told “Fox News Sunday” that he thought Republicans were “pretty reasonable” in their shutdown demands.

Hackett thinks Graves is “great” because “somebody’s got to stand up to him” — President Obama, whom Hackett can’t bring himself to name, but readily blames for his economic woes.

“I’m going to go hide for two years,” he said, until “he” — President Obama — is on his way out. “It’s sad. People are hurting. There’s no reason for it to be happening, other than what he’s doing.”

That’s where the Post stopped doing journalism and took up stenography. Hackett’s claim that “there’s no reason” for the economic distress in his or other tea party districts other than “what [President Obama]’s doing,” went unquestioned and unchallenged.

There are plenty of reasons why the economy in tea party districts is a lot worse than it is in the rest of the country. There’s a short view and a long view.

The Short View

Here’s one major reason why tea party districts are in economic distress. The entire country was hit with the Great Recession in 2007, before Barack Obama ever set foot in the White House. The recession followed a financial crisis that was the direct result of conservative economic policies. The whole country was in economic distress.

Since then, conservatives have stalled the recovery by blocking legislation to help state and local governments keep public sector workers like teacher and police officers on the job. As local governments were laying off workers, and more than 500,000 state and local government jobs were at riskconservatives in Congress opposed aid to save those jobs.

Conservatives cheered for the sequester, but it was a major blow to local economies. According to a White House fact sheet, these are just a few of the ways sequestration affected Georgia, this year alone:

  • Teachers and Schools: Georgia will lose approximately $28.6 million in funding for primary and secondary education, putting around 390 teacher and aide jobs at risk. In addition about 54,000 fewer students would be served and approximately 80 fewer schools would receive funding.
  • Education for Children with Disabilities: In addition, Georgia will lose approximately $17.5 million in funds for about 210 teachers, aides, and staff who help children with disabilities.
  • Work-Study Jobs: Around 2,490 fewer low-income students in Georgia would receive aid to help them finance the costs of college and around 890 fewer students will get work-study jobs that help them pay for college.
  • Head Start: Head Start and Early Head Start services would be eliminated for approximately 1,700 children in Georgia, reducing access to critical early education.
  • Military Readiness: In Georgia, approximately 37,000 civilian Department of Defense employees would be furloughed, reducing gross pay by around $190.1 million in total.
  • Army: Base operation funding would be cut by about $233 million in Georgia.
  • Air Force: Funding for Air Force operations in Georgia would be cut by about $5 million.
  • Law Enforcement and Public Safety Funds for Crime Prevention and Prosecution: Georgia will lose about $427,000 in Justice Assistance Grants that support law enforcement, prosecution and courts, crime prevention and education, corrections and community corrections, drug treatment and enforcement, and crime victim and witness initiatives.
  • Job Search Assistance to Help those in Georgia find Employment and Training: Georgia will lose about $873,000 in funding for job search assistance, referral, and placement, meaning around 33,160 fewer people will get the help and skills they need to find employment.
  • Child Care: Up to 1,100 disadvantaged and vulnerable children could lose access to child care, which is also essential for working parents to hold down a job.

Every single sequestration cut hurts local economies. Teachers buy groceries. Law enforcement officers buy lunch. College students buy clothes and lots of other things. But not if they’re laid-off, furloughed, or can’t find work. Local economies shrink, local businesses see profits decline, and soon even private-sector jobs are at risk.

Republicans celebrated the government shutdown, but it meant more than 77,000 Georgia workers were furloughed. That’s 77,000 more Georgians going without pay, not supporting local economies by spending money in shops just like Hackett’s.

None of these things were President Obama’s doing. They were embraced by ultra conservative Republicans, with devastating consequences for their own districts and their own constituents.

Those districts were already in economic distress when the financial crisis, the Great Recession, and tea party politics ratcheted up the pain.

The Long View

The Post reports that just 45 House Republicans pushed the GOP into economic brinksmanship. The economy in the districts those Republicans represent is significantly worse than the rest of the country. The Deep South, the Post reports, is the “epicenter of that economic distress.” Most states in the region ended 2012 with double-digit unemployment rates. Metro areas have not recovered the jobs lost during the recession.

The Deep South was the epicenter of job loss before anyone heard of Barack Obama or the tea party, because of conservative economic policies that have dominated the region for decades. The success of the GOP’s “Southern Strategy” wasn’t just getting more conservatives elected to Congress, but electing conservatives to state and local government, and implementing conservative economic policies in state and local governments.

The economic decline of the Deep South began with the offshoring of jobs that sounded the death knell for the textile industry. The industry shifted from New England to the South 80 years ago, and then left for places like Mexico, Honduras, and Pakistan thanks to looser trade laws favored by Republicans. Thousands of workers were left behind to face shuttered factories and few prospects. During the 1990’s, 441,000 jobs — 44 percent — disappeared from the Southern textile industry.

Enter the “Toyota Republicans,” as Pat Buchanan named them. Some displaced textile workers probably ended up at the automobile factories that sprung up in the South, thanks to more than $3.8 billion in tax subsidies for foreign automakers — like Nissan, Volkswagen, Mercedes-Benz and Honda. After all, southern states had a population of workers desperate enough to accept lower wages, fewer benefits and no union protection.

Those huge corporate tax subsidies ultimately did not benefit state or local economies, or come close to replacing the jobs lost due to the same push for globalization that gave rise to such deals. States even handed out corporate tax subsidies at taxpayers’ expense. Some diverted taxpayer dollars away from vital services, and gave away millions to foreign automakers while cutting low-income citizens from Medicaid rolls and cramming children into overcrowded classrooms.

Georgia On My Mind

All of this played out in Georgia much as it did in other states. From 2000 to 2009, Georgia lost more than 200,000 blue-collar jobs, making it one of the 10 states where blue-collar jobs were disappearing, and one of the 10 states with the highest unemployment rates.

Last year, Georgia offered Caterpillar $44 million in tax incentives. Counties ponied up free land, $15 million in tax breaks, and $8.2 million in road, water and sewer repairs. The tractor company has received $196 million in local aid across the country since 2007. Caterpillar profits have soared, but the company froze worker’s pay for six years at some of the locales where it received local aid and tax incentives in exchange for promises of jobs and economic growth.

Corporate tax breaks during the years leading up to the recession drained $3 billion from the fund Georgia uses to pay state unemployment benefits. The state had to borrow from the federal government in 2009 to keep up payments to the unemployed. Georgians are paying off that loan with their state tax dollars.

Georgians are paying in other ways. When governors across the country proposed deep cuts to social services, damaging state economies while still offering huge tax cuts, Georgia Governor Nathan Deal:

  • proposed cutting state lottery funds for pre-kindergarten by 5.6 percent, eliminating 4,500 preschool slots, and reducing payments to providers;
  • proposed cutting funding for a merit-based scholarship program by one-third, university funding by 10 percent, and technical colleges by 6 percent;
  • proposed cuts to several areas of Medicaid and children’s health; reducing payments to physicians, dentists and pharmacies; increasing adult co-pays by 15 percent, and requiring co-pays for many children’s services for the first time;
  • proposed cutting funding for subsidized childcare at level that would reduce the number of children served by 10,000, and create a waiting list of 4,000;
  • proposed eliminating 14,000 state government positions, and about 200 layoffs.

Meanwhile, Deal proposed massive tax cuts for the wealthy, and tax hikes for the middle class.

Georgia isn’t done cutting yet. In a state already reeling from “budget fatigue,” Governor Deal has asked state agencies to find another $553 million in reductions through June 2014. This is the fifth year in a row that the governor has made such a request.

All of these cuts come with a cost. Republicans don’t think that government jobs are “real” jobs, but they mean real paychecks to real people, who support local economies by spending money for goods and services in stores like Tom Hackett’s former shop. When those jobs go away, paychecks go with them, and shops like Hackett’s lose business and revenues.

Health care reform is not “killing the economy.”  Financial reform didn’t cause banks to stop lending. The credit crunch was a result of the financial crisis, which was caused by a lack of regulations, not the adoption of new regulations.

If Hackett or The Washington Post want someone to blame for his economic woes, Republicans — at home and in Washington — are much better candidates than the president.

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