Does certainty really matter?

One problem that we find in politics is that people stake out a position and then look for arguments to support their stance. This leads to convenient rhetoric. One example of this is the push by Republican legislators to extend the Bush tax cuts because this would create certainty. John Engler said "We've got to provide businesses some certainty about what their tax landscape is going to look like, and we've got to provide families certainty,". "That's critical to maintain our recovery."

If we assume that this narrative is correct and that certainty is important to job growth then it follows that extending the Bush tax cuts should have a positive economic impact. It also follows that when families have a level of certainty they would feel more comfortable spending their discretionary earnings instead of saving them. If this is the case then the vast levels of uncertainty that Republicans are creating for public employees is detrimental to the economy.

Nationally the public sector has lost 435,000 jobs since 2008 and is estimated to lose between 25,000 and 30,000 a month in the second half of this year. In Michigan Governor Snyders proposed cuts that would cost public employees $180 million while increaing taxes by 1.1% for households making under $17,000 a year. Add in the current union busting tactics and public employees have anything but certainty.

If certainty is good for the economy it is good for every sector of the economy not just the sectors you support. Giving Michigan businesses $2 billion in tax breaks that the state can only afford if it slashes wages, and cuts jobs does not create certainty. If anything it creates more uncertainty. Henry Ford knew that paying his employees twice what other companies were paying would help his business because his employees could then afford to buy his cars. Similarly as a Michigan businiess a tax cut adds no value if that tax cut comes at the cost of shrinking the cosumer base.

Businesses already have a record amount of cash on hand. The problem is not the lack of certainty regarding taxes but the lack of certainty among consumers and public empoyees are consumers.

Either certainty matters or it doesn't and politicing to make certainty an excuse for massive give aways to big business on the backs of the middle class helps no one.