Mayor Newsom doesn’t understand economics

Pub date February 13, 2009
SectionPolitics Blog

By Steven T. Jones

It’s maddening to read Mayor Gavin Newsom’s latest prescription for local economic recovery, which parrots the position and talking points that we’ve been hearing for weeks from congressional Republicans. And that fiscally conservative position is just factually wrong.
That was made clear recently in a widely circulated report from Moody’s that shows a dollar of tax cuts provides just over a dollar in economic activity, while a dollar of government spending provides about $1.60 in economic activity. And the most economic activity, about $1.73 for each dollar spent, comes from food stamps (which are similar to welfare assistance to the poorest citizens, which Newsom slashed with his Care not Cash program).
Yet Newsom boldly and stupidly declares in today’s Chronicle op-ed about economic stimulus that, “We need less spending.” Guess what? Spending is stimulus. Newsom even cynically refers to President Barack Obama as if he agrees, even though Obama recently scoffed at the very argument Newsom is trying to make.
Mr. Mayor, all the city jobs that you want to cut are jobs, good paying jobs with good benefits that cause people to spend money in San Francisco. Cuts those jobs and you hurt the economy, and you hurt is far more than you will help it by cutting the taxes of local businesses. It’s just dumb. Or if it’s not dumb, it’s at least very ideologically conservative, this discredited, faith-based belief in trickle-down economics.