Republicans Don't Know What They're Talking About: Sens. Coburn And Snowe Edition
Even for a political party that has long embraced the dubious fantasy that cutting taxes always yields higher revenue, the modern Republican Party is home to a breathtaking amount of economic know-nothingism. And it's not just coming from a handful of Tea Party freshmen who will soon be little more than historical footnotes, as two recent examples remind us.
"The real problem is we've got a federal government that's totally outgrown it's [sic] bounds, totally outside of the Constitution, that's highly inefficient, that's wasting 5-7 trillion dollars a year - pure waste," said Coburn.
Seven trillion dollars a year of "pure waste" would mean that the government is somehow wasting half of the nation's whole gross domestic product. That's rather unlikely, since the entire federal government's budget is about $3.8 trillion — roughly half of what Coburn says the government is wasting. And this isn't the first time Coburn has failed to confine his criticism of government spending to government spending that actually exists.
Then there's Sen. Olympia Snowe's odd definition of "anti-competitive." The Maine Republican denounced Amazon's mobile phone application, which allows shoppers to compare the prices they see in local stores to Amazon's prices for the same products:
"I urge Amazon to cancel its planned promotion, and look for ways to partner with Main Street, not promote anti-competitive behavior that could shutter the doors of America's small businesses."
It's understandable that Amazon's competitors don't want shoppers to quickly and easily see if Amazon offers the same product for less money. But making it easy for consumers to know when you offer a product for less money than your competitor does isn't "anti-competitive" — it's competition. And yes, Amazon's app helps it learn how much its competitors are charging — but its competitors already have the ability to easily learn how much Amazon is charging, via the public database of its products and prices Amazon makes available around the clock to anyone with an internet connection.
Though Snowe managed to miss it, there actually is an anti-competitive aspect to Amazon's business, as Houston Chronicle business columnist Loren Steffy explains:
[S]mall business owners do have a legitimate complaint against Amazon, and it's one that Price Check highlights. The online retailer pays no sales tax in most places.
"This app allows Amazon to exploit a loophole that allows them to sell the exact same product as brick-and-mortar stores and not charge sales tax," Jason Brewer, a spokesman for the Retail Industry Leaders Association told ConsumerAffairs.com.
Price Check is nothing more than Amazon using technology to create a competitive advantage, and that, after all, is what competition is all about. The real benefactor is the consumer.
What Snowe and other politicians ought to decry isn't Price Check, but Amazon's sales tax exemption. That's what gives it an unfair advantage.
But Snowe told the New York Times she doesn't know if she'll support legislation to address that advantage:
Curiously, Ms. Snowe, who spoke out so forcefully against Amazon's promotion, has not signed on to the leading Senate sales tax bill, the Marketplace Fairness Act, although Amazon itself has. "I am absolutely committed to protecting small businesses and keeping Main Street positioned to flourish once again, and I am carefully examining these and other legislative proposals on this issue," Ms. Snowe said in a statement provided by a spokesman. But, she said, "the need for comprehensive tax reform also must be considered, since the current overall tax system is its own source of problems for small businesses."
Snowe's definitionally-challenged statement did contain one encouraging sign:
I often tour Main Streets in cities and towns across Maine to speak directly with local business owners, and they have told me repeatedly that they rely on increased sales during the holidays to grow their businesses and create new jobs. Indeed, according to the latest NFIB Economic Trends Survey, small business owners listed "poor sales" as the top problem they face.
Snowe, like the rest of the GOP, has spent years ignoring the concept of demand, so it's nice to see her recognize that it's the biggest impediment to economic growth. Now if only she'd start behaving accordingly.