“You can’t eat GDP”

August 2, 2018 6:07 am
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Nevada’s senior senator, Dean Heller, is for veterans, according to a recent Heller campaign ad. And, veterans — especially the one who does most of the talking in the ad — are for Heller.

“We were alone, forgotten, until Dean Heller stood up for us,” the vet says. “And finally we had a voice…”

This is a powerful ad that highlights Heller’s truly unique role as the only politician in the history of Nevada, or for that matter the United States of America, who has ever had the courage to say anything nice about veterans.

“I’ll vote for him ’til the day I die,” the veteran promises, evidently on the presumption that for as long as both he and Heller are alive — and neither of them look that old — Heller will be running for something. It seems a mean thing to say, actually. It’s not like Heller is Danny Tarkanian.

A Republican PAC called One Nation is also running ads praising Heller’s record of fighting for veterans. There is supposed to be no collusion (No collusion! No collusion! And even if there is collusion, it isn’t a crime!) between Heller’s campaign and dark money outside groups. So the fact that both Heller and One Nation are focusing on veterans is either a remarkable coincidence, or both realize that there are more than a quarter million veterans in Nevada and about 70 percent of them are likely voters. Seriously, you’d think some politician other than Heller would pay attention to them!

In any case, Heller’s remarkably singular status as the only politician in U.S. history who has stood up for veterans notwithstanding, veterans (to reiterate: Heller is for them) are not the most interesting thing about Heller’s ad about veterans.

The most interesting thing about Heller’s ad about veterans is that it’s not about tax cuts.


Remember when the tax bill was all Heller wanted to talk about?

Early this year, when he still had Tarkanian to kick around, nary a day went by that Heller didn’t toast  some transnational conglomerate or other for announcing that, thanks to tax cuts, wages would be raised from a mere pittance all the way up to a full pittance. Whenever a giant restaurant or retail chain gave a one-time bonus to its chronically underpaid disposable workforce, Heller was there (there being social media) to gush about the wonders of the Republican tax cuts. As Heller put it last spring, “more than 500 companies throughout the country have committed to giving their workers bonuses, pay raises, or enhanced benefits as a direct result of tax reform.”

So how come Heller’s not running ads about that? Jeesh, just last week it was announced that gross domestic product (GDP) grew by a majestic 4.1 percent in the second quarter.

Prosperity! It’s what’s for dinner!

Alas, as so many have noted over the years, “you can’t eat GDP.”

GDP measures the size of the economy. Politicians and the press put an awful lot of emphasis on it, but as the old song goes: It don’t mean a thing if it ain’t got that broadly consistent pattern of fairly proportional distribution across all income quintiles. A rising GDP — a growing economy — is better than the alternative. But economic growth is better still when the benefit of that growth — more money — is distributed to households of working families. GDP doesn’t measure that.

Any number of reports have documented how the Trump-Heller tax cuts have overwhelmingly benefited CEOs and wealthy shareholders while providing little if any help to the vast majority of mere mortals who don’t own a company or accrue their income through capital gains. (Trump wanted to lower capital gain taxes even more via an inflation indexing shenanigan; he appears to have backed off the plan for now, thus saving Heller the trouble of asking his campaign staff what he thinks about it).

The failure of bigger GDP to “trickle down,” to borrow a phrase Republicans used to say before their consultants told them to quit saying it, has been taking a toll on too many Nevadans for years.

Nevada GDP plummeted during the Great Recession. But since bottoming out in 2009, it has recovered rather nicely, and GDP in 2017 was 30 percent bigger in non-inflation-adjusted dollars than it was eight years before. Nevada median household income has also grown since the depth of the Great Recession, but by a much more modest 8 percent as of 2016

If adjusted for inflation, the increase in GDP is not as impressive, at less than 12 percent since 2009.

And if adjusted for inflation, median household income in 2016 was still 3.6 percent smaller than it was during the depth of the recession. Compared to 2000 — that bygone age before the crash, before 9-11 and before the Forever War, when Nevada was booming — real, inflation-adjusted Nevada median household income had fallen 13 percent by 2016.

Nevada GDP was growing. But the money wasn’t going to, well, you. So where was it going?

Between 2009 and 2015, 81 percent of Nevada income growth was captured by the top 1 percent, according to the Economic Policy Institute. In its report on The New Gilded Age released last month, EPI found that income for the top 1 percent in Nevada was 33 times that of the average earned by the 99 percent. Only in three states (New York, Connecticut and Florida) was wealth more concentrated at the top.


Despite reports that Republicans have in large part abandoned running on their tax cuts, it’s hard to imagine Heller waiting much longer before making them central to his campaign. His other signature issues are a) hating sage grouse, b) hating California, and c) loving Trump (not necessarily in that order), and as compelling as those issues are, his campaign may not want to entirely risk Heller’s future on them. Tax cuts have been mostly upside down in polls since Trump & the Republicans passed them in December. But Heller will dust them off and prop them up on TV sooner or later, most likely by deliberately distorting his opponent’s position on them.

Heller’s forthcoming tax cut charm offensive won’t be an instructive moment in Nevada political or economic history. Acknowledging that Nevada’s economy has grown while household incomes have languished, let alone explaining why? That sort of thing isn’t in Heller’s wheelhouse.

And there’s zero chance that Heller will honestly confront the most important point about his beloved tax cuts: Designed to overwhelmingly reward those at the top, they’ll just make Nevada’s income inequality worse.

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Hugh Jackson
Hugh Jackson

Hugh Jackson was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and author of the Las Vegas Gleaner political blog. Prior to moving to Las Vegas, he was a reporter and editor at the Casper (Wyoming) Star-Tribune.