Last month, President Obama signed into law a tax deal preserving the Bush tax cuts for all Americans — including those for the wealthiest, which he personally opposed — in a deal with Republicans that also cut the payroll tax and extended unemployment benefits. When it was struck, a slew of corporate CEO’s claimed that the deal, and not the fact that corporations were seeing record profits and sitting on trillions in cash while the stock market climbed, proved the Obama administration was unveiling a new, pro-business attitude.
During an interview with Bloomberg News’ Al Hunt, Sen. Jon Kyl (R-AZ) took this absurd meme one step further, asserting that the tax deal — which wasn’t passed by Congress and signed into law until December 2010 — was actually the cause of all the excellent results corporate America saw throughout 2010:
HUNT: Let me talk about the Obama administration and business. Corporate profits are soaring. Goldman Sachs named 110 new partners. Bonuses are flowing. S&P has risen more than in any three-year period since the tech bubble. General Motors is — the IPO. This isn’t an anti-business administration, is it?
KYL: I would contend that, for the last two years, it’s been highly anti-business. Some of the results that you just talked about, I suspect, are coming from the fact that we extended tax rates that the president did not want to extend, but was willing to do so at the end of the year last year.
HUNT: But, of course, all these things happened before that.
KYL: No, all these things are, I think, partially a – a result of the knowledge now that taxes are not going to be raised in the next two years.
Kyl doesn’t deign to explain how a deal negotiated in the waning moments of a calendar year had any bearing on what occurred in that year’s first eleven months. All his comment does is show that conservatives are willing to go to great lengths in order to continue asserting, despite the evidence to the contrary, that Obama is anti-business.
In fact, since the Obama administration came into office, times have been very good for corporate America. Here is the New York Times in November, before the contours of the tax deal came into focus:
Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. That is the highest share since the fourth quarter of 2006, when they accounted for 11.7 percent of output.
So does Kyl think that the tax deal is also responsible for all of these numbers? Can we start claiming that the passage of the Dodd-Frank financial reform law in July 2010 caused 2009’s corporate growth?