McCain has Depreciated a Valuable Asset: His Reputation

Senator McCain reached almost the pinnacle of American politics based in large part on his reputation as a maverick who stood up for his principles. His reputation was a valuable asset based on a number of issues on which he has disagreed with his president and his own party, including opposition to torture, support for campaign finance reform, and opposition to some of President Bush’s fiscally irresponsible tax cuts.

What is remarkable about the list is how each time McCain disagreed with Bush, McCain was right. What is tragic about the list is that McCain has backed off many of his maverick opinions – most obviously in terms of tax policy.

A few years ago, McCain talked of progressive taxation favorably: “I believe that when you reach a certain level of comfort, there's nothing wrong with paying somewhat more.” He explained “I voted against the tax cuts because of the disproportional amount that went to the wealthiest Americans.” (These quotes are from Meet The Press today.)

Today his tax policies are incoherent.

On the one hand, he promises to increase the child deduction. This is a sensible short-term policy to spur spending in a recession, but has no long-term benefits for the economy. It is an obviously populist move to offer a tax cut to the median voter.

On the other hand, his economic advisors speak of the need to cut taxes on dividends and capital gains in order to free up capital for investment. That outcome would only make occur if the tax cuts reduced consumption by more than the government deficit grew and, thus, decreased aggregate demand. Such a decline in demand would be a disaster in a recession.

Mavericks are desirable if they buck powerful pressures to sustain an ethical point of view. McCain’s move to the right-wing orthodoxy on fiscal policy depreciates the investment he made in his reputation as a principled maverick.