Saturday, October 25, 2008

Yesterday a major party's presidential candidate proclaimed boldly in his speech on economic policy:

We cannot spend the next four years as we have spent much of the last
eight: hoping for our luck to change at home and abroad. We have to act. We need
a new direction, and we have to fight for it.

The candidate continued with talk of the importance of "spreading equal opportunity for those who need jobs" and "I'm going to make sure we take care of the working people who were devastated by the excesses of Wall Street and Washington."

Somewhat peculiarly, that candidate was John McCain. I say it is peculiar, because the speech was full of policies to enrich the prosperous. I have already posted on hhow is promises to cut capital gains taxes do nothing to spur investment but raises the debt we will pass on to our children and the fantasy underlying how his claim about balancing the budget while cutting taxes enormously.

McCain claims Obama's tax increase will "would impact 50 percent of small business income." What is amusing about this statement is that McCain does not explain what share of small businesses will be affected by the tax policies. Small business income in phenomenally skewed, my deduction is that the vast majority of small businesses will benefit under Obama's plan.

McCain's claim "I'm not going to spend $750 billion dollars of your money just bailing out the Wall Street bankers and brokers who got us into this mess" are contradicted by his plan for "buying up bad mortgages." As I hope he understands, his plan is to buy those mortgages from the Wall Street bankers he claims not to be bailing out. While sophisticated plans could purchase mortgages for far less than face value and help homeowners without bailing out bankers, the version of McCain's plan I read was a massive transfer to banks and other lenders. That is far from my preferred way to spend the bailout funds.

Every politician has strong incentives to explain how their policies will help essentially all Americans. McCain the politician responds well to those incentives. Unfortunatley, McCain the policy-maker does not follow through.

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