Political Corner - the Economy

Today’s topic – money


Love it, hate it, we've all gotta have it. By popular demand, here is my ode to the economic troubles of the time.
Let’s be honest, this is THE issue of the 2008 presidential race. Last weekend the stock market crashed beyond belief when Merrill Lynch and Lehman Brothers failed, and AIG would have been right behind them without a little help from Uncle Sam. Beyond the stock market, paying $4/gallon for gas, along with rapidly rising rent and grocery costs have hit us on a personal level. Whether you believe the struggling US economy was caused by the greed of the capitalist market or botched policies of the Bush Administration, you’ve got to be curious how the candidates propose to handle the situation. Below is what I hope is a fair, although far from comprehensive, analysis (for a more detailed analysis of specific tax policies, please click here):

	McCain	Obama
Fuel/Energy	Mandate greenhouse gas reduction, In favor of suspending the national gas tax. Would open coastal areas for drilling, and lift the ethanol tariff. Does not support federal funding of energy research.	Tax oil companies and use $ to help low income families, also tax green house gas emission and use that $ to commit $150 billion to research. Wants to double fuel economy standards within 18 years to 50 mpg by 2026. Wants to make all new buildings carbon neutral by 2030. Lift cap on tax credit for more efficient cars, and increase funding for public transport. Opposes drilling.
Financial Sector	Recently suggests that some regulation is necessary, however, has no record of supporting government action.	Calls for the same government regulations on investment firms that are required of commercial banks.
Housing Market	Would offer government backing for refinancing a home, given that the lender writes down the loan to 90% of the home’s current retail value. The lender and federal government would then receive 30% of the equity (each) when the home sells.	Would require government backing on home loans, meaning that borrowers share equity with the Federal Housing Administration when they sell or refinance their home.
Economic Advisors	·John Thain, chief executive of Merrill Lynch ·Phil Gramm, senator ·Alan Greenspan, former chairman of the Federal Reserve	·Robert E. Rubin, former treasury secretary; now a senior adviser at Citigroup ·Paul A. Volcker, former chairman of the Federal Reserve ·Lawrence H. Summers, former treasury secretary

I have to confess that I don’t understand the housing policies all that well. I would suggest reading the CCN articles listed under sources if you want to know more about that subject. Since neither candidate has extensive business or economic policy experience, perhaps the most important row on the chart above is the last – economic advisors. These are the men who are mostly making the policy suggestions now, and who are prime candidates for cabinet positions. It seems to me that John McCain’s economic policies are not especially helpful, and Barack Obama’s are not especially realistic. But, you decide.

In Their Own Words:

“This crisis serves as a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary. It's a philosophy that lets Washington lobbyists shred consumer protections and distort our economy so it works for the special interests instead of working people; a philosophy that says we should give more and more to those with the most and hope that prosperity trickles down to the rest.”

Barack Obama

"The government was forced to commit $85 billion. These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America."

John McCain

Sources:

http://www.latimes.com/news/nationworld/nation/la-na-campaign18-2008sep18,0,1817927.story

http://www.nytimes.com/2008/09/16/us/politics/16record.html

http://money.cnn.com/2008/06/09/news/economy/candidates_energy/index.htm

http://money.cnn.com/2008/04/10/news/economy/mccain_econ_plan/index.htm?postversion=2008041017

http://my.barackobama.com/page/community/post/samgrahamfelsen/gGg4DC

http://www.boston.com/news/nation/articles/2008/06/27/grim_proving_ground_for_obamas_housing_policy/