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Saturday, August 23, 2008

Democrats/Republicans on the Economy

Watch any debate between someone that supports McCain economic policies against someone that supports Obama in this election and here is the dynamic that you will see.

Those supporting McCain will point out that raising the capital gains tax will stunt the growth of business. They say that that soaking the rich with more taxes and at the same time you give tax breaks to the middle class is nothing more than income redistribution. They will point out that raising taxes on corporations will only make corporations more likely to go overseas. They will point out that the last time we tried protectionist free trade policy as the economy was weakening was the disastrous 1932 Smoot Hawley Act. Furthermore, they will point out that Obama's windfall profits tax also failed when it was tried by Jimmy Carter.

When you get an Obama supporter, what you get is that John McCain will continue the "same failed policies of the last eight years". You will also get that Obama will bring "the kind of change this economy needs". The thing is we don't know, because they won't say, what those failed policies were, and what that change is. That's because these Dem supporters neither know what brought us to the brink of economic strife and they certainly don't know what Obama will do to bring us out. That's because Obama won't do anything to bring us out of economic disaster. In fact, he will only bring us further into disaster.

Of course, it is up to the Republicans to explain better why we are in economic dire straits. The first reason is that we have had atrocious Fed policy over the last ten years. While the 1990's were a period of nimble Fed rate hikes and drops, the last ten years have been marked by extremes. First, Greenspan dropped the Fed Funds Rate below 1% and set off the mortgage crisis. More recently, Bernanke dropped rates furiously again and weakened an already weak dollar. This psychzophrenic rate policy has created uncertainty in the economy.

This has been compounded by a Congress that spent like drunken sailors for the first six years of Bush's term. This failing must be acknowledged by Republicans, and given that McCain has made fiscal responsibility his centerpiece of domestic economic policy, he is the right man to lead it. The Democrats propose to increase spending even more and they call this responsible spending because they plan on increasing spending at the same time. This isn't responsible, it is tax and spend.

This has been compounded by the meteoric rise of gas prices in the last year plus. This dynamic is the result of a failure in leadership over the last 35 years, not merely 8 years.

The Democrats will get away with platitudes and vague and undefined rhetoric unless their feet are held to the fire. They will respond to a series of specific policy failures in the Obama economic policy by saying that Republicans are

proposing the same failed policies they were over the last eight

Everytime, a Republican points out that Obama wants to foolishly raise taxes they will respond

Obama is bringing the necessary chage this economy has been missing the last eight years

They will continue to say these vague rhetorical attacks unless someone defines exactly what went wrong over the last eight years.


Jay said...

I'm surprised at the number of Obama supporters that freely use the words "change" and "hope," not only regarding economic policy, but for any issue that you bring up. A lot of times, you can't even debate with someone simply because they're not saying anything - they're just parroting campaign slogans.

mike volpe said...

Unfortunately, I am not. Several years ago, I realized that campaign talking points are vital because they work. As far as politics is concerned, most people just aren't all that educated. I agree that you really can't debate with some people because issues aren't as important as platitudes.