{"id":4695,"date":"2008-08-22T11:27:12","date_gmt":"2008-08-22T18:47:00","guid":{"rendered":"http:\/\/www.amptoons.com\/blog\/archives\/2008\/08\/22\/obamas-economic-policies\/"},"modified":"2008-08-22T11:27:12","modified_gmt":"2008-08-22T18:47:00","slug":"obamas-economic-policies","status":"publish","type":"post","link":"https:\/\/amptoons.com\/blog\/?p=4695","title":{"rendered":"Obama's economic policies"},"content":{"rendered":"

David Leonhardt has written a long and substantive (although definitely pro-Obama) piece on Obama’s economic policies<\/a>. It’s definitely worth reading if you want a one-stop summary of Obama’s economic views.<\/p>\n

From a progressive point of view, assuming the article is accurate, Obama’s not as bad as a lot of centrist Democrats — or, more accurately, his positions reflect how the center of the Democratic party has moved a bit to the left since 8 years ago — but neither is he the answer to progressive dreams.<\/p>\n

In practical terms, the new consensus means that the policies of an Obama administration would differ from those of the Clinton administration, but not primarily because of differences between the two men. \u201cThe economy has changed in the last 15 years, and our understanding of economic policy has changed as well,\u201d Furman says. \u201cAnd that means that what was appropriate in 1993 is no longer appropriate.\u201d Obama\u2019s agenda starts not with raising taxes to reduce the deficit, as Clinton\u2019s ended up doing, but with changing the tax code so that families making more than $250,000 a year pay more taxes and nearly everyone else pays less. That would begin to address inequality. Then there would be Reich-like investments in alternative energy, physical infrastructure and such, meant both to create middle-class jobs and to address long-term problems like global warming.<\/p>\n

All of this raises the question of what will happen to the deficit. Obama\u2019s aides optimistically insist he will reduce it, thanks to his tax increases on the affluent and his plan to wind down the Iraq war. Relative to McCain, whose promised spending cuts are extremely vague, Obama does indeed look like a fiscal conservative. But the larger point is that the immediate deficit isn\u2019t as big as it was in 1992. Then, it was equal to 4.7 percent of gross domestic product. Right now it\u2019s about 2.5 percent.<\/p><\/blockquote>\n

I would have liked the article much better if Leonhardt had said the truth flat-out — by all appearances, Obama’s plan will increase the deficit (Obama aides optimism aside) or at best keep it the size it is, but McCain’s plan ((McCain has said he intends<\/i> to balance the budget, but the actual economic plans he’s released don’t add up to a balanced budget.)) would increase it more. ((Quoting EconomistMom<\/a>: “…if we use Tax Policy Center estimates for the cost of the McCain and Obama tax plans (I know the Obama campaign is using a much larger figure for McCain), then the Obama tax plan adds ‘just’ $2.8 trillion to the federal debt over ten years (not counting interest), while the McCain tax plan adds $4.2 trillion.”)) It’s odd that Leonhardt dodges around this question, since Obama openly admits<\/a> that he doesn’t expect to balance the budget.<\/p>\n

Leonhardt also emphasizes Obama’s interest in market-based solutions to problems. For instance, on cap-and-trade:<\/p>\n

By last year, Democrats in Congress essentially agreed that to reduce greenhouse-gas emissions, the government should place a nationwide cap on these emissions and then issue tradable permits giving companies the right to produce them (thus the term \u201ccap and trade\u201d). Most Congressional bills envisioned giving away many of the permits to power companies. Economists, by and large, considered this giveaway to be the worst part of the plan. It would require Congress to decide how many free permits each company should get and would set off a frenzy of corporate lobbying.<\/p>\n

The alternative was to auction off the permits \u2014 to let the market set their value. \u201cIf you don\u2019t auction 100 percent of the permits,\u201d [Obama econ adviser] Goolsbee told me, \u201cthis could be one of the biggest pieces of corporate welfare ever.\u201d With Congress making the decisions, the power companies with the best political connections might get the permits. With a full auction, the permits would end up with companies willing to make the highest bids. Presumably, these would be the most efficient companies, the ones able to produce the most energy (and profits) for a given amount of greenhouse-gas pollution.<\/p><\/blockquote>\n

Edited to add: Isn’t this exactly backwards? It seems to me that the least efficient, most polluting companies would be the ones forced to pay the most for these permits — while the most efficient companies would be less in need of the permits. Or am I misunderstanding something?<\/p>\n

The auctions would have another big advantage too. They would raise billions of dollars for the government, money that could then be returned to taxpayers to offset the higher energy prices created by the emissions cap.<\/p>\n

It seems likely that a President Obama would sign a cap-and-trade bill even if it did give away some permits. But candidate Obama has at least moved the debate toward a more pro-market solution.<\/p><\/blockquote>\n

The writer roots Obama’s market attitudes in his background at the University of Chicago. There’s some left-wing critique of Obama’s market bias in the comments at this post on Angry Bear<\/a>.<\/p>\n

A curious lack in the article is any discussion of trade policy. Nor is there any discussion of wage gaps (either gender or race).<\/p>\n

Anyhow, I could go on more, but I’m going to go to the pool with my niece and nephew instead. Later, folks.<\/p>\n","protected":false},"excerpt":{"rendered":"

David Leonhardt has written a long and substantive (although definitely pro-Obama) piece on Obama’s economic policies. It’s definitely worth reading if you want a one-stop summary of Obama’s economic views. From a progressive point of view, assuming the article is … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,27],"tags":[],"class_list":["post-4695","post","type-post","status-publish","format-standard","hentry","category-economics-and-the-like","category-elections-and-politics"],"_links":{"self":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/4695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4695"}],"version-history":[{"count":0,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/4695\/revisions"}],"wp:attachment":[{"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amptoons.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}