« Fare thee well | Main | Why aren't the superdelegates committing? » The niceness primary22 Apr 2008 10:48 pm Barack Obama's concession speech is vastly more gracious than Hillary Clinton's victory speech. I suppose it's a lot easier to be gracious when you've got the election nearly in the bag. Update Noooooooooooooooooooo . . . he's launched ino the protectionist spiel. Comments (32)
Obama may indeed be the least bad of the three candidates remaining -- although it can be argued. However, like rwe, I really do wonder why Megan finds the guy so appealing. Other than his association with her favorite B-school professor, that is. From a pro-market libertarian perspective, Obama is a disaster. I'm not sure why Megan won't acknowledge that. 
You should consider changing your presidential preference to John McCain. He opposed Ethanol in Iowa. He supports immigration reform even though many in his own party hate him for it. He spoke out for free trade and against protectionism in Ohio. http://seattlepi.nwsource.com/national/1131ap_mccain.html If you're worried about the war, none of the candidates would pull out tomorrow and all are looking for some form of graceful exit. Besides, McCain's temper would be useful for getting the Iraqi politicians to take responsibility and do something.
As an Obamaphile investment banker, I'd urge you guys to, as Professor Goolsbee so infamously cautioned, take this kind of protectionist talk with a grain of salt. He's in a hard fought Democratic primary in the Rust Belt, what do you want him to do? The guys not perfect. And yes, he's going to roll back most of the Bush tax cuts, hopefully with some of the capital gains cuts retained, but nonetheless it's inevitable. But then, the current Federal budget situation is untenable and no one, not Obama, not Clinton, not McCain, is going to cut spending enough to balance the budget without some tax increases. Especially not McCain, who doesn't even claim to want to stop flushing money down that Mesopotamian toilet. But at the end of the day, Obama is a really smart guy who prefers to surround himself with really smart guys. If you're able to get your head around the fact that, maybe, a return to a 39% marginal tax bracket isn't the end of the world, and that not signing a trade agreement with a middling industrial power like Colombia isn't going to bankrupt American industry, I think you can get comfortable with him and his Chicago School cohorts.
39%, or 54.3%? I'd ask Goolsbee for details, but I find the tire tracks distracting.
Did anyone else notice the three guys wearing Abercrombie shirts with giant logos directly behind Obama? They were completely disinterested in what he had to say, staring at the ground or taking amongst themselves while the rest of the audience was enthralled. They were also the three most prominent members of audience. It seemed like a blatant product placement. This has to be intentional, as i remember previous stories spell out just how choreographed these audiences are ("We need more white people"). Corporations can't donate to political campaigns though, so I wonder what they got out of it.
"And yes, he's going to roll back most of the Bush tax cuts, hopefully with some of the capital gains cuts retained, but nonetheless it's inevitable."-TH TH, Obama has said that he wants to nearly double the capital gains tax rate. And taxing capital gains is a marvelously stupid and inefficient way of raising revenue. A 28% capital gains tax rate will create very large deadweight losses. And as for the supposed inevitability of tax increases, I refer you to the words of a Chicago economist of somewhat greater repute than Dr. Goolsbee: "I believe that government is too large and intrusive, that we do not get our money's worth for the roughly 40% of our income that is spent by government--federal, state and local--supposedly on our behalf, or the additional 10% or so of income that residents or businesses spend in response to government mandates and regulation. History suggests that Washington spends whatever it receives in taxes plus as much more as it can get away with. Deficits have been the norm... Under those circumstances, how can we ever cut government down to size? I believe there is one and only one way: the way parents control spendthrift children, cutting their allowance. For government, that means cutting taxes. Resulting deficits will be an effective--I would go so far as to say, the only effective--restraint on the spending propensities of the executive branch and the legislature."-Milton Friedman
The problem with that theory is that it's utterly failed in what we call "real life." Usually when a hypothesis fails you come up with a new one. But for religious zealots I suppose no matter how many times it fails you've just got to keep the faith. Cutting taxes results in reduced spending? History proves otherwise. There is something perverse about burying your nose in a religious tract and taking it as gospel even though what it says is directly contradicted by reality.
"For government, that means cutting taxes. Resulting deficits will be an effective--I would go so far as to say, the only effective--restraint on the spending propensities of the executive branch and the legislature." So how does he explain the last 7 years of cutting taxes AND the government increasing spending and going further into debt. The problem with cutting spending, is that when it comes down to it a lot of the funded programs are popular. While Americans are for cutting spending in general, when spending cuts are brought up on specific programs they are against it. Do you think there is enough popular support to cut medicare, social security and defense? "And taxing capital gains is a marvelously stupid and inefficient way of raising revenue. A 28% capital gains tax rate will create very large deadweight losses." Capital gains should be taxed the same as all other income. I haven't seen a convincing argument for taxing it at a different rate than other income.
Margalis, the budget deficit as a percentage of GDP is only 2.4%, by no means an abnormally high level. In fact it is slightly less than it was 30 years ago--in 1978 the deficit was 2.7% of GDP. In that time we've has substantial tax cuts, first under Reagan and then under Bush. So the fact that the deficit has not increased means that expenditure has tracked revenue fairly closely over time. If you run a regression of expenditure on revenue over time you'll see that this is true. Friedman's argument was that when the deficit starts to approach a high enough level (perhaps around 5% of GDP), it puts serious constraints on the ability of the Congress to increase expenditures. The pressure for spending restraint increases significantly. And that is indeed what has happened. Friedman has been proven correct. Actually, though, what matters much more than the level of the deficit is the overall level of spending. In his famous cross-country growth regressions Robert Barro found some time ago that increases in government spending have a significant negative impact on economic growth. Whether we finance our spending with taxes or borrowing is of secondary importance. Government borrowing tends to raise real interest rates somewhat, which dampens investment. But high taxes cause large deadweight losses, and it isn't at all clear a priori that the deficits cause more damage than tax increases. The capital gains tax increases Barak Obama proposes would be especially destructive. The surest way to enhance long-run growth would be to cut taxes and spending. This would enhance incentives, eliminate deadweight losses and encourage saving and investment. And John McCain is much more likely to bring taxes and spending down than his Democratic rival. Now if you can explain to me why I am wrong, I'll be happy to consider your arguments and your evidence. And of course, I'll be very interested to see what sort of result you got from your regression of expenditures on revenues.
My theory on the Abercrombie guys is Obama's trying to send a subliminal message that he's cool with companies who engage in racist hiring practices, and , by extension, is trying to reach out to racist white people.
"...not signing a trade agreement with a middling industrial power like Colombia isn't going to bankrupt American industry" Nobody ever claimed that it would. It's not Columbia specifically, it's the protectionist stance generally that's especially worrying. And Columbia matters in its own right -- dumping the treaty undermines one of the few pro-U.S., anti-Chavez governments in the region. To throw Columbia and Uribe under the bus is inexcusable. The number of things we're supposed to assume that Obama is just pandering on and doesn't really mean is growing steadily longer: - Protectionism (doesn't really mean it) What's the secret code for determining what's just pandering and what he really means?
I used to take the protectionist stuff with a grain of salt, too. But now that the campaign has dragged on so long it looks like both candidates are stuck with it. They've pushed it so hard that backing off would be too blatantly dishonest even for a politician. So McCain is the only hope for sensible economic policies. I don't much like McCain, but I don't see any real alternative. Especially since trade policy is one area in which the choice is really likely to make a difference, as I don't see either Hillary or the strike-force guy actually pulling out of Iraq and leaving an ally to a vicious civil war.
-in 1978 the deficit was 2.7% of GDP. The interest rate was 10% though. What happens to our budget and interest payments when interest rates rise again???
Well said, rwe. McCain can be a bit self-righteous for my taste, but he is the only one of the three remaining candidates who advocates anything even remotely acceptable from a libertarian standpoint on trade, taxes, and government spending. And you have to admire is courage - bashing corn subsidies in Iowa and pushing free trade in Youngstown. Unlike Megan, I cannot cast my vote for someone whose STATED policy proposals I abhor simply because I hope that deep down he is really as cool and smart as he seems.
But at the end of the day, Obama is a really smart guy who prefers to surround himself with really smart guys. Like these guys? Counter example:
take this kind of protectionist talk with a grain of salt. He's in a hard fought Democratic primary in the Rust Belt, what do you want him to do? I don't know anything about trade policy or economics, but I do know a bit about Iraq. And I'm convinced that Obama isn't being truthful about what his Iraq policy will be (as evidenced by the fact that, when pressed, Obama and his foreign policy advisers disavow the candidate's own stated policy). So if he's just saying what he "has to" say about trade, and he's just saying what he "has to" say about Iraq, what are the core issues about which he's actually being honest? I say this as someone who'll probably vote for the guy, but I'm starting to think that says more about the lack of alternatives than it does about Obama.
Wow, these comments about what a great free-market, small-government guy John McCain is are just the sort of gut-busting humor that I need to start the day on a bright note. Thanks comedic commenters, keep the funny lines coming!
Wow, you fellas telling us that the sky is blue and that the Pope is Catholic are really hillarious. Just what I need with my coffee in the morning. Thanks comedians. Keep the jokes coming.
If I understand the McArdle/TH argument, it is that Obama is a politician and therefore of necessity a habitual liar, but you shouldn't worry because he doesn't mean the bad stuff, just the good stuff. Which is fine, since I wasn't voting on a messiah, just a president, but, given a choice between habitual liars, I'm voting for the one what won't raise my taxes. I would think any libertarian would do the same.
Wow, you folks who land on "sarcastic" while aiming for "ironic" are really funny. Just the sort of passive-aggression that goes well with my mid-morning snack! Thanks, hilarious commenters, keep the jokes coming!
Megan's support of Obama as some sort of liberatarian is a bit of a joke. It's like Dandy Andy Sullivan constanly trying to convice the world that he and Obama are really true conservatives. I think in both cases what you have is copule of folks who want desparately to be in the cool kids click in the event Obama wins, and are willing to look past the fact that he just another token liberal espewing the same old tired policies of class warfare and victimization of a generation ago.
Hey, Just Stopping In, how about you study up on McCain's actual record rather than his phoney talking points? Matt Welch at Reason Magazine has been systematically documenting McCain's love of big government and compulsive urge to regulate everything he doesn't like.
Margalis, my friend, where are you? I'm still waiting for your proof. Or perhaps you've realized that you were wrong--that, in truth, government revenues do determine government spending over time. Regardless, those interested in understanding better why McCain's economic policy of cutting taxes and spending would be better for the economy than Obama's policy of increasing taxes and spending might want to read the following from Robert Barro of Harvard (excerpted from his Business Week column in 2004):
The main costs and benefits from the government's budget come from how much is spent -- whether on defense, roads, courts, health care, welfare, or pensions... The important point is that this debate involves levels of spending, not the budget deficit. Government outlays must be financed by taxes, and the economy performs better if the distortions from taxes are small. Examples of distortion are the negative effect of tax on work effort and investment and the time required to comply with tax laws. Taxes that distort the most are those with high marginal rates and those that fall on income from capital. HIGH MARGINAL TAX RATES ARE BAD, since they discourage effort, capital formation, and innovation... The tax reforms of the 1980s wisely cut marginal rates, and the 2003 tax law returned to this theme. Taxes on capital income -- such as the corporate income tax or taxes on dividends, interest, capital gains, and estates -- are harmful because they tax savings. These taxes motivate people to consume more today and less tomorrow. The 2003 cut on dividend tax helped reduce the rate on capital income. The federal income tax is not efficient: Marginal rates are high, and capital income is taxed... The government must decide how to tax and when to tax. By running a deficit, it shifts from collecting taxes today to collecting them tomorrow. Because a deficit does not change the total collected (in present value), there is a sense in which the deficit does not matter... The Reagan policies added a new dimension to the theory. Reagan wanted a smaller government, but he was initially more successful at halting the growth of taxes than at stopping the growth of spending. Budget deficits resulted, and the ratio of public debt to gross domestic product increased. Eventually, deficits and debt exerted enough pressure on Congress to curb spending. After trending up from the 1950s to the early '80s, the ratio of federal spending to GDP declined through the '90s. This pattern is clearest for spending outside of defense and interest. Thus, Reagan's method for curtailing government worked. So we ought to cut taxes, cut sepnding and let the natural dynamic forces of the free market spur competition, innovation and growth. Whatever his failings, McCain is certainly friendlier to free trade and free markets than Obama, and is therefore more likely to implement policies that reduce inefficiencies and remove government obstacles to growth.
But at the end of the day, Obama is a really smart guy who prefers to surround himself with really smart guys. So was Kennedy, but that didn't keep us out of Vietnam. Obviously his policies were different from Obama's, but as I understand it, during his campaign Americans projected their own values on Kennedy, the way they seem to be doing to Obama. Naturally we want intelligent leaders, but we also want leaders who understand and respect what we really value, instead of telling us what we should value. Sometimes really smart people get arrogant, and think they know best for everyone else. Obama has to show that he's not like this.
As an Obamaphile investment banker, I'd urge you guys to, as Professor Goolsbee so infamously cautioned, take this kind of protectionist talk with a grain of salt. That explains why Obama is doing so poorly amongst older voters – they’re watching their sodium levels and the amount of salt it would take to make Obama palatable would probably kill most of them. Me, I prefer a more humane way to fix Medicare and Social Security like means-testing.
Hey, Just Dropping By, how about you study up on McCain's whole record rather than focusing on heresies here and there. N. Gregory Mankiw in his New York Times column has systematically documented McCain's consistent support for free trade and contrasted it with Hilbama'a mercantilism. See here: http://www.nytimes.com/2008/03/16/business/16view.html I don't see anyone claiming that the Arizona Senator is a model libertarian, just that he is significantly better than Obama or Clinton. You could deny that, but then you would clearly be wrong. But thanks for dropping by anyway.
I wonder just how horrific the candidates from both major parties would have to be, before a so-called libertarian would just stay home. Your vote is meaningless anyway, but why take the time to vote for someone who doesn't stand for nearly anything you do, just because the other major option really doesn't stand for nearly anything you do. Cognitive dissonance is no way to go through life.
I wonder just how horrific the candidates from both major parties would have to be, before a so-called libertarian would just stay home. It depends on the libertarian. If we’re talking about single issue voters who think that there is NOTHING more important than Ending The War On Some Drugs or going back to the gold standard, they’ve pretty much made the choice to marginalize themselves by putting purity on their single issue above all else. If on the other hand, we’re talking about the more pragmatic who realize that (a) they’re in very small minority, (b) change takes time and being willing to work with people you disagree with and (c) who have the patience to do the real work of politics, then I’d say that it depends on how committed they really are. Case in point, a few weeks ago I attended a meeting of the committee which helps to draft the MN GOP party platform because I had a new plank that proposed ten suggestions for how we could move towards a more consumer-driven health care system and away from the third-party payer/quasi-socialized medicine system we have today. I spent three hours waiting for my turn while the committee debated other issues on the agenda – some of which I agreed with, some I didn’t and a couple I thought were rather silly. But when my turn came up and I spoke on behalf of my suggestions, I got 9 out of 10 passed within a few minutes because I’d participated in the process and while I spoke against some of the things that passed overwhelmingly, I did so respectfully and patiently knowing that part of politics is working with people you are going to disagree with on some issues. People with strong beliefs, including libertarians, who learn that lesson early on tend to be the ones who have a chance to influence the process and street things a bit in the direction they want it to go (or at least better than it would be otherwise). Those who don’t, stay home and sulk.
Thorley, Is there some point at which you would find it counterproductive (or a waste of time, or possibly immoral) to work with people who not just disagree with you, but are actively working towards the further theft of your productive wealth, reducing the sphere of your personal freedom and privacy (in the name of either "the children" or "homeland security") and who have little inclination (short or long term) of reducing (not just slowing the rate of growth of) government influence and interference in society and the economy? It wouldn't make much sense to sulk when you stay home; a person should be using the time saved to enjoy their life. At the least they should take comfort in the fact that they were not complicit in the sordid process.
Is there some point at which you would find it counterproductive (or a waste of time, or possibly immoral) to work with people who not just disagree with you, but are actively working towards the further theft of your productive wealth, reducing the sphere of your personal freedom and privacy (in the name of either "the children" or "homeland security") and who have little inclination (short or long term) of reducing (not just slowing the rate of growth of) government influence and interference in society and the economy? That sounds like a great description of the reasons why libertarians shouldn’t support Democrats but it’s not really applicable to Republicans. At least not any Republicans that I’ve met or campaigned for. And yes, I am including John McCain in that regard. John McCain who has been one of the most consistent opponents of farm subsidies and other forms of corporate welfare, who has never supported a tax increase and has supported most tax cuts, supports means-testing Medicare and voted against Medicare Part D, wants to let workers invest at least a portion of their FICA into personal accounts, supports school choice, and supports consumer-driven health care that would result in far less government (and third-party payer) control over health care than we’ve had for the last 60 years of government-intervention. So yes, I do see this fall’s election as giving a real choice, not merely an echo, for those libertarians who are serious about advancing the cause of liberty in ways that actually would matter to a substantial number of Americans. For those that aren’t serious, there’s always staying home and sulking.
Megan, you really are a twit with selective hearing, aren't you? Obama's tone--at least toward McCain--was singularly unpleasant.
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I find the error about Cameroon's GDP a lot easier to forgive than this constant shilling for Obama. Megan can be quite insightful at times, but this irrational swooning for this liberal lightweight--despite his protectionism, his promised tax increases, his utterly naive foreign policy pronouncements (one day he wants to invade Pakistan, the next he wants to have tea and cakes with Ahmadinejad)--is too much to take at times.
He makes pretty seeches, yes, but look more deeply. There's no there, there.
Posted by rwe | April 22, 2008 11:00 PM