JPMorgan (JPM) has broken out to new highs this week, but sits near a perilous technical level, writ...
Keeping Score on the Candidates
09/08/2008 12:00 am EST
While the presidential election certainly won't be decided only on economic issues, the polls tell us it's at the top of voters' minds as we move into the home stretch of this marathon campaign. The candidates have widely different programs and policies. At least, that's what we can deduce from their acceptance speeches.
So maybe we should create an "economic scorecard" and track their policies and performance, just as avid baseball fans keep detailed scorecards, showing walks, strikeouts, base hits, and home runs. Certainly the presidential campaigns deserve a similar treatment—a detailed look at the candidates' proposals and promises, as well as the costs and tradeoffs.
So here's a stab at creating an economic policy scorecard. We'll keep track of this throughout the rest of the campaign, and I hope you'll also fill in the boxes with your views. Here are three key categories—and some comments to start.
You'd think there would be a clear-cut difference on this topic, but it's hard to find out who will be impacted by higher taxes, and who will get a tax cut from the rhetoric that's been posted already.
Senator Barack Obama promises a middle class tax cut, but he doesn't define "middle class." And he has said he will let the 2001 and 2003 Bush tax cuts expire for "wealthy" individuals. Tax rates on capital gains and dividends would rise, too. Obviously, his definition of "wealthy" is individuals earning more than $200,000 or couples earning over $250,000.
We've all heard Senator John McCain's definition of middle class—something around $5 million in assets. In his acceptance speech, he promised to "keep taxes low, and cut where I can." To most that means making the Bush tax cuts permanent—everything from the estate taxes and other cuts that were scheduled to "sunset" in 2011.
Sen. McCain also says the United States has the "second highest business tax rate in the world," and he wants to cut the corporate tax rate from 35% to 25%.
So, why don't you help me fill in the blanks in this category? What do you hear each candidate promising on the subject of taxes? Do you think he can deliver?
The latest unemployment figures—a five-year high at 6.1%—make it tough for Sen. McCain to campaign on a platform of continuing President Bush's economic policies, while still promising job creation. But what would he do differently from the president, who presided over a loss of 600,000 jobs over the last year?
Sen. McCain says the private sector should create jobs, and laid out a plan in his acceptance speech, "As president, I will enact a Jobs for America economic plan that creates jobs, helps small businesses, expands opportunities, and opens markets to American goods." Details, please.
Meanwhile, Sen. Obama wants to create federal job training programs and end what he calls "tax subsidies" for companies that ship jobs overseas. And he wants to create protection though new trade deals to ensure jobs remain in America. Can government legislate job protection, when the economics of foreign labor are so compelling? Could tougher trade deals cost more American jobs than they save? What do you think?
And what's the true cost of all these promises to a country to $9 trillion worth of national debt?
Sen. Obama says: "If I am president, I will cut taxes for 95% of all working families and provide an immediate $50 billion to struggling states so that they don't have to cut back on health care and education and can rebuild roads and schools." Now, all he has to do is explain where he'll get the money to do that—and more that he has promised!
Sen. McCain has come late to the supply-side view that cutting taxes encourages growth. It must also encourage childbirth—because he promised to double the tax exemption for children from $3500 a year to $7,000. Clearly, the man believes in tax incentives!
Bottom line: I don't think they've made their positions clear. And when they do take a clear position, they clearly don't consider the costs and other implications.
In other words, so far in this campaign, the economic promises have been double talk.
Let's track both candidates' promises, policies, and the consequences of their proposals by creating an economic scorecard—updated regularly with their latest public comments.
Only then can we—together—try to sort out their economic positions. Are you up for it? Please add your comments here.
Related Articles on MARKETS
Major markets are waiting on the the policy statement coming out of the FOMC later today, writes Bil...
Crude oil prices should be moving higher than they are, writes Phil Flynn, senior energy analyst at ...
Our view is that inflation will soon pick up, which means you will need to reshuffle your investment...