A look at Barack Obama's campaign's view on economics.

[Straha]

An editorial from the NY Sun posted without comment.

Senator Obama's choice of the left's most prominent defender of Wal-Mart, Jason Furman, as his campaign's economic policy director is a sign of hope for the Democrat of Illinois. Mr. Furman, in a 2005 paper, "Wal-Mart: A Progressive Success Story," took issue with attempts by Democratic lawmakers such as the New York City Council to block Wal-Mart stores from opening. "Attempts to limit the spread of Wal-Mart and similar 'big box' stores do not just limit the benefits of lower prices to moderate-income consumers, they also limit the job opportunities that Wal-Mart and other retailers provide," Mr. Furman wrote.

"A Harvard applicant has a higher chance of being accepted than a person applying for a job at that Wal-Mart," Mr. Furman wrote. "These anecdotes strongly suggest that jobs at Wal-Mart are better than the opportunities these workers would have in the absence of Wal-Mart, either other jobs or unemployment." The study found that "Wal-Mart's health benefits are similar to or better than benefits at comparable employers" and that given the company's "razor-thin" profit margin, the company had little room to pay its workers more or offer more generous benefits. "By acting in the interests of its shareholders, Wal-Mart has innovated and expanded competition, resulting in huge benefits for the American middle class," the study said.

If Mr. Obama acquaints himself with the Furman paper, maybe he'll stop the Wal-Mart bashing he engaged in during the primary campaign, when he criticized Senator Clinton in a debate by saying to her, "While I was working on those streets, watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board at Wal-Mart." And it isn't only Wal-Mart where Mr. Furman has shown flashes of good sense. In a 2007 paper, he praised Rep. Charles Rangel's proposal to cut the corporate tax rate in America to 30.5% from 35%. It would be nice to see Senator Obama back a reduction in America's corporate tax rates. Instead, what Mr. Obama has had to offer so far in the campaign, on the economic policy front, is falsehoods festooned with flip-flops.

Yesterday's campaign kick-off speech on economic policy was a perfect example. "For eight long years, our president sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs," Mr. Obama said. That's just false. When President Bush took office in 2001, the federal government spent $429 billion on health care, or 4.3% of gross domestic product. In 2008, the number will be $761 billion, or 5.3% of GDP, according to the Office of Management and Budget. Say what you will about Mr. Bush's tax cuts, but the idea that investments in health care were sacrificed is just ridiculous. Education spending also soared, with outlays for the federal department of education increasing to $68 billion in 2008 from $35.5 billion in 2001, according to the OMB — a 91% increase.

Mr. Obama claimed, "In America, our prosperity has always risen from the bottom-up. From the earliest days of our founding, it has been the hard work and ingenuity of our people that's served as the wellspring of our economic strength." Well, it would be nice to think that, but in fact during the earliest days of our founding a lot of the economic strength of America, such as it was, resided in vast plantations of the sort overseen by George Washington and Thomas Jefferson and in shipping empires of the sort overseen by John Hancock. Had the rest of Americans spent their days carping about how the founders hadn't risen from the bottom up, we'd be still announcing "God Save the King."

***
The broad question all this raises is whether Mr. Obama has any deep core of belief or understanding on economics. Yesterday he derided Mr. McCain's proposed tax cuts for corporations — tax relief along the same lines as the Rangel plan backed by Mr. Furman — as "handing out giveaways to corporations that don't need them and didn't ask for them." Mr. Obama claimed in his speech that "free-trade" is "a cause I believe in," and he said, "we can't or shouldn't put up walls around our economy." It's just breathtaking for Mr. Obama to say this now, after campaigning in the primaries as a protectionist vowing to pull out of Nafta unless it is renegotiated. If Mr. Obama is willing to flip-flop on free trade, we suppose there is still time for him to back Wal-Mart, back the McCain corporate tax cuts and the Bush tax cuts on income, dividends, and capital gains, and, for that matter, support the war in Iraq. We'd like to think that Mr. Furman could be part of the solution, though the presidential candidate Mr. Furman last advised was Senator Kerry. But as Mr. Obama adjusts his policies toward the center to accommodate the reality of a general election campaign, he'll need to be careful to avoid giving the impression that he is simply saying what is necessary to get elected. There Senator McCain, no matter what his shortcomings on the details of economic policy, will be able to offer a strong contrast.

[CaptainZoidberg]

a lot of the economic strength of America, such as it was, resided in vast plantations of the sort overseen by George Washington and Thomas Jefferson

Um, does he realize that those plantations produced America's least developed and backwater regions, not America's "economic strength"?

[Surlethe]

Yesterday's campaign kick-off speech on economic policy was a perfect example. "For eight long years, our president sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs," Mr. Obama said. That's just false. When President Bush took office in 2001, the federal government spent $429 billion on health care, or 4.3% of gross domestic product. In 2008, the number will be $761 billion, or 5.3% of GDP, according to the Office of Management and Budget. Say what you will about Mr. Bush's tax cuts, but the idea that investments in health care were sacrificed is just ridiculous. Education spending also soared, with outlays for the federal department of education increasing to $68 billion in 2008 from $35.5 billion in 2001, according to the OMB — a 91% increase.

And what was the opportunity cost of the tax breaks? Oh, right -- health care, education, energy, and infrastructure investments.

[CaptainZoidberg]

And what was the opportunity cost of the tax breaks? Oh, right -- health care, education, energy, and infrastructure investments.

One could argue that for Bush the opportunity cost was greater military spending.

[Patrick Degan]

"For eight long years, our president sacrificed investments in health care, and education, and energy, and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs," Mr. Obama said. That's just false. When President Bush took office in 2001, the federal government spent $429 billion on health care, or 4.3% of gross domestic product. In 2008, the number will be $761 billion, or 5.3% of GDP, according to the Office of Management and Budget. Say what you will about Mr. Bush's tax cuts, but the idea that investments in health care were sacrificed is just ridiculous.

A good chunk of that being the Bush prescription drug package, which among it's other charming aspects specifically forbade Congress by law to negotiate for lower drug prices from the pharmaceutical companies and ended up costing $139bn more than announced to implement for seniors who are finding themselves being hit by ever increasing prescription drug prices and higher co-pays.

Oh, and just about a third of that increase in spending is simply due to inflation as well. Which means when somebody actually looks at all the numbers and what they mean, the charge by the Obama campaign is anything but ridiculous.

[ArmorPierce]

a lot of the economic strength of America, such as it was, resided in vast plantations of the sort overseen by George Washington and Thomas Jefferson

Um, does he realize that those plantations produced America's least developed and backwater regions, not America's "economic strength"?

What does your comment have anything to do with the quoted line. Fact is that these plantation owners did hold a lot of economic strength and were the aristocrats of the day.

[CaptainZoidberg]

What does your comment have anything to do with the quoted line. Fact is that these plantation owners did hold a lot of economic strength and were the aristocrats of the day.

Sure, they held a lot of economic strength, but the author claimed that they were America's economic strength.

They weren't. The South's reliance on slavery delayed their industrialization and held back America's economic strength.

[ArmorPierce]

What does your comment have anything to do with the quoted line. Fact is that these plantation owners did hold a lot of economic strength and were the aristocrats of the day.

Sure, they held a lot of economic strength, but the author claimed that they were America's economic strength.

They weren't. The South's reliance on slavery delayed their industrialization and held back America's economic strength.

Oh I see. I thought that you were criticizing the fact that plantation owners weren't rich but now I see that you are criticizing the fact that the article seems to be for trickle down economics and even tries to bring issues of patriotism into the equation.

[CaptainZoidberg]

Oh I see. I thought that you were criticizing the fact that plantation owners weren't rich but now I see that you are criticizing the fact that the article seems to be for trickle down economics and even tries to bring issues of patriotism into the equation.

Yeah, he definitely is defending trickle down theory.

[lazerus]

Why is another conservative whack-job getting off on the idea of fiscal irresponsibility noteworthy? Anyone who doesn't see the horrific flaws in Bush's tax cuts has clearly lost his credibility as an economist.