Relevant and even prescient commentary on news, politics and the economy.

Dep’t of WTF (McCain and Economic Crisis Management)

At Americablog, Robert Arena writes:

Watching John McCain’s economics speech in Wisconsin. It’s like watching a modern day Herbert Hoover live. He really doesn’t get it…

– He went through a castigation of the Fed and basically told them to stay out of this – I mean, does he really not understand that the Fed was designed to regulate the financial markets? These investment and insurance companies, given their enormous size, are effectively a part of the financial services system. That was the rationale for nationalizing them instead of letting them fail. The Fed has been doing exactly what they are supposed to. Now the Treasury Department, that’s a different question – does McCain know the difference? After years on the Commerce Committee one would expect so, but maybe not.

Exaggeration? This is the text of the Green Bay speech from the McCain website:

Finally, the Federal Reserve should get back to its core business of responsibly managing our money supply and inflation. It needs to get out of the business of bailouts. The Fed needs to return to protecting the purchasing power of the dollar. A strong dollar will reduce energy and food prices. It will stimulate sustainable economic growth and get this economy moving again.

Does McCain really think that the economy would be in better shape if Ben Bernanke and company hadn’t been trying everything in the books to counteract the crisis? If so, on what basis? Could he possibly have a clue as to, e.g., what happens to the money supply in a credit crunch? Whether the Fed’s crisis management policies have constituted economic stimulus? (This is not to say that Bernanke and the Fed are infallible by any stretch of the imagination, but as Brad DeLong suggests, we at least want them to avoid the known gross mistakes of the past.)

What’s arguably worse is that this represents some form of his advisers’ “wisdom.” Which is to say, as a big picture matter neither McCain nor his economic advisers deserve to be let anywhere near the tiller of the metaphorical supertanker.

Added: DeLong concurs… also PGL at EconoSpeak.

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The Last Word on The 300

From me, at least, goes to Hilzoy and the off-my-reading-list-for-politics Obsidian Wings:

while I’d ordinarily assume that economists signing on to “John McCain’s plan” were signing on to the actual document he had released, the fact that those 300 names were released within hours made me wonder whether all of them had had a chance to read the document itself.

The answer, of course, was “No.”

Read the whole thing.

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One in 300, or the Only one in Government?

UPDATE: Brad DeLong lists some of the Usual Suspects who are Not in the Line-up.

John McCain’s 300 economists who support his Jobs for America Plan (via Tyler Cowen, non-sociopath, who provides an appropriate context for the list) includes one person, an Ike Brannon, whose affiliation is listed as “Department of the Treasury” and who, per this site, is “Senior Advisor to the [Tax Policy] Assistant Secretary,” one Eric Solomon.

My initial suspicion was that this might be a violation of the Hatch Act. But that appears not to be necessarily true:

These federal and D.C. employees may-

* express opinions about candidates and issues
* contribute money to political organizations
* attend political fundraising functions
* attend and be active at political rallies and meetings
* join and be an active member of a political party or club
* sign nominating petitions
* campaign for or against candidates in partisan elections
* make campaign speeches for candidates in partisan elections
* distribute campaign literature in partisan elections
* hold office in political clubs or parties

So as long as Mr. Brannon didn’t sign the petition while “on duty [or] in a government office [or] using a government vehicle,” it appears he is clearly permitted to sign the petition.

Now, generally, these petitions are circulated through personal connections. So presumably someone knows Mr. Brannon and forwarded it to him at his personal e-mail address. And one would assume that Mr. Brannon, if he were enthusiastic about the petition, would forward it—in a manner not to violate the Hatch Act—to others, including co-workers.

And presumably those others would know that, so long as the contact was of a personal nature, they, too, could sign on to “support of John McCain’s Jobs for America economic plan.”

The silence from the rest of the Treasury Department is deafening.

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Some Election Economics

I check out Robert Reich’s blog on occasion being that he is a person who was involved in the past. Yesterdays:

Over a decade ago when, as Secretary of Labor, I hollered about the scandal of widening inequality in America, I’d get phone calls from Democratic officials who politely asked me to shut up. After all, I was part of the administration, and my complaints made it seem as if the administration wasn’t doing nearly enough. It wasn’t. We hadn’t delivered on Bill Clinton’s 1992 election promises. An expanded Earned Income Tax Credit helped the poorest but the old working class was going nowhere.

Well, what’d yah know? Clinton’s progressive first run rhetoric was fluff.

He says there are 2 thoughts in this country; trickle down and bottom up.

In a global economy, investments don’t trickle down; they trickles out to wherever on the planet the rich can get the highest return. If trickle down worked as advertised inequality wouldn’t be widening so fast.

Bottom up means giving all Americans what they need to be productive – universal and affordable health coverage, good schools, a chance to attend college, job retraining, affordable child care, and good public transportation to and from the job, for starters. But as we learned a decade ago, this requires money – even more, now. So the question is how the nation can afford it…

Solution:

The only way is to stop obsessing about balancing the budget and start pushing for a serious tax hike on the rich. Yet all Democratic presidential candidates are styling themselves “fiscal conservatives” and none has suggested raising the marginal tax rate on the richest beyond the 38 percent rate it was under Bill Clinton. They may talk bottom-up economics but they’re still wedded to trickle down.

I think someone is feeling betrayed. So, what are the candidates talking?
I give you an interview by Charlie Rose of 3 economic advisors to 3 democratic candidates.
And, just for good measure here is an interview with Leo Hindrey, Mr. Edwards econ adviser.

A teaser from the interview:

In 1981 the Business Roundtable noted that CEOs have multiple constituencies, but in 2004 – after Enron, WorldCom, Adelphia, the NYSE, etc. – that very same Business Roundtable narrowed CEO responsibility back to “shareholders only”. How wrong they are! Unless and until CEOs acknowledge obligations as well to employees, customers, communities and the nation, misbehaviours will continue – and, by the way, management is not a constituency unto itself.

My favorite line from the interview (cause I’ve noted here, and implied here the same question although Walmart is just his example):

The question Wal-Mart simply needs to ask itself is “when is enough, enough?”

What was that Mr Bogle was saying about enough?

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