I’m not exactly sure how they got my name, being that I am NOT registered under their party. Usually my junk mail bears the title of “Current Resident” or some such vagueness. But this time, the sender had my name and address.
What a waste of postage!
This will be waiting for my mail delivery person on Monday, with the little red flag turned up to indicate the presence of outgoing mail. Actually, the “Return to Sender” idea was my wife Carolyn’s. When I first opened the mailbox and found this inside I announced loud enough for all of my neighbors to hear, “Hey! Somebody sent us some toilet paper through the mail!” I’m guessing that it was one of them who submitted my name to the McCain campaign—probably in response to the picture of Obama that hangs in my front window and the Obama/Biden sticker on the back of my car, which sits just beneath my “U.S. Navy” window decal.
I’ve previously published my analysis of the McCain plan, which I recommend that you read in addition to this one. Having all of the facts is important for people engaged in a discussion, and it seems that a lot of people like to discuss the economic plan of their candidate for the Presidency when very few seem to have actually researched the topic. This is evident in statements like, “Obama is going to tax us all to death!” and/or, “McCain will give the average American a tax break.” The simple fact is that neither statement is true, and no amount of flinging them around will make them true.
The first thing that one notices about the economy page of the Obama website is that the brunt of the economic plan resides on a single page, navigable by way anchored links. While website aesthetics have no real bearing on the validity of either candidate’s plan for th economy, I can say that I immediately felt a bit of relief upon noticing Obama’s design. This was due simply to the fact that having had to navigate between 9 pages (1 index page and 8 talking point pages) on the McCain site in order to complete my analysis, the simplicity of interpreting a single page seemed somehow more convenient.
This may have an impact on undecided voters as well. Most anyone in the web design business can tell you that a typical visitor only gives you a few seconds—just barely enough time for a few cursory glances and headline scanning—to convince them either to stay or to go. Because it is vital to a candidate that they actually convey a message rather than just demonstrate their prowess with html, this seems like a smart choice for the Obama camp. The Obama site is likely to convey more of their message faster. Now, let’s take a look at that message.
The economic plan page begins with a quote taken from Senator Obama in September of 2007:
“I believe that America’s free market has been the engine of America’s great progress. It’s created a prosperity that is the envy of the world. It’s led to a standard of living unmatched in history. And it has provided great rewards to the innovators and risk-takers who have made America a beacon for science, and technology, and discovery…We are all in this together. From CEOs to shareholders, from financiers to factory workers, we all have a stake in each other’s success because the more Americans prosper, the more America prospers.”
The next most impressing fact about the Obama website is that there are ten bulleted items for discussion, up two from McCain’s eight. And they aren’t just fluff, either:
Jumpstart the Economy
Provide Middle Class Americans Tax Relief
Trade
Job Creation
Support Small Business
Labor
Protect Homeownership and Crack Down on Mortgage Fraud
Address Predatory Credit Card Practices
Reform Bankruptcy Laws
Work/Family Balance
Immediately following this list, just before diving into the meat of these ten issues, is something that is conspicuously absent from the McCain economy page, and something that is typically missing from most political campaign websites—a link to a form that allows the visitor to provide feedback on the Obama policy, and to provide their own insight into the important issues of this election. Called MyPolicy, this is perhaps the smartest and most inclusive move that a politician has made in my lifetime:
“The best, most comprehensive plan for change in our country will include your ideas and your feedback. America needs a president with a mandate from the people, and everyone deserves a voice in shaping our next president’s agenda.”
Next, Obama does yet another thing that McCain did not do with his site—he lists two major problems with the current economic picture before launching into his solutions. Flat wages and rising prices, including the rising cost of college tuition, are mentioned first. Tax breaks for the wealthy are listed as the second major problem, outlining again the stance of the Obama camp that America needs to stand behind the middle class. Giving tax breaks to Americans who make over $1 Million dollars per year is indeed a problem for someone such as myself, who for the last 4 years straight has filed an average annual income of $8,000.
The first item under this category is likely to hit home with most Americans. Through the enactment (re-enactment, actually) of a windfall profits tax Obama would provide an immediate $1000 emergency energy rebate to help address the rising cost of energy in all forms during this time of economic stagnation. This tax, to be place upon oil company profits is designed to recover some of the “excessive” profit being raked in by the industry.
While one may be quick to jump into an argument over what exactly “excessive” means, it is certain that only a very small percentage of Americans can logically relate to an opposition of such a tax. Americans have been paying more for their energy than ever before, all the while oil companies have been reporting more profit than ever before. True, speculation and investment markets create a sort of buffer, or delay in gasoline pricing. But it does not require a genius to see the inequity inherent in this situation.
If my income remains flat, or that of any other American who is not taking home the 7-figure incomes of contemporary oil executives, why should we pay more for our energy? Why should the executives be paid more and more and more money while we are paid the same as always, all the while expected to simply eat the rising costs of energy? Honestly, do you think it would possible for them to take home so much money if you weren’t paying more at the pump?
There is a direct correlation, I assure you. Otherwise, we could pay pennies on the gallon for our gasoline without endangering the salaries of the big oil executives. This is a move that we’re not likely to see happen. If you’re a business person, think of this as akin to informing your customers that you’ll be raising prices on your goods and/or services simply because you feel that it would be nice to have more money. Think you’ll hold onto your clientele with a policy like that? But when it comes to oil we—the customers—have no choice. It’s not as if we can set up a refinery in our back yards, now is it?
One popular argument against a windfall profits tax is that the income tax supposedly addresses such issues by the nature of it’s scalability. If you take more home, you pay more to the government. But this does not address the ability of the oil industry to “hide” or protect profits by diverting them to proprietary assets rather than to salaries. But let’s say for a moment that every penny of profit were to go straight into salaries, thereby allowing the income tax to “do its job.” The highest of the American income tax brackets, which taxes its members at a rate of 35%, begins at the $349,700 per year level, and extends ad infinitum.
But since the low end of oil company CEO compensation sat at the $15 Million level last year, it’s pretty hard to see where a top end tax bracket of just under $350k per year would have any impact on record income. In fact, it would have none. Every last oil company executive already makes more than this, so how exactly the income tax addresses windfall profits seems to be something of a mystery.
In reality though, it’s not a mystery at all. The income tax simply does not address windfall profits whatsoever. A windfall profits tax such as the one supported by the Obama/Biden ticket would help to balance the inequities between the cost of gasoline—and other forms of energy such as natural gas production—and the salaries of executives versus those of the average American. Rather than making them even richer, Obama would divert some of that money back to Americans who will see an immediate impact on their bottom line.
The next item under the jumpstart bullet is a $50 Billion dollar plan that is designed to protect over 1 Million already existing jobs, and to ease the pain of economic stagnation at the state and local levels. $25 Billion would go into a State Growth Fund designed specifically to prevent cuts in those budgets to vital services such as health, education, and housing. It would also attempt to negate the current trend of economically harmful hikes in property taxes, tolls, and fees.
Clearly the Obama/Biden ticket “gets it” when it comes to addressing federal issues without turning Washington’s back on state issues. Such a fund would alleviate the pressure placed upon state and local governments to provide services in an environment of shrinking budgets. Just the other day Colorado Governor Bill Ritter announced a partial hiring freeze and other measures that he intends to put in place to address a $100 Million dollar budgetary shortfall in this state.
The second $25 Billion would go to a Jobs and Growth Fund intended to prevent cutbacks in road and bridge infrastructure and to fund school repair. Such a measure would allegedly save 1 Million pre-existing American jobs. While we all want to hear about the creation of jobs, which Obama does address later in his economic plan, one cannot expect such news without first having the ability to protect the jobs that are already out there.
If $50 Billion sounds like a lot of money to you, consider the $700 Billion tax dollars that Congress and the president seem all too happy to give to American banking institutions just to prevent them from having to feel the pangs of closing their doors. If they get $700 Billion to bail them out of a situation that they themselves have created, then $50 Billion for American job protection and service/infrastructure support at the state and local levels begins to seem like chicken feed. Personally, I’d like to see those two numbers flipped. $700 Billion into growth, and $50 Billion to greedy Wall Street. Actually, I’d let Wall Street fall on their asses. Call me crazy, but when a bank fails based on bad mortgages that they themselves chose to authorize, I only see one loser: The Bank. I say let the banks fail, and let American homeowners “win the lottery.” Free homes for all who bought from failed banks. But then, I am not a policy maker.
Whatever happened to the conservative axiom of pulling oneself up by their own bootstraps? After all, it is the conservative right that wants to hand over 30% of my nation’s 2007 tax revenue. Seems to me that the American financial sector has a pretty tight grip on my bootstraps, having kicked off their own footwear some time ago. In 2007 the IRS collected 2.5 Trillion dollars from taxpayers, private and corporate alike. That’s 2,500,000,000,000 if it helps you to see all the zeros. Now, pull out your calculator and do the math. $700 Billion ($700,000,000,000) divided by $2.5 Trillion equals .28, or 28% of all the money that the IRS collected in 2007 in the form of taxes. To be sure, there are other sources of federal revenue: tariffs, fines, etcetera, but 28% is a massive chunk of our tax revenue.
That’s nearly 30% of our 2007 tax dollars being spent to bail out these irresponsible executives on Wall Street. Suddenly, spending $50 Billion on job protection and economic growth seems almost inadequate, certainly not excessive by any means. State and local governments, as well as average citizens, will all benefit greatly from the Obama/Biden jumpstart plan. But their support of American families by no means ends here.
Here is where the Obama/Biden economic plan outshines, outstrips, and outperforms the McCain/Palin plan in spades. In fact, it could be said that this one item is the reason behind my analysis of both plans. I hear way too many working Americans—not executives taking home enough money to make that top 35% tax bracket, but people who truly work hard for what they have—saying that they are afraid of Obama’s tax hikes. Folks, if you’ve been told that Obama will raise your taxes, there’s a 95% chance that you’ve been lied to.
According to the Tax Policy Center, less than one percent of American taxpayers report incomes of over $160,850 annually. Actually, it comes out to .4 percent in each of the top two income brackets. Taken together, that’s still only eight-tenths of one percent of all American taxpayers. Fact: both sides will raise taxes somewhere, the difference between campaigns lies in where those hikes will fall. But because Obama’s tax hikes start at the $250,000 level, 99% of taxpayers won’t see any increase in their taxes. Now, that’s 99% by my math, but Barack Obama has stated over and again that 95% of Americans will see no tax hikes. The typical line from the McCain camp is that, “Obama will tax us to death.” Take this McCain ad for example:
An interesting ad when you consider that Obama has made it very clear that his policies are actually exactly contrary to the claims made in the ad. Read on to see what I mean. Obama intends to eliminate taxes completely for seniors making less than $50,000 per year. This will eliminate income taxes altogether for 7 million seniors, and rescind the obligation of another 27 million seniors to file at all. Increase the size of government? Obama is taking measure like eliminating the need for the federal government to process 27 million tax returns. I don’t know what that translates to in terms of man hours, but it’s got to be massive.
Then there’s Obama’s Making Work Pay tax credit, which will give American workers $500, up to $1000 per household. This would nullify the tax burden of another 10 million Americans. It truly begins to smell a bit when you hear Obama’s opposition talking about how he intends to tax us into oblivion. All it takes are five minutes on the respective candidates’ websites to see that Obama is the only one that has tax alleviation in mind for those of us in that lower 99% of the country who don’t have the money to pay higher taxes.
Obama also intends to simplify the filing process for millions of Americans and his plan for doing so is bold. He would make available the option of pre-filled tax forms, requiring only the verification and signature of the taxpayer. True, not all Americans have taxes that would lend themselves to such simplicity, but millions do:
“Experts estimate that the Obama-Biden proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.”
The Obama website lists 5 main points under the category of Trade:
Fight for Fair Trade
Amend the North American Free Trade Agreement
Improve Transition Assistance
End Tax Breaks for Companies that Send Jobs Overseas
Reward Companies that Support American Workers
Admittedly, the first two come across as a little vague, but then again if we’re talking international free trade law, not many of us are going to be able to read a full dossier on the approach to be taken and understand what we are reading. Suffice it for now to say that Obama and Biden intend to make adjustments to NAFTA, CAFTA, and possibly other Free Trade Agreements that they label as having been, “oversold to the American people.”
The last three items on this list of five deal mostly with supporting the American worker when the market is shining less favorably upon their industry. Obama would make retraining assistance available to Americans who are losing their jobs, before they actually see termination. Also, in order to keep good jobs right here on American soil the Obama/Biden ticket would create incentives for U.S. businesses to avoid the exportation of our national labor needs. They seem to truly understand that it is not okay to pay someone in another country less than they would pay an American simply for the purpose of improving profit margin.
“Barack Obama and Joe Biden believe that companies should not get billions of dollars in tax deductions for moving their operations overseas. Obama and Biden will also fight to ensure that public contracts are awarded to companies that are committed to American workers.”
Following the structure of the Michigan 21st Century Jobs Fund, Obama would create an Advanced Manufacturing Fund to, “…identify and invest in the most compelling advanced manufacturing strategies.” He would also double funding for the Manufacturing Extension Partnership, which has seen budget slashing under the current administration.
“This highly-successful program has engaged in more than 350,000 projects across the country and in 2006 alone, helped create and protect over 50,000 jobs. But despite this success, funding for MEP has been slashed by the Bush administration. Barack Obama and Joe Biden will double funding for the MEP so its training centers can continue to bolster the competitiveness of U.S. manufacturers.”
Under the Obama/Biden plan, $150 Billion would be invested in clean energy over the next ten years in order to bring about vital change in a multitude of green energy areas. In fact, a commitment to clean power that producers can benefit from and consumers can rely upon is another area where the Democratic ticket is pulling no punches. They make it very clear that clean energies are a priority.
Not only do they intend to invest in new technologies, but also in job training programs that will be necessary to fill the personnel needs of companies who embrace, and therefore grow within this plan for a new, greener American energy climate. The Obama/Biden website also mentions their intent to create a federal Renewable Portfolio Standard that will require 25% of U.S. energy production to originate from clean/green sources by 2025—a real, tangible goal that can actually be obtained. Also, they state that they would like to extend the Production Tax Credit for renewable energy.
But the Obama/Biden job creation package certainly doesn’t end with clean/green energy:
“Barack Obama and Joe Biden believe that it is critically important for the United States to rebuild its national transportation infrastructure – its highways, bridges, roads, ports, air, and train systems – to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.”
A National Infrastructure Reinvestment Bank would be created under Obama’s leadership, with the directive to invest in America’s transportation infrastructure. This bank would be funded with $60 Billion over the course of ten years to accomplish that end. Though the original funding would be federal, the bank would be independent in nature, ensuring that the market has the ability to lend the proper incentives required in order for such investments to succeed. This means that the overall size of government would not be changed by the creation of this bank; improved care for our transportation infrastructure without expanding government, an excellent approach indeed. This plan is projected to create around 2 million new jobs and would create an estimated $35 Billion of new fiscal activity.
Also included under the Job Creation category are the following points:
Invest in the Sciences: A reversal of our current Administration’s policies would see the doubling of R&D funding and a return to science-based initiatives that are necessary to open the door for the creation and stimulation of tech-sector jobs. This is vital for any nation wanting to compete in the new, globalized economy.
Make the Research and Development Tax Credit Permanent: Continuation of this incentive will allow American companies to make the tough decision of investing scarce resources into long-term R&D projects. This will be key in maintaining a healthy tech-sector.
Deploy Next-Generation Broadband: Making data sharing and communications networks more available to a larger number of Americans will mean expanding digital trade, safeguarding and growing broadband technology jobs, and continue America’s march down the path of technological innovation.
Through tax relief and $250 Million in funding annually for a national network of small business incubators, particularly in disadvantaged communities, the Obama/Biden ticket would lend assistance to small businesses in their initial phases. They would work to lessen the burden of double taxation which occurs as the result of a small business owner having to pay both the employer and employee sides of the payroll tax. The $500 “Making Work Pay” tax credit would enable the reduction of this burden.
Yet another area where the Obama plan easily wins out over the McCain strategy is in the area of supporting the working and middle classes. The Democratic nominee clearly understands the vital role that Labor plays in our economy. While giving huge tax breaks to a corporation my be a great way to simulate the growth of that company, it simply has no impact on the take home wages of those workers who find themselves on the bottom and middle rungs of our American economic ladder.
Actually, this is precisely where the “Trickle Down” approach to economics fails because no matter how much money a company makes, the lowly worker can only make as much money as a 40- or 80-hour work week will allow them to make. If they are salaried the amount of additional money that they will see is linked directly to the whims of management, who would more often than not prefer to invest in either expanding the size of their markets or in compensating their executives with disproportionate levels of wealth and privilege.
This is why it is so vital for government to step in and support “the little guy” in a free-market, capitalist economy. It simply is not in a company’s fiscal interest to increase compensation of their employees, no matter how well business is going. Barack Obama has a plan for aiding the American worker.
“Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers’ rights and will work to ban the permanent replacement of striking workers. Obama and Biden will also increase the minimum wage and index it to inflation to ensure it rises every year.”
Here again Senator Obama’s plan is favorable for the Middle Class, an important category of homeowners to be sure. His plan would provide tax credits to 10 million homeowners, most of whom earn less than $50k per year. His STOP FRAUD Act would establish a legal definition for mortgage fraud, expand funding for federal and state law enforcement programs, create new penalties for offenders, and enable more responsive, internal regulation.
Obama and Biden would also require lenders to accurately convey the obligations of a borrower when entering into a mortgage through the implementation of what they call a Homeowner Obligation Made Explicit (HOME) score. Comparable to the APR metric, it is intended to be a simplified, standard metric for use by potential borrowers to compare loan products before buying. Buying a home can be one of the most complicated experiences in a person’s life, and Obama clearly understands that this does not have to mean that lenders will take advantage of that complexity to improve their standings.
Obama would also close a loophole in bankruptcy laws that prevent changes to the monthly payments for mortgages in cases of bankruptcy. They clearly indicate that illicit behavior within the sub-prime markets is currently “shielded” by federal law, and that they intend to change that. Predatory lending in any situation is bad, and Obama will work to reduce the impact of such illicit behavior even outside of the mortgage markets, as evidenced by the next issue on their website.
One thing about Obama’s website that I find to be highly valuable is the fact that he does not just feed you fluff text. He gives very specific ways in which he intends to accomplish very specific goals. This was a trait that I found to be altogether lacking from the McCain website. This category of his economic plan includes many of those specificities that I mention.
“Obama and Biden will establish a five-star rating system so that every consumer knows the risk involved in every credit card. They also will establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices.”
As a former card holder myself, I can say for certain that a five star system would have been very useful in making my selection of service providers. I have since sworn off of credit cards in all forms and refuse to open even a line of credit at a department store because of the fact that I wound up paying so much more than I had borrowed. But the credit card rating system is not the only way in which Obama would establish protections for credit consumers. He would also implement a Credit Card Bill of Rights.
This list of built-in, consumer protections would provide the following benefits to consumers:
Unilateral changes would be banned.
Interest rate increases would only be applicable to future debt, not retroactive with respect to already existing debt.
The Obama camp also plans to reform bankruptcy laws with the goal in mind to, “protect working people, ban executive bonuses for bankrupt companies, and require disclosure of all pension investments.” In the current American economic climate, these steps are incredibly important. It’s bad enough that Wall Street and corporate executives take home millions more than the average worker in salaries and benefits per year, but to allow such disparate compensation to continue even when those executives have caused the financial collapse of their business interests is pure insanity. Obama and Biden would put an end to such nonsense.
Payday loans have become an extremely unfortunate part of an increasing number of Americans lives. Not only are they a bad choice for someone who already has too little money to make ends meet, but they are a very dangerous one because they can very quickly become cumulative as Americans take out new payday loans to pay off their old ones. It is a vicious cycle that has put more than one person that I personally know on the coals, so to speak. In fact, I myself have an ongoing dilemma with a payday loan provider.
Obama would extend a 36% cap on interest charged for payday loans to all Americans. While 36% may sound high, consider the current ceiling of around 400% and you can begin to appreciate the measures that Senator Obama would like to take to protect us all from these money sapping traps. He would also encourage legitimate lenders to provide small-dollar and short term loans to responsible consumers to help drive the predatory payday lenders out of business.
Perhaps most importantly though, Obama and Biden would reverse the changes made to bankruptcy law by President Bush and his financial advisors, which have cut American consumers off from any protection they might have enjoyed from financial ruin that is directly related to a medical emergency. Bush and his team have changed laws so that when a person files bankruptcy, medical bills are not wiped away. This has meant that if the average American household were to undergo a serious, unexpected medical emergency, they could very have to watch as their ability to earn a comfortable living was destroyed, because no matter what they might do, they would be stuck with the massive medical bills of an exorbitantly overpriced health care industry.
Essentially, this reduces life in working and middle class America to a crap shoot. Will you live a happy life? Roll the dice and see if you get sick. Sorry Jack, but this is an approach to government that I simply cannot support. This is one of the biggest reasons that I feel more comfortable with the Obama economic plan; McCain simply has not built in the kinds of middle and lower class protections that Obama has. If you have any doubt that Obama is doing more to look out for you as a member of these American social classes, just read their policies for yourself. Senator McCain has put very little effort into assisting those of us who bring home 4- and 5- figure incomes as opposed to 6- and 7-figure salaries—a luxury enjoyed by less than one percent of Americans.
Finally, but certainly not least importantly, comes the ever important struggle of “Work to live, or live to work.” Obama and Biden understand that while America remains strong, she does so because of the innovation and solid work ethics of the American people. Even so, it would be unwise to allow a person’s professional responsibilities to trump their personal lives. This is particularly important for Americans who are raising families.
“Obama and Biden will double funding for after-school programs, expand the Family Medical Leave Act, provide low-income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules.”
The Family and Medical Lave Act would be expanded to include businesses that employ 25 or more employees, more inclusive than the current requirement of 50 or more employees. It would also be adjusted to include more instances of need. This means that it would expand to include time for employees to participate in their children’s academic activities, to address domestic violence, and even to care for elderly family members.
Additionally, Obama would create a $1.5 Billion fund to assist state governments with the adoption of paid leave systems. He would double funding to the 21st Century Learning Centers program which would provide upwards of a million American children with access to quality, after school programs, an essential tool for supporting hard working American families. He would also reform the Child and Dependent Care Tax Credit in order to provide up to a 50% refundable credit towards the cost of child care. Also on the list of items under the Work/Family Balance header are protections against caregiver discrimination and the expansion of flexible work opportunities for American workers, including within the federal government.
Barack Obama’s Record
The Obama economic plan wraps up with a list of specific examples which illustrate the Senator’s record of backing the American worker and promulgating job growth and fairness within the workplace. I found this to be a refreshing close to this section, as the McCain site pretty much left me up to my own devices when it came to researching their actual contributions to the forwarding of policies that address the issues at hand.
My Summary
Clearly, I support the Obama economic plan hands down over the McCain plan. I’ve done my best to provide an objective analysis of the two, though I am aware of the fact that I have clearly been outlining the benefits of the Obama plan over the McCain plan from the start. For this, I apologize, but the bottom line remains the same. The McCain plan looks and smells like a Trickle Down, born of Reagan himself kind of mess.
The simple fact is that for as long as we Americans work for hourly compensation, no amount of fiscal vitality is going to improve our standard of living. Our employers could quadruple their profits and we would still be limited to our 40- or 80-hours per week paycheck. It is for this reason that under the “trickle down” model of economics, the wealth reaches down only as far as the pockets of those who own the means of production. The average worker sees zero benefit from this approach.
Obama seems to truly understand the unique position that lower and middle class Americans find themselves in today. And after all, because we comprise some 99% of the population, one would think that we should demand some sort of fair compensation. But while hoots and calls of “socialism” have been tossed around with regard to the Obama plan, the majority of such opinions are wholly uninformed and designed solely to play off of your natural inclination to oppose such ideologies.
Neither Obama nor Biden have any interest in doing away with American capitalism. For, while it is rife with inequity and laden with greed, it is also many thousands of times better than the next thing going. They stand for a strong American economy, based on a strong American worker. And that is why I support them. Hopefully, that will be why you support them now as well.
Aloha all! I just wanted to assure my readers of two very important points:
My last post, while obviously written out of frustration, was not directed at anyone who knows me well or reads this post regularly. It was caused by a two-pronged source of frustration in my life including my personal relationship with my parents and the way that I perceive the American Right to be reacting to Barack Obama’s platform. I wasn’t calling any of my friends idiots, so if you thought I was, you’re an idiot!
I have not forgotten about the second part of my analysis of the McCain and Obama economic strategies. In fact, I’ve been working faithfully on my analysis of the Obama economic plan. The simple fact of the matter is that, and I say this without dipping into my partisan tank, Obama’s plan simply has way more meat to it than McCain’s did. The article is nearing completion now, and will likely be published later this afternoon. I have also had friends and friends of friends asking to get a printed copy of each so that they can read them side by side, and I intend to fulfill those requests soon as well.
I’ve decided to conduct an independent study of the economic plans maintained by our two mainstream Presidential candidates, John McCain and Barack Obama. I came to this decision after enduring much consternation this election season regarding people who talk about these policies as if they have themselves authored the plans, despite the fact that most of what they say tends to seem very misinformed. There are people out there, and far too many I might add, who are planning to vote for a particular political camp based on their own, poor interpretations of the economic plans that McCain and Obama have put forth.
Here then is my careful analysis of each plan. The information and quotes that you will find here have come directly from the official campaign website of the relevant candidate. I will not be quoting any third party sources, nor will I be adhering to any third party analysis. The point of this exercise is to get an unfiltered look at each plan in order to better inform. As such, I will not be taking any third party shortcuts. Today we will begin with the John McCain economic plan.
The McCain website (JohnMcCain.com) immediately establishes that their economic plan covers eight major economic areas:
Workplace Flexibility
Relief for Families
Government Reform
Supporting Small Business
Cheap and Clean Energy
Better Health Care
Simpler and Fairer Taxes
Lower Barriers to Trade
Prominently placed on the front page of the McCain economy plan, in addition to the eight major areas, is the list of economic advisors who endorse McCain’s economic strategies. An aesthetic little banner scrolls through a list of names and credentials, though there is no indication of who supports what, exactly. This may be intended to imply that each of those on the list supports every facet of the McCain plan, though this seems unlikely. We’ll begin with Workplace Flexibility.
“John McCain understands that today’s changing economy is making it harder for parents to balance the demands of family life and their jobs. He believes that strong families require that parents be involved in the lives of their children. Flexible work arrangements can help families strike the right balance.”
This page opens with two examples of previous workplace flexibility related legislation that John McCain claims to have been involved with, including the Family and Medical Leave Act of 1993 (incorrectly titled on the McCain website as “Family Medical Leave Act of 1993″), and the Family Friendly Workplace Act.
While McCain’s vote for “Yea” on the former can be found in the United States Senate Roll Call Vote record (103rd Congress), McCain’s name is strangely absent from H.R. 6025 (110th Congress). In fact, even amongst several lists of amended co-sponsors to the bill, his name appears nowhere. Odd that he claims to be a co-sponsor when the congressional record seems not to support the allegation. This could be a typo or perhaps the congressional record is out of date, but it does warrant a mention.
The McCain workplace flexibility page goes on to explain that McCain supports portable health care benefits along with worker driven training incentives in order to allow for upward mobility within the middle and lower classes. The language does seem to paint a positive image of the McCain workplace, at least for motivated employees who intend to better themselves and further their careers. The requirement does not seem unreasonable to this analyst.
McCain would create a National Commission on Workplace Flexibility and Choice:
“…This Commission would bring together a bi-partisan set of leaders representing workers, small and large employers, labor, and academics. The Commission would make recommendations to the President on how modernizing our nation’s labor laws and training programs can help workers better balance the demands of their job with family life and to enable workers to more easily transition between jobs.”
It seems odd that the candidate whose platform is based squarely around smaller government and fiscal responsibility should want to create a commission with such a narrow focus, and right out of the box no less. It almost seems to be an unnecessary growth in government rather than a reduction. And to be totally honest, as a member of the working class I have to say that I feel there are far more important economic issues facing our nation right now. I’ve never had any real trouble with getting days off when I have needed them. This is probably because I don’t abuse my sick days or call out for clearly arbitrary reasons.
According to the McCain website, the commission would focus on the following issues:
Modernizing the nation’s labor laws so that they allow for more flexible scheduling arrangements
Ensuring that the nation’s labor laws don’t get in the way of working at home
Promoting telework so that workers can spend less time commuting
Making health more portable so that workers don’t lose their benefits when they switch jobs
Ensuring that workers can choose retirement plans that best suit their needs
Providing workers with more choice in job training assistance so that they can build the skills they need for new and better jobs
“John McCain will help Americans hurting from high gasoline and food costs. Americans need relief right now from high gas prices. John McCain will act immediately to reduce the pain of high gas prices.“
McCain’s method for reducing gas prices, according to his website, is to strengthen the dollar and give warning to foreign oil producers that our national plan includes oil independence. He professes that these two items, when used in tandem, will simultaneously bring the price of gasoline down. But realistically, “strengthening the dollar” is not something that can just be done at the push of a button. There are factors in that equation that exist independently of U.S. policy, no matter how well written or how widely supported that policy may be.
Even if McCain had some kind of an “ace in the hole,” able to bring immediate strength to the dollar, the impact would not specifically be on gasoline but would actually include many other commodities. To say that this is a means of reducing the price of gasoline is to make a blanket accreditation. It’s like claiming that by spending less of your money you will become more wealthy. Of course one affects the other, because it actually affects every part of the equation. It’s also much easier said than done.
McCain would support a “gas tax holiday” from Memorial Day to Labor Day. According to the figures posted on his website, this would alleviate $6.8 Billion of tax burden from the American worker. What the site does not mention is how it intends to make up the resulting $6.8 Billion gap in the U.S. budget. With two wars that are shaping up to be the most expensive armed conflicts ever in terms of dollars spent, it seems fiscally irresponsible to offer a gas tax holiday that would create such a huge gap in our budget while simultaneously giving out tax breaks to the oil companies. That money has to come from somewhere, obviously, and it certainly won’t come from reducing taxes or creating $7 Billion tax holidays.
McCain also claims to support the repeal of a $.54-per-gallon tax on imported ethanol. He mentions no means by which to support the American farmers who have reluctantly made the switch to ethanol markets for their corn harvests. They will likely be unable to compete with an untaxed foreign source of ethanol and will find themselves in the position of having changed their business model only to find that they can’t compete with foreign suppliers.
If you think that ethanol is a non-player in our economy, that is to say that if you don’t believe that by cutting off support for American producers of the corn-based hybrid fuel we will experience any ripples in our markets, just consider the recent moves made by General Motors toward their line of FlexFuel vehicles. They now offer 11 models that are E85 ethanol capable. To walk away from ethanol altogether at this point would have a negative impact on American farmers and industry alike.
For homeowners McCain has what he calls his “HOME Plan:”
“Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home’s market value. “
This is an interesting claim, though the language of “deserving American family or homeowner” worries me some. Who will be making the assessment of what “deserving” means in any given context? McCain also states that he would prevent 200,000 to 400,000 Americans from losing their homes by adopting elements of a proposition being floated by Democrats.
“…at the same time, McCain is calling for aggressive federal action to help keep 200,000 to 400,000 families from losing their homes. That plan has many of the elements of a proposal by Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn...”
Think carefully about the math there. “200,000 to 400,000″ is the same as stating, “200,000 plus or minus 200,000.” That’s not a margin of error, that’s a non-claim. If you are comforted by a statement like that then let me assure you that I too can be of assistance to you and yours. I will gladly give you $1,000,000…give or take $1 Million. See my point?
Plus, according to the McCain website, he would put the burden of distributing applications for the HOME Plan program upon the U.S. Postal Service. Cross-tapping of government agencies is not an efficient way of running a bureaucracy. You can’t save one agency money by charging items to another. This doesn’t offset costs, it merely shifts them around.
Finally, McCain makes a very brief reference to assisting college students who face the potential of evaporating loan opportunities as a result of the present trend in the American banking community toward seeking government bailouts. McCain claims not to support bailouts for financial industry businesses that might fail as a result of improper credit risk assessment, yet he closes out this page by saying that he intends to “expand the lender-of-last-resort capabilities for each state’s guarantee agency.” In other words, he wants to federally subsidize loans for companies that offer them to risky borrowers, a policy stance that he claims to be against as I have already pointed out.
“John McCain will balance the budget by the end of his first term. The near-term path to balance is built on three principles:
Reasonable economic growth...
Comprehensive spending controls...
Bi-partisanship in budget efforts…“
It is no surprise to hear that a Presidential candidate would like to balance the budget. But, much like “strengthening the dollar,” it is a claim that is far easier to make than to make good on. The first bulleted point on this McCain campaign page seems like a no-brainer, “…historically the greatest success in reducing deficits (late 1980s; late 1990s) took place in the context of economic growth.” How profound; we paid off more debt more often when we’ve had more money. What a massive realization!
McCain’s next statement is perhaps the most frightening for Lower and Middle Class Americans yet:
“In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid.“
Sure, turning our backs on senior citizens in their retirement and denying the poor critical medical assistance is a guaranteed way of reducing expenditures. It’s also a surefire way to go to hell if you subscribe to traditional Christian values. If you do not count yourself as a Christian, as I myself am somewhere between an agnostic and an atheist, it is at least a questionable way to show voting Americans that you stand behind them.
If you look at the McCain website, you’ll notice the lack of any alluding toward where Americans will turn for sustenance in their retirement, or when they are gravely ill but too poor to pay a doctor. Then again, back on the “Workforce Flexibility” page McCain did make mention of allowing seniors to work until later in their lives. Perhaps he plans to do away with Social Security by simply not allowing us to retire?
McCain would also show deference to “Small Businesses” by “…minimizing expensive mandates - such as those for health insurance and pro-union initiatives like card check.” Yet another head scratcher in the McCain economic plan. He states that he wants to increase workplace flexibility, partially through making health care benefits more “portable,” but he concurrently supports eliminating the need for small businesses to provide health care to their employees. Sure, no health care is more portable than any health care. But is that really a solution that we want to explore?
McCain goes on to state that he will provide incentives for corporations to keep good jobs in America as well as deterrence to corporations who would otherwise export their labor needs. He says that he will do so by providing tax incentives to corporations who employ Americans, by encouraging corporations to invest in technology, and by balancing the budget. I’ve already pointed out that the third item in this group is not something that anyone can claim to have direct control over.
As for the first item in that group, I personally believe that tax incentives have proven wholly ineffective at reigning in big business. In fact, more often than not such fiscal experimentation leads to creative energies being put toward tax avoidance rather than toward labor market improvement. And as for the second, and only remaining item in that group, I would first state a question. Has investment in technology improved the labor picture or worsened it? If you consider automotive manufacturing, it has clearly cut jobs by the thousands. Conversely, it does create a few tech sector jobs, but the number of jobs lost is never equal to the number of jobs created. This is not to say that our nation would benefit from avoiding technology, only that by embracing technology we do not aid our labor markets.
In terms of government spending controls, McCain begins with what seems to this analyst as a very strange statement that seems to be made in detachment from reality:
“The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.“
Two questions; 1) What victory?, and 2) What savings? Honestly now, is Senator McCain suggesting that we’ve been profiting from this war and therefore we’ve somehow been able to create a savings from that profit? Because that certainly doesn’t seem to be the tone of the headlines that I’ve been reading:
And the list goes on, and on, and on. I’ve chosen to list only the first three to pop up in the Google search results for the purpose of brevity. But the simple fact remains that the cost of current U.S. policy is no secret. The payout, however, certainly seems to be.
The McCain website then provides an answer to one of my above questions, “What savings?”:
“A one-year spending pause. Freeze non-defense, non-veterans discretionary spending for a year and use those savings for deficit reduction.”
Read that as absolutely anything that isn’t directly related to the business of war will phase out of existence for at least one year, assuming that the McCain administration wouldn’t then find it decidedly convenient to continue such a policy. Folks, that means health care, that means education, that means Homeland Defense. This essentially means that—for the term of no less than one year—your government will not be there to serve you, unless you consider furthering the depletion of our already nonexistent funds (hence the deficit) through the continuation of one very nearly failed war with Iraq and one wholly ambiguous War on Terror.
Both of those wars are inflating the national deficit exponentially. Neither has provided an immediate, tangible benefit to the American people. If Americans are concerned about their safety at home, they should encourage their representatives to fund the department of their government that is actually charged with providing that safety—and people, that just is not the Department of Defense, somewhat ironically. Onus for providing national security actually falls upon the Department of Homeland Security. If the goal is to defend our nation, why open our coffers to the aggressive, occupational department of our government rather than fund the defensive and protective department? This just simply does not make sense. But it’s standard procedure, and so Americans often just go along.
McCain then mentions the importance of bi-partisan cooperation when addressing the economic factors facing this nation. This may be because so much of McCain’s fiscal policy tends to borrow from concurrent efforts being made by Democrats. It’s almost as if the Senator from Arizona has chosen to “upgrade” Democratic policy as opposed to floating his own.
One policy that appears to be truly germane to a potential McCain administration:
“McCain could use the bi-partisan commission structure used for the Defense Base Realignment and Closure Commission (BRAC). Such a commission could be required to report to the President who would then submit the recommendations to the Congress for a straight up or down vote. “
For those who don’t know, the Defense Base Realignment and Closure Commission (BRAC) was responsible for the closure of a slew of military bases and installations around the globe. Now, I am not arguing that reigning in military spending is a bad idea. But certainly if John McCain wants to make the case that America is in the position of needing a strong military, then why is he suggesting on his campaign website that we should close down more bases and further restrict our global military operations? Again, it makes no sense.
Having served in the Navy myself, I can tell you that the BRAC agenda was one of the most reviled by members of the armed services. I can recall countless “old timers” complaining about the effect that BRAC “realignments” (the term was almost always accompanied by the speaker pantomiming quotation marks) had on the nation. The effects weren’t limited to military strength and agility either, though those are two major problems that result from BRAC base closures. The local economies that surround a closed military base are often decimated by the sudden withdrawal of millions upon millions of government dollars from their incomes and tax revenues in the form of soldiers, sailors, airmen, and marines spending their hard earned checks “out in town.” Take that away from an otherwise small town, and watch the bankruptcies begin to roll in with the tide.
There is a good bit of what comes across as fluff text filling up the next few screen fulls of this page. McCain makes the typical political claims that he aims to reduce corruption, enhance accountability, serve with indifference to party or creed, and so on. These are conversations that any politician would have well rehearsed and ready to go at the drop of a hat. Then he returns, albeit briefly, to Social Security.
McCain apparently supports private retirement accounts as a supplement to, but not as a replacement for government entitlements. But he has also already indicated that Social Security is one of three major areas of government spending that he intends to eliminate. He talks here about reform, but he does not reassure the voter that he will not simply make Social Security go away.
Finally, he states that he will do what amount to good things for health care, but he excludes any mention of what exactly those good things might be. Of course, being that Medicare and Medicaid are the other two items on that list of government programs to be phased out by McCain, one is left to wonder what McCain’s idea of a good thing really might be. It also leaves them asking the question, “Good for who?”
Here the McCain website seems to wander a little. There was more mention of policies that might support small businesses on the Government Reform page than I found in the opening paragraphs of the Small Business page. The page begins with a short word about reducing energy costs. There is mention of new construction for tens of new Nuclear generation sites as well as investment in clean coal technology. How this is supposed to relate to the small business is not exactly clear.
The Small Business page continues with a short word on Health Care. Once again the McCain campaign paints the corporate “burden” of providing health care to employees as a problem with the economy. But I ask, how much larger will the burden then be on the American Hospitals who provide health care to an increasing number of uninsured? Do we “save” the small business by sticking it to the Health Care industry? Health care is one of the fastest growing industries in the country right now. Why in the world would we put a stop to that growth—which provides high wages in skilled and rewarding professions—just to reduce the ability of the American workforce to pay for the care that those new jobs were created to provide? This doesn’t seem to be an overtly wise approach to Health Care in my analysis.
Roughly midway through the Small business page, the conversation returns to Small Business. Arguments are again made for reducing corporate taxes and encouraging R&D and technology investments. While technology is a wonderful thing that often brings high paying jobs for highly skilled workers, it doesn’t often bring the “highly skilled workers” along with it. If McCain won’t be supporting lenders who provide tuition assistance to American college students—arguably the riskiest demographic to lend to—how exactly are Lower and Middle Class Americans supposed to get qualified for all those wonderful new jobs?
McCain closes out the Small Business page by stating that the creation of new markets abroad is vital factor in the success of our economy. He then contradicts a previous policy stance that claims to shunt the idea of exporting labor. Here he claims that allowing American corporations to export goods and services will have a positive effect on our economy. But earlier in his economic strategy he claimed that he is interested in, “Enhancing international competitiveness to keep jobs here; not abroad.” Well Senator McCain, which is it?
Here the McCain campaign seems to find some coherency, and if not that perhaps at least a hint of clarity. This page opens with some background and policy plans for three major areas of energy reform:
Nuclear Power
Coal
Renewables
McCain intends to construct 45 new nuclear power plants by 2030, though the fact that his term in office faces a maximum expiration date of December 2016 seems to be an item for consideration when examining this intent. Ultimately McCain sees American building 100 new nuclear plants.
“A rough estimate is that 45 new nuclear power plants will create roughly 700,000 jobs - jobs in construction, engineering, operation and maintenance.”
Notice though that two of the four categories of these “new jobs” are temporary. They only include the designing and building phases which means that once the projects are completed, those jobs go away. Only the other two categories of operation and maintenance would create long-term employment opportunities, and then only to those elusive “highly skilled workers” that I have already mentioned.
When it comes to coal McCain intends to, “commit $2 Billion annually to advancing clean coal technologies.” This is an admirable plan; it would be more admirable though to promise that those $2 Billion would come directly from a Department of Defense spending reduction. Such promises are not likely to come. McCain also mentions that he would like to enhance the coal production capabilities of our nation in order to allow for larger export of our coal to nations like China who have the infrastructure to consume the coal. No mention is made regarding the environmental impacts of allowing an unregulated nation such as China to see such growth in their consumption of unclean technologies for power generation.
The area where McCain seems to have it right is in his affirmation that renewables are of growing importance in the larger energy picture of this nation. He states that permanent tax credits for the booming solar and wind power industries will enable the gradual shepherding of the fledging industries into a commercially viable market. He does not, however, say what those credits would be or what one would have to do in order to qualify for the credit. Such ambiguities are not often fertile grounds for political support.
Some very moving words are then said about domestic oil and gas production. If the claims made by the McCain camp on this issue are true, then we are certainly losing much American wealth by exporting oil and gas production overseas. This much I agree with. But the numbers can be deceiving. McCain points out that:
“Estimates from the Minerals Management Service indicate that technically recoverable resources currently off limits in the lower 48 OCS total 18 billion barrels of crude oil and 77 trillion cubic feet of natural gas.“
Here are the numbers they don’t offer you:
Average number of barrels of oil pumped daily by OPEC nations: 31.9 million.
Number of months required for OPEC nations to pump the entirety of the 18 billion barrels available for production domestically within the U.S.: 18.
A drop in the bucket, for sure. What happens to all of those new jobs when we’ve tapped our domestic resources, in under two years, and there simply is no more oil to pump here at home? Unless concurrent investments in renewables are able to completely offset the American market for fossil fuels, a major economic crisis will loom on the horizon. I hate to sound so ominous, but the fact is that domestic drilling really is a stop-gap measure at best. To base a nation’s entire energy policy around a two-year, temporary fix is like playing Russian Roulette with America’s economic and energy futures.
Next on the Cheap and Clean Energy page, McCain suggests some fiscal incentives for companies who play an active role in the transformation of America transportation. But the figures he has posted are laughable, even when compared to his $2 Billion in planned funding for the development of the notoriously dirty use of coal for power. He would offer $600 Million in what he actually calls “prizes” to a company who improves battery technologies for electric vehicles. A $300 Million prize would go to a company who improves battery and gasoline efficiency in hybrid vehicles. It almost seems that his sincerity for supporting renewables is less than candid.
McCain continues to discuss transportation reform and suggests that through more efficient energy consumption we can reduce the need for energy production. He cites high-efficiency light bulbs for American homes and the “greening” of our federal government as priorities.
This page is perhaps the least impressive of the entire McCain economic plan. The majority of the ideas on this page are presented in an incredibly brief list of buzzwords where each idea is described in less than a paragraph. Though the list does outline some concepts that the McCain campaign wants us all to know that they feel are important, there is almost no depiction of how they would bring a resolution for any of these concepts to fruition. In fact, this page comes off sounding more like a list of wishes than a plan for action.
The list of McCain’s health care buzzwords is as follows:
Cheaper Drugs: Low cost medication is desirable.
Chronic Disease: Chronic disease is undesirable and expensive.
Coordinated Care: Having multiple caregivers is preferential.
Greater Access and Convenience: More is better, and quicker.
Information Technology: Technology improves safety.
Medicaid and Medicare: Reform is needed to avert fraud.
Smoking: Cessation is desirable.
Tort Reform: Rampant suing of medical caregivers is a burden.
Transparency: Secrecy and complexity are undesirable.
I am really disappointed by the massive lack of any sort of suggestion relating to how any of these issues will actually be addressed from a policy standpoint. The list does, however, fill up an entire page or more with what seem to be well thought health care catch phrases. Still though, considering the fact that there is an entire section of the McCain website dedicated to health care, one is left wondering if this page was seen as fluff material by the web design team.
Following the list are three paragraphs that deal with reform and the promulgation of portability and lower prices within the health care system. As with the list above them though, these issues are broached but never quite addressed from a policy standpoint. Here McCain mentions that he would give a blanket tax credit out to all American families in the amount of $5,000 ($2500 for individuals), what it calls “cash towards insurance,” though it clarifies by mentioning that the money would actually go straight to the insurer and not ever into the hands of the taxpayers themselves. This seems more to me like a health care industry subsidy than it does a tax credit for the American worker.
This page follows the example set by the previous page on health care in that no one item seems to have warranted more than a single paragraph of discussion. The very first item on the page relates to maintaining low taxes. “John McCain will keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax. ” You’ll notice that the McCain camp have taken care not to mention middle or lower class tax changes here.
This seems to be the single most common item of misunderstanding between the McCain and Obama followers that I have spoken with in person and, as such, is the primary reason behind my decision to write this analysis. The simple fact is that while McCain tiptoes around telling us that under his plan corporations see tax cuts of 10% and the rich keep their current tax rate, but the Lower and Middle classes will see tax hikes. One can at least take comfort in Obama’s tax hike floor, which has been openly declared at the $250,000 per year income level. This means that unless a family makes a quarter of a million dollars per year or more, they will not see their taxes go up.
In fact, under Obama’s plan an effort would be made to triple the Earned Income Credit—which, as a parent I can tell you for certain is the single most important fiscal policy that relates to me as a lower class income earner and a parent of two) . Obama would also move to reduce or eliminate taxes on retirement benefits. It seems odd to me when I hear senior citizens and my fellow members of the American Lower Class talking about how Obama wants to increase the size of government and therefore raise taxes on us. This notion is purely misinformed.
The Simpler and Fairer Taxes page of the McCain economic plan closes with more discussion, albeit brief, relating to technology and innovation. There is mention of eliminating taxes on the Internet which McCain says, “threaten this engine of economic growth and prosperity.” This sounds well and good, though for the life of me I can’t recall the last time I heard Americans complaining about how the “Internet Tax” was destroying their lives. Also, McCain would halt any new taxes that might otherwise be placed upon cell phones.
Oddly enough, there are only three paragraphs on this page, and at that only the first has anything to do with Lowering Barriers to Trade:
“John McCain believes that globalization is an opportunity for American workers today and in the future. Ninety-five percent of the world’s customers lie outside our borders, and we need to be at the table when the rules for access to those markets are written. To do so, the U.S. should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules. “
For reasons unbeknownst to me, the final two paragraphs of the Lower Barriers to Trade page deal with unemployment benefits reform and improved access to local and community colleges. The shortest page of the entire McCain economic plan, I almost get a sense that the author was growing impatient by the end of writing this section of an eight-part plan for the economy.
All in all, being that I don’t own a corporation and that I’m a member of the American Lower Class, I really have not seen any indication from the McCain website that his party has any concern for me. Indeed, as per the relative norm, I tend to get a sense of their penchant “bootstrap” phraseology, and that has always left a bad taste in my mouth.
