Two Takes on Obamanomics
As the Deomcratic Party Convention gets underway in Denver, The New York Times Magazine makes an attempt to unpack Obamanomics. In a lengthy, thoughtful analysis that is well worth reading, David Leonhardt finds that Senator Barack Obama’s economic ideas are complex and nuanced. Whether you agree with Obama’s policies or not, it is clear from the article that he has given the subject a great deal of thought. Obamanomics seeks to incorporate lessons from the successes and failures of previous presidents of both parties, albeit from a Democratic perspective. However, the economic world is increasingly complex, presenting Obama with a significant challenge in communicating a nuanced economic policy in campaign-style soundbites.
Leanhardt contrasts Obamanomics with Senator John Mccain’s plan to largely continue with the Bush strategy, which he thinks is too bad:
For the time being, only one party is applying the lessons of history to the country’s biggest economic problems. There is no great battle of new ideas, and that can’t make it more likely that those problems will be solved.
Leonhardt is far from certain that Obama’s plan will succeed, citing his lack of administrative experience and other factors. “But it’s not entirely clear what the alternative is, at least in the broad sense and at least for the time being.”
But writing in Barron’s, Jim McTague is convinced that Obamanomics would be bad for the economy. He notes that while most in the business world “would be more comfortable with the Republican candidate, the vast majority don’t think that either man would affect the economy much differently than the other. The vast majority, however, are wrong.”
The top 1% of taxpayers targeted for tax increases by Obama account for more than 20% of all adjusted gross income, McTague writes. “And these folks tend to plow a lot of their money into businesses — from family operations to blue-chip stocks — to say nothing of shopping trips and travel.”
In other words, cutting their after-tax income could deal another blow to an already-hobbled economy.
In contrast, “McCain’s plan is more growth-oriented than Obama’s because it punishes no one group and, by lowering corporate tax rates, makes U.S. businesses more attractive to American and foreign investors.”
Still, McTague holds out hope that “Obama, who’s no dummy, might think twice about raising taxes during the worst financial crisis in 78 years.”
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