Politics

With the political conventions beginning this week, the Presidential campaign is entering the phase when the general public starts to pay attention. I have not written about politics nearly as much as I've been thinking about it, but I image as we get closer to November I'll be writing more of those thoughts here.

The New York Times Magazine published a great article about Obama's economic policy today. It's long, but worth reading. My short summary will do no justice to Obama's approach, but here it goes anyway.

“The market is the best mechanism ever invented for efficiently allocating resources to maximize production,” Obama told me. “And I also think that there is a connection between the freedom of the marketplace and freedom more generally.” But, he continued, “there are certain things the market doesn’t automatically do.”

When an Obama presidency would interfere in the market, the above quote will provide guidance. Where does he think the market fails? The fact that over the past couple of decades workers have not benefited from the great gains in efficiency and wealth. The fact that the market is fundamentally incapable to dealing with a non-commodity like health care. The fact that the big business, like the oil industry or banking or big pharma, rely on huge government susbsidies and knowledge that the government will bail them out if they screw up. The fact that the market does not reflect the true costs, both economic and environmental, of a carbon-based energy policy.

This article mention that Tax Policy Center's analysis and comparison of Obama's and McCain's tax plans. I don't know why Obama has not been focused on this, but I hope it is a major part of his campaign following the convention for purely political reasons. Much of the country believes that McCain is a tax cutter and Obama is a tax raiser. They think that their tax bill will be smaller under McCain than under Obama. This only true for the top 20% of the country. For the vast majority of us, McCain's proposal will leave up with a higher tax burden than Obama. For 80% of the country, Obama is the tax cutter.