I caught the debate on Saturday night (I say “caught” casually-in reality it was the centrepiece of my evening’s viewing). It was shown a day later here in the UK which gave me an opportunity to compare it to the reactions in the media in the aftermath. Mostly the consensus was reasonably accurate – that Obama was somewhat stronger in the economic section, the foreign policy portion was about even but that this would probably help Obama a little as he is considered weaker in this area, and that nobody landed a knockout punch (does anybody nowadays). There are a couple of areas I want to pick up on though:

1. The foreign policy area was pretty interesting. McCain, to his credit, showed a wide knowledge about various global issues and a clear analysis of various conflicts without resorting to the naked scaremongering of Bush/Cheney/Rumsfeld. However, he did try to harp on about possible naivity on the part of Obama. But Obama was well prepared enough to bat these issues away.

2. Obama has received some criticism for how many times he said McCain was right. I think this is unfair as he usually followed this praise up with a but or however and a clear description about where McCain’s argument fell down. There’s no point completely disagreeing with your opponent if your opponent is making some sensible points – you’ll only come across as overly partisan and truculent.

3. What was up with McCain never looking or engaging at Obama – was it rude and disrespectful? Was he afraid that Obama would take apart his arguments? Or did he just forget the agreement that this debate was supposed to include inter-candidate exchanges? The agreement, as I understand it, was that Palin wouldn’t have to go toe-to-toe with Biden, as long as the presidential debates were proper debates instead of recent affairs where candidates, as Martin Sheen said in an episode of The West Wing, give two stump speeches in the same room and nobody learns anything new. If he didn’t forget and chose to ignore this agreement what does this indicate about about a potential McCain presidency? Will he completely ignore Congress and the Judiciary when they raise constitutionally mandated objections? Will he agree not to bomb-bomb-bomb, bomb-bomb Iran and then go ahead and do it anyway? Just how often will he renege on promises when he can’t even keep a promise to face his opponent?

4. McCain kept telling us what a maverick he was in the senate. This is a bit like Obama saying how charismatic he is. That should be for other people to decide, not him. And besides, he may have been a maverick in earlier times but what has he done for us lately?

5. And here’s the big point – when asked about how the Wall Street bailout plan would affect their spending plans, Obama admitted he would have to delay or possibly limit some spending but that a lot of fundamentals would stay in place. McCain said that apart from the military and veterans affairs he would suspend all spending. WWHHATTT??!! HAS HE COMPLETELY LOST IT??!!! Apart from the misery this would cause for many people, does he want the economy to grind to a complete halt?? Consumer confidence is in the toilet (0ver 80% negative, according to Gallup), so consumer spending is restricted. The fed’s interest rates are at 2%, I read, so not much scope there. The only way for the government to get spending going again may be to go and do it themselves. It becomes a matter of basic Keynesian economics, the type of policies that Roosevelt used to drag America out of the Great Depression, through a program of public works and transfers to those on the bread line.

For those of you who may not be familiar with Keynesian economics (I’m not an expert myself, but I do know a little), this states that an extra dollar injected to an economy will create more than a dollar in wealth. This is because the person you give the dollar to will spend a portion of it and that the people who receive this expenditure will spend a portion of that and so on. The actual amount created will depend on people’s Marginal Propensity to Consume, or in layman’s terms, how likely people are to spend locally and not save or import. So common sense would tell us that to really get the economy going, extra money should be given to those who will spend it even when confidence is low, quite simply because they have little scope to set aside funds – i.e. poor people – through government transfers or job creation through public works. McCain actually wants to cut them off completely as a way of getting the economy going!

And this brings us to the BIG LIE about tax cuts that the Bush Administration told Americans at the start of the 21st century – that tax cuts, 46% of which went to the richest 1%, would stimulate the economy and bring wealth to everybody, so don’t worry about the morality of giving away the budget surplus to people who don’t need it. And even apart from the morality, this is a ridiculous rationale. Rich people, when they get extra cash, are less likely to rush out and spend locally on things they couldn’t afford before, simply because they probably have pretty much everything they want. Instead, they are more likely to save the money, or if they do spend it, possibly on expensive imports and thus a good portion of their share is lost to the economy. And the proof is in the pudding. Over the last eight years growth became sluggish to the point where America is on the brink of recession.

So, simply from the cold, rational, non-moralistic point of view of wanting to get the economy going when it’s starting to sputter, the best thing to do is give it to those at the lower end of the socioeconomic ladder. And don’t worry, richer people, I’m sure that as a result of their spending, there will eventually be an increased flow of funds into your pockets. And more than likely it will work faster than the Trickle-Down economics of the past eight years.

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Comments
  1. fifthdecade says:

    Very well written. I like your reversal of the trickle-down philosophy!

  2. LuRain Penny says:

    Hi Sam,

    We think along the same lines about a lot of things. You much more intellectual and intelligent than me, but still make your points accessible. Plaudits!

    You know what I say about Reaganomics –
    Trickle down means they piss on you from a high place.
    That’s what a peon is.

    ;~)

    Would you mind if I added you to my blogroll? I think my readers would find your work stimulating.

    Best of Luck,

    LuRain
    x

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