Osler's Razor

McCain's tax policy is exactly what Bush's was-- keep the tax cuts for the rich that created the wealth disparity we now suffer from.

Plus, with the deficit what it is, any responsible president is going to have to raise taxes. I know, you guys still believe in tinkle-down economics, but the facts speak for themselves-- Reagan cut taxes for the rich, and the deficit bloomed. Same with Bush II. Under both, the GDP grew, but not income for most Americans. The financial gains were limited to the rich.

The closest we have come to a conservative on fiscal matters is Bill Clinton.
 

Nice try.
 

I personally have issues with the health care.

Taxing the health care benefits provided by employers as ordinary income. Does this mean we pay social security taxes on this amount as well? Small business already have a hard time offering health care benefits to there employees at a reasonable price and now we want to tax these benefits. It is no longer a benefit at that point. The benefits offered by big corporations have dwindled while the cost to the employee has increased.

Something has to give. We have our own insurance through Humana and I can assue you that it is no bargain for a catastrophic deductable. We have no tax benefits for providing our own insurance.
 

To me, McCain's selection of Palin was very cynical. He seemed to be purely checking off the boxes: Alaska (to Obama's Hawaii)- young - female - ultraconservative - attractive -- unknown-- attention-getting.

And especially in retrospect, it seems almost unkind to her to have selected her. From her point of view, it would be very very hard to say No under those circumstances (five children notwithstanding), and she's been put in situations for which she is unequivocally not ready. To me, that's poor judgment on his part, appearing to be the desperation of somebody who wants to get elected at all costs.

I'm sure McCain is capable of some good judgment, too, but to me that has not been evident during the campaign.
 

Well, at least McCain will get one vote.
 

I'm gonna vote for him too, so that is at least two votes!
 

Make that three votes.

IPLG, you had me cheering until the concluding caveat.

No apologies for McCain. He ran in a year almost impossible for a GOP victory and against an unprecedented media headwind.

I am proud of Johnny Mac.
 

While this is totally off topic, I'd like to hear people's take on what impact, if any, shows like the Daily Show and the Colbert Report will have on the election. I don't have a tv to watch comedy central; however, I watch it everyday on the internet and both have gone out of the way to mock McCain. I was wondering what possible impact that may have since the shows have a following with the younger voters.
 

Daily Show & Colbert? Zero impact. Younger voters have historically been highly motivated during the campaign and highly apathetic on Election Day. It's just too hard to wake up and stand in line to vote but, hey, the victory party, that's another story.
 

Well, I'm not going to vote for McCain. If you love your mamma you'll vote for Obama; if you're insane you'll vote for McCain. (My kids told me that one - no disrespect intended for the guest blogger or other regular commenters.)
 

This is fun.

I’m voting for Barack Obama and you should too:

Barack Obama is a liberal Democrat who has the right plan for our country. While McCain has been involved in high profile fights with his Party in the past he tows the conservative line on large tax cuts for the wealthy while pushing austerity on social spending for the poor, on an aggressive and bellicose foreign policy without a decent respect to the opinions of our allies and the rest of the world, and on social issues where he opposes abortion rights even where it is necessary for the health of the mother. Barack Obama is a highly respected U.S. Senator and former Illinois legislature who has lead on ethics reform, stopping nuclear proliferation, and opposing the Iraq war.

John McCain continues George W. Bush’s tradition of letting polls and political manuvering drive his domestic policy agenda. His proposals are a grab bag of gimmicks, some that will do nothing to help the problem (the summer gas tax cut) others are a massive give away to corporate interests (the mortgage buyout proposal, which differs from current law only in that McCain will pay banks the full price for distressed mortgages), and those that will actively harm America (a neo-Hooverite spending freeze, that seems to only even apply to programs which help the poor, during a recession). We have seen how this approach works for the past 8 years; ballooning spending that doesn’t even work and only makes the rich richer. Barack Obama and a Democratic Congress will take domestic policy seriously; providing tax cuts to the middle class, a health care reform that gives more access to the uninsured and holds down prices, and economic stimulus that will get the economy moving again.

John McCain’s signature policy of cutting government waste is incoherent. Earmarks are less than ½ of 1% of the budget. Further, getting rid of them does nothing to remove corruption - the money is still spent - its just appropriated by an executive agency branch beauracrat instead of Congress. The idea that corruption is what causes our spending largesse is a joke. Entitlement and Defense is where we spend our money (over half the budget is Social Security, Medicare and Defense), and another 9% is debt servicing. The budget cannot be balanced without making deep cuts in these valuable programs or by returning taxes on the richest quintile to 1990's levels. McCain wants to extend and expand on Bush’s regressive tax policy. Obama wants to return to the broad middle class based economic growth of the 1990s.

McCain is wrong on Iraq and defense policy in general. His foreign policy, like George W. Bush’s, is simplistic and manichean. He is consistently in favor of hard line measures rather than doing the hard work of diplomacy. His signature plan is a league of democracies which would alienate China and Russia as well as other states who we need to support our efforts to keep Iran from getting nuclear weapons, and bring pressure against Al Qaeda. McCain simply does not see the immense damage his desire for a long term U.S. presence in Iraq will do to all our other foreign policy goals. And it will use up the troops we need to win the war in Afghanistan, where the leadership of Al Qaeda is and has been for the past ten years. Obama has consistently been opposed to the war in Iraq. He understands that just because a country’s leadership is evil does not mean we should go to war with them, else we would never again have peace. He is not afraid to talk to our enemies and reach compromises with them. McCain’s hardline posturing on these issues will get us nowhere.


John McCain’s health care policy is a nightmare. It taxes health care benefits for the first time thereby destroying the employer based system while providing nothing to replace it. You get health care benefits through your employer so that you can pool risk. McCain’s plan is fine as long as you are healthy, but try finding coverage on the individual market if you have ever been sick; a family that is already suffering from, for example a child with cancer, should not lose its coverage because it cannot afford the exhorbitant costs of insurance if the companies no you will need medical care. Barack Obama’s plan solves this problem. His plan will let you keep your coverage if you are happy with it, while creating a basic federal plan that will have set minimums to provide for the uninsured.

On taxes Barack Obama wants to give money back to the poor and middle class, those who have not seen their real wages rise over the past 8 years even while corporate and executive compensation skyrocketed. Your FICA taxes have been covering the short fall in the federal budget for years, which underwrote Bush’s tax cuts for the wealthiest which McCain wants to expand. When the wealthiest few have captured the vast majority of gains in the past 8 years; giving families that make under $150,000.00 a year a tax cut (including credits) is not a “wealth transfer” it is simple fairness.

On Social Security, McCain supports privitization, putting the money in the stock market - which all of you who have looked at your 401Ks recently should understand is a bad idea. Social Security should remain public because its an anti-poverty program. There probably are slightly greater returns over the long run if you are in equities, but you then bear the risk of having a massive downturn when you retire. A public program ensures that we never have elderly people, who may be to old to work, in stark poverty ever again.

Our corporate tax rate is low; it has a higher base rate, but more exceptions and loopholes than say Ireland. McCain wants to give corporations a low base rate AND keep the loopholes. Now is not a time when we need more corporate giveaways.

John McCain is an honorable man whose service to our country is deserving of great respect, but his judgment and ideas have shown that he is the wrong man to lead our country. Further, he is trapped in a party that is fundamentally wrong for our country at this time. His Republicans opposed Secretary Paulson’s economic rescue package - favoring more tax cuts instead. They had John McCain chose Governor Sarah Palin for his running mate, a woman who has no experience or demonstrated judgment on national policy - who was chosen to re-start our divisive and distracting culture wars at a time when our country faces serious problems. This influence will continue to harm his presidency.

Barack Obama has had a shorter time in public service, but in that short time he has excelled and demonstrated competence, character, and leadership. This is why he has won the endorsements of notable public figures such as Warren Buffett and Collin Powell. We need a real change in Washington, D.C., we should elect Barack Obama.
 

1. "Going against" one's own party is not, in itself, a virtue. To the extent that McCain has gone the "right" way (e.g. opposition to torture) I am pleased; to the extent that Obama has gone the "wrong" way (e.g. the FISA debacle) I am displeased. Whether either of them was or was not opposing their own party's line in these cases is entirely irrelevant to me -- and since I support the Democratic "party line" more often than not (and to the limited extent that such a thing exists) I hardly see Obama's record as a problem.

2. McCain has indeed opposed earmarks effectively. He then cut himself off at the knees by selecting a running mate who has eagerly pursued them, and who seems to thinks that "earmark" = "budget line item."

3. Whatever McCain once was in the realm of military policy, he is now disturbingly erratic (we need Russia's cooperation -- let's kick them out of the G8!) and surrounded by the worst of Bush's discredited former neocon advisers. He's prepared to keep us in Iraq indefinitely, and I agree with the Iraqis that we should leave ASAP. By the way, I don't understand what you mean when you (indirectly) say that the U.S. is a "force for good." Usually, when I hear this phrase, the speaker seems to be implying that because we are good and have good intentions, our actions are inevitably good.

4. McCain's idea of a spending freeze is extremely foolish, since belt-tightening is the last thing our economy needs right now. Let's not repeat the mistakes that led to the Great Depression.

5. Unless you have something against early childhood education, your argument boils down to "spending is bad." I deeply disagree. Spending on some things is bad. Spending on others is good. I put education, infrastructure, defense, health care, and energy independence (among other things) in the "good" column.

6. WHY should health benefits be counted as income? They are excluded from gross income, just like other things we're not taxed for. Do you have a practical objection to this?

7. "The other side's" idea is not vague at all, and I would have expected better of you. It is a quite precise proposal, and you can read the details right here. For those not paying Federal income taxes, this will be a reduction in the other taxes (payroll, etc) that they do pay, and that you mention a few sentences later. I consider the fact that most Americans will collect more than they put in to Social Security to be a feature, not a bug -- that's what a good retirement plan does!

8. Social Security doesn't need serious reform, only minor tweaking.

9. If "the number of former compatriots, colleagues and staff members who are volunteering to get him elected" is proof of McCain's leadership, what is proved by the number of such people (quite a few) who have publicly stated or implied that his temperament makes him unfit for office?

10. When considering a person's qualifications for a job, the relevance of experience in dissimilar jobs is that such experience can act as a proxy measurement for the person's judgment, steadiness, knowledge, and effectiveness. In this election, we don't need to turn to such a proxy, since the campaigns of the two candidates provide direct evidence of the sort of executive that these two men would be. Each campaign is a vast operation, spread across all fifty states, with a budget of hundreds of millions of dollars, providing many, varied, and very public tests of character, and answerable directly to the candidate. I think the results speak for themselves.
 

And I wonder, too, IPLG, at your mention of McCain's "rambling, on-the-fly style which worked well in New Hampshire but not so well on the national stage."

It appears to be more than style: it appears to be substance, decision-making, not just style. Styleis how you say it; substance is what you do, or what you propose to do, how steady you are in assuring people of what you'll do.

And yes, I'm going to vote for Obama anyway, but if McCain does win, his on-the-fly decision making worries me a lot. Couple that with the flimsy backup of Sarah Palin's scant knowledge of the wider world (and scant interest in learning its complexities, to my mind) and I think it's a scary prospect.
 

I heard that McCain was born outside of the US, and that he doesn't go to church, and that he has been associated with some people who turned out to be fringe-movement wackos.
 

Ananonymous 4:29
McCain was born in the Panama Canal zone - a legal US territory at the time of his birth. His father was stationed there with the Navy.

Both candidates have their share of fringe lunatics. I would suggest if you are going to comment you join us in discussing 'real' issues.
 

There is little to add here without repeating the fine rebuttals already made, so I will attempt to offer a imagistic critique of the post. My central problem, aside from what nearly everyone else has said, is that IPLG seems to think divisible by a dotted line the two segments of his post. That it is a porous line, I think, represents the problem: McCain's poorly run campaign is indicative of his poor leadership, misguided judgment, and uncertainty when it comes to the national stage.

I commend IPLG for admitting the complexity in his own views on McCain, but would encourage the transmigration of ideas between the two segments. In many ways, his post echoes (gasp!) John Kerry's Dem Convention speech, outlining the difference between "candidate McCain" and "Senator McCain." (We all wished Kerry would have spoken so well and so forcefully 2004!)

Interestingly, "mayhem" derives from "maim", and its archaic meaning is still the first in the OED, of use primarily in criminal law (which I'm guess Prof. Osler and IPLG know): "The infliction of physical injury on a person, so as to impair or destroy that person's capacity for self-defence; an instance of this." This campaign has indeed caused mayhem on McCain; he was, here and there, a decent Republican politician, but he has inflicted physical injury on his political person in his own quest for power, and weakened himself in the process.
 

anonymous 9:29 -

You said, "Younger voters have historically been highly motivated during the campaign and highly apathetic on Election Day. It's just too hard to wake up and stand in line to vote but, hey, the victory party, that's another story."

That's highly cynical of you, don't you think? I take offense to that, being that I am a "younger voter" who votes early. I don't know how old you are, but lots of "younger voters" were out in force in the primaries. Who's to say they won't cast their vote for the real deal?

There may have been some previous veracity to the MTV/Rock The Vote crowd showing political zeal--yet not even being registered to vote. I just don't think that's the case in this election.

Younger candidates, younger voters might just take the leadership away from those "older ones."
 

See, my problem is that I think McCain is a principled conservative that would act on those principles, principles I feel are deeply, intrinsically wrong for a variety of reasons, bad for the country in practical terms, and antithetical to my own personal ethos as a citizen.

When people say things like "socialism" and "spread the wealth around" and "force companies to change the way they do business" and "one of the intellectual elite," I like the sound of all those things. They're not pejoratives in my ears.
 

Prof. Osler,

Reagan and Bush II both had the same problems but it wasn't the lower taxes, it was higher spending. Reagan spent us out of the Cold War, Bush II - who knows. Tax revenues actually increased after both cuts, proving up the Laffer Curve. Clinton did well because he largely left the economy alone during a serious boom cycle. His tax policies had nothing to do with the record surpluses we had during his 8 years.

In fact, because there is a delay between tax cuts and their economic impacts, Clinton benefited from the Reagan cuts in that they encouraged a solid recovery while Bush kept spending in check. The economy actually began cycling upwards while Bush was still in office.

The supply-side argument is for lower taxes and lower spending to spark growth. As you pointed out, it works pretty well as far as GDP. However, the trickle down takes time. If decifits bloom because of overspending, requiring higher taxes to service the debt (or you get people in office who like to "spread the wealth around") the process gets short circuited before lower income folks can benefit.

The trickle down effect reached the middle class after both cuts, as measured by real wages, stock ownership, and net worth. Bush II killed it by overspending to the point that the dollar collapsed, reducing real wages. But there is also a moral hazard in effect for many of our poorest - the cost-benefit relationship between accepting public benefits while not having to work. We know there are jobs, because we import so much labor, but low income Americans don't run after those jobs because they don't get any benefit from doing so. Meanwhile, undocumented workers return most of their untaxed earnings to foreign countries instead of using it domestically (by investing or saving). The cycle of economic development gets broken right before it reaches our poorest citizens, but that isn't a failure of supply-side economic policy.

It also matters what taxes get cut, as there is limited benefit from cutting unavoidable taxes because if people can't avoid the taxes, their behavior doesn't change much. Capital gains taxes are avoidable. So, when they're lower, more capital goods get exchanged, raising GDP but also tax revenues as people allow themselves to be taxed more often. Income tax, on the other hand, is less avoidable, so you get less benefit despite the obvious political popularity in reducing it.

Since we don't really tax people of low income, they don't get a direct benefit from tax reductions, which delays the trickle down, and also incentivizes poverty. Hitting the business class, of course, is a disincentive to innovate, invest, and work so hard for the benefit of others - at least in that business environment, further decreasing the kinds of jobs that are available to those who need them most.

A trickle may become a torrent, but only if it is let to grow.
 

Joe-

I understand your argument, but what evidence do you (or anyone else) have that our current tax/revenue rate falls on the right side of the Laffer curve, where a decrease in tax would increase revenue? I have yet to see anyone that can show why we're on that side of the curve as opposed to the other side, where an increase in taxes would increase revenue.
 

Joe, regarding your last paragraph, when is the business class ever motivated to "work so hard for the benefit of others?" Really? I thought they worked hard to make money for themselves.

Of course, that's what we all do, but come on. Did those executives at Morgan Stanley work really really hard so that something might trickle down?

And I'm sorry, but as I've said on here before, the notion of one class of people having to wait years to reap the benefit from breaks that wealthier people get right away is just WRONG. Maybe not wrong as a principle of capitalism, but wrong as a principle of fairness. The language itself is highly demeaning and paternalistic, too: does any of us really want to wait around so that some scraps might come our way?

Not me . . . there has to be a fairer way. My ideal America is better than that.
 

Kuddos to IPLawGuy on a wonderful post. I only agree with what goes below the dotted line, but the whole post has inspired some intelligent and thoughtful conversation on boths sides.

During this entire campaign I have been asking myself, "Where is the John McCain I came to admire in 2000?" Of course, he was destroyed by the Bush machine and eight years have not been kind to him, which is a bittersweet tragedy.

I understand what he is trying to do. I have listened to the debates, watched him talk in other venues, but I keep hearing the hollow, empty promises of Karl Rove, James Baker and W. That group, at least for me, does not inspire any kind of confidence. JM has lost is way, and violated the number one rule of campaigning: Polonius, Hamlet: To thine own self be true. He has forgottent this, and it shows.

As for his running mate: she is a really sad case of someone with very little wordly experience, and it has showed whenever she has had to talk on her own. This is not her fault--it's who she is. John would have been much better off finding someone young and articulate with a great intellect.

Again, thanks IPLawGuy, I read ever word, and thanks to Osler for letting this happen today.
 

Joe-- Bush I raised taxes once Reagan was out of office, so it is hard to see how Clinton benefited from Reagan's cuts, given that interceding event.

And it is too big a caveat to assume that spending will be held in check, when only democrats (or democrat-- Clinton) seem able to even limit the rate of increase in spending.

Bush really blew it, and one thing that was lost was the possibility that people like me would believe it when Republicans claim to want to shrink government or reduce spending.

In the end, spend and not-tax is worse than spend and tax. With the latter, at least you are not leaving so much debt for following generations.
 

What, no love for Bob Barr? What a shocker. For a couple of candidates that like to preach about "change," you would think they would offer something other than wiretaps, bailouts and more spending. Sounds familiar, doesn't it?

I know, I know, Barr doesn't stand a chance. But if you live in Texas (as many of you do), a vote for Obama is just a drop in the bucket. McCain's bucket, that is. For all 0 remaining undecided voters out there, think about it!
 

In the 70's & 80's, one of the ways the Republican Party gained traction was by labeling the opposition as "tax-and-spend Democrats." McCain has been saying the same thing recently, if not using that same phrase.

To echo Oz... I have come to prefer tax-and-send Democrats to borrow-and-spend Republicans.

And I have to agree 100% with The Medievalist: I greatly admired the John McCain of 2000. In fact, I voted for him in my state's primary, which he *won*, and promptly dropped out of the entire race the very next day. Had *that* guy been running this time around, I would have given him some consideration.

But in the end (I've already voted, via absentee ballot b/c I won't be home on Election Day), I believe Barack Obama is the right man for right now.
 

Wrong conjunction... I should've said, "which he *won*, BUT promptly dropped out of the entire race the very next day."

I am such a grammar cop... drives my kids nuts.
 

Nope. Didn't work. I don't believe McCain. Nothing in his past as a politician (which is separate from his past as a soldier) tells me I should.
I'm voting Obama. We can't take another eight years of this as a nation.
RFDIII
 

Anon. 12:09--

Partisan be I! Top company of management wind up for thing in plan. Go to profit engorge mouse stereotype!
 

Justin T: Considering that any tax plan necessarily takes rightfully earned property from people for the use of government, I think you have the burden of proof. You accept that the Laffer Curve exists, so I shouldn't have to prove that gov't is taking too much. Gov't should prove its policies are correct before taking our stuff. That said, I haven't actively studied economics in enough detail since leaving grad school to give you the data, but the Hoover Institute was regularly doing that and probably still does - check their website. That last study I checked was around 2000 and indicated an ideal capital gains rate under 20%. Since we're higher than that, we are not yet on the right of the curve. Nat'l Review covered the study, but i can't remember the authors of the original.

Swissgirl - I'm not claiming the business class cares about the less fortunate. Supply side economics is about harnessing people's self-interest to achieve economic efficiency (which means more people getting what they need at a price they can afford). Their self-interest should lead them to produce ever better and cheaper products, grow the economy, and develop their markets. That happens to be good for everyone.

Morgan Stanley and other bad actors are not operating in that mode. the appropriate response is not to castigate all businesspeople, but to punish the bad actors, which we do civilly, criminally, and by letting them fail. except when we bail them out and just give them an incentive to continue their bad behavior. :)

As for fairness, i think it is unfair to punish people who are successful by taking more of their wealth and resources than we do for people who create fewer jobs, fewer useful things, and do less to increase our overall standard of living. Redressing that injustice by reducing the disproportionately high taxes they pay is quite fair. It is also economically responsible because it encourages people to succeed by rewarding them (really, just letting them enjoy the rewards they earn) instead of providing a reward for not succeeding. I also think it is unfair to assume that wealthy people just got lucky and poor people just got unlucky. Sociologists have marveled at the persistent 'underclass' and its resistance to gov't programs since the New Deal. Economist explain the problem by pointing at that at the margins of our economy, it is a perfectly logical choice to live on aid and chill all day rather than work hard for a minimal improvement in quality of life. As i pointed out earlier, redistribution of wealth actually hurts the poor by creating this moral hazard and by reducing the options available to the working class to move up the socioeconomic ladder. So, apparent fairness in the near term masks old injustice and a long term harm far greater.

'Trickle down' is actually a pejorative term coined by opponents to supply side theory. It became popular and is now in common usage but it was never intended paternalistically. I use it because most people know what it means and don't know what 'supply side' is. A better metaphor would actually be 'a rising tide lifts all boats.'

Osler- I agree the GOP's economic record is absurd. I am not advocating anything like it. I am only advocating for low taxes as the best long-term economic policy when paired with appropriate spending. That sparks growth, spreads the progress around, and tends to limit inflation.

Bush 1 raised taxes midway through his term. The full effects wouldn't be seen for years. It was followed by a tax cut when the GOP took congress under Gingrich. The thing to remember is that our economy moves like the Titanic - major changes by the bridge take a long time to be reflected in our overall course. Arguably, the Clinton years would've been even better if Bush 1 had not raised taxes, I only gave him credit for reigning in spending.

You may be correct that tax and spend is better than low taxes with high spending. It depends on how much debt we start with and how much we accumulate, and for how long. However, because lower taxes can increase tax revenue, there is a significant window in which spending can grow without increasing debt or taxes. I advocate aiming for that window. A corollary benefit is that we would avoid constantly changing economic policy (based on politics more than economics) and bring stability into the market environment. Its a perfect recipe for a sustained growth trend and gradually reducing the variations caused by the business cycle.

The proof I offer is our economy compared to everybody else's. The US is far more supply side oriented than most of the world and we are clearly the most successful economy in the world, despite a debt load that is inconceivably large. I think we would be in even better shape if we stuck to supply side economics consistently. BTW, Clinton's success in moving people off welfare and other government programs was mostly related to a strong economy generally, not any of his various insignificantly small-scale redistributive programs. So, a rising tide will float all our boats.

Some of us just need to get raised up a bit higher than others and have to wait for the tide to peak. But, in response now to Swissgirl, I don't see what's fair about making the folks who can start sailing wait for everybody else or trying to make them tow boats that are too grounded to move. It's pointless and mean. That kind of 'fairness' is a childish fairness where the younger sibling, instead of accepting a Big Wheel, demands the older sibling's bike because everybody should have the same things.