McCain and the Economy

Brendan Nyhan calls me out for too much psychologizing in my last post on John McCain. And it's true. I don't like the guy. He's not the worst politician on the planet, but he's pretty bad, and I'm pretty sure he's the most overrated politician so thinking about him aggravates me. But these would be my sober-minded, non-psychic points about John McCain and the economy:

• He's not good at projecting empathy.
• His major political theme about the need to "serve a cause greater than self-interest" is not well-suited to projecting empathy.
• McCain's background is in the military, his first political work was military-related, and his strong political issues involve national security.
• McCain says he doesn't understand economics.
• McCain really doesn't appear to understand economics:
  • He thinks interest rates should be zero (but why?)
  • He thinks spending cuts will stimulate the economy.
• He has a tendency to flip-flop not on specific economic policies, but on broad economic themes like whether or not inequality is a problem.
• His constituents in the elite press are weirdly obsessed with the idea that public policy should force average people to endure economic pain.

All of this leads me to conclude that John McCain would not govern very well on economic policy issues, and would fare poorly in a campaign that focused heavily on economic problems.

Comments

He thinks interest rates should be zero, and Muslims don't countenance interest. Coincidence, or Conservative Islamofascist, sequel to Conservative Communist...? Never has an argument been undertaken in such detail or with such care. Indeed, that is central to my point.

Posted by Jen | January 23, 2008 4:40 PM

And we will be doomed to years of speeches filled with "my friends"

The worse speaking bipartisanship and acting partisan.

Posted by Stellaa | January 23, 2008 4:41 PM

Jen wins the thread and the day.

Posted by Sam | January 23, 2008 4:41 PM

Maybe his motto should be: "we're all pre-Keynesians now".

Posted by Jim W | January 23, 2008 4:42 PM

Has he ever not received a paycheck from the government? He was in the Navy from the academy (where he finished near the bottom of his class) until 1981. In 1982, he became a U.S. Representative for AZ; he's been a U.S. Senator since 1986.

Not to get all free-markety on y'all, but the dude has been sucking from the government teat for his entire adult life. Let the dude go out and try to find a job before he starts thinking about running the economy with his crazy supply-side idealogy.

Posted by ben | January 23, 2008 4:47 PM

John McCain... would fare poorly in a campaign that focused heavily on economic problems

Such as the one we're in now. Which is why he's toast in Florida.

Posted by right | January 23, 2008 4:54 PM

His constituents in the elite press are weirdly obsessed with the idea that public policy should force average people to endure economic pain.

Because economic pain for the plebes, like blowing up foreigners (and US service people) is very serious.

Posted by AJ | January 23, 2008 4:57 PM

He thinks interest rates should be zero, and Muslims don't countenance interest. Coincidence, or Conservative Islamofascist, sequel to Conservative Communist...? Never has an argument been undertaken in such detail or with such care. Indeed, that is central to my point.

Conservative Islamofascists: From Mohammed To Mo' Money

It's obvious that conservatives are no different than, nay, SPRING FROM, Islamofacism if you just look closely at the cherry picked examples I present in this book.

Posted by Jason B. | January 23, 2008 5:12 PM

Yes, Jen, that was excellent.

Posted by Neil the Ethical Werewolf | January 23, 2008 5:15 PM

Apparently he also recently got confused and thought that Putin was the head of the German government. Given that he was something like 5th from the bottom of his West Point class, drank quite a lot, and then endured 5 years as a POW, I think odds are good the man just isn't too sharp at this point in his life. If elected I imagine he'd be under the influence of his handlers to the same extent that Reagan was during his second term.

Posted by bbartlog | January 23, 2008 5:17 PM

His major political theme about the need to "serve a cause greater than self-interest" is not well-suited to projecting empathy.

Uh, isn't "serving a cause greater than self-interest" exactly what the Democrats are calling on people to do?

McCain really doesn't appear to understand economics:

The voters really don't appear to understand economics either, so I don't think this is as big a liability as you're making it out to be.

Posted by Xeynon | January 23, 2008 5:20 PM

Well, get used to it, because if the Dems nominate Billary, McCain will win. Aargh.

Posted by Noman | January 23, 2008 5:22 PM

I think this is a compelling argument for why Romney would be a better nominee than McCain from the GOP perspective. Absolutely right. And let's not forget that Iraq is still unpopular and could get worse. Since McCain's been taking credit for the surge, he'll be taking the heat if things fall apart in Iraq.

I actually do think that Hillary would be able to defeat McCain, and the economic situation now is a bit part of the reason why. Clinton is geared up to talk about the economy, and I think she'd wipe the floor with McCain if it become the issue. I actually think Romney would be a lot tougher for Hillary to beat, because Romney's quite a bit smarter than McCain and is a far better politician with an ability to project the image that's needed at the proper time. He's definitely an asshole, as is McCain, but he can certainly talk about things like this without McCain's "funeral for American enterprise" schtick.

Posted by Lev | January 23, 2008 5:36 PM

Screw you Maththew, McCain is a better man than you are any day of the week.

When you have achieved a hundreth of what he has then you will have a right to talk. Till then do us all a favor and shut your resentful and hypocritical trap.

Posted by kilmartin | January 23, 2008 5:44 PM

I think Romney would (will) be a very effective candidate in a general election dominated by a looming recession. He knows this stuff and is very comfortable talking about it, and can work the "outsider" angle against whichever Senator the Democrats end up with.

Posted by right | January 23, 2008 5:46 PM

It's odd to a see a blogger who admits to ignorance of monetary policy in one post turn around and accuse a politician of being weak on economics in the very next post.

Posted by Helter | January 23, 2008 5:51 PM

Helter - the painfully obvious retort to that is that MY isn't running for president.

However I don't think it'll be that hard for McCain to fake some interest in economic policy. Yes it will be a Democratic advantage, but I don't think it will be enough to overcome the primary motivation for voting patterns: likability.

Posted by greg | January 23, 2008 6:01 PM

All of this leads me to conclude that John McCain would not govern very well on economic policy issues

Since Yglesias lists "empathy projection" as an element of "good economics," I hope he'll forgive me if I wait until McCardle posts about McCain's economics.

Besides, the only candidates in the race that can credibly claim they do "understand economics" are Romney, Paul (though his understanding of economics is limited to the Austrian school) and, according to Greenspan, Bill Clinton (though Hillary doesn't have any interest in or knowledge of the topic).

Posted by Shinyk | January 23, 2008 6:05 PM

Why pay attention to Brendan Nyhan?

Posted by Clark | January 23, 2008 6:09 PM

"When you have achieved a hundreth of what he has then you will have a right to talk. Till then do us all a favor and shut your resentful and hypocritical trap"

Mere mortals may not speak ill of great men.

Posted by mad6798j | January 23, 2008 6:14 PM

And we will be doomed to years of speeches filled with "my friends"
The worse speaking bipartisanship and acting partisan.
Posted by Stellaa

It's a wierd passive-aggressive schtick. He uses it with people he despises - Clinton, Romney, Byrd - and uses it with his legitimate "dear friends" like John Kerry and Chuck Schumer, as well as a greeting to total strangers.

I find it creepy, especially from speculation that he picked it up as a mannerism when he was forced as a POW to address guards as "My Dear Friend Comrade Guard".

Posted by chris ford | January 23, 2008 6:27 PM

Re Chris Ford

Actually, Senators McCains' best friends on the Democratic side in the Senate are Joe Lieberman and Russell Feingold.

Posted by SLC | January 23, 2008 6:42 PM

You're right, McCain really isn't very good on economic issues, apart from non-defense govt spending. But, is "projecting empathy" really related to understanding economics, or having sound economic policies? It would also be nice if someone (someone sane, not Ron Paul) acknowledged that the president doesn't run the economy. That's for pinkos.

Posted by too many steves | January 23, 2008 6:47 PM

Does anyone think that it may be possible that he select Lieberman for something like Sec'y of State?

Posted by Gus | January 23, 2008 6:49 PM

I think it is important to realize that when electing a president to remember that there are areas where their influence can have more of an impact. true, if elected, romney is better than mccain on economic policy, but a president can not single handlely change the economic situation. That is why i want mccain to win the repub nomination, he will stop waterboarding and follow the geneva conventions, something that the prez IS able to accomplish.

Posted by Gunther | January 23, 2008 6:54 PM

Projecting empathy is "economically important" on the campaign trail.

McCain is almost as good a candidate as Bob Dole was.

By the way, President can do a lot about the economy. The government regulates bussiness practices by commission and omission. Current crisis is largely caused by removal of banking regulation and neglectful regulation of financial companies, so incredibly lax loans could be (1) offered, and (2) packaged as AAA bonds. It was exactly the same moral hazard that caused S&L crisis, except that it was packaged into different "financial products".

More typically a single regulation has very small impact but the sum total is large. This is one reason why employment growth is more robust during Democratic administrations.

GOP way is to nominate stooges of the regulated industries and give them free reign, while Democrats are much more meritocratic.

Posted by piotr | January 23, 2008 7:34 PM

Zero interest rate policy is called the "Friedman Rule" after Milton Friedman. It come from a simple macro "cash in advance" model. Most (perhap almost all) economist don't really think the model is realistic all the way down to an interest rate of zero - bad things happen there in the real world.

Posted by Michael H. | January 23, 2008 7:39 PM

Don't worry about Nyhan the Waffle King.

He built Spinsanity on that false equivalence schtick, and he's riding it all the way to the bank.

He's so into a-pox-on-both-your-housesism and both-sides-do-it-itis that the usual truism that 'if both sides are picking on you you're probably right' applies if Nyhan picks on you all by himself.

Posted by Davis X. Machina | January 23, 2008 7:58 PM

"Helter - the painfully obvious retort to that is that MY isn't running for president."

That's not much of a retort. Yes, he's not running for president. But that's irrelevant. He's evaluating the level of knowledge of another person without having any real knowledge of the subject at issue. It sounds boneheaded.

Posted by Helter | January 23, 2008 8:24 PM

"He's evaluating the level of knowledge of another person without having any real knowledge of the subject at issue."

You must be new here.

Matt's a pundit (or a wannabe, anyway). This is what pundits do.

Posted by Richard Steven Hack | January 23, 2008 8:39 PM

Relax, he's got Phil Gramm on the job. He's a proven crowd pleaser.

Posted by Sir Charles | January 23, 2008 9:00 PM

Let me add, to the "but Matt isn't an economist either" debate, that one need not be an expert on subtle points of monetary policy to note that some of Mr. McCain's ideas, as linked above, are self-evidently ridiculous (spending cuts as economic stimulus... wha?). I still think he's a much stronger candidate than Romney, though; the head-to-head numbers and favorability ratings he puts up, while imperfect, are really the best indicators we have at this point of how he could do. I'm pulling for Mitt for that reason.

Posted by Kraz | January 23, 2008 9:23 PM

Helter, dare we ask what your views on the current state of the economy are, and your qualifications for discussing this point?

Posted by sashaqz | January 23, 2008 9:43 PM

That is why i want mccain to win the repub nomination, he will stop waterboarding and follow the geneva conventions, something that the prez IS able to accomplish.
Posted by Gunther

But, if you are big into terrorist's civil liberties, the chances are you automatically vote Democratic!

So, given you will not vote for a Republican because Jihadis would protest - it doesn't really matter that you like McCain as a near-Democrat, because you will go for the Real Thing anyways.

Posted by chris ford | January 23, 2008 9:43 PM

McCain has said that he'd like his treasury secretary to be Phil Gramm. Phil Gramm!

Posted by Asp | January 23, 2008 10:02 PM

Actually, the view that the optimal interest rate is zero is a respectable academic position that arises naturally in many economic models. The result is known as the 'Friedman rule'. The basic idea is that the interest rate is the price of holding money balances and that a positive interest rate induces people to try to hold lower money balances, thus giving up some of the services provided by money. But this is socially inefficient, since in a fiat money system the social cost of creating money is zero. A zero interest rate equates the social cost of creating money and the private cost of holding money.

Just google 'friedman rule'. Google scholar is also a good bet. This is a standard monetary theory prelim question.

Posted by stefan | January 23, 2008 11:18 PM

Though his specialty is national security, his worldview lacks nuance and sophistication. It is binary, black-and-white, with-us-or-against Bushism all over again.

Posted by bob h | January 24, 2008 7:33 AM

Hey Matt - check out this article about McCain from the London Independent

http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-dont-be-fooled-by-the-myth-of-john-mccain-773072.html

Might be worth a link, it takes him apart in a way I haven;t seen in the US press yet

Posted by Dave | January 24, 2008 8:43 AM

I rather reluctantly defend MY, but the conclusion that McCain doesn't really understand economics comes from, well, John McCain:

"At a recent meeting with the Wall Street Journal editorial board, Republican presidential candidate John McCain admitted he “doesn’t really understand economics” and then pointed to his adviser and former Senate colleague, Phil Gramm - whom he had brought with him to the meeting - as the expert he turns to on the subject, The Huffington Post has learned."

http://www.huffingtonpost.com/2008/01/21/short-on-economic-underst_n_82529.html

Posted by Arr-squared | January 24, 2008 8:44 AM

When you have achieved a hundreth of what he has then you will have a right to talk.

Where's Sailer when we need him to explain thsese things? Let me try, anyway.

McCain's descended from a family of 4-Star Admirals. That's why he's such a national security expert, even though his own military accomplishments consist of dropping bombs on villagers, getting shot down and captured, and spending 5 years as a POW.

Matt, on the other hand, is a peculiar cross-breed of novelists and economists.

So, from a genetic point of view, call on McCain if you need a boat sailed somewhere, or a war started--but Matt is the go-to guy if you need to explain economic policy.

Heredity is inescapable . . .

Posted by rea | January 24, 2008 8:58 AM

McCain getting the Republican nomination is a mainly glorious prospect for three reasons:

#1) it's a big f you to the Bush Republicans; despite McCain's unwavering support of the Iraq War and right wing voting record McCain is still at the back of the public mind the anti-Bush for having been taken down by the Bush/Rove smear machine in 2000

#2) he's too old to beat that Clinton lady

#3) he's not Rudolph Giuliani

Posted by Linus | January 24, 2008 12:05 PM