How is it that John McCain couldn't be bothered to personally issue a statement on the financial markets situation and found himself letting Doug Holtz-Eakin do it for him? He does understand that if he's elected president he needs to do all the parts of the president's job and not just the "let's start some more wars" stuff he happens to be most interested in, right?
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McCain On the Economy
17 Mar 2008 05:56 pm
Comments (25)
Republicans don't believe that the economy is part of the President's job. They believe the President just needs to get out of the way and allow the magical free market to do its thing.
He's said already he will let the Fed and presumably the Treasury with Paulson or some other Street insider at the helm, to run things.
That is where we are now actually so unless things get a lot worse, probable. he's off the hook.
Just today Steve Forbes proposed eliminating mark to market accounting. This is a bold proposal. Eliminating market pricing pretty much ends free markets as we know them but WTF. There is simply no other way to keep the current elites in charge. It's heartening to see conservatism finally make the break from what has been a problematical marriage with capitalism and throw in finally and decisively with asset holders who simply want to keep what they have and get more. That drive caused the market turmoil so the best answer is to end free markets.
I'm sure McCain will approve. After all, he never worked a day in his life.
John McCain has a copy of the non-existent economics textbook by Alan Greenspan, which if it existed would now be on the remaindered shelf at B&N.
Maybe McCain should have just referred voters to a list of leftish econoblogs instead. Isn't McCain in Iraq right now though?
Personally I can't wait until the Democrats run McCain's admission that he's not an expert on the economy on loop for six months straight.
It will never get old.
http://www.youtube.com/watch?v=RqsH7dkFGTo
More McCain fodder:
McCain on 12/18/07: ""The issue
of economics is not something I've understood as well as I should. I've got Greenspan's book."
Well, THANK GOODNESS he has that book. No word on whether he's read it.
http://www.boston.com/news/politics/politicalintelligence/2007/12/mccain_its_abou.html
No, he doesn't.
"It's heartening to see conservatism finally make the break from what has been a problematical marriage with capitalism and throw in finally and decisively with asset holders who simply want to keep what they have and get more."
I would argue that conservatism's marriage with capitalism was really only ever partial and temporary: when capitalism rewarded or at least preserved previous asset holders (asset holders who gained assets/status from previous economic eras or structures), conservatism was happy to have that marriage - but when full-fledged late-stage capitalism didn't deliver in various contexts, they were eager to prefer previous asset holders over having capitalism which might greatly enrich others.
For example: you can see in the American South: conservatives loved capitalism when it created a certain type of hierarchical elite; when that structure collapsed after the removal of slaves, conservatives opposed economic modernization of the South (the introduction of the modern mid-century technocratic corporation run as a meritocracy) in order to preserve that now-fading elite. When that elite could rejoin modern capitalism as the financialization of the economy increased in the 1980s (which meant that the elite could re-leverage old social networks and their ownership of real estate assets), only then did the region's conservatives re-marry capitalism.
Similar progressions happened in such places and environments as nineteenth versus twentieth century England, eighteenth century Netherlands versus seventeenth century Netherlands and so on.
McCain is still stronger on the economy because he will keep the Bush investment tax cuts.
The Dems are currently planning to eliminate Bush's cuts on investment, which made no sense, but now looks doubly stupid even under Democratic economics, raising taxes during a recession.
The market has lost a thousand points under the supposition that the Hillary/Obama will get elected and roll back the tax cuts. I predict that if McCain gets a 10 point lead, the markets will gain 1000 points back.
Now that's funny.
wellbasically-
Yeah. THAT'S why the market is tanking. Because the Republicans have been such great stewards of the economy over the last 8 years that we're on the verge of a severe recession, our deficit is at record levels, discretionary spending is greater than in the Clinton administration, our trade deficit has never been wider, the fed is bailing out investment banks who went wild under zero regulations and absurdly low interest rates, the dollar is weaker than the FREAKING LOONIE... but no -- that's not why the stock market is tanking. It's the prospect of a Democrat returning to the White House, with all its accompanying fiscal responsibility and regulatory oversight. The horror!
You, my friend, are an idiot.
This is worth reading: "Reflections on the International Dimensions and Policy Lessons of the US Subprime Crisis". It gives an idea of what to expect going forward based on previous financial crises. It also shows how the real estate bubble and bust wasn't limited to the U.S. but also hit countries such as Spain and New Zealand.
The whole thing is only one page long, but here's the summary:
We may just have started to feel the pain. Asset price drops – including housing – are common markers in all the big banking crises over the past 30 years. GDP declines after such crises were both large (-2% on average) and protracted (2 years to return to trend); in the 5 biggest crises, the numbers were -5% and 3 years. This column, based on the author’s testimony to the Congress, picks through the causes and consequences. It argues that when it comes to ‘cures,’ it would be far better to get the job done right than get the job done quickly.
Can anyone give me a good place to start about the deflating value of the dollar wrt other currencies? This would seem to be the starting point to a lot of our problems, and I'd love to know of a good resource where I could begin my research. Thanks!
he needs to do all the parts of the president's job and not just the "let's start some more wars" stuff he happens to be most interested in, right?
A President can wreck the economy in a couple of ways, but the amount he or she can do to keep it healthy is limited to setting a favorable enviroment and saying a prayer.
That a President can successfully (and, more or less, blindly) micromanage something with billions upon billions of dependent variables is a myth. Chavez is attempting that now and all he's managed to do for Venezuala, so far, is create an artificial food shortage.
I would argue that conservatism's marriage with capitalism was really only ever partial and temporary
I assume you mean "free markets," not "capitalism," which is, incidentally, married to most every political ideology other than Communism (and Communism has been shown by history to be both nonviable and, in every way, undesirable).
It depends. There are about five or six "conservatisms." Some of them genuinely believe in free-markets because they think free-markets work better than the alternative (libertarians, small business owners, Fiscal Conservatives), some believe in free-markets because they are personally lucrative (Wall Street types, the hereditary rich), some believe in free markets only because the antithesis, a Communist system, is associated with Atheism/Worship of State (social conservatives).
Because the Republicans have been such great stewards of the economy over the last 8 years that we're on the verge of a severe recession,
Clinton presidency--overall, good long-term growth, but ended in short, mild recession.
Bush presidency--overall, record long-term growth, but might end in recession of undetermined length and magnitude.
Has it occurred to you that, in both cases, the economy has followed, I don't know, an economic cycle?
I'm sure McCain will approve. After all, he never worked a day in his life.
Yes, those five-years of hanging around in Southeast Asia sound like they were such fun.
Oh call me silly for bringing up this explosive topic, but last I checked it was economically related.
http://gregmankiw.blogspot.com/2008/03/trade-debate.html
Let's see we could go with the guy who promotes a better global economy and wants to help those who are displaced by creative destruction, or we could laugh at all that economics mumbo jumbo and retrench for 1930's isolationism, and stupid corporate welfare binging like the populist duo suggest.
While I'm at it, how can an ex-Walmart board member complain about China causing us to pay higher prices for low cost consumer goods!?!
BTW, thanks for the post Fred
"Bush presidency--overall, record long-term growth, but might end in recession of undetermined length and magnitude."
Dude are you insane? In terms of job creation, that was the weakest recovery in modern history.
"Has it occurred to you that, in both cases, the economy has followed, I don't know, an economic cycle?"
There's no doubt that there are 'lotta demand' then 'too much supply' biz cycles, and we are certainly experiencing one, but we are ALSO experiencing three phenomena that are all far worse, namely:
1. Falling dollar.
2. Rising oil prices.
3. Arrested credit markets.
Although I don't blame Bush for the predictable recessionary over-supply cycle, I definitely blame him for the relatively flat jobs recovery, and problems 1-3 above. He, Greenspan, and Snow were just lousy economic stewards, end of story.
Oh and by the way, the relationship of tax changes for the wealthy and domestic demand is largely non-existent, and if you're looking for excuses for lack of investment, check the savings rate, because S=I is an iron law.
McCain is with the troops in Iraq right now, BOZO.
For what it's worth, from FDR on, the stock market has done better on average under Democrats than Republicans.
Why in the world would McCain want to associate himself with such bad news?
It's lose-lose.
Better to talk about something not so well understood. Like Iraq.
You guys are the biggest blusterers... nobody has explained under what model Hillary or Obama can convincingly argue that raising taxes is the right thing to do at this time. It doesn't work under traditional Keynesian economics, wherein raising taxes is for slowing an economy that is growing too fast and inflating. It doesn't work under Clinton 1993 economics, because Democrats can't claim to look at Wall Street as the judge of Federal solvency.
Dude are you insane? In terms of job creation, that was the weakest recovery in modern history.
This is also the first time in modern history that more people are retiring than entering the workforce. How can jobs be created when businesses are having difficulty replacing retirees?
1. Falling dollar.
2. Rising oil prices.
3. Arrested credit markets.
1. It is unclear whether this is Bush's fault or whether this would have happened anyway. Not saying it's not Bush's fault, just that it's far from clear that is the case.
2. Mostly not Bush's fault. Bush didn't create OPEC. Bush didn't industrialize or personally populate China. Bush didn't industrialize or personally populate India. Bush didn't make US automakers build gas-guzzlers, and Bush didn't make the American people demand them. You can, however, partly blame Bush for increasing instability in the Middle East (though, according to Gary Kasparov, Putin's got a greater [invisible] hand in that than Bush, so take that for whatever you think that's worth), which encouraged oil speculation as a lucrative investment strategy, though speculation has far less impact on the per-barrel price than China, India and OPEC.
3. Not Bush's fault at all.
Oh and by the way, the relationship of tax changes for the wealthy and domestic demand is largely non-existent, and if you're looking for excuses for lack of investment, check the savings rate, because S=I is an iron law.
Depends on the tax cut. The Capital Gains Tax cut certainly encouraged investment. Estate Tax cut, not so much.
Look, I find myself feeling awkward defending Bush, whom I consider an unmitigated disaster for party, country and the world. Too often, however, Democrats take a kitchen sink approach and blame Bush for things that have between little and nothing to do with him (or actions of the executive in general). Oil prices have a little to do with Bush. The Housing Crisis and job creation numbers have nothing to do with Bush. If it must be rag-on-Bush day, all day, every day, it would be wiser to stick to foreign policy and centralization of power issues; he's ripe for criticism on those fronts.
Some portion of high oil prices is a terrorist tax which was not cut by Bush. The rest is a matter of monetary inflation that doesn't have much to do with him.
In the subprime crisis, 60% of foreclosures were caused by the borrowers losing their jobs. 2% were caused by ARM mortgage rate resets.
The Federal Reserve under Greenspan and Bernanke raised rates 8 times in order to increase the unemployment rate. Poor people lose their jobs first, poor people are subprime borrowers.
The Fed's mismanagement of the money supply created inflationary signals such as high oil prices. The Fed misinterpreted the signals and decided to slow the economy by raising rates. (98% of economists would do the same because they don't understand growth and the floating dollar.)
I'm not a good Paul-ite, I don't think the Fed is illegal. But I wait for the day when any major candidate will take a close look at this and point a few fingers in the Fed's direction.
I predict that the pendulum has swung away from the Fed's rate hikes, we will now see an easy money expansion that will bring the price of gold back down closer to $500 than $1500 by years end, and the oil price therefore closer to $60/barrel than $150.
"I assume you mean "free markets," not "capitalism," "
No, actually, I do mean capitalism. There are no such things as "free markets", it's simply an abstraction that the neoclassical school of economics needs to make its theory work. "Free market" does not describe any possibly existing market. It's like assuming a square cow because that makes your cow theory work.
Capitalism is the political / economic superstructure or system that's most certainly NOT something that emerges naturally (those capital markets we see "free-marketers" babbling on about were all created by their respective governments: Alexander Hamilton started the American ones, for instance).
"incidentally, married to most every political ideology other than Communism (and Communism has been shown by history to be both nonviable and, in every way, undesirable)."
Only in modernity. Capitalism is explicitly opposed by Aristotlean political philosophy (i.e., the dominant world philosophy in the West until 1500 or so), for instance.
Capitalism is explicitly opposed by Aristotlean political philosophy (i.e., the dominant world philosophy in the West until 1500 or so), for instance.
Despotism's sins are less than those of Capitalism? Now I've read everything.
There are no such things as "free markets", it's simply an abstraction that the neoclassical school of economics needs to make its theory work.
This is possibly one of the most interesting and nonsensical things I've ever seen someone claim in a thread on a political blog. "Free market transaction" is jargon created by "the Neoclassical School of Economics" to describe a particular human phenomenon (not an abstraction). The described human phenomenon predates Marx, the State, Aristotle, Draco, the City-State, even currency. Free Market transactions started on the very same day as trade, which may-well have existed before we hunched out of our caves.
If, at any time in human history, there existed "Person A," who agreed with "Person B" to swap something, with no third party approving or taking a cut, they would have completed a "Free Market" transaction (though they wouldn't have called it that).
To suggest this first happened in the 18th century (or that it's never happened) just leaves me speechless.
those capital markets we see "free-marketers" babbling on about were all created by their respective governments: Alexander Hamilton started the American ones, for instance
It is almost as bizarre to say no transactions occurred in the colonies before Alexander Hamilton, I guess, invented them. I seem to remember the colonists rebelling against motherland interference in colonial market transactions. I also seem to remember Native Americans having at least some concept of trade (notably between tribes) without either the benefit of an education in the school of Neoclassical Economics or of a Hamiltonian Prometheus to bequeath such knowledge upon them.
Comments closed March 31, 2008.
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Heads in the Sand
After Bush ran the US right down into the gutter, maybe we should hope that all McCain will do is start more wars.
Posted by John McCain: More of the Same | March 17, 2008 6:20 PM