So do we want them to feel our pain or get down to work?
By Jean Johnson and Scott Bittle
web posted October 20, 2008
If you have the flu, you stay in bed, down your flu medicine of choice, and try to sleep it off. But to be healthy for the next couple of decades, you get yourself out of bed every morning and invest some time in exercising and eating right. The prescription for a bout of flu is not the same as the prescription for long-term health. The same could be said of the U.S. economy. We need to do some things to get ourselves out of our current mess, and we need to do some other things to get the economy on the right track over the long haul.
The problem is that all the political talk about how to "fix the economy" rarely makes the distinction. The short-term and long-term ideas are all mixed in together, so it's hard for people who aren't well-schooled in economics (which is most of us) to sort out what the choices are and where the Presidential candidates agree and differ. Not really understanding the economic debate, a lot of voters have latched onto the "does he feel our pain" strategy. In other words, "we don't actually understand what they are saying, so we just hope they understand how we feel."
That may not be the best approach. Neither Barack Obama nor John McCain is exactly an average Joe. Obama has a premier education, a couple of top-selling books, and a comfortable, affluent lifestyle. McCain is the son and grandson of four-star admirals and is wealthy by virtually anyone's standards. Yes, we know, Joe Biden grew up in Scranton and takes the train to work, while Sarah Palin is a hockey mom and former small-town mayor. But honestly, once you become a governor or senator, your Joe Six-Pack card should be automatically revoked. You're playing at a different level now.
Then again, FDR and JFK were very rich -- filthy rich actually -- and Americans tend to admire them both for their sympathy with people from different walks of life. It's not just about your background -- or your bankbook.
What might be more helpful to voters is to distinguish between what the candidates are offering to address the short-term problem versus the long-term one. Obama and McCain don't really seem that far apart on the near-term strategy to get the country out of the global financial crisis, or the recession that's almost certain to follow. Or maybe they're just equally confused. If that's the case, they're hardly alone; even the economic brain trust types seem to be making it up as they go along.
Both candidates are supporting strong government intervention to unfreeze the credit markets. Both voted for the $700 billion financial bailout, and McCain has suggested an even larger government role in buying up and renegotiating mortgages people can no longer afford. They're both talking tax cuts, a classic anti-recession tactic. Obama proposes cuts for middle and lower income Americans and hikes on top-earners, while McCain suggests extending the Bush cuts for all. Yet at its heart, getting out of a recession tends to be a "feel your way" problem, and that's what both candidates appear to be doing. In fact, if one of them suggested that he had a sure-fire, four-point plan to get us out of this one, voters should probably be dubious.
But the two candidates offer dramatically prescriptions for the longer term relationship between government and the economy. McCain proposes a small-government, low-taxes environment as the way to free up free enterprise. He celebrates the ingenuity and independence of individuals and sees government as wasteful, plodding -- more concerned with protecting itself than helping citizens. Obama sees government as a constructive economic player -- one that invests in public works to rebuild the country's infrastructure, along with alternative energy, scientific research and development, and education as a way to push the economy forward. To be able to do that, government needs tax money from somewhere, and Obama is comfortable in saying it should come from those with top incomes. The contrast between the economic visions of these two candidates is probably sharper than we've seen in years. Voters need to make their choice according to their own lights.
What should worry voters more is that both candidates are dancing around the potentially devastating long-term threats to the economy. Most experts don't think the new president can (or even should) do much to end deficit spending right now when the economy is teetering. But continuing to operate the federal budget in the red in good times as well as bad -- which the U.S has done for 31 out of the past 35 years -- could really pull the U.S. economy under over the long term. According to the best estimates by the Tax Policy Center, McCain's plans will add $5 trillion to the national debt over 10 years while Obama's proposals will add $3.5 trillion. Neither amount is acceptable, especially when the national debt just topped a mind-boggling $10 trillion.
And both candidates are dodging the looming fiscal disaster on Social Security and Medicare. If nothing changes, in about 30 years or so, the government will need every tax dollar it collects just to pay for Social Security, Medicare, Medicaid, and interest on the debt. That just can't happen, and the sooner we begin putting Social Security and Medicare on a sound financial footing, the easier the adjustments will be for everyone.
So do we want a president who empathizes with the economic angst and fears most of us are facing? You bet we do. But we also better vote for the one whose vision of government and the economy matches our own. And we better point out to both of them that we expect them to tackle the country's long-term budget and entitlement problems in their first term -- not just keep kicking the can down the road. 