What Business Can Expect from Obama

Matt Cooper reports from Denver: Like everyone else, business leaders are going to watch Barack Obama's address on Thursday night as he accepts the Democratic nomination for president of the United States. I think it's worth keeping in mind a few things.

The first is that we have the broad outlines of Obama's economic philosophy. As David Leonhardt in The New York Times argued and as I did earlier this year, Obama's got some basic liberal tendencies—higher taxes on wealthier earners, expanded government programs with some more market oriented ones. I don't think we'll get any new surprises tomorrow.

The more important point is that it may not matter what Obama says or promises now. If you listened to Bill Clinton in 1992 as he ran for president, you would have had some clues about his economic philosophy—for instance, his support of the NAFTA accords. But you also would have thought that he would push for huge worker retraining programs funded by a tax on business, and you would have thought that he'd implement a middle-class tax cut. After he was elected, of course, he abandoned both to take an approach that focused more on deficit reduction. My guess is that Obama could get pushed in different directions. He's already come out for a gimmicky windfall profits tax on oil companies. You might get more of that. If he has a big Democratic majority to work with, he's going to get pushed in a more leftward direction. He could also jettison a lot of his middle-class tax cuts, too.

In other words, you don't really know.

One thing you can be sure of, I think, is that Thursday's speech will be less ethereal than the speeches Obama gave in the primaries—less about the transformation of politics, and more filled with pragmatic talk about what's wrong with the economy and what he plans to do to fix it. He'll talk about shifting the tax burden to wealthier earners and giving middle-class families more of the tools they need from affordable health insurance to easier access to student loans.

In other words, expect nothing new from what's in his economic plan, but all laid out more specifically. Of course, middle-class voters like business leaders should know that it can all change pretty easily.

Comments

[whidbey:]

Yes, we know the bureaucrats are not likely to go far their current (biased) policy positions, but...... we must not under estimate the potential for major blunders by a one party national government attempting to reshape both the economy and national ethos. Reformers are terrible to behold and worse to deal with.

Clearly, after Bush (and others as well) there is room for an open mind about the effects of character on presidential candidates. Unfortunately character has little to do with the art of the possible in a global economy. Obama probably will be no different; he will wear out the world in his own time. Still, I think his shadow economic team is weak and little invested in our institutions. That should bother you a great deal.

2008 Aug 27 08:02 PM

[THofler:]

Yes, Obama's campaign tax promises will be meaningless, just as Bill Clinton's were. The simple reason is that most of the Democrat voter base expects & condones campaign duplicity as a means to an end.

2008 Aug 27 10:13 PM

[Brian27:]

The key Economic Policies during the Clinton Administration

1) Nafta ... Obama the opposite
2) Abandoned Socialized Health Care ... Obama the opposite
3) Capital gains tax cuts .... Obama the opposite
4) Welfare cuts (redisitribution policies) .... Obama the opposite
5) Government Spending cuts .... Obama the opposite
6) Less Regulation .... Obama the opposite

Does anyone disagree with the premise if the opposite policies are followed that the opposite result will occur?

2008 Aug 27 11:01 PM

[sumosama:]

Brian, we I think you are very close with the exception of the law of unintended consequences. We need to examine the outcomes of the entire package.

2008 Aug 28 12:34 PM