Candidates' Economic Advisers Debate

The economic advisers to Barack Obama and John McCain debated today at the UW-Madison. Ike Brannon spoke on behalf of the McCain-Palin campaign and Austan Goolsbee on behalf of the Obama-Biden campaign. Here's the link to Proposals for Change (Adobe Flash required).

For me, of greatest interest is the excellent question by Dean Knetter of whether the current financial crisis is to be attributed to too much government intervention (e.g., it's F&F, CRA, etc.) or insufficient regulation of the appropriate type.

Surprising to me was the response to the question about income inequality. While Goolsbee doesn't take a stand on how to apportion the causes between trade, technical change and other factors, Brannon attributes greatest importance to technical change.

On the issue of international trade, Goolsbee views the current account deficits as a sign of weaknesses, rather than a problem in and of themselves. In addition, Goolsbee asks if free trade agreements are truly pro-free trade, a question I myself have asked. Brannon was unabashedly in favor of free trade -- preferably via multilateral agreements, rather than free trade agreements -- but viewed there being little argument for any regulatory impediments. I thought the idea of wage insurance, if properly implemented (I'm not sure how it'd be paid for given the current budgetary conditions) was a good way in which to make an open trading regime sustainable.

I may have mis-characterized some positions, but it's all online.

Comments

[whidbey:]

This debate is moot since the Congress is the final arbiter of policy. The Congressional policy is for sale, and is packaged for sale, to the highest bidder. The Members have no grasp of the financial limits of the federal system, given some desire to continue private enterprise. We must be skeptical that our political process offers anything to policy as enacted. The Presidents recently have been ignorant of the financial limits, so we have no checks on policy. The advisers are ants with no impact on what happens; just decorations for the body politics.

2008 Oct 10 08:15 PM

[taxed2much:]

Does the recent way the gov't (recent, try the past 40 years but 20 in particular)has been systematically finding ways to collect tax money and spend it in ever increasingly large chunks in ways that are just so stupid, most of us were voicing the opinion to not pass the recent bailout? That one just completely pissed me off, to allow the regulator BArney Frank anywhere near the bill to bail out the financials who made their own bed of gnasty with the regulators right there every step of the way doing nothing at all but skimming from all sides. So far they have done nothing but throw good money after bad with the same result every time they do it. More money us American tax paying citizens get stuck paying. Well...
It makes me want to go to washington DC and just find a group of our elected officials and begin uncontrolably vomiting all over them. I think that might make alot of us feel better and would get the message across that we as a Nation are fed up with how our lives are being ruined by their innane repetitous inept (but carefully planned to benefit them) policies that do not help anyone in this country without it benefitting them first. Yes they make me sick.

Barf for change. My name is Matt and I approve this message.

2008 Oct 10 09:24 PM

[John Preston:]

There are two kinds of regulation...and two kinds of deregulation...simply put, either can be good or bad.

If you want to get to the heart of the current economic crisis, however, you need to examine the bad, flawed, misguided, misintended and (possibly) fraudulent regulatory efforts of the mid-to-late 1990's, and and the supporting the regulatory support as it relates to mortgage financing and housing reform efforts.

As the Clinton administration pushed for greater housing reform in its plan to expand home ownership opportunities, a lack of transparency developed.

The REAL reason for Fannie/Freddie evolution during this time was to shroud the underwriting process in mystery and to expand the business model and the borrower model ... under the radar, so to speak....

Yes, there was plenty of opportunity for Republicans to have questioned this process...it began 16 years ago...and there was plenty of opportunity for the Democrats to have been candid and open about their motivations and goals...

A part from the two major parties screwing up...there was ACORN...and other advocacy groups....another common tread throughout the process....outside influence....

And then there is the Fannie/Freddie "We Bought Your Vote List" .... that's a bad "Top 10 List" to be on......

2008 Oct 11 11:05 AM

[mediapro:]

John P only needs to look a wee bit farther back into history.

Flash back to the neo-con's answer to 1970's stagflation and Milton Friedman's Shock Economics Theory he plied so well in South America for the right wing fascists.

Roll tape a bit forward to the Gipper. Cut taxes, spend on defense out the wazoo, run record deficits, de-regulate markets and watch Uncle Milties' magic work.

While every right wing neo-con tape loop is buzzing with out-of-control GSEs, we all seem to conveniently ignore how all of this silly and frightening theoretical economic approach played out around the world through the likes of the IMF, World Bank, Halliburton, and their ilk.

Look at any country where this supply-side, trickle down, deregulated gambit has played and look at how eeiry is the similarity between those countries and this one:

1. The top 1% control 40% of all financial wealth in the U.S. The top 20% another 52%, leaving the rest of us (80%) America's financial wealth at a whopping 8%.

2. In terms of inherited wealth only 1.6% inherit moe than $100,000. 91.9% receive nothing. Yet the "death tax" is the highest priority on the ultra-conservative agenda.

Now for some sobering reminders:

Under Clinton we enjoyed a $287 Billion SURPLUS that's now an ever-growing DEFICIT that at last peek was nearing $700 Billion and national debt that has grown from $5.7 Trillion to $10.2 Trillion in just seven years.

It wasn't because Clinton was an economic genious. He simply chose folks who shared his philosophy of government and its role. I'll put my money in the hands of the guys that believe that it's the government's job to invest in the 80% of us that need practical ways to grow our own wealth (smart energy policy, infrastructure development, education).

Where was FDR when we needed him 28 years ago, when this Milton Friedmanesque, neo-conservative insanity began?

2008 Oct 11 07:21 PM

[woodsey:]

Right on, mediapro. But where do we go from here? There is no guarantee that we shall find a way out.

2008 Oct 12 02:15 AM