McCain's economic advisor to Americans:

Quicherbitchin'

In an interview today with the Washington Times, one of McCain's top economic advisors, Phil Gramm (of Enron loophole and mortgage meltdown fame), said that Americans facing hardships due to the (near?) recession we are facing are "nation of whiners." The article goes on, "'We've never been more dominant; we've never had more natural advantages than we have today,' he said. 'We have benefited greatly' from the globalization of the economy in the last 30 years."

For some sectors, that may be true. Unfortunately, a larger portion of our workers are in sectors that have not grown and more often shrunk. You have only to look at Michigan (although the car companies themselves are more to blame than globalization), Pennsylvania and Ohio. You have only to look at our now non-existent textile manufacturing industry, or most other manufacturing industries for that matter.

Gramm's pay as a UBS vice-chairman may have only gone up over the past six years as he got more and more borrower safeguards removed, but the average American's wages have barely kept up with inflation - in many cases they have lagged behind. For the first time in at least 35 years (google finance didn't go back any further) the S&P is on target to be lower at the end of a president's term than it was at the beginning (even during the recessions of the Carter and Reagan administrations it closed higher).

This is the type of person John "I still need to be educated [on economics]" McCain is choosing to do that educating. This is why McCain's solution to the mortgage crisis is "get over it." Advisors like Phil "Enron" Gramm are the reason McCain thinks an eighteen cent tax holiday for a couple months won't just go right into gas company pocketbooks.

When Americans say that the fact they aren't being paid enough to buy the gas necessary to get to work, they deserve more than "You're just whining," or "Get over it," or even "Go buy some more marshmallows." They need someone who will keep not only their needs in mind when negotiating foreign trade agreements, but also the rights of foreign workers and the safety of the environment. They need someone who will fight for FAIR trade agreements, not blind "free" trade agreements.

Thin Veneers

Two short stories of how easy it is to see through John McCain:

Some of you may have noticed that he has updated his website taking many layout aspects from Obama's site. To most viewers it is nice and flashy. Me, however, I browse using Firefox with the NoScript add on enabled. This means javascript doesn't run on pages unless I tell it to. So when I loaded his fancy new page, there was a giant "McCain Golf Gear" ad. That is what is central to his website message... Obama's, on the other hand, looks fine with javascript turned off - his people do it right. As a side note, this is also what search engines like Google see.

This evening, McCain's new TV ad came on during dinner. You know, the one that says, "Only a fool or a fraud talks tough or romantically about war." After the end of the commercial, my son asks, "Is John McCain pretending to be Barack Obama?"

Yes, Isaac, but he isn't doing a good job of it...

McCain's Iraq Plan

1. Be elected president.
2. ???
3. Peace in Iraq.

No questions allowed.

Pandering

You know, it's one thing when a Republican proposes a tax cut that will only help large corporations and hurt the rest of the country. But when a leading Democratic presidential hopeful echoes him, that really just takes the cake. I don't know if she just doesn't understand the economics of supply and demand, fails to understand what this tax will save/cost, or is just being naive, but this is just ridiculous.

At current gas prices, about $3.50 per gallon, the average American will spend $420 for gas over the three months being proposed (1000 miles per month, 25 mpg vehicle). Of that, a total of $7.36 $22.08 (over three months) goes to the government in tax. That isn't even half a tank of gas saved should the tax be revoked for a few months. And that is at current prices; gas is expected to reach $4 per gallon or more by the time this "holiday" is proposed to go into effect. That $7 $22 won't cover a quarter tank of gas. I might be able to get to work and back on that, but I live a mile or two from work.

Then there is what that tax pays for. $7 isn't much for you or me when it comes to gas, but $7 from all of us over those three months is several hundred million dollars that go to maintain roads and bridges. McCain doesn't have any idea of how to make that up, so at least Clinton does improve on that plan by also proposing a "windfall" tax on the gas companies. The thing is, that tax is just going to be passed on to us the consumers in the form of raised gas prices. So, if you're following all this, Clinton is proposing to lower front end gas taxes for three months, but raise taxes on the gas companies that will then raise the cost of gas to compensate.

All of this completely ignores the fact that gas prices are (largely) determined by the amount of gasoline available. Now, I expect that, largely, supplies are being kept lower by these companies in order to help push prices up slightly, but there are a number of things entering into this.

One is the supply of raw oil. Much of this comes to us from the Middle East, where Clinton is doing some saber rattling of her own to match Bush's and McCain's. This heightens the instability in the region and causes crude costs to go up.

Next is refining capacity. This is where, I think, oil corporations are doing the most to keep prices up. Oil companies would like you to think that they aren't being allowed to build new refineries. This is completely untrue. In 25 years, 1975 to 2000, there was one application to the EPA for a permit to build a refinery. There are environmental requirements that must be met to build a new refinery, as well there should be. But there is nothing creating a blanket ban on building new refineries. Instead, oil companies are holding out for a tax break ransom, holding these high gas prices over our heads and threatening to move them higher unless they get paid to make new refineries instead of paying to do it themselves.

I say we don't negotiate with these economic terrorists and instead encourage lower consumption through higher CAFE standards and increased development of alternative energy sources. These are the proposals that Sen. Obama has voted for and supports expansion of.

EDIT: Fixed amount saved in the tax holiday. Originally I had calculated it for only one month.

McCain "Economy, shemconomy"

John McCain has released a few of his planned economic policies this week. As reflective of his previous statement "I know a lot less about economics than I do about military issues," these changes will do a lot of harm our economy, especially long term. His policies are - update the tax code to something simpler, but leave the old tax code in place if you would prefer to use it; create a "gas tax holiday" for the entire summer; and offer government backed 30 year mortgages to at risk borrowers, with applications available at the post office.

That last one may be something helpful, he is vague on the details though so I can't say for sure. We do need real help on the mortgage front, but I am wary about the government arbitrarily buying back mortgages. I need to look at this proposal more closely, should more details be released, and compare them with the other candidates' before I can make more detailed remarks.

The gas tax holiday has to be the most ridiculous proposal I have heard in a while. The problem with fuel prices isn't the $0.18 added to unleaded to pay for road repairs. Repairs that are used (or should be) to keep bridges from collapsing for example. This will save the average driver less than the cost of one tank of gas over the three months he is proposing (3 months, 15 gallons per week, $3.50 per gallon). The problem is the $1.00+ hike created by an oil man's war in the Middle East. The instability we created there reduced output and encouraged speculators. Meanwhile, encouraged to "keep spending" here, our consumption has gone up. Bush's unwillingness to push for tougher CAFE standards until Congress just recently acted, plus his unwillingness to encourage funding in new energy sources has also helped raise demand. The last thing we need to deal with $114 oil is an 18 cent per gallon encouragement to use more. What we need is real encouragement to consume less or at the very least, more wisely. We need to stop using oil and natural gas for electricity when infinite (at least for the next several million years) energy is beamed to us 11-13 hours a day. But pushing a policy like that could hurt the Exxon's of the world who are making $41 billion off of $100+ oil.

The change to the tax code has to be almost as idiotic. So now, should his plan go through, not only would we have the convoluted craziness of the current tax code, where someone making billions of dollars can pay less in taxes than his secretary making $30-$50k, but we will also have yet another (lets call it 1040EZ-R) form that may or may not allow us to pay less. In order to figure out which one is the best, we will still have to pay tax professionals hundreds of dollars while the tax code adds five more books. "Americans do not resent paying their rightful share of taxes -- what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands." This is why we will offer one more random form for you to compare with the other arcane rules and demands.

And that is where you will stay

Yesterday, during a question and answer session, McCain was asked whether he would give up his seat in the Senate for his presidential run. The idea was to have the special election to replace him while his name was on the ticket for president to give his successor a better chance, rather than waiting until after the presidential election.

His response, very prescient in my view, was “I will go back and think about it, and think about the scenario that you just described,” adding, “right now my intentions are to remain in the United States Senate.”

Those are my intentions as well.

I see your bet

Too bad he can't raise McCain one.

Earlier today, John McCain called on fellow Senators Obama and Clinton to release the earmarks they requested. This is part of an initiative he is co-sponsoring to block all earmarks for one year. According to information released last month, Clinton was in the top 10 Senators requesting earmarks, having requested more than $340 million in 2007, Obama was in the bottom 25 Senators, having requested $91 million, and John McCain (and my home state Senator, Claire McCaskill) are among the 5 Senators that did not request any earmarks.

Both Democratic candidates have agreed to co-sponsor the amendment proposed by Jim DeMint amendment to the 2009 budget. Sen. Obama has also, with a very quick turn around, released a full list of his earmark requests, not only from the 2007 budget year, but also from 2006. This list also includes a full description of what the request would do. I haven't looked over the full list (it's $91 mil., and, just skimming it, the average request is for 1/2 to 3/4 of a million), but it includes requests for scientific grants for local universities, law enforcement funding, education, health, and others. Dig through it, let me know what you find.