Closing Thoughts on the Presidential Election

Tomorrow, Americans will head to the polls and cast their votes for one of two viable candidates: John McCain or Barack Obama.

John McCain is not my ideal candidate, but represents an agenda I think all moderate and conservative voters should be much more interested in.

Barack Obama - by measure of his associations, his voting record, or his proposed policies - would be the most liberal president we've ever had. Some of you may read that and think I'm exaggerating or using hyperbole. I am not. Barack Obama is an excellent politician who has done a tremendous job during the campaign convincing Americans he is moderate and reasonable. But he is not.


On social policy, the issue most important to me is abortion, because literally at stake is life and death. I believe any rational person should be able to discern the scientific case that life begins at conception.

Even if you aren't pro-life, most moderate voters want abortion to at least have some restrictions, like parental notification. But Obama has pledged that "the first thing I would do as President is sign the Freedom of Choice Act." The FOCA would remove all restrictions on abortion, from parental notification to re-legalizing so called "partial birth abortion" which is much more accurately described as infanticide.

Obama's ultra-liberal dedication to abortion even includes his vote against a bill in the Illinois Senate that would have required doctors to provide medical care for babies that survived botched abortions.


On foreign policy, we are now winning in Iraq thanks to the The Surge, a strategy McCain advocated at great risk to his political career. Had we followed Obama's plan we would have begun a withdrawal of troops prior to even attempting The Surge and Iraq would be in shambles, with Al-Qaeda strengthened. Senator Obama has next to no foreign policy, military, or executive experience. Making him president while engaged in wars in Iraq and Afghanistan seems downright dangerous.


On economic policy - the area that seems to be ruling the day, we have Obama proposing a redistributionist tax policy that would literally cut checks to "working families" while ramping up hundreds of billions of dollars of new spending to be paid for exclusively by the top 5% of income earners (or, if you go with this cut off of "$250,000" - the top 1.5% of income earners.) The top 5% of income earners, today, already pay 60% of the personal income tax burden (while making only 20% of the country's income - a disparity of 3:1). Does that seem fair to you?

By contrast, John McCain wants to lower taxes across the board and reduce government spending - starting with reforming earmarks.

Analysis by economists indicates that Obama's policies will actually slow the economy, while McCain's will help it grow. This is probably best demonstrated by the following chart which I'm stealing from here:



From the study from which that chart is generated:

When fully phased in, and all economic adjustments are made, the McCain tax plan would increase the private sector portion of GDP relative to the baseline by about 2.7 percent, and the Obama tax plan would reduce private sector GDP by about 3.5 percent, a significant 6.2 percent difference in output and income between the two plans. (See Chart 1.) The difference in private sector capital accumulation would be 15.8 percent or $4.1 trillion in favor of McCain. Hourly wages before-tax would be up 2.2 percent under McCain, down 2.6 percent under Obama, a 4.8 percent difference. Hours worked would be 0.5 percent higher under McCain, and 1 percent lower under Obama.

I do not want to see this recession continue for four years, do you?

Government Intervention Atheist

Mark Shields, last week on The NewsHour with Jim Lehrer

And, you know, Jeffrey Frankel of Harvard put it, I thought, perfectly well. He said, "Just as there are no foxholes -- there are no atheists in a foxhole, there are no libertarians in a financial crisis."

I mean, all of the good folks who've told us "hands off, laissez-faire, no government," I don't know where they are. They've suddenly become Marcel Marceau . They've gone mute on us. You know, everybody wants Sam in there, and you can feel the irresistible wave for regulation.

Oh, hi there. I'm a libertarian ... despite this financial crisis.

And I'm a rather concerned libertarian because Shields is right. Most fiscal conservatives have shut up and the climate is ripe for new regulatory legislation. In particular, the so called "fiscal conservatives" - the ones the left paints as being fiscally conservative, like Bush and McCain, when their record proves otherwise - seem to be especially pro-new-government-intervention.

But government intervention is not the cure all for economic woes.

In the early 80s, under the Reagan administration, taxes were lowered and regulation frozen. Although not immediate, the recession that began under Carter came to a close under Reagan.

In the early 20s, another (serious but lesser known because of the 30's depression) recession came and went without Big Government intervention.

And the economic conditions of those two recessions were dramatically worse that today.

At 6.1%, unemployment is lower today than during any year in the entire twelve year range of 1975 to 1987 with the one exception of 1979 where it was only two tenths of a percent lower than today. And 1979, 1980, and 1981 all saw double-digit inflation.

Between 1919 and 1921, unemployment climbed to 11% and the Dow Jones Industrial Average fell losing nearly half it's value.


Now, new regulations would not necessarily be a bad thing. I would welcome laws requiring more transparency assuming that said laws don't add major imediments to business (like say, Sarbanes-Oxley has done). And, if Fannie Mae and Freddie Mac are regrettably here to stay, something needs to be done to change them away from a model of private profits and socialized losses.

But, it's clear that history teaches markets can correct themselves without dramatic government involvement. And it's unlikely that giving in to the temptation to try to have government rescue us from this will be in our interest in the long run.

I join the plea: Kill the Bailout.