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Where do Clinton and Obama stand on the economy?

Escrito el 25 febrero 2008 por Gayle Allard en Economía de EEUU

As the U.S. primaries move toward their conclusion and it becomes increasingly evident that Barak Obama and Hillary Clinton will fight it out to the end, the question many economists are asking is, on the issues that matter to us, are the two Democratic candidates different?

From the series of debates held between the two and their Republican challengers, few differences emerge. Both have promised to reverse President Bush´s tax cuts for high-income Americans and make the tax code more middle-income-friendly. Both have discussed the need to protect consumers from predatory credit card companies and dubious college loans, and both have pledged to end corporate tax breaks that they blame for taking jobs outside U.S. borders. They also agree on the need to protect homeowners.

Similarly, Clinton and Obama have avoided protectionist rhetoric, in a departure from earlier Democratic tradition. “I won’t stand here and tell you that we can — or should — stop free trade,” Obama said recently. “We can’t stop every job from going overseas. But I also won’t stand here and accept an America where we do nothing to help American workers who have lost jobs and opportunities because of these trade agreements.” In contrast to the Republicans, and in keeping with party tradition, both candidates offer government solutions to job loss, mortgage defaults, rising debt and sagging incomes.


How will they pay for the extra government spending needed to finance their plans? Here they also agree on eliminating tax breaks for companies that send jobs overseas. But Clinton has further plans: she intends to lay the burden for tens of billions of dollars of planned investments in renewable energy technology on oil companies (they can either invest in renewable energy on their own or finance the federal effort out of royalties paid for drilling on public land). She also wants to close the “carried interest” tax loophole that has allowed private equity and hedge fund managers to pay very low tax rates.

Though the policy contrasts are small, the two candidates´ underlying attitudes may be more different than they appear. In the debates, Clinton´s approach leans most heavily and most specifically on government solutions to the economy´s current problems, while Obama tends to stress personal choice and initiative. The candidates´ health care proposals illustrate this difference between the front-running Democrats. Both promise to extend health insurance to (nearly) all Americans, but Clinton plans to do it through mandatory coverage while Obama relies on reducing health care costs while preserving Americans´ freedom to choose whether or not to participate in a public health insurance scheme. One U.S. organization calls Obama´s approach “left-libertarianism”, and describes it this way:

Advancements in behavioral economics, public and rational choice theory, and game theory provide us with an opportunity to attend to inequality without crippling the economy, enhancing the coercive power of the state, or infringing on personal liberty. The cost – higher marginal tax rates – is real, but eminently justified by the benefits. (click here)

The conservative twist on classical Democratic logic that this rhetoric implies could stem from the fact that Obama´s top economic advisor is Austan Goolbee, professor at the business school of the University of Chicago, a bastion of conservatism. Whether the ideas that Obama embraces are his or Goolbee´s, the difference with Clinton is significant and could have huge implications for the next four years of economic policymaking and the business climate in the United States.

Want to see where the candidates stand on more issues, and whom you agree with? One online quiz can be found here.

Comentarios

Ameya Prabhu 26 febrero 2008 - 01:40

Barack Obama and Hillary Clinton both display starkingly similar stances on economic issues. Both advocate a non-renewal of the Bush tax cuts when the expire next year and have made health care a significant issue in their campaign. While Hillary Clinton’s healthcare program is far more elaborate, Obama is still formulating his but will probably win the Democratic nomination riding on the charisma wave that is currently engulfing Democratic America. However, I am of the strong opinion that Obama will pursue protectionist trade policies derailing the Doha round. He recently criticized Hillary Clinton for voting for the NAFTA.
attached is an link on thus

http://www.reuters.com/article/topNews/idUSN2414727720080225

however, there exist inherent contradictions in his policy by on one hand criticizing the NAFTA but on the other hand advocating for the movement of more jobs south of the border (so as to counter illegal immigration). As Obama emerges as the possible Democratic candidate and the ‘Obama wave’ plateaus, such inherent contradictions will come under closer scrutiny. One can only hope that in a year or probable recession, Obama can formulate a solid and watertight economic plan. Otherwise, there exists the real threat of the ‘Obama wave’ ending in but a ripple.

Robert Darcy 5 marzo 2011 - 16:10

I’m glad I came across your blog. Thanks for this very informative post. I wasn’t a fan of long blogs but found myself reading this till the end. I think you’ve spent a lot of time updating your blog. I have bookmarked it and I am looking forward in reading new articles from you. Please keep up the good articles!

Angela Williams 5 marzo 2011 - 16:11

I’m glad I came across your blog. Thanks for this very informative post. I wasn’t a fan of long blogs but found myself reading this till the end. I think you’ve spent a lot of time updating your blog. I have bookmarked it and I am looking forward in reading new articles from you. Please keep up the good articles!

Regards,
Angela Williams

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