Krugman on the candidates' recession packages
With people again talking recession, Paul Krugman gives a quick review of how the candidates plan to deal with it.
Among the Republicans, John McCain makes jokes about not knowing much about economics. Seriously. Which is most encouraging, when you realize he may be our next president. Rudi Giuliani, Mike Huckabee and Mitt Romney offer the same old same old- mostly tax cuts, mostly for the wealthy.
On the Democratic side, John Edwards, although never the front-runner, has been driving his party’s policy agenda. He’s done it again on economic stimulus: last month, before the economic consensus turned as negative as it now has, he proposed a stimulus package including aid to unemployed workers, aid to cash-strapped state and local governments, public investment in alternative energy, and other measures.
Last week Hillary Clinton offered a broadly similar but somewhat larger proposal. (It also includes aid to families having trouble paying heating bills, which seems like a clever way to put cash in the hands of people likely to spend it.) The Edwards and Clinton proposals both contain provisions for bigger stimulus if the economy worsens.
I'm particularly fond of the idea of investing in alternative energy sources, but energy and environmental policy has been one of John Edwards's strong suits. It's good to see Hillary following his lead.
The Obama campaign’s initial response to the latest wave of bad economic news was, I’m sorry to say, disreputable: Mr. Obama’s top economic adviser claimed that the long-term tax-cut plan the candidate announced months ago is just what we need to keep the slump from “morphing into a drastic decline in consumer spending.” Hmm: claiming that the candidate is all-seeing, and that a tax cut originally proposed for other reasons is also a recession-fighting measure — doesn’t that sound familiar?
It's no secret that Krugman thinks Obama is too cautious and centrist, and it therefore shouldn't be a surprise to know that he thinks Obama's latest stimulus plan emulates those of Edwards and Clinton, while tilting too far to the right.
For example, the Obama plan appears to contain none of the alternative energy initiatives that are in both the Edwards and Clinton proposals, and emphasizes across-the-board tax cuts over both aid to the hardest-hit families and help for state and local governments. I know that Mr. Obama’s supporters hate to hear this, but he really is less progressive than his rivals on matters of domestic policy.
To be fair, Obama does have money for alternatives in his energy package, but Edwards and Clinton correctly also see it as an economic stimulus, and this is also a terrific way to politically frame it. And it should also be emphasized that even though Krugman has problems with Obama's economic centrism, he seems to view it as better, by far, than anything offered by any of the Republicans. But overall, on responding to a potential recession, Krugman clearly believes that the best leadership is being offered by John Edwards