John McCain’s views on the economy came under attack by Democratic Presidential candidates Barack Obama and Hillary Clinton.
Sens. Barack Obama and Hillary Rodham Clinton yesterday sharply criticized presumptive Republican presidential nominee John McCain’s views on the housing crisis, illustrating a wide gap between the two parties on how to fix the ailing economy. Sen. McCain and the Democrats long have sparred over U.S. policy toward Iraq, but the collapse of the subprime lending market and subsequent softening in other sectors of the economy have opened a second front in the competition among the presidential rivals.
In an economic speech on Tuesday, McCain (Ariz.) said he supports government assistance for Americans facing home foreclosure because of the turmoil in financial markets. But he declined to embrace the kind of government intervention for individuals and institutions favored by Clinton and Obama, arguing that “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”
John McCain has admitted on several occasions that he knows little about the economy.
At a recent meeting with the Wall Street Journal editorial board, Republican presidential candidate John McCain admitted he “doesn’t really understand economics” and then pointed to his adviser and former Senate colleague, Phil Gramm – whom he had brought with him to the meeting – as the expert he turns to on the subject, The Huffington Post has learned.
The incident was confirmed by a source familiar with the proceedings of the meeting.
On the campaign trail, McCain has often made light of his lack of economic policy understanding. But his concern over such a shortcoming may be even greater then he has suggested.
One of the most effective economic tools a President can use is an abstract concept: “inspiring confidence.” When John McCain admits he knows little about the economy and this admission hardly inspires confidence. I find John McCain the candidate for President uninspiring, but equally troubling for me is that he teeters on incompetency. Couple with John McCain’s hard-nosed position on the Iraq War (fifty, a hundred years in Iraq “would be fine with me” crack), inspiring confidence becomes challenging.
John McCain’s election would be an automatic four year extension of George W. Bush’s Administration.
A hundred more years in Iraq.
A demoralized military.
Even higher gas prices.
All the negative effects of higher gas prices such as inflation.
A loss of confidence in economic policies.
In other words, a stalemate. And that can’t be good for anyone.
Filed under: Barack Obama, Blogs, Commentary, Democrats, Election 2008, Hillary Clinton, John McCain
A few weeks ago, John McCain made an unguarded admission that he doesn’t understand that much about economics. This week he gave a speech that displayed that shortcoming in great detail.
Oops, I missed commenting on an even greater silliness – “all the negative effects of higher gas prices such as inflation”????
Um, I think you have a few of those parts in backwards, Chief.
Higher gas prices are not causing inflation, inflation is causing higher gas prices. A friend in Belgium recently confirmed that fuel prices in Europe are stable. (Please don’t respond with the irrelevancy of their higher price structure. That’s just to fool the yokels. Europeans pay similar prices to what we pay for gasoline, they just pay much higher taxes on it. We all know taxes are evil and provide no benefit to society, which is why Europe has highway systems devoid of both tolls and potholes as part of the best transportation infrastructure on the planet.)
Our inflation is pretty directly rooted in the dramatic acceleration of our debt. The rest of the rise in fuel prices is also tied to the source of that debt. Crude was trading about $35 a barrel about the time the US decided the smartest thing we could do was invade Iraq.
It looks like McCain isn’t the only person who could use an Econ 101 refresher.
SO, once again Walden proves you can lead liberals to water but, you can’t make them drink.
If you hadn’t kept sniveling we would have thought you might have started to grow up and learned something…shame on you little one.
I repeat, higher gas prices cause higher commodity prices, and these higher prices cause inflation. Bring down gas prices and inflation disappears. Or, elect Obama and inflation also disappears. Do not elect John McCain who is an “economic illiterate.” Long live liberalism.
Walden,
I have to take exception to your comment on higher prices = inflation. That is backwards. Inflation causes higher prices.
Inflation is often defined as higher prices, but that is not the case. It is an increase in the supply of money that causes the dollar to devalue, thus meaning it takes more dollars to buy the same amount.
Increases in the supply of money causes inflation. A price increase from gas going up is not because of inflation, though, but because of the law of supply and demand. Greater scarcity pushes the price up.
The Dems need to be hitting McCain hard on the economy starting NOW. The economy will be the biggest issue in this election and McCain is very vulnerable on this issue.
Lance, there are two schools of thought on the causes of inflation. One is the money supply, (the monetarists) and the other is the demand theory, which I adhere to. That is, oil prices are driving inflation. I don’t believe inflation drives oil prices. Both sides have valid arguments and I am glad to see this site have these type of discussions.
I like the independence of John McCain but I was shocked yesterday when one of his proposal to get out of the crisis was to dismantle the “mark-to-market” mechanism. Basically he is proposing to forget and let the banks bury their losses, Rather than propose more tighter regulation this guy is proposing to even throw away the existing rule book. Mr McCain please start thinking and talking like a President if you want my vote, not tow the same staid lines that have gotten us here.
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Walden,
In my opinion the demand theory makes little to no sense. I’m not a “monetarist” by any means because that train of thought is usually allied with Milton Friedman, who I disagree with on the most important subject: money.
Higher prices can’t cause inflation, that doesn’t follow a logical train of thought. Higher prices only come from two things: an change in supply/demand, or the increase in the money supply. One is a natural cause of market forces, the other is not.
Ah, the holes we dig for ourselves when we assume simplistic solutions to complex problems. As our current situation shows, there are multiple vectors at work in any economy. A scarcity of a commodity can drive up prices, by increasing the extrinsinc value of that commodity. A surplus of the medium of exchange used to buy that commodity can also drive up prices. Or, the price increase can be due to a combination of those factors. Further, the potential causalities for those underlying scarcities and surpluses are manifold.
If there is one underlying cause for our current economic problems, it’s Iraq. Let’s see the effects of that particular cause:
We took Iraq’s oil output offline, decreasing supply. (That was VERY predictable at the outset.)
We freaked-out the oil market (traders are people) giving the price an emotional spike. (Also predictable)
Spiking oil prices brought unschooled hedge-fund players into the market, which drove crude prices still higher. (I did not see that coming, but I should have.)
Paying for the war with the VISA card required the printing of dollars faster than the economy was expanding, inherently devaluing the dollar, the currency in which oil is traded.
All of this pressure on the price of oil caused the hallucination that our problems could be solved via a technology that is ultimately a net energy-loser, corn-based ethanol.
Corn prices went up, more acres of that were planted, resulting in fewer acres of soy, wheat, and other commodities.
So, our current inflation is brought to us by a combination of decreased supply, increased demand AND inflationary monetary policy, aided and abetted by some of the natural responses and ill-advised “solutions” to the symptom of inflation.
I guess you bumped this up to the top to distract from the poor performance of Obama at the last debate for the season. He came across as the rookie he is, and the whining that followed made his campaign and followers look no better.
Winner of the Democratic debate was clear; John McCain. the other two didn’t even come close
Actually, I bumped it up because of its continuing popularity and demand from readers. You know, McCain, to remind you, doesn’t know much about the economy . . . history . . . the war . . . and immigration . . . and on . . . and on . . . and making up his mind on issues, like when he voted against his own bill. Tax cuts. He is one confused politician. But he is likable. I don’t make it a practice to defend Bush (I’ll hold my nose), but at least I do know his stance on the issues.
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