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Economists who have endorsed John McCain's economic plan
Gary Becker, James Buchanan, Robert Lucas, Robert Mundell, Vernon Smith, Michael Boskin, John Cogan, Steven Davis, Francis X. Diebold, Martin Eichenbaum, Martin Feldstein, Kevin Hassett, Douglas Holtz-Eakin, Glenn Hubbard, Anne Krueger, Deepak Lal, Burton Malkiel, Paul W. McCracken, Allan Meltzer, Tim Muris, June O'Neill, Michael E. Porter, Kenneth Rogoff, Richard Roll, Harvey Rosen, George Shultz, Beryl Sprinkel, John Taylor, and Arnold Zellner.
I was sent that list in an email. The opening of the statement reads:
We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.
His plan would control government spending by vetoing every bill with earmarks, implementing a constitutionally valid line-item veto, pausing non-military discretionary government spending programs for one year to stop their explosive growth and place accountability on federal government agencies.
No, I don't do endorsements but if I were tempted to (and I'm not) I would this year be even more suspicious than usual. I feel that the candidates are trying to trick me and the one who isn't -- Hillary Clinton, whose negatives are too transparent to my eyes -- has been trying to trick everyone else.
I'll put the rest of the letter in the first comment, but in the meantime my advice -- at least for this year -- is to vote on the basis of foreign policy.
Posted by Tyler Cowen on May 11, 2008 at 06:29 AM in Current Affairs | Permalink
Comments
Here is the rest:
"His plan would keep taxes from rising, because higher tax rates are exactly the wrong policy to restore economic growth, especially at this time.
His plan would reduce tax rates by cutting the tax that corporations pay to 25 percent in line with other countries, by completely phasing out the alternative minimum tax, b! y increasing the exemption for dependents, by permitting the first-year expensing of new equipment and technology, and by making permanent a reformed tax credit for R&D.
His plan would also create a new and much simpler tax system and give Americans a free choice of whether to pay taxes under that simple system or the current complex and burdensome income tax.
His plan would open new markets for American goods and services and thereby create additional jobs for Americans by supporting good free trade agreements such as the one with Colombia and working with leaders around the world to avoid isolationism and protectionism. His plan would also reform education, retraining, and other assistance programs so they better help those displaced by trade and other changes in the economy.
His plan addresses problems in the financial markets and housing markets by calling for increased transparency and accountabi! lity, by targeted assistance to deserving homeowners to refinance thei r mortgages, and by opposing so-called reform plans which would raise the costs of home-ownership in the future.
The above actions, as well as plans to address entitlement programs--especially Social Security, Medicare and other government health care programs--and his regulatory reforms--especially in the area of health care--constitute a broad and powerful economic agenda. Because of John McCain's experience working with the American people in all walks of life, with members of Congress on both sides of the aisle, and with leaders around the world, we are optimistic that these plans will become a reality and will create jobs and restore confidence and strong economic growth."
Posted by: Tyler Cowen at May 11, 2008 7:21:57 AM
Only one female name on that list of economists. Is McCain a man's man? In any case, I'll probably vote for Obama, but I hope he doesn't go too far to the left in the rest of the campaign (or when he gets to the White House.)
Posted by: Dirk at May 11, 2008 7:38:44 AM
The Constitution does carry the implication that Foreign Affairs are a President's business in a way that Economic Policy is not. As if anyone cares.
Posted by: dearieme at May 11, 2008 9:13:23 AM
How about not voting at all because "it only encourages them"?
As a libertarian button says:
"Don't Vote, It Only Encourages Them"
And yes, they're all criminals.
Posted by: Bill Stepp at May 11, 2008 9:43:14 AM
McCain => divided government. The status quo ain't so hot but the thought of the Dems controlling executive and legislative branches is dismal.
Posted by: Frank at May 11, 2008 9:54:24 AM
Do all those, um, more serious economists enjoy sharing equal billing with Kevin "Dow 36,000" Hassett? And is it really possible they couldn't get Greg Mankiw to sign that?
Posted by: Lev at May 11, 2008 10:47:22 AM
Greg Mankiw (and Alex Tabarrok) signed this letter instead:
http://gastax08.blogspot.com/
I wonder if there are any economists who signed both letters?
Posted by: a student of economics at May 11, 2008 10:51:26 AM
Whoops, sorry, Greg apparently did not sign the gas tax letter. He just railed against the tax holiday on his blog and in the press.
Posted by: a student of economics at May 11, 2008 10:55:54 AM
Two comments:
1. Although Tyler is absolutely right that the President has a great deal of power in foreign policy and that it makes sense, therefore, to vote on that basis,"dearleme" (above) is incorrect in saying,"The Constitution does carry the implication that Foreign Affairs are a President's business in a way that Economic Policy is not." The Constitution gives the power to declare war to Congress, not the President. Presidents, Congresses, and the U.S. Supreme Court have ignored this part of the Constitution for about 60 years. But that is what it says.
2. Here's what I said on April 16 in refusing to sign the statement in favor of McCain's economic policies:
This morning I received a request to sign an “Economists’ Statement in Support of John McCain’s Economic Plan.” The statement laid out his plans to prevent taxes from rising, to reduce some taxes, such as the corporate income tax, to support free trade agreements, and to restrain the growth of domestic government spending. Notice something missing? I did.
Here’s the answer I sent to the co-chair, economist James Carter:
There’s nothing in there I disagree with. [I later found a few things but I agreed with the vast majority.] The problem is that it leaves out a huge part of his economic policy that will make it virtually impossible to achieve what’s in the statement. That huge part is his policy on war–with Iraq and maybe with Iran. War is very expensive and is part of an economic policy. So by signing the statement, I would be helping Senator McCain maintain the fiction that there’s no connection between war and economic policy. I’m unwilling to do that.
Posted by: David R. Henderson at May 11, 2008 11:35:17 AM
I was asked to sign this statement. But I refused --sending an email back arguing that the very costly and counterproductive War in Iraq was, in an important sense, an economic issue. If I were better connected and had the money I'd like to publish the list of those who were asked but refused to sign for similar reasons. Frankly, one name that surprises me on the list is Vernon Smith. Some of those on the list (not Vernon) are hoping to get big jobs in a McCain administration and know they have no hope in the Democrat is elected. I really hope they get what they deserve. Indeed, this is the time to vote on foreign affairs and I think, of the two, Obama is much superior.
Posted by: Mario Rizzo at May 11, 2008 12:10:20 PM
" In fact, the economic policies of his (Reagan) administration and that of Bill Clinton were marked by more continuity than change "
There was a big difference on their policies in deficits and we saw growth in income inequality every year during the Reagan years but during the Clinton presidency there was almost no change in the inequality measure.
See second graph at
http://www.visualizingeconomics.com/2008/04/27/
income-inequality-democratic-vs-republican-administrations/
Posted by: joan at May 11, 2008 1:13:02 PM
I did not know that McCain supported a line item veto. I guess most president's probably do, but I still find it rather frightening.
Posted by: jsalvati at May 11, 2008 1:58:11 PM
Oh, I get it. McCain is responsible, he just lies about it.
Posted by: Lord at May 11, 2008 2:41:50 PM
A cursory glance at this list shows a number of people who have held posts in past Republican administrations, so their endorsement is hardly a surprise.
McCracken, Schultz, Hubbard, Feldstein, Sprinkel -- probably others as well.
McCain's mother didn't sign, but she'd already endorsed him.
Posted by: ZBicyclist at May 11, 2008 2:51:11 PM
I've put from Los Angeles Times/Bloomberg latest Pools.
Economy grew at a 0.6% annual rate over the last two quarters, it's the slowest since the 2001 recession.
REG
No recession 17%
Recession (net) 78%
Mild recession 24%
Moderate recession 31%
Serious recession 24%
Don’t know (net) 5%
Among the 78% of voters who said they believe the economy has slid into a recession, 52% would vote for Hillary, compared with 32% for McCain.
Mc.Cain will be lucky if he take Ron Paul advantages to distinguished younger voter, in cases Milli Vanilly run on the second rounds.
Rest report could be downloaded here:
http://www.calendarlive.com/media/acrobat/2008-05/38689272.pdf
Posted by: donny at May 11, 2008 3:02:35 PM
The effective corporate tax rate in the US is already 25%.
So why is achieving something we already have a major plank of his platform?
Is that what it means to be be a conservative?
Posted by: spencer at May 11, 2008 3:06:53 PM
I don't get it. McCain's plan is a transparent attempt to deceive the voters. $400B in tax cuts financed by $15B in spending cuts - it's Christmas every day.
Don't these folks have reputations to protect?
Posted by: peter at May 11, 2008 4:02:30 PM
The largest recent increase in federal expansion came under Bush, and the second largest under Feldstein and Reagan.
The federal share was flat or decreasing under Clinton.
Marty got the Nobel prize for what?
Economists like Marty do not think that efficient market equilibrium occurs in government so they continue to push for its deliberate violation. The result, inevitably, is more Republican government.
Let me explain supply and demand to Marty. In public choice theory, we raise the price of government when we have too much of it, we do not lower it. That is, Marty, we treat government just like any other supply and demand system.
If Marty wants to change this rule, then Marty will have to go back to R&D, without a government subsidy.
Posted by: Matt at May 11, 2008 4:54:19 PM
I'll sign when I see the plan he puts in front of the congress. This version is cheap talk. (I also wonder why Vernon signed; he's a libertarian but also follows the money.)
Posted by: David Zetland at May 11, 2008 6:19:06 PM
Buchanan's endorsement disappoints me a little because I think he really is a quality economist.
Here's my thought on the issue: the war spending is sinking this country faster than any socialist program could. A president who would pull us out of Iraq (or at least scale back and not pick fights with Iran), would be better for this country than one who would cut taxes.
My best-case-scenario is Obama with an (unlikely) Republican Majority in Congress. So we get the foreign policy benefits of Obama and maybe the GOP will start acting like fiscal conservatives again...
Posted by: Brian at May 11, 2008 10:00:01 PM
My fellow Economist for Obama Jonah Gelbach has a nice post on the letter at our site:
http://econ4obama.blogspot.com/2008/05/mccains-economist-supporters-vs-facts.html
Posted by: Don Pedro at May 11, 2008 10:29:00 PM
McCain would blow the budget on war. War is not cheap. Also he favors cap and trade and opposes the the simple carbon tax. Both will raise the price of carbon based energy but at least with a carbon tax you can decrease other taxes.
Posted by: Richard A. at May 12, 2008 1:13:58 AM
Reason #569 why the market is better than politics.
To get an Obama foreign policy, you have to hold your nose and get the rest of Obama, and you encourage the Obama Nation.
In the market, if this I decide I want Frosted Flakes, I don't have to get Frosted Steaks, and by next week they are gone.
Posted by: Andrew at May 12, 2008 3:34:54 AM
At Andrew, regarding reason 569... well, where ever was there a market in foreign policy with which to compare the political solutions available*?
Seriously that is "...and a pony..." thinking of the highest order, it's like saying that cars are better than Beethoven because wheras Beethoven sound good, you can use a car to drive across America.
*I would have some sympathy with the argument that there are better political solutions available, which would allow you to get a sane foreign policy with a domestic policy more to your liking. But that's not what you said, you seem to want to wander down to the 7-11 and pick up a new foreign policy with your bread and milk.
Posted by: tadhgin at May 12, 2008 3:54:31 AM
"The effective corporate tax rate in the US is already 25%." Yes, but we wouldn't have to have the deadweight loss of what it takes to get there. Corporations routinely spend two dollars to save three.
"Is that what it means to be be a conservative?"
Now you're getting it, or are you with Obama and 'favor higher taxes out of being more fair' whether they generate income or not?
Posted by: Tom at May 12, 2008 9:44:18 AM
"So by signing the statement, I would be helping Senator McCain maintain the fiction that there’s no connection between war and economic policy. I’m unwilling to do that."
Superb!
By the way, the same thing goes for the War on Drugs, except its economic damage is far worse than a war in a foreign country.
Posted by: Mr. Econotarian at May 12, 2008 2:16:27 PM
Brian: "My best-case-scenario is Obama with an (unlikely) Republican Majority in Congress. So we get the foreign policy benefits of Obama and maybe the GOP will start acting like fiscal conservatives again..."
The GOP hasn't been a fiscally conservative party since the start of the Reagan era, at very least.
This means that you're hoping that a deep 30 year shift in party policy somehow reverses itself.
Posted by: Barry at May 12, 2008 4:36:41 PM
Huh.. I know Gary Becker but not well enough to bother him about this. We haven't spoke in several years [I always found him very gracious].
I'd love to know if he signed this or if this is another fabrication, like those issued by The Discovery Institute (Intelligent Design outfit). It's not entirely uncommon for shady outfits to just sign names on whatever they are pushing, often refusing to remove names when those people request removal.
Mr. Becker is a conservative Economist but some of the assertions in this letter seem disconnected from reality. Seriously.. I wasn't aware that McCain had even announced a full economic plan.
Posted by: ffakr at May 12, 2008 6:36:54 PM
Funny that nobody here has mentioned what Brad DeLong instantly noted, the three actually
unlikely names on this list: Diebold, Krueger, and Rogoff, with Krueger especially surprising.
Perhaps she wants to weaken the "bipartisan" appeal of a joint Nobel for her and Tullock for
rent seeking.
Posted by: Barkley Rosser at May 12, 2008 7:35:46 PM
"Yes, but we wouldn't have to have the deadweight loss of what it takes to get there. Corporations routinely spend two dollars to save three."
Tom,
Do you honestly believe that if the rate was dropped to 25%, corporations wouldn;t continue to "spend two dollars to save three" in order to get that rate down to 22% or so?
Posted by: orogeny at May 13, 2008 9:55:01 AM
Yeah, more tax cuts. Because, you know, that worked so well over the past three years or so.
Can we please put the tax cut myth to bed now?
Posted by: CommonSense at May 13, 2008 1:57:04 PM
