[Opinion] – The economy, stupid!

Call it the Greenspan Paradox: Alan Greenspan, as former chairman of the Federal Reserve, oversaw the years of decay and deregulation that brought global financial markets to their knees last week. Greenspan has endorsed John McCain for president. But Greenspan has also said that McCainâÄôs proposed tax cuts are impossible. And McCain has joked that he would choose Greenspan to pilot the economy, even in death (and making a pretty solid âÄúWeekend at BernieâÄôsâÄù reference in the process). So, Greenspan messed up, but likes McCain, but disagrees with McCain, but McCain likes him, but proposes things that Greenspan thinks are bad âĦ Oh. Good thing weâÄôve got that straightened out. To be fair, McCain is probably just as confused as the rest of us; he still thinks âÄúthe fundamentals of our economy are strong.âÄù Now, itâÄôs important to point out that the president doesnâÄôt really âÄúcontrol the economy.âÄù Nobody does âÄî there are far too many moving parts. But presidents still matter, and McCainâÄôs combination of proposals and past record should be sending shivers down your spine right about now. McCain has admitted in the past that heâÄôs no economic mastermind. And thatâÄôs fine; itâÄôs the presidentâÄôs job to hire smart, responsible people to look after such things. ThatâÄôs why the role of Phil Gramm, the guy who called our country âÄúa nation of whiners,âÄù matters: HeâÄôs long been McCainâÄôs economic go-to guy, and heâÄôs got his fingerprints all over the mess weâÄôre in now. Back in 2000, when Gramm was in the Senate, he tacked a little 262-page add-on called the Commodity Futures Modernization Act onto a federal spending bill. Seems like a harmless enough title: after all, modernizing things is always a nice idea. But this bill did the opposite, guaranteeing that risky financial transactions called credit default swaps remained entirely unregulated. These swaps grew completely out of control, and are a major cause of last weekâÄôs financial chaos. Perhaps Gramm didnâÄôt realize what his bill would do âÄî but thatâÄôs probably even more damning than if he knew exactly what he was doing. Either way, Gramm has long worked both to avoid new regulations and roll back existing ones, some of which date back to the Great Depression. His form of extremist free-market orthodoxy is flat-out dangerous, as weâÄôve seen. And McCain agrees with him. The Arizona senator has spent his entire political career supporting the continual deregulation of the financial markets. Up until the last week or so, heâÄôs bragged about that fact. As a senator heâÄôs continually voted for acts of deregulation (many of them sponsored by his guru Gramm). As I already mentioned, heâÄôs expressed only great admiration for Greenspan, the deregulator-in-chief. He loves to pine for the days of Reagan and the destruction of the regulatory state that ensued. At least, he used to. Now, as his trusted free-market principles are crumbling and the government rushes to rescue massive companies like AIG, McCain is backpedaling as quickly as he can. He came right out and proclaimed that âÄúwe need strong and effective regulation.âÄù Maybe thatâÄôs just naked pandering; maybe McCain has suddenly seen the regulatory light. It doesnâÄôt really matter. The fact remains that McCain is uniquely unqualified to oversee the kind of fundamental overhaul that our economy needs. And not just when it comes to problems in the financial markets, either: from tax policy to entitlement spending to his crusade against congressional earmarks, nothing about McCain adds up. Neither candidate is going to magically balance the federal budget while in office. The last seven years have put us in far too deep a hole for that to be reasonable. But we can try to stop the bleeding. Barack ObamaâÄôs proposals do a better job of that. The non-partisan Tax Policy Center released at the end of July a study of how both candidatesâÄô proposals would affect the governmentâÄôs bottom line. They found that Obama would add from $3.6 to $5.9 trillion to the national debt over the next 10 years. ThatâÄôs a huge amount of money. But McCainâÄôs plan would add from $5.1 to $7.4 trillion. The math major sitting next to you in your lecture right now can tell you which of those numbers is bigger. There are drastic differences in how each candidate would distribute the national tax burden, as well. For all but the top quintile of the population, Obama actually cuts taxes more than McCain. And the differences get more extreme at the highest income levels âÄî McCainâÄôs plan would cut the taxes of those making over $2.87 million (the top 0.1 percent) by hundreds of thousands of dollars. Those at lower income levels get smaller breaks âÄî and the federal budget gets blown to smithereens. McCain claims that by cutting earmark spending out of bills passed by Congress, he can make up the difference. That isnâÄôt true. The entire earmark bill for 2008 totaled about $16 billion, and nearly half of that was military spending that McCain has no intention of cutting. ThatâÄôs a drop in the bucket when you remember the federal deficit for 2008 is going to clock in at around $400 billion. I could go on and on, filling this column full of figures to show how none of this adds up. But IâÄôll spare you. LetâÄôs leave with this thought: McCain favored (and still favors) privatizing social security. (He calls it âÄúpersonal accounts,âÄù which are the same thing). HeâÄôs claimed that if we could deregulate health care like we did the banking industry, our problems would be solved. These are such staggeringly bad ideas that I think they speak for themselves; letâÄôs take another glance at Lehman Brothers stock and see how thatâÄôs working out. John Sharkey welcomes comments at [email protected]