Economists who have endorsed John McCain’s economic plan

by on May 11, 2008 at 6:29 am in Current Affairs | Permalink

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.

Tyler Cowen May 11, 2008 at 7:21 am

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.”

dearieme May 11, 2008 at 9:13 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.

Frank May 11, 2008 at 9:54 am

McCain => divided government. The status quo ain’t so hot but the thought of the Dems controlling executive and legislative branches is dismal.

a student of economics May 11, 2008 at 10:51 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?

David R. Henderson May 11, 2008 at 11:35 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.

joan May 11, 2008 at 1:13 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/

Lord May 11, 2008 at 2:41 pm

Oh, I get it. McCain is responsible, he just lies about it.

donny May 11, 2008 at 3:02 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

peter May 11, 2008 at 4:02 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?

David Zetland May 11, 2008 at 6:19 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.)

Don Pedro May 11, 2008 at 10:29 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

Andrew May 12, 2008 at 3:34 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.

Tom May 12, 2008 at 9:44 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?

Barry May 12, 2008 at 4:36 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.

Barkley Rosser May 12, 2008 at 7:35 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.

CommonSense May 13, 2008 at 1:57 pm

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?

dofus kamas January 1, 2009 at 9:34 pm

Welcome to our company which sells all kinds of dofus kamas.

ella May 14, 2009 at 1:07 am

It seems we will be in economy ression for quite a long time. We can see the economy crisis effect everywhere.

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