McCain's Economic Illiteracy

By his own admission (to the Wall Street Journal in 2005 and The Boston Globe in 2007, see John McCain on Meet the Press) John McCain is not an expert on economic policy. If anybody doubts this, he proved it with his remarks about the recent employment report. In response to the loss of 80,000 jobs in March, McCain, in a  press release, called for lower taxes and less regulation as a solution to creating job growth.

Under the current administration, overall federal income tax rates are at historically low levels. Yet the overall growth rate of private sector employment during George W. Bush’s administration is the second worst performance since World War II (his dad gets honors for the worst performance). Contrast this with the Clinton record, where despite tax increases, job growth outpaced Bush’s record by a factor of four. This certainly dispels the Republican mantra that the only way to grow the economy is by cutting taxes.

As for less regulation, the cause of the current financial market distress appears to be completely lost on the Republican nominee for president. More, not less, regulatory oversight of the subprime mortgage market could have reigned in the excesses of the imprudent lending and financing practices that are the very cause of the economic downturn that McCain believes less regulation would alleviate.

Regulation serves the purpose of policing markets where the actions of individual players can harm more than just themselves. Surely the current situation, where the reckless actions of companies like Bear Stearns are driving the economy into recession and seriously threatening the stability of financial markets, is proof positive of the need for regulation.

So when John McCain says “The American people cannot afford the Democrats and their economic leadership”, you might want to think twice. It’s time to put somebody in the White House who will put aside dogma in favor of an informed economic policy. Clearly that person is not John McCain.