Tuesday, October 14, 2008

McCain's better-late-than-never economic plan

John McCain is set to unveil his new economic plan today to save the world. The plan has all of the tenants you would expect from a McCain economics plan: cutting taxes and increasing tax loopholes for businesses without accounting for how that loss of tax revenue will be replaced. The underlying concept that McCain and other conservatives attempt to promote is that lowering corporate taxes has the effect of improving wages for workers as the company has more money left over to spend on their employees.

Reality is much more complex than that, and this assumption ignores significant contributions to wages for employees including the tried and true concept that companies pay you only as much as they have to pay you to be competitive regardless of how much profit they actually make. The only people who make more money when the company makes more money are shareholders, which is an unfortunately small percentage of families in the current economic climate. In fact, the evidence to support this concept on McCain's own website is a clever mixture of opinion pieces from conservative economic pundits and studies of economies with significant manufacturing sectors and substantially lower education levels than the US.

The real question is where McCain's economic plan has been. For a guy who saw this economic crisis coming years ago, this "new" plan has been slow to materialize. If you have followed McCain's economic policy at all during the last two years, it's very clear that the plan is just taking that pig wearing lipstick and putting a dress on it as well. The fundamentals of McCain's economic philosophy, the very same philosophy of deregulation that got us into this mess, have not changed. Hopefully, voters will notice that this is the same old economic plan, dressed up to make him seem more credible on the economy.

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