Obama? Really? The Economist's Free Exchange sums up the discomfort that my commenters, and indeed I myself, have with Obama:
As Mr Crook observes, Mr Obama is far from a centrist. His voting record suggests that, if elected, Mr Obama would be the most economically left-wing American president since ... well, it's hard to say. Richard Nixon? In any case, that the junior senator from Illinois is such a skilled negotiator and conciliator bodes rather ill for those who wish to see less rather than more government involvement in the economy, I conjecture.
Unlike Hillary Clinton, Mr Obama will not inspire venomous, high-spirited obstruction from the Republican congressional minority. On the contrary, an Obama victory will be cast as such a triumphant watershed moment (and quite reasonably so) that we should expect an especially drawn out and sunny honeymoon. Republicans will be anxious to take off the kid gloves, but will be much constrained by the prevailing spirit of celebration and hope, which may leave the charasmatic young president seeming untouchable, at least for a time. Add to this Mr Obama's much-touted skill for diplomatically forging consensus, and it seems we could end up with an American economic policy rather further to the left than seemed politically possible even a few month's ago.
How, then, can I support him? Allow me to channel my former Economist colleague, and now co-worker at The Atlantic, Clive Crook:
My perspective as a pro-market egalitarian condemns me to be perpetually disappointed by politicians. Mr Obama may prove no exception. Last week, in a speech at a General Motors plant in Wisconsin, he unveiled an economic plan. It mainly gathered previously announced ideas, spun to appeal to the “working Americans” in Mrs Clinton’s base. Indeed, the Clinton campaign accused him of plagiarism. Costed (conservatively) at more than $140bn a year, it includes comprehensive reform of healthcare, subsidies for alternative energy, investment in infrastructure and tax cuts aimed at the low paid. Unwinding some of the Bush tax cuts, together with unspecified increases in other taxes on companies and the higher-paid, would pay for it all, he said.
The goals are worthy. The US healthcare system is long overdue for reform. The country’s infrastructure has suffered years of increasingly apparent neglect. The Bush administration’s tax cuts worsened inequality at a time when economic forces were already pushing strongly in that direction.
But American corporate taxes are already high. Post-Bush, top marginal rates of tax on personal income are not low, when you take state and local taxes into account. Mr Obama’s proposal to restore top rates to the levels of the 1990s, and then lift the cap on social security taxes as well, constitutes a swingeing rise in the highest rates. Very high rates applied to a narrow base is bad tax policy. A more broadly based and (above all) far simpler tax system with a moderately progressive structure of rates is the way to combine increased revenues, a more equal distribution of post-tax incomes, and tolerably efficient incentives. No sign of this in Mr Obama’s proposals. It is also a great shame that Mr Obama, like Mrs Clinton, has adopted a populist stance on trade. He attacks her for having once supported the North American Free Trade Agreement, which he blames for “exporting jobs”.
Perhaps, for a Democrat, this position is a political necessity. It is a badge of economic ignorance, nonetheless.
Elsewhere, though, one sees flashes of an independent intelligence in Mr Obama’s economic pronouncements. He is no knee-jerk anti-capitalist: he lauds the “free market that has been the engine of America’s great progress”. He is cautious about mandates and other forms of dirigisme – which is why some party liberals still view him with suspicion.
Mr Obama is a paradox, as yet unresolved. His plan and his votes in the Senate show that he is a liberal, not a centrist. And he is no wavering or accidental liberal. His ideas are of a piece. He sees – or convinces people that he sees – a bigger picture. And yet this leftist visionary is pragmatic, non-ideological and accommodating of dissent. More than that, in fact, he seems keen to listen to and learn from those who disagree with him. What a strange and beguiling combination this is.
So how can I support the man? Well, I wouldn't, if there were better alternatives. But my choices are Hillary Clinton and John McCain, whose goals may be slightly more moderate, but whose instincts are for regulating the hell out of any market outcome they don't like. McCain is not a classical liberal; he's the product of an intensely hierarchical honor culture that he seems to think would substantially improve the rest of us if we adopted more of its values. I have no shortage of respect for the military, and their willingness to place their own lives between the rest of us and war's desolation. But that doesn't mean I think America would be a better place if we had a more martial state. His record bespeaks little respect for spontaneous order and individual freedom. What free-market instincts he evinces seem to have come as part of the conservative ideas combo-pack he bought because it was cheaper than buying the parts individually--all he really wanted was the national greatness and the moderately conservative social structure.
As libertarians go, I'm not a tax nut; I think deadweight loss is relatively low, and taxation is among the least intrusive actions the state can take. I'm far more concerned about regulation. The economic cost tends to be higher; it lacks the natural limits imposed by citizen resistance; and it doesn't so extensively accustom the citizenry to taking orders from the state.
I have the terrible feeling that for both Hillary and McCain, that last is a feature of regulation, not a bug.
Faced with that, I'm betting on the advisors. Obama's economic advisors are some of the smartest economists working in the field today, and they're people I deeply respect. I rest on the hope that they say something about the man who would choose them.