Come to the candidates cold! Three economic visions

Suppose you came to the candidates cold and had to judge them solely on the basis of their speeches in response to the housing crisis?

You'd be judging Clinton and Obama at their best. Both gave great speeches last week. Both set detailed policy prescriptions in broad -- though markedly different - conceptual frameworks. Both were able to document that they'd seen the problem early and had called a year ago for actions they're still calling for now. Both argued forcibly that distressed homeowners are as worthy of targeted aid as the Wall Street banks that have already been the beneficiaries of -- admittedly necessary -- Fed largesse. (Here's Obama's speech; here's Clinton's.)

McCain in contrast was at his worst. He gave the impression that the crisis had just been brought to his attention. He treated Wall Street with kid gloves and distressed homeowners with contempt. Schooled doubtless by Phil "Dereg" Gramm, he proposed less regulation for banks and no aid for homeowners. He managed to make Bush look like a compassionate conservative. He bid fair to concede the election on the issue likely to be foremost in voters' minds, barring true catastrophe.

While Obama and Clinton proposed similar measures to prevent and deal with foreclosures, their speeches differed considerably in emphasis and concept. The differences dovetail with those of their core overall pitches to voters. Obama, characteristically, sought historical context, arguing that the current crisis was caused not only by bad policies but by a corrupt policymaking process - executed during the Clinton Administration. His proposals therefore focused as much on regulatory reform as on aid to homeowners - with the whole package implicitly pinned on breaking the grip of lobbyists. More broadly still, he set the struggle to shore up homeowners and rein in financial institutions in the context of a 200-year struggle to keep the concentration of wealth in check without choking off opportunity.

Hillary provided more detailed description and justification for her proposals to aid homeowners than Obama did. She had room to do so, because she barely touched on regulating the financial industry or on how we got into this mess (a blind spot that perhaps explains her tone-deaf eagerness to put Alan Greenspan on a blue ribbon commission to rescue homeowners). Her speech was no mere laundry list, but her conceptual frame was how Wall Street's troubles trickle down to Main Street (in marked contrast to Obama's arresting formulation: pain trickled up). She laid down a causal chain from tanking securities to dried up credit to falling home values to falling tax revenues. Describing the family home rather movingly as the foundation not only of wealth but of security. and she identified the core problem as a crisis in confidence. That's Rooseveltian - nothing to fear but fear itself. And the crisis in confidence was laid at the doorstep of "brain-dead" Bush Administration policies. Of course, it takes a Clinton to roll back those policies and get the government working for working people.

The speeches reflect how Obama and Clinton's differing political interests mesh with differences in character and outlook and personal history. Since his days as an organizer, Obama has been about systemic change. He aims to be a transformational President. He wants to be more like Reagan than Bill Clinton, to "change the trajectory of American politics" -- which in his view entails changing the political process by reducing the influence of monied interests. He takes a long view of American history, viewing it, as in this speech, as an endless struggle for balance between opportunity and fairness. He views the current moment as one in which the pendulum has swung to a dangerous degree toward concentration of wealth, which is both reflected and furthered by the power of lobbyists and campaign finance. He bids openly to move the country's political center to the left by asking for a broad mandate, the 'working majority' that, as he first said openly in January, Bill Clinton failed to get.

In Obama's narrative, Bill Clinton fought a good rearguard fight against Republican redistribution toward the wealthy. But he did so in large part by playing ball with vested interests -- as in his signing of the Gramm-Leach-Blilely bill dismantling Depression-era restrictions on financial industry activity. In this speech, Obama identified that "fundamentally flawed" deregulation as the root cause of our current financial crisis. And his pain trickled up argument to a Wall Street audience was that those with wealth and power saw off the branch they're sitting on when they "put their thumbs on the economic scales" by undermining effective regulation and enabling exploitive practices. "The result," Obama said, "has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both."

Hillary's shorter historical purview is shaped not only by political necessity but by the experience that shaped that necessity. Her fundamental economic message is 'back to the nineties.' That means some income redistribution downward and some risk shift back to the community. It means fighting vested industry interests head-on at times, but not attempting to change the way they influence policy. She aims to get the financial industry on board to help homeowners -- in their own interest -- but not to change the rules by which they operate.

It's no accident that Hillary continues to put Alan Greenspan forward as candidate number 1 for her Emergency Working Group on Foreclosures. In his autobiography, Greenspan identifies Bill Clinton as the smartest President he worked with. He portrays Clinton as an excellent student who worked closely with him to balance the budget and build confidence in the bond market (hence, perhaps, Hillary's emphasis on confidence as "the true currency" of the American economy). When she looks at Greenspan, Hillary apparently sees primarily her husband's partner in producing prosperity. And that certainly is a major part of Greenspan's legacy. But what about the Fed Chairman who ignored urgings to use the Fed's power to rein in abusive lending practices? Nary a word from Hillary on that front.

Hillary might indeed do well getting into the trenches with the wise men of Feds past to craft the most efficient workout possible for the nation's distressed housing portfolio. But what about restructuring the financial industry itself? Henry Paulson has laid down the gauntlet, introducing a regulatory reform plan that embodies the industry's fondest wishes for a lighter regulatory touch. But Paulson has also made clear the magnitude of the task facing the next President, emphasizing that meaningful financial regulatory reform is generally a 2-8 year process. Obama has mapped out the lines tying political reform to regulatory reform to the larger national enterprise of reversing the tiding of rising income inequality and restoring momentum toward increasing opportunity for all Americans: "the core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well being of American business, its capital markets, and the American people are aligned."

Is it prudent to believe that Obama might make meaningful progress on this 'transformational' agenda? If it strikes you as a pipe dream, vote for Hillary.

Related Posts
Obamanomics: rebalancing the national portfolio
Breaking the Commander-in-Chief Chokehold
Audacity of Obama: Embracing Wright and Grandma
Audacity of Respect: What Obama Owes to Reagan II
Obama's Metapolitics
Obama gets down to tax brass
Obama brings it back to earth in Virginia
Feb. 5: Hillary's Speech was Better than Obama's
Truth and Transformation
Obama Praises Clinton, and Buries Him
Obama: Man, those Clinton Kids are Something

A more perfect speech draft: Obama edits "our" national story

Editors of the world are agog at a close-up of Obama's mark-up of a draft of the speech on health care he delivered to both chambers of Congress on September 9. It's an extraordinary window into Obama's mind.

What did Obama do to the draft? Repeatedly, he added agency, attributing acts, feelings and thoughts to specific people or groups of people.  He added nouns and pronouns and active verbs, converting verbal nouns in the original draft to active verbs with human predicates(Teddy, our seniors, members of Congress, I, we, etc.).  He drew individuals, members of Congress generally, and the American people as active agents into a joint national project of compassion and positive action.  He reminded Republicans that they had been part of this national project (extending from social security to Medicare to the current health reform) in the past.

His additions of this sort are boldfaced below. Text in blue appears neither in the typescript nor in Obama's handwritten edits -- it was apparently added later

But those of us who knew Teddy and worked with him here -- people of both parties -- know that what drove him was something more.  His friend Orrin Hatch -- he knows that.  They worked together to provide children with health insurance.  His friend John McCain knows that.  They worked together on a Patient's Bill of Rights.  His friend Chuck Grassley knows that.  They worked together to provide health care to children with disabilities.

On issues like these, Ted Kennedy's passion was born not of some rigid ideology, but of his own experience.  It was the experience of having two children stricken with cancer.  He never forgot the sheer terror and helplessness that any parent feels when a child is badly sick.  And he was able [orig: or his ability]  to imagine what it must be like for those without insurance, what it would be like to have to say to a wife or a child or an aging parent, there is something that could make you better, but I just can't afford it.

That large-heartedness -- that concern and regard for the plight of others -- is not a partisan feeling.  It's not a Republican or a Democratic feeling.  It, too, is part of the American character -- our ability to stand in other people's shoes; a recognition that we are all in this together, and when fortune turns against one of us, others are there to lend a helping hand; a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise [orig: "...security and fair play that only government can ensure"].

This has always been the history of our progress.  In 1935, when over half of our seniors could not support themselves and millions had seen their savings wiped away [further edited before delivery], there were those who argued that Social Security would lead to socialism, but the men and women of Congress stood fast, and we are all the better for it.  In 1965, when some argued that Medicare represented a government takeover of health care, members of Congress -- Democrats and Republicans -- did not back down. They joined together so that all of us could enter our golden years with some basic peace of mind.  

You see, our predecessors understood that government could not, and should not, solve every problem.  They understood that there are instances when the gains in security from government action are not worth the added constraints on our freedom.  But they also understood that the danger of too much government is matched by the perils of too little; that without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, the vulnerable can be exploited.  And they knew that when any government measure, no matter how carefully crafted or beneficial, is subject to scorn; when any efforts to help people in need are attacked as un-American; when facts and reason are thrown overboard and only timidity passes for wisdom, and we can no longer even engage in a civil conversation with each other over the things that truly matter -- that at that point we don't merely lose our capacity to solve big challenges.  We lose something essential about ourselves.

That was true then.  It remains true today.  I understand how difficult this health care debate has been.  I know that many in this country are deeply skeptical that government is looking out for them.  I understand that the politically safe move would be to kick the can further down the road -- to defer reform one more year, or one more election, or one more term. 

But that is not what the moment calls for.  That's not what we came here to do.  We did not come to fear the future.  We came here to shape it.  I still believe we can act even when it's hard.  (Applause.)  I still believe -- I still believe that we can act when it's hard.  I still believe we can replace acrimony with civility, and gridlock with progress.  I still believe we can do great things, and that here and now we will meet history's test.

Because that's who we are.  That is our calling.  That is our character.  Thank you, God bless you, and may God bless the United States of America. 

One addition -- not the warmest, but one that opens a window onto how Obama conceives of government -- deserves an additional spotlight. At the end of  a complex sentence, he added a clause to change this:

It, too, is part of the American character -- our ability to stand in other people's shoes; a recognition that we are all in this together, and when fortune turns against one of us, others are there to lend a helping hand; a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play that only government can ensure.

 To this:

It, too, is part of the American character -- our ability to stand in other people's shoes; a recognition that we are all in this together, and when fortune turns against one of us, others are there to lend a helping hand; a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise. 

Talk about "active government" -- you have here a seven-word active verb phrase: "has to step in to help deliver."  Note how qualified government's role is: it steps in only when it has to, and it only helps deliver on the promise that is part of the American character.  That is liberalism chastened by Reaganism -- a conservative superego imposed on a liberal id.

UPDATE: In a look at Obama's rhetoric, Jonathan Bernstein suggests that Obama defines American greatness as the capacity for creative political action:

We, in the United States, do not accept history, or live through history -- we have the capacity, Obama (and Biden) say, to make history, through collective action, whether it is in the Revolution, the Constitution, the Civil War, the civil rights revolution, or now, in tackling the challenges that face us in the 21st century.  America, therefore, is self-created, and continues to be self-creating, by political action. 

The changes noted above reinforce this theme by naming and crediting the actor. See also 'We've been here before': How Obama frames our history.

Update, 10/4/12: In a similar vein, see the changes Bill Clinton ad-libbed in his speech at the 2012  Democratic National Convention.

The Obama Rhetoric Series

• The great myth about Obama's soaring rhetoric
• Obama denounces Holocaust denial, loses Arab students
• 2029: Look back in wonder
• The gospel according to Obama
• What Will.i.am had to work with
• Killing McCain with Kindness
• We've been here before: How Obama frames our history
• Obama does it with integrity
• Obamanomics: rebalancing the national portfolio
• Breaking the commander-in-chief chokehold: Obama maps a strategy
• What Obama owes to Reagan II
• Obama praises Bill Clinton, and buries him

Obamanomics: rebalancing the national portfolio

One of Obama's favorite words is 'balance.' It's been a central premise of his campaign that moving economic policy to the left is a matter of restoring balance after a generation of deregulation, tax cuts, widening income inequality, and risk shift from institutions to individuals.

Given this recurring theme, it's amusing to look at how Obama, in his speech devoted to the housing crisis delivered at Cooper Union in New York City today, tacks back and forth between Hamilton and Jefferson to establish a framework for his proposed policies.

First, Obama enlists Hamilton in support of government providing 'prudent aids and encouragement' to economic growth, extrapolating from Hamilton's activism "weaving together the economies of the states and creating an American system of credit and capital markets" an implied support for government as rulemaker, i.e. regulator. He implicitly acknowledges that Hamilton's vision of an economy based on manufacturing enterprise better describes the path of American development than Jefferson's agrarian vision.

But then he tacks over to Jefferson's fear that Hamiltonian capitalism "would favor the interests of the few over the many." Finally, with a bit of sleight of hand, he implies that Hamilton shared this concern, by segueing from the rivals' different attitudes about concentration of power to their alleged agreement that "opportunity had to remain open to all." In effect he coopts Hamilton's authority for a strong Federal role in the economy, and Jefferson's mandate to work against the concentration of power and wealth.

Having yoked the rivals to support his own advocacy for free markets, strong government regulation, and reduced concentration of wealth, Obama goes on to frame strong if measured doses of re-regulation and government aid to distressed homeowners as a matter of redressing imbalances created in the Clinton era.

But the frame is not finished at this point. Before moving on to specific policies, Obama introduces these paired principles:

Prosperity is only sustainable if it's shared: "there is no dividing line between Main Street and Wall Street. The decisions made in New York's high-rises have consequences for Americans across the country. And whether those Americans can make their house payments; whether they keep their jobs; or spend confidently without falling into debt – that has consequences for the entire market." In the current crisis, "What was bad for Main Street was bad for Wall Street. Pain trickled up (my emphasis).

Concentration of power distorts policymaking and undermines shared prosperity: specifically, bank deregulation was botched in the 1990s because of unchecked lobbying. Characteristically, Obama begins here by acknowledging that "the other side may have a point": "The evolution of industries often warrants regulatory reform...There were good arguments for changing the rules of the road in the 1990s." But a broken political system distorted reform: "Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one – aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy."

Within this context, Obama positions individual policy prescriptions -- as he always does -- as means of restoring balance and fairness. Let's look at one proposal aimed at distressed homeowners, and one at regulation of lenders. First, Obama's defense of the Dodd-Frank FHA Housing Security Program:

Senator McCain argues that government should do nothing to protect borrowers and lenders who've made bad decisions, or taken on excessive risk. On this point, I agree. But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly, as they will take losses. It is not a windfall for borrowers, as they will have to share any capital gain. Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. That is what Senator McCain ignores.

Asking both sides to sacrifice is a classic Obama trope. This 'balance' is matched by his acknowledgement of McCain's moral concern. But in Obama's moral universe, McCain's got just one hand clapping.

The proposal to subject mortgage brokers to the same lending guidelines to which commercial banks are subject is presented as a a restoration of government's historic oversight function:

we need to regulate institutions for what they do, not what they are. Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of subprime mortgages don't originate from banks. This regulatory framework has failed to protect homeowners, and it is now clear that it made no sense for our financial system. When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with.

Having placed his measures to deal with the current crisis in this framework, Obama broadens it, articulating principles that he has emphasized throughout his campaign:

Good policy reform requires systemic political reform:

the American people must be able to trust that their government is looking out for all of us – not just those who donate to political campaigns. I fought in the Senate for the most extensive ethics reform since Watergate. I have refused contributions from federal lobbyists and PACs. And I have laid out far-reaching plans that I intend to sign into law as President to bring transparency to government, and to end the revolving door between industries and the federal agencies that oversee them.

To move left today is to restore the center:

today, for far too many Americans, [the American] dream is slipping away. Wall Street has been gripped by increasing gloom over the last nine months. But for many American families, the economy has effectively been in recession for the past seven years. We have just come through the first sustained period of economic growth since World War II that was not accompanied by a growth in incomes for typical families. Americans are working harder for less. Costs are rising, and it's not clear that we'll leave a legacy of opportunity to our children and grandchildren. That's why, throughout this campaign, I've put forward a series of proposals that will foster economic growth from the bottom up, and not just from the top down....we need to pursue policies that once again recognize that we are in this together.

Those who dismiss Obama's calls for unity as empty rhetoric miss his relentless efforts to create unity by force of argument -- to convince Americans that our true national center is well left of where we are now. His rhetoric is powerful because his thinking is powerful. He is unmatched by any living American politician in his ability to develop and articulate policy proposals in a clear historical and theoretical context.

Hillary's policy proposals are a laundry list. McCain's are a morality play. Obama's are new chapters in an historical narrative.

Related Posts:
Breaking the Commander-in-Chief Chokehold
Audacity of Obama: Embracing Wright and Grandma
Audacity of Respect: What Obama Owes to Reagan II
Obama's Metapolitics
Obama gets down to tax brass
Obama brings it back to earth in Virginia
Feb. 5: Hillary's Speech was Better than Obama's
Truth and Transformation
Obama Praises Clinton, and Buries Him
Obama: Man, those Clinton Kids are Something

Obamanomics II: a corporate tax cut?

The Wall Street Journal Online has a terrific interview with Obama on economics up today - wide-ranging, confrontational, moving freely between theory and policy specifics.

Unfortunately, the front-page print writeup by Bob Davis and Amy Chozicki fails to do the discussion justice. Curiously, it's only two-thirds as long as the print writeup of a March 3 economics interview with McCain -- early fruits, perhaps, of Murdoch's stated desire to make WSJ features shorter. Douglas Holtz-Eakin, McCain's chief economic advisor, gets almost half again as much ink as Obama, and much of the article is devoted to dubious parallels between Obama's plan for Federal venture capital-style investment in alternative energy and past failed Federal attempts at alternative energy investment.

The print article does not convey the subtlety, pragmatism, balance and strategic reach of the economic vision Obama expressed in the interview.*

The full discussion is a prime example of how Obama casts liberal spending and tax proposals as a restoration of balance, a return to the historical center after years of rising inequality, and a set of investments essential to competing in a global economy. Obama's bid to build a working majority for these policies consists in part of acknowledging the validity of certain conservative principles and (for a Democrat) inconvenient truths:

• "the combination of globalization and technology and automation all weaken the position of workers" (listening, David Brooks?).
  
• "You might undoubtedly get to a point where the capital gain and dividend taxes are so high that they distort investment decisions and you're weaker economically."
• "if somebody shows me we can do something better through a market mechanism, I'm happy to do it. I have no vested interest in expanding government or setting up a program just for the sake of setting one up."
  

Acknowledging these points enables Obama to present his redistributionist tax proposals and proposed investments in education, health care, infrastructure and alternative energy as pragmatic and essentially centrist. He uses history -- references to previous periods of successful public investment, and to the last thirty years' rise in income inequality -- to move the center to the left. Particularly revealing is his response to a question about taxes. Challenged as a redistributionist, Obama talks first about fairness, but then about efficiency:

Here's what I would say: I do believe the tax policies over the last eight years have been badly skewed towards the winners of the global economy. And I do think there is a function for tax policy in making sure that everybody benefits from globalization or at least the benefits and burdens are shared a little more easily. If, as some talk about, we've got a winner-take-all economy where the highly skilled, highly educated are reaping huge rewards and the unskilled or even semi-skilled are getting a much smaller share of the economy, then our tax policies can help cushion some of the blow through providing health care. So if people lose their jobs they're not losing their health care as well. That actually makes a more flexible work force that makes workers more mobile and less resistant to change.

If we've got investments in education, that will make us more competitive in the long run. We've got to pay for that like anything else. But it would be a mistake to say I view our tax code only as a distribution question. I also think that our tax code has come to distort a lot of economic decision making so I'd like to see simplification as part of an overall tax agenda. On the corporate side, for example, one of the things I've asked my folks to look at is: Are there ways we can close existing loopholes in tax havens at the same time as we're lowering overall rates? We've got this new problem: The biggest problem with our tax code when it comes to the business side is that we have one of the highest tax rates -- corporate tax rates -- on paper but our effective tax rate is one of the lowest … You know, how much you pay in taxes as a corporation a lot of times is going to depend on how good your lobbyist is, as opposed to any sound economic theories. So those distorting effects I'd like to actually remove and eliminate from our tax system, but obviously that's a complicated and difficult task. The last time we did it was in 1986. We're going to have to, I think, revisit that.

A less skilled politician, and a less subtle thinker, would use McCain's proposed cut in the corporate tax rate as a populist bludgeon -- a powerful one, at a time of heavy economic stress. Obama, instead, acknowledges that a high corporate tax rate can hurt U.S. competitiveness -- or would if it were not offset by a thousand loopholes. Obama argues fairness and efficiency and good economic outcomes are interdependent. And fairer, more rational and efficient policies depend on lobbying reform.

The discussion is shadowed by a different kind of centrism: Clinton's. Obama is asked explicitly whether budget pressures would not force him, as they did Clinton, to put deficit reduction ahead of investment - specifically in infrastructure, but implicitly in a range of social programs. The reporters also cast this question as a choice between Clinton's Treasury Secretary Robert Rubin (deficit reduction) and Clinton's Labor Secretary Robert Reich (investment in infrastructure). Obama says explicitly that he would draw on both. But he also makes it quite clear that he expects to reverse Clinton's emphasis, and put investment first -- and that the historical moment would allow him to do so:

Well, look, the difference I would suggest is that there is a strong recognition in the public mind that we can't continue on our current energy path. It's not sustainable. Which means there's a bigger opening to bring about change....

Finally, you've got a war in Iraq that is deeply unpopular, where we've been spending billions of dollars. We're going to have to catch up on deficit reduction but I think people also recognize that if we can spend that much money rebuilding Iraq, surely we can find some money to rebuild America.

It's interesting that Obama "leans Reich" on this question, because on a different plane he's deeply influenced by Reich's thinking. That is, he's absorbed Reich's argument in Supercapitalism that widening income inequality, a large risk shift from the community to the individual, and the corruption of our political process by lobbying are all due more to the rise of global hyper-competition among businesses than to the policies of either party. Obama's position is that Republican policies -- anti-unionism, radical deregulation, tax breaks for the wealthy --have exacerbated and failed to address these problems -- but not caused them. His response to a question about the historical underpinnings of "the question of redistribution" is almost pure Reich:

...the combination of globalization and technology and automation all weaken the position of workers. I would add an anti-union climate to that list. But all weakens the position of workers, particularly blue-collar workers, in the economy, and some of it is just historical. You know after World War II, we were in this unique position where Europe was decimated, Japan was decimated. China was off the grid because of Mao. And so we didn't have a lot of competition out there, and now other countries are rising and automation has supplanted a lot of work that used to be done by middle-class workers.

We have drastically increased productivity since 1995, and there was the theory that if you increase productivity enough some of these problems of living standards would solve themselves. But what we've seen is rising productivity, rising corporate profits but flat-lining or even declining wages and incomes for the average family.

What that says is that it's going to be important for us to pay attention to not only growing the pie, which is always critical, but also some attention to how it is sliced. I do not believe that those two things -- fair distribution and robust economic growth -- are mutually exclusive.

Having argued at length that re-emphasizing shared prosperity is the deepest pragmatism, Obama is able at the end of the interview to effectively cast himself as the anti-Bush (and implictly, an anti-McCain)-- a card-carrying member of the reality-based community:

I tend to be eclectic. I do think we're in a different time in 2008 than we were in 1992. The thing I think people should feel confident in is that I'm going to make these judgments not based on some fierce ideological pre-disposition but based on what makes sense. I'm a big believer in evidence. I'm a big believer in fact. You know, if somebody shows me we can do something better through a market mechanism, I'm happy to do it. I have no vested interest in expanding government or setting up a program just for the sake of setting one up. It's too much work.

On the health-care front, for example, if I actually believed that just providing a tax cut to everybody would solve the problem of lack of health insurance and cure health-care inflation, I'd say great, that's a nice way to do it. It prevents a lot of headaches. But I've seen no evidence that the kinds of policies John McCain puts forward would actually work.

If I saw strong evidence that an additional $300 billion in tax cuts that John has proposed -- without a clear way of paying for it -- would actually boost economic growth and productivity, I'd be happy to take a look at that evidence. But I haven't seen that. It's all conjecture.

Obama is telling the country that Colbert was right. Reality has a liberal bias. Not everywhere, not at every time. But here in the U.S., after eight years of Bush.

*In fairness, it should be noted that while Davis and Chozicki seem deeply skeptical about Obama's spending and tax plans, Davis at least is an equal-opportunity skeptic. Reporting the McCain interview, he pretty much let McCain hang himself - making it clear without editorializing that McCain's proposed tax cuts would cost about $400 billion per year, to be offset only by trivial savings gained by clamping down on earmarks. Davis also reported deadpan as McCain disowned, as it were in real time, the social security plan posted on his own website.

Related posts:
Obamanomics: rebalancing the national portfolio
Obama gets down to tax brass
Obama brings it back to earth in Virginia

Era of Obama: Flashpoints

• The credo of a community organizer
• Change, four years later
• Obama maintains hope, but not in comity
• The president who doesn't do sound bytes
• Judging Obama by his own standards
• A lover of fairy tales casts Obama as villain-in-chief
• Obama's uncertain trigger finger
• Obama: better hedge than wedge
• Liberal Reagan - not
• Where Obama's "placation" ended
• A more perfect speech draft
•  The great myth about Obama's soaring rhetoric
• Obama denounces Holocaust denial, loses Arab students
• 2029: Look back in wonder
• The gospel according to Obama
• What Will.i.am had to work with
• Killing McCain with Kindness
• We've been here before: How Obama frames our history
• Obama does it with integrity
• Obamanomics: rebalancing the national portfolio
• Breaking the commander-in-chief chokehold: Obama maps a strategy
• What Obama owes to Reagan II
• Obama praises Bill Clinton, and buries him