The Economy, Stupid, Version 2008.0
The Top Story by Chris Graham
John McCain took some time away from his ongoing effort to make Britney Spears and Paris Hilton into ’08 campaign issues to talk about the economy today, releasing his plan for helping small businesses through the economic slowdown, though looking at it might make one wonder if Republicans are that out of touch with what it means to be a small-business owner.
The first line in the plan announces to the world that McCain thinks it is a top priority in the effort to protect small business that the top income-tax rate be maintained at 35 percent, that the capital-gains rate be left at 15 percent and that the dreaded Alternative Minimum Tax that dooms so many of us in the small-business world so loathe would be phased out.
“Small businesses are the heart of job growth,” reads the item in the McCain campaign press release on this issue sent out earlier today. “Raising taxes on them hurts every worker.”
Tone deaf to the fiscal realities out here in the heartland as this might be, at least the McCain side seems to be recognizing that the issue that will drive the ’08 presidential race has to do with the economy, stupid. Democratic candidates tend to do better in tough economic times – think Bill Clinton in 1992 – ” because they offer a lot of government help, a lot of active government help, to solve the day-to-day problems that voters are suffering from, and Republicans tend to take a laissez-faire approach, let the problem work itself through the economy, and the economy will be better off in the long run, that sort of thing,” Christopher Newport University political-science professor Quentin Kidd said.
“So what you end up getting is a slightly clearer message from the Democratic candidate saying, This is what we want to do. And you get a confused message from the Republican candidate, because on the one hand, they want to say to the voters, We understand, and we’re here to help, and on the other hand, what they want to do is let the economy sort of go, let the economy work itself out. That’s usually to the advantage of the Democrats, and I don’t see that changing this year,” Kidd said.
I think we’re seeing that trend play itself out at this early, early stage in the ’08 general-election campaign. McCain clearly wants to be seen as offering something on the economic front, even if the effect of what he has actually had to offer is more of the same that we’ve been seeing for generations from Republicans. And Obama is focusing on the government-help aspect of Kidd’s construction, talking up his ideas for another economic-stimulus package to give the macroeconomy another jumpstart.
Taking what the two candidates are saying on the economy in full consideration, I don’t know that I disagree with University of Mary Washington professor Stephen Farnsworth when he says that he doesn’t think that either campaign “has been effective on the economic question yet.” “This is the single biggest unanswered question in this campaign, it seems to me,” Farnsworth said. “There’s a clear sentiment in the polls that people are hurting. They’re hurting because of the cost of gasoline, they’re frustrated about the economic insecurity, they’re very discouraged about the uncertainty over their pensions and their job prospects.”
But that said, I don’t know that McCain is going to be able to escape the shadow of the economic issue in November. As Farnsworth points out, “Forty years of political-science research demonstrates that people within the president’s party are hurt when the economy is performing poorly even when the president is not on the ballot. So McCain has to work twice as hard to get half as far on the economy. And all indications are that this election is going to be won or lost on the economy,” Farnsworth said.
A quick look at the poll numbers bears this out. Even as McCain has pulled back to within three points in today’s Gallup tracking polls, a solid majority of voters are telling pollsters that they think Barack Obama would do a better job managing the economy, one, and two, a slightly smaller majority gives Obama the nod on the tax issue, perhaps surprisingly.
It’s going to take more than continuing Bush-era tax breaks for the wealthy and disguising them as a small-business plan to turn things around for McCain to that end. In other words, it’s going to take some of the old McCain, who voted against the Bush tax cuts and seemed to have some economic common sense before he handed the keys to his campaign to the Bushies, to steer himself back into contention on the issue that will decide the day come Nov. 4.