This is the third article in our “issues week” series being written in conjunction with Dave Schuler’s series at The Glittering Eye. The first article in the series, on Foreign Affairs, can be found here. The second article, on Fiscal Policy, can be found here.

Image Credit: Vangelis Thomaidis

Today we’re focusing on the economic policies of the candidates.  Obviously, there is going to some overlap with fiscal policy here, but that’s pretty unavoidable.  However, I’ll try to focus on three general areas: International trade, economic stimulus and economic regulation–both the direct and indirect kind.

First, some general comments.  With the financial state of the nation as it is, neither Obama or McCain have a snowball’s chance of getting their plans enacted.  Let’s be clear about that. McCain’s plan to cut taxes on businesses and high net worth individuals won’t get past a Democratic Congress, and Obama’s plan is only marginally more likely.  With capital losses and unemployment rising, tax revenue is going to fall and render most of the economic plans the candidates currently have untenable.

International Trade

Ordinarily I would not consider this hugely important in the grand scheme of things, but with the collapse of the dollar, it is more important to get our products into foreign markets now that other countries can look upon American goods as a good deal.  Increasing American exports is one of the best ways to turn around our current financial problems.

As was addressed here earlier this week, McCain’s position on the matter is straightforward: continue the policies of Clinton and Bush in expanding the number of countries with which we have free trade agreements.  Obama would use free trade agreements to bind other countries to labor and environmental standards.  While I’m very much against exporting American labor standards to countries that can’t sustain them, I sympathize with a very limited use of Obama’s tactics for exporting environmental regulations to China and India.  While labor and living standards may require cultural advancements we can’t force on these countries, no such problems exist with carbon emission and other pollution control standards the rest of the industrial world operates by.

Stimulus Attempts

With regard to the current economic meltdown, the best writing I’ve seen regarding its causes so far comes from FactCheck.org: “The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation.”  The corollary to this is that fixing it equally complicated.  Silly gimmicks like the economic stimulus checks and the gas tax holiday simply don’t work.  The American economy is too complex and unwieldy to fix with something as simple as the elimination of a Federal tax on gasoline or a $300 check.  McCain’s endorsement of the gas tax holiday may be good politics, but it’s bad policy.

Don’t consider that an endorsement of Obama, either. His gimmicks aren’t much better. Take his idea of taxing the ‘windfall profits’ of the oil companies–in order to provide every American a tax rebate. To pay for oil. It doesn’t make a lot of sense, nor does his call for another stimulus check to be sent out to taxpayers. Especially given that the last stimulus had little long-term effect on the economy.

Financial Market Regulation

Obama has been on the case blaming “deregulation” as the cause of the current crisis, but his vague references to repealed financial market regulations are meaningless.  The only actual regulation repeal anyone has been able to cite is Phil Graham’s bill that allowed investment banks and ordinary banks to co-operate.  That deregulation has actually helped make the financial downturn less severe by allowing banks like Bank of America to acquire investment banks like Merrill Lynch.

Conclusion

The bottom line, if you’ll pardon the pun, is that neither candidate has a good solution to our current economic problems because, frankly, there is no good solution to our current economic problems.  The economy doesn’t work because of the President’s policies so much as it does in spite of the President’s policies.  While this makes it more difficult to demonstrate which candidate would make the better president, on the bright side it also makes economic issues much less relevant to the decision-making process. Or, at least, it should–in reality, though, that isn’t quite the case.