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McCain-Gramm Economics
John McCain has said that he doesn't know much about economics, but this morning he set out to prove that fact.
McCain urged Congress to institute a "gas-tax holiday" by suspending the 18.4 cent federal gas tax and 24.4 cent diesel tax from Memorial Day to Labor Day. He also renewed his call for the United States to stop adding to the Strategic Petroleum Reserve and thus lessen to some extent the worldwide demand for oil.
At the very point when the market is sending signals to consumers to buy more fuel efficient vehicles and the United States Treasury is increasing its borrowing to fund McCain's War surge, McCain want to make gas cheaper so people will keep buying SUV's and cut income to the Treasury so we will have to borrow more from the Chinese government. Back in February during a Republican Debate, McCain said he was going to cut wasteful spending so much that we would no longer have to borrow from the Chinese. He's a magician!
These brilliant economic strategies probably issue from the mind of McCain's key advisor, former Senator Phil Gramm, a man who did more damage in his short Senate tenure than most bad politicians can do in a lifetime.
"Phil Gramm's career was as the most aggressive advocate of every predatory and rapacious element that the financial sector has," Mr. Galbraith said. "He's a sorcerer's apprentice of instability and disaster in the financial system."
The very idea of Phil Gramm as Secretary of the Treasury boggles the mind.
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United States Treasury is increasing its borrowing to fund McCain's War surge
According to Dean Baker 'standard economic theory' says that big deficits raise the value of the US dollar, although exactly the opposite seems to be happening since Bush became President.
April 15, 2008 11:32 AM | Reply | Permalink
"Gas-tax holiday" is pretty well-worn political gimmick. Not surprising that someone has made it part of their electoral tool-kit. (It's at odds with McCain's environmental talking points, but hey, flip-flops happen.)
Stopping adding to the strategic reserve is pretty dumb, however; if it did happen, it would almost certainly trigger a spike in crude prices (traders would assume we would have to start buying again). In reality, I can't imagine the market would believe the guy who talks about bombing Iran would ever do such a thing. So I'd slap McCain for a foreign policy gaffe here, as much as for the economic naivity.
April 15, 2008 11:34 AM | Reply | Permalink
Altho some feminists or not may reasonably object claim guilt by association ,Gramm's wife's involvement with Enron's debacle raises questions about the Senator himself. Just google Gramm's wife and Enron.
April 15, 2008 11:39 AM | Reply | Permalink
Camera hog Phil Gramm's wife's name is Wendy, and Enron wasn't the only thing she had her hands in. They are quite a pair. Why "Camera Hog"? It was a standard joke that to get between Phil Gramm was suicide.
April 15, 2008 3:54 PM | Reply | Permalink
maybe it doesn't make economic sense to those of you who are doing well, but here in Michigan, where I'm filing for bankruptcy next month and there are foreclosed houses being auctioned all around me: it would sure help.
as for getting consumers to buy more fuel-efficient cars: in my neck of the woods, if we can all continue to make the payments on our NON-fuel-efficient cars, we'll count ourselves lucky.
but then again, I'm just a typical white person, so I'm bitter.
April 15, 2008 12:55 PM | Reply | Permalink
This is just for the summer?
Oil companies have been on a Gas tax holiday for 50 years.
April 15, 2008 1:22 PM | Reply | Permalink
Americans have not learned that they can not separate the fate of their government from their own. So when the federal government collects less tax revenue than it spends, and borrows the rest from foreigners, it is just as if you had done the same. If you keep doing this year after year, pretty soon you are going to be in trouble. The fall out from Bush's 8 years of fiscal mismanagement are only beginning to be felt now. If McCain Gramm are the ones in charge when the bigger crisis hits, expect them to choose the worst possible policy option to solve the situation. Then the mindless republican voting idiots like gretz will understand the meaning of bitter.
You reap what you sow America. Start learning. Stop voting republican. Save yourselves.
April 15, 2008 1:40 PM | Reply | Permalink
northern observer: dude, I'm a Democrat!
aside from your pointless ad hominem attack, however, might I note that Americans will continue to vote Republican as long as Democrats keep nominating left-wing idealogues (McGovern, Dukakis, Mondale, Obambi) who don't share their values? and no amount of playground name-calling is going to change that.
April 15, 2008 2:01 PM | Reply | Permalink
I'm sorry Gretz but your argument just doesn't make sense to me.
So you are saying that Americans will continue to vote for consistently destructive right-wing ideologues because the Democrats nominate left-wing ideologues? You didn't exactly say that but it is in essence what you're saying. That's mind-numbingly nonsensical. Why? Why in the world would a person vote for someone that's SURE to make things worse (just about every Republican that's been elected) over someone who MIGHT make things worse? And while I will admit that this does seem to be what Americans do I'm still stunned by it. Republicans have done nothing for the average American yet they continue to get suckered into electing them into office where they rob them blind, gut service that were put into place to help them and privatize everything they can so that we can all pay more for less. It's simply ridiculous.
There's also the very blurry definition of what right-wing and left-wing really means in America today. The Democratic party has shifted pretty dramatically to the right over the years (the Clintons certainly played some role in this) so the term left-wing is pretty misleading and very often misused. It's gotten to the point that if you don't hate abortion, love automatic weapons and wear an American flag lapel pin you're a left-wing nut which is of course completely absurd.
On a side note, I personally don't think playground name-calling is helpful in discussing what's wrong with our nation or how we can all go about making things better. But if you are going to attempt to take the high road might I suggest you avoid the adolescent name manipulation? Obambi? Come on... seriously
April 15, 2008 3:07 PM | Reply | Permalink
McBoo!
Yay! McBoo is in da house.
April 15, 2008 4:42 PM | Reply | Permalink
hey, Obambi is Maureen Dowd's name for him, not mine. but you're right, it was inappropriate--I just couldn't help it.
as to your question:
"So you are saying that Americans will continue to vote for consistently destructive right-wing ideologues because the Democrats nominate left-wing ideologues?"
Yes.
April 15, 2008 3:18 PM | Reply | Permalink
Americans will continue to vote for consistently destructive right-wing ideologues because the Democrats nominate left-wing ideologues
Damn right Gretz....and that's what makes America what it is today.
April 15, 2008 4:34 PM | Reply | Permalink
Nothing to add, just want to say I always read your columns and they're consistently good.
April 15, 2008 4:43 PM | Reply | Permalink
Yes, this is a dumb gimmick, but a gas tax cut of $.18 will still leave gas well above $3. I doubt it will send folks flocking to the Hummer show rooms.
April 15, 2008 5:26 PM | Reply | Permalink
Gretz, why characterize Obama (I assume) as a leftist ideologue? Although I'd like to see a more nuanced view of economic realities from him (see David Brooks comments today in NYT) a guy that would like to save 3 billion a day by exiting a pointless war and try to fix a health care system that's the laughing stock of the world doesn't seem like such an ideologue. You're simply buying into mindless GOP name-calling. Do you do this for fun? It's not funny. I am as depressed as anyone over the undeniable stupidity of so much of the American electorate, but why accept the vicious neocon categorizations of the only reasonable people around?
April 16, 2008 8:15 AM | Reply | Permalink