Tuesday, June 24, 2008

Why I do not want Obama to win

Douglas Carswell writes that he wants Obama to win. I find the idea horrifying and think that McCain would make a far better President. I'll try to set out why by going through Obama's positives, as set out by Douglas and, earlier, Dan Hannan and then briefly discussing McCain's negatives before describing what I see as the big divide between Obama and McCain.

Arguments for Obama

Douglas argues that Obama's refusal of public money to fund his campaign should count heavily in his favour:

"Does Obama believe in small government? As with McCain, I really don't know. But I do know that last week he became the first Presidential candidate since Nixon to refuse public money to fund his campaign.

Instead of relying on State handouts, Obama's campaign will be funded by millions of people each giving small on-line donations. In the primaries alone, the $133 million spent came via 1.5 million web donors. That's less than $100 each.

Sounds pretty Edmund Burke.com to me."

I think that the motive this implies just isn't there. Obama originally committed to take public funding and accept limitations on his fundraising but changed his mind when his campaign proved better able to raise funds than expected. We shouldn't - as some Republicans are - get in a hissy fit about his u-turn, to expect him to hobble his campaign out of some sense of chivalry would be silly, but it is clearly not an act of Burkean principle. McCain is dreadful on campaign finance reform but his differences with Obama are only as old as Obama's fundraising success. As such, I don't see how this can be a critical issue unless you think, and I guess Douglas does, that there aren't significant other issues that make McCain the better candidate.

Dan Hannan's suggestion that electing Obama would be a great idea because it will repair America's reputation is unrealistic. America's friends are dismayed by foreign policy incompetence and there is little sign that Obama will improve things on that front. America's enemies take their hatred of the country rather too seriously to be convinced by the election of a black man. Those Europeans impressed by Obama's election will return to their anti-American ways the first time he makes a decision that doesn't fit their tranzi agenda (if he doesn't make such a decision we have bigger problems). There is also the rather unfortunate likelihood that if Obama is elected it will probably be with a white majority voting against him (the Republicans usually have a majority among whites) which will be prime fodder for the US bashing BBC and America's domestic race industry.

The problems with McCain

McCain's support for the EPP is lamentable and foolish. American right wingers have long assumed that a more united Europe, and a more united European right, will make both easier to rally as allies for the United States. Only now are they realising their error; that submerging proud nations in transnationalist, supranational slush makes them weaker in themselves and as allies. Fortunately, the EPP is one issue on which the American President doesn't really have much influence. The question doesn't come up for Obama so a comparison is hard to draw. McCain's soundness on the UN suggests that his instincts are in the right place on the tranzi institutions, even if his judgement is out on the EU. I don't think that the issue can be critical to our assessment of McCain as a Presidential candidate.

McCain has been on the left of the Republican Party on a host of issues such as tax cuts but, with our current binary choice, that is pretty irrelevant. As the debate stands right now he is the one defending the Bush tax cuts and calling for a ten per cent cut in corporate tax rates. That ten per cent corporate tax cut would do great things for America's competitiveness and might even finally convince our politicians that the time has come for serious tax cuts. To describe McCain as "high tax and spend" in that context is bizarre. In fact, I think that the corporate tax cut proposal already puts sufficient clear blue water between McCain and Obama to justify supporting the Republican.

The big difference between McCain and Obama

I'll largely leave aside foreign policy as I don't want to talk past Douglas. Suffice it to say that I think McCain's suggestion Obama is running for Jimmy Carter's second term has an awful plausibility to it. On a broad range of domestic policy issues Obama has proven himself a friend of protectionist, big state special interests while McCain has shown admirable economically liberal principle. Of course, the big example is the attack on NAFTA but here are a few you might not have heard of:

Agriculture subsidies

David Brooks, writing in the New York Times, summed up a new bill ramping up agriculture subsidies: "The $307 billion farm bill that rolled through Congress is a perfect example of the pattern. Farm net income is up 56 percent over the past two years, yet the farm bill plows subsidies into agribusinesses, thoroughbred breeders and the rest." The bill was so bad, such pure pork, that it attracted bipartisan scorn in the press; the New York Times called it "disgraceful" and the Wall Street Journal called it a "scam". Despite that the bill passed with Obama's support. By contrast, Brooks sets out how "John McCain opposed the farm bill. In an impassioned speech on Monday, he declared: “It would be hard to find any single bill that better sums up why so many Americans in both parties are so disappointed in the conduct of their government, and at times so disgusted by it." Quite right.

Class action reform

This may seem like a minor issue but it matters a lot in the States where their class action system is wide open to abuse. Ted Frank, at the American Enterprise Institute, sets out the problem and Obama's dismal response:

"CAFA came about because trial lawyers had been abusing the class action mechanism by filing dozens of class actions in different states seeking to certify a nationwide class. In a game of "heads I win, tails don't count," if the trial lawyers lost in one jurisdiction, they would merely proceed with an identical lawsuit in a more favorable jurisdiction until they found a judge receptive enough to sign on to the most meritless of lawsuits.

As a consequence, the notoriously plaintiff-friendly Madison County, Illinois, ended up with hundreds of lawsuits seeking to dictate consumer law nationwide, and defendants were forced into countless extortionate settlements.

CAFA simply undid this upside-down federalism by establishing that lawsuits alleging a nationwide class belonged in a single federal court rather than the most favorable magnet jurisdiction in state court that trial lawyers could find.

This is entirely sensible good-government legislation, which is why the bill passed by such a large margin. But the bill passed in the form it did in spite of Obama's efforts, not because of them.

While CAFA was under consideration, Senators Ted Kennedy, D-MA, Mark Pryor, D-AR and Dianne Feinstein, D-CA, proposed amendments that would have eviscerated CAFA; Senator Feinstein's proposed amendment likely ran afoul of constitutional due process requirements set forth by the Supreme Court in a 7-1 decision in 1985. Each amendment failed by large bipartisan majorities, supported only by Democrats; each time, Obama voted with the trial lawyer lobby.

These votes were not outliers. Obama also voted to filibuster medical malpractice reform and to kill an asbestos reform bill in 2006, each time providing a critical vote for a minority of senators that blocked tort reforms from achieving a three-fifths supermajority. That is hardly reaching across the aisle, much less showing a willingness to flout a Democratic special interest."

The U.S.-South Korea free trade agreement

From the Wall Street Journal:

"Here's one "change" presidential candidate Barack Obama apparently believes in: higher prices. Witness his letter last week urging President George W. Bush not to submit the U.S.-South Korea free-trade agreement to Congress for ratification.

Mr. Obama's objection, as stated in his letter, is that the deal "would give Korean exports essentially unfettered access to the U.S. market and would eliminate our best opportunity for obtaining genuinely reciprocal market access in one of the world's largest economies." In other words, ordinary American consumers would get too good a deal.

For an idea of how good, look at automobiles, about which Mr. Obama professes particular concern. The free-trade agreement would eliminate America's 2.5% tariff on most Korean car imports. Even better, it would phase out the 25% tariff on pick-ups and light trucks. Overall, the Korean trade deal would boost the U.S. economy by $10 billion to $12 billion.

Mr. Obama thinks this benefit to U.S. consumers isn't worth the risk that South Korea might not live up to its promise to eliminate its own 8% tariff on U.S. autos and cut its bewildering array of nontariff barriers, such as arcane safety standards. This despite the fact that the deal includes enforcement provisions if Korea backtracks.

On the record so far, Mr. Obama is the most protectionist U.S. presidential candidate in decades."


In the end, economic hard times reveal two kinds of politicians. On the one hand there are those who will offer the fools gold of endless subsidies and protections from foreign competition to buy the support of particular communities and industries. The subsidies distort the economy and hurt the chances of a genuine, lasting recovery while protectionism makes most people significantly worse off. On the other side there are those, Margaret Thatcher being the most brilliant example, who make the case for real reforms that can improve the long term prospects of the economy.

In the coming US election Obama is the protectionist throwing subsidies at interest groups, McCain is the reformer promising aggresive action to curb wasteful and distorting subsidies while cutting corporate tax rates. With that choice, I'll support McCain without hesitation.


Ewan Watt said...

I think it's a little unfair to claim that McCain is "on the left" of the GOP just because he opposed Bush's tax cuts. McCain did so on the premise that America had a spending problem. It's worth adding that Barry Goldwater was exactly the same and regularly called for spending cuts before any cuts in taxation. I doubt whether people claimed Goldwater was on the left of the GOP, but in the current context, you never know.

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