McCain’s Acceptance Speech: A Recipe for Disaster

September 6, 2008

I watched much of the coverage of the RNC with great interest, anxious to hear more details about McCain’s plan for the economy. What I heard Thursday night I found very disturbing. I hoped to hear details of a plan that would take us in a new direction. Instead, he served up a recipe for disaster – an intensification of the policies of the past three decades – policies that have driven our nation to the very brink of bankruptcy and complete economic collapse. His plan is the very antithesis of the policies I’ve called for in Five Short Blasts.

The worst element of his plan is his call to “open new markets.” I suppose that has an appeal to the uninformed. It sounds like a plan to increase exports. That would be fine if that’s how it worked. What was unsaid is that the only way to open new markets is open our market further as well. This is exactly the blind trade approach that has resulted in a cumulative trade deficit of $9 trillion since 1975, growing at an annual rate of three quarters of a trillion dollars. It’s an expansion of the policy of trading away our healthy market while getting access to stunted markets in return, if we get access at all. It has often been said that doing more of the same while expecting different results is the very definition of insanity.

And, as if to underscore his lack of even a basic understanding of our trade picture, while promising to “drill, drill, drill,” he repeated once again the erroneous claim that arose from the T. Boone Pickens TV ad. “$700 billion per year is sent overseas to people who don’t like us very much,” implying that that’s how much we spend on foreign oil in the Middle East and other places like Venezuela. I thought my head would explode when I heard that lie proclaimed once again, but this time so forcefully in front of a national audience. Perhaps if Joe Lieberman were standing next to him, he could have whispered in his ear and corrected him. “Psssst. John! That’s not right. $700 billion is our total trade deficit. Only about a third of that is spent on foreign oil, and only a fraction of that goes to the Middle East.” (For the benefit of those unaware, the T. Boone Pickens ad never claimed that we spend $700 billion per year on foreign oil. Pickens said that “We send $700 billion per year to foreign countries.” By plopping our trade deficit figure into an ad for breaking our dependence on foreign oil, he bolstered his case without technically making an exaggeration. Watch the ad again. You’ll see that I’m right.)

As I’ve said before, this calls into question whether McCain lacks the intellectual curiosity that one needs to make informed decisions. The man has admitted to being computer-illiterate. He doesn’t even use E-mail. Shouldn’t anyone being considered for president show at least enough curiosity about what has become a critical element of our economy to be able to handle the basics, like E-mail? If he had, in about five minutes he could have Googled “trade deficit,” gone straight to the U.S. Census Bureau site (the agency that tracks trade data), and learned the basics about our trade deficit. He would then have known that we only spend about $250-300 billion on foreign oil, and that Canada is our biggest foreign supplier.

But I’ve digressed. So what is McCain’s plan for dealing with job losses? Retraining. I wanted to scream loud enough for him to hear all the way in Minneapolis, “retrain to do what? Where are these mythical jobs that are going unfilled because we’re all too uneducated to perform them?” He never answers that. It seems that the plan is to successively move our excess labor supply from the segment of the economy where it’s the worst to other segments, one after the other, destroying the wage structure in each as we go. By creating the illusion of progress in one area, maybe we won’t notice the deterioration in another. That seems to be the plan. Also, by proposing that the federal government make up a person’s shortfall in wages in their new job vs. the job they just lost, at least during the “retraining” process, he seemed to making a tacit admission that wages will, in general, continue to decline under his plan.

But no, there will be new jobs, he says, in the mythical new “green economy,” not to be confused with the “new economy” of the ’90s, based on the internet, that was going to be our job salvation. This one will be based on building new, renewable energy sources. Somehow politicians have been sold the idea that the equipment used to generate renewable energy can only be made domestically. Wasn’t that the same promise of “high tech?” Weren’t we promised that computers and cell phones would be made in America, while the rest of the world would make the simple, boring things like cars and appliances? And, even if true, wouldn’t the gain in jobs in making renewable energy sources be offset by a loss of jobs in the old energy technology? How does this gain us anything?

At this point, McCain took a swipe at Obama’s plan. “While I’m creating these new jobs, my opponent’s plan is to bring back those old jobs.” “Those old jobs.” He rolled out the words with a Bush-esque smirk on his face. Anyone who works in manufacturing should have been insulted by this statement. This demonstrates how little regard he has for the people who have surrendered their jobs to the Global Trade Welfare State (globalization) that was established by our goofball trade policies.

Finally, I was horrified at his proposal to double the tax deduction for children. If you want to lower taxes, why not reduce the base rate so that everyone can benefit? It’s clear that pro-population growth economists, interested in stimulating another baby boom, had a hand in crafting this proposal.

I like John McCain.  He’s a true American hero.  There’s no doubt about the depth of his love for his country.  There’s no doubt that he believes fervently in his plan.  But, unfortunately, his plan represents more of the same – more population growth, bigger trade deficits and more deficit spending to offset the negative effects. This isn’t change. It’s an intensification of the policies that have ravaged our economy for decades. It’s the old “if it isn’t working, do it harder” approach.  McCain’s plan is a recipe for disaster.