Krugman on Presidential Leadership through Policy Proposals

Does a candidate’s policy proposals reveal the kind of president he/she would be?  Paul Krugman today in the NYT suggests that policy proposals have revealed the kind of leadership that past presidential candidates.  He points out that Bush proposed big tax cuts for the rich and followed through on them, making life harder for the rest of us.  

The moral is that it’s important to take a hard look at what candidates say about policy….. policy proposals offer a window into candidates’ political souls – a much better window, if you ask me, than a bunch of supposedly revealing anecdotes and out-of-context quotes.

The current issue that McCain, Clinton and Obama have responded to is the mortgage crisis.  Krugman analyzes the three responses and I found his analysis interesting and to be troubling for progressives.    

Let us first look at McCain.  He is a Republican.  McCain’s solutions seem to be to call for “the country’s accounting experts to meet to discuss current accounting systems” and “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.” In other words he would provide assistance to the big banks but not to ordinary citizens who are suffering but providing the tax dollars.

Howard Dean has said:

John McCain today showed that he doesn’t understand the economy, the mortgage crisis, or its impact on America’s families and communities.  Instead of offering a concrete plan to address the crisis at all levels, McCain promised to take the same hands off approach that President Bush used to lead us into this crisis.

Krugman points out

These days, even free-market enthusiasts are talking about increased regulation of securities firms now that the Fed has shown that it will rush to their rescue if they get into trouble. But Mr. McCain is selling the same old snake oil, claiming that deregulation and tax cuts cure all ills.

Krugman sees Clinton’s proposals in a different light

But the substance of her policy proposals on mortgages, like that of her health care plan, suggests a strong progressive sensibility.

Maybe the most notable contrast between Mr. McCain and Mrs. Clinton involves the problem of restructuring mortgages. Mr. McCain called for voluntary action on the part of lenders – that is, he proposed doing nothing. Mrs. Clinton wants a modern version of the Home Owners’ Loan Corporation, the New Deal institution that acquired the mortgages of people whose homes were worth less than their debts, then reduced payments to a level the homeowners could afford.

The specifics of her plan

include government guarantees of troubled mortgages and money for cities hurt by foreclosures.

Mrs. Clinton also proposed limited protection from lawsuits by investment houses for mortgage companies that want to restructure loans to help borrowers, and a blue-ribbon panel to track whether efforts to stem the crisis are working.

Krugman’s criticism of Obama is the same as in the past, Obama is cautious in his proposals and does not take bold steps to help the regular working families.  

I was pleased that Mr. Obama came out strongly for broader financial regulation, which might help avert future crises. But his proposals for aid to the victims of the current crisis, though significant, are less sweeping than Mrs. Clinton’s: he wants to nudge private lenders into restructuring mortgages rather than having the government simply step in and get the job done.

Krugman reiterates his view of the three candidates.

Mr. McCain, we’re told, is a straight-talking maverick. But on domestic policy, he offers neither straight talk nor originality; instead, he panders shamelessly to right-wing ideologues.

Mrs. Clinton, we’re assured by sources right and left, tortures puppies and eats babies. But her policy proposals continue to be surprisingly bold and progressive.

Finally, Mr. Obama is widely portrayed, not least by himself, as a transformational figure who will usher in a new era. But his actual policy proposals, though liberal, tend to be cautious and relatively orthodox.

My ambivalence about our Democratic candidates continues.  Many progressives seem to have decided that Obama is the best bet for change and yet I keep seeing Clinton offer better policy proposals.  Nonetheless people have legitimate concerns about her corporate ties and whether she would really follow through on these proposals.

As I have said previously, I have not liked the candidate battles on other sites.  So I ask that in discussion here we look at the issues that Krugman is raising and does he make sense in his approach?



Cross-posted from EENRblog