McCain and Obama represent two fundamentally different economic philosophies. McCain’s is top-down economics; Obama’s is bottom-up.
Bottom-up economics holds that:
1. The growth of the American economy depends largely on the productivity of its workers. They are rooted here, while global capital and large American-based global corporations are not.
2. The productivity of America workers depends mainly on their education, their health, and the infrastructure that connects them together. These public investments are therefore critical to our future prosperity.
3. Global capital will come to the United States to create good jobs not because our taxes or wages or regulatory costs are low (there will always be many places around the world where taxes, wages, and regulatory costs are lower) but because the productivity of our workers is high.
4. The answer to our energy costs is found in the creativity and inventiveness of Americans in generating non-oil and non-carbon fuels and new means of energy conservation, rather than in access by global oil companies to more oil. So subsidize basic research and development in these alternatives.
5. Finally, in order to avoid a recession or worse, it’s necessary to improve the financial security of average Americans who are now sinking into a quagmire of debt and foreclosure. Otherwise, there won’t be adequate purchasing power to absorb all the goods and services the economy produces. (As to “moral hazard,” the financial institutions that did the lending had more reason to know of the risks involved than those who did the borrowing.)
Listen carefully to the economic debate in the months ahead in light of these two competing economic philosophies. And hope that the latter wins out in years to come.