Wednesday, July 16, 2008

Economic Scorecare for Presidential Candidates

It’s often stated that economists agree about the majority of issues. In that spirit, Greg Mankiw had a recent piece titled What If Candidates Pandered to Economists? These are the issue he came up with that a large majority of economists would agree (without ‘Raise Funds For Economic Research’ which I’m not sure about): Support Free Trade, Oppose Farm Subsidies, Leave Oil companies and Speculators Alone, Tax the Use of Energy, Raise the Retirement Age, Invite More Skilled Immigrants, and Liberalize Drug Policy. I’d like to add three more to that list: Oppose Ethanol Subsidies, Liberalize Labor Laws, and Ensure Central Bank Independence.

I have been toying with the idea creating an economic scorecard to measure the candidates and hopefully this gives my chosen issues a bit more weight. Economists have well developed opposing arguments about Healthcare, Income Taxes, Entitlement Spending, and School Spending. Those are complex issues that there can be quite a bit of reasonable disagreement on. This post does not attempt to judge the candidates based on the merits of there positions on those issues. Instead, I am judging candidates based on issues where economists know with I would estimate greater than 80% confidence what is the correct stance.

I give each candidate a score of 0-10. 10 being straight from Mankiw’s principles, 0 probably being whatever Lou Dobbs says. The Format is Obama's score first, McCain's second:
- Support Free Trade 5- 9 - McCain strongly does, Obama probably secretly does.
- Oppose Farm Subsidies 3 - 8
- Leave Oil companies and Speculators Alone 3 - 3
- Tax the Use of Energy 8 - 4 - McCain wants to get rid of the gas tax, Obama would keep it. Both want some sort of cap-and-trade system, although McCain sometimes doesn't seem to understand it.
- Raise the Retirement Age 3 - 5
- Invite More Skilled Immigrants 5 - 5 - I cannot find a policy difference
- Liberalize Drug Policy 4 - 0
- Oppose Ethanol Subsidies 1 - 8
- Liberalize Labor Laws 3 - 6
- Ensure Central Bank Independence 5 - 5 - Sadly I cannot find positions for either candidate...
Bottom Line: Obama 40 - McCain 53

Based on this not at all scientific analysis, John McCain is 33% better than Barack Obama on these issues with pure economic answers. There’s a fair degree of art in these scores. For example, I assume Barack Obama will be a more free-trade oriented President than he claims he will be (Austin Goolsbee gets him a couple points on the scorecard). I did not give Obama points for the fact that he will likely be more able to push trade deals through Congress than McCain, if he chooses to do so. McCain scores better than I would have expected. However, I did not have any category for his arguing that further tax cuts will raise revenue – the dubious claim for which he is so often blasted on the econ-blogosphere.

So, McCain wins. However, this is not an endorsement. Perhaps the most important issues are not addressed in this comparison – Foreign Policy, Taxes, Social Security, and Health Care. I have my views on those issues but they’re lower-confidence stances and I won’t go into them in this post. Furthermore, both McCain and Obama’s campaigns center on personal qualities beyond the issues as the main reasons they should be President. McCain promotes his honor and experience. Obama is promoted as a smart internationalist who has the potential to be a uniting figure both domestically and internationally. So, this chart may only amount to 1/3 of what makes up my voting decision. However, it does say something about the candidates that they probably know the right answers to these issues, but they have chosen to take some different positions.

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