Obama and McCain: Some Micro Issues

1
Obama and McCain SomeMicro Issues
2

• Bliss was it in that fall to be an economist, But
  to be an old economist was very heaven!
• Apologies to William Wordsworth! (1770 - 1850)

3
Microeconomic issues

• Energy policy
• The environment
• Health care
• Regulating financial institutions

4
McCain - Energy

• Gas tax holiday
• Tell foreigners we are serious about reducing
  imports increase value of the dollar.
• Drill offshore and elsewhere

5
McCain energy continued.

• 2 billion per year for clean coal
• 45 new nuclear plants by 2030
• Greater RD tax credit
• Eliminate subsidies, mandates tariffs on biofuels
• CAFÉ standards

6
McCain energy continued.

• 300 million battery prize
• Flex-fuel vehicles
• Clean car challenge, 5,000 tax credit for
  zero-emission vehicles
• Renewables even-handed system of tax credits

7
Obama - Energy

• 150 bn / 10 years in clean energy
• Double energy RD venture capital fund
• 25 renewable mandate by 2025
• deploy celluose ethanol 2 bn. gal. by 2013
• Local ownership of biofuel plants
• 36 bn gallons renewable fuel by 2022

8
Obama Energy cont.

• CAFÉ standards, double mileage in18 years
• Reduce oil use 35 by 2030
• Emergency 1,000 tax credit
• Swap oil from SPR.
• 7,000 advanced hybrid vehicle tax credit
• Crack down on oil speculation

9
Obama Environment

• (see energy issues above)
• Cap and trade greenhouse gas with auctioned
  permits. -80 by 2050
• Energy efficient light bulbs
• Green Jobs Corps
• UN Framework Convention on Climate Change

10
Obama Environment cont.

• Regulate Concentrated Animal Feeding Operations
  (CAFO)
• Reduce mercury pollution
• Support Clean Air Act (in contrast to Bush)
• Restore wetlands
• Other miscellaneous programs

11
McCain - Environment

• Market-based cap and trade for greenhouse
  gases, some auctioning
• Leadership for effective international efforts
• Tradeable permits for other pollutants
• green federal government

12
McCain Health Care

• direct refundable tax credit (2,500/5,000)
• Portable health insurance
• Expand Health Savings Accounts
• Work with states on guaranteed access plans.

13
McCain Health Care cont.

• Lower costs
• Drug re-importation
• Tort reform
• State flexibility

14
Obama Health Care

• New national health plan based on existing
  institutions
• National health insurance exchange
• Mandatory employer contribution or pay toward
  national plan
• Mandatory coverage of children
• Expanded Medicaid SCHIP
• Flexibility for state plans

15
Obama health care cont.

• Increase competition
• Allow drug re-importation government negotiation

16
General Observations

• Neither candidate gets particularly high grades
  from economists, but dont flunk either
• Obama has big lead over McCain in endorsement
  from economists, but
• Prudent citizens will weigh many factors when
  deciding how to vote.

17

• As in 1932, real issues will be substantially
  different on Inauguration Day than what were
  thought to be during campaign.
• Choose candidates based on your overall
  evaluation of their experience, prudence and
  character, not on their campaign briefing
  documents.
• Events are in the saddle, and what the new
  president will be able to do about growing
  economic problems is limited.

18
Good Luck!

• We live in interesting times.
• Learn from them!