Presidential Economic Advisors speak at the New America Foundation

Ellen Ratner reported from the New America Foundation where advisors to the various presidential campaigns spoke on the state of the economy. Advisors to John Edwards, Barack Obama, Hillary Clinton, and John McCain spoke about their candidates and economic stimulus. 

Leo Hindery, the managing director of InterMedia Partners L.P., is the senior economic advisor to John Edwards. Hindery said that the United States can't educate or invest our way our of the current economic crisis. He cautioned that trade must be looked at as a fairness issue. Hindery said that a long-term plan for economic growth shouldn't be called a stimulus. He addressed several of the  problems he sees with the current discussion on the economy. He said that the Federal Reserve is not the entity that should be developing legislation and pointed out that this is not a sub-prime mortgage problem. He said that we have a "pervasive consumer debt problem" and noted the $7 trillion in consumer debt and without war accounting accounting the federal debt has been raised by $4 trillion. 

Austan Goolsbee is a senior economic advisor for Barack Obama. Goolsbee gave an overall economic assessment. He said that we have inadequate health insurance and that college has become less affordable and that the bottom 75 percent of earners have not seen income growth. He also mentioned the personal savings rate as problematic. Goolsbee said that Barack Obama has an iPod version of the government: easy to use. He spoke about the $200-$400 billion in mortgage losses and cautioned that bailing out financial institutions should be a last resort. On the Federal Reserve Goolsbee observed that the Fed is in a tight spot and that if we cut interest rates the value of the dollar goes down and a weak dollar is not good for the U.S. economy overall. The economic advisor to Obama also looked to history sighting that typically recessions have lasted 11 months since World War II. His suggestion for an immediate solution is to distribute rebates from payroll and put it into social security payments. He said that a solution "must be right now" without applications to fill out and speed the money out the door.  


Kevin Hassett is a senior advisor to John McCain and the Director of Economic Policy studies at the American Enterprise Institute. His statements on the state of the economy began with the observation that the U.S. government is $50 to $60 trillion dollars short of obligations like social security. He said that the minute the markets start to think that the U.S. doesn't have it's house in order the situation could get worse. Hassett said that John McCain wants to restore the comprehensiveness of corporations. His other suggestions were to have compromise legislation immediately and make business measures in that legislation retroactive. He cautioned that to put forth a stimulus package and later raise taxes would "not be a good idea."  He said that in the long history of stimulus packages they don't work expect for the last one when the government mailed money to people and it was associated with permanent tax cuts. He said that McCain believes in getting government out of the way and letting infrastructure happen without lots of regulation. 

Gary Gensler is a senior advisor to Hillary Clinton and a former Under Secretary of the Treasury for Domestic Finance and the former Assistant Secretary of Treasury for Financial Markets. He spoke about health care costs as well saying that they are up while the American middle class has lost up to $2 million in foreclosure filings. He said that the Clinton campaign is focused on housing, energy and jobs. In terms of the economic stimulus he said that it is critical that the government act fast and put out a $110 billion package. Clinton outlines such a plan as $40 billion in tax rebates, $30 billion in energy costs, $10 billion in unemployment insurance, $30 billion in housing via state authorities. He said that if you raise taxes of those making $250,000 a year or higher than you still have a great economy. He spoke about the difference between a stimulus package that gets spent and a money that gets put toward paying down debt. $40 billion in immediate energy costs is something the states could do right now, he said. He also mentioned that housing money would take a bit longer to have an effect. 

Back in the Saddle, Still on the road

The House is back and the Senate will be meeting pro forma for this first week of the first legislative session of 2008. There is still a bad taste in every one's mouth from the close of the last session and Bush's not-so-surprising veto over the break on the defense spending measure. The administration objected to a provision that might allow for victims of terrorism to bring lawsuits against the government of Iraq, leaving the Democratic House leadership to search for a quick fix and get the bill back to the president's desk before the Pentagon gets antsy about pay raises for service members. 

Two big interrelated E words to be aware of as this session gets rolling: Election and Economy. Members of congress tend to think and act differently in an election year, particularly in one where the economic outlook is "challenging" to say the least. The latest Gallup Poll shows that the economy was an increasingly important issue in the New Hampshire primary and forecasts that it will only continue to grow in importance as the nation marches toward Super Tuesday. The credit crunch, the housing market, the weak dollar, and the rising price of gas will be harder for Congress to ignore in this new session. Other leftovers include tax reform and the Foreign Intelligence Surveillance Act, which is still stuck on immunity for telecoms that helped the administration. FISA is currently running on an extension and the Senate will have about a week to address it after they return to act on the legislation before the law expires. 

Senate Majority Leader Harry Reid (D-NV) said that success in this session would depend on whether "Bush Republicans" will choose to work with or against the Democrats. But the Democrats are not sending a warm welcome back to the Bush administration as they are expected to take up contempt-of-congress resolutions against White House Chief of Staff Josh Bolten and White House Counsel Harriet Miers for their failure to appear before hearings in 2007. 

Meanwhile, things on the road are starting to look nastier than Congress, and that is quite a feat. Back and forth over the weekend about an ill-advised statement has led to even higher tensions in the triangular relationship between the Obama campaign, the Clinton campaign and the press. As much as political campaigns have progressed or appeared to progress issues of race and gender are still taking center stage over serious issues, though some sparring over Iraq was evident on the Democrat side. On the Republican side the focus was the economy and the "mini"recession of the state of Michigan. Mitt Romney is hoping to get a first place out of this primary, especially since he is a native son. Most speeches by Republicans in Detroit have focused on the auto industry and the disappearance of jobs from that sector. Romney is promising a roundtable on the auto industry with unions and industry leaders and reexamine jobs that some see as extinct.

And no matter where the U.S. automotive industry is going, it's been a heck of a road trip for us at Talk Radio News Service and it's only just begun.