“Obama’s Policies Will Worsen ‘Recession,’ McCain Says”

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McCain — Palin Rally Columbus, OH — 9/29/08 — Parts One and Two

http://kudlowsmoneypolitics.blogspot.com/2008/10/theres-more-here-than-just-bailout_02.html

“We are almost surely in a recession.”

On the morning after Senate passage of the Treasury rescue bill stocks are down 200 points. So there is no silver bullet to our economic woes.

Now, the dollar is up strong, and gold is off $35. Those are positive signs that the Treasury bailout will improve the quality of U.S. credit. More and more over the past year, I have come to believe that gold and the greenback are more closely correlated with our credit problems than with inflation fears.

And turning back to the rescue package, tomorrow’s House vote is likely to be close, but there are a lot of positive signs that enough Republicans and Democrats will move from the nay column to a yea vote. I think the odds favor passage in the House. And the Treasury will probably start its auctions to purchase toxic bank assets in a couple of weeks. This will add much needed liquidity to the financial system.

But there is another problem: We are almost surely in a recession. Some of the recent numbers suggest the economy may have fallen off a cliff in September.

See also:

http://www.stltoday.com/blogzone/mound-city-money/us-economy/2008/10/advisers-contrast-candidates-economic-policies/

Austan Goolsbee, a University of Chicago academic, is Barack Obama’s top economic adviser. Douglas Holtz-Eakin, former director of the Congressional Budget Office, holds the same position in Sen. John McCain’s campaign.

· Goolsbee on corporate taxes: Although the statutory rate is the highest in the developed world, he says total tax collections rank near the bottom because of loopholes. He accuses McCain of favoring tax cuts only for the rich and for big corporations, and says, “That is not a job creator, that is a job killer.”

· Holtz-Eakin on corporate taxes: “I would guess that those who have seen their jobs go to India, China or Ireland do not feel rich, and would not oppose a tax cut that’s going to keep them in their jobs.”


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