Presidential campaigns can be depressing times when you are in the fact–checking business, because so many of the “facts” being waved around wind up as shaky as Karl Rove at a Plame family reunion.
Take just one round of Olympic-Size Policy Pitching this week.
Both candidates were on the trail, once again, making bold statements full of reasonable assertions about what we need to do to cut our dependence on foreign oil, develop alternative fuels and vehicles, and generally get our economy on somewhat sounder footing. Both marshal an impressive array of facts to support their claims. But economic, political, tax, and energy analysts all say both senators have left out critical parts of the equation.
Let’s start with McCain. (I could say it’s because I’m doing this alphabetically, but mainly it’s because I just looked up and saw him on the TV.) Here’s something he said today: “America has the second highest business rate in the entire world. It is any wonder that jobs are moving overseas when we are taxing them out of the country? Unfortunately Senator Obama's plans would raise taxes on businesses even more. He has promised tax increases on income, tax increases on investment, tax increases on small businesses. That is exactly the wrong strategy. Raising taxes in a bad economy is about the worst thing you can do because it will kill even more jobs when what we need are policies that create jobs.”
First part: He’s right. The United States has the second highest tax rate on corporate profits in the world; behind only Japan. Many states have high rates of their own, too, only increasing the impact. That matters to regular voters, because tax analysts have been saying for years this is a significant reason that we are losing jobs to other countries.
I spent a good bit of time on the phone with the Tax Foundation, a non-partisan, non-profit group here in DC that considers and analyzes tax issues, and they shed light on this whole situation.
For example, McCain does not point out that while Obama does want to increase taxes for some individuals and some businesses, he’s certainly not talking about all of them. And the Tax Foundation says while, in the long run…in say five or ten years…Obama’s plan may indeed hurt investment and economic expansion, in the short term, it probably will not have the debilitating effect McCain is predicting. Not because Obama’s plan is necessarily good or bad, but because the economy is just too big and complex to respond the way these candidates are suggesting it might.
Moving on to Obama; look at part of what has been his standard stump speech on energy this week.
“I will put the full resources of the federal government and the full energy of the private sector behind a single, overarching goal – in ten years, we will eliminate the need for oil from the entire Middle East and Venezuela. All of it. To do this, we'll invest $150 billion over the next decade and leverage billions of dollars more in private capital to harness American energy and create five million jobs in the process – jobs that cannot be outsourced, good paying jobs that will be created right here in Indiana and all across the United States of America.”
Wow. Ten years to eliminate all the oil we use from the Middle East and Venezuela? That’s a lot. Or maybe not so much, depending on how you look at it. The American Petroleum Institute points out that only about twenty-percent of all the oil we burn comes from those places. We get much more from Canada, Mexico, and Nigeria. Even if Obama’s cutback works like a charm, we’ll still be heavily dependent on foreign oil, and pounded by world oil prices.
Part of Obama’s new plan calls for investing 150-billion dollars in so-called Green Technology; and he says much of the “green” for that can come from a windfall profits tax on oil companies. Of course plenty of us would love to watch Big Oil squirm. Stick it to the fat cats. Problem is, the Tax Foundation gang points out that we’ve tried this before. In the 1980’s, a windfall profits tax on oil companies produced less than a quarter of the tax revenue we expected. Worse: When the oil companies faced dwindling profits, they cut production. We lost jobs. We lost oil. We gained more dependence on foreign fuel. It did not work out so well.
And those five million new, clean energy jobs Obama is proposing? Industry and economic analysts admit that sounds nice, but they have a warning: those new jobs may come at the cost of just as many old jobs in the energy sector…jobs lost by people who are working today with coal and oil.
See? I told you: It’s depressing.
Make no mistake: Both candidates have real plans for making improvements in our economy that are really worth considering. But check the facts: they are also both leaving out details that they know won’t sell so well on the stump; details that could have all of us wondering in a few years “Whatever happened to the great promises of the ’08 campaign?”
Anderson Cooper goes beyond the headlines to tell stories from many points of view, so you can make up your own mind about the news. Tune in weeknights at 8 and 10 ET on CNN.
Questions or comments? Send an email
Want to know more? Go behind the scenes with