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Now that Obama has decided to shed a fraction of his flowery rhetoric in favor of more specific ideas, especially on economic issues, he is beginning to paint a better self-portrait of himself as a policy man. But when listening to him talk substance, I cannot help but raise an eyebrow relatively often. Here was a absurd comment from his Chesapeake victory speech:

It’s a game where trade deals like NAFTA ship jobs overseas and force parents to compete with their teenagers to work for minimum wage at Wal-Mart.

This contention is just completely wrong and makes almost no economic sense. It is illogical and there is no data to support it. Not only is it sensationalism and Wal-Mart bashing, but seems that there is no reason to say it unless it were aimed at scaring people into supporting Obama and his economic plan. There is really no other explanation to why he said it other than it is pandering and, ironically, fear-mongering from the man who pontificates about hope all the time.

If he was economically literate he would take note of the fact that over half of those working minimum wage are under the age of 25 (and more than a quarter in their teens), while almost nine of every ten minimum wage workers do not have any dependents (BLS). Moreover, he would also recognize that freer trade allows for more capital mobility and for businesses and people to remain more productive, thus delivering more, cheaper, and better products to consumers. Bill Clinton was honest enough to embrace free trade even when it went against his party’s grain. Now even his wife isn’t brave enough to stand up against her party. Worse yet, Republicans like Huckabee, and to an extent Romney when he was still in the race, underhandedly went after free trade, using the unoriginal line, “I believe in free trade, but it has to be ‘fair’ trade.” Talk about a lepor’s bell. Among candidates on trade, however, McCain has demonstrated that he is most consistently in favor, even telling Iowans that he is in favor of eliminating all farm an ethanol subsidies.

One of America’s most prominent economists, Greg Mankiw, writes:

An open question in my mind is whether Barack Obama is going to align himself with the economic centrists in the Democratic party or with the populists on the far left of the party. A key litmus test is trade, and so far it does not look good.

And, for that matter, it doesn’t look so good for the other Democrat in the race as well.

From the Washington Post, here are the candidates records on earmarking which should serve as an indicator to how much fiscal restraint and responsibility they will practice on the whole:

Sen. Hillary Rodham Clinton helped secure more than $340 million worth of home-state projects in last year’s spending bills, placing her among the top 10 Senate recipients of what are commonly known as earmarks, according to a new study by a nonpartisan budget watchdog group.

Working with her New York colleagues in nearly every case, Clinton supported almost four times as much spending on earmarked projects as her rival for the Democratic presidential nomination, Sen. Barack Obama (Ill.), whose $91 million total placed him in the bottom quarter of senators who seek earmarks, the study showed.

Sen. John McCain (Ariz.), the likely GOP presidential nominee, was one of five senators to reject earmarks entirely, part of his long-standing view that such measures prompt needless spending.

On the issue of disparity in pay between men and women, the candidates positions serve as an indicator of their overall attitude towards free exchange and market forces, as well as their willingness to use government to stifle those forces. From the WSJ:

There are actually two versions of comparable worth legislation, the Fair Pay Act and the Paycheck Fairness Act. The former is co-sponsored by Sen. Barack Obama; the principal sponsor of the latter is Sen. Hillary Clinton (Mr. Obama is a co-sponsor). Both would push companies to set wages based not on supply and demand — that is the free market — but on some notion of social utility. The goal is to ensure that jobs performed mostly by men (say, truck drivers) are not paid more than those performed mostly by women (paralegals, perhaps).

President Ronald Reagan correctly called comparable worth “a cockamamie idea.” A great lesson of economic theory, not to mention historical experience, is that government-set wages and prices not only curtail freedom, but lead to shortages, surpluses and market disruptions.

The writer is right on the money with his conclusion, but I will add that the arrogance of the candidates who think that the millions upon millions of individual economic actors determining supply and demand, while working in their own self-interest, should be manipulated on a whim by government edicts is becoming increasingly ominous. While I have traditionally said that Obama would be slightly more rational on the economy than Clinton, it is clear that their platforms are very, very similar (Clinton even accused Obama of copying her ideas) on these issues and that neither are very desirable Presidents at least in terms of how they would handle the economy. And even though McCain has his fair share of economic setbacks, not to mention the fact that he claims to not know much about the economy, he appears to be a more consistent backer of limited government and the free market than either Democrat would wish to be accused of in their wildest nightmares.

Last 5 posts by Ryan

• Scarcity, Shmarcity - June 26th, 2008
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• Step One: Open mouth... - June 23rd, 2008
• Sobering Statistics and Economic Commentary - June 11th, 2008
• Obama: Humbly setting out to save the world - June 8th, 2008

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