In today’s NYT magazine, David Leonhardt has the first decent overview I’ve seen of what BHO’s economic policies might be if he becomes president. Essentially, Obama is trying to reconcile two Democratic Party camps — the old-school Keynsianism of Robert Reich, and the fiscal conservatism of Robert Rubin.
Ideologically, Obama comes across as a liberal who has learned to love the market, a legacy, perhaps, of his immersion at the University of Chicago.
Policy-wise, it seems to boil down to a more progressive tax system, with respect to payroll taxes as well as an income-tax reform that would cut taxes on the bottom four-fifths of the population, and raise taxes back to Clinton-era levels on the 20 percent of the households making more than $118k per year. [number corrected; see comments — ap]
Additionally, Obama seems open to increasing government investments in education, working re-training, and infrastructure. These investments would be less about redistribution, more about completing the public insurance safety net and contributing to economic efficiency.
The problem Obama is going to have is when it comes to selling this, since even he admits that his message is not as simple as the ‘low taxes, smaller government’ mantra of the Republicans. It struck me that what Obama is offering, and the theme he is searching for, is a view of the relationship between government and the market that is proposed by Joe Heath in his excellent book The Efficient Society.
“American must become an Efficient Society!” — how’s that for a campaign slogan.