ECONOMY
McCain-onomics

Sen. John McCain (R-AZ) has spent much of his general election campaign for president trying to distance himself from President Bush's failed policies -- even though the policies he has outlined and would pursue as president mirror those of the last eight years. McCain's strategy so far has been to make the public forget he is offering Bush's policies. During the Republican National Convention earlier this month, McCain and his fellow conservatives seemingly refused to acknowledge that the current administration even exists: Bush's name was mentioned once while Vice President Dick Cheney's name was not mentioned at all. Convention speakers also ignored many key issues that face Americans today, such as health care, environment, and the economy. Yet at times, McCain's surrogates will let the truth slip out. In June, Sen. Lindsey Graham (R-SC) admitted that McCain's economic policies would "absolutely" be an "enhancement" of Bush's. He's right. McCain's economic policies are rooted in the same supply-side economic theories that give huge tax cuts to the rich and the most profitable corporations, which will ultimately expand the already ballooning federal deficit. Indeed, as New York Times columnist and Princeton University economics professor Paul Krugman noted, McCain's economic proposals are "Bush made permanent" and "would leave the federal government with far too little revenue to cover its expenses."

THE WEALTHY WILL CASH IN: If elected president, McCain plans to double down on Bush's corporate and individual tax cuts. His plan calls for reducing the corporate tax rate from 35 percent to 25 percent, a plan that would save corporations $175 billion per year, with $45 billion going to America's 200 largest companies as identified by Fortune Magazine. The five largest U.S. oil companies would save a grand total of $3.8 billion per year. The wealthiest Americans would also cash in. McCain's tax plan will increase after-tax income of the richest 3.4 percent by more than twice the average for all households -- and offer no benefit to the poorest taxpayers and minimal savings for the middle class. At the same time, McCain has not offered any specifics on how he would pay for these massive cuts. In fact, McCain's plan would produce the highest federal deficit in 25 years. After inheriting Bush's $407 billion deficit, yearly deficits under McCain would increase sharply, beginning with at least $505 billion in FY2009. 

THE FLAWS OF SUPPLY-SIDE ECONOMICS: Like Bush -- and President Reagan before him -- McCain is fully embracing supply-side economics, lowering tax rates to promote economic activity which, in theory, lead to additional government revenue. But a new report from the Center for American Progress and the Economic Policy Institute has analyzed the two "supply-side eras" in U.S. history -- 1981 to 1993 and 2001 to present -- and concluded that "the results have been meager." The report found that after tax increases in 1993, real investment growth was much higher than after the tax cuts of 1981 and 2001 and "economic growth as measured by real U.S. gross domestic product was stronger following the tax increases of 1993 than in the two supply-side eras." Real median household income "was greatest after the 1993 tax increases, at 2.0 percent annually compared to 1.4 percent after 1981 and 0.3 percent after 2001." Wages and employment also rose higher after 1993 as compared to the two supply-side eras. And in contrast to record deficits that resulted from the two supply-side eras, between 1993 and 1999, the United States"went from a federal deficit of 3.9 percent of GDP to a surplus of 1.4 percent." Even Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke have said that tax cuts do not offset revenue losses.

GREENSPAN WEIGHS IN: Former Fed Chairman Alan Greenspan said that the current downturn in the economy is "probably a once in a century type of event," one that is the worst he has seen in his career "by far." Indeed, just yesterday, Merrill Lynch agreed to sell itself to Bank of America "for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, filed for bankruptcy protection and hurtled toward liquidation after it failed to find a buyer." But Greenspan also addressed McCain's $3.3 trillion tax cuts, telling Bloomberg news last week that the country cannot afford the cuts "unless we cut spending." "I'm not in favor of financing tax cuts with borrowed money," Greenspan said. Perhaps McCain will take Greenspan's advice. While McCain has acknowledged that "issue of economics is not something I've understood as well as I should," he has also added the caveat: "I've got Greenspan's book."

Under the Radar

ENERGY -- NO ENERGY EXPERT AT SENATE HEARING WILLING TO SAY THAT OIL DRILLING IS AMERICA'S MOST IMPORTANT ISSUE: Last Thursday, the Senate Committee on Energy and Natural Resources held a Bipartisan Energy Summit featuring experts from MIT, Google, Shell, and others. At one point in the hearing, Sen. Sheldon Whitehouse (D-RI) tore into the energy protest House Republicans have been holding for the past several weeks. This political stunt was meant to demand a vote on oil drilling and "attack Democrats for leaving town" in August "without doing something to lower gas prices." After listing problems facing the country, including the war in Iraq, debt, to name a few, Whitehouse asked the experts whether anyone thought drilling was the top issue right now. "Do any of you seriously contend that drilling for more oil is the number one issue facing the American people today," asked Whitehouse. Almost nine seconds went by with complete silence. "No, it doesn't seem so," said Whitehouse after the silence. House conservatives have spent the past month claiming that their political stunt was "America's greatest hour" and the "2008 version of the Boston Tea Party." Not only are they out of step with energy experts, but according to recent polls, the majority of the American public believes that the economy -- not drilling -- is the most important issue facing the nation. 

ENERGY -- HURRICANE IKE DESTROYS OIL PLATFORMS: In the wake of Hurricane Ike, the U.S. Minerals Management Service (MMS) reported that at least 10 offshore oil platforms have been destroyed. Lars Herbst, regional director for the MMS said, "It's too early to say if it's close to Katrina- and Rita-type damage," which altogether destroyed more than 100 oil platforms. Ike also damaged several large oil and natural gas pipelines. The extent of the environmental damage resulting from the destroyed oil rigs is unknown. Already, "the average price for a gallon of gasoline has increased to nearly $3.80 from $3.68...a jump that has been rare since the oil price spikes of the 1970s and 1980s." In their push to expand offshore drilling, conservatives have insisted that oil rigs are completely safe, constantly declaring that Hurricane Katrina "didn't cause a single oil spill." In fact, the oil spillage from Katrina was so extensive it was clearly visible from space. It also wreaked environmental damage near the scale of the 1989 Exxon Valdez disaster. 

RACE -- 'OBAMA WAFFLES' FEATURING RACIST, STEREOTYPED IMAGES SOLD AT VALUES VOTER SUMMIT: At the Family Research Council's Values Voter Summit over the weekend, vendors sold boxes of waffle mix that were branded "Obama Waffles." The product's packaging featured a racist cartoon image of Sen. Barack Obama (D-IL) on the front -- with "popping eyes and big, thick lips" -- and another image of him wearing an Arab-like headdress on the top. The top of the box read, "Point box toward Mecca for tastier waffles." Its creators, Mark Whitlock and Bob DeMoss, said the product was meant as "political satire" and denied that their "satire" could be seen as racist. "We had some people mention that to us, but you think of Newman's Own or Emeril's -- there are tons and tons of personality-branded food products on the market. So we've taken that model and, using political satire, have highlighted his policies, his position changes," they claimed. CNN's Lou Dobbs stopped by the booth and exclaimed, "My wife will love this!" A photo shows Dobbs with a box of the mix in his hand. The American News Project produced a video interview with the creators.

Think Fast

Markets sank in Europe and Asia today, stock index futures slipped sharply on Wall Street, and the dollar plunged as two giant investment banks, Lehman Brothers and Merrill Lynch, collapsed over the weekend. Compounding the financial uncertainty, insurance giant A.I.G. "sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive."

Former Fed chairman Alan Greenspan said the U.S. credit squeeze has brought on a "once-in-a-century" financial crisis that is likely to claim more big firms before it eases. "Indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes," Greenspan said.

A new poll released by the AP and National Constitution Center finds that "Americans strongly oppose giving the president more power at the expense of Congress or the courts, even to enhance national security or the economy." Two-thirds of Americans oppose altering the balance of power to strengthen the presidency.

The government announced yesterday that "it would not allow Fannie Mae and Freddie Mac to pay their departing chief executives the separation payments, known as 'golden parachutes.'" The decision deprives the departing chiefs of Fannie and Freddie of $9.8 million and $14.9 million respectively.

Before assuming his post as head of Central Command, Gen. David Petraeus drafted "a final letter of thanks" to the troops serving in Iraq in which he "underscored his view that the struggle to bring stability to Iraq is far from over." In an interview with the Associated Press, Petraeus said of Afghanistan, "You don't kill or capture your way out of an industrial strength insurgency."

The location of a President Bush fundraising event in Florida has been changed after event planners realized that the original host is under an IRS investigation. The event was originally scheduled to be at the home of John Boswell, whose Boswell House Ministries is undergoing an IRS probe.

Spanish diplomat Francesc Vendrell, "[o]ne of the most experienced Western envoys in Afghanistan," yesterday said that conditions in that country are at the worst point since 2001. He "urged a concerted American and foreign response, even before a new American administration took office, to avoid ‘a very hot winter for all of us.'"

And finally: Former "Star Trek" crew member George Takei and his partner Brad Altman were "among the first gay couples to get a marriage license" after the California Supreme Court struck down the state's gay marriage ban in May. Yesterday, the two men were finally married in a "Buddhist ceremony at the Japanese American National Museum in downtown Los Angeles."

Good News

"China is studying whether to impose an environmental tax on polluters to cut their emissions." China's deputy minister for environmental protection, said "several government agencies had formed a team of experts to research the issue."

State Watch

COLORADO: State to spend $1.5 million annually to protect streams.

TEXAS: "Hundreds of first responders at two staging areas in Texas for Hurricane Ike have run out of food and water."

PENNSYLVANIA: Smoking banned entirely at colleges in Pennsylvania.

Blog Watch

THINK PROGRESS: Karl Rove: "You can't trust the fact-check organizations."

WONK ROOM: Newt Gingrich's right-wing game plan for "Solutions Day" on Sept. 27.

YGLESIAS: Francis Fukuyama was prescient about how America's current policy towards Russia was unlikely to be accepted.

OLIVER WILLIS: National Review's Kathryn Jean Lopez claims she doesn't know "a single person who wants to throw a woman in jail for having an abortion."

Daily Grill

"There has not been any serious disagreement about the program."
-- Former Attorney General Alberto Gonzales, 2/6/06, on the NSA surveillance program

VERSUS

"[FBI Director Robert Mueller] was getting ready to turn in his badge. ... The FBI's general counsel, Valerie E. Caproni, and her CIA counterpart, Scott W. Mueller, told colleagues they would leave if the president reauthorized the program over Justice Department objections.'"
-- Washington Post, 9/15/08