What Are Obamanomics, Exactly? Here's a Reading List
With Democrats heading for Denver for the convention opening Monday, plenty is bound to be orated, written or broadcast about Barack Obama's economic philosophy, especially since pollsters believe that the faltering U.S. economy is the No. 1 issue for voters.
I've been reading for clues sporadically throughout the primary season and beyond and have some thoughts and places to link to. If you want a jump on the game, I suggest two readings.
The first is a June article in The New York Review of Books by John Cassidy who introduces the idea that Obama is a disciple of "behavioral economics." This genre merges "the insights of psychology to the rigor of economics." The idea morphed from earlier theories at the University of Chicago, where Obama taught law and spent the salad years of his intellectual development. Yet the genre has only as a little to do with the famous, Milton Friedman, free market-is-everything Chicago School that originated on that campus.
Rather than rely on the traditional invisible hand to fix all things, as the old Chicago School types urged, this new theory supports giving economic "nudges" to change bad behavior or encourage good one. Is it like John Maynard Keynes pouring on government money in order to achieve an economic aim? No, not really. The way I understand it, behavioralism is more subtle and still relies on the market to get things straight. It just uses nudges and that could come from the government. One advocate of the theory is Austan Goolsbee, a U. of Chicago professor who has been Obama's earliest economic advisor.
For more thinking, go to The New York Times website and read this Sunday's upcoming magazine article by David Leonhardt who notes that fixing the broken economy is the election's hugely important issue. John McCain's vision is not much different than usual GOP orthodoxy based on tax cuts. Obama has more detailed proposals, such as tax policies, but is harder to pin down on ideology.
Obama defies Clinton orthodoxy on such matters as mandating health insurance and following what Bill Clinton's famous "Bobs" -- former Labor Secretary Robert Reich and Treasury Secretary Robert Rubin -- wanted, Leonhardt writes.
Leonhardt picks up on the Chicago thinking but says Obama was more part of the set of liberals who liked Milton Friedman -- up to a point. Obama's tax proposals end the Bush Administrations's gravy train for the rich by cutting tax cuts for the top echelon. But he's not advocating soak-the-wealthy socialism, either. He backs bigger cuts for the middle class but to some extent, so does McCain, although Obama goes further.
In many ways, Obama's philosophy is still evolving. He is backing $50 billion in new spending for infrastructure like bridges and roads and scientific research. Does that make him a New Dealer? Or is he some kind of European-style Neo-Liberal? Leonhardt says all the dots haven't been connected yet.
Next week will fill in more of the picture. Stayed tuned. I will.
(Image courtesy BarackObama.com)