Seeker Blog

Commentary by UK economists Willem Buiter and Anne Sibert:

Barack Obama, the likely Democratic presidential candidate, has proposed tax breaks for US corporations that invest at home rather than abroad. This column argues that his proposal is protectionist, reactionary, and economically unsound.

Senator Barack Obama’s campaign has been long on slogans and mood music but short on concrete proposals and policies. However, on 2 Aug 2007, along with Senators Dick Durbin and Sherrod Brown and Representative Jan Schakowsky, Obama introduced the yet unpassed Patriot Employer Act. On 13 February 2008, he stopped in Janesville, Wisconsin to give a speech extolling this accomplishment. Janesville was an ideal place to peddle his protectionist legislative initiative: the Janesville Assembly Plant of General Motors is the largest employer in town. This bit of political pandering no doubt contributed to his endorsement on 20 February by the Teamsters Union.

Of course Sen. Hilary Clinton has been no better in her shameless attempts to snare the funding and get-out-the-vote machine of organised labour. Bill Clinton’s greatest achievement as President was his remarkable and unstinting support for a liberal international economic order. As candidate for the Democratic nomination, Hilary Clinton proposes to destroy her husband’s one great legacy for the United States and the world. As Obama’s populist co-sponsor Sherrod Brown said admiringly, ‘Hillary’s clearly moved way away from the old Clinton position.’ Hilary Clinton, however, now appears unlikely to win the Democratic nomination, so we focus on Barack Obama’s position.

If the Patriot Employer Act proposal is anything to go by, we are in trouble if Obama wins…

Detailed discussion follows. It is not just Ms. Obama who needs to take an elementary economics course.