Loans and leadership

Updated: Mar 31 2008, 03:45am hrs
When George W Bush first ran for the White House, political reporters assured us that he came across as a reasonable, moderate guy. Yet those of us who looked at his policy proposals big tax cuts for the rich and social security privatisation had a very different impression. And we were right. The moral is that its important to take a hard look at what candidates say about policy. Its true that past promises are no guarantee of future performance. But policy proposals offer a window into candidates political souls a much better window, if you ask me, than a bunch of supposedly revealing anecdotes and out-of-context quotes. Which brings me to the latest big debate: How should we respond to the mortgage crisis In the last few days John McCain, Hillary Clinton and Barack Obama have all weighed in. And their proposals arguably say a lot about the kind of president each would be. McCain is often referred to as a maverick and a moderate, assessments based mainly on his engaging manner. But his speech on the economy was that of an orthodox, hard-line right-winger. Its true that the speech was more about what McCain wouldnt do than about what he would. His main action proposal, as far as I can tell, was a call for a national summit of accountants. The whole tone of the speech, however, indicated that McCain has purged himself of any maverick tendencies he may once have had. I was even more struck by McCains declaration that our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital. These days, even free-market enthusiasts are talking about increased regulation of securities firms now that the Fed has shown that it will rush to their rescue if they get in trouble. Hillary Clintons speech could not have been more different. True, Clintons suggestion that she might convene a high-level commission, including Alan Greenspan who bears a lot of responsibility for this crisis had echoes of the excessively comfortable relationship her husbands administration developed with the investment industry. But the substance of her policy proposals on mortgages, like that of her healthcare plan, suggests a strong progressive sensibility. Maybe the most notable contrast between McCain and Clinton involves the problem of restructuring mortgages. Finally, Barack Obamas speech on the economy followed the cautious pattern of his earlier statements on economic issues. I was pleased that he came out strongly for broader financial regulation, which might help avert future crises. Obama also continues to make permanent tax cuts middle-class tax cuts, to be sure a centerpiece of his plan. Its not clear how he would pay both for these tax cuts and for initiatives like healthcare reform, so his tax-cut promises raise questions about how determined he really is to pursue a strongly progressive agenda. All in all, the candidates positions on the mortgage crisis tell the same tale as their positions on healthcare: a tale that is seriously at odds with the way theyre often portrayed. Do these policy comparisons really tell us what each candidate would be like as president Not necessarily but theyre the best guide we have....

NY Times / Paul Krugman