Barack Obama and Supply-Side Economics

James Pethokoukis

Some Congressional Democrats are sniping that Barack Obama's stimulus package is too heavy on tax cuts vs. infrastructure spending. Now many conservative economists would balk at even calling them tax cuts since they don't cut marginal tax rates, even temporarily. Tax credits aren't really tax cuts to supply-side economists. But even that is too much for Sen. Tom Harkin who tosses this moldy piece of cliched criticism at #44 in the NY Times:

There is only one thing we have got to do in the stimulus, and that is how can we create jobs,” said Senator Tom Harkin, Democrat of Iowa, as he left the meeting. “I am a little concerned by the way that Mr. Summers and others are going at this in that, to me, it still looks like a little more of this trickle-down, if we just put it in at the top, it’s going to trickle down. A number of people in there said, ‘Look, we have got to have programs that actually create jobs and put people to work.

"Trickle-down economics", you know, is the concept that businesses and entrepreneurs and investors actually create jobs -- not government redistributionists. Weird. Imagine if Obama actually cut corporate and capital gains taxes? But, hey, Obama said the same thing about John McCain. Here is a snippet from last October:

"The decline in our GDP didn’t happen by accident – it is a direct result of the Bush administration’s trickle down, Wall Street first, Main Street last policies that John McCain has embraced for the last eight years and plans to continue for the next four. These policies didn’t work then, they won’t work now, and I’m running for President to end them."