Arnold Kling: Sarah Palin's First Hundred Days

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Noted economist and author Arnold Kling at EconLog imagines President Palin's first 100 days:

She comes to office in January of 2013 with three priorities in economic policy. These are restoring the health of the private nonfinancial sector, putting entitlements on a sustainable path, and reversing the trend toward centralization of power.

1. A tax bill eliminates the corporate income tax and the employer portion of the payroll tax. It eliminates the tax deductibility of mortgage interest and employer contributions for health insurance.

2. An entitlement reform bill limits Federal spending on health care and social security to 10 percent of GDP, using these proposals or some equivalent.

3. Obamacare and Dodd-Frank are repealed.

Kling foresees the first woman President of the United States instituting a health care voucher system to subsidize the very poor and/or the very ill. He also sees her phasing out FHA, Freddie Mac, and Fannie Mae over a period of three years.

Kling, who earned his Ph.D. in economics from MIT, served as an economist in the Federal Reserve System from 1980 to 1986, was a senior economist at Freddie Mac from 1986 to 1994, and is currently an adjunct scholar with the Cato Institute. His full EconLog post is here.

- JP

Rob Bennett on Palinomics (Updated)

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Rob Bennett, who writes on investment strategies at DBKP (Death By 1,000 Papercuts), predicts that not only is Sarah Palin going to end the economic crisis, but she may even accomplish that daunting task "before she becomes President":

There’s an old saying that argues that “you cannot con an honest man.” That’s what Palin is getting at when she says that we need to focus more on the personal responsibility aspects of today’s crisis.

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The amount of overvaluation in the stock market in January 2000 was $12 trillion. A free market economy cannot take a $12 trillion hit without it doing serious damage to all of our plans for the future and even to our confidence in our system of government,. The Crony Capitalists who push Buy-and-Hold are not terribly concerned about the human misery they have caused. They have their own problems.We are on our own re this one.

We can do this! We don’t need the “experts” to tell us how to invest. Common sense is what works. Common sense tells us that we should not have stayed with heavy stock allocations when stocks were priced to provide a long-term negative return. There aren’t too many politicians today who have what it takes to dare to say that out loud. Governor Palin is friends with real live people who are suffering real live pain as a result of this crisis. That makes a difference.

Common sense may not be spoken today because it has come to represent a threat to people who are making huge amounts of money persuading people to ignore its call. But all signs are that things are going to start unraveling fast after the next crash. Governor Palin is the only political leader I can think of who is today positioned to be able to retain people’s confidence when the work of our betters leads to its inevitable bad end.

Palinomics is going to be comprised of one part common sense and one part personal responsibility and one part optimism and one part courage. In today’s United States, that’s a winning combination that no other politician appears to be willing or able to advance. It gets us back to a free market system that works.

Despite Bennett's astonishing prediction, Gov. Palin has never claimed to be able to single-handedly solve the nation's economic problems. While her common sense recommendations for turning the nation's economy around are prudent, Bennett's prediction is less so. If he wants to climb onto a limb and saw it off, as DBKP's editors suggest, it's not fair to the governor for him to drag her out there with him. His full post is here.

Update: Rob Bennett replies in the comments to this post.

- JP

Steven Kates: Can Sarah Palin make them listen?

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Dr. Steven Kates, Senior Lecturer in Economics at RMIT University in Melbourne, addresses the questions, not only of whether Sarah Palin will run for the office of President of the United States, but should she run for the job, in an essay in Quadrant, "the leading general intellectual journal of ideas, literature, poetry and historical and political debate published in Australia." Some excerpts:

The question becomes, if Sarah Palin does actually seek the nomination in 2012, whether she is the right one for the job.

Her book is therefore in many respects an outline of her political past. It is a review of many of the decisions she has made as a sampler of the kind of President she would be. It discusses her philosophical position on a number of questions which will be major matters for decision for a President having to deal with the world as it will be in 2013 and beyond.

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That... she has quoted Thomas Sowell gives me a fair idea of where such ideas may have come from. But it is not that she read such concepts in Sowell that matters (if that is indeed what happened) but that when she did come across them, those were the ideas that stuck and remained. Sowell is one of the most articulate conservative intellectuals of our time... That she would find an affinity with Sowell, understand with perfect clarity what he had written and then condense the points so well, is entirely to her credit. She (as well as he) may be wrong. But these are crucially important ideas that, should current policies fail and new ones be required, may make the difference between prolonging recessionary conditions even further and the ability to recover from what began as a relatively mild recession, however much commotion there may have been at the time.

It is that these ideas resonate and make sense to her that matters. Being President is not being the head of a fact-finding commission. It’s not about being the smartest person in the room. The role is to make decisions in real time about issues that have become boiling hot. What you are looking for is someone whose value system, background capacities and general outlook on the world will keep the community safe in a dangerous and unpredictable world. It is to answer these kinds of questions towards which this book has been directed. Sarah Palin’s aim is to demonstrate that she is just the kind of person in whose hands the American public can safely place its trust.

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Will Sarah Palin be President? Will she be the one to “make them listen”? This we will only know sometime in 2012, possibly not until the first Tuesday following the first Monday in November. Maybe we won’t even know until 2016.

More important, however, is should she be President? Is she up to the job (assuming anyone is)? That is a different matter that may never be resolved unless she finally is, and perhaps not even then. In the meantime, Going Rogue is her early manifesto, written to put her back on a pathway towards this undoubted goal. The book has done exactly that and has done it extraordinarily well in spite of the enormous obstacles that have been thrown in her way. She is nobody’s fool, not to be underestimated by anyone.

You can read the full article by Professor Kates here.

h/t: Real World Libertarian

- JP