As Austin Powers would say, "Ouch, baby -- very ouch."
Paul Krugman simply blisters John McCain Monday on economics. The particularly blistering portions:
It's 3 a.m., a few months into 2009, and the phone in the White House rings. Several big hedge funds are about to fail, says the voice on the line, and there's likely to be chaos when the market opens. Whom do you trust to take that call?
I'm not being melodramatic. The bailout plan released yesterday is a lot better than the proposal Henry Paulson first put out -- sufficiently so to be worth passing. But it's not what you'd actually call a good plan, and it won't end the crisis. The odds are that the next president will have to deal with some major financial emergencies.
... We've known for a long time, of course, that Mr. McCain doesn't know much about economics -- he's said so himself, although he's also denied having said it. That wouldn't matter too much if he had good taste in advisers -- but he doesn't.
Remember, his chief mentor on economics is Phil Gramm, the arch-deregulator, who took special care in his Senate days to prevent oversight of financial derivatives -- the very instruments that sank Lehman and A.I.G., and brought the credit markets to the edge of collapse. Mr. Gramm hasn't had an official role in the McCain campaign since he pronounced America a “nation of whiners,” but he's still considered a likely choice as Treasury secretary.
And last year, when the McCain campaign announced that the candidate had assembled “an impressive collection of economists, professors, and prominent conservative policy leaders” to advise him on economic policy, who was prominently featured? Kevin Hassett, the co-author of “Dow 36,000.” Enough said.
Now, to a large extent the poor quality of Mr. McCain's advisers reflects the tattered intellectual state of his party. Has there ever been a more pathetic economic proposal than the suggestion of House Republicans that we try to solve the financial crisis by eliminating capital gains taxes? (Troubled financial institutions, by definition, don't have capital gains to tax.)
... At this point, one has the suspicion that a McCain administration would have us longing for Bush-era competence.
That had to sting.
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