My friend Jim Pethokoukis, who writes the Capital Commerce column for US News and World Report, wrote an interesting piece on Barack Obama’s position(s) on trade. I have worked with Jim on TV and sat with him over coffee. He’s a good, curious guy with a respect for free markets but no particular political axe to grind.
As you know, I am particularly worried about 2 policy issues. One is the possibility of sharp increases in tax rates, the other is policies designed to stop trade in goods, services and capital. Both would have the effect of driving capital offshore just when we need it to raise our worker productivity, which is necessary for increases in real incomes.
I don’t believe that either of these risks is priced into the markets today. When that happens, we will have a bad day.
As it looks more and more likely that Obama will be the presidential candidate it becomes more important to clarify his positions. There is a conflict between the young, optimistic, forward-looking, intelligent, and inexperienced but willing to learn man we have gotten to know and the recent campaign speeches. I am old enough to know that people say strange things on the campaign trail. A President with his rhetorical abilities could do a lot of good, or a lot of damage. I hope that first fellow who wrote the book is the real one.