Palin and 'Reaganomics'

Though selected as running mate primarily to energise the Republican base, Sarah Palin is positioning herself as the champion of “hard-working” and “middle-class” families.

It is a paradox exposed by the manner in which she espouses the virtues of Ronald Reagan. But redneck Americans have long baffled commentators through voting against their economic interests. If they do so again, it will offer the McCain-Palin ticket their best chance of election to the White House.

In her speech at a rally in Pennyslvania today, Palin made attempts to persuade that elusive group of voters – middle America – that they would be better off under a third term for the Republicans. She claimed her ticket’s tax-cutting measures would stimulate business, with the result that there would be more jobs available for America’s poor. Such a claim is reliant upon voters voting based on “qualities” of the candidates rather than digging deeper into the intricacies of the policies they actually advocate.

For those who have studied the respective tax plans of McCain and Obama are in no doubt that, under Obama, at least 80% of Americans would be made better off. Indeed, research by the Tax Policy Centre shows Obama’s plan would make the poorest 20% of Americans over 5% better off, which would be funded by hikes for not the “middle class”, as his opponents have suggested, but for the phenomenally wealthy. The top 1% would lose by 8% under Obama’s plan.

Conversely, under McCain, both the very bottom and very top would be made better off. So what’s to argue with? The devil is in the detail; whilst McCain and Palin are portraying themselves as willing to take on Wall Street, their tax plans would make the top 1% of the population 2% better off. As for the bottom 20%, they will gain, yes – but by a completely trivial and irrelevant 0.2%.

So the argument Palin advanced today is completely bereft of meaningful substance. Amidst all her attacks on Barack Obama came the claim that, through freezing “non-essential” public spending the ticket would balance the federal budget within their first term. Such a claim evokes the “voodoo economics” George Bush Senior attacked Ronald Reagan over in 1980.

And, while Reagan continues to be revered today, there are important points about his legacy that need to be accentuated by the Obama camp. It was under Reagan that the budget deficit initially ballooned, putting it on the way to the crippling levels of today. And, as she explicitly praised Reagan’s economic policies, Palin opted to ignore the fact they seriously damaged the poorer workers whose support is essential if she is to be the new Vice-President.