Economic Plans Do Matter: Keeping Markets and Morality Close Together

John ArmstrongEconomy/Economics

As Senators Barack Obama and Hillary Clinton draw nearer to a very important primary race in Pennsylvania they seem to continually seek to "one-up" each other with the newest economic solution packages for what they think will gain votes for their respective campaigns. Piggy_bank
One cannot be exactly sure what they are actually promising voters without a good deal of careful reading. Says one writer in a paper today, "They often appear to be playing a game of policy leapfrog." Sen. Clinton proposed  a $30 billion package on Monday that would provide grants and loans to localities so they can acquire foreclosed properties, make improvements and then sell them. The aim, she says, is to head off big clusters of foreclosures that can undermine neighborhoods.

Then yesterday Senator Obama countered Clinton with his own $30 billion package, although he says his would help financially stressed borrowers keep their homes through individual aid (whatever that means seems unclear to me right now). In the Obama plan the money would also be used to help states deal with their projected budget shortfalls because of a weakening economy.

In today’s news reports we hear that both Senators Clinton and Obama have pledged to support legislation being written by Rep. Barney Frank (D., Mass.) and Sen. Christopher Dodd (D., Conn.) that would establish a federally backed auction system for mortgages in default. Both candidates also have called for a $10 billion expansion of the mortgage revenue bond program that offers below-market interest rates to first-time home buyers.

Given the NAFTA debates in Ohio (which came down to who would provide the most protectionist policies) I have to wonder what else we will be offered to gain the votes of frustrated people who are in default financial positions. The two Democratic candidates seem determined to press two issues: (1) The War in Iraq; (2) The Economy. The question I have is simple: "What is the real difference between their respective positions?" So far, Clinton offers a plan, then Obama one ups her plan and then she comes back offering even more than she did before. This is precisely the kind of "messing with the economy" that I wrote about earlier today.

For many Christians, who do not understand economics or have a solid grasp of how markets and capitalism actually work together, all these plans look and feel like "compassion." Sadly, they offer much more than they will deliver. Many people, including younger Christians who are influenced by the political left, do not understand that liberty, both personally and financially, can (and should) be balanced with moral responsibility. And this can be done without the federal government trying to interfere. The name of the game here is to label something. The Democrats are still defending the policies of the "New Deal" and the Republicans are still pretty close to "Reaganism." President Bush clearly moved away from Reaganism, at least in spending measures, and now the party is confused about where to stand on some of these points. The Democrats have no such problem. They are going back to the well that they have gone to for over sixty years. Most people understand this, to some degree, but most are also unable to understand how markets can actually benefit people so long as freedom is preserved and morality is not surrendered to the almighty dollar. The way to fix our economic problems, long term, is to embrace both free markets and real (private and public) morality. The two extremes are what we are often give by the two parties and common sense. It would be great if we could move the discussion in a different direction, especially among Christians.