The embryonic Rudy Giuliani campaign has gotten a lot of stick from critics who doubt he'll be able to effectively win over Christian conservatives because of his liberal social views. Less has been said about Sen. John McCain's need to win over another important GOP group: economic conservatives. McCain voted against President Bush's 2001 and 2003 tax cuts, though he voted in favor of the 2006 extension of Bush's capital gains and dividend tax cuts. Here's what McCain, who reportedly has been consulting with supply-side guru Arthur Laffer, says about tax cuts on his exploratory committee website:
" I have always believed in the power of the American people, and the importance of keeping marginal tax rates low. But tax cuts work best when accompanied by lower spending. Higher taxes and greater spending discourage entrepreneurship, foster wasteful tax planning, and slow long-term growth. Intelligently formulated tax cuts and sensible tax reform will deliver much higher growth when they are accompanied by lower spending."
Now here's what Pat Toomey, president of tax-cut-loving Club for Growth said about McCain in a chat with me yesterday:
" McCain is not a supply sider. I don't think he gets it, the enormously constructive role that cutting taxes can play in economic growth. I don't think he believes it. I don't think he gets it. I don't think he cares.... I think [Mitt] Romney, Giuliani, and [Sam] Brownback do understand that ... Giuliani has spoken about tax cuts very much as a supply-sider ... I think very badly we need a presidential candidate to advocate the complete overhaul of our tax system.... One of the leading candidates might find that they need some kind of bold, out-of-the-box economic position to separate themselves from the others."
So far, though, none of the main GOP contenders have gone further than advocating an extension of the Bush tax cuts beyond 2010.
The February jobs report: This analysis from Action Economics is probably just about the consensus take on the news that the economy added 97,000 new jobs last month (plus an upward 55,000 revision to job growth in December and January) as the unemployment rate dipped to 4.5 percent:
"The U.S. jobs report capped market fears of an out-sized undershoot. The figures were almost exactly as would be expected if weakness were attributable to weather alone, hence diminishing fears of heightened housing sector pass-through. Risks remain, but the prospect of a trifecta of a falling stock market, a weakening economy, and weather-related downside surprises in near-term economic reports has been diminished considerably."
Lately, with the slowdown and all, the economy has been reminding me of the dysfunctional family in the film Little Miss Sunshine. It's a bit funky, doesn't work perfectly but in the end has been getting the job done, especially when it comes to jobs and wages. Not only did the economy add a sizable number of jobs last month despite the nasty weather, average hourly earnings rose by 6 cents, or 0.4 percent, over the month and are now up 4.1 percent over the past year.