Inside Giuliani's Economic Thinking

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One frequent criticism of Rudy Giuliani and his 2008 presidential candidacy is that "America's Mayor"–a total policy wonk when running New York–seems to be winging it on the stump and is a little light on details. So I was happy to have the opportunity earlier this afternoon to participate in a conference call with Michael Boskin, Team Giuliani's senior economic adviser and former head of the White House Council of Economic Advisers under President George H. W. Bush between 1989 and 1993.

Boskin described Giuliani's economic philosophy as one of "fiscal discipline" and "supply-side economics." He also said that Giuliani wanted government to be "run like a business," meaning "accountable." He said Giuliani was for lower income taxes, getting capital gains taxes "as low as possible," tax simplification, regulatory reform, and permanent abolition of the estate tax. Giuliani also wants to "press forward" with continued trade liberalization.

All this I've heard before.

So I asked Boskin specific questions:

Major tax reform beyond extending the 2001 and 2003 tax cuts? Boskin said Giuliani was for "substantial reform of the tax code" but was against a consumption or national sales tax.

Social Security reform? Boskin said Giuliani agreed that long-term costs and solvency are an issue and that private accounts should be part of the solution, adding that "people should have some choice" in how their accounts are handled.

China and free trade? Boskin said that Giuliani thinks the role trade has played in lifting hundreds of millions of Chinese out of poverty is a good thing and that friendly trade relations lessens the chance of military conflict–but he has not yet developed any plans for a broader social insurance program, such as the one some Democratic candidates are suggesting, to deal with losers from trade agreements or the economic volatility that trade creates.

Finally, I asked Boskin if he was converting Giuliani to his belief that government statistics vastly overstate the rate of inflation. (If true, issues such as slow wage growth and Social Security solvency are pretty much nonproblems.) Boskin said Giuliani was going to leave it up to government number crunchers to fix the problem, which he personally believed they were on the way to doing.

Clearly, none of what Boskin said is exactly deep, white-paper material. How the heck, for instance, does Giuliani want to simplify the tax system? If not a flat tax, a two-rate income tax, maybe? I still have no idea.

I also want to know how the mayor is going to "impose"–Boskin's phrase–fiscal discipline on Congress and the rest of the government. Rival Mitt Romney, for example, wants to cap nondefense discretionary spending at inflation minus 1 percent, saving maybe $300 billion over 10 years. That sort of detail would be real helpful.

So to use a football metaphor, today's conference call was "three yards and a cloud of dust." But since Giuliani is a Yankees fan, I'll say that the conference call was a shallow pop fly to the outfield that landed between second baseman Robinson Cano and right fielder Bobby Abreu for a single. Better than a strikeout, at least.