Whom should entrepreneurs vote for in November? At the Inc. 500 conference this Friday, a panel consisting of McCain's top economic adviser, Douglas Holtz-Eakin, and Obama's chief economic guru, Jason Furman, was supposed to be convened to answer that question. Unfortunately, Furman had to cancel at the last minute, so we got the side of the story only from the McCain camp. Still, we got the meat of what a McCain presidency would do for entrepreneurs, according to Holtz-Eakin.
- "The notion that we must tear down the fundamental business model of Washington" is the single most important step for improving the business climate for entrepreneurs, he said.
- The overall economic strategy is removing barriers that get in the way of creating jobs. That means "aggressively" phasing out the alternative minimum tax, keeping dividend and capital gains taxes low, and keeping the top marginal income tax rate where it is.
- Reforms to make healthcare more "portable," i.e., not tied to a specific job.
- On environmental policy: "We don't think the government needs green capital funds. We have them in the entrepreneurial sector."
- General view on government: Government should not try to act like venture capitalists. "Venture capitalists are very good at saying, 'Stop. That's not working.' " Government is not good at saying "stop." "If you ever see a government program acting like a venture capitalist, you've got disaster," Holtz-Eakin said. Applying similar analysis to the current financial crisis, he pointed out that the unregulated hedge funds are doing OK, while the regulated investment banks are failing. The point is that as we rush for the government to do something about this crisis, it's very easy to try to do too much regulation, instead of saying "stop."
It's important to remember that although he has the senator's ear, Holtz-Eakin is not John McCain. Indeed, we can think of several examples where McCain has recently diverged from Holtz-Eakin's comments.
- He blames "fat cats" on Wall Street and a "casino" mentality for the recent crisis. That's not really the attitude one would take if he's trying to hold back regulation.
- While maybe it's not the same as "green capital funds," McCain does support, among other subsidies for alternative energy, spending $2 billion annually on clean coal energy.