Negative Interest

Obama’s “vulnerability” on the economy

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I’m a bit puzzled by this Associated Press piece. It’s titled “GOP focus on flat taxes and smaller government, try to exploit Obama vulnerability on the economy” (they might want to look for a less clumsy headline writer), and it glosses over a few important points.

There are basically two separate dynamics at work here. The first is that, in order to gain the upper hand in the Republican primary, the GOP candidates are presenting economic plans that move far to the right, because that is generally what the Republican party leadership and primary electorate are looking for. The second is that by moving far to the right to prevail in the primary, the candidates are undermining their chances to exploit Obama’s vulnerability on the economy in the general election. A flat tax (which will raise taxes on lower income households and lower them for upper income households) and deep spending cuts may play to individual candidates’ advantage in the primary, but there is a real tension between what plays well in the primary and what plays well in the general election.

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Written by negativeinterest

October 30, 2011 at 5:44 pm

Posted in Uncategorized

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