Exams

Sorry that posts have been temporarily suspended for exams (when many of you need distraction most). There's still a lot going on -- watch the news and check back at the end of the month.

John McCain Tribute

John McCain's concession speech was the finest moment of his campaign; he finally had nothing to lose. As he addressed the noiseless crowd we all saw a John McCain we remember -- the one who would have run with a Democrat, Joe Lieberman, just to show the country what unity could mean. I'm reminded of the scene from Hook where a Lost Boy presses the wrinkles out of an aged Peter Pan's (Robin Williams) face until he exclaims "Oh, there you are Peter." There you are John.

I've always resented the effect an election has on the candidate. It forces the candidate to be someone he or she isn't -- or at least to bend his or her image to something that the electorate wants to see. The truly genuine candidate cannot be elected. We selfishly want them to tell us only what we want to hear -- and they do, though it sometimes costs their soul.

John McCain finally had the weight off his shoulders so that he could tell his constituency something they didn't want to hear, but needed to hear anyways. "I urge all Americans who supported me" he said, "to join me in not just congratulating [Obama], but offering our next president our good will and earnest effort to find ways to come together."

The periodic boos in the arena at the mention of the resented victor seemed to make Sen. McCain uncomfortable with the supporters he had been leading only minutes before. Those boos were fueled by a long, and often dirty campaign that left few without mud on their hands. John McCain after losing to Bush in South Carolina commented that there was a special place in hell for those that ran the smear campaign against him there. John's now got his own repentance to deal with, but his gracious speech showed that the McCain we remember is still there and willing to make of this country what he dreamed to make of it through the office of the presidency.

Maybe McCain wasn't fit to be president -- at least not this year (2000 sure would have been nice in many people's opinions) -- but he will remain a honorable Senator. "Country First" doesn't die with an election, and if John McCain is still John McCain, he will be at the forefront of competition and comprimise with the new administration to guarantee that the interests of the nation are the priority in Washington. I'm honored to know that John McCain continues to represent us in the Senate and trust that he will lead his battered forces to reconciliation with the new President Elect.

A New Brand of Democracy

Last night's celebration outside the White House had the excitement of an at home basketball upset over Duke-- District residents "rushed the court." The victory was hardly an upset in the short run - Obama has been expected to win for months - but in the long run this was an upset victory over the pride, political interests, prejudices, and patrimony that mark Washington-as-usual.

Some would deride the recent political enthusiasm as a mark of a radicalism and faction, of the sort criticized by Federalist 10. I beg to differ. What we see in reality is a young, highly educated and compassionate generation reinvigorated by the hope of a new brand of politics. A good friend sent a brief text message saying, "I will admit it was great to feel so inspired by our new leader after so long of not feeling that." Not since a brief period after September 11 has my generation felt encouraged by our democracy. Mark Shields commented in a Newshour interview, "I think there's a sense of goodwill in the country... A sense of goodwill in the world that George Bush had after 9/11 and the country had after 9/11 that was squandered, quite honestly, in Iraq...which has been repurchased in his victory." For many of us our democratic enthusiasm was betrayed in Iraq with lies, deceit, and political interests.

Last night, I saw wounds heal. Last night was a stamp on the self-efficacy of a people, and especially on the self-efficacy of the young and minorities.

The Obama presidency now has the burden and privilege of redefining democracy in America and setting the example of what the standard of politics will be for my generation. In the words of John McCain, a man who paved the way for the kind of politics Obama represents, "Godspeed to the man who was my former opponent and will be my president."
Godspeed President Elect Obama and Godspeed citizens of the United States of America.

Virginia Blue

In 1959 public schools in Prince Edward County, Virginia, closed for five years rather than integrate as the federal government had mandated. The state government looked on passively and even provided vouchers for the private educations of white students. My great grandfather became superintendent of the county in 1965 to oversee the integration process begun in 1964. According to my grandmother, it was a battle her father would aver “ruined me among my peers.”

Last night the Commonwealth of Virginia offered its 13 electoral votes in support of a black man as president of the United States. When Barack Obama was born, Virginians would have pulled their children out of school rather than have them go to school with a black boy. Yesterday Virginians affirmed their confidence to hand responsibility for their education, economy, security, and general wellbeing over to a black man of the same generation to which they denied an education fifty years ago. I couldn’t be prouder to be a Virginian today.

InkBlogs' First Official Campaign Endorsement

Well the absentee ballot is in the mail as of a few minutes ago, and given our anticipated rapid ascension to the peak of political media, InkBlogs thought it appropriate to release an official campaign endorsement.

After great deliberation, we have concluded that Barack Obama will make the better president of the two candidates. This is not to detract at all from the great respect and admiration I still hold for John McCain as a Senator and American hero. In spite of a celebrated tenure in the Senate, McCain proved to be less of an astute campaign manager. While I acknowledge the very difficult balancing act he had to perform, McCain's campaign showed that you can shout "Maverick" from Washington to Alaska, but your message will be considerably muffled if you're stuck in the pocket of the hard Right. David Brooks commented in a Newshour interview, "You have to reform your own party before people trust you to reform the country." If anyone could do it, I thought it would be John McCain, but McCain let the opportunity slip through his hands and probably the presidency as well.

Obama showed profound professionalism in the executive capacity of managing a long and arduous campaign. His amazing ability to rally votes, expand the democratic process, conduct unprecedented fundraising, and maintain a calm respectability about him will surely translate into an effective chief of state.

But, after all, we don't vote for a campaign manager but for a president. In the end, this election should be about issues. I believe McCain had a far more sound approach to Iraq, but the success of the Surge has made the issue more or less a moot point in the campaign. Obama, on the other hand, promises to bring a new face to foreign diplomacy that has been much anticipated by the rest of the world ever since the Clinton presidency.

Obama's tax policy is hotly contested, but my vote on this issue arises from an intuition that that Bush tax breaks worked in the wrong direction. Tax breaks in the top tier proved not to effectuate the desired trickle-down effect, but rather lead to unhealthy market speculation.

I don't think of the Obama tax plan as wealth redistribution as much as a framework for keeping money where it will most probably be spent on consumption of necessities, while taxing at higher rates those income groups that delegate a greater portion of their wealth to luxury spending. This may inhibit the diversification of the economy, but it reinforces those markets on which our general welfare is most dependent. Besides, the middle and lower classes are precisely the groups that need to be targeted now to help curb defaults on home mortgages. Bush's "Ownership Society" would never be effectuated by giving those who already own everything more disposable income by which they can own even more. Higher margins of savings and disposable income are best maintained in the middle and lower class where "Joe the Plumbers" (I'm sick of the phrase too) can buy into the markets and make capital investments of their own.

Which brings us to the matter of the capital gains tax. I agree with conservatives that now is the worst time to raise the capital gains tax as Obama proposes to do; however, Obama also has a less-popularized proposal to completely eliminate the capital gains tax on small business. This should result in a shift of financing and investment toward small business and entrepreneurship. That means that when Joe the Plumber starts his plumbing business (or has a change of heart and decides to start his own biomedical research or IT consulting company), he'll find more willing investors. In my mind this allows more flexibility to break from the established big business economic frameworks by spurring productivity-enhancing innovation and entrepreneurship.

I'm constrained from breaking down the campaign issue by issue, but based on my analysis, which points at times to McCain and at times to Obama, a thorough examination of the totality of issues points convincingly toward Obama.

Iraq First: then we can fix our own mess

I've said before that I'd vote for Gen. Petraeus in this election over either candidate. What problems will our next president face: a faltering economy, Washington-as-usual, two far-away wars, a country sharply divided. Take a look at Petraeus's resume. Having taken his job in the midst of a disfunctional economy, a corrupt and deadlocked government, an all-out war outside his office window, and a country ravished by sectarian violence, the general has done remarkably well on all three fronts in spite of the immense challenges handed over to him by the former command and the Bush administration. Diplomat, economist, philosopher, military master-mind, and all-around productivity machine, I can think of no better candidate for Chief of State and Commander in Chief -- but the last place I want him (for the time being) is in Washington.

While I'd love to have Petraeus as president someday, it seems to me preposterous to pull him out of precisely the place where he's most needed: Iraq.

But in a sense, isn't that what Obama wanted to do?

While our country may look like it is in dire straits, Iraq (pop. 28 million) has it far, far worse. Sure, there are countries all over the world -- Haiti, the Democratic Republic of Congo, Sudan to name a few -- where conditions rival those in Iraq, but none where the blame points so accusingly toward the US as in Iraq (granted, you could make an argument for Haiti).

I'm sorry to say it: it was not just the Bush administration that invaded Iraq -- it was all of America, and we've incurred substantial moral liability as a result. While I sincerely hope that the current president has a nightly "out damn spot" episode, our nation has no right to just wash our hands of Iraq and absolve ourselves of the sins of our leaders. The least we must do is restore Iraq to where it was and put it on a path to future prosperity. Anything less would be a disservice to humanity and to the 28 million citizens of Iraq, most of whom are peace-loving and law-abiding human beings.

The Obama campaign is simply wrong to treat the war in Iraq as less important because it was less legitimately conceived. His argument focuses entirely on what was already done as a justification as what we should do now -- that somehow by turning the war machine in reverse, it will undo all that has already been done. McCain, at least I think, takes the past as an exogenous variable, and seeks to optimize the outcome in Iraq with what he's given, as he showed by supporting the Surge. This is the more rational approach. I know Democrats (Republicans too) are unhappy with the "original sin" of invading Iraq, but the logic goes that by pulling the feet out from under the war, we'll somehow get back at Republicans and the president -- maybe we'll even get to say "I told you so" if Iraq goes down with the Republican party. Its kind of perverse, but thats all the sense I can make of it.

Luckily for Democrats, and largely thanks to the good General-saint, Democrats may get their cake and eat it too. The argument for immediate withdraw that looked ludicrous at the beginning of this campaign suddenly appears at least feasible thanks to the unanticipated success of the Surge. While we won't be able to vote for Petraeus, his role in this election is far from isolated. For myself and those who think about Iraq as I do, the general paved the way for making Obama an acceptable candidate.

I was wholly unprepared to throw the fate of 28 million people to the mercy of the democratic whims of a dissatisfied American populous by voting for Obama -- I don't know that he would have done it, but he at least had to say it to get elected. On the domestic front, our nation will remain more or less prosperous no matter who is elected. A bad choice on Iraq, however, especially when sectarian violence still raged, could have meant the demise of an entire country. In the beginning, that was enough to make this election a one-issue vote for me.

Things are very different in Iraq now, and a rapid pull-out appears to be a much less disasterous option than it did before. For myself, and I think most Americans, the issues in this election have shifted from Iraq to the economy as we become more comfortable with progress in Iraq and less comfortable with our own domestic problems.

Thank General Petraeus (and ironically John McCain to some extent) for permitting me to vote Country First in this election - which might well mean Obama - and not solely Iraq First as I would have been morally compelled to do before.


Further Reading:
He Came, He Cut Deals, He (May) Conquer
Gerson: Casualty of the Surge
Diehl: McCain's Running Mate

Irony

Joe the Dagger?

Anyone else starting to wonder about all the Joes popping up in this campaign?

If Joe-sixpack wanted to play a drinking game during the last debate he would have heard "spread the wealth" seven times out of McCain's mouth, referencing Obama's comment to Joe the Plumber (mentioned 9 times). The McCain campaign has seized on the personality of Joe the Plumber -- with good reason -- releasing a recent "We are all Joe the Plumber" campaign ad. If anyone can unclog the McCain campaign now, Joe's the man to do it.

Despite our immense affluence according to world standards, the US has held tightly to its middle-class ideals. America, in a sense, is all middle class -- all but those at the margins are self-proclaimed average middle class Joes. According to the 2007 American Community Survey, about 65 percent of American families earn between $35 thousand and $150 thousand dollars a year, a huge spread which, we nonetheless lump together in our heads as one big "middle class." Honestly, I think it makes us feel better. If Joe the Plumber stands for the middle class, in a sense we all are Joe the Plumber (and we kind of like it).

"Middle class" Americans generally have little resistance to "spreading the wealth" of the upper-class -- its a Robin Hood ideal that is reflected in the general abhorrence for oil tycoons and the "greed" and "avarice" on Wall Street. After all, didn't we fight a war to get away from all those Prince Johns and Sheriffs of Nottingham in England? But Robin Hood never stole from the middle class; not from Joe the Plumber! That sounds a lot like the "S" word --- socialism. What is this Obama guy up to?

This race hinges on the middle, both the middle class and the political moderates. In an attempt to alienate the middle from Obama, the McCain campaign has adamantly tried to paint Obama as a radical leftist, from touting the label "most liberal Senator" to associating him with the likes of Wright and Ayers. I think most Americans were able to see through those attacks -- they were about third parties -- but Obama's recent comment played right into McCain's hands.

Forget the facts -- that Obama will only raise taxes on those making over $250,000 a year -- Obama said he's going to spread Joe the Plumber's wealth around. Does that mean my wealth too?

Obama should learn two lessons form this experience. First, don't ever say "spread the wealth" in the heat of a campaign. Even a small-town mayor can put a better gloss than that on the "T" word than that. After all, taxes aren't exactly spreading the wealth either -- overall, they're a means of pooling resources to accomplish public aims which wouldn't otherwise be met. You could just as easily call the bailout "spreading the wealth," but no right-minded politician would do that; they call it butter.

Second, the middle class is king-maker, and to them Robin Hood economics appeal more than Marxist innuendos. Spin this issue around and show that Joe's still fronting the bill while big oil and the economic elite get the break. We're "spreading" Joe's wealth around on Wall Street. If Americans are as afraid of socialism as they think they are, they've just witnessed the biggest socialist investment in American history and John McCain raced back to Washington to push it through. Sorry, John, we're all socialists now.

Lets face it, we've just authorized a $700,000,000,000 soup kitchen that may or may not pay itself off when America gets back on its feet. I recently saw a man outside a real soup kitchen in DC shouting to a friend "I want a bailout, a million dollar bailout -- just like the one the white people (I suggest interpreting in terms of class, not race) got." Given the price tag for that project, the people at the DC soup kitchen won't be seeing much of Joe's money at all, no matter who's in the Oval Office. Joe the plumber is always going to pay something, its the "price of civilization," but let's at least make Prince John earn his keep too.

Hate Rhetoric and the McCain Campaign

An interesting op-ed from the Washington Post by E.J. Dionne ("Hoover vs. Roosevelt") compares Obama’s message to that of Roosevelt (Hope) and McCain’s to Hoover (Fear) in the election of 1932. Obama has not quite inspired any “fireside chat” comfort for me (in fact neither candidate has shown convincingly to have picked up on the import of the situation at hand), but the McCain campaign has taken a marked turn in rhetoric toward hate, that the right-wing crowds (mobs?) have amplified with boos and chants of “no-Bama.” Whatever the right feels about Obama, in 3 months, he might well be sworn in as President of the United States, in which case the conversation will have to shift back to policy and away from the Senator’s middle name in order for the right to maintain any integrity and for our democratic system to move forward as a people.

The beauty of democracy is in its institutionalization of regular peaceful revolution. Hate speech like that which we have seen gnaws at the peaceful nature of democracy, and the battle of passions that it provokes lurks right below the surface of violence -- a latent shadow of the force of arms. McCain’s campaign has begun to undermine the peaceful transition that our nation must undergo in a matter of weeks. Obama is and will be a respectable leader, and the authority he inspires among his fans and followers is both admirable and powerful. His ideas may be grounded in a philosophy and ideology that directly challenges Republican ideals, but they are grounded and, though different, they are not necessarily wrong.

Hannah Arednt writes in The Human Condition that forgiveness paves the way for progress. In a sense, the right will have to forgive Obama for what he represents. They will not have to agree with him and absolutely should not blindly go along with him, but they will have to forgive and respect him as the leader of our nation so that the wounds of an election can heal and so that our nation stands on a foundation (set by its people) of reason and not blind passion. The next president takes the reins of two wars and a financial melt-down. These tribulations will require unity and cooperation from both sides of the spectrum. The harsh notes of “No-Bama” must cede to harmonious “U.S.A., U.S.A.” or else doom and chaos will come in through the back door to undermine U.S. prosperity.

I have great respect for John McCain, and have long been one of the infamous “fence-sitters” in this election, but the tone the McCain side has taken casts a shadow on many of the positive policy aspects of his campaign. David Brooks recently wrote a sort of eulogy for the old McCain, if not an apology for the new McCain (“Thinking about McCain”). I read it and said to myself, “That's the guy I like, where’d he go?”

From the beginning of this campaign, even back when McCain began shoring up support with company like Falwell, I have wondered what McCain really seeks to gain from this shape-shifting dance. Maybe he had to move right to secure the Republican nomination, but why keep moving even farther right, as the selection of Sarah Palin represents, once he did?

McCain’s appeal was always to moderates like me. There’s an economic theory developed by Harold Hotelling which represents buyers as dispersed along a linear path. The example uses swimmers along a beach, but let’s analogize it to voters lined up on the political spectrum from left to right. Two ice cream vendors (candidates) are trying to decide where to locate on the beach. Given that swimmers go to whichever ice cream vendor is closest, Hotelling’s theory is that two ice cream vendors will both locate in the middle, equidistant from both ends of the beach. If one vendor instead stayed farther south, the other would move south too, keeping her old customers to the north while capturing even more of the market farther south. We see that Obama was pretty well established to the left, but he has adapted his image to move closer to the middle to start in order to capture some of the moderates. McCain has taken the opposite approach. He was close to the middle, right where he should want to be, but keeps drifting to the right, forfeiting voters in the middle who suddenly find Obama closer to their ideologies than McCain.

To illustrate a little more simplistically, Voters to the far right will always always vote for McCain over Obama, so why adapt your campaign to that group? Shift to the middle and capture the entire right and whatever marginal ground Obama leaves uncovered by staying to the left. In contrast, McCain has retreated from the middle to fortify himself in the castle on the right, which leaves the plains in between undefended and open for the taking. Obama is selling more ice cream, and McCain has resorted to fussing and shouting. I don’t want to buy ice cream from the angry old man at the far end of the beach either.

So that’s a brief tangent on what McCain should have done to win. Unfortunately for McCain, winning is moving farther out of the picture, and now McCain’s patriotic duty should be to stop burning bridges and keep in tact the means for forgiveness and democratic reconciliation. Once the election is over, the nation must return to business as usual, and those angry shouting people in the crowd aren’t going to make that so easy. I hate to do it, but must I remind that race is still a factor in this election. See Kristof’s article “Racism without Racists”. While I have no doubt (well, less doubt – the middle name thing bugs me. See Hosseini "McCain and Palin are Playing with Fire") that McCain can separate his political evocation of hate from any racial dimensions of the campaign, I’m not so sure that his audience can. Our nation has much more at stake than political reconciliation after this election. The true test and triumph in the aftermath of the election, no matter who wins, will be untying race-related emotions from political emotions, and honestly, treating the results like any other W.A.S.P. v. W.A.S.P. election. I say this because the day that the victory or defeat of a black man or woman has absolutely no significance on a racial dimension (as I hope would be the case for a modern-day Catholic candidate) will represent the true triumph of racial equality. It will be far easier to untie those emotions after the election if the McCain campaign would stop putting the bellows to the fire of emotion right now.

I think that our nation stands to come out of this election with a very strong president no matter which way the vote goes. My hope is that we will also come out as a strong and respectable electorate. I can’t place blame squarely on the McCain campaign (The Obama campaign has run its fair share of negative ads), but I think that, of late, McCain's campaign has done more to fuel the fire than rise above it. He is scaring my vote away, and he threatens to do much worse, while gaining no advantage that I can see for himself. John McCain, please stop playing with our emotions.

Counterfactuals: What could the McCain campaign have looked like?

Scalpel or Hatchet?: Is Keynes relevent again?

You'd think that by the fourth time the debates throw out the same question, at least one candidate would be able to formulate an answer that actually addresses the question. Instead of talking about what a $700 billion bailout will force them to cut back on, both candidates resort to their respective government spending talking points. McCain says "spending freeze" which Obama predictably analogizes to a "hatchet" before introducing his "scalpel" strategy, cutting back on some areas of excess but allowing the flexibility to increase funding where needed. I want to raise the possibility that maybe cutting spending isn't the answer, but hopefully I'll say it in a way that actually does answer the question.

On this issue, I have to give my vote to Obama's scalpel, especially given the current state of the economy. Macroecononmists are familiar with the axiomatic formula Y=C+I+G. The formula tells us that Income (i.e. GDP, blunt measure of the strenght of the economy) equals Consumption plus Investment (in buildings, equipment, machinery, etc.) plus Government Spending. The Keynesian approach posits that when "C" and "I" are hurting (as they are), "G" (usually best reserved on the sideline) may be called upon to balance insufficient private spending in order to maintain a steady "Y." The balance is delicate because too much "Y" can cause inflation whereas too little "Y" results in high unemployment. Keynesianism is challenged because the government has a very difficult task in determining where to strike the balance, especially since data lags behind the time frame for decision-making. Normally economists agree that a combination of low taxes and small government works best, delegating that decision making to private markets (under the careful supervision of the Fed) to determine the correct level of spending.

That philosophy works well under normal economic conditions, but these are unprecedented times for the economy. "C" and "I" are largely dependent both on individuals' and businesses' ability to obtain money and on their comfort level to spend it. A credit freeze erodes consumer confidence and investment enthusiasm and makes it virtually impossible to obtain funds for those who would spend. Anecdotal evidence shows that currently many companies cannot borrow beyond even the next business day, forcing them to survive from day to day and rendering any long-term investment infeasible.

Deficits are generally seen as inherently undesirable, as reflected by both campaigns' promises to eliminate the deficit. While deficits are undesirable in a booming economy, in an economy such as the one at hand, a deficit can prove a useful tool to stimulate the economy where the private sector is utterly unable. Due to the credit freeze, the government is one of the few entities left with the means to borrow and invest. Unlike private institutions, the government enjoys a constant and compulsory source of revenue (taxes) and a reliable means of financing (Treasury Bonds). If the private sector cannot and will not spend, the government must, or else a credit freeze will cause a downward spiral in output ("Y") and put upward pressure on unemployment.

Additionally, public spending can prove useful in ways that private spending cannot. Investment in public infrastructure paves the way for more rapid recovery whenever the private sector does revive itself. Public spending is a means of overcoming the collective action problem articulated by Mancur Olson. Consider an investment such as advanced equipment for hands-on technology education in public schools, which would improve productivity for every business which has access to the school's students as a potential workforce. Knowing that all other businesses will benefit at no cost from the investment that any one business would have to make at a great cost, no one business has the incentive to invest on its own in advanced technology devices for schools. As a result, the private sector will rarely overcome the collective action problem and invest in technology education. Alternatively, all businesses in a locality can pool their money in the form of local taxes so that the government can upgrade the school's technology and improve the local workforce for them. Since everyone who benefits also contributes, public investment minimizes free-riding.

This was the philosophy behind the Tennessee Valley Authority during the Great Depression. The federal government used public funds to provide jobs for the construction of, among other things, a vast power grid which, once the Depression ended, served to enhance the entire region's capacity for economic development. Governments can make more liberal investments in public infrastructure during downturns because the investments inject revenue into the private sector and provide jobs to compensate for increasing unemployment without the risk of inflation that normally accompanies increased spending during normal times. Once the private sector picks back up, the government can retreat to an inferior position and pay off its debt with the surpluses of a strong economy.

Like the Roosevelt Administration, the next administration may be called on to find new and innovative ways to invest in public infrastructure if the financial crisis causes our economy to slip into a recession -- or worse. A McCain spending freeze would effectively bind the government's hands from moving government spending to areas where it doesn't already occur. In my mind, the flexibility of the Obama "scalpel" offers a much more promising method to trim waste while leaving the government unfettered to pursue new public spending initiatives when the economy demands it.

What might these public investments look like? As I mentioned before, investment in public schools shouts out for attention. The American economy of the future depends on student competency, superiority even, in science, math, engineering, and technology -- all subjects in which American students are rapidly falling behind the rest of the world. Further, public schools in this country exhibit unacceptable disparities in education and infrastructure. Federal funds offer a means to level the playing field and guarantee that education is the right of every child, regardless of neighborhood or economic background. Investment in new schools or physical upgrades to deteriorating schools can also pick up some of the slack in the faltering construction industry.

Public transportation too demands an immediate government response. The recent spike in gas prices highlighted our nation's helplessness in the face of the capricious, foreign controlled oil market. Despite the recognition of both parties of the need for oil independence, neither has proposed a comprehensive transportation initiative. Instead, we continue to pour money into highways, the cost of which continues to rise, in terms of depreciation, environmental externalities, and the opportunity costs of traffic congestion. Rail offers an efficient substitute to automobile travel. Its installation is expensive, but such a public sector infusion of money would funnel money into the private sector and provide new jobs, precisely what the economy may need in a deep recession.

Another public infrastructure project could be extending broadband networks into underserved rural areas. Connecting those areas into the global information network aids both in developing trade and entrepreneurship and enhancing education for those areas.

Finally, the one area of public investment that candidates are talking about is in scientific research. R&D is a risky investment that offers high social payoffs on the aggregate, but uncertain private gains on a case by case basis. A government infusion of grants for energy, medical, science, and technology research could produce productivity-boosting developments that both help the country out of a recession and lead to a reduction in prices to combat inflation.

The key to any of these investments is the ability to retreat from them once the economy picks back up. Investments will have to be made rapidly and efficiently with mechanisms in place to scale back once the private sector heats up; otherwise, inflation could result. I do not mean to say that the next administration will necessarily have to pursue a Keynesian interventionist policy, only that if these bizarre economic times demand as much, Obama's scalpel philosophy will be much more effective than the hatchet.

Then again, there is that $700,000,000,000 (I feel like only writing the number out can do it justice) bailout to consider. The government says that the bailout will pay itself off once the financial markets recover. Since the those assets are tied to people's abilities to pay off their mortgages, their solvency will depend on steady employment and wages. The Keynesian approach may not be the answer, but on its face it at least seems worth some consideration.