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Jewish World Review Sept. 3, 2008 / 3 Elul 5768 It's Still the Economy, Stupid By Tony Blankley http://www.JewishWorldReview.com | The No. 1 issue (in contrast to personality) in the presidential campaign, according to every poll of voter opinion, is the economy. More than the wars in Iraq and Afghanistan, more than the concerns about health care, the public's negative view of the economy is unambiguously driving the historically unprecedented 80 percent of the public who believe the country is on the wrong track. As a result, Sen. Barack Obama is in a powerful position. He merely needs to state that the current economy is unacceptable and that we must change the policies that have caused it. In national politics, the side that can make its point with a slogan usually beats the side that needs two paragraphs to rationally refute (or at least plausibly rebut) the slogan. That is why, for instance, President Clinton capitulated to Newt Gingrich's Republican Congress in 1996 and signed the Republican welfare reform bill (after vetoing it twice in 1995). As slick-talking as Clinton was (and is), he simply could not communicate effectively against the slogan of welfare reform having a work requirement. In the remainder of this campaign, the Republicans have to avoid two traps. The first trap is to defend the current economy. Even though as of now, the economy is not in recession but in fact is growing slightly, it would be electorally lethal for Republicans to deny what at least two-thirds of the country feels: The economy stinks, and they want it fixed. The second trap is to permit McCain and the Republicans' message on the economy to sound like merely a continuation of Bush's policy. The obvious problem is that the continuation of Bush's tax cut policy is a necessary part of any economic recovery policy. Indeed, the most important step that can be taken to protect American jobs and keep American-based companies from moving offshore is to reduce our corporate tax rates sharply. Currently, the United States has the second-highest corporate tax rate of all industrial societies, after economically anemic Japan. The U.S. federal rate of taxation is 35 percent, and when the average state and local corporate tax rates are added, American corporations pay, on average, a 39.27 percent tax on their incomes. China is at 25 percent; Mexico is at 28 percent; socialist Sweden is at 28 percent; and prosperous Ireland is at a mere 12.5 percent. If these comparative rates continue for much longer, the United States economy will mortally bleed jobs and prosperity to a world — both nominally socialist and free market — that has learned the low corporate tax lesson from Reagan's America that current Washington has forgotten. Obama's solution to the problem of jobs and industry going offshore is to lean toward protectionist policies (renegotiate NAFTA, oppose new free trade treaties, etc.). When one combines Obama's plans to tighten international trade, create carbon trading regulations that will be the equivalent of a further $100 billion corporate tax, raise taxes generally on business, as well as his mind-numbingly counterproductive "windfall" profit taxes on petroleum product companies (full disclosure: as a rational person, I support and provide professional advice to the petroleum industry), one has a formula for economic catastrophe not seen since Herbert Hoover's similar Depression-inducing policy in 1929. Thus, the real danger to the country is that voters, having bought into Obama's critique of the economy, will be ready to try something different — whatever it is that Obama is calling for — and Republicans will find it difficult to explain why a rational recovery policy must include part of Bush's economic policy (the tax cut part). The two-paragraph rational refutation of the Obama economic policy is not likely to be heard or be persuasive in a mass national audience — in the absence of a massive advertising campaign to educate the public. In its bare-bones, unadvertised version, it will fall victim to the Democratic trope that Republicans are just for big business. The fact is that in a free market, nonsocialist economy, the prosperity of the employees requires the prosperity of the employers. But Obama's populist argument (for instance, his claim to ABC News that raising capital gains taxes is necessary in order to be "fair," even if it means less total revenues to the government) may be the appealing handmaiden of his other argument that the economy stinks and the policies that caused the stink need to be changed. Thus, the second trap the Republicans have to avoid (in the absence of that massive advertising campaign to educate the public) is using an ineffective slogan to rebut Obama's effective slogan. The obvious GOP slogan is the old standby that the Democratic candidate will tax and tax, spend and spend. It is true, of course. But will it ring true? With President Bush having been seen to spend and spend himself, will the slogans sound hypocritical? If McCain and the Republicans cannot either educate the public through a massive advertising campaign or come up with a truly compelling slogan, they could lose the November election on that issue alone. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Tony Blankley is executive vice president of Edelman public relations in Washington. Comment by clicking here. © 2008, Creators Syndicate

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