Sen. Barack Obama (D., Ill.) has kicked off his for run for the general election with a two-week tour and plans to focus heavily on the economy. He began with a speech in Raleigh, N.C., on Monday.
Obama has two immediate goals: tie his opponent, Sen. John McCain (R., Ariz.), to the unpopular policies of President Bush, and show that the Republicans are out of touch with the average American's economic pain.
Obama had this to say Monday:
"We did not arrive at the doorstep of our current economic crisis by some accident of history. ... It was the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long. George Bush called it the Ownership Society, but it's little more than a worn dogma that says we should give more to those at the top and hope that their good fortune trickles down to the hardworking many."
This strategy should seem familiar: It helped Bill Clinton defeat George H.W. Bush in the 1992 election, which parallels this election in terms of the economy. In 1992, Americans faced an economy beset by the savings and loan crisis and dismal real estate values -- similar to the current subprime crisis. And, voters in 1992 were coming off eight years of Republican leadership that favored tax cuts as a cure for the economy.
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Obama used his speech as a forum to advocate for some immediate changes, first and foremost among them another economic stimulus plan that calls for an additional $50 billion in government spending to spur the economy. Much of the money would go to extend unemployment benefits. Friday's employment report proved the fifth month in a row of negative job growth, which is one indicator for recession.
Obama also said he would try to stop the housing market's downward spiral. He calls for putting aside $10 billion to help those facing foreclosure and a tax credit for low- and middle-income families to cover 10% of their mortgage payments. Finally, he would crack down on fraud in the mortgage market:
"The principle is simple: If the government can bail out investment banks on Wall Street, we can extend a hand to folks who are struggling on Main Street. As president, I'll get tough on enforcement, raise the penalties on lenders who break the rules, and implement a new Home (Homeowner Obligation Made Explicit) Score system that will allow consumers to find out more about mortgage offers and whether they'll be able to make payments."
One major difference between this election cycle and 1992's sticks out: surging oil prices. McCain had recommended instituting a gas-tax holiday for the summer to help businesses and consumers at the pump. Obama sees this as nothing more than a tax break for
Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks) and other big oil companies. He prefers to shut down the tax breaks for big oil and use the money to pay for a middle-class tax cut.
Obama plans to release a long-term economic and social-policy agenda in the coming week. This probably will include a reference to his health care plan and other economic proposals. In all, the tab could add up for taxpayers. Obama has endorsed a pay-as-you-go policy to fund his proposals.
McCain is expected to give a speech on the economy on Tuesday.
John Fout
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