Advice And Assent

Were President-elect Obama truly post-partisan, he might heed advice from Harvard econ prof (and former Bush CEA chair) Greg Mankiw:

Embrace some Republican ideas. No party has a monopoly on truth. Be ready to take the best Republican policy proposals and make them your own, as Bill Clinton did with welfare reform in 1996.

Health policy is a case in point. Over the past several months, you lambasted McCain’s proposal to reform the tax code to include a refundable health insurance tax credit. Did you know that long before McCain ever proposed this idea, it was advanced by Mr. Furman, your campaign’s policy director? He can explain to you why the Furman-McCain plan makes a lot of sense.

Now you may decide that this plan does not go far enough. You may want a more generously funded social safety net to help the less fortunate get health care. Fair enough, but in pursuing that goal, you run into the next issue.

Pay attention to the government’s budget constraint. The nation faces a long-term imbalance between government spending and tax revenue. The fundamental problem is that the federal government has promised the elderly more benefits than the tax system can support. This fiscal imbalance will become acute as more baby boomers retire and start collecting Social Security and Medicare.

Yet during the campaign, you promised that you would cut taxes for 95 percent of Americans, that you would vastly expand health insurance coverage, and that you would never cut Social Security benefits or raise the retirement age. You will almost surely have to renege on some of these promises. As your economic team will often remind you, even if the laws of arithmetic are ignored during campaigns, they provide a real constraint when making actual policy.

Recognize your past mistakes. As a new senator, you voted along predictable left-wing lines. As president, you will need a more eclectic, nuanced approach.

Take trade policy, for example. In the senate, you voted against the Dominican Republic-Central American Free Trade Agreement. You opposed free trade agreements with Colombia and South Korea. You supported Senators Charles Schumer and Lindsey Graham in their quest to put tariffs on Chinese goods if China failed to revalue its exchange rate. You supported the Byrd Amendment, which encouraged domestic companies to file anti-dumping suits against foreign competitors. You supported subsidies for domestic producers of corn-based ethanol and tariffs on imports of more efficient sugar-based ethanol.

Your economists can explain to you why these positions were wrong-headed. Economic isolationism is not in the national interest.

Will Obama listen? National Review's Larry Kudlow thinks the current financial crisis may force Obama into being "an economic moderate." In my most optimistic moments, I agree. On the other hand, the Weekly Standard's Irwin Stelzer lays out the worst-case tax-and-spend scenario. From the department of pure speculation: could pulling all the substantive policy from his transition website be a sign that Obama isn't committed to the redistribution he campaigned for?

Whose prediction will prove-out? Who knows?, says Noemie Emery in the Weekly Standard:

Which Obama will turn up to govern, the man of moderate temperament, or the functional liberal, whose record is way left of center? When the phone rings for real at three in the morning, who will pick it up: the oh-so-cool cat who was so self-possessed while campaigning, or the neophyte who, outside of campaigning, has never faced a real test in his life?

(via Instapundit)