Economists weigh in on the Clinton-McCain gas tax holiday plan and give it the thumbs down:
Backing up Obama's position against Clinton's proposal to suspend the 18.4-cent-per-gallon tax for the summer is a slew of economists who argue that the proposal, first offered by Sen. John McCain, the presumptive GOP nominee, would be counterproductive. They argue that cutting the tax would drive up demand for gas at a time when the supply is tight, which would mean that the price at the pump would drop by much less than 18 cents per gallon.
The tax suspension would, as a result, cut into the highway trust fund that the tax supports, a loss of about $9 billion over the summer, but also result in fatter profit margins for oil companies. Clinton says she would replace the lost revenue by raising taxes on the oil industry.
Harvard professor N. Gregory Mankiw, who has written a best-selling textbook on economics, said what he teaches is different from what Clinton and McCain are saying about gas taxes. "What you learn in Economics 101 is that if producers can't produce much more, when you cut the tax on that good the tax is kept . . . by the suppliers and is not passed on to consumers," he said.
Despite tightening poll numbers (these, too) and the media's continuing Jeremiah Wright obsession, Barack Obama picks up some new support today, and his guy doesn't make any reference to his testicles... former DNC chair Joe Andrew may need to harden his own, however, since the former Clinton appointee says he expects the Clinton "attack dogs to come after him."
He anticipates the Clinton campaign "will use the same words and the same language to attack me that Republicans used to attack me when I was DNC chair and I was defending Bill Clinton."
"I say this as a longtime participant in old politics," he says. "I've sparred with everyone from Lee Atwater to Karl Rove."
Andrew points out that he was in charge during a rather tumultuous time for the party — during impeachment and the Florida recount.
"The same words will come out of the [Clinton campaign's] surrogates' mouths to attack me that the Republicans used — and that demonstrates the very hypocrisy of the old politics," he says. "We need to unite the party. You can actually be for someone without being against someone else."
