Is This the Iraq Recession?

I just got back from the New America Foundation forum on the economic crisis, with presenters from the McCain, Edwards, Obama, and Clinton. Apparently the Romney, Paul, and Huckabee campaigns were going to send reps, but did not. I wanted to test out the 'Iraq Recession' frame, which Moveon put out in an email a few days ago when discussing the stimulus.

Basically, this is the closest any of us are going to get to Davos, the exclusive global elite conference going on in Switzerland right now where the freakout du jour is the credit crunch and coming recession. Multiple Democrats made the point that this is not a 'subprime' mortgage crisis, it's a credit crisis reflecting many sectors of the economy. Leo Hindery from the Edwards campaign said it's a crisis involving regulatory neglect combined with trade, current account, Federal, state, and consumer deficits and debt. He was by far the most radical in his diagnosis of the problem, which coheres with the politics of the Presidential campaign.

Gary Gensler of the Clinton campaign spoke, and I found his speech interesting for the way that he framed Clinton's thinking about policy. Gensler said that Clinton is an extremely thorough policy-maker, and won't put out policy unless she has personally ensured that it is rigorously done. But he also added that she is listening to voters on the campaign trail (he spoke of her 'conversation' with the country that she announced upon the start of her campaign), and she is hearing that middle income voters are suffering because of housing and energy costs. This explains why her plans are targeting these areas, and why she's become much more liberal in her rhetoric. Gensler also mentioned Clinton's embrace of 'smart trade' instead of simply free trade.

Kevin Hassett of the McCain campaign also spoke, and he gave a remarkably uninspiring and status quo argument for tax cuts for corporations as well as entitlement reform (ie. gutting Social Security). Hassett basically doesn't see anything particularly problematic in our current predicament except that the long-term crises of Medicare and Social Security are going to cause the markets to 'punish' us, and that corporate tax rates have stacked the deck against companies that invest in America due to lower tax rates abroad. In an unwitting nod to Naomi Klein's Shock Doctrine, he spoke of the current economic crisis as a great opportunity that we should not squander to fix our longer term problems, as well as lauding Bill Clinton's record on free trade and attacking Hillary's recent move away from it.