Two profs, 10 alums sign McCain statement

The statement attacks Obama’s proposals to raise taxes and hinder international trade agreements.

Obama’s proposals will “run a high risk of throwing the economy into a deep recession” by slowing down trade and investment and having a negative impact on American businesses and consumers, the statement explains.

According to the Illinois senator’s website, “Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility.”

Though his proposals will raise taxes on the wealthiest Americans, the site notes that “no family will pay higher tax rates than they would have paid in the 1990s.”

The statement also says that Obama’s plans to increase taxes on dividends and capital gains would “reduce investment and cut into the savings of millions of Americans.”

Criticizing Obama’s suggestion that he could postpone increasing taxes until his second year in office, the statement said such a policy would not prevent harm to the economy.

“In sum, Barack Obama’s economic proposals are wrong for the American economy,” it concludes.

Economics professor Harvey Rosen, who signed the statement, declined to comment, stating in an e-mail, “Although I am an adviser to the McCain campaign, I have not been deeply involved, and have not been giving any interview[s].”

Economics professor Burton Malkiel GS ’64, who also signed the statement, could not be reached for comment.

Chester Spatt ’75, a former chief economist for the Securities and Exchange Comission (SEC) and currently a finance professor at the Tepper School of Business at Carnegie Mellon University, noted his belief that Obama’s positions on free trade would be harmful to the economy.

“I feel that free trade is incredibly important to our market and that low taxes are very important,” Spatt, who worked for the SEC for three years before stepping down in 2007, said. “Those are very central issues to our economy.”

According to Obama’s website, he will “pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exporters and nontariff barriers on U.S. exports.”

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Michael Porter ’69, a Harvard Business School professor who signed the statement and identifies himself as a “centrist,” said in an e-mail that he believes “The statement opposing Obama’s economic thinking is clear and stands on its own.”

But he explained further that “Obama’s economic ideas are not pro-growth nor focused on wealth and job creation. Instead, they are more about redistribution, protection, and trading off economic success for other social agendas.”

“While many of Obama’s ideas are well meaning, economists know that they have not worked elsewhere in the world and will not work in America,” Porter said.

“Without a competitive economy, progress on social issues will stall,” he added.