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Experts Weigh Obama Windfall Profits Proposal


We have our political commentators with us here in the studio now. David Brooks of the New York Times and E.J. Dionne of the Washington Post and the Brookings Institution, welcome to both of you.

DAVID BROOKS: Good to be here.

E.J. DIONNE: Great to be here.

NORRIS: And I want to start by asking each of you to quickly weigh in with your reaction to Obama's economic stimulus package: windfall profits tax on oil companies, rebates, $50 billion funneled to states for infrastructure and to help ward off budget cuts. E.J.?

DIONNE: Well, first of all, I think that the two parts of it are classic stimulus, and they make sense, I think, to a lot of people. State budgets are being slashed, and in this kind of situation, many states have to balance their budgets, so they either have to raise taxes or cut spending. That doesn't help the economy. The other part, to improve infrastructure, that's a classic way to boost the economy.

The unusual one is the windfalls profits tax, and I think what Obama's trying to do is to say Republicans want to drill offshore, and that's their answer. I'm going to put some money in your pocket. A lot of people will say, as you suggested in your interview, windfall profits taxes don't work, but I would challenge somebody to say, no, we think the money should stay with the oil companies instead of going into the pockets of people who think they're paying too much for gas. So I think he's finally found some answer to the Republicans' emphasis on drilling.

NORRIS: David, even after all this time, the polls suggest that a lot of voters still aren't sure what exactly Barack Obama stands for when it comes to economic relief. Do the specifics that he's putting forth today help fill that picture out?

BROOKS: No, I think that he remains elusive. I don't think he believes in most of this stuff. This is a political document. Gas prices bring out the worst in politicians. Hillary Clinton and John McCain had that idiotic gas tax holiday a few months ago. This is slightly better, but only slightly.

The idea that a stimulus package is going to stimulate the economy is extremely dubious. There's been a history of stimulus packages. They almost never stimulate the economy. We just had one; that doesn't seem to have worked, though I did see a study suggesting the stimulus package, the old one, raised online porn subscriptions.

But this windfall profits tax, it's politics. It's terrible economics. I mean, it's been tried before. Jimmy Carter tried a windfall profits tax. It drove down domestic production, it increased imports from OPEC. It's just bad economics.

So this is a good political document. As an economic document, it's something politicians do.

NORRIS: Now, on this issue of race, which we also spoke with Senator Obama about, we just heard him respond to these back-and-forth charges about who actually played the race card. This is an issue that's often described - race is an issue that's often described as a distraction, but this year it seems like it's almost unavoidable. To the extent that it does surface in this campaign again and again, who does it help, who does it hurt?

DIONNE: Well, I think that first of all, I hope someday somebody says something other than playing the race card off the bottom of the deck. It's like the Ten Commandments of political cliches. It always has to come from the bottom of the deck.

I think that the race issue - Obama was right in what he said when it comes to the fact that they have questioned his patriotism, they meaning his opponents, people online, you know, this idea that he's a secret Muslim, and some people have mentioned that two blondes on the ad, Britney Spears and Paris Hilton, carried a subtext. We can argue about whether that's true or not.

So clearly race is here, and the Democrats are worried that where this will hurt them is among middle class, lower middle class whites. They've done badly in Appalachia, Obama has, did during the primaries. Maybe there's a racial component there.

I think the mistake Obama made this week is putting John McCain's name in that statement, where he made it easy for the McCain people, who are really under siege for these trivial, puerile, negative ads, suddenly to be able to lash out and say, well, John McCain isn't playing the race card, and Obama himself had to back off.

I think in the long run, what the McCain people did this week is a net small win for them. They put this in circulation, they hit Obama back, but it only raises the standard that they're going to have to meet later on.

NORRIS: We're going to continue our conversation in just a moment. David, I'd like to hear your thoughts on this as well, but we're first going to go to a quick break. We'll continue our conversation with David Brooks of the New York Times and E.J. Dionne of the Washington Post and the Brookings Institution in just a moment. Transcript provided by NPR, Copyright NPR.

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