Robert Casey (D) vs. David McCormick (R)
Abortion
Apparently, Bob Casey used to represent himself as a pro-life Democrat. He now favors legislatively re-establishing the rights guaranteed under Roe v. Wade nationally. McCormick favors the states’ rights approach. There may be some constitutional issues associated with national legislation on abortion, but I believe there are ample grounds for some kind of protection that would survive court challenges. This is not an issue that is easily resolved by reason. It involves weighing individual rights vs. some, arguably, legitimate state interests. On the whole, I come down on the side of Casey’s current position.
Immigration
The Trump administration was able to drive illegal immigration numbers down in 2020, largely because the Covid pandemic recession reduced the incentive to cross the border and because the pandemic provided a justification for executive actions to force immigrants to remain in Mexico. The combination of the recovery and court decisions, that those executive orders were no longer justified, resulted in a pent-up surge in illegal immigration. The massive increase in the number of claims for asylum led to a death spiral of the system, in which wait times for asylum claims increased from months, or a couple of years, to as much as a decade. As a result, a specious claim for asylum gave an immigrant a free pass to work in the U.S. for many years before having to return home, further increasing the number of border crossings. The Biden administration waited way too long to address these issues. When it did, finally, put together a bi-partisan piece of legislation to deal with the issue, Trump intervened to keep the issue alive for the election. That is the truth as I understand it.
Casey shares the responsibility for the delay on the part of the Biden administration. McCormick shares the blame for inaction this year by his stated opposition to the bi-partisan deal.
Going forward, I think Casey supports the above mentioned legislation. I think McCormick favors Trump’s mass deportation. The economic and humanitarian consequences of Trump’s proposed mass deportation plans are pretty devastating, so I give this issue to Casey.
U.S. Steel-Nippon Acquisition
Both Casey and McCormick oppose the sale of U.S. Steel to Nippon Steel. This is a case of bi-partisan stupidity. Japan is a close ally, the assets remain here, and Nippon has promised a massive infusion of capital. Even the United Steelworkers favor the deal.
Price Controls, Anti-Price Gouging, and Shrinkflation
Both Casey and McCormick seem to think that price gouging causes inflation. McCormick even cites a Fed study to prove it. Let me explain. If war breaks out in the middle east and oil supplies are expected to be disrupted, any sensible gasoline retailer will recognize that the gasoline in storage, including tanks at the gas station, is instantly more valuable. Therefore, the price of gasoline at the pump should be increased immediately to reflect the higher opportunity cost of the gasoline in storage. This means that the “profit margins,” crudely calculated as the difference between the original cost of the gasoline in inventory and the price the gasoline sells for today, will increase. (If gasoline retailers fail to raise prices intelligent consumers will recognize that gasoline is underpriced and top off their tanks and there will be lines and shortages. This phenomenon was created artificially by price controls in the 1970’s.) This does not mean that the resulting higher corporate profits caused the increase in the price of the gasoline at the pump. The same is true of all events and policies that increase the value of existing inventories.
Casey adds another nonsense cause of inflation, “shrinkflation.” Yes, marketing suggests that consumers are less likely to respond negatively to smaller sizes than to explicit price increases. That does not mean that this phenomenon causes inflation. Legislating against this phenomenon would be unenforceable and incredibly pointless.
Inflation and the Economy
All of the countries in the G10 experienced a recession and some degree of inflation following the Covid-19 pandemic. Some, like the U.S., chose to use aggressive fiscal policy to combat the recession. This, combined with a slow response on the part of the Federal Reserve Board, led to a spike in inflation. Some other countries took a less aggressive approach to combating the recession and consequently had a more modest spike in inflation. Looking back, the U.S. approach seems to have worked better, with the U.S. outpacing the rest of the G10 in terms of economic growth and employment, with a fairly similar result in terms of inflation. That is not to say that some of the specifics of the fiscal spending were not mistaken. But the general policy seems to have worked well relative to the alternatives.
Neither of the candidates in this race appears to even understand this issue. Casey babbles on about price gouging and efforts to lower the price of prescription drugs. McCormick seems to like the price gouging argument and borrows it. While McCormick is right in saying that the fiscal stimulus (some of which occurred under Trump) contributed to the inflation, he fails to give it any credit for the recovery.
Neither candidate seems to understand the central role of the Fed in ultimately curtailing the inflation. To her credit, Kamala Harris has pledged to maintain the independence of the Fed. Trump, to his discredit, has said he wants to play a role in monetary policy. Since McCormick is a Trump loyalist, I can only guess that he would cooperate in giving Trump greater control over Fed policy. Political involvement in monetary policy generally leads to greater inflation.
Fiscal Discipline
Fiscal discipline is a two-sided street. Casey, and the Democrats in general, seem to have an affection for unlimited government spending and tax cuts for the “middle class.” McCormick is right to call this out, but he, and Trump Republicans in general, seem to embrace similarly undisciplined policies. This includes a virtually limitless list of tax deductions including tip income, overtime income, retirement income, auto loan interest, and the state and local tax deduction (SALT). McCormick does depart from Trump in opposing lifting the SALT cap. Trump, and I have to assume McCormick, also favors lower corporate and personal income taxes. Trump does favor one tax increase, tariffs. Collectively, all of these proposals would massively increase the deficit and, in the case of the tariffs, significantly increase consumer prices and lower economic growth and employment. The right-leaning Tax Foundation estimates that the Trump tax plans will increase the national debt by about $4.7 trillion more than the Harris plan over 10 years. They actually credit the Harris proposals with lowering the national debt but at the expense of reduced economic growth, since the Harris plan is weighted toward higher corporate and personal income taxes. The Wharton/University of Pennsylvania model predicts that Trumps’ policies will increase the debt by $4 to $6 trillion over 10 years.
Liar, Liar, Pants on Fire
There was a fairly incomprehensible section of the debate between Casey and McCormick in which they traded accusations about lying. There were also many references by Casey to McCormick living in Connecticut while running in Pennsylvania and running a hedge fund that invested in China and Russia. McCormick answered that those investments were a small part of the overall portfolio. Some people may care about all of this. I can’t say that I do, without a lot more detail about the specific investments.
The Filibuster Rule
Casey clearly favors abandoning the filibuster rule in the Senate. I think this is a bad idea, although I could see lowering the threshold to 55 rather than 60 senators. This kind of change has happened in the past. I would think this issue favors Republicans like McCormick except that Trump, who seems to have an iron grip on the party, also favors abandoning the filibuster rule. Sadly, I think that the rule will, eventually, be dropped no matter who controls the Senate.
Climate Change and Fracking
The Democratic Party wants to phase out fossil fuels. The right way to do that is to impose a carbon tax that reflects the negative impact of carbon emissions on the environment. Given the advantage that natural gas has over oil and coal in terms of carbon emissions, natural gas should remain a major source of energy supply for many more decades. The Democratic Party does not like that solution, so they want to create regulatory barriers to the use of fossil fuels and subsidize their preferred alternatives to accelerate the shift away from fossil fuels. The Republican Party wants to deny that the problem of climate change exists.
In the last year or so, Democrats have recognized that political success and power runs through Pennsylvania. They have also discovered that fracking and natural gas production are important to Pennsylvanians. So now fracking and natural gas production are no longer bad.
I suppose that, on balance, I favor acknowledging the problem and trying to find a better solution. I think there is more chance of getting to that point by working with those who believe that there is an underlying issue, than with those who deny its existence. That said, shame on the Democrats for using pro-climate legislation to favor unionized labor, as they did in the “Inflation Reduction Act.” Is this an existential issue, as you insist, or not?
Foreign Policy and Defense Spending
I don’t think there is a lot of difference between these two candidates on Israel and Ukraine. The Democrats have published a live quote from McCormick saying he would have opposed the military aid package “as proposed.” I wish they would have also given the context for that quote. McCormick seems to favor a more robust defense budget. Sadly, it is hard to reconcile that point of view with support for Trump’s tax proposals. These are important issues but they don’t provide much basis for deciding between these two candidates.
The Endorsement
Bob Casey is a truly uninspiring politician. That said, if I were still living in Pennsylvania, I would hold my nose and vote for Casey.