RENEE MONTAGNE, host:
With all the presidential candidates talking about the troubled economy, we turned to David Wessel to find out what they proposed to do about it. He is economics editor of the Wall Street Journal.
David, welcome.
Mr. DAVID WESSEL (Wall Street Journal): Good morning.
MONTAGNE: Let us look first at the latest reports, or you look for. Do these reports indicate that we're any closer to a recession?
Mr. WESSEL: It sure looks like we are closer to a recession. The government's retail sales numbers, which came out yesterday, were bad. People are buying fewer cars, building materials stores are reporting declining sales. Former Federal Reserve chairman Alan Greenspan told the Wall Street Journal this week that he now thinks we're probably in a recession. And of course his successor, Ben Bernanke, is rushing to the rescue, promising to cut interest rates - a sign that he too was worried about the economy.
MONTAGNE: Let's turn then to the Democrats and what they're proposing - to head off a recession, keep recession from hurting people as much as it might. Generally, what are their proposals?
Mr. WESSEL: Generally, the Democrats want to use the government spending and tax-cutting power very quickly to get some money into the economy and stimulate it. Hillary Clinton and John Edwards would spend about $70, $75 billion of government money to get to do that, and Senator Obama, in contrast, is offering a proposal for an immediate $250 worker tax cut with another $250 if the economy weakens.
MONTAGNE: And the Republican candidates.
Mr. WESSEL: Most of the Republican candidates are avoiding that kind of stimulus, although interestingly, President Bush seems to be thinking about it. They focus mainly on keeping tax rates low in the future as a way to bolster confidence in the economy. Although former New York Mayor Rudy Giuliani is talking about a quick corporate tax cut as a way to stimulate the economy.
MONTAGNE: And of all the different proposals, what strikes you as the most original?
Mr. WESSEL: Well, you know, it's funny, there really aren't any new ideas here. President Bush, in his first term, gave us all, or most of us, a rebate in 2001, and then later had an aggressive program to give businesses an incentive to spend money and investment now rather than in the future. And those ideas are similar to those that are coming up again.
The one who seems to be the sharpest, though, I think is Senator Obama, who has decided that you really need to put money in people's pockets now in order to get the economy going. Of course, he has no power to make that happen. This is sort of an illustrative example of what he would do if he were the president.
MONTAGNE: Okay. Of all those then suggestions, why do you think Senator Obama's is the sharpest? Is that because in fact putting money in people's pockets is the likeliest way to head off a recession?
Mr. WESSEL: I don't know that the government that can do anything to prevent a recession. The question here is, if the government sought to prevent one or soften one, what could it do that would have the biggest immediate bang for the buck?
It seems to me that when the government tries to spend money itself, the pipeline is so long that by the time the money get spent, the recession is over. So that's why President Bush in 2001 and Senator Obama now are talking about something that gives money directly to people so they can spend it now.
Now, the evidence is - the economic evidence is that a lot of people got those rebates in 2001 and saved them rather than spending them. So it's not a surefire trick.
MONTAGNE: David, though, what is the value of candidates campaigning to become president, even talking about economic fixes? Obviously by the time a new president gets in the office a year from now, economic conditions could be quite different?
Mr. WESSEL: That's right. I think there are two reasons. One is, it does create a consensus. Nancy Pelosi, the speaker of the House, and Ben Bernanke, the chairman of the Fed, met this week to talk about stimulus. So if all the candidates do something, there's a possibility that that would create a consensus that Congress would act. And the second thing is, it tells us what the candidates would do if they were president, and after all, that's what campaigns are supposed to be about.
MONTAGNE: David Wessel is economics editor at the Wall Street Journal.
Thanks very much.
Mr. WESSEL: Thank you.