Before I continue, let me update that a focussed plan for the American Middle Class was published on the Obama-Biden campaign website. This was the revised The Economic Rescue Plan for the Middle Class. Couple this with the detailed plan on the website and all my past assumptions of the McCain plan being more comprehensive go right out of the window. Obama matches McCain's plan with added detail to boot. So I must revise my score...
Score: Obama 2: McCain 2
Now, going ahead with the analysis:
4. The Economic Crisis:
I'm taking this seperately as both sides have rather varying stances on how to handle this.
Obama's Stand: Free up the withdrawal of savings by legitimate savers if required, without any taxes or penalties. Frankly speaking, Obama tends to attribute a lot of cautious behavior to the American masses. But its a liberal stand, allowing people to be responsible for themselves and meet immediate urgent cash needs.
McCain Stand: Reduce taxes!! That's it!! I must say that the Republicans really think the American is stupid and needs to be continuously patronized. Though reduced taxes really sounds good, it will hit the US exchequer. Tax optimization is good, straight cuts based on popularity only reminds me of the story back home!!
India context: India can only wait and watch. The bailout plan and the different stances about solutions are all good newsbytes, but execution of the plan is going to be a real challenge. A focus on cash flow monitoring and checks and balances in the economic situation is really necessary now.
Score: Obama 2: McCain 2 [The points are for India Context]
5. Taxes on Business:
Obama Stand: This is something McCain makes a lot of noise about!! Obama wants to raise tax on any business that makes more than $250k a year. I think that is reasonable. Tiered taxation makes a lot of sense and establishes fairness in the economy. However this will hit the savings that businesses make from outsourcing.
McCain stand: Straight tax cut in Corporate tax from 35% to 25%!! Though small businesses will benefit outright, I'm worried about the windfall that large corporations will make out of this. More cash on hand, more fraud and reckless investing, more damage to the economy.
India context: Both plans hurt India, especially the Outsourcing industry. With Obama's plan, outsourcing for the sake of outsourcing will grind to a halt. Deals will be harder to come by and the margins will be wafer thin. However, in the long run, India would have an opportunity to develop value in its outsourcing offerings. We can move up the outsourcing value chain, making the deals richer and having more depth in specialization. So there is long term good coming out of this. McCain on the other hand is the larger evil. His tax cut will bring more business to India in the short term, however we will stagnate at the same old outsourcing offerings with little innovation and value addition.
Score: Obama 3: McCain 2 [Sustainable long term gain over short term gain gets more brownie points]
Well, the contest is tied close, but as I suspected, Obama did come ahead. I reiterate that Obama's plan was much more concrete than McCain's plan, while both were equally detailed. Obama-Biden dare to call a spade a spade effortlessly. And I believe that is where the strength of the Democrats lie.... fearless leadership in these troubled times.
Here's where Obama scores more brownie points:
- Green fuel tech focus as against McCain's "clean" coal technologies
- Reduced dependence on oil imports
- Focus on new small business development
- strong focus on eliminating corruption, especially with bankruptcy reform
- Opposed to Free Trade Agreements. This is big for India for levelling the playing field, though China will benefit more.
On an analysis, though the first two years of the Obama presidential reign will bring pain to India, it is going to make the best come out of us. Sooner or later, we will have to build value into our business relationship with the US. This seems to be the right opportunity.
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