Senator Obama is on a vist to the Middle East and Europe.   Senator McCain went to visit Colombia earlier in July.   These trips suggest a seriousness of purpose that American presidential candidates often lack.    They offer us hope that the candidates want to learn how to do the job well.   Furthermore, they offer a hyper-attentive world grounds for hope that the next president will have a higher level of interest in other countries than did his predecessor.

So far as I know, it is unprecedented for the two party candidates to do foreign policy trips before the election.    I can think of three reasons why we are seeing this now.    First, because the primary elections started early this year, there is a hiatus between the end of the primaries and the party conventions.   Thus the candidates can spare the time to go abroad.   Second, foreign policy has risen much higher on the agenda of concerns of typical American voters, since September 11, 2001, and since the invasion of Iraq.   (And of course Obama wants to put to rest McCain’s past jibes about not having visited Afghanistan and Iraq.)   Third, Barack Obama and John McCain are not the usual inward-looking, domestically-oriented parochial governors that we all too often get as presidential candidates.    Both are US Senators, and both in their youths had very formative adventures in foreign countries (both in Southeast Asia, as it happens).    Thus both, if nothing else, have the cosmopolitan outlook that a world leader needs.

Traditionally new presidential candidates do not think much about foreign policy during their campaigns.  This is especially true of governors who have only domestic experience.   But, regardless of the candidates, in most election years the American public cares little for international affairs, and is far more concerned about domestic issues.

Once new presidents take office they ften have to go through a period of “breaking in” in the area of foreign policy.   International events often take them by surprise and disrupt all their fine platforms and plans.  This period can be very costly to the country.   Think of John Kennedy’s first-year failures in his initial summit meeting with Premier Khrushchev and in the Bay of Pigs invasion.   Think of George W. Bush’s first-year failures in ignoring warnings that Al Qaeda would strike in the US or that an invasion of Iraq would be fraught with danger.    A little international exposure before they took office would have served them well.  So perhaps the excessive length of this election cycle has a silver lining after all !

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Following up on my preceding post, I asked my colleague here at Harvard, Jeff Liebman, about the evidence on the effective marginal tax rate facing low-income workers. (Professor Liebman is an expert in this area, which I am not. Incidentally he is also an economic advisor to Barack Obama.) Here is his response:

“Despite the EITC and child credit, the poverty trap is still very much a reality in the U.S. A woman called me out of the blue last week and told me her self-sufficiency counselor had suggested she get in touch with me. She had moved from a $25,000 a year job to a $35,000 a year job, and suddenly she couldn’t make ends meet any more. I told her I didn’t know what I could do for her, but agreed to meet with her. She showed me all her pay stubs etc. She really did come out behind by several hundred dollars a month. She lost free health insurance and instead had to pay $230 a month for her employer-provided health insurance. Her rent associated with her section 8 voucher went up by 30% of the income gain (which is the rule). She lost the ($280 a month) subsidized child care voucher she had for after-school care for her child. She lost around $1600 a year of the EITC. She paid payroll tax on the additional income. Finally, the new job was in Boston, and she lived in a suburb. So now she has $300 a month of additional gas and parking charges. She asked me if she should go back to earning $25,000. I told her that she should first try to find a $35k job closer to home. Also, she apparently can’t fully reverse her decision to take the higher paying job because she can’t get the child care voucher back (the waiting list is several years long she thinks). She is really stuck. She tried taking an additional weekend job, but the combination of losing 30 percent in increased rent and paying for someone to take care of her child meant it didn’t help much either.

The question is what is the policy solution here. Means-tested transfers have to be phased out at some point, so there is no easy answer. I think there are three things we might be able to do — all of which would, as you say, be a better use of revenue than tax cuts for the rich. First, make child-related tax benefits equal for all families (now they are high at the bottom because of the EITC and high at the top because the dependent exemption is more valuable the higher the tax bracket you are in, and the dip in the middle raises marginal tax rates by 21 percent for a family with two kids — so eliminating the dip would get rid of this 21 percent portion of the effective marginal tax rate). David Ellwood and I analyze this first idea. Also Sawicky and Cherry have put forth a similar idea. Second, in designing universal health insurance, we need to be very careful not to phase out income-related premium subsidies over the same income range where all of these other benefits are being phased out. Third, implement a delay between income increases and rent increases in section 8 — allow people to save up a bit before they are hit with the rent increase (I believe I read that some states have been trying out something like this recently, but I am not up to date on these policies). There are some excellent papers that carefully model how the cumulative effects of the welfare system create a poverty trap. But I don’t think either of these papers includes all of the factors facing the woman above — so they would probably indicate that she faced a 60 percent marginal tax rate rather than the 130% (or whatever it really is) rate that she actually faces.”