At Reuters Summit, McCain Seen as Best Choice for Economy


By Jennifer Ablan, Reuters
June 16, 2008

Article Excerpts:

NEW YORK (Reuters) -- Republican presidential candidate John McCain's tax policies have given him an edge as the better man for the economy, various Wall Street experts said at this week's Reuters Investment Outlook Summit. . . .

McCain plans to extend the Bush administration's tax cuts, eliminate the Alternative Minimum Tax, and slash corporate taxes. Obama, who has derided the Arizona senator's plans, has pledged to raise taxes on the wealthy and introduce a broad range of refundable tax credits.

"My personal opinion is I would argue that McCain is probably the better candidate for the economy and that is more or less because of his tax policies," James Caron, head of global rates research at investment bank Morgan Stanley in New York, said at the Reuters Summit this week.

"In this environment that we're in right now, the last thing you want to have is higher taxes and taking money out of the consumers' pockets," he added.

David Bianco, chief U.S. strategist at UBS Investment Research, told the summit that Wall Street would welcome McCain with open arms. "My view is that McCain is better for the market," Bianco said.

"The market will respond to McCain corporate tax cuts," said participant Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut. . . .

Six of 10 business sectors tracked by the Center for Responsive Politics had given more money to Democrats as of late April in all federal races, marking a shift over the past year with profound implications for Republicans.

That said, prominent Wall Street economist Henry Kaufman said it is too soon to formulate who would move the economy in the right direction.

"Both of the two candidates thus far have not expressed in detail their financial and economic programs," he said.

But Kaufman, president of financial consulting firm Henry Kaufman & Co, quickly added: "I was a little bit dismayed when Senator McCain said flippantly that he does not know too much about economics but carries Alan Greenspan's book under his arm. That does not encourage me."

All told, U.S. stock markets will do well regardless of who takes the White House, one strategist said. . . .

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