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‘McCain-onomics’ Put to the Test in Northern Virginia

With the Republican convention underway in St. Paul, the NewsHour's economics correspondent Paul Solman speaks with Nancy Pfotenhauer, an adviser to Sen. John McCain's campaign, about the GOP presidential hopeful's economic policies and how they could impact everyday Americans.

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  • PAUL SOLMAN, NewsHour Economics Correspondent:

    In the past four presidential elections, we've asked an economic adviser from each campaign to take us on an early tour of their convention city to outline their economic program.

    The McCain campaign was unable to send anyone to St. Paul, so they met us instead outside our offices for a local tour of Northern Virginia.

    Nancy Pfotenhauer is a top McCain economist. First stop she chose: the station where our own camera crews gas up. The reason: to highlight a key part of Senator McCain's economic program, which begins with an 18.5-cent tax cut, she says, ends with energy independence.

  • NANCY PFOTENHAUER, Adviser, John McCain Campaign:

    In the short term, what Senator McCain wants to do is, of course, give us a gas tax holiday, like we've had before in this country, like Japan has tried.

  • PAUL SOLMAN:

    Every economist I know says that's exactly the wrong way to dampen energy use and, if it's ever even conceivable, make us energy independent.

  • NANCY PFOTENHAUER:

    But you now know an economist who advocates a gas tax holiday, because that would be me.

  • PAUL SOLMAN:

    In the past, campaigns have set up the issues, providing local folks to help make the case. Pfotenhauer made most of it herself, the reporter playing devil's advocate to highlight her arguments.

    The first thing we learn in economics is the supply-and-demand curves. And that is that, if the price is high, there's less demand and, if the price is low, there's more quantity demand.

  • NANCY PFOTENHAUER:

    So are you in favor of higher gas prices? I mean, the point is American consumers are suffering under this burden, and it's having a very real impact on them, low-income particularly.

  • PAUL SOLMAN:

    In the past year or more, American consumers at all income levels have felt themselves to be suffering. The famous filmmakers of "Naked Gun 2 1/2," "Airplane!", and other satires, the Zucker brothers have even made a video for the Internet, "Nozzle Rage," encapsulating the anger.

    McCain would supposedly assuage some of that rage short term with gas tax repealing.

  • NANCY PFOTENHAUER:

    He's not talking about repealing it forever; he's talking about a gas tax holiday.

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