A talk with Giuliani's economic adviser

David Malpass

TEXT OF INTERVIEW

KAI RYSSDAL: Some of the people who'd like to be giving the State of the Union speech next year have had to change direction lately. They've recast their messages to capitalize on a falling economy. We're going to be talking to campaign economic advisers this week. Today it's David Malpass. He's a senior adviser to Rudy Giuliani. The former mayor of New York City got a boost in the early polls by saying he's strong on national security. Now he's become, to quote the mayor, "the real fiscal conservative" in the race. Mr. Malpass, good to have you here.

DAVID MALPASS: Hello, Kai.

RYSSDAL: I'd like to ask you about Mr. Giuliani's quote that I saw the other day about this stimulus package. He said, "I would support it, but I don't think it goes far enough." What would he like to see in there that's not there?

MALPASS: He's looking for programs that really transform the economic outlook for the U.S., and so that includes a big change in the direction of tax policy. One of the things hanging over the economy right now is the idea that taxes are going to go up a lot in 2011, unless there's concerted effort in Washington to stop that, and he'd like to see the Bush tax cuts made permanent, but going farther, a further cut in the capital gains rates. Then on a corporate tax front, lowering the corporate tax rate to 25 percent. All of this designed to make the economy grow more, so as Washington's thinking about stimulus, they're thinking in a pretty limited sense about, you know, tax rebates this year. He'd like to go farther.

RYSSDAL: We'll get to the long-term plans that the mayor has for the economy in just a second, but I want to make sure I understand you right. He doesn't see any need now for short-term stimulus?

MALPASS: I think he's comfortable with the idea that Washington wants to work on this, also comfortable with the idea of more help on the mortgage side for homeowners. That's actually a critical part of the problem.

RYSSDAL: What would he do in terms of the housing industry, and the wave of foreclosures that could hit this country in the next year, year and a half or so. How would he help those folks who are in danger of losing their homes?

MALPASS: Yeah, he's wanted to make sure that the laws that regulate the mortgage industry are enforced better. That's been one of the problems. Then also see some consideration of a tax credit or a deduction for people within their foreclosure problems.

RYSSDAL: The mayor is proud of saying that he's advocating the largest tax cut in American history. It's valued at several trillions of dollars I believe. Do you think this economy's in a position right now to absorb those kind of tax cuts?

MALPASS: I do. As taxes go down, for example on capital gains as the mayor has proposed, you're going to get more people buying machines, building businesses, holding long-term capital gains, because they wouldn't be taxed on the inflation, so that should be fixed within the tax code, and that will help economic growth.

RYSSDAL: The mayor's run very heavily on his track record as mayor, specifically in national security policy but also, in the last couple of weeks, on his economic legacy in New York. It's one thing though to run a city, even a city as big as New York, and it's entirely another, don't you think, to run the largest economy in the world?

MALPASS: Well New York is a huge economy by itself, and so he's had experience with one of the nation's big economic entities, but I think you have to go beyond that and look at Washington from the standpoint of, can you pull together teams of people and lead in a concrete direction. In the economic direction the mayor's strongly supportive of small businesses and of innovation, of entreprenuerism, of a changed energy policy for the country, a changed health policy for the country, so I think those two things go together, the experience and then a clear vision.

RYSSDAL: David Malpass is a senior economic adviser to the Giuliani campaign. Mr. Malpass, thanks a lot for your time.

MALPASS: Thank you, Kai.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, the most widely heard program on business and the economy in the country.

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