CNBC Anchor Ask Obama Advisor 'What Would Milton (Friedman) Do?'

     Anytime a journalist invokes the name of the late economist Milton Friedman, and doesn’t bash him, it is worthy of praise.

     CNBC “Squawk Box” fill-in co-host Michelle Caruso-Cabrera did just that. The comment came in an interview with Democratic presidential nominee Sen. Barack Obama’s senior economic adviser Austan Goolsbee.

     Goolsbee, who is also on the faculty at the University of Chicago where Nobel Laureate Friedman, a prominent advocate of free markets taught, came on the show to discuss Obama’s tax plan. That plan would raise the capital-gains tax rate on those making above $250,000 annually to 20 percent.

     “WWMD, Austin – what would Milton do? Remember that,” Caruso-Cabrera said. “Remember your roots – what got you to where you are.”

     Goolsbee defended the plan by telling Caruso-Cabrera and co-host Joe Kernan that taxes would be lowered for lower income Americans and that would result in an overall net tax cut.

     “It doesn’t increase taxes – that’s what’s made clear in this,” Goolsbee said. “It’s a net tax cut and it’s paid for by a net spending cut.”

     Goolsbee, along with Jason Furman – another economic advisor for the Obama campaign, also had an op-ed in the August 14 Wall Street Journal [1] outlining the Democratic presidential candidate’s tax proposal. Goolsbee, in other media appearances, has also consistently defended the Obama plan by claiming the overall rate would be lower than it was under former President Ronald Reagan.

     “He’s outlined a program that’s paid for and keeps the overall tax rate in the economy the same as what it was under Ronald Reagan,” Goolsbee said.

     Goolsbee was referring to the tax rates as a percentage of gross domestic product compared to Reagan – as Caruso-Cabrera pointed out on CNBC’s August 14 “Power Lunch.” But “Power Lunch” co-host Sue Herera warned with the current economic conditions, it would be no time to raise taxes on anyone – as would an Obama administration might try to do.

     “[W]e’re at a very fragile state in this economy,” “Power Lunch” co-host Sue Herera added. “If indeed – as [CNBC contributor] Dennis [Kneale] suggests, we’re at an inflection point at either the economy or the stock market, this is the worst time to raise taxes. You want to improve the economy? Cut spending, don’t raise taxes.”

     To Caruso-Cabrera’s credit, she wasn’t shilling for one political party or another. She also had criticism for the Republican Party in general on CNBC’s August 14 “Power Lunch.”

     “[T]he Republicans have not had truth in advertising,” Caruso-Cabrera said. “They were supposed to be the party of smaller government. They were supposed to stay out of your pocket and out of your bedroom and they didn’t do either of those things. They did just the opposite.”