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eBay McCain's Answer for Recession and Palin's Plane

September 10, 2008

The mythical role of online auction powerhouse eBay in John McCain's presidential campaign took on a new dimension today. Not only did his running mate Governor Sarah Palin not sell an Alaska government jet on eBay (as she has repeatedly claimed), the state's chief procurement officer acknowledged "It was the practice of the state to dispose of items such as this via eBay." No doubt, John McCain will continue to peddle this eBay myth just as he has a previous one. eBay, McCain assured us this spring, is the solution for Americans grappling with poverty and recession.
Back in April, McCain told an audience in economically hard-hit Inez, Kentucky, "You have a right to expect us to show as much concern for helping you create more and better choices to make for yourselves as we show any other community in America." And one of those better choices, according to John McCain, is to become a seller on the auction site, eBay:

"Today, for example, 1.3 million people in the world make a living off eBay, most of those are in the United State of America."

Ebay's Whitman couldn't have put it better herself. In fact, she put it almost exactly the same on way on CBS 60 Minutes in March. As she told Lesley Stahl:

"We have about - around the world, about 1.3 million people make most, if not all, of their living selling on eBay."

That John McCain, who more than once admitted his limited knowledge of the economy, would parrot one of his most senior campaign aides is unsurprising. But that he would cite eBay as the way forward for a community where 37% live in poverty and 40% of the wage income comes from mining seems remarkably callous, even by McCain's standards.
No doubt, tens of thousands off people make a good living as eBay sellers. As eBay's Whitman told CBS' Stahl, "people can supplement their income from several thousand dollars a month to...I think our top seller on eBay grosses $20 million." But for a country slipping into recession and facing the loss of thousands of good paying manufacturing jobs in a rapidly globalizing economy, a high-speed Internet connection and an eBay virtual storefront is hardly a substitute.
To be sure, McCain's magical eBay economic tonic produces stunned incredulity among economists. As Bloomberg reported in June, the feedback isn't pretty. While McCain, who has admitted knowing little about economics and even less about computers, may envision a nation of web-based auctioneers, "new people selling stuff out of their closet on EBay isn't growing the economy."
That's the message from economist Betsey Stevenson, a professor at the Wharton School of Business.

"In terms of jobs, there's no net increase in GDP that comes from trading stuff that's already made. To trade things that are produced in other countries just to swap them,'' -- conveys a message, "that America can't produce anything and that's a very dismal view of the U.S. economy."

Lehman Brothers' Ethan Harris noted that while eBay no doubt transformed an "incredibly inefficient market for junk and turned it into a very efficient market for junk," at the end of the day:

"It's an example of good old-fashioned U.S. ingenuity, but selling used products is a limited business model."

John McCain is selling something, all right. Hoping to provide McCain the facade of economic knowledge and his running mate with reformer credentials, his campaign has deployed its dual purpose eBay myth. And if you buy it, Sarah Palin has a Bridge to Nowhere to sell you.
Put another way, you can fool some of the people all the time. And that's John McCain's target market.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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