John Edwards, historically a moderate Democrat, has reinvented himself for 2008 as a populist. The former running mate of John Kerry promises to close the $750-$800 billion (Rs29.55-31.52 trillion) US payments gap though trade and energy policy, and to raise taxes substantially on the rich. In an era of widening income differentials, this approach should have considerable electoral appeal.

Like Barack Obama, Edwards deplores widening income differentials, particularly those since 2000 that have seen almost all income gains go to the top few per cent of the population. He is, however, less apologetic about the economic policies to which this analysis leads him.

Edwards proposes to increase taxes on the rich, including repeal of the Bush tax cuts for those earning over $200,000 a year, to increase capital gains tax to 28% and to extend the 6% social security payroll tax to incomes over $200,000 (with a gap between $95,000 and $200,000). He would also greatly expand the Earned Income Tax Credit, trebling it for single wage earners.

The former congressman, who later worked as an adviser to private equity house Fortress, proposes ending the Iraq war and keeping defence spending at its ex-Iraq level. These savings, plus his tax proposals, would provide funding for his plan to mandate universal health care, including preventative and mental health care.

Edwards favours “cap-and-trade" controls (selling emissions permits to raise revenue) with the objective of reducing carbon output 80% by 2050. Unlike other candidates, he opposes nuclear power and wants to eliminate the $250 billion US payments deficit in energy through conservation and domestic energy sourcing. He is a protectionist on trade, believing that the US payments deficit should be eliminated through government action, including anti-dumping actions against Chinese imports. The candidate’s policies have the virtue of being clearly outlined and internally consistent, but they are significantly to the left of other major candidates.

The economic risks of substantial tax bracket increases and aggressive protectionism are substantial, as are the costs of attempting to reduce carbon emissions without using nuclear power.

Nevertheless, the failings of the Bush-era US economy in distribution and trade imbalances may give his policies considerable electoral appeal.