John McCain delivered his first major economic policy speech at Carnegie Mellon University as the GOP nominee, and conservatives will find much to like in it. He hits Hillary Clinton and Barack Obama hard on their tax increases, turning Obama’s “audacity of hope” against him. McCain offers a few clunkers, especially when harping on CEO pay, but overall it promises a clear difference between his platform and the Democratic policies in 2008.

This portion is the highlight:

There’s never been a problem Americans couldn’t solve. We are the world’s leaders, and leaders don’t fear change, pine for the past and dread the future. We make the future better than the past. That is why I object when Senators Obama and Clinton and others preach the false virtues of economic isolationism. Senator Obama recently suggested that Americans are protectionist because they are bitter about being left behind in the global economy. Well, what’s his excuse for embracing the false promises of protectionism? Opening new markets for American goods and services is indispensable to our future prosperity. We can compete with anyone. Senators Obama and Clinton think we should hide behind walls, bury our heads and industries in the sand, and hope we have enough left to live on while the world passes us by. But that is not good policy and it is not good leadershi p. And the short-sightedness of these policies can be seen today in Congress’ refusal to vote on the Colombian Free Trade Agreement.

When new trading partners can sell in our market, and American companies can sell in theirs, the gains are great and they are lasting. The strength of the American economy offers a better life to every society we trade with, and the good comes back to us in many ways — in better jobs, higher wages, and lower prices. Free trade can also give once troubled and impoverished nations a stake in the world economy, and in their relations with America. In the case of Colombia, a friend and crucial democratic ally, its stability and economic vitality are more critical now, as others in the region seek to turn Latin America away from democracy and away from our country. Trade serves all of these national interests, and the interests of the American economy as well — and I call on the Congress once again to put this vital agreement to an up or down vote.

Conservatives will also like this pledge:

It is not enough, however, to make little fixes here and there in the tax code. What we need is a simpler, a flatter, and a fair tax code. As president, I will propose an alternative tax system. When this reform is enacted, all who wish to file under the current system could still do so. And everyone else could choose a vastly less complicated system with two tax rates and a generous standard deduction. Americans do not resent paying their rightful share of taxes — what they do resent is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS. We know from experience that no serious reform of the current tax code will come out of Congress, so now it is time to turn the decision over to the people. We are going to create a new and simpler tax system — and give the American people a choice.

And in reaching out to the bitter and cynical middle-American voters, McCain makes clear on which side he sees himself:

In the same way, many in Congress think Americans are under-taxed. They speak as if letting you keep your own earnings were an act of charity, and now they have decided you’ve had enough. By allowing many of the current low tax rates to expire, they would impose — overnight — the single largest tax increase since the Second World War. Among supporters of a tax increase are Senators Obama and Clinton. Both promise big “change.” And a trillion dollars in new taxes over the next decade would certainly fit that description.

Of course, they would like you to think that only the very wealthy will pay more in taxes, but the reality is quite different. Under my opponents’ various tax plans, Americans of every background would see their taxes rise — seniors, parents, small business owners, and just about everyone who has even a modest investment in the market. All these tax increases are the fine print under the slogan of “hope”: They’re going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don’t mind.

So McCain hits most of the notes that Republicans like to hear in economic plans. He also castigates Republicans, but on grounds conservatives will approve: for spending big while controlling Congress. McCain says that the GOP must return to its empowering, small-government roots, and repudiate the free-spending practices of 2001-2006. He repeats his pledge to veto bills with pork and to use the veto for a wide range of other purposes to control spending and growth at the federal level.

He hits a couple of bricks, too, but nothing major. McCain talks about CEO salaries but never addresses federal intervention. McCain wants to revamp unemployment benefits into a retraining program, but that sounds a little odd, assuming that one job loss means that the skill set is no longer viable. Conservatives may have a bigger issue with his approach on mortgages, which makes Uncle Sam a co-signer on a massive refinancing program, replacing unrealistic ARMs with 30-year fixed-rate loans, guaranteed by the American taxpayer. While this program at least targets the right people for a bailout, having a bailout at all only encourages riskier behavior in the future.

Outside of these issues, the overall speech can help conservatives take comfort in a McCain campaign for the White House. It will remind many of the real differences between McCain and either Democrat, and set the stage for an interesting general-election debate.