Probono

From The Newyorker

COMMENT

TAXING

Issue of 2004-01-26
Posted 2004-01-19



In 1981, David Stockman, Ronald Reagan? budget director, invited the financial journalis William Greider to the White House and tol him that the President?s controversial an far-reaching tax-cut package was a ?Troja horse? designed to reduce the top tax rates o the wealthy. Greider reported this comment iThe Atlantic Monthly, and the flap that ensued prompted James Baker, Reagan?s flinty chief of staff, to summon Stockman to his office. ?My friend,? Baker began, ?I want you to listen up good. Your ass is in a sling.? The only way for Stockman to save his job, Baker explained, was for him to have lunch with the President. ?The menu is humble pie. You?re going to eat every last mother f?ing spoonful of it. You?re going to be the most contrite sonofabitch this world has ever seen.? Just in case Stockman hadn?t got the message, Baker added, ?When you go through the Oval Office door, I want to see that sorry ass of yours dragging on the carpet.?


Several years later, after Stockman left the White House, he wrote a best-selling book, ?The Triumph of Politics,? in which he recalled the encounter with Baker and lamented the fact that Reagan?s political advisers refused to sanction cuts in spending programs to pay for the tax reductions. The book remains an essential source for understanding why the first round of supply-side economics left the federal government trillions of dollars in debt. Now it has a successor: ?The Price of Loyalty,? by the former Wall Street Journal reporter Ron Suskind, which recounts the experience of Paul O?Neill, George W. Bush?s first Treasury Secretary.


O?Neill is hardly a dispassionate observer. In December, 2002, after two uncomfortable years on the job, during which time he earned a reputation as a maverick, he got a call from his old friend Dick Cheney, who told him that he was being fired. Suskind?s book is O?Neill?s reply to this indignity?a third-person memoir that bristles with resentment at his treatment. But, self-serving though the book may be, it offers enough inside information to be a damning read.


The media?s attention has focussed mostly on O?Neill?s not very revealing revelation that the Administration was plotting from week one to remove Saddam from power, but the bulk of the tale concerns domestic policy. O?Neill provides a vivid and detailed account of how, in just three years, the Bush Administration transformed a healthy budget surplus into a deficit that this year is likely to reach five hundred billion dollars. O?Neill is often described as a moderate; in fact, he is a fervent believer in the free-market approach to almost everything. His ambition, when he left the chairmanship of Alcoa for the Treasury, was to replace Social Security with a system of private-investment accounts. He supported tax cuts, too, but he thought that the Administration?s $1.6-trillion giveaway should be contingent on the state of the economy. Suskind discloses that O?Neill and the Federal Reserve chairman, Alan Greenspan, tried to persuade the President to accept a set of ?triggers,? which would limit the scope of tax cuts if the fiscal outlook worsened, as it soon did. ?I won?t negotiate with myself,? Bush told O?Neill when he brought up the idea. ?It?s that simple.?


Having worked with Richard Nixon, Gerald Ford, and the elder George Bush, O?Neill was astonished at this President?s casual approach to governing. (?Pablo . . . whatta ya got?? he would ask when O?Neill entered the Oval Office.) O?Neill quickly concluded that a small group surrounding the President made most of the key decisions. It consisted of Karl Rove, Bush?s political adviser; Karen Hughes, his communications adviser; Andrew Card, the White House chief of staff; and Dick Cheney, whom O?Neill had known for almost thirty years. As Stockman?s book made clear, the Reaganites, however much they may have misled the public, were true believers engaged in an ideological crusade to reinvigorate the economy. By contrast, most of the senior members of the Bush Administration come across in Suskind?s book as political opportunists with no real interest in economics. They are much more concerned with delivering goodies to the President?s political base of wealthy corporate executives and conservative activists, regardless of long-term consequences.


Very occasionally, Bush questioned whether he was going too far in pandering to the rich and the right wing. ?Are you proposing that we accelerate all the tax cuts, or just for those in the middle?? he asked his senior officials in late 2002. ?Won?t the top-rate people benefit the most from eliminating the double taxation of dividends? Didn?t we already give them a break at the top?? The White House?s economic experts, who had been hired for their conservative views, were momentarily taken aback. ?Mr. President, remember the high earners are where the entrepreneurs are,? Glenn Hubbard, then the chairman of the Council of Economic Advisers, said. ?It?s also about the supply side,? Lawrence Lindsey, who headed the National Economic Council, added.


O?Neill watched all this with anguish. Shortly before he was fired, he confronted Cheney about the Administration?s latest proposal to cut taxes by another six hundred and seventy-four billion dollars over ten years, pointing out that the country was ?moving toward a fiscal crisis.? The Vice-President stopped him. ?Reagan proved deficits don?t matter,? he said. ?We won the midterms. This is our due.? In fact, Reagan didn?t prove anything of the kind. Early in his first term, Congress was forced to adopt emergency tax increases and spending cuts to restrain the ballooning budget shortfall. Despite this remedial action, it wasn?t until the early nineties, when George Bush Senior and Bill Clinton raised taxes, that the nation?s finances were put in proper order, opening the way to the longest economic expansion on record.


This year, absent a major shift in policy, budget deficits will exceed those incurred in the Reagan era. As a result, the country faces the prospect of higher interest rates, lower investment, a spending crunch in Congress, and, quite possibly, a financial crisis as international investors lose faith in the ability of the Treasury to finance the imminent retirement of the baby boomers. The White House, under the guise of providing a necessary short-term stimulus to the economy?the short term being a period that ends on Election Day?has stored up a lot of trouble for the future. Our breezy President, if he is reëlected, may well find himself ruing his refusal to heed O?Neill?s warnings.

IPK

cliff notes

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SleazyDream

like father like son - one term and they're done

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tranza

Lol... You don't expect that people will actually read this huge text, do you??? This is GFY!!! If I wanted to read political news, i'd go to cnn or something...

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Babaganoosh

Blah blah blah
bush sucks
blah blah blah


You're welcome

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I like pie.

Probono

I hope 12clicks reads it, his ignorance scares me.

- AFN -

You think so?

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The Truth Hurts

Gephardt called...
he says keep it...
he won't be needing it anymore.

SleazyDream

who the fuck is Gephardt?

you've got the personality of a roof shingle

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directfiesta

takes about 4 minutes to read, just about the same time for most of you to jack off ...

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I know that Asspimple is stoopid ... As he says, it is a FACT !

But I can't figure out how he can breathe or type , at the same time ....

The Truth Hurts

The guy that said the line you spewed.

SleazyDream

and how do you know he didn't steal it from me?

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The Truth Hurts

Because Canadians aren't that witty.

Paul Markham

Bush may have screwed the US budget, but look what he has done to his and his friends. Seems to me he can't be that stupid to make all that money.

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CDSmith

Wrong. How could so much idiot be packed into so little space?

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The Truth Hurts

A: I'm never wrong.
B: Who the fuck was talking to you?
C: Eat my ass.

that is all.

tranza

Ah... Ok then....

I agree with you btw (about 12clicks)....

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Probono

12clicks where are you? I await your rant of Right

12clicks

sure kid, you've got a left wing reporter explaining how what Reagan did and what Bush is doing is wrong.

Reagan got us out of Carter's resession by cutting taxes, Bush is getting us out of the false internet economy crash of the Clinton years.

Newsflash for the stupid:
Reagan succeeded
Bush is following suit, keep pretending it won't work.

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69pornlinks

I doubt it's him. i'm sure someone is really pulling his strings

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cluck

The "false internet economy" crash has only just begun. The problem wasn't so much the internet businesses themselves, it was the huge money they were taking in from investors while making miniscule returns.

All that did was expose what a sham the stock market really is. Our economy is essentially based around nothing. You put money in, more people buy, your share value increases, you pull out at the right time and make a profit. Where does the money really come from? Other investors. Eventually, if they leave their money in long enough, something devastating happens(enron) and we realize that there's nothing backing the money.

The problem is deeper than any presidential candidate can handle. The best any president can do is keep the money flowing so people still believe it exists. That's where the problem with tax cuts for the rich comes in. In the past, there's been a trickle down effect that ended up working out for everyone. These days, the rich are taking their money and fleeing. In a sense everyone's going for the "one big payoff". The trickle down just kind of stops in multi-billion dollar chunks, fucking over everyone but a handfull per millions of people.

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Probono

Hey 12Clicks the left wing reporter was the Sec of the Treasury for GW Bush for 2 years. read the article before you comment.

dig420

The Reagan campaign also had extensively documented contact with Iran during the hostage crisis. Funny how Iran got weapons and the hostages got released the day he came into office eh?

What is it with you Republicans, you have no moral character at all??

Elli

*munching the popcorn*

So.. what you're saying is Bush is rescuing us from a market crash? And he's doing it by going to war (which always is a great economy-booster) and by giving breaks to big business and cutting social funding? Well, I'd say that's pretty spot-on. But the question remains: was this the only way to recover, or even the best way? Back to Jurassic Park (the book): Just because something *can* be done doesn't mean it *should* be done.

*munch munch*

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swoop

looking at the assclown democrat guys running for president, Bush will get his 2nd term

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Probono

Bush is something other than a medicore, manipulated pawn with millions behind him?

I would take Wes Clark any day over GW.

swoop

and why's that...u like the fat ass-fuck who's backing him Michael Moore?

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Theo

He's not smart, a C student
And that's after buying his way into school
Beady eyes, and he's kinda dyslexic
Can he read? No one's really quite sure
He signs stuff and he executes people
Maybe that's why, he doesn't have any friends
Cocaine and a little drunk driving
Doesn't matter, when you're the Commander in Chief.

Idiot son of an asshole
He's the idiot son of an asshole

Put on some make - up, turn on the 8 - Track,
I'm putting a week back on the shelf,
Suddenly I'm the President, of the United States,
But they I woke up, and realized I'm still me.

He's too dumb, to eat pretzels, apparently smart enough to fix an election.
Moved ??? into the White House,
But most people voted against him.
He likes naps, He's good at naptime, A couple of naps and then a nap and then he's ready for bed,
He may be from ????, He's always gonna be ????

Idiot son of an asshole
He's the idiot son of an asshole

He's your president

swoop

you forgot the BJ in the white house....

oh, that was our last president

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Webby

Gotta look after and entertain the blind and disabled!


I "KNOW" Bush is a liar, incompetent, a con-artist yet totally naive. It anyone was ever foolish enough to actally trust the man with their country's "safekeeping", they need a shrink.

Hiya 12clicks!! Have a nice day!!

swoop

a Democrat lover eh??? love Mr. Clinton...."I did not have sexual relations with that woman"...now that's a liar...

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Webby

swoop:

Na.... don't assume so much!! I also "knew" about Clinton as well! :-)

The very slight minor difference if you are comparing Bush to Clinton is that he lied a little bit less, never was responsible was killing quite so many people (a few tho, but that's personal *g*) and managed to have some basic concept of a fiscal policy.

It ain't all that shit politics stuff that actually matters in the end, - it's the way folks handle the real job!!

swoop

u forget about Kosovo??

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Webby

swoop:

Nope!!

swoop

ok and your point then??? i'm confused.

"never was responsible was killing quite so many people"

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12clicks

hahahaha, typical.
Is this all you got?
dear dope, the author of the above article was never in the Treasurey, let alone the secretary.
no wonder you're so confused.

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12clicks

Nope, not a crash, a resession.
We've never been able to tax our way out of those. We have tax cut our way out in the past though.
No, the war was for a totally different reason and its ok if you don't like the reasoning, I do.
cutting social funding is a myth. Giving breaks to Business is always a good idea. Any time you tax a business, you inhibit their ability to expand and hire.
The only way? no but I'm ok with it.

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Theo

12clicks in the whitehouse

Webby

swoop:

Point?? Your apparent confusion followed on from a statement I made. It is purely a matter of fact. What are you trying so hard to read between the lines for??

If you are unware of these simple factual comparisons... sorry I can't help ya!!