Admiral Quixote,I found your blog through a post you made at Samizdata a couple weeks ago, and it's become a daily stop for me.
Thank you. Incidentally, I change some of my links periodically to get fresh perspectives and took Samizdata off my list. However I have found myself really missing Samizdata (especially the comments) and will probably relist it the next time I make changes to Solport's links.
I wonder if Alan Greenspan isn't overstepping his authority or sphere of influence, and what exactly his reasons for changing his tune regarding tax cuts would be. Recall that around February 11th of this year, Greenspan roundly criticized the stimulus package including the proposed tax cuts. He said fiscal stimulus, if it comes this year, is premature. And for his comments, Sen. Bunning (R-Kentucky) angrily rebutted that Greenspan's job is to set monetary policy, and to leave the fiscal policy to the President (and Congress). There was even talk that perhaps Greenspan's job was on the line.On the other hand, Bunning and others weren't complaining two years ago when Greenspan offered his support for the first round of tax cuts.
But I find it interesting that now he has come out in support of a tax cut package he previously decried.
Yes, Alan Greenspan is a character. I believe Greenspan should have retired years ago, so I naturally agree with Senator Bunning. You are right, Bunning is gunning for Greenspan; he even uses his official website to slam Greenspan. This is not a recent development, Senator Bunning has been after Greenspan for years.
Unfortunately, President Bush has announced he will reappoint Alan Greenspan next year. While I am not impressed with President Bush's handling of the economy, he is a skilled politician. So I see two main reasons for this decision.
1) Since the national debt is increasing -- at least for the short-term -- it helps the US to have very low interest rates. While he may have started lowering rates a bit late, Greenspan is currently a strong proponent of low interest rates. In fact, he is pushing to lower them again.2) Alan Greenspan enjoys the confidence of the average American. Since the 2004 elections will take place about the time Greenspan's current term ends, President Bush probably feared making Greenspan a political issue.
My guess is that reason 2 is the main reason President Bush continues to support Greenspan. If the economy is still slow next year -- which I doubt, but it is certainly possible -- the economy will be the Democrat's biggest issue. President Bush is too shrewd a politician to give them additional ammunition by firing Greenspan.
However, since President Bush has already announced he will reappoint Greenspan, why did Greenspan change his tune on the tax cuts? Well, Greenspan is also a politician of sorts. Realistically, he will probably not live another ten years. So his legacy is on his mind. Currently he enjoys a good reputation among most people and he does not want to ruin it at the last moment. As I discussed yesterday, many economic indicators predict that the economy is improving and will be in good shape in 2004. Greenspan certainly is aware of these indicators. So my guess is that Greenspan's recent comments were to protect his reputation. If he continued to say tax cuts were a bad idea and the economy continues to improve, his reputation might suffer.
On the 2004 elections: I'm not sure the Democrats will have to manufacture a scandal--let's assume the WMD issue remains the same on election day as it stands today--that is, no weapons to be found, few if any legitimate facilities to be seen. Don't you think they'll try to pounce on that, to allege impropriety in the evidence-gathering or outright deception? At any rate, if you're right and the economy does rebound significantly, Iraq may be the strongest card in the Democrats' hand. Public sentiment seems to remain strongly positive even in the uneasiness of not yet finding the "evidence", so it could take a sustained campaign by the Democrats.
Sure, some Democrats will pounce on this. I do not think it will matter though. The majority of Americans know that Saddam Hussein was an evil dictator who tortured his people and the world is a better place without him in power. Any Democrats who make this an issue will be driving security-conscious moms into the arms of the Republicans. And the Democrats case is made weaker when you look at their pre-Bush comments.
I think Hillary IS planning for 2008, though. This new book is part of her master plan. It clears the deck, cleans up some loose ends.
I agree. I may also vote for the first female President of the United States in 2008.
Finally, Texas may not be income tax-free for too much longer. Governor Perry tried to assure us two days ago that he won't accept an income tax, but Democrats have pushed for one (not too strongly, yet, since they know who the Governor is, but I'm not optimistic that the state will remain income tax-free forever). But your point about spending cuts is well taken.Thanks for your time and be well.
--Kevin White
http://kevynwight.diaryland.com
Thank you for a thoughtful and interesting message. Good luck in keeping Texas free of an income tax.
Admiral Quixote