In Search of a Bush Supply Sider: The president can do better than Stephen Friedman.

National Review Online ^ | December 11, 2002 | Stephen Moore

[xsysmgr]

What do you when you've done everything you can to try to save a friend from making a grave error, but they don't want to be saved?

That is the situation with the apparent impending nomination of former Goldman Sachs partner Stephen Friedman to be head of the President's National Economic Council. After two days of furious lobbying by the Reaganite supply-side klan to prevent a catastrophically ill-advised appointment, the Bush White House has now tried to gamely reassure free-market tax cutters that Friedman will be a loyal team player who can help sell the president's economic program of tax cuts to generate jobs and growth.

I will bet you a nickel they're wrong.

The problem is that this nominee, as Larry Kudlow pointed out eloquently on these pages on Tuesday [Posted on FR here], has no history of supporting tax cuts — ever. So how in the world can he sell a program that he has never shown any inclination of believing in? President Bush deposed his economics team last week because — fairly our unfairly — they were thought by the White House to be deficient in their ability to sell the president's product to Wall Street and Capitol Hill. Friedman is likely to suffer the same defects.

Now I should acknowledge that I have never met Friedman before in my life. (He is not a member of the Club for Growth — which naturally makes me suspicious of his judgment.) Incidentally, I have met John Snow, the new Treasury Secretary, when we worked together on the Kemp Commission on tax teform. I have great admiration for the man and his economic instincts. He'll do just fine.

I have no personal animosity toward Friedman whatsoever. I wish him well in the private sector.

The core problem with Friedman as the president's top economic spokesman is that he has a history of hanging around with all the wrong crowd of friends. Friedman has been a long-time member of the Council on Foreign Relations, a group of elites that never saw a tax cut they liked. They are stodgy 1950s style Rockefeller Republicans who disdain conservatives about as much as they disdain conservative ideas. I don't generally believe in guilt by association, but it does make one suspicious.

Even more problematic is Friedman's co-chairmanship and big-dollar donations to the Concord Coalition — an organization dedicated to blocking supply-side tax cuts. In this case, his partnership in this group is highly suggestive that his economic beliefs are wrong-headed in the extreme. The Concord Coalition represents the Chicken Little deficit reduction myopia that was once the rage in the Republican party before someone by the name of Ronald Reagan came along and thankfully converted the GOP into a tax cutting
party.

Throughout the 1980s the Concord Coalition types (the organization was not formally created until 1992 when the late Democrat Senator Paul Tsongas got together with Sen. Warren Rudman to create the entity dedicated to deficit hysteria) whined about the Reagan budget deficits and agitated for higher taxes on a daily basis. To his great credit, the Gipper never listened. They said that deficits would cause higher interest rates, and Reagan said his tax cuts and his inflation-slaying policies would cause interest rates to fall. Lo and behold, the economist from Eureka College was right and the Ivy League trained Wall Street know-it-alls were dead wrong.

In the 1990s the Concord Coalition continued its cultish worship at the deficit-reduction altar and rejected the notion of tax cuts to stimulate economic growth. Bush Sr. listened to this crowd and the only price he paid was his presidency.

Lord, I wish I had a dime for every time I have been on a radio or TV show debating the legion of Concord Coalition spokesmen about the wisdom of tax cuts — where I take the affirmative and they take the negative. The most recent example — are you listening Karl Rove — was during the debate in 2001 over the George W. Bush tax cut. The Steve Friedman Concord Coalition was against it. Too expensive, they said. Let's be specific, lest you think I am engaging in hyperbole. Here is what president of the Concord Coalition Pete Peterson said about the Bush tax cuts on the eve of their passage on national TV: "There is no reason to lock in a large 10-year tax reduction to give short-term stimulus." Gee. That was helpful to the president's cause.

That's not all. During the debate over an economic stimulus bill earlier this year, the Concord Coalition adopted the Tom Daschle position of temporary tax cuts: "Any fiscal stimulus should be carefully designed to have its maximum effect in the very short term, minimizing costs in the long term."

The group also wants to scuttle the Bush tax cut. This past October the Coalition advised that "costly policies based on the premise of perpetual surpluses should be scaled back or postponed until the fiscal outlook improves. This includes politically popular items such as . . . prospective tax cuts that are not scheduled to take effect until later years."

My goodness. Why doesn't Bush throw Friedman overboard and just hire Al Gore to be his top economic adviser?

To be fair to Friedman, his policy positions may have evolved and perhaps he doesn't subscribe to these discredited economic ideas any longer. Maybe he now truly believes in the president's policies on tax cuts, a strong dollar, free trade, and Social Security privatization. Indeed, I have no doubt that the man will dutifully mouth the right words if he is handed the job. But Bush needs a true believer — someone who if you cut them bleeds supply side, not someone who will have to be reprogrammed and learn economics on the job.

The tragedy of this hire (if it occurs) is that President Bush will be frustratingly passing over such an outstanding talent pool of economic stars. Why not Steve Forbes? Why not Brian Wesbury? Why not Kudlow, or Dick Armey, or Phil Gramm, or Bill Archer, or Jack Kemp, or Bob Kasten, or Pete DuPont, or Arthur Laffer? If you have Kirk Gibson warmed up and sitting on the bench in the ninth inning, I'm sorry, you don't pinch hit Mario Mendoza.

You can do better, W. You have exactly the right program. You have exactly the right tax-cut message. All you need now is the right messenger. Keep looking until you find him.

— Stephen Moore is president of the Club for Growth.

[xrp]

How about Stanton Friedman?

[TruthNtegrity]

Friedman is not a team player. I listened to how Kudlow described him and Bush would not have a loyal player on his team with this pick.

Bush could do so much better. All he has to do is ask Kudlow or Jack Kemp for recommendations and then look at those whom they suggest.

Friedman needs a class in anger management followed by what we call in the Military, "knife and fork school" - to learn how to behave around people and talk nicely.

[caltrop]

Guys like Friedman were GHWB's biggest supporters in 1980 and loyalty counts for plenty with the Bushs. Friedman and other Rockefeller Republicans know Bush is only as conservative as he has to be to keep conservatives under control. As a result, Bush will be defending his miniscule tax cut for his entire first term - doing so keeps the conservatives in line. In the meantime, Bush will keep making the government grow. Face it, he's a Rockefeller Republican - he believes government is the solution, not the problem. What we're watching is the Republican version of Clinton's triangulation.

[Forgiven_Sinner]

To: xsysmgr

Guys like Friedman were GHWB's biggest supporters in 1980 and loyalty counts for plenty with the Bushs. Friedman and other Rockefeller Republicans know Bush is only as conservative as he has to be to keep conservatives under control. As a result, Bush will be defending his miniscule tax cut for his entire first term - doing so keeps the conservatives in line. In the meantime, Bush will keep making the government grow. Face it, he's a Rockefeller Republican - he believes government is the solution, not the problem. What we're watching is the Republican version of Clinton's triangulation.

I agree GHWB was a Rockefeller Republican, but I think GWB is driven by principle. I think he wants a smaller government, but he is a consumate politician and is willing to work by incrementalism.

Prediction: the Democrats will get the "middle class" tax cut AND GWB will get the tax cut permanent. It's not clear if there will also be a cut in the capital gains tax, which is what would REALLY get the economy going. I also expect the AMT to take a hit, although that may be thrown overboard to get other stuff.