Posted on 12/09/2002 12:54:58 AM PST by MadIvan
When George W. Bush fired his Treasury secretary and chief economic adviser on Friday, he was signalling to the financial markets not just a change in personnel but a change in economic policy to come.
Both Paul O'Neill and Lawrence Lindsey are able men, and were fiercely loyal to the president. Their downfall was a result of the "bumpy performance of the economy" - as President Bush put it - over the past two years and what turned out to be a series of Pollyanna-ish economic forecasts. It was only coincidence, but symbolic nonetheless, that what has come to be known in the US media as the "Friday morning massacre" occurred as new unemployment numbers were released for November, showing a sharp rise in the number of jobless.
Mr Bush and Karl Rove, his chief political stragegist, are keenly aware that the only thing that stands in the way of this enormously popular president being re-elected in a landslide in 2004 is the economy slipping into a double dip recession. Mr Bush's father was thrown out of office 10 years ago despite foreign policy successes because he seemed to be inattentive to the ailments of the economy. And the truth is that Mr Bush Senior was guilty as charged.
This president wants a more aggressive economic stimulus plan to revive the 4 per cent economic growth of the 1980s and 1990s and, just as important, to bring the bulls back to Wall Street. No president has been re-elected in this century when the stock market has been down by more than 20 per cent during his first term. Mr O'Neill in particular did not share the White House's enthusiasm for a big new tax cut next year. We can be sure that his replacement will.
What should that tax cut look like? What is needed now is a cut designed to benefit workers and investors. This plan should combine the Republicans' goal of creating economic growth incentives and the Democratic goal of offering a slice of the tax cut pie for middle-income workers and those out of work.
The problem with the US economy is not insufficient demand from consumers, as many Keynesian economists have suggested. In fact, for the past year or two, the American consumer has continued to spend and the government has spent at an even more frantic pace. The problem is barriers to production. These barriers include over-taxation of capital and labour, over-regulation of the business sector and over-litigation. Unless these barriers are cleared away, no amount of Fed interest rate cutting or demand-side tax cuts such as tax holidays will impel businesses to produce.
If you want to see a symptom of the ailing US economy, look at the venture capital industry, which is almost entirely dormant today. Investors do not see the profit opportunities in new ventures. Costs are too high for new businesses thanks to government meddling; payoffs are too meagre thanks to excessive taxes on capital investment - the capital gains tax and dividends tax.
With that in mind, the president should endorse a tax plan that has three components.
First, Congress should reduce the capital gains tax from 20 per cent to 10 per cent on all new investment. Any share purchase made after January 1, 2003 should be taxed at a new lower rate in order to incentivise new business creation and lift stock values.
Second, Congress should chop the payroll tax on all workers from 15.3 per cent to 13.3 per cent. The payroll tax cut should remain in place until economic growth is resumed to 4 per cent and the unemployment rate falls back to the level of full employment. This would allow all workers to keep more of their pay cheques and lower the cost of labour so businesses would start hiring again. Third, implementation of the Bush tax cut from last year should be accelerated. Seventy per cent of the Bush tax cut has not yet taken effect. There is no point in delaying income tax cuts until 2005 and later years. The economy needs an adrenalin shot now.
The idea behind this plan, which the White House is considering, is to replicate the supply-side tax cut successes of presidents Ronald Reagan and John F. Kennedy. It was JFK who said: "It is a paradoxical truth that when tax rates are too high the economy will never produce enough jobs or enough revenues to balance the budget."
Deficit hawks in both parties will no doubt squeal that this tax plan is unaffordable and will run up the national debt. They are wrong. What Presidents Kennedy and Reagan, and now George W. Bush have understood is that an absence of economic growth causes runaway budget deficits.
Mr Bush is riding high now with voters. He appreciates, in a way that his father did not, that this popularity can be fleeting. His father's conqueror, Bill Clinton, was right when he said that "it's the economy, stupid". Mr Bush will soon have an economic team that understands both the politics and economics of growth.
If he can lead in the economic arena with the same tenacity that he has shown in the realm of foreign policy, he has an opportunity to be one of the most successful presidents in US history. And he will avoid his father's sad fate: being a one-termer.
The writer is a senior fellow at the Cato Institute
You never answered the question, "Yes" or "No", nor answered it directly.
That is weaseling. You should not be allowed to get away with it as it is an issue that requires moral clarity. Something which you have none of, otherwise you would have had a clear and unequivocal answer to this question, would not have smeared Reagan, and not tried to invoke Jim Rob to make me "bend to your will".
Ivan
Of course. That explains her original posts to me on the subject.
Ivan
You are now clearly lying.
I'll leave the lovely Happygal to dispense with you for this silly quip.
Ivan
Fine, let them read the threads. You never answered the question directly, "Yes" or "No".
Thread 1
Thread 2
People will see that you never answered the question directly, and in fact tried to weasel out of it.
Ivan Ivan
I realise this is a tactic on your part to make me angry and say something that will get me banned.
Very unsubtle, old boy, and won't work. Hope this helps.
Ivan
I realise this is a tactic on your part to make me angry and say something that will get me banned.
You are projecting old chap. You describe your own dirty deeds as if they were the work of others.
Oh really? Was I the one who invoked Jim Rob and the implicit threat of Jim Rob first?
Who whinged to the authorities first? And who said they would continue to fight their own battles?
Nice try, old boy, but you really need to let it go. You're not going to get me to let you off the hook. Hope this helps, lad.
Ivan
I made no threats. I asked you a question. I informed you of the rule laid down along time ago and you continued. If I had meant to have you banned (like I even have that power LOL) I would have flagged Jim or a moderator to the thread. I was appealing to your own conscience. I stated as much.
Your entire interrogitory on this subject of child pornography on the other hand is a great description of that which you project upon me.
What I think readers will notice on the two threads is that xJones has been noticably absent since he came in with his stink bomb. He left you to wallow in the stench of an accusation you didn't even bother to verify for yourself. You just went with it because you imagined it might help you.
Your objective failed.
Give me a bloody break. You would not have brought it up if you did not want to intimidate me into doing what YOU want. That is plain to see. I have not done anything similar to you. You trying to excuse this tactic is truly pitiful.
Your entire interrogitory on this subject of child pornography on the other hand is a great description of that which you project upon me.
A persecution complex is never pretty to behold. If you had answered the question directly, yes or no, then there would be no need for this. People will look at your post 81 and realise the lack of moral and legal clarity that you are running around with. You simply didn't want to answer that question directly, and it is to the detriment of your reputation.
What I think readers will notice on the two threads is that xJones has been noticably absent since he came in with his stink bomb. He left you to wallow in the stench of an accusation you didn't even bother to verify for yourself. You just went with it because you imagined it might help you.
I asked you the question directly more than 5 times now. You simply cannot issue a straight answer. If you said "No, I don't believe the possession of child pornography should be legal", then it would be all over. You didn't say that, you made a choice to weasel instead, and weaseling on such an issue is disgusting.
As I've said, you tied a noose around your neck, stood up on the chair, tied the rope 'round a hook, kicked the chair away. You're just upset that I'm telling you you're dangling in the breeze.
Ivan
You can't possibly imagine that somebody who disagrees with you could be telling the truth about their intentions. My actions bear out my words. Jim wasn't summoned. No Admin Moderator was flagged. You can overlook that fact but you can't reconcile it with your flawed conclusion.
A persecution complex is never pretty to behold.
LOL.
Who whinged to the authorities first?(sic)
Excuse me, but I told you I wasn't going to let you off the hook. You posted on here knowing full well I wasn't. Then you brought up Jim Rob to try and get me to let you off the hook. End of discussion. You really haven't a clear thought about anything, do you?
And as for bringing up Jim Rob, you did indeed bring him up first on this thread. Posting backwards to me pointing that out is hardly flattering to your cause. One wonders if you need to "sleep it off" and try again in the morning.
Ivan
You apparently by the looks of the sanitation going on in the thread. LOL.
There is also the RINO problem. I think Bush needs to tread lightly and carefully on this - however if he can come up with a very simple, clear proposal, such as the abolition of the income tax, the nation will love him forever. He can appear on national television, with a bound copy of all the tax regulations (probably huge) and say, "This is the present tax law. It is complex, unnecessary and a terrible drain on the economy. What I propose is very simple."
Cue, him throwing it into the rubbish. And he announces a new national sales tax to replace the IRS. The IRS, all its auditors and employees, to be told to get lost.
The pure love that would accompany such a move would overwhelm the Democrats and RINO.
Regards, Ivan
Not at all. I did not call on anyone. You invoked Jim Rob first.
Ivan
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