http://select.nytimes.com/2007/09/17/opinion/17krugman.html?th&emc=th
Sad Alan's Lament
By PAUL KRUGMAN
NY Times Op-Ed: September 17, 2007
When President Bush first took office, it seemed unlikely that he would
succeed in getting his proposed tax cuts enacted. The questionable nature of
his installation in the White House seemed to leave him in a weak political
position, while the Senate was evenly balanced between the parties. It was
hard to see how a huge, controversial tax cut, which delivered most of its
benefits to a wealthy elite, could get through Congress.
Then Alan Greenspan, the chairman of the Federal Reserve, testified before
the Senate Budget Committee.
Until then Mr. Greenspan had presented himself as the voice of fiscal
responsibility, warning the Clinton administration not to endanger its
hard-won budget surpluses. But now Republicans held the White House, and the
Greenspan who appeared before the Budget Committee was a very different man.
Suddenly, his greatest concern - the "emerging key fiscal policy need," he
told Congress - was to avert the threat that the federal government might
actually pay off all its debt. To avoid this awful outcome, he advocated tax
cuts. And the floodgates were opened.
As it turns out, Mr. Greenspan's fears that the federal government would
quickly pay off its debt were, shall we say, exaggerated. And Mr. Greenspan
has just published a book in which he castigates the Bush administration for
its fiscal irresponsibility.
Well, I'm sorry, but that criticism comes six years late and a trillion
dollars short.
Mr. Greenspan now says that he didn't mean to give the Bush tax cuts a green
light, and that he was surprised at the political reaction to his remarks.
There were, indeed, rumors at the time - which Mr. Greenspan now says were
true - that the Fed chairman was upset about the response to his initial
statement.
But the fact is that if Mr. Greenspan wasn't intending to lend crucial
support to the Bush tax cuts, he had ample opportunity to set the record
straight when it could have made a difference.
His first big chance to clarify himself came a few weeks after that initial
testimony, when he appeared before the Senate Committee on Banking, Housing
and Urban Affairs.
Here's what I wrote following that appearance: "Mr. Greenspan's performance
yesterday, in his first official testimony since he let the genie out of the
bottle, was a profile in cowardice. Again and again he was offered the
opportunity to say something that would help rein in runaway tax-cutting;
each time he evaded the question, often replying by reading from his own
previous testimony. He declared once again that he was speaking only for
himself, thus granting himself leeway to pronounce on subjects far afield of
his role as Federal Reserve chairman. But when pressed on the crucial
question of whether the huge tax cuts that now seem inevitable are too
large, he said it was inappropriate for him to comment on particular
proposals.
"In short, Mr. Greenspan defined the rules of the game in a way that allows
him to intervene as he likes in the political debate, but to retreat behind
the veil of his office whenever anyone tries to hold him accountable for the
results of those interventions."
I received an irate phone call from Mr. Greenspan after that article, in
which he demanded to know what he had said that was wrong. In his book, he
claims that Robert Rubin, the former Treasury secretary, was stumped by that
question. That's hard to believe, because I certainly wasn't: Mr.
Greenspan's
argument for tax cuts was contorted and in places self-contradictory, not to
mention based on budget projections that everyone knew, even then, were
wildly overoptimistic.
If anyone had doubts about Mr. Greenspan's determination not to
inconvenience the Bush administration, those doubts were resolved two years
later, when the administration proposed another round of tax cuts, even
though the budget was now deep in deficit. And guess what? The former high
priest of fiscal responsibility did not object.
And in 2004 he expressed support for making the Bush tax cuts permanent -
remember, these are the tax cuts he now says he didn't endorse - and argued
that the budget should be balanced with cuts in entitlement spending,
including Social Security benefits, instead. Of course, back in 2001 he
specifically assured Congress that cutting taxes would not threaten Social
Security.
In retrospect, Mr. Greenspan's moral collapse in 2001 was a portent. It
foreshadowed the way many people in the foreign policy community would put
their critical faculties on hold and support the invasion of Iraq, despite
ample evidence that it was a really bad idea.
And like enthusiastic war supporters who have started describing themselves
as war critics now that the Iraq venture has gone wrong, Mr. Greenspan has
started portraying himself as a critic of administration fiscal
irresponsibility now that President Bush has become deeply unpopular and
Democrats control Congress.
***
----- Original Message -----
From: RICK CHERTOFF
To: 'Ed Pearl'
Subject: Walt-Mearsheimer event is Tuesday.
No indication if RSVP required
The collapse of a "taboo"; 'don't' criticize Israel': The book by these
two scholars along with the of Jimmy Carter' a dissenting point of view on
Israel and AIPAC's (American Israel Political Action Committee) outsized
role in shaping US foreign policy in the Mid-East is at issue. I can hear
my grandmother, "A Shandeh fur de Goyim!!" ("a Shame in front of the
Gentiles!"), as well as the more present usual howls from knee-jerk jerks
like Tim Rutten in the LA Times this week puts the mild and circumspect
Harvard guys in the role of at least wild "conspiracy" theorists and at
worst wild-eyed Jew-haters. Come see for yourself- I think its free! -Rick
Discussion
Tuesday, Sep 18
7pm
The Israel Lobby and US Foreign Policy
John J. Mearscheimer & Stephen M. Walt
The Israel Lobby, by John J. Mearsheimer of the University of Chicago
and Stephen M. Walt of Harvard's John F. Kennedy School of Government, was
one of the most controversial articles in recent memory. Originally
published in the London Review of BooksM in March 2006, it provoked both
howls of outrage and cheers of gratitude for challenging what had been a
taboo issue in America.
For more information about programs at the Hammer Museum, please
contact Darin Klein at 310-443-7040, or [EMAIL PROTECTED]
[Non-text portions of this message have been removed]
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