Semi-Daily Journal

Aaaaaaaaarrr! Avast, ye scurvy, craven lot! If ye be lyin' about the Federal booty balance, ye should do yer financial analyses in Davy Jones' locker!

*idly wonders if the word "dastardly," which he thinks is criminally underused, can be worked in there*

What I'm wondering is, why is it really so much in the Bush administration's interest to say Clinton didn't do much for the deficit? Bush II doesn't really seem to have much more admiration for his father's administration than for Clinton's (let alone Foley or Mitchell). Bush II doesn't support spending caps. To the extent that the peace dividend saved us money, he's not in favor of continuing in that direction. Is it just Glenn Hubbard taking a Democratic president and saying "he really didn't do that much good, budget-wise. See, some other (Republican) president, along with external circumstances, did almost all of it!"

Aaaaaaaaarrr! Avast, ye scurvy, craven lot! If ye be lyin' about the Federal booty balance, ye should do yer financial analyses in Davy Jones' locker!

*idly wonders if the word "dastardly," which he thinks is criminally underused, can be worked in there*

What I'm wondering is, why is it really so much in the Bush administration's interest to say Clinton didn't do much for the deficit? Bush II doesn't really seem to have much more admiration for his father's administration than for Clinton's (let alone Foley or Mitchell). Bush II doesn't support spending caps. To the extent that the peace dividend saved us money, he's not in favor of continuing in that direction. Is it just Glenn Hubbard taking a Democratic president and saying "he really didn't do that much good, budget-wise. See, some other (Republican) president, along with external circumstances, did almost all of it!"

Brad, or maybe I should say Professor DeLong, this is one shining example of why I check your site eagerly.

Should I assume that your opinions are determined by your past relationship with Clinton or any other government official? Were you Clinton's indentured servant? Maybe Hubbard is wrong in his analysis, but your remarks about his relation to Karl Rove show your analysis most likely is biased and does not deserve any attention.

I want to read Brad's review (well, blog entry will do) of Bob Rubin's book.

Please note one exquisite detail of Hubbard's review:

"...surplus-enhancing measures signed by George Bush Sr."

Glenn is such a loyal Republican. He cannot bring himself to utter the fatal words - "tax increases" - nor can he allow the concession that Bush played more than an ancillary part in the unspeakable act - "signed by" - but, presumably, not actively advocated by.

So screw him - he gets none of the credit, either.

what i would like to know, is the Fortune article about a 44 trillion debt accurate. What is past is gone what of the future.

“…most likely biased and doesn’t deserve any attention.” Hmmm. Let’s see. Another way to put it would be “not even sure it’s biased, and doesn’t deserve any attention.” That wouldn’t be a good way to think about things. Yet another would be “is biased, and doesn’t deserve any attention” but it doesn’t follow that even actual bias means there is nothing worth learning in Brad’s comment, only that you need to be careful with it. So must we conclude that Edgardo’s response is biased, and doesn’t deserve any attention?

Even assuming the most praise-worthy scenario for Clinton, there is probably a strong interaction between policy and economic performance that makes assessing praise shares tough. Would Clinton and his allies have stuck to their guns if the economy had not responded so well? Was some part of the economic response (as partisans claim) due to the massive upwelling in available capital due to the perception of good economic management under Rubin(Clinton)/Greenspan? Duuno.

I do wonder at Hubbard. Just about everybody who has seen into the political promised land wants to be thought of as a “big deal” (as far as I can tell). Hubbard has climbed about as high as a policy economist can climb – he has seen into the promised land. Taking on Rubin in a cheap way (and this was cheap) undermines Hubbard's "big deal" status. Why would he not understand that Rubin is now part of the mythic landscape? Good management, especially of the dollar and fiscal policy, are Rubin’s forever. Why not take the path that a Nobel Prize winner has taken, noting that Rubin worked to fend off good corporate governance efforts from the SEC? That he may thus have contributed to the equity bubble? I have not heard that claim rebutted, and it certainly could gain resonance if repeated often enough, because good corporate governance is not part of the Rubin myth.

For a tax increase to be labelled a "surplus enhancement," it seems to me there must be a surplus in existence to be enhanced. Since old Bush was running massive deficits, it seems to me Hubbard's cute phrase is a lie pure and simple.

To K Harris, do you want to spend time reading "carefully" a text despite of its author's acknowledged biases?

"what i would like to know, is the Fortune article about a 44 trillion debt accurate. What is past is gone what of the future."

Posted by: big al on November 18, 2003 03:37 AM

Yes. Ignore what Republicans have done - that's generally what they want.

Edgardo,

Simple answer? Yes. Thomas Jefferson had a very strong bias in the Federalism debate, but I find him well worth reading.

And while you may not have meant it quite the way it reads, yes, it is exactly because Brad (sometimes) acknowledges his bias that he is worth reading. That and the fact that he can see right through the schenanigans of somebody like Hubbard. I want to know that Hubbard is playing tricks. I don't mind finding it out from somebody who has an partisan interest in telling me. Without some motivation for doing the homework, it is unlikely that anybody would bother to point out Hubbard's effort at being sly. Once it is pointed out, it is pretty obviously egregious. That is good to know.

Seems to me you are trying pretty hard to argue that Brad, who got Hubbard dead to rights, is somehow not worth listening to. How come?

The problem with bias is the cognitive dissonance it creates in the minds of the objective. That is, it's NOT a problem for the biased.

But to assert

"The Dole-Gingrich-Bush Republican Party
thatwould have had a working majority
in 1993 had George H.W. Bush won
reelection in 1992 would have promptly
set to work rolling back the 1990 progress
made on the deficit"

is plainly contrary to the historical trend. It was voter concern about the lack-of-progress on deficits that led to the Perot campaign, after all. The Gingrich revolution of '94 was founded on the (by now conveniently forgotten) Contract with America that promised (to try for) a constitutional amendment on balancing the budget (an effort which failed) AND giving the president extraordinary (and, as it happened, unconstitutional) budget power via the "line-item veto". THAT effort did pass Gringrinch's Republican Congress, and handed that awesome deficit-reduction tool to their avowed nemesis, then-President Clinton. (Who never even attempted to USE it, sensing that the USSC would find it faulty.)

Deficits were clearly a campaign issue in '92 AND '94 and one that Republicans repeatedly attempted to address -- if differently than
their Democratic rivals. The assertion that the Bigoted Party was as distainful of budget concern as the Stupid Party despite the publicity surrounding the Crazy Party gives rise to serious concern about Alzheimer's Disease afflicting anyone offering that assertion. I'll be worried about Brad all week, now.

"To K Harris, do you want to spend time reading "carefully" a text despite of its author's acknowledged biases?"

Posted by Edgardo at November 18, 2003 04:44 AM

Edgardo, we are all biased. Brad's bias doesn't make him wrong just as Glenn's bias doesn't make him right.

Pouncer, I've heard that theory that assigns most/all credit in deficit reduction to the GOP Congress, and dismisses Clinton's role. I think that that theory has now been falsified, by our experiences under the Bush II administration (and no, it's not 9/11; the budget went back into the red before that).

Aren't all of you guys colleagues in a smallish enough professional circle so that you can call him up and ask, what the f? Or, once one you works for an administration, those in the circle who may be of the other political leaning simply end all dialogue?

>>The assertion that the Bigoted Party was as distainful of budget concern as the Stupid Party despite the publicity surrounding the Crazy Party gives rise to serious concern about Alzheimer's Disease afflicting anyone offering that assertion. I'll be worried about Brad all week, now.<<

I heard too much from Newt Gingrich and others in early 1995, saying that the "right" way to address the deficit was to pass a Balanced Budget Amendment that would then die in the states, and otherwise go about business as usual...

Glenn Hubbard has made disgraceful comments for an economist again and again and again. Time for excuses is past. Yuch!

Barry, I'm not about assigning credit or blame for the surpluses or deficit. I'm about the history -- which lives in my memory. Attempts to rewrite my memory with assertions about the period contrary to my experience are rather Orwellian. Or symptomatic of some serious mental condition in SOMEBODY's brain.

Brad, I'm perfectly prepared to defer to your
own first-hand experience with regard to what Gingrinch intended with a BBA. But that doesn't address the zeitgeist of the period. Recall than in spring 1994 -- BEFORE the "Contract with America", and in our own timeline -- the split Senate only failed of submitting a BBA resolution by four votes. Would a second-term Bush have been twisting arms _against_ such a proposal? What the states and the public would have made of a BBA ratification campaign, once launched, is a unpredictable kettle of fish. But it's hard to posit that Republican would have ignored voter concern.

You mention that Bush I was "pressured" into tax increases /deficit reductions in 1990. I mention that Perot (with his simple little 8x11 line charts) continued to raise the deficit-reduction pressure in 1992. I don't see how you can posit a second Bush term coming out of that three-way election -- which would have left Gore as tie-breaker in the split Senate and Democrats in control of the House (( again, isn't this an attempt to rewrite the history of the 1993-94 era? Or do you get "working majority" concept from some unusual insight about how lamely Tom Foley ran the House during that term?)) AND a still feebly active Reform Party licking wounds and dreaming of 1996 -- which would have failed to take some kind of response to ease that continuing pressure 1993 when it already caved to such pressure once before.

I ALSO seem to recollect that in our "real" timeline of 1994-1995, when the adolescent Republicans actually took over the house and proposed various budget cuts, the cuts were considered so drastic that the president refused to sign off. Republican efforts to "balance the budget" (which addressed nothing AFAICR about paying down existing debt via applied surplus, but merely meant to hold spending in line with tax collections) in three-to-five years were met with Democratic counter-proposals to accomplish the same thing, over TEN years instead. The Democratic "five year plan" reduced the deficit (which meant, falling into debt more slowly) by about a mere third. )

The '92 election were, IIRC, about the first in which voter turnout INCREASED, and by 10-15% -- some 20 million additional voters. Perot's deficit-reduction campaign dragged these new voters out of hiding holes -- even if a LOT of them were voting AGAINST the Crazy Man. Bush, Dole and Gingrinch, like Clinton, HAD to have been conscious of the issue. I do agree they would not have, as Clinton did one month after inauguration day, claim they had been lied to about the size of the deficit. (In effect agreeing that Perot had been right...) I also agree a fifty-fifty Senate standoff over budget reduction packages in August of 1993 would have gone some other way given (accursed by?) Dan Quayle.

As near as I can tell from my memory of the time, the 103rd Congress would have been addressing deficits regardless of who held the White House.

Ignore the confused bit where I give Democrat President-of-the-Senate Gore to the alt-Bush presidency.

(Being a Perot support does funny things to one's thinking process.)

But, I remember what I remember. And I remember a lot more deficit hawks swooping about in 1993 than any one president could dismiss easily.

Cheers Brad. I read Hubbards' FT article slagging off Rubin today and thought:

"A man who failed in introducing good economic policy criticises one who succeeded".

http://www.publicdebt.treas.gov/opd/opdhisto4.htm

Federal Debt:

12/30/80 $0.9 Trillion

Reagan ($1.8 Trillion)

9/30/1989 $2.9 Trillion

Bush41 ($1.6 Trillion)

9/30/1993 $4.4 Trillion

Clinton ($1.2 Trillion)

9/30/2001 $5.8 Trillion

Bush43 ($1.3 Trillion and counting)

11/17/2003 $6.9 Trillion

Any fool would pick 8 years under Clinton to 4 years under either Bush. History shows GOP administrations = very large budget deficits.

Dave Larson's comment here was my favorite. I'm just waiting for those 'economists' at the Joint Economic Comittee to publish some study that proves tax increases lower GDP growth but "surplus enhancing measures" increase GDP growth!

To write about spending by national government in the early to mid 90s without once mentioning defense appropriations, and why those appropriations changed, is missing the picture somewhat. Also, it must be noted that the first two years of the Clinton Administration were in large part devoted to nationalizing health care, which had much to do with the Republicans gaining a majority. Failing to address what impact on govt. spending this measure would have had in coming years, had it passed, while assigning to Democrats credit for spending restraint, is akin to saying that the Medicare Act of 1965 was an act of fiscal responsibility on the part of LBJ.

"Failing to address what impact on govt. spending this measure would have had in coming years, had it passed, while assigning to Democrats credit for spending restraint, is akin to saying that the Medicare Act of 1965 was an act of fiscal responsibility on the part of LBJ."

The Medicare Act of 1965 was of course an act of supreme fiscal responsibility! Duh....

Yeah, Lise, it is fiscally responsible to be off by 700% or so in projected spending over 25 years when a program is instituted. You may like Medicare, and you may be right, but don't try to pass it off as measure of fiscal restraint.

Lest any of this be taken as a defense of Republicans, let me just clarify; getting analysis from a member of a political party regarding his party's performance, vis-a-vis the performance of the party he opposes, is like getting opinions on college football teams from somebody named Peter Carroll or Jim Tressell. One would be advised to seek other sources.