No. No! No!! NO!!!! That's not how it happened.
Jonathan Weisman leads his article with:
The Tax-Cut Pendulum and the Pit (washingtonpost.com): In 2002, with midterm elections approaching and the nation edging toward war in Iraq, President Bush's economic team divided into opposing camps, with one side worried about rising budget deficits and the other pressing for tax cuts to stimulate a stagnant economy. One group [the deficit hawks], led by Treasury Secretary Paul H. O'Neill and White House budget director Mitchell E. Daniels Jr., watched anxiously as the government's 2002 balance sheet swung from a record $313 billion surplus projected when Bush took office to a $157 billion deficit projected that August. How could the president demand fiscal discipline from Congress, they argued, then push expensive reforms of Social Security and the tax code if he continued cutting taxes?...
That's simply false. Paul O'Neill certainly did not want further tax cuts, led the deficit hawks, and argued against them. And one would have expected OMB Director Mitch Daniels to fulfill his institutional role of being the advocate for budget balance. But O'Neill turned out to be a general without troops. At crucial moments he got no support at all from anyone--and especially not from Mitch Daniels. At the NEC meeting in late 2002 at which the decision to try for yet another tax cut was made... well, let's switch over to Ron Suskind's report of the meeting in his The Price of Loyalty:
Notes: Suskind and O'Neill: Archive Entry From Brad DeLong's Webjournal: O'Neill... looked over at [Mitch] Daniels.... He knew Daniels was focused on the perils of rising deficits, but it would take gumption to air those concerns in a room full of tax cut ideologues.
"I think we need to balance concerns," Daniels said.... "You need to be out front on the economy, but I am concerned that this package may not do it. The budget hole is getting deeper... we are projecting deficits all the way to the end of your second term." From across the table came glares from the entire Bush political team. Daniels paused.... "Ummmm. On balance, then, I think we need to do a package... accelerate the rate cuts and [eliminate] the double taxation of dividends..." O'Neill looked with astonishment at Daniels... turn 180 degrees in midsentence.
This isn't "leading" the deficit hawks. This is turning tail and running away as fast as possible when Karl Rove gives you a sharp look. It is true that at the end of the meeting Daniels seemed conflicted: "'Not a typical Republican package,' he muttered. 'Definitely not'." Real faction leaders tell the president what they think--they don't skulk off muttering and whispering in corners after the meeting is over.
I do understand that right now--with Bush administration fiscal policy a grotesque embarrassment, and with everyone involved knowing that they have shredded their reputations--Mitch Daniels wishes to persuade the world that he was brave, and fought hard to prevent fiscal policy disaster.
But why should Washington Post reporters help him mislead?
Posted by DeLong at October 8, 2004 10:33 AM | TrackBackCheck out this.
Posted by: MattB at October 8, 2004 10:40 AMhttp://atrios.blogspot.com/2004/10/call-them-out.html
Posted by: MattB at October 8, 2004 10:44 AMGood ol' Mitch. His ability to maintain this bullshit reputation for budget hawkery while also kowtowing to Karl Rove & co sure has come in handy for that lil' guv race in Indiana, hasn't it?
Posted by: Sean at October 8, 2004 10:58 AMWhy would WaPo help the misleaders? Because they believe it's their job, and it's hard, it's hard work helping the misleaders mislead.
Posted by: Brian Boru at October 8, 2004 11:11 AMMitch Daniels is Repug scun. He was up to his ears in a scandal while on the Board of Indianpolis Power and Light. He and other board members sold their stock but left the employees and stock holders holding the bag.
http://www.courier-journal.com/localnews/2004/09/22in/A1-kernan0922-8576.html
Posted by: llamajockey at October 8, 2004 11:25 AMWhile we're going ballistic around here about something that supposedly happened years ago, back in the real world, in real time, in the big house down on the ol' D.C. plantation, our national overseers are busy 'maximizinq wealth' for ALL the usual suspects. And, as far as I can tell, Brad hasn't even noticed....
-------------------------
Negotiators Approve Big Tax Cuts for Business
By EDMUND L. ANDREWS
Published: October 7, 2004
WASHINGTON, Oct. 6 - In an act of pre-election largess, House and Senate negotiators approved a sprawling corporate tax bill on Wednesday that would shower corporations and farmers in politically sensitive states with about $145 billion worth of new tax cuts...
http://www.nytimes.com/2004/10/07/business/07corptax.html?oref=login
-------------------------
Now I ask you: Where's the 'moral philosophy' in THAT?
Posted by: Mike at October 8, 2004 11:30 AMHey Mike, deficits don't matter! And those tax breaks are going to create jobs! What's the problem?
Posted by: Jon at October 8, 2004 11:45 AMI'm not sure Daniels, by himself, has enough squeeze to get the WP to take that kind of dive. When the White House puts in a good word for "my man Mitch," then reporters take what is handed to them at face value. For some reason, when the White House hands out mud pie and calls it blueberry, the WP and NYT report that their slice tasted a lot like blueberry.
Daniels has a governorship to win, he's in a tight race, and having the reputation of a deficit hawk just might help in Indiana. Let's see if the WP's little lie gets carried in the Indianapolis Star. Oops, no. Indianapolis he can get. Let's see how this story is treated in Indiana's swing areas.
Posted by: kharris at October 8, 2004 11:48 AMhttp://www.jobwatch.org/
Weakest job recovery since the 1930s
Since the recession began 42 months ago in March 2001, 940,000 jobs have disappeared from the U.S. economy, representing a 0.7% contraction. To put this performance in historical perspective, the Bureau of Labor Statistics began collecting monthly jobs data in 1939 (at the end of the Great Depression). In every previous episode of recession and job decline since 1939, the number of jobs had fully recovered to above the pre-recession peak within at least 31 months of the start of the recession (the average, excluding the 1991 recovery, has been 20 months to full recovery). In the three downturns since the early 1970s, the economy had not only recovered from any job loss but had also generated 4.3% more jobs. By this standard, the economy would have had a positive job gain of 5,750,000 by the 42nd month, or 6,691,000 more jobs than we have today.
Private-sector jobs have fared worse than public-sector jobs. Jobs in the private sector have dropped by 1,638,000 since March 2001, representing a 1.5% contraction. However, having no job losses, or gains, is a very low standard by which to judge a recovery—with history as a guide, one would have hoped that the economy would have recovered months ago the jobs lost. If job growth had been at the pace of other post-war business cycles (a 5.2% growth by the 42nd month), then 6.8 million new jobs would have been created by now, 7.8 million more than we have today.
KHarris
What do you make of Fed governors talking down the value of the dollar? This is highly unusual, and I am puzzled. Is this a sign of worry about a rapid decline in future which can be eased if the dollar drifts lower now? Is this simply a way to generate export growth as the dollar drifts down? Why is the decline in the dollar so gentle given the Fed governor's statements.
Posted by: anne at October 8, 2004 12:38 PMHey Jon at October 8, 2004 11:45 AM:
I don't know how you're fixed for petards at the moment, but just in case you happen to be running short of them, here's another (recent) one SOME 'moral philosophers' I can think of but won't name OUGHT to be hoisted on:
-------------------------
Oct. 8, 2004, 10:50AM
'Dead zone' in gulf continues to expand
Agricultural runoff, shrinking wetlands threaten fisheries
Associated Press
SAN ANTONIO -- Fisheries in the Gulf of Mexico are threatened by loss of coastal wetlands and agricultural runoff, from which a "dead zone" of oxygen-depleted water has grown, experts say.
To stop expansion of the 5,000-square-mile area where low oxygen levels make it difficult for marine life to survive, studies show that wetlands must be reclaimed and fertilizer use in the Mississippi River basin cut by 25 percent, said Andrew Solow, a researcher at the Woods Hole Oceanographic Institution in Massachusetts...
...Meanwhile, marshes and wetlands that catch sediment and nutrients, reducing nutrient-laden runoff, continue to shrink.
The Mississippi's delta-building process has stalled from decades of engineering to straighten the river to make more land usable and reduce flooding (Sic), said Len Bahr, director of the Louisiana Governor's Applied Coastal Science Program.
"We're losing 200 million tons of sediment a year into the gulf," he told the San Antonio Express-News in today's editions, adding: "we see an imminent collapse (of gulf fisheries) if the coastal marshes keep pulling away."
Studies have not shown clear economic benefits that could prompt politicians to act...
http://www.chron.com/cs/CDA/ssistory.mpl/metropolitan/2836979
-------------------------
And just so you know Jon, I have more 'petards'. LOTS more.
I've been collecting them for quite some time now...
Personally, I don't think that's the most significant thing in the article. Usually, Brad's pretty focused on the main thing -- which to me seems to be a, the pretty concise marshalling of figures that got us to the kind of budget where we are paying 128 billion per year on interest on the debt, and b., the plans to cut such non-essentials as homeland security spending to bring the budget down, floated by Bush backgrounders in the piece.
That's the news here. Who cares about Mitch Daniels.
Posted by: roger at October 8, 2004 12:49 PMThanks Mike:
http://www.nytimes.com/2004/10/07/business/07corptax.html?oref=login
Negotiators Approve Big Tax Cuts for Business
By EDMUND L. ANDREWS
WASHINGTON - In an act of pre-election largess, House and Senate negotiators approved a sprawling corporate tax bill on Wednesday that would shower corporations and farmers in politically sensitive states with about $145 billion worth of new tax cuts.
In an attempt to get backing from Southern Democrats, Republican leaders included a $10 billion buyout for tobacco farmers, but they rejected a Senate provision to link that buyout with a requirement that cigarette companies be subject to regulation by the Food and Drug Administration.
Without the F.D.A. link, the bill could be jeopardized on the Senate floor, where opponents have threatened to stretch the debate to run down the clock as Congress tries to adjourn on Friday.
But Republican leaders said they had more than enough votes to stop a filibuster, contending that the overall tax bill has provisions sought by so many different lawmakers that it was almost assured of final passage by the end of this week. President Bush is expected to sign the bill if it reaches his desk.
The agreement involves the cozy deal-making that often characterizes pork-barrel politics, with lawmakers from both parties insisting on breaks for hometown industries in return for their support of the overall measure.
The big winners include General Electric, Exxon Mobil, electric utilities, movie producers and agricultural producers.
Keith Ashdown, vice president for policy at Taxpayers for Common Sense, a public advocacy group in Washington, said, "This legislation is an early Christmas gift for corporate fat cats."
The bill was initially intended to compensate exporters for the loss of $50 billion in tax breaks that the World Trade Organization had declared illegal, but Congressional negotiators approved a 633-page behemoth that doled out tax breaks worth nearly three times the original subsidy.
Supporters said the bill would resolve a trade dispute that has led the European Union to impose tariffs on up to $4 billion worth of American exports, while promoting job creation at American manufacturing companies.
"It also gives a real shot in the arm to U.S. factories and farmers, at home and abroad," said Senator Charles Grassley, the Iowa Republican who is chairman of the Senate Finance Committee. "We need to give permanent relief to the nation's job creators and lift the sanctions burden from our exports."
Not all lawmakers were happy. "This is a disgrace," said Senator John McCain, the Arizona Republican who had backed the proposal to make tobacco products subject to F.D.A. regulation. "They have removed the linchpin in the passage of this legislation in a complete sellout to the tobacco companies."
Maybe Weisman's reporting is a zero sum game, or something like it.
Posted by: Brian at October 8, 2004 01:20 PMDear roger at October 8, 2004 12:49 PM:
According to The Bureau of Public Debt, Interest Expense on the debt for fiscal year 2004 ACTUALLY amounted to--Taaah Daaah!--
-------------------------
[Avert your eyes NOW, Alan Greenspan lovers everywhere.]
$ 321,566,323,971.29
http://www.publicdebt.treas.gov/opd/opdint.htm
-------------------------
Maybe one of the many, many 'moral philosophers' around here will 'volunteer' to bring you up to date on the current status of our 'globalized' Current Accounts (read: "Trade Deficit") situation.
Then again. Maybe one of THEM won't, too...
Posted by: Mike at October 8, 2004 01:34 PMMitch Daniels is best known for his "there's plenty of money for a tax cut". How can anyone suggest he was a deficit hawk?
Posted by: pgl at October 8, 2004 01:44 PMYes. IN is getting a steady diet of My man Mitch selling his IPALCO stock for millions and leaving town as the pension fund hit the skids. The question for Mitch is whether he can be trusted to be in charge of state pension funds given a) past history with IPALCO and b) the fact that creative accounting using underfunding of state pension funds could be used to cover tax cuts for the wealthy. There is not a union member in the state of Indiana that will vote for him. IN has a lot of union members.
Beware of multimillionaires who run "Aw shucks" campaigns.
Posted by: bakho at October 8, 2004 01:51 PMSo, we finish the week with 53 dollar a barrel oil. We have an energy tax in effect along with a weak employment market and a tightening Fed. Careful.
Posted by: anne at October 8, 2004 01:54 PMI long for the days back when Paul O'Neill seemed like a bad Secretary of the Treasury, because we remembered Summers and Rubin, rather than now, when we remember him as a sorta good one, because we live with John Snow.
Posted by: Julian Elson at October 8, 2004 02:42 PMLet me put in a good word for the incumbent governor of Indiana, Joe Kernan. He is a good person, and a good democrat. He graduated from Notre Dame, joined the Navy, shot down in Viet Nam, POW for several months, good business career, good mayor of South Bend, elected lt. gov, became governor when the incumbent died, did not plan to run himself, but did when the r's recruited the budget coward, and self-serving dog daniels to run, at the request of the party. Contribute at http://www.kernandavis.com/
Posted by: masaccio at October 8, 2004 03:13 PMYou probably know too, anne at October 8, 2004 01:54 PM, that "we have" a global climate that is 'changing':
-------------------------
"GLOBAL WARMING: Early Warning Signs"
http://www.climatehotmap.org/
-------------------------
A 'phenomenon' which will affect 'our' future in various, sundry and deleterious ways NOBODY can predict with any real confidence.
-------------------------
"The Earth's life-support system is in peril"
http://www.iht.com/articles/125563.html
-------------------------
While, at the SAME time, 'WE' are busy trying to 'pacify' a country which just happens to lie directly over one of the (relatively) few, remaining, significant 'reserves' of some of the very same stuff which is CAUSING that 'problem'.
-------------------------
"The End of Cheap Oil"
http://dieoff.org/page140.htm
-------------------------
Now, you'd LIKE to think the world's 'moral philosophers' would be ALL OVER a conundrum like that, wouldn't you?
Well, you'd be thinking incorrectly. See, THAT'S 'somebody else's' problem.
-------------------------
"BUSH'S DEEP REASONS FOR WAR ON IRAQ: OIL, PETRODOLLARS, AND THE OPEC EURO QUESTION"
http://ist-socrates.berkeley.edu/~pdscott/iraq.html
-------------------------
And besides, a bunch of those 'moral philosophers' are 'conflicted' about the conflict themselves...
-------------------------
"Smells Like Team Spirit"
http://www.counterpunch.org/floyd02092004.html
"Serving Two Flags"
http://www.counterpunch.org/green02282004.html
-------------------------
Unfortunately for EVERYBODY else, it happens that the moral philosopher's BEST 'friends' (in THIS world) really, REALLY like things the way they are.
-------------------------
"Asia's Stockpiles of Dollars Pose U.S. Economic Risks"
http://www.sdcia.com/msgboard.mv?parm_func=showmsg+parm_msgnum=1003491
"Tanking up on the oil crisis"
http://www.tomdispatch.com/index.mhtml?pid=1458
"Israeli Cat out of the Bag"
http://www.progressive.org/webex04/wx1007a04.html
-------------------------
But the MOST galling thing about it all anne, is that it's so, so, self-destructive AND unnecessary...
-------------------------
"National Renewable Energy Laboratory"
http://www.thesustainablevillage.com/partners/nrel.html
"Toward a Single State Solution"
http://www.counterpunch.org/ignatiev06172004.html
-------------------------
Julian Elson
KHarris
Some comments please on the currency remarks of Fed governors that Brad posted.
Posted by: anne at October 8, 2004 04:09 PMToday's Washington Post prominently displayed the email address of the corrections department.
corrections@washpost.com
The full text "The Washington Post is committed to correcting errors that appear in the newspaper. Those interested in contacting the paper for that purpose can send an e-mail to corrections@washpost.com or call the main number, 202 334 6000, and ask to be connected to the desk involved -- National, Foreign, Metro, ..." then it gave the Ombudsman's telephone number (202) 334-7582.
Posted by: MikeC at October 8, 2004 04:19 PMRe: environmental concerns
Yes there are probably many more problems that are more serious than fiscal policy disasters.
The main trouble is that people who do bad things don't have to pay, they make other people pay for them. Perhaps it has changed, but did you know that if someone wants to keep a wetland, and a ditch project goes through, they have to pay their share of the project, like a sewer assessment. Then after their wetland is drained that they wanted to keep, they will have to pay for mitigation to restore it and keep it. They have to pay for something they don't want, just because the majority of people they live around want it.
Things won't change until people have to pay for what they do. Damages will be assessed and we will have to pay.
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