January 14, 2004

SEC Overreach

George W. Bush reveals why he thinks the labor market is sluggish. The cause? "SEC overreach" and the uncertainty that it has created:

The Price of Loyalty: p. 305: [Karen] Hughes... stopped the proceedings. "But there is uncertainty in this economy," she said.... "Real uncertainty that this won't solve."...

Bush stopped in midstride and looked hard at Hughes. He was silent for a moment. "The economic uncertainty is because of SEC overreach," he said pointedly.... O'Neill couldn't beleive what he was hearing--SEC overreach? No wonder the White House had backed off from... medicine for crooked executives... ceded the corporate governance debate to Congress. How, though, could the President believe the largely overwhelmed SEC had any significant effect on the vast U.S. economy?

Posted by DeLong at January 14, 2004 09:10 AM | TrackBack


Of course, yesterday's WSJ oped page in its zeal to attack O'Neill starts off by rightfully saying some in the Reagan team questioned voodoo economics. But then the oped claims all are now on board that free lunch supply side economics works. And the criticism of O'Neill is he does not understand this 'reality'. Huh? Did the editorial writers ever read the academic writings of Greg Mankiw as to this episode of fiscal stimulus?

Posted by: Harold McClure on January 14, 2004 10:25 AM


This is a good example of what Dawkins would call a brain virus. Bush has grabbed onto this bad meme since he doesn't have the background (I'll give him the benefit of the doubt that it's not a capacity issue) to challenge the thought. It is scary that he throws these out indiscriminantly.

Posted by: AJ Colyer on January 14, 2004 10:30 AM


Of course the SEC overreached. It tried to investigate him while he was at Harken, right? Didn't anyone tell them that Bushes are above the law?

Posted by: JP on January 14, 2004 10:39 AM


"George W. Bush reveals..."

um, who wrote the book again?

What happened to "Fair and Balanced almost every day" Brad?

Again, I style myself a political nihilist - meaning in part that I subscribe to the view that I can't possibly know what happened. Saying "Bush reveals" to me is inaccurate.

Bias may get you an audience among those that think like you, but do you want a discourse among people that think like you or people with different opinions?

I have to say, the past few days of posts has me reconsidering my bookmark list. I like to hear views from both sides of the fence as I sit safely perched on said fence, but I'll stop listening when the noise sounds more like spin than analysis.

Posted by: Pragmatic Idealist on January 14, 2004 11:01 AM


Now, this sounds like the 'real' G. W. Bush. Pathetic.

Posted by: Matt on January 14, 2004 11:16 AM


Pragmatic Idealist, no one's begging you to stay. Vote with your feet. Judging by your cliched middle-of-the-road-nihilist contribution just now, you're not likely to be of much interest. (Note that your generic comment had nothing to say about the issue here; it could have been tacked on to any comment line whatever).

If you decide in advance that the truth is always in the middle, it makes your life easier but cripples you with a jellified inability to respond effectively whenever one side or the other happens to be right. Likewise, if you decide that they're all crooks, you become incapable of spotting crooks.

The Republicans have learned to game moderates by noisily claiming that moderates are liberals and that conservatives are moderates. Since one category of moderate is dumb as a stump, it works far too often.

Posted by: zizka on January 14, 2004 11:19 AM



The book cites a direct quote of Bush, given by someone who was present at the time. I think it is therefore justified to use the phrase "George W. Bush reveals..." when referring to the words of George W. Bush. Exactly how do you see this as biased? Is your objection to Brad's unfair and unbalanced use of the present tense to refer to an incident in the past? Damn that liberal bias!

Posted by: Smokey on January 14, 2004 11:29 AM


Piling on to Pragmatic Idealist who I will rename Hypersensitive Squishy:

You are a dog and Delong is a high pitched whistle.

Get in the game, Squishy.

Posted by: huh??? on January 14, 2004 11:41 AM


Prag, remember the wisdom of the Greek philosopher Testicles: "Show me a man who straddles the fence and I'll show you a man with no balls."

Posted by: Marbo on January 14, 2004 01:16 PM


zizka - re: voting with feet, good advice, i think i'll take it. btw, my nihilism extends primarily to the loud proclamations of those that claim to have the right to an opinion without a sufficient bolus of factual evidence, not in total. my approach is to sit on the fence until the evidence convinces me to jump to one side or the other. i started viewing this site as a source of observations intended to clarify my understanding and therefore assist me in making an intelligent and informed choice. it has recently disintegrated in much the same way Krugman has morphed from academic to demagogue.

smokey - well my view is that if person A tells me person B said something, i'll take it with a grain of salt until i have a chance to hear what person A has to say about it. ymmv.

huh - i prefer to think of flaming as a last resort when intelligent discourse fails rather than the first attack vector of debate.

my way of thinking can be illustrated by asking a question - what is the agenda of this site? if it is to advance knowledge and understanding, then unbiased, factual discussion is of paramount importance. if it is to propagate the meme of "Bush bad", then i would think that one would court the middle of the distribution rather than the tails. after all, the tails ain't gonna change their minds, but the middle of the bell is the group susceptible to influence.

perhaps demogoguery is an effective tool of influence for that undecided group. for me, it has the opposite effect on my interpretations and cognitive perambulations - i simply tune out as the discourse has ceased to be relevant to my evaluation process. i'm not going to make my decision based upon which side is more shrill or which side racks up more points in the mud-slinging contest - the winner in that contest is the one more skilled at sophistry, not the one with the ideas and tools to improve aggregate human utility (is my context-specific nihilism a bit more understandable now?).

in my opinion, a collection of like-minded individuals agreeing with each other does not advance understanding, it hinders it. i am saddened by the change in tone on this site, as it was a resource for me to help me decide who to vote for in the upcoming elections as well as to better understand economic policy impacts.

but now it just feels like spin.

Posted by: Pragmatic Idealist on January 14, 2004 01:24 PM


Perhaps Pragmatic Idealist is taking the last opportunity to defend a fellow human. Hats off to him. I was with him on Iraq, up until he decided to take advantage of my trust.

Prag's a better man than I am on this point, because GW and the rest of them are purveyors of putrid idealogical poop.

I think George HW should get some money back from his son's "edumication."

Posted by: Sabbadoo32 on January 14, 2004 01:27 PM


"Prag, remember the wisdom of the Greek philosopher Testicles: "Show me a man who straddles the fence and I'll show you a man with no balls."

Posted by Marbo at January 14, 2004 01:16 PM "

sigh. no better than usenet. sigh.

apparently the last few posters feel that taking a position on a topic upon which you are not sufficiently informed is preferable to trying to gain a deeper understanding before making a decision.

yes! we should all vote with our emotions instead of our brains! vive l'evolution!

and that, good people, will be my last comment on the topic.

Posted by: Pragmatic Idealist on January 14, 2004 01:31 PM



What evidence do you need? You've got the words and transcripts from actual meetings at the actual White House. Before O'Neill was proven a non-idealogue, he was hailed by the GOP as a solid replacement for Robert Rubin.

It's OK to like Bush. He looks like a nice guy. Probably a great guy to hang out with and watch a ball game. And that's where "we the People" have let our collective guards down. We're replaced personality with substance. We've forgotten the words of Reagan, "trust but verify." Granted, Karl Rove runs Bush like a Swiss clock. But a little follow up combined with a skeptical mind may have saved this country a few trillion dollars in debt.

Posted by: Sabbadoo32 on January 14, 2004 01:33 PM



I agree that a collection of like-minded individuals does not foster effective information gathering, but neither does ignoring evidence.

You said that, since this is hearsay evidence, you will take it with a grain of salt, and that's fine. It is important to consider the source and the quality of all information presented when reaching a conclusion (if only this was done on that pesky WMD issue). But, that doesn't mean that the above quote is "spin" or "demogogeury" either. It is a direct statement reported by an individual who whas present at the time.

Obviously this evidence is unflattering of the President's methods and state of mind, but presenting that information is not an indication of bias. The only hook for bias is one use of the word "reveals" in the single sentence written by Brad. I don't think this characterization is unfair. He has presented a quote with a verified, knowledgeable source. Just because the Whitehouse has not confirmed this particular quote does not make the word "reveals" any more biased.

Is it really just this word that has made you consider giving up on the site, or the relentless revalation of evidence (not conclusive evidence, but certainly probative) indicating the poor performance of the present administration?

pardon any mistakes, not spell checking this...

Posted by: IMU on January 14, 2004 02:42 PM


You again exemplify what I said. Because we've come to conclusions and hold them strongly, you've decided we're wrong. Not smart -- sounds like Miss Manners to me.

None of us started from zero this morning, as you apparently did. It's like you came in in the middle of the fifth act of a play and decided that the people on stage were crazy.

Note that you took the offensive first. Note that you have affected a tone of superiority in your posts which is not backed up by any evidence of superiority.

Posted by: zizka on January 14, 2004 03:01 PM


By the way, whatever happened to the SEC investigation into Halliburton's accounting practices while Cheney was CEO? Disputed costs booked as revenue, if I remember.

Posted by: Bob H on January 14, 2004 05:36 PM


The only certainty a businessman cares about is the certainty that he will not be prosecuted.

Posted by: Frank Wilhoit on January 14, 2004 05:39 PM


There used to be a time when people were excited to read some information about the inner workings of the highest government level. Bush's fixation on the 'overreach' of the SEC affects our jobs and lives.

I would sure like to know how you are above that fray.

Posted by: J Edgar on January 14, 2004 05:46 PM


Looking across the ocean, the German economy is in recession. Germany, a country dependent upon manufacturing, is suffering a lot of manufacturing job loss. Are the causes behind manufacturing job loss in Germany and the US similar? I think so.

Given the EU is a basket case with their restrictions on running deficits, etc. But it seems that manufacturing job loss is perhaps a structural problem that is beyond the hand of any government to fix. However, if one cannot treat the disease, then at least manage the symptoms. The US needs to accept loss of manufacturing jobs as a given and look for new areas for manufacture and expansion, or new jobs for people to transition from mfg to other work. My criticism of this administration is not that we are losing mfg jobs, but that their response to the job loss have been so weak. Where are the funds for retraining and new infrastructure?

Posted by: bakho on January 15, 2004 06:14 AM


We need people like Prag. People that can take an unpopular stand in the face of adversity. People that despite "The Facts" ( as contained in The Cost of Loyalty) can have a different view and defend it.
Maybe not to the death, but atleast for half a dozen posts. Weren't you impressed--I was.
Do you think he could be persuaded that the views here are just Spin? Not to belittle the integrity or worth of the average American voter, but I think Prag Is average and capable of reading The Cost of Loyalty and coming to his own conclusions.
Do you think he'll read it?
Hope so.

Posted by: calmo on January 15, 2004 07:49 AM


Go to google, punch in Cheney investigation bribery and then tell me that the entire news that we get is not controlled by these Bush people.

Posted by: donna on January 15, 2004 09:07 AM


Just posting to change the default website on my signature. I keep forgetting to do it. I'm now a guest at Seeing the Forest.

Posted by: zizka on January 15, 2004 01:29 PM


bakho: Germany's economy has a large export sector, which of course is tied to the manufacturing that you are referring to, and the US are a significant part of the export market. So any global downturn hits Germany big time.

Due to perceived high labor costs (due to sharing of social security and unemployment related taxes and medical insurance that nominally sum to about 40% of gross earnings), there is a high pressure on labor and a big incentive for automation. (By "nominally" I mean that it does not really matter how the money is divided up, as it comes all out of the "employer's pocket", i.e. the workers' work, anyway. But declaring the employer's portion to be "extra" has two effects: (1) employers can point to "brutal" extra taxation, but also (2) that the extent of this taxation is partially hidden from employees -- the nominal rates are known, but the paycheck portion appears smaller.)

Combined with relatively rigid labor laws that make it (relatively) difficult to lay off people and thus cause more cautious hiring, there is a lot of pressure on labor. And then you have the domestic feedback loops (lack of demand after mass layoffs or meager raises). But shifting labor abroad (mostly (?) central/southeast Europe, Spain, Portugal) is increasingly becoming a factor as well.

Posted by: cm on January 15, 2004 06:29 PM


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