January 14, 2004

Worst Presidential-Level Economic Policy Meeting Ever

From Suskind's The Price of Loyalty. An account of the worst White House economic policy meeting ever.

But first, a few comments:

  1. Mitch Daniels was, without a doubt, the worst Budget Director ever.
  2. Paul O'Neill is wrong about one thing--the economy did need extra stimulus--and right about two things: the package was largely ineffective as a short-run stimulus--it had an extraoardinarily low bang-for-buck ratio--and if you believe (as I do) that America invests too little, the right growth package is not one of savings incentives (dividend tax cuts) but investment incentives (expensing, shorter depreciation).
  3. Glenn Hubbard says one true thing: the package was not a short-term stimulus package. He says one false--well, almost false--thing. Glenn Hubbard believes (and I believe) that if you run a deficit of $200 billion for one year and then return the budget to balance, that raises interest rates by 0.03%. (But if you raise the deficit by $200 billion and then keep that deficit at its higher level indefinitely, then the effect on interest rates is in the 0.5%-1.5% range.) And Hubbard does not say one important thing: the growth benefits from dividend tax cuts vanish if they are financed not by spending cuts but by higher deficits.
  4. For things to be this disorganized is strong evidence that Larry Lindsey was the worst Assistant to the President for Economic Policy since the job was invented: his job is to organize things so that meetings like this one are structured and coherent.
  5. One almost feels sorry for Bush. His Treasury Secretary thinks he cannot remember whom the members of the Business Roundtable are. His advisers are all trying to manipulate him by inserting phrases they think push hot buttons into their statements. People like Karl Rove talk way over his head about the number of years the tax code allows businesses to take to amortize asset purchases. Josh Bolten and Glenn Hubbard allow him to misinterpret what Hubbard's claim that a $200 billion deficit raises interest rates by only 0.03% means. One almost feels sorry for Bush. But not quite. One feels sorry for the rest of us.

Now let's go to the videotape:

p. 295 ff: November 26, 2002:in the White House's Roosevelt Conference Room:

The President... sat down. "All right, how are we doing?"

[Larry] Lindsey began, "I'm reminded, looking at the table, of a joke I heard from Prime Minister Koizumi of Japan, that he gets two opinions from each economist, and since, Mr. President, you have five economic advisers--"

"What are you talking about?" snapped Bush.

"Yes, sir. Your economic team agrees on the key elements of an economic growth and jobs package: reduce the double taxation of dividends, accelerate the rate cuts, and provide more epensing of investment losses. Let me now turn to Secretary O'Neill."

O'Neill shuffled some papers--thinking maybe Larry [Lindsey] and the President weren't getting on so well after all. But now that he knew about Cheney's [support for further large-scale tax cuts], it didn't much matter where Larry [Lindsey] was.

"... On balance, I am more optimistic about the U.S. economy than the group, and I remind you that I was right last year, and we've mostly been right this year in our real-time forecasts. And that leads me to believe we don't need a major, expensive stimulus package.... I am concerned that what we do now not tie our hands on major tax reform or on creating Social Security private accounts. And when I look at what we have got here, in this package of proposals, I am dubious that we can get anything enacted in time to do much good."

Bush looked at him quizzically. "What is your point about Social Security private accounts?"

"There will be a transition cost, Mr. President," O'Neill explained, surprised. "Perhaps a trillion dollars over many years. This will be more difficult to do with large budget deficits. It will also be difficult to keep Congress in check."

"We have had some success on the spending side, but also some setbacks," Bush said.

Gazing down the row, Bush now looked at [Glenn] Hubbard.... "I don't think of this as a stimulus package, but a growth package," Hubbard said. "The economy is facing headwinds.... The third quarter numbers were strong, but they borrowed from the fourth quarter..."

"Do we have to give it back?" Bush quipped, getting off a good one to big laughs.

Then to Keith Hennessey: "The priority should be eliminating double taxation of dividends. I think that the revenue loss will be much smaller than the static estimate," Hennessey said.... "We should also include more expensing of investments and accelerating the rate cuts. I think of this as an insurance policy, not against a double dip back into recession, but against 1 percent slower growth in each of the next two years."...

The Commerce Secretary echoed much of what had been said.... As usual, not a real discussion, O'Neill thought as he 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 pacakge... accelerate the rate cuts and the double taxsation of dividends..." O'Neill looked with astonishment at Daniels... turn 180 degrees in midsentence.

Lindsey jumped in. "Mr. President, this is an insurance policy, and it is a bad time to go uninsured. With the world economy as it is, the United States is the only game in town."

Bush looked with disdain at Lindsey and went in anther direction. "We are slowing from third to fourth quarter, but O'Neill hasn't been wrong yet. Why have nominal wages stopped growing?" The answer was complex... the kind of academic discussion the President generally abhorred. But... Bush seemed to be encouraging unscripted exchanges.... "What we are proposing is good long-run tax policy," Lindsey said in a non sequitur, trying to get the President back on track.

Bush acted as if he hadn't heard him. "Are you proposing we accelerate all the tax cuts, or just for those in the middle? Won't the top-rate people benefit the most from eliminating the double taxation of dividends? Didn't we already give them a break at the top?"...

Hubbard: "Mr President, remember the high earners are where the entrepreneurs are."...

Bush seized on it. "This is about demand," he said. "I want this to work."

"It's also about the supply side," Lindsey said.

"Eliminating the double taxation of dividends is a game changer," Hubbard added. "Game changer" is one of Bush's favorite phrases.

Rove finally spoke up, a rare event in a meeting of this size. "You should be basing the package on principle--if double taxation of dividends is wrong, why... settle for just eliminating 50 percent...?" "Stick to principle" is another phrase that has a tonic effect on Bush....

Josh Bolten leapt into the fray. "This burns a big hole in the budget."...

Daniels, having changed direction only a few minutes back, now spoke as an ardent supply-sider. "Yes, but we get a lot back"...

O'Neill picked up... "The trouble with the double taxation is that... there's a strong chance it will all be dissipated.... He put forward an alternative: the permanent expensing of capital expenditures, which... prompts expenditures on capital goods that benefit the wider economy. He looked across the table and saw the President was befuddled. He quickly moved to hold the floor.... "We don't want to slam the door on our toes in the fourth quarter of 2004 after the current provisions expire."

Bush picked up on that last dangling reference to the date: "Just as long as we don't slam the door in the third quarter of 2004."

But Rove seemed intrigued by... expensing capital expenditures. "On the Hill, there is talk of a plan to change all the depreciable lives," he said, and then ticked off th enewly proposed intervals...

The President was now thoroughly lost. "What are you talking about?" he barked at Rove.

Hubbard moved to smooth things: "This should wait for a time when we do major tax reform."

Glenn thinks that a deficit of $200 billion pushes up interest rates by just three basis points [or .03 perent]," Josh Bolten interjected, bringing things back to the key issue of whether the dividend tax cut was affordable.

"That's right," Hubbard said. Sitting next to him, O'Neill shook his head. Greenspan and he had been running tables on the effects on deficits for years; that figure was wildly low.

Bush waved his arm dismissively. "Hold on. We're betting that revenue streams come back with growth and that we can hold the line on spending.... This focus on the top rate, is it a high priority? Again, won't the high end benefit most from the double-taxation elimination?"

No one seeme to want to reply. Eliminating the double taxation is a benefit heavily weighted to those who hold stock.... Of coures, the "high end" was the "base"--the income distribution of the proposed cuts was largely a political calculation searching for an economic rationale.... After a noticeable, pregnant pause, Dan Bartlett moved back to politics. "We are hearing from governors about state budgets."

Andy Card said, "We need a quick payoff, Mr. President."

Hubbard was intent that they not forget what had brought them here: "Elimination of the double taxation will boost stock prices and repair balance sheets."

Card jerked things back: "There is excess capacity, so why do we want to boost investment?"

O'Neill was pleasantly surprised. "Mr. President, the Business Round Table of the country's leading CEO's says the focus should be on boosting consumption demand.... I'm not sure that a tax cut that benefits mostly wealthy investors, many of whom will just push these gains into savings, will do much for demand."

Bush nodded.... The ideology of ongoing tax cuts seemed to make less sense.... Finally he spoke, haltingly. "The divided tax cut could repair corporate balance sheets," he said, feeling his way, "and that's a kind of growth package, isn't it?"...

Hubbard rushed to the President's aid. "Households who desire to save more can do so through higher stock prices."

Bolten attempted closure: "I think we have agreement.... Now, how big should the package be? How much extra... so we have something to give bakc in the legislative process?

The President didn't seem ready to close. "Didn't we do the investment package already? Wha twould you rather have? We went through this last year, are you telling me we did it wrong?"...

"There are headwinds," Hubbard said.

"Not additional headwinds," Bush countered. "They can say, 'They did it twice and it didn't work.' Why do we play our hand now, negotiate against ourselves? I want to stay with principle."

This seemed to be a cue to Rove.... Karl moved to tactics...

Daniels, still looking to redeem himself for his earlier deficit hawk comments, jumped to support Rove: "I suggest a $50 billion package--$50 billion a yeare--and that we go on the offensive, including accelerating the rate cuts, and expensing, and dividends."

The president seemed releaved, as though the key issues had been considered. "Thank you for all the briefing materials, this was good research. So when do we roll this out?"...

"Good, what I am hearing is that we roll out in mid-December," President Bush said as he began to stand.

Rove looked at the President with pride. "Stick to principle," he said.

On O'Neill's left, Daniels was still of two minds. "Not a typical Republican package," he muttered. "Definitely not."

Posted by DeLong at January 14, 2004 09:13 AM | TrackBack

Comments

Wow. That's extremely depressing. And who doesn't think that national security meetings don't follow the same template?

Posted by: Keith M Ellis on January 14, 2004 09:41 AM

____

People have tried to make it taboo to talk about this, and I don't think that the Dems should put it at the center of their Presidential campaign, but the Prez does not seem smart.

Shrewd, cunning, and with lots of "emotional intelligence", perhaps, but that's what con men and pimps have. He seems like a regular guy and he's able to persuade / manipulate a lot of people, but you sort of wish for more than that from a President. He's about as dangerous a guy to have in office as could be imagined -- a likable and persuasive (albeit ruthless) guy who has always been able to wing it on the substantive issues he doesn't understand. Our legacy president.

A lot of of the differences I see in the interpretation of the O'Neill book seem to depend on whether the book has been read or not. Those who have read it seem to think it's pretty damning, whereas non-readers just point out that O'Neill is an embittered ex-employee who didn't do a good job and wasn't involved in any important decisions anyway, though somehow he did get his hands on some classified information which he wrongly revealed to the US public (sort of).

Posted by: zizka on January 14, 2004 09:42 AM

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Now we hear that the pResident doesn't even understand expensing periods for capital goods? Didn't he run several businesses into the ground before he went into politics? How could he be completely ignorant about corporate finance?

The general misbehavior of the presidential advisors and ignorance of the president described in the excerpt defies belief.

Posted by: Newt on January 14, 2004 09:46 AM

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Are you doing an implicit Simpsons reference with the heading for this post? One could imagine an econ version of comic store guy wearing a t-shirt with that written on it.

Posted by: P O'Neill on January 14, 2004 10:03 AM

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His heart seems to be in the right place - he wants to spur the economy, and he has a sense of fairness regarding giving too much for the top bracket. But he clearly doesn't have the background he needs to make these kinds of decisions without help. And he is unwilling to ask the tough, "dumb" questions to get to a good answer.

It reminds me of a conversation that JFK had with one of his advisors where he asked him the difference between fiscal and monetary policy. A basic question. But he was willing to ask it. Perhaps this can be explained as the difference between a one-on-one meeting and a meeting in a large group. But based on the Suskind book, he doesn't seem to be effective in one-on-ones either.

It strikes me is that he clearly doesn't trust any one person in the room to help him make the decision. And that is the only way that anyone with a lot on his/her plate can be effective.

Posted by: AJ Colyer on January 14, 2004 10:16 AM

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The comment about how not double taxing dividends would benefit "households" whom have stock...

I make ends meet, have 2 kids, earn good money, cannot save a dime because I am already taxed 48%
(state, fed, local), so I do not own any stocks...
so which households is he talking about?

Not mine!

It sounds like he's talking about households in the "upper crust" of society whom can dabble...maybe when I retire, I can play the stocks and reap this huge windfall in tax breaks when I my decendents cash me in when I die...whoooops, forget about the estate tax, so that is why I refuse to play the stocks, now or never....


Thanks

Dave

Posted by: Dave S. on January 14, 2004 10:29 AM

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I think zizka is right and that it's time to stop seeing the discussion as taboo: Bush does not have the brains to do the job.

But ever more frightening, I'm worried the general American populace doesn't have the aggregate intellect to see this.

It's beyond partisanship at this point, because, as conservatives themselves say, this administration is not even close to Republican anymore. This administration doesn't represent any ideal except funneling resources to the wealthy, using the "threat of terrorism" to divert attention so they can proceed. They have no interest in making America a better place, to view their policies.

As Krugman, O'Neill, Rubin, Roach, and so many others point out, they've taken us hurtling into uncharted territory (which alone should call for extreme caution). But all agree: to allow this to continue will result in dire results. Further, as we tend toward optimism, imagine how bad the consequences -could- be based on what we're not understanding yet. I note that very, very few saw the collapse of the late 90's "productivity miracle-driven" market rise. No one saw Enron. No one saw LTC's derivative crisis coming.

Since to some limited extent we see this one coming, (numbers are right there in black and white) imagine how bad it -could- be given what we don't see yet given our historical precedent for myopia.

This is a desperate moment for our country. This is beyond politics, it's getting to be about our very survival as a first-world nation.

We've elected a moron as our leader. God bless him, he's a nice guy, but he's a moron.

And that's because America is largely morons because our educational system is a bad joke.

I urge everyone to take this moment in history very seriously and do whatever you can to change things.

Posted by: PaulO on January 14, 2004 10:52 AM

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Dave, if you are just making ends meet, there is no reason to worry about the estate tax. The big myth about the estate tax is that everyone pays it when in fact a very small percentage of the population ever pays it. And getting smaller all the time as the exemption level is rising from $1.5 million this year to $3.5 million in 2009. Meaning you would have to have a taxable estate above $3.5 million to owe any estate tax. It is currently scheduled to be completely repealed in 2010 although the repeal last for one year then the tax comes back. Republicans are pushing to make the repeal permanent, of course, but the costs are very high and even some repeal supporters are starting to talk about something less than full repeal. But I would imagine if they do continue the tax, they will keep the exemption at least at the level in 2009. It will continue to be a tax that the vast majority of Americans never have to worry about.

As for the worst economic policy meeting ever, it just confirms how shockingly fiscally irresponsible this administration is. It also shows how Bush can walk out of a meeting like this & believe that all the lost revenue from his tax cuts will be made up by economic growth. Something that is clearly not true, that is not believed by even the most die-hard supply-sider, yet something he continues to say. It is also disturbing to see his advisors, who should know better, sacrificing policy to politics. Back in the 2000 election we were told it was ok that Bush wasn't the sharpest knife in the drawer because he would surround himself with good, smart advisors. We see now how foolish that assumption was both because the advisors are afraid to offer good, smart advise, and because Bush isn't willing to ask for it.

Posted by: Terry on January 14, 2004 10:59 AM

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The problem with simply calling bush dumb is that, frankly, it doesn't convince anyone who doesn't already know it.

I prefer the line that AJ Colyer starts to imply: Bush's heart is in the right place; he just makes bad policy choices.

The fact that he makes bad policy choices because he's shallow, ill-informed, a bully, and surrounded by conniving enablers, while fascinating as objective analysis and historical interpretation, is neither here nor there to the potential swing voter.

That said, this meeting that Brad discusses here is exactly the kind of thing that will show future historians exactly how shallow, ill-informed, and surrounded by conniving enablers that Bush was.

Posted by: howard on January 14, 2004 11:04 AM

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One reason why the Dems should not attack Bush's lack of intelligence is that many Americans actively dislike people smarter than them and prefer to be governed by people about the same as them.

Some of the people I know who are still with Bush are actually quite bright on, for example, technical topics or everyday life. But politics is very messy and doesn't have satisfying cut and dried technical answers and for that reason many people hate it.

Wishfulness (the Tinker-bell affect), discomfort with ambiguity and doubt, and desire to be taken care of by a trusted leader all contribute to Bush's support. He's starting to look like a sort of "strong-man" leader though he hasn't done anything blatantly and openly extra-constitutional yet. (But he's come close).

Many of his core followers have agendas which most American would find intolerable, but they have the good sense to fly beneath the radar and by and large the media go along with that. The Rev. Moon is a dramatic example, and a lot of media people work for him or get money from him in some ways.

For those not familiar with me, I'm the resident conspiracy theorist and am hardened to snarky, dismissive comments. I try to confine myself to reasonable deductions from checkable evidence, though anyone can slip up every now and then.

Posted by: zizka on January 14, 2004 11:04 AM

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A side note on presentation only: You may want to consider collapsable windows for long posts, or put more health warnings concerning the effects of reading economic policy meeting minutes.

I mean, that read like a brainstorming session for a 6th grade class project.

Posted by: norbizness on January 14, 2004 11:08 AM

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Jesus. Jesus Christ.

How to comment? I don't even know where to begin.


Posted by: ryan b on January 14, 2004 11:16 AM

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Aside from the Suskind/O'Neill running commentary, is this a transcript of the meeting, or a collection of recollections?

Posted by: Sven on January 14, 2004 11:17 AM

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What's really revealing isn't Bush's intelligence, but rather the frank way the advisors discussed getting money back to the wealthy without paying a political price. Recall that when the administration rolled these out, they made the claim that the benefits would go to the middle class (the "average" person--remember?). This is yet further evidence that Bush and his team are con men.

Playing the smarts card is a losing gamble. Playing the liar card will be more convincing: in polling, that's already turned up as a problem for him.

Posted by: Jeff on January 14, 2004 11:25 AM

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Good points: Many people do dislike those they perceive to be smarter, and many do support Bush because of technical or everyday reasons.

I guess I'm trying to foresee, or at least point to the very real possiblity of, a disaster for almost -all- of us based on the long-term myopia that our systemically short term-looking political and governing system engenders. Many of us feel immune because "This is America, gdammit" Or "I'm sure there are nice smart people in Washington taking care of us, because, well, isn't that their job?" Or "Well, I don't know about this deficit thing, but I'm sure they'll figure out something. Hey it always works out in the end. This is America, right?"

It's as though someone needs to get up and shout "extremely bad things actually CAN happen!" When you have empowered leaders who don't care about the country's well-being, yes, they can destroy a nation. America's not immune from anything.

Our common "everything's gonna be all right" anesthesia is stunning. Heck, even look at Brad, a liberal economist who runs a major blog dedicated to his message: his first reaction to Paul O'Neill's courageous act was to dis' the guy! Even he didn't see how important this chink in the armor is (though, to his credit, he seems to have changed his tune in a major way now).

And at moments like this election cycle, when a democracy has a chance to wake up and change, it freakin' better do so. For as we've sadly learned over the last four years, we get one day in November to do it, or that's it. We're screwed for another 4 years. And we've got enough evidence now with Shrub to see that one incredibly bad administration can do in 4 years almost unthinkable damage to a standard of living, very possibly irreparable, except in the very long term.

Posted by: PaulO on January 14, 2004 11:34 AM

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"I make ends meet, have 2 kids, earn good money, cannot save a dime because I am already taxed 48%
(state, fed, local), so I do not own any stocks...."

I suggest an accounting. There is no way you should be paying 48% of your income in taxes. This makes no sense.

Posted by: lise on January 14, 2004 11:37 AM

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Yeah, the smarts card is among us. But out there with the voters, such arrogance will just make us lose again.

But if it's possible to subtly demonstrate that some level of competence should be a prerequisite to any job, even president of the United States (God, it almost sounds like a joke...not meant to be...), then maybe people will view this book and his revealed intellect as a material disqualification for the position.

Posted by: PaulO on January 14, 2004 11:38 AM

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Brad,

For readers who are not economists, I think it would be helpful to post a few paragraphs on why this was the worst economic policy meeting ever. Lots of folks, like me, will be coming here from Atrios and are general news/politics junkies, but not economics wonks. Or more briefly, I know that these people are clueless, but I want to know exactly how clueless they are.

I think it would be widely read,
Thanks,
Kevin

Posted by: KevinNYC on January 14, 2004 11:51 AM

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The "MBA President" doesn't understand depreciation? He must have been AWOL from Corporate Finance and Managerial Accounting, too.

If I ever run a meeting like that, I hope some one on my staff double piths me and drags my corpse out to the curb, because that's what I'd deserve.

Posted by: consigliere on January 14, 2004 11:53 AM

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Back up Lise's comments.

anyone paying 48% tax rate is being taken for a ride. No one need pay that much in taxes.

Posted by: spencer on January 14, 2004 11:57 AM

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Kevinnyc, to provide a potential answer for brad to your question (and i'm sure the prof could come up with a better one): it's the "worst" ever because at one and the same time, it was fraught with dishonesty and ignorance, it featured no actual policy discussions of any merit, and it resulted in a policy whose ill effects, the return of structural deficits, were obscured at the time but which will nonetheless be with us for a generation.

It's hard to imagine any one meeting on federal government fiscal policy hitting all these notes with such equal awfulness.

Posted by: howard on January 14, 2004 12:01 PM

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I agree with KevinNYC. These meeting notes, to me, show Bush as impatient, mildly paranoid, and snippy, but not necessarily stupid.

So he "doesn't even understand expensing periods for capital goods." So what? Neither do I. Hardly makes me a moron. (Dammit Jim) I'm a software developer, not an economist. Perhaps you can make the case that Bush should know that (as an MBA and all) but if so, make that case, and make it explicitly.

I don't think Bush is a dumbass. Honestly, in terms of "raw intelligence", he might even be slightly above average. What he does lack is:

a.) Any sort of useful real-world expertise
b.) The curiousity to acquire same, or
c.) The humility to seek out those who do
d.) The wisdom to know which advice from (c) to trust

Basically, he's a semi-smart, over-confident slacker who thinks he can mail in the job of running the country.

Now that read that, I wish he were merely dumb...

Posted by: santoast on January 14, 2004 12:08 PM

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AJ Coyler: JFK did take a real interest in the economics of fiscal policy - so much that he had Gardner Ackley explain the old Keynesian multiplier to him so he could explain it to Congressmen. But silly me - I post my observation as to WSJ oped on Suskind's book on that SEC thread.

Posted by: Harold McClure on January 14, 2004 12:08 PM

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I'm not an economist, either, KevinNYC, and I'd be happy with some background, just as you would, or an assurance that the book itself contains it, but I can still see why the meeting is awfully bad: it was called in order for the president to endorse a course of action, to judge. It's clear that it ended with his blessing one, but with the president confused as to what he had just approved.

I have the sense that Bush is suspicion us of his expert advisors, yet unwilling to display his relative ignorance to them. There was disagreement among his advisors. That should have been an alarm. He should have sought out the reasons for that conflict, and settled it knowledgeably--a painfully tedious excercise, I'd guess. Instead of demanding a close, jargon-free argument as an answer for those suspicions, he terminates the meeting. He declines to wade through the morass. I get the impression that he didn't want to be bothered with unpleasantness of it all.

Posted by: Brian C.B. on January 14, 2004 12:17 PM

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"Above average intelligence" -- yeah, I'd put Bush at 110-115 but intellectually lazy and arrogant.

My guess is that even the supposedly non-smart presidents like had better than 120-130 IQ's. That was in the day when many very smart people did not go to college. Truman wasn't well-educated, but I bet he was smart. Opposite of Bush, maybe, in the sense that Bush attended a good college).

I'd hate to be told that the starting center on my favorite team was taller than the average American guy. Sometimes you actually want someone who's WAY better than average.

Posted by: zizka on January 14, 2004 12:20 PM

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santoast: "What he does lack is:

a.) Any sort of useful real-world expertise
b.) The curiousity to acquire same, or
c.) The humility to seek out those who do
d.) The wisdom to know which advice from (c) to trust"

So if I understand you correctly, someone who allows himself to run the free world while lacking the above is not dumb???? I beg to differ!

Being dumb doesn't just mean not knowing specifics, it also has to do with basic judgment. If I put you in charge of US economic policy/consequences, don't you think you'd be "dumb" not to learn a little economics???

You may say he doesn't know he lacks these qualities, in which case I'd argue he's even dumber than I thought. Or maybe he does know and doesn't care, in which case he's also evil.

But I choose, from hearing him speak and reading his comments, to be "gracious" and believe he's dumb.

You may disagree, but I think if one doesn't understand simple stuff and have some remote semblance of good judgement, one is "dumb", but more importantly should not be president.

Posted by: PaulO on January 14, 2004 12:27 PM

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So am I to understand from all this that Bush at al did not and do not have a coherent agenda for bringing about (1) a landslide of a transfer and concentration of wealth towards the top income and wealth groups from the rest of the population and (2) kill any serious possibility of significantly expanding social programs and spending for the next decade or two?

All this posting here portrays the Bush team as a bunch of incompetent slops, barring a few exceptions like O'Neill, who were just going through "dialogs of the deaf" yelling and screaming half-learned ideological slogans and bar jokes? Is that basically it?


If the latter is true, then the world is at this time a more dangerous place than I thought.

It is also a state of affairs that offers little intellectual stimulus.

Posted by: bulent on January 14, 2004 12:28 PM

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To Lise and Spencer:

My post about being taxed at 48% caused some reaction, so some of you do not comprehend how middle America is taxed to death.
I made a mistake, it is like I got a $1,000.00 bonus for Christmas (I do feel fortunate).
My yield after taxes (state, fed, local) was:

$595.00

That's $405 that govt too a big bite. You do the math, so it is like barely under 41%, so OK- then you are saying my family of 2 parents and 2 small children under age 6 can be taxed at 41% total taxation package. Forty-eight percent is unacceptable to my fellow readers, but 41 is OK???

That is roughly almost half I earn. As for estate tax I never will pay because I may never be worth 3.5 million. But what if I go to work for Enron/ or Halliburton and join the Old Boy network. You know Martha Stewart is not part of "old-boy network" because she is being crucified now, while Mr. Lay gets laid in the back room (for free).
So, then: as long as I am not taxed 48%, cool, we can all live on 41% of what we make, can't we. Hey, maybe we can adjust our life to live ob only 33% of what we make, that's OK too!

TO Terry:

We (America) did not elect George Bush. George Bush lost the election and filed law suit after law suit to keep hand-held votes from being re-tabulated because he was afraid the re-count would not work out in his favor...So he was actually appointed by a Republican weighted appointed Supreme Court panel. REMEMBER, Do you have amensia, I know, Terry, you just forgot that juicy tid-bit, so this post is not meant to attack you for forgetting. You did forget, right?

Because the Republicans are counting on you forgetting that the country was taken in an electronic coup.

Do you know that Diebold company is supplying computer voting machines for election 2004 that leave no paper trail and can be hacked into by anyone ...

so enjoy 4 more years, buddy, of this bs.

ciao,
Dave S

Posted by: Dave S. on January 14, 2004 12:29 PM

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We must not mistake long-term disinterest for stupidity. Bush, while hardly old, is into that part of his life in which new learning may come hard. Certainly, his career has allowed him to enjoy power and the impression of success without having many intellectual task-masters insisting that he learn things in which he had no interest. I imagine national security meetings, and certainly political strategy meetings, would show a much higher level of engagement from Bush.

I have in mind the example of Dan Quayle. He was notoriously dumb -- couldnít spell, wished heíd studied Latin, couldnít find the 19th hole if it was there (a rather backhanded expression of confidence in his fidelity from his wife). But when he was in a conservative crowd, talking about the threats to the US from unwed mothers and secular humanism and liberalism, he was a wonder. He could keep a million so-called facts straight, light up the room and convince people that he was the smartest guy there. I doubt that Bush has ever been mistaken for the smartest guy in the room, but I suspect he can absorb a good bit of information, as long as it confirms what he already thinks. Economics is just not all that engaging for him.

That said, Bush probably doesnít have the brains to do the job. Thatís because the job has an enormous breadth of responsibility. Interest in a limited part of one's job is not good in a president.

Howardís point is a good one, I think. Those who are not convinced that Bush is dumb probably share many of his interests and beliefs, so he seems smart enough to them. They donít notice that he canít stick two economic, or environmental, or educational concepts together and draw a reasonable conclusion. Itís not that these folks donít want the best from their economy, environment or schools. They just donít think a grasp of the details is a big deal.

The thing about this book that gives me hope is that OíNeill (through Suskin) is earnest enough in his presentation that he may be able to impress some of those people who arenít impressed with intellect. Or is that wishful thinking?

Posted by: K Harris on January 14, 2004 12:33 PM

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Regarding Bush as dumbness/semi-smart slacker issue and how to present it: On another thread I suggested that a real threat to Bush is the collection of his own reported quotes from the book. Some of those quotes look pretty bad, and if accurate, he will probably have to explain them himself. Or if they are inaccurate, he himself will have to discuss what he actually did say.

So, one quote shows him concerned that the first tax cut went to the rich and wondering why shouldn't the middle have more tax relief. Seems to me some one will eventually ask Bush himself to explain how he resolved that issue. His explanation better look a lot better than O'Neill's version of the meeting.

Same with social security. Want to change soc sec from a pay-as-you-go to a funded system? Want to partially privatize? Fine with me, if it's done responsibly and honestly. But the attitude reported in O'Neill is "my campaign promises must have been right" and everything has to fit into that no matter what data turns up or how conditions change. Is that an accurate representation? He might have to explain that.

So I think a compilation of interesting Bush quotes (with some context) would be useful. No one can really settle the issues raised by those except Mr. Bush himself.

See the post on the formation of Israel/Palestine policy, where the President seems to say that force (violence?) will clarify things. That will be hard to explain. A recent poll shows that a large majority of Jewish-Americans will oppose Bush. Even if Bush's policies were designed to appeal to them, and most of that community are sympathetic with a hawkish Isrealy stance, apparently they can distinguish between a pose and a real policy. I wonder what explanation will satisfy the Muslim/Palistinian population that the Republicans have courted in the past.

I'd personally like to hear the President's own explanations, because I am curious.

Posted by: jml on January 14, 2004 12:33 PM

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Bulent -- insofar as I see any coherence to Bush's policies, it is to bankrupt the government, force a major restructuring on unfavorable terms (busting social security and medicare), and reduce most Americans back to an impoverished plebian state. Lind in "Made in Texas" claims that Bush picked up a plantation-owner mentality growing up in East Texas (which is Southern more than Western).

I next point out that Patriot Acts I and II give the government unprecedented powers to use against domestic enemies.

But I try to measure out my paranoia in small doses. And the way I read things, there were two very, very smart people in that room -- Rove and Cheney.

Posted by: zizka on January 14, 2004 12:38 PM

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I was a classmate of George's in prep school. We were not friends, but I knew him fairly well.

I think Santoast has it about right. He's not stupid; neither is he curious.

He was a cheerleader at Andover, and the pattern continues. But America likes cheerleaders. The election is a popularity contest and George still has remarkable approval ratings.

Reagan wasn't the sharpest knife in the drawer, and he won a second term with enough good will left over that GHWBush could become President. It's not easy to unseat an incumbent, especially one with a highly evolved Wurlitzer. While I agree that the Suskind book reveals a chink in the armor, it's hard to see a foolproof strategy to exploit it.

Posted by: Matthew McClure on January 14, 2004 12:39 PM

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A few things to hit here.

Bush's intelligence: Recall that he was a C student through college, and his mother had to work flash cards with him well into middle school. Yeah, he received an MBA, but his resume demonstrates that he learned little from it. One might think that, having been involved in the oil exploration and drilling business, he might have something of a clue on expensing and depreciation schedules (the real life-blood of such equipment-heavy businesses). Alas, he does not.

Talking about Bush's Intelligence: America has developed an extremely virulent anti-intellectual culture over the last 50 years. It pervades all aspects of our lives, and makes truly intelligent people objects of scorn and suspicion. People smart enough to function, but not to excell, are considered "normal" and trustworthy. And those who advance because of favors and family ties are worshipped with as much fervor as lottery winners are.
Thus, pointing out the obvious fact the Bush does not have the brains to govern the country is a definite losing strategy. Joe Average would much rather be governed by morons to his own detriment than to think that the President of the United States is somehow better than he is.

And one final point: Bush's presidency heralds the absolute end of meritocracy in this country. He entire life has been a string of unearned honors, privileges, and financial rewards. And the public at large loves him for that. He became wealthy not by dint of brains or the work of his hands, but by the favor of his birth and the deep pockets of his friends. That is nothing short of the American Dream.

Posted by: Derelict on January 14, 2004 12:39 PM

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" Bush looked at him quizzically. 'What is your point about Social Security private accounts?'

" 'There will be a transition cost, Mr. President,' O'Neill explained, surprised. 'Perhaps a trillion dollars over many years.' "

O'Neill exposes his ignorance in the above. The cost of paying future SS benefits is independent of a decision to privatize. It's a sunk cost, not a "transition cost".

No wonder Bush cuts him out of the loop.

Posted by: Patrick R. Sullivan on January 14, 2004 12:49 PM

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All this talk about Bush being unintelligent obscures the reality that JFK, that supposed paragon of intellect, had a recorded IQ of 117, while "Dumbya"'s 1206 SAT score translates to about 125, considerably higher than the 110-115 so generously granted him earlier in this discussion. Call him "dumb" if you want to, but I suspect that he's actually more intelligent than a fair percentage of those on here rushing to label him a moron.

Even if we grant that the passage quoted here is a verbatim record of what actually transpired at this meeting, I still don't see how one can conclude that Bush is in any way a dummy or "incurious"; if he was, why would he ask O'Neill his point was on Social Security accounts? Even the notion that Bush doesn't know what depreciation of capex is about rings hollow; from the passage, it is crystal clear that Rove is talking about a congressional initiative about which Bush is uninformed. Do you really expect him to keep track of *every* new scheme that comes into some congressman's head? What reaction would *you* have if someone started discussing the technicalities of legislation of which you'd previously been unaware?

The natural tendency on here is to accept everything O'Neill says as the gospel truth, at least to the extent that it makes Bush look bad, but I think you ought to ask yourselves if you aren't just buying into this because of the psychic satisfaction it offers. Why is it that Krugman is able to pirouette from being an O'Neill hater into an aficionado with such ease, if not that O'Neill's book gives Krugman an opportunity to engage in the precisely the sort of Bush-bashing he goes in for anyway? If the book had been full of glowing tributes to Bush's leadership and intellect, would any of you have bothered to read it? Would Paul Krugman have seen any virtues in it? Of course not.

Posted by: Abiola Lapite on January 14, 2004 12:52 PM

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Matthew, just to make the general point: Reagan wasn't an intellectual, but until the Alzheimer's hit (date uncertain, but somewhere during his administration), he had sufficient smarts and life experience to take part in policy discussions. If you look at the book that - was it martin anderson? - came out several years ago about reagan's '70s radio addresses, it's clear that he had much more of a clue than bush.

not that it obviates your other points.

Dave S, this isn't a financial planning site, but for what it's worth: while it's not impossible that your combined tax rate is 40%, it's highly unlikely. When you tell us what happened with your bonus check, that doesn't tell us what happened with the rest of your income. That ridiculous Mallard Fillmore strip ran something along these lines ("average household pays 50% of its income in taxes"), and i spent some time (as did others) at the time in looking at state and local tax rates, federal rates, etc., etc., and there really is no way that a moderate income household with 2 kids should be paying 41% marginal rates from dollar one unless there is some very special set of circumstances.

it is easy to confuse the marginal rate on your last dollar of earnings with the marginal rate on your first dollar of earnings, which may be what's happening with you.

For what it's worth, i favor progressive taxation; most state and local taxes are deeply regressive, so the first monkey i'd like to get off your back are regressive state and local taxes.

For what it's furthe worth, my household income (wife and I, no kids) is somewhere up in the upper 4-5% range of households incomes, and our effective tax rate, in aggregate, is somewhere in the upper 20s to low 30s (if we just rented rather than owning a home, it would be higher, but you claim not to be that high in income).

Posted by: howard on January 14, 2004 12:52 PM

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Tax rate itself is not really important for wage earner -- it can be 70 or 80 percent or it can be 10 or 20 percent or, for that matter, zero percent.

The important thing is the take home pay. Is it enough or is it not? That's the question.

And then the other important thing is what the gov does with tax revenues.


Also there is always the question whether it is better to pay taxes now or let the kids pay national debt when they grow up.

Having said all that, I must admit I am somewhat surprised by how high the total tax rate is for middle class Americans -- I thought it was lower.

And finally this may come as surprise to you but I used to think during campaign 2000 that Bush tax cuts proposition was a good idea because there was budget surplus.

But this!?

Posted by: bulent on January 14, 2004 12:56 PM

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abiola, there you go again, doing cartwheels to enable george bush.

What is revealed in this meeting is that george bush is a good politician and an ill-informed, shallow individual. If you can't grasp that from all the references to how specific phrases are Bush favorites (like "game changer"), to his abhorrence of complex discussion, to the ways in which political beliefs trump empirical information, to the ways he wanders around the topic and listens best to the people who play off his known favorite topics - well, not much is going to change your mind, i guess.

Posted by: howard on January 14, 2004 12:57 PM

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I've read a few of the excerpted bits in various stories but just now went through the stuff Brad's put up. And I must say, its changed my mind about Bush, to the extent that it's humanized him.

He does seem to care. Granted its the care of someone who has little more than an abstract sense of humanity; anyone who can fly over the camps in Gaza and then consign the Palestinians to Sharon's hands because sometimes a show of force helps sort things out, or "stick to principle" when he knows full well its the rich who get the bulk of the benefit from his tax cut, is quite comfortable with the idea of society as an abstract machine that can be tweaked or kicked here and there. So he's got the compassion part down. He feels the pain. But he seems to think that all pain has some kind of cleansing, improving effect. My old version of Bush had him as ignorant of any of the effects of his policies, and I was convinced that if he knew anything about the world at all it was because his advisors told him something had happened.

But his intellect is clearly cloudy. He understands a lot, and much more than I thought he would. But his judgments are based on a hierarchy of interest, with Rove clearly at the top, with degrees of sycophancy and convenience dictating how much attention he needs to pay to an opinion. He's just a figurehead, a cheerleader right down to his genes. His compassion - abstract enough to play with the wealthy, genuine enough to play with everyone else - is the vehicle Rove uses to garner support, but he eventually does what he's told. And no more than that - he doesn't have the capability to initiate something, just to follow up on it.

All in all, O'Neill has done the country a service. There's more than enough to bust through various stereotypes about smart America/dumb America. Bush succeeded because his folksiness was packaged. This is a chink in the slick armor.

Posted by: yowsa on January 14, 2004 01:02 PM

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To all in disbelief of what I pay in taxes...

I live in Philadelphia. This dirty, incompetent city has the highest wage tax of people whom work in city ( I think is highest, or 1 of the highest in my country tis tax of me).

The city wage tax is: 4.4625%.

sales tax is 7%, if I buy a hoagie.

so this year my year-end bonus was $1000.00 (I cleared $595.00 after taxes)

last year (2002), a better year, I received a whopping bonus, not exactly wall street, but I was not complaining until I saw:

Gross: $1,575.00

Withholding: $350.00
FICA $97.65
medicare $22.84
City wage tax$61.11
Pa State $44.10

net: $999.30 Ohhhh happy rainbow


My township (suburbs)also has a earned income tax ("wage tax"), so I pay double on wage tax. I fought that, and fight that each year, and have to prove to my township that I pay already a city wage tax (that is called double taxation, or being tried 2 x for the same crime of earning money...

The city also has the highest sales tax at 7% (check what that is elsewhere).

so, yes, I should have an accounting
I hope the voters take the DC boys up for an "accounting", huh?

thanks,

Dave S/ Filthadelphia
I pay school taxes, sewage taxes, Iraq taxes

Posted by: Dave S. on January 14, 2004 01:02 PM

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Re convincing the electorate - or re anyone changing their mind for that matter - Timothy Burke at http://www.swarthmore.edu/SocSci/tburke1/perma11304.html -
"The reasonable thing to do is be predictive. What information would change your mind, whatever your feelings are? What developments would alter your assessment? Say it now and say it explicitly. "

And make it a point to ask others to do (i.e. think, then say) likewise.

Although as written I think it's a bit too strong - we are not computers, the changing of mind is a process more than an event - so the question is more, "what would make you seriously consider changing your mind"...

Posted by: Anna on January 14, 2004 01:02 PM

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Matthew (who shares my last name) - my strategy to beating Bush is put forth a package for free trade and long-term growth that combines fiscal restraint with old fashion integrity. Alas, the politicos in the Democrat Party seem to think my ideas are a recipe for defeat in 2004. Maybe they know more about politics than I do, which is why many of the Democrats are sounding like clones of Karl Rove. Sad.

Posted by: Harold McClure on January 14, 2004 01:04 PM

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DaveS., Human Resources always witholds an unusually high proportion from bonuses. I don't know what triggers it, but this is a common phenomenon.

Compare the rate of taxes witheld on your bonus to a) the witholding on your regular paycheck, and more relevantly, to b) the rate of tax you actually pay in April when you do your taxes. You'd be surprised.

Posted by: Brittain33 on January 14, 2004 01:20 PM

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Patrick, I missed your comment on social security the first time. I have no idea what you mean.

When Bush pushes privatization or partial privatization of social security, he is talking about letting people use the payroll taxes they pay into the social security system (yes, i understand the money is fungible, so let's not go down that path) for their own investment.

As a result, there is a new, unfunded hole in social security.

everyone who studies the matter knows about this, and everyone who studies the matter calls this a "transition cost" of a move to privatization.

O'Neill demonstrates his awareness of the issues; the ignorant one in this discussion is bush, who is so caught up with the idea of privatizing social security that he doesn't realize what it means in practice.

Dave S: a.) yes, you're being dinged by state and local taxes; b.) i'm still not clear about your total tax picture - it's looking a little south of 40%; c.) the fact that you still are having payroll taxes deducted but not at the full 8.3% suggests that your are somewhere in the $65 - $80K pay range, which, i'm sorry to say, believe it or not, isn't moderate income - it's roughly the upper third; and d.) good luck electing a better class of politicians in your locality and state....

Harold, i agree with you.

Posted by: howard on January 14, 2004 01:29 PM

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Zizka:

Intentional or not, American citizenry is indeed being impoverished by this Administration's policies.

This should be perhaps the central point of Democrat opposition to Bush administration.

-------
If they use Patriot Acts for anti-terrorist purposes only, then whatever is wrong with it can be corrected, I mean one would not need to lose sleep over it. But if they use Patriot Acts as a means of state terrorism, I mean in ways like McChartyism (spell?), then there is a serious problem. I mean if tomorrow a judge asks a worker on strike or a citizen on protest row a question like "are you with us or are you with the terrorists?", then there is a real problem.

Posted by: bulent on January 14, 2004 01:40 PM

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Bush wasn't just running businesses into the ground. At Harken, the company that he performed his insider trading at, he was on both the Board of Directors as well as the audit committee for the company. Of course, he was probably out partying with his Saudi friends, but if his cover was legit, then he should certainly know more than he does (or lets on--whatever).

www.tomfairlie.com

Posted by: Tom Fairlie on January 14, 2004 01:42 PM

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To back up howard's reply to P. Sullivan:

The issue of the cost of moving from a pay-as-you-go to a funded, or advance finance, system is tied up with privatization. And I think nearly all economists agree that the cost is big, not small. And this was exactly the part of Bush's proposal that was most critcized during the campaign. You can call it the "transition" or "hidden" cost problem, or whatever, its a big deal. Some one in the room should have known about it other than O'Neill.

The issue is discussed in the sources below, and I think there is agreement among all the contributers that it is a big problem that needs careful attention for any reform scheme that privatizes or in any other way moves away from pay-as-you-go to work.

Issues in Privatizing Social Security: Report of an Expert Panel of the National Academy of Social Insurance, Peter A. Diamond

Should the United States Privatize Social Security?, Henry J. Aaron, John B. Shoven, Benjamin M. Friedman

MIT Press

Posted by: jml on January 14, 2004 01:43 PM

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There's a lot in this thread. I think that the portrait O'Neill paints is a credible one--Bush is not shown to be stupid. No one of any standing has ever said he was. Mark Crispin Miller notes that Bush can be articulate when speaking on matters of security, or authority--his verbal gaffs tend to pop up when he holds forth on popular social causes associated with government--Medicare, Medicaid, Head Start, Social Security, etc. They're not something he understands or of which he approves, and he only addresses them at all in order to do a bit of political pandering.

I agree with the poster who proposes that a meeting on military (or political) strategies might show him engaged and enjoying his role.

The trouble is, here, that administering fiscal policy is sort of a big part of the job for which he campaigned. I have no real head for economic matters, either, so I would have had to make myself learn how to treat with economists and Treasury officers, if I were in Bush's place. If he hasn't done so, he may still be an intelligent, affable, compassionate (to an extent) person. He's just incompetent through laziness.

I don't feel that much better about him.

Posted by: Brian C.B. on January 14, 2004 01:54 PM

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The thing about this book that gives me hope is that OíNeill (through Suskin) is earnest enough in his presentation that he may be able to impress some of those people who arenít impressed with intellect. Or is that wishful thinking?

Posted by K Harris at January 14, 2004 12:33 PM

K Harris, I don't think many of W's supporters will read it for some of the very reasons Abiola mentions.

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But I try to measure out my paranoia in small doses. And the way I read things, there were two very, very smart people in that room -- Rove and Cheney.

Posted by zizka at January 14, 2004 12:38 PM

zizka, I see nothing from what is relayed to conclude that any of them are any smarter than the others in the room though I do believe Rove and Cheney seem less scared. The presentation does paint a trio of elitests including Rove, Cheney, and Lindsey. It is hard to tell from this recounting whether Cheney or Rove were simply pleasing their political base or if they truly understand their actions as elitism. Lindsey knows.

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Joe Average would much rather be governed by morons to his own detriment than to think that the President of the United States is somehow better than he is.

Posted by Derelict at January 14, 2004 12:39 PM

The relative worth of an individual has nothing to do with their intelligence and a capable President need not be intelligent.

Posted by: Stan on January 14, 2004 02:13 PM

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Dear Dave, since you gave the detailed figures for your bonus last year, we can simply divide the total deductions by the total amount to get 36.5% takeout. Of course any tax refund you get reduces that amount, which as others have said, appears high for someone in your bracket. As to the sales tax, well you don't pay 7% on everything (for example mortgage), shopping in Deleware, internet sales, etc.

You probably do need a long sitdown with an accountant.

Posted by: Eli Rabett on January 14, 2004 02:14 PM

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Interesting comments in this thread, but I was most struck by bulent's skepticism at the possibility of incompetence as opposed to conspiracy. (This brings to mind a recent conversation over on "Crooked Timber".)

The incoherence and happenstance presented in this account of that meeting rings more true-to-life to my ears than would bulent's slick, knowing, conspiracy-style alternative.

We're always astonished to find incompetency, stupidity, sloth, pettiness, and ignorance operating at the highest levels of power; and yet in every case in which we have detailed information about the workings of the inner sanctum we find them even among the best of people at the best of times. And these are neither the best of people nor the best of times.

Democracy in its particulars probably fails us at least as often as it succeedsóit is certainly not a meritocracy. Institutional inertia often protects us from ourselves, but not always. We've suffered the misfortune of an incompetent Presidency at a time when its influence was unusual strong; we've failed to correctly evaluate it thus because its incompetence results from incoherence, and its incoherence is often a veil.

There are other people, presumably of good faith, in this administration who should be asking themselves why they have not done what Paul O'Neil has done.

Posted by: Keith M Ellis on January 14, 2004 02:37 PM

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This is an astonishing meeting. Most meetings start with a bit of levity, which I always think of as mind-clearing, and good for re-establishing the relationships of the people meeting. Why does the President snap at Lindsey for his lame attempt at humor? And why does his equally lame joke get a big laugh?

The joke suggests that there is not likely to be much agreement among the parties on the subjects to be discussed. And if there is only one recommended course of action, what is the point of the meeting? But that does not appear to be the case.

The suggested policy, ending double taxation of dividends, draws little discussion. The President notes that it benefits the rich, leading to this:

Hubbard: "Mr President, remember the high earners are where the entrepreneurs are."...

That, of course, is just wrong. The entrepreneurs are the people trying to get rich, not the rich. The first goal of most rich people is just to stay rich, or to get richer in some way that does not involve significant risk of making them poor. It is the person of modest means who takes the risks that justify the praise implied by the word entrepreneur.

In sum, it is hard to see how this process could produce a decent result. It is just too depressing.


Posted by: masaccio on January 14, 2004 02:39 PM

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In my original post I used "doesn't seem smart" rather loosely and colloquially, since it can mean either/both "not very intelligent" or "not very knowledgable or perceptive". For example, you could say "Einstein was dumb about politics".

The meat of what I was saying, which seems implied by things O'Neill has said (and a conclusion which I'm pretty sure Brad shares) is that Bush was not really in command, in part because there were some major issues he just plain didn't understand, regardless of his IQ test or SAT. (And still isn't and doesn't).

Rove and Cheney strike me as the ones who knew what's going on and how to make things happen. Most of the others in the room were smart in some professional sense. Bush was not.

"The relative worth of an individual has nothing to do with their intelligence and a capable President need not be intelligent." The mystique of dumbness is far too strong in this country.

It may be that the president has become in some way a purely symbolic front man -- that's what people are saying when they say Rove and Cheney (and Rumsfeld) are the brains of this operation. I guess I would translate to say that you can have a good presidency with a dumb president. To me that wouldn't make the guy a good president though, so much as to say that the president himself isn't very important any more. (Sort of like the Japanese Emperor when the Shogun actually ran the show).

The fact that most people don't share my opinion of W doesn't mean I'm wrong. It does mean that this is not a good issue for the Dems to run on.

Posted by: zizka on January 14, 2004 02:51 PM

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Calculating withholding involves annualizing your paycheck, and deducting from it the amount you would pay in taxes if your paycheck is the same every year. In other words, they deduct your average tax rate. For a bonus, they assume that you've been earning, and that the bonus is the "last" $1500 or whatever, and so they have to deduct based on your marginal tax rate. If you are in the 35% tax bracket, your entire bonus will be taxed at 35%, while your income is taxed partly at zero, partly at 10, 15, 28, etc. So they will deduct more from the bonus. The SS and Medicare taxes come out at fixed percentages from both, so looking at a bonus check you could easily be taxed 50% if you have a state income tax, local income tax, etc. Over your entire income, it will be far less.

Posted by: rvman on January 14, 2004 03:04 PM

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Bush may be smart, but not wise. He clearly isn't economics-savvy. I'm not sure I trust this account of the meeting - it makes some known smart people like Larry Lindsey and Glenn Hubbard look like sloganeering idiots. It also makes O'Neil look good - convenient, that, since it is his account which is being used. This sounds like the sort of thing which is the agglomoration of several meetings - it represents what life in the Bush White House "was like" rather than the actual events of one meeting.

On the other hand, we know from his POLICIES (steel tariff, dividend cut as "stimulus") that Bush couldn't find an economic theorem with both hands. (Its a good thing Bush wasn't the businessman in "The Choice". Ricardo would have never gotten his wings.) Not much new here on that score.

Posted by: rvman on January 14, 2004 03:11 PM

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"My post about being taxed at 48% caused some reaction, so some of you do not comprehend how middle America is taxed to death.
I made a mistake, it is like I got a $1,000.00 bonus for Christmas (I do feel fortunate).
My yield after taxes (state, fed, local) was:

$595.00

That's $405 that govt too a big bite. You do the math, so it is like barely under 41%,"

You earlier claimed you were taxed at 48%. Now we find that your _marginal_ tax rate is 41%. This means that your total tax is much _less_ than 41%. You really should get an accountant if you know this little about the US tax system.

The way the system works is that the first X dollars you make are basically not taxed at all, then the next Y dollars are taxed at a fairly low rate, then the next Z dollars you make are taxed at a higher rate, and so on. So if taxes you pay on a bonus are 41%, it means that the overall portion of your salary paid in taxes is much lower because much of your salary is taxed at a lower rate, and some is not taxed at all due to the basic deduction.

Posted by: Ian Montgomerie on January 14, 2004 04:05 PM

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rvman, thank you for the explanation. This has puzzled me for years.

Posted by: Brittain33 on January 14, 2004 04:50 PM

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Concerning the final tax cut that cost O'Neill his job, Cheney is said to have stated they deserved it since they had won the election of '02. But I do think polling showed this tax cut was not favored by Americans, and that the election was won by demagoging Homeland Security; what kind of economic policy-making is it when cuts with such far-reaching consequences are made as "rewards" for elections or wars?

Posted by: Bob H on January 14, 2004 05:40 PM

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Pegging intelligence to a figure has always struck me as a pretty poor way to think about intelligence. I think Howard Gardner is right, that intelligence is not a unified "thing." So it is less Bush's intelligence that comes into question, for me, than other character traits. The chief of those is gullibility. It seems that Bush strongly wants what he believes to be real to be real -- and resists testing it in any way. This, of course, is what conmen have played on over the ages. If you put this transcript into better prose, you could have a scene right out of Alchemist, by Ben Jonson -- basically, this conference was on the same level as the idea that you could change base metals into gold.

It's so funny it makes me laugh, but it hurts so much when I laugh...

Posted by: roger on January 14, 2004 05:42 PM

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Take note: Brad says "let's go to the videotape" and, from there, of course, comments follow without an eyelid batted, as if this is really the conversation that took place. As if this really was a *videotape* instead of someone's recollection as reported by someone else who is not necessarily sympathetic.

How about employing our critical reading skills, folks.

Can we assess how much of the reported conversation is accurate, how much a hatchet job, how much foggy memory, etc.? Before we leap into assuming its word-for-word true and framed correctly?

I love the knee-jerk willingness to take anything at face value if it reaffirms their prejudices...

Posted by: lee kane on January 14, 2004 05:44 PM

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Recall that this is a man (Bush) with a Harvard MBA, one who ran his own business for a long time.
The intellectual skills seem remarkably undeveloped.

Posted by: Bob H on January 14, 2004 05:48 PM

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Dave S.: I do sympathize with you, but please do the following exercise if you like: go to your tax and wage records for a given year (presumably 2002), and tally up the numbers for: total income (TI), total taxes paid (paycheck deductions, tax check, interest taxes) (TT), total tax refunds (TR). Then calculate (TT-TR)/TI. This is your effective income tax rate, the portion of your income you have to pay in income taxes. Your marginal tax rate is (approximately) what comes out of your bonus check. Approximately because the paycheck deduction formulas only approximate your actual taxes, withholding amounts that you declare may be involved, and you may have other tax-deductable expenses like medical costs that lower your taxes when prepare the returns.

And don't forget that the sales tax applies only to the portion of after-tax income (TI-TT+TR) that goes to taxable purchases, i.e. no food (?). If your county has different tax rates for different goods categories, your have to modify the calculation accordingly. And, please, no offense, it has happened to others, don't accidentally figure any 401(k) or such amounts as tax withholdings.

You will most likely find that your effective tax rate is substantially lower than the marginal one.

Posted by: cm on January 14, 2004 05:58 PM

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Hey Brad --

It might also be the worst recollection of an economic policy meeting ever. Of course, that might force you to consider that Bush isn't dumb, he doesn't need to be impeached, and Suskind has written a hatchet job.

Nah -- life's just not as fun that way, huh?

Posted by: Mike on January 14, 2004 07:47 PM

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Regarding Dave's tax rates, and whether the "middle class" is being "taxed to death" -- you are describing a person who pays the absolute top tax rates, AND claiming that Social Security is an income tax. But if you are getting taxed at those rates you shouldn't even be paying Social Security anymore!

You don't pay the top tax rates if you are in the "middle class." If you are in any kind of range where you can be "taxed to death" you make a LOT of money, don't pay Social Security anymore, and, as I said, you make a LOT of money, which means you have a LOT of money left over after the taxes. Rates like that don't kick in until you have already pocked a LOT of money.

For those here who don't think that higher tax rates kick in at high incomes because you don't think your income is that high, like Dave, please think about how the REST OF US have to live on much lower incomes! Look at the charts of where you sit in the income distribution. If you are reading this you are likely WAY above the median. That new car or that $500,000 house, or that nice TV or that trip to Europe are LUXURIES not necessities. Many of the rest of us don't even have health insurance so stop whining. You actually have it really good, but you have been trained to always want more. Jeeze.

Posted by: Dave Johnson on January 14, 2004 08:25 PM

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I've been asked to be more substantive. Here is Gregg Easterbrook's critical (as in applying critical thinking skills) post on the O'Neill Book. I am not sure if I entirely agree with the analysis but it is a critical analysis, which gives it value.

http://www.tnr.com/easterbrook.mhtml?pid=1185

I would also like to retract my "I love the knee-jerk..." comment. This was insulting in tone.

Instead, I would suggest pausing to wonder about the accuracy of the perceptions produced in the book before moving to draw conclusions, which may in the end be correct conclusions, about Bush.

Posted by: Lee Kane on January 14, 2004 09:05 PM

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Guys, Dave is likely a member of the Grover Norquist patrol, tasked to wander the b(l)ogs of the land endlessly moaning about exaggerated taxes. Quite Victorian that. A sure sign of such beasts is their purported confusion of marginal and actual tax rates. Another is emission of anger when told to find an accountant or a clue. It is bluff.

The meme is disinformation and it has worked, by constant repetition. The taxaphobics, free riders and mathematically deficient are amongst us. Providing them quiet understanding is our road to dystopia.

Trust in an anonymous media is foolish.

Posted by: Eli Rabett on January 14, 2004 09:07 PM

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>>Here is Gregg Easterbrook's critical (as in applying critical thinking skills) post on the O'Neill Book. I am not sure if I entirely agree with the analysis but it is a critical analysis, which gives it value. http://www.tnr.com/easterbrook.mhtml?pid=1185<<

The strange thing about Easterbrook is that he says that there are only two departments--State and Defense--whose Secretaries are allowed to do more than "hold their peace, toe the line, and keep the constituents happy." In fact, there are three such departments that are centers of enormous power: State, Defense, and Treasury. Consider Larry Summers, or Bob Rubin, or Lloyd Bentsen, or James Baker, or George Shultz. Every single government initiative that involves the tax code or the trust funds--and almost every domestic government initiative does--requires the active cooperation of the Treasury Department...

Posted by: Brad DeLong on January 14, 2004 09:20 PM

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One other happy thought to accompany all to bed: This chapter is going to feature in business and management school case books on anti-meetings till the end of the next century.

Posted by: Eli Rabett on January 14, 2004 10:01 PM

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I agree with Zizka and a few others, though I think other terminology is in order. There is a strong anti-intellectual streak in the electorate, but part of the blame for that rests on the intellectuals. Talking in terminology foreign to many creates a breakdown in communications. If something can't be easily defined so a high school grad can understand it, then it ought to come with illustrative anecdotes that they at least can relate to.

Reagan was a master of that, even when his anecdotes were false and misleading. His social IQ was very high, rooted in the Dale Carnegie school of selling, though in standard IQ, he likely ranked much lower.

And it's long been obvious that economics is a very difficult topic to explain; they don't call it 'the dismal science' for nothing.

Thus, running on economic arguments or on claims of Bush's dullwittedness is not likely to persuade many at all. For most, the only economic argument well understood can be found as the answer to these four questions:

1) How secure's my job?
2) Is my takehome pay increasing?
3) Is inflation increasing faster, while I fall behind?
4) How big's my tax refund?

Beyond that, it's long proven that large numbers are not easily grasped, so arguments about the budget deficits are often irrelevant to voters. Here, comparatives can help. For example, at the peak of the cold war, how much money was being spent protecting us from how many Soviet troops and nukes? Compare that to perhaps 2,000 terrorists today with no known nukes. How much are we spending for that?

Weighing those numbers against each other provides a context that aids the comprehension.

Beyond those points, it does seem clear that Rove and Cheney speak in manipulative terms, while many others in the group behave like sycophants. But the terms they're discussing are sufficiently beyond the comprehension of the majority, so the points about intelligence or lack thereof, simply do not register.

Does the evidence suggest Bush is a moron? Perhaps. Unless he has spots of brilliance in certain topics, marking him as an idiot savant.

Sadly, folks are more likely to pass such judgments via visual cues. So does Bush look confused or like a smug Eddie Haskell? Does the angry Dean look smarter than when he has that goofy smile?

That's why graphics and soundbites often have more impact than a well-crafted argument full of numbers and percentages. And it's why human psychology is an equally dismal science to consider.

Posted by: Kevin Hayden on January 14, 2004 10:11 PM

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In 1999 I was, by a large amount, in the highest marginal tax bracket. This was 100% W-2 income. I filed only a 1040A. I probably paid about as much, proportionally, as anyone ever pays in federal income tax. And I can assure you that it was less than 40%.

Furthermore, the following year I incurred a similar tax liability except that, this time, I left the *taxable income* sitting in the form of exercized stock options of my company which then *fell in value more than 70%*.

If I have to hear some panty-waist middle-class conservative whine about how high their tax burden is ever again, I think I might have to shoot someone.

Were the US a civilized country, I'dve at least gotten health care out of the deal. Or, you know, at least maybe a free flu shot.

Posted by: Keith M Ellis on January 14, 2004 10:18 PM

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What I get from the passage is that Mr. Bush has economic meetings with people who know something about economics, but other people in the room who are just as clueless as Bush. Bush does not give the economic minds free reign at the meeting. Instead he allows them to be intimidated by the ideologues and agenda pushers. He accepts technical advice from ideologue advisors instead of presenting plans to the experts for their input. He allows ideologues and non-experts to dominate the conversation even though they know as little as he does.

It reminds me of a CEO planning a product who ignores the engineer's advice on the details of how the product has to work and instead promotes marketing ideas about how they would like it to work. "If we give her enough incentives, we can have a new baby in just 4 months instead of 9," declared marketing. "But, but but..." screamed the engineer.

The goal of the discussion is not clear. Some are focused on tax cuts, some are focused on the deficit, some are focused on jobs and the economy. Nowhere in this meeting does the group work together to create a unified paradigm of the policy options and their effects.

Mr. Bush does not state the goals he wishes to achieve with the policy and left unstated does not prioritize them. Is the primary goal of the policy to stimulate the economy? cut taxes? create jobs? A good meeting would lay our different policies and how they would affect the deficit, jobs, etc. Mr. Bush could then choose the policy that best met his goals. I find that the meeting was a failure because of a lack of clear broad goals and direction from the top. It seems that everyone has their own pet policy that they champion at the expense of group consensus.

Stockman would have given accurate numbers and stuck by them, at least in private meetings. I doubt that Clinton would have tolerated an OMB that did not give him correct numbers. Daniels is little more than a sychophant. Get ahead by go along. That is the worst qualtity for an OMB director. OMB has to be the enforcer, the parent or loan officer that says NO. A yes man cannot do the job. It is the job of OMB to interject reality into the discussion and a large problem in the meeting comes from a failure to speak out.

Bolton does not come across at the meeting as someone who will say NO either.

Posted by: bakho on January 15, 2004 06:05 AM

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"The relative worth of an individual has nothing to do with their intelligence and a capable President need not be intelligent." The mystique of dumbness is far too strong in this country.

Posted by zizka at January 14, 2004 02:51 PM

zizka, I was referring to a reference suggesting that higher intellegence made somebody better. Intellegence can be a very useful attribute but frequently enough those possessing it are horrible people. I do agree that there is a lionization of the regular guy within America's heartland which makes perceived intellegence a bad thing at the polls. I also do see your point about Rove and Cheney.

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I love the knee-jerk willingness to take anything at face value if it reaffirms their prejudices...

Posted by lee kane at January 14, 2004 05:44 PM

lee, has everybody here taken the book at face value? If somebody does believe the book gives a realistic portrayal events from Paul's perspective (with all that implies) are they reaffirming prejudices or are they building a case upon available evidence?

The book can never be anything more than evidence. While it is clearly not "true", it does appear to provide an interesting perspective on events in the Bush cabinet. There is a mountain of documentation reenforcing the perspective provided.

Claiming that all who believe it to be a useful perspective are reinforcing prejudices is an interesting position. Ironically, it requires a prejudice toward discounting the book. That prejudice is hard to defend with the documentation provided.

Posted by: Stan on January 15, 2004 06:51 AM

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zizka (as resident conspiracy theorist)
Just wondering how central a theme The Moon Mission is as a defection device here. Laughable cost numbers--numbers that really do indicate that this is, at best, just dreaming.
But if you were Rove or Luskin or, even Daniels, you'd need something to distract a lot of attention.
Listening to NPR yesterday interview Suskind and O'Neill. Sure it wasn't as long or as deep as some would have liked but the 20 minutes was enough for me.
Let's skip the argument about the 'managed' nature of these 'live' broadcasts. ( 'The Cost of Loyalty' is so much more persuasive than any talk about it could be.) These 2, Suskind and O'Neill, are very different individuals. Just listen to their views on O'Neill's second thoughts about that phrase "like a blind man in a room full of deaf people".
That's the character that I can't find in Dubya: I always get the sense that someone told him to use This Line in response to that line of questioning. It's not a matter of intelligence ( big or small) it is a matter of personal honesty.
So, now that the s___ has hit the fan, how do you think the damage control will spin out? If you were part of the Inner Circle ( capitals for you Conspiracy Theorists only) what would you be thinking? It is a good time to review your press contacts to see how they take their directions. And we can guage just how deep their loyalty is to Dubya. Look for major tax cuts next.

Posted by: calmo on January 15, 2004 07:14 AM

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Here's the thing --

A couple of people have referenced this exceprt as "evidence". Kevin seemed to suggest that the people who were urging others to critically judge the source and tone of O'Neill's account, might themselves not like (or understand) economics:

Thus, running on economic arguments or on claims of Bush's dullwittedness is not likely to persuade many at all.

I am, in fact, going to college for economics -- though I clearly don't have the same level of knowledge as many others here.

My point is that O'Neill's account should definitely not be taken as evidence of any sort: it should be critically viewed as the account of a biased source, unless he has hard evidence to show his claims. In other words, it fails the test of verification at present.

I can't understand why anyone would take this meeting as being able to prove anything: it does not prove Bush is stupid, it does not prove O'Neill was the brightest mind of the bunch. It does show Bush as stupid, it does show O'Neill as bright. In itself, that should bring into question it's veracity.

By the by, in 2000 I voted for Hillary Clinton and Al Gore.

So there.

Posted by: Mike on January 15, 2004 07:39 AM

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Hell all from Philadelphia:

wow, zowie, The reason the certified accountant industry us such a big industry, and has its lobbyists to ensure its stature and necessary nature, is to continue the complicated tax codes and such a mess mish-mosh that we (most average people) need an accountant. So many of us are still confused, but I will offer further clarification of my situation as it seems some posts have conjectured without all facts, and some posts have attacked me.

I would like to thank all those who rushed to my aid with suggestions and attempting to wake me up to this situation. I will take heed and meet with proper professionals.

TO DAVE JOHNSON, ELI RABETT AND KEITH ELLIS:

Just a note, I am attempting to live the translucent American dream...that silly epoch in time from the previous mid-century on. My family has chosen to make it on my 1 income and have my wife stay at home to raise the 2 young children. You see, I guess, Dave, Eli and Keith- I am lucky, yes- to have a good paying job. But, then yes, I was not born with a silver spoon as some may posture. I have worked every type of job from clerk, construction, driver, news reporter, sportswriter, valet parker, just the same as you people---worked up the ladder in this company for 14 years from pittance salary to something decent. I am 42 years old. Is that not what they taught us in school, if you work hard, keep your chin to grinding wheel, take your lumps and believe in yourself, et cetera. Sounds like a soundbite, But, yes, I am lucky my hard work paid off, there are others whom have played the same rule and are still on outside looking in. My wife does not work, so we did that as a conscious choice so the kids can be raised by us, not strangers, so it is the same as 2 teachers living on take home pay of $32,000.00 per year, because I live on take home of roughly $55,000 per year after taxes, plus a tax return. The other pitfalls is because of this, with mortgage and other normal expenses, I fall in credit card debt each year, because, like the govt, I unfortunately go through deficit spending...I then have my boss take out more than usuall witholding so since my wife does not work...I get a much better tax return in April, thus paying off a some credit cards and a little breathing room. These are life and marital decision. If was a "panty-waisted conservative", as I was coined, I would make my wife work, or my motherly wife would insist on worshipping the almighty dollar and we would strive for careers and real breathing room, and hire a nanny, as I have heard some professional , elite couples do, But we are simple people who were raised in the last century and are madly chasing some lost, translucid dream that is now ever-shrinking and impossible for most of middle america. Yes, most of middle america is now forced to have both husband and wife work, mostly by necessity.
As for luxurious vacation, I have no idea what you are talking about. About new cars, I drive a 1979 Buick, and I own a beat-up 1977 El Dorado I picked up for $1,400 as my alternative wheels. I average 5,000 miles combined per year on both.
So, guess what, in my neighborhood, where medium house costs on average $185,000.

There are many families who have chosen the same road, either with a Mr. Mom at home, and mom as breadwinner- ALL FOR THE KIDS, you see. I have caculated that what my wife would bring home, and what we would pay in child care, coupled with the big tax return which bails me out each spring (renewal). This is the plan we have chosen, because I am lucky to have good income, but is stretched thin because we are 4 people living on take -home of approximately $55,000. It is tough at times, but this person cannot complain because there are so many other families whom have both spouses work and struggle worse than me...so for Eli, and Keith and Dave...sorry for making a good salary, but I am humbled every day going home in Philadelphia, and I give to charities, and to homeless vet, et cetera. So give me a freaking break, I am no conservative, and some of you are just frustrated for various reasons...and soon this mad chase at the lost American dream will be over as the squeeze will continue. So, sorry for being ignorant of my tax situation...it is not an "emission of anger"...just ignorance. Maybe as to not to offend certain readers, there should be some laws decalred on this sight that you have to be ina low, or middle rung tax bracket, or you cannot enter a post, or thus having the risk of offending certain "frustrated" readers of this page...I too am frustrated that 35% is taken by the feds, funny, I make less than $70,000 personal for my family to survive, but I am taxed as if I make as much as Neil Bush did this year as a consultant, as if I make millions each year.
so the tax code is not fair, and poor people should pay no income tax, and the real wealthy (2%) should pay 50%, and they can still have their luxurious vacations, probably. George Bush can afford a month-long vacaction each August - right?
I also would like to pay my fair share, but I do not want to see it allocated incorrectly, like the Big Dig in Boston, or the current energy bill that would result in tax breaks for energy companies. I could go on, by why
We are broke from Iraq, and we have a Clown prez who wishes to push us further on the brink of financial disaster by shooting for mars.
So no big vacations, so no new cars (I love cars from the 70's- cheap insurance and proetction from all this SUV's). No pearl necklases for wife, no adult toys, no video camera...just our memories as we raise our children the best way we are able.

Thank you

Dave S/ Philadephia

ps: I walk my own tightrope, and I do not have a defeatist attitude - I just hope this pays off because we have no savings nor can we save anything for retirement that much, so I hop it pays off...So keep the tax laws that penalizes married couples who both work, keep slapping families.

Posted by: Dave S. on January 15, 2004 08:09 AM

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I wonder what my repeated misspelling of "intelligence" suggests about my own?

Posted by: Stan on January 15, 2004 08:15 AM

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To those pursuing the new line - how evidentiary can o'neill's book be? - surely you can do better.

It's not like we don't already know much of what o'neill is saying: we know what diullio said. we know what david frum has written. we saw george bush during the debates with al gore (for instance, when challenged on his tax plans by gore, bush responded with the famous "fuzzy math" retort, rather than make an economic argument). we know bush's track record as a business person. we know what bush biographers have said. we saw the way that he used a phony "average" tax cut size to sell his policies. we saw him lie at least 13 times on the "trifecta" line before senior republicans finally made him stop. we see how he seizes upon the lowering of the unemployment rate as good news, rather than honestly dealing with the fact that it's bad news. we saw how poorly he handles direct questions the few times he's asked them in press conferences.

in short, we have a very good amount of information at hand already against which we can compare the o'neill account. They align - the preponderance of the evidence affirms that bush is shallow, ill-informed, and runs an administration in which policy and policy expertise is disdained in favor of politics.

So we don't have to believe every single syllable in o'neill's book to understand that the thrust of the book is, sadly, only too true.

Posted by: howard on January 15, 2004 09:49 AM

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Derelict: - "Joe Average would much rather be governed by morons to his own detriment than to think that the President of the United States is somehow better than he is."

Boy does THAT sound like it hits the nail on the head.

Posted by: PaulO on January 15, 2004 10:28 AM

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My point is that O'Neill's account should definitely not be taken as evidence of any sort: it should be critically viewed as the account of a biased source, unless he has hard evidence to show his claims. In other words, it fails the test of verification at present.

By the by, in 2000 I voted for Hillary Clinton and Al Gore.

Posted by Mike at January 15, 2004 07:39 AM

Mike, it is evidence. O'Neill was part of the events he is talking about, he does provide documents to back up what he says, and he isn't so known for lying that we can dismiss what he says offhand. At this point it is reasonable to consider his recollections generally accurate. Being skeptical of his motives doesn't mean consigning his account to fiction. By the by, I voted for Bush.

Posted by: Stan on January 15, 2004 10:36 AM

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Dave S. - Sounds like you should think about moving to another city before you give youself a heart attack.

No one likes paying taxes, but some persepctive is required here. A stable, well-financed government is one of the major factors making it possible for us to earn some of the highest incomes in the world. It's a fallacy to assume that we would be earning the same income we earn today if taxation had historically been much lower and government had not been financed properly.

In any case, you really sound like you need some financial advice. One of the first things you'd learn is never, ever, ever, run up debt on credit cards.

Posted by: wvmcl on January 15, 2004 12:28 PM

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Dave/Philadelphia:

Please stop and take a breath. It would be too bad for you and your family if you lose your health just because you did your math wrong. Take home of 55 on 70 makes your effective tax rate about 22%. That sounds about right. I am not piling on you - my spouse makes the same error in confusing effective and marginal. Take care.

- The Perlustrator

Posted by: Perlustrator on January 15, 2004 02:35 PM

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With regard to the various arguments about how smart the US electorate is, I would remind everyone of PT Barnum's take on the issue: No one ever went broke underestimating the intelligence of the American public

Posted by: Eli Rabett on January 15, 2004 06:38 PM

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Dave -

Sorry for coming across as I did. You do illustrate why Republicans are so successful with their bullsh*t -- most people are too busy to spend the time it takes to get the info necessary to understand that what they are telling you is full of cr*p. I'm not saying you're a Republican, I'm saying their line about taxes HAS filtered in to your thinking.

It is not the taxes that are causing you problems. (I think you're counting Social Security and Medicare as taxes, since they come out of your paycheck -- but you more than get it back later.) But I don't see what IS eating up your income, from your description. Do you pay for your own health insurance? You should be living a rather good life with your income, even with only one parent working. Is it private school? Unless it's the credit cards. Never, ever use credit cards - you'll be surprised how much easier life is when you don't have those payments. Why do you think bankers are rich?

You make much more than most people. Your family income is more than most families. Your housing prices sound lower than most cities. (If you ever come to California, hang around people who have defibrilators in their cars! I'm talking OVER $500,000 for an average house.)

Posted by: Dave Johnson on January 15, 2004 07:26 PM

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Howard-
"in short, we have a very good amount of information at hand already against which we can compare the o'neill account."
Most of us were hoping that the inside view would be different. That Dubya had a real role in policy development --a strength that was not in public view.
That Gary Trudeau's feather representation of Bush was unfair and harsh.
Now it appears he is in the hands of Rove and Cheney.
"So we don't have to believe every single syllable in o'neill's book to understand that the thrust of the book is, sadly, only too true."
I agree. But how will the rest of these guys (Rove et al) respond?

Posted by: calmo on January 15, 2004 07:48 PM

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Hello from Philadelphia:

I am no Republican, I hate those red-ties guys!

I saw Bush wearing a blue polka-dotted tie yesteday on the news- can he get in trouble for that.

The other reason my $ goes fast is my Wife...some of you may know what I am talking about.

The reason I loathe Republicans is because they do not really care for families, or working families; they say they do; but they spew falsehoods out the side of their mouths; its primary agenda is to protect corporate profits.

NOTE:
In the New York times Sunday - January 11, 2004(week in review) an editorial by Jacob Hacker: "Call it the family risk factor"

He talks about the jobless recovery and how it can affect families, and what risks we have to fend
"...an increasing shift of economic risk from goverment and corporations onto workers and families.":

Then there is a graph depicting year-to-year family income from 1972 to 1998. It traces the extent of family income from both goverment and provate sector fluctuates year by year- it takes into account the to control the size of family and rise of income for all Americans- the graph takes into account the family nature and changes like divorce and separation that can alter living standards...the graph demonstrates that families and income have become less secure- it states family instability was 5 x greater at the peak 1990's than in 1972.
So while Americans are wealthier than in the 1970's - bit as a whole - the incomes for poor and middle class families have grown not much. Coupled with effects of losing a job have made it worse than in 1970's because the cost of upkeep for family (housing, education) has augmented at an madening pace.
Programs to poor have been cut, state-by-state scenario.
Employment health insurance has risen, so for a small firm to hire a new full-time employee has to take into account that must post an additional $8-to$12,000 per year on top of salary just to add an employee to its health-care account, so it is easier and more cost-effective to just spread the work around an already stressed work team, then quality goes down, and the whole country turns into New Jersey.
So in general from my viewpoint in Philadelphia...for families that struggle, whether poor, middle class, or those who choose to make it 1 income...IT REALLY SUCKS FOR FAMILIES

Do we really need cell phones, computers, et cetera...think about where our bills go- cable TV, life insurance, ...In the 1970's we did not have all these much needed electronics, and big tv screens. It is America's excess that makes it tougher to survive as family- the key is to forgoe electronic toys and live as we did in the 70's.

Thanks,

Dave/ Philadelpia


ps: My TV is 28" (small by today's standards, I am gladly stuck in the 1970's) Auto's and all.

Posted by: Dave Steel on January 16, 2004 08:17 AM

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I find it interesting the "hero" of the story wants to not push too hard on tax cuts because it might hurt later on when trying to privatize social security

Posted by: smartone on January 16, 2004 06:01 PM

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