February 05, 2004

Documents, Documents, Documents

The Argus-eyed Wonkette reports that Ron Suskind has released some of the original documents that informed his portrait of Paul O'Neill's time at the White House. The documents are here.

The document above is a Larry Lindsey memo, written in the first week of the administration, and Paul O'Neill's measured, reasoned response.

One of the great mysteries of the Bush administration is why O'Neill didn't muscle Larry Lindsey out of the administration in the first six months. Larry was, it appears, completely unsuited to the job of economic policy traffic cop and honest broker that they gave him. Cheney begged O'Neill to come into the administration in the first place. O'Neill called on Cheney for backup to help him fix the broken economic policy decision-making process. And Cheney... did not respond. Why not? It's not as though Cheney had a dog in any particular economic policy fight. And Cheney did have an enormous interest in setting up a process that would generate good economic policies to reduce the chances that one would have to, three years down the road, produce fraudulent budget numbers and try to explain away the worst employment record since Herbert Hoover.

Posted by DeLong at February 5, 2004 10:57 AM | TrackBack


Or, Cheney figured after Bush vs Gore, and the Senate Dems rolling over like whipped dogs, that the fix was in. The Dems wouldn't oppose him, the media were on their knees. So why be honest, when dishonesty would pay so well?

Posted by: Barry on February 5, 2004 11:11 AM



A historical analysis of wage trends reveals that they carry a lot of momentum. Wage growth neither accelerates as soon as the job market begins to tighten, nor does it falter as soon as jobs become scarcer. It takes a long time—a year or longer—for these job market dynamics to begin to shift wage trends one way or another. Unfortunately, this means that once the weak labor market does affect wages, it can lead to earnings stagnation and even real losses, as wage growth falls behind inflation.

The jobless recovery has persisted long enough to dampen wage growth, and in some cases, wages are even falling in real terms, eroding living standards for some [middle and low wage] working families despite the fact that they have maintained their employment.

Posted by: anne on February 5, 2004 11:16 AM


I have suggestion:

Try to forget, to the extent you could, some of the time, that America is YOUR country. Try to imagine that it is an administration in some other country that is implementing exactly these economic "policies" that the Bush administration is implementing. That could give you a different kind of insight as to the possible motives of various individuals in the Administration and their supporters outside the administration.

Would you consider it possible, for example, that capitalists in London would want capitalism NOT to perform so well for a while in UK?

If yes, then why in the world should they want capitalism to perform too well in America?

And why in the world should the American capitalists want things to develop differently than the London capitalists want them?

Remember: Edison was capitalist/entrepreneur. So were the gas companies who were trying to stop him -- and they went as low as trying sabotage. Mind you; I say sabotage: Today that's Ashcroft's department (did I get the name right?).

So, at that juncture in history, as Edison was trying to light up our streets and homes, the gas companies were wishing that capitalism did not perform so well for a while.


If it is too difficult to imagine America is not your country, then you might want to try to imagine that this is not your times, that you are really ahead of your time, and that you are looking back in history to today.

Piece o cake, no?

Posted by: Bulent Sayin on February 5, 2004 11:44 AM


OK, maybe I don't know how government works, but just who was expected to model the Bush tax proposals while he was still only a candidate? The US government? As yet unnamed cabinet officials? I suppose someone had to be the target of the 'harumph,' and it wasn't going to be Lindsey.

Posted by: Frank on February 5, 2004 11:46 AM


What is Larry's complaint? That OTA did not have a model of the president's tax proposal in an operable condition. This suggests that the Bush advisors did not write their own "model" during the campaign and they were not using the Clinton model. In other words, the Bush tax cuts that he refused to change were not based on coherent or at least up to date economic modles.

As for the OTA model not working, If they were using a standard model, they should have been able to plug and chug UNLESS the Bush assumptions were absent from the previous model.

Did Lindsey want an analysis that replaced Clinton projections with projects that included a "supply side stimulus"?

And what was the Bush response? Go ahead and fly blind without good numbers? For whatever reason, revenue estimates have been wildly (10+ %) overoptimistic in this administration.

Posted by: bakho on February 5, 2004 11:53 AM


I learned a new phrase today. "bureaucratic chicken----." What could that mean?

Posted by: Alan on February 5, 2004 12:06 PM


Important aside -

ALBANY, N.Y. (AP) -- Gov. George Pataki is co-hosting a fund-raising dinner for fellow Republican Gov. Arnold Schwarzenegger of California at which guests are being asked to donate up to $500,000.

The minimum ticket price is $50,000 a person....

Posted by: Ari on February 5, 2004 12:23 PM


This is far more disturbing than the letter that Brad posted- As far as I am concerned this really illustrates how close we are to a total meltdown in the fiscal and financial structure of the united States. But then our global financial hegemony is dictated by the strength of the dollar....Don't cry for me America.

Posted by: Allen M on February 5, 2004 12:41 PM


Wow, people are really starting to wiggle to avoid blame. We are in the early stages of the collapse of the Bush Administration facade. This is of a piece with that interview Colin Powell gave the other day in which he intimated that if it had been known that Iraq had no WOD, going to war might not have been the first option. Of course Administration hacks jumped on him right away, and he backed off. But that was a Sign. People are beginning to get it that going along with these bogus policies, this intellectual bullying, is going to make them look like pieces of sh** in the long run.

Posted by: camille roy on February 5, 2004 12:45 PM


So who's Dubya's replacement?

Posted by: Bulent on February 5, 2004 01:10 PM


Bulent Sayin: In response to your post, I recall that one of the ironies of capitalism is that everyone benefits from competition, except the competitors. Therefore, competitors are strongly motivated to reduce competition.

Posted by: Moniker on February 5, 2004 01:24 PM


Has anyone besides me read Rubin's book? He clearly defines what role the NEC was to perform; looks like Lindsey went 180 degrees the opposite way.

Posted by: Linkmeister on February 5, 2004 02:02 PM


The address for submitting those suggested questions is Michelle.Jaconi@nbc.com.

Posted by: Lydia on February 5, 2004 03:37 PM


Three days into their Administration and Lindsey whines about having to wait a few more for the numbers from OTA. But the White House never really analyzed the cost of the Rx plan until AFTER it passed and was signed into law. Interesting.

Posted by: Harold McClure on February 5, 2004 04:17 PM


Harold, Don't read too much into it. Take it at face value. 3 days in and Lindsey is NOT WHINING. Lindsey is in a PANIC because he has to tell Bush how much tax cut he can afford and he does not have good numbers. No one does. The Bush campaign NEVER ran the numbers through a model to see if they were affordable. Remember the debate with Gore when Gore knew more about the Bush tax cut numbers than Bush did? Bush had no idea how much his tax cuts would cost either.

Bush made tax cuts that will affect revenue for the next 10 years and Lindsey was in a PANIC because no one had RUN THE NUMBERS. No one could get him numbers before the meeting. The decision was made without the numbers. This is the point of the Lindsey memo and the warning to O'Neill that Bush is a loose cannon on deck and any chance of keeping him on track depends on having the numbers to counter the political calculus.

The Rx plan was passed and Bush did not have his own numbers then either we learn. If Brad were Bush, he would fire Snow and Bolton for not having the numbers. However, Bush is apparently not angry at them. This only means that Bush does not care that he did not have his own numbers. He got to make the political decision he wanted to make without having to consider the numbers. Brad would want to know what effect the policy would have on the budget. Clinton and Rubin would demand to know. This is not the Clinton Wonk House. This is the Bush WH. Bush don't need no numbers.

CLOWN SHOW sums it up.

Posted by: bakho on February 5, 2004 07:36 PM


Funny Brad should have mentioned Herbert Hoover.

"A chicken in every pot, a car in every garage."

(A Republican party slogan in the 1928 election campaign, attributed to "Republican prosperity" of sitting President Calvin Coolidge. The idea was to vote for Coolidge's man, Herbert Hoover.)

Some short months later, the Great Depression.

Today, the Bush Administration would have to rephrase it: "Don't eat the chicken, and sell one of your cars, the dollar is plummeting!"

Some short months later, the Great ????? .

Will US$1 plunge to 10˘ under Bush rev. 2.0?

Posted by: Joy Chervil on February 5, 2004 09:09 PM


could somebody explain o'neil's comments to me? o'neil calls the memo chickenshit. what does he want lindsay to write? i'm confused. somebody parse this for me!

Posted by: c. on February 5, 2004 09:11 PM


The memo is sent to Chief of Staff Card. O'Neill thinks it is designed to make him look bad (not on the ball). O'Neill thinks that if Lindsey is going to complain about O'Neills dept, he should talk to him, not the COS. ONeill is telling Lindsey to stop the chickenshit running to the COS and face him like a man if he has a problem.

Posted by: bakho on February 5, 2004 10:18 PM


could somebody explain o'neil's comments to me?

In the book Suskind makes clear that Lindsay's purpose in writing the memo was not about policy, it was ass-kissing. He is writing to Chief-Of-Staff Andy Card, which is a way of getting your views straight to Bush without writing straight to Bush. He is requested a complicated set of numbers from a division that has only served the Administration for three days. It's an absurd request. It makes no sense if you think the request is about policy. It's not. It's about Larry Lindsay proving how dedicated and loyal to the President he is. He is already attacking the professional staff for not being as dedicated and loyal to the presdent as Larry Lindsay. It's also a dig at O'Neill. Here is how Suskind characterizes it:
The memo had a not-so-hidden-subtext: O'Neill's Treasury was not sufficiently loyal to the new President, while Lindsey was dutifully carrying forward Bush's agenda.

Posted by: KevinNYC on February 5, 2004 10:28 PM


I honestly don't see what's so wrong with the memo.

Posted by: Kevin on February 6, 2004 12:47 PM



Posted by: c, on February 6, 2004 05:02 PM


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