May 13, 2004

ALAN GREENSPAN is a gold-plated hypocrite.

The 2004 election is a national referendum on the
CREDIBILITY, COMPETENCE and CHARACTER of the
incredible shrinking _resident. The central issue is
SECURITY: NATIONAL SECURITY, ECONOMIC SECURITY and
ENVIRONMENTAL SECURITY. Are safer today than you were
four years ago? No. And Alan Greenspan knows it.

Robert Kuttner, Boston Globe: ALAN GREENSPAN is a gold-plated hypocrite. Last week the Federal Reserve
chairman, speaking at a conference in Chicago, warned
that the endless federal deficits had become "a
significant obstacle to long-term security because the
budget deficit is not subject to correction by market
forces." What does Greenspan think caused the deficit
-- sunspots? He doesn't deign to say. But everyone
else knows. While increased military spending is part
of the story, the huge imbalances that rightly worry
the Fed chairman are mainly the predictable result of
President Bush's immense tax cuts.

Restore the Timeline, Show Up for Democracy in 2004:
Defeat Bush (again!)


http://www.commondreams.org/views04/0512-10.htm

Published on Wednesday, May 12, 2004 by the Boston
Globe
What Greenspan Won't Admit About Deficit
by Robert Kuttner

ALAN GREENSPAN is a gold-plated hypocrite. Last week
the Federal Reserve chairman, speaking at a conference
in Chicago, warned that the endless federal deficits
had become "a significant obstacle to long-term
security because the budget deficit is not subject to
correction by market forces." What does Greenspan
think caused the deficit -- sunspots? He doesn't deign
to say. But everyone else knows. While increased
military spending is part of the story, the huge
imbalances that rightly worry the Fed chairman are
mainly the predictable result of President Bush's
immense tax cuts.

At the time of their enactment, not only did Greenspan
fail to warn against the danger; he even gave tax cuts
his support. Greenspan's early ideological moorings as
a far-right Republican accolyte of Ayn Rand continued
to trump his current responsibilities as chief central
banker.

It's one thing to deliberately run a deficit during a
recession. It's quite another to deliberately blow a
huge hole in the government's revenue structure.
Greenspan should surely know the difference. But like
Bush, Greenspan uses the immense deficits as a
rationale to keep cutting social outlays.

The deficits are now projected at $400 billion this
year and at comparably destructive levels for the
indefinite future. The tax cuts are responsible for
more than $3 trillion in long-term revenue losses over
10 years. And Greenspan hasn't even spoken out against
the president's campaign to make the cuts permanent.

Just imagine the outcry from Greenspan, Wall Street,
and the Republican Party if these deficits had been
the result of social spending rather than tax cuts for
America's wealthiest. For half of the cost of the
projected deficits -- $200 billion a year -- we could
have universal, high-quality child care and health
insurance for all Americans. Think of that.

But if some Democratic president had managed to
persuade Congress to enact such a program, the right
would be going nuts at the fiscal irresponsibility.
Clearly the right's fiscal ethics are entirely
situational. If deficits are caused by tax cuts for
corporations and the rich, well, this is a manageable
problem that can be solved by reduced social spending.
But if deficits result from spending, Wall Street and
the right would have us believe the economy is about
to collapse.

Indeed, if the gold medal for hypocrisy goes to
Greenspan, Wall Street deficit hawks get the silver
medal. Remember the Concord Coalition -- that
bipartisan group of worthies concerned about federal
deficits? It's still there, and a few of its members
are actually principled conservatives. You just don't
hear as much from it when the deficits are Bush's.

The one recent president, of course, who took deficits
seriously was Bill Clinton. Presidents Reagan, Bush I,
and Bush II have all been all fiscally reckless. Yet
somehow the conservative press would have us believe
that it's Democrats who have to live down a reputation
of being deficit-happy.

Other notable situational ethicists who get bronze
awards for hypocrisy are deficit hawks in the
administration. The White House economic policy czar,
Steve Friedman, was a prominent investment banker and
one of Wall Street's leading critics of fiscal
imprudence. Now that he's on the inside, we haven't
heard so much as a bleat from him. If he's advising
Bush to resist tax cutting for the larger good of the
economy, he certainly is having no effect. One wonders
how Friedman can look in the mirror.

Likewise Greg Mankiw, the Harvard economist whose
best-selling textbook warns that prolonged deficits
will raise interest rates and slow economic growth. It
is a tradition that eminent economists punch their
career tickets by doing a prestigious stint at the
Council of Economic Advisers, which Mankiw chairs for
Bush. But at what cost?

It would be one thing if Mankiw were a pure technocrat
who stayed in the back rooms and crunched numbers. But
Mankiw's appointment is a political one, and part of
his job is to go out front and vouch for an
administration and policies that he knows are
deplorable.

What gets lost is the fact that taxing and spending
involve political choices. One path involves slightly
higher tax rates on America's most privileged in order
to pay for decent public services. The other path
allows the deserving rich, such as the children of the
wealthiest 2 percent of families, to forgo taxation at
the expense of needed social outlay. This is the real
national choice that is cynically obscured by the
running up of endless deficits.

Robert Kuttner is co-editor of The American Prospect.

Copyright 2004 Globe Newspaper Company.

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Posted by richard at May 13, 2004 02:50 PM