Alan Greenspan attacks Bush over economy

[spike]

Alan Greenspan, the former head of the US Federal Reserve, has issued a withering attack on President Bush handling of the American economy.

The man credited with guiding the US through two decades of economic boom says Mr Bush and his inner circle put their political priorities ahead of the economic good of the country.

Denouncing the tax cuts which President Bush brought after winning power, Mr Greenspan says in his memoirs that the Republicans deserved to lose the last Congressional elections in November because they abandoned fiscal discipline and hugely swelled the US budget deficit.

Mr Greenspan, 81 - a lifelong Republican who served six presidents as an adviser and as Fed chairman from 1987 to 2006 - reserves his most coruscating criticism for the current occupant of the White House.

In discussing the tax cut, he writes in The Age of Turbulence: Adventures in a New World: “Little value was placed on rigorous economic policy debate or the weighing of long-term consequences.”

Contrasting the behaviour of Dick Cheney and other officials when they served President Gerald Ford with their attitude working for President Bush, Mr Greenspan says: “Now, the political operation was far more dominant.”

He adds: “With George Bush came the tax cuts, unmatched by decreased spending, and, in the wake of September 11, still more open- handed spending,” something he brands “a major mistake”.

“My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending,” he writes.

“‘Deficits don’t matter,’ to my chagrin, became part of the Republicans’ rhetoric. The Republicans in Congress lost their way. They swapped principle for power. They ended up with neither. They deserved to lose.”

Without elaborating, he also observes: “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.”

By contrast Mr Greenspan said Richard Nixon and Bill Clinton were the most intelligent presidents he worked for.

He praises Mr Clinton for his “consistent, disciplined focus on long-term economic growth” whose decision to cut deficits was “an act of political courage” and observes: “We both read books and were curious and thoughtful about the world” - perhaps another implied criticism of Mr Bush.

Mr Greenspan found Gerald Ford the most normal and likeable president and praised Mr Reagan as the most devoted to free markets, though he says his grasp of economics “wasn’t very deep or sophisticated.”

Mr Greenspan defends himself against charges that by reducing interest rates in 2003 he helped foster the current subprime mortgage crisis.

“We wanted to shut down the possibility of corrosive deflation,” he writes. “We were willing to chance that by cutting rates we might foster a bubble, an inflationary boom of some sort, which we would subsequently have to address....It was a decision done right.”

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/15/wgreenspan115.xml

 

[2minkey]

they certainly did abandon fiscal discipline.

i like tax cuts but not irresponsible ones.

this is why i just can't take republicans seriously in fiscal matters. they're just as flaky as demnocrats.

 

[markjs]

I agree with Greenspan to the letter. Just one of the many reasons I have always diliked the current administration. To this day, believe it or not, I'd have traded the current administraitons for 12 more years of Reagan. Much as I disagreed with Reagan on so many fronts, he was twice the president, and twice the man Bush jr. is. Hell I didn't even hate Bush sr., disagreed, and prefered another choice (I voted for Clinton of course), but this Bush-Cheney gang is x10 more politically power hungry and self serving than Reagan or Daddy Bush combined. The elder Bush and Regan at least put America first on many fronts. It seems to me Bush and Cheney have put themselves, their cronies, their party, and politics first on nearly every front.

You wanna know something funny? Contrary to what I hear a lot of conservatives saying on this board, in 1980, when I was young and naive, I was a staunch Regan supporter, I was overjoyed when he became president, and would have voted for him had I been of age. Life, experience, and education, have brought me tword some liberal leanings, not conservative.

 

[markjs]

Actually as a matter of fact I am not near as liberal as some may think. There are just certain issues, that I lean lib on, so heavily that it seems like it outweighs the areas I lean conservative on. I suppose overall it does outweigh it, but as I have said a few times if you knew the whole picture you'd probably be surpised, because there are a lot of areas I am very consevative in. Thing is, the ones I lean liberal in are perhaps more important to me, and I am perhaps more passioante about them.

 

[Gonz]

Denouncing the tax cuts which President Bush brought after winning power, Mr Greenspan says in his memoirs that the Republicans deserved to lose the last Congressional elections in November because they abandoned fiscal discipline and hugely swelled the US budget deficit.

While I agree the Republicans spent like drunken sailors & needed a kick in teh ass, the "Bush tax cuts" have paid for themselves multifold. They need to be made permanent.

 

[2minkey]

the "Bush tax cuts" have paid for themselves multifold.

how so? can you support that idea or is it just a guess based on "trickle down?"

 

[catocom]

They need to be made permanent.

won't happen, if we want to take back our economy from China.

Times are going to get tough....I can see it coming.
(been runnig credit toooo long now)

 

[Gonz]

how so? can you support that idea or is it just a guess based on "trickle down?"

After 9/11, over five years of war & a Republican spending spree, the market is setting records & the defecit is much much lower than projected.

 

[Gonz]

won't happen, if we want to take back our economy from China.

Times are going to get tough....I can see it coming.
(been runnig credit toooo long now)

Increase taxes, which will decrease spending, will damage the economy. Tax increases have never increased gov't coffers.

 

[2minkey]

After 9/11, over five years of war & a Republican spending spree, the market is setting records & the defecit is much much lower than projected.

interesting idea but i'm not sure those two things are truly causally connected... could just as easily be a big coincidence.

 

[catocom]

Increase taxes, which will decrease spending, will damage the economy. Tax increases have never increased gov't coffers.

I didn't sat it would help the economy, it's just going to pay the unemployment.

Not increasing it, isn't going to save the economy either.

 

[Gonz]

We had this conversation (well, kinda) at OCN. My contention was, and still is, that all tax cuts increase the economy. Go back to JFK, then Reagan. Then look at Bush Srs increase. The follow the cuts the Republican House forced on Clinton. Look at today. If the republicans had controled themsleves and shelved the drug program & homeland insecurity, we'd be flying along at 15000 right now.

There is an economic model that shows diminishing returns from tax cuts-but that's like 7%. I can't recall where I saw the model & it's been a long time so don't ask me for a link (plus, that'll just start mark & SnP again)

 

[catocom]

the difference now, than back when you refer is, we have Wayyy more
outsourcing, and importing going on.
The jobs aren't really here now...many people just aren't going to the unemployment office,
so the unemployment numbers do look that bad.
When the economy gets tighter, you'll see a very fast jump there though.

 

[Gonz]

We have plenty of jobs & plenty of employed folks. Look at the GDP.

 

[catocom]

yeah we do ATM, but there's a lot of sponges out there, and if/when it get though,
and they start looking for jobs....

Time will tell. I truly hope I'm way off the mark, but it doesn't look that way
to me...looking into the future, with the current policies.

 

[Gonz]

Remember, an healthy economy is not static. There isn't X amount of money or X number of jobs. The faster is grows, the more it expands.

 

[catocom]

If the books haven't been cooked, as with the previous admin.

IMO what some call the economy is actually just a political tool.
e.g....exactly whose economy are they talking about.

Since going off the gold standard, it can be made to look different ways.

So what is 'the economy"? how much the dollar is worth compare to other moneys, wall street, store prices, howmuch the average
person makes a year, how much total worth persons project?
What about the debt to other countrys?

IMO it's just nearly in line with polls.

 

[Winky]

Let me run this mutha fucka fo eight years
and I could fix this sumbitch right up!

 

[Cerise]

http://www.msnbc.msn.com/id/20817260/

"I was not saying that that’s the administration’s motive," Greenspan said in the interview conducted on Saturday. “I’m just saying that if somebody asked me, ’Are we fortunate in taking out Saddam?’ I would say it was essential......."

"....My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day passing through," Greenspan said.

“The next administration may have the Clinton administration name, but the Democratic Party ... has moved ... very significantly in the wrong direction.” Greenspan said.

 

[2minkey]

""....My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day passing through," Greenspan said. "

and that is THE reason for the war. not that 'ties with al quada' and 'WMD' mumbo-jumbo.

but hey, gotta sell it to the lap-it-up masses, and you need some intrigue and sensationalizm for that, not just boring old economic reality!