Greenspan Contests O'Neill Quote on U.S. Tax Cuts

[papau]

http://story.news.yahoo.com/news?tmpl=story&ncid=578&e=3&u=/nm/20040115/pl_nm/economy_oneill_greenspan_dc

Greenspan Contests O'Neill Quote on U.S. Tax Cuts


WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan disagrees with former Treasury Secretary Paul O'Neill's claim in a controversial book that the Fed chief considered Bush administration tax cuts "irresponsible."

In the book by author Ron Suskind, Greenspan was quoted saying in May 2001 of the first Bush tax cuts that, without "triggers" to end them if deficits swelled, "that tax cut is irresponsible fiscal policy. Eventually, I think that will be the consensus view."
Greenspan denies saying so.

He told the Wall Street Journal, in a quote confirmed by the Fed on Thursday, "It's been rare over the many years of our friendship that Paul and I have a different recollection of events, but in this case we do." <snip>

At the time, there were still budget surpluses and Greenspan was concerned about how to deal with them, preferring it be done through tax decreases rather than more spending. <snip>



http://www.guardian.co.uk/comment/story/0,3604,1123443,00.html
A rebel Republican

Sidney Blumenthal
Thursday January 15, 2004
The Guardian

One of the tacit operating assumptions of the Bush administration is that the checks and balances have been checked. But that implacable wall has been cracked by an insider's surprising confessions. The former treasury secretary Paul O'Neill, fired and forgotten, mild-mannered and grey, appears an unlikely dissident. He was, after all, the CEO of Alcoa, a pillar of the Republican establishment.

More is involved with him than pride and pique. While O'Neill records slights and is dismissed by some as a dotty reject, he does more than tell a few tales in the book The Price of Loyalty. The attack on him, consistent with Bush efforts to intimidate anyone who challenges the official version, underscores the inherent fragility of Bush's public persona, upon which rests his popularity. Bush's greatest political asset is his image as a masterful commander in chief who happens to be a nice man. Alongside him, Dick Cheney is viewed as the sagacious Nestor.

O'Neill's persuasiveness and the long-term damage he does to these icons comes from his years in the Nixon and Ford administrations and his first-hand critique of a government radically unlike any before, especially Republican ones. O'Neill's threat is to a president unusually dependent in an election campaign on fear and credibility to sustain a sense of power and inevitability. He sounds an alarm against an unfit president who lacks "credibility with his most senior officials", behind whom looms a dark "puppeteer", as O'Neill calls the vice-president, and a closed cabal.

Invading Iraq was on the agenda of the first "principals" meeting of the National Security Council (NSC), of which O'Neill was a member, months before September 11, and relentlessly pushed. Regressive tax cuts creating massive deficits were implemented without economic justification as "the administration has managed to kill the whys at every turn".

When the political team distorts basic economic numbers on tax cuts and inserts them into the 2001 state of the union address, O'Neill yells: "This is complete bullshit!" It is "something that knowledgeable people in the US government knew to be false". The business executive is shocked at the derogation of policy in favour of corporate interests - a "combination of confidentiality and influence by powerful interested parties". He learns that moderate Republicans like him; that Christie Whitman, the director of the Environmental Protection Agency, sees her efforts to affirm policy on global warming "slaughtered" by Cheney and the politicos; and that secretary of state Colin Powell "may have been there, in large part, as cover". <snip>

[priller]

1. I know O'Neill has to be heartbroken

In the Suskind book it shows he and Alan Greenspan have been good friends for a long time. Too bad Greenspan continues to side with the forces of evil. If I could give him a little advice, I would say, "Alan, it's not too late to salvage your reputation. Start telling the truth, it's infectious. Slowly others will come out to support you."

[Marlie]

3. Good Old Greenspan

Will never forget how he raised the interest rate 6 times the last
year of Clinton's presidency. His reasoning - the economy was too
good, the bubble needed to be burst. In reality, Corporate America
was being forced to pay a decent wage and benefits - the middle class
was getting too big for it's britches and had to be put in their
place. Well, it sure worked.

[DeepThinkingDuck]

5. Greenspan needs to keep his job

Until the next election (and hopefully not a minute after) the country needs people like Greenspan around. Although he doesn't come across as someone very concerned with workers earning a decent wage, he is a roadblock against the Bush regeime's plan for the economy.

And if that involves siding with the forces of evil, well it's better to have him there than one of Cheney's henchmen.

By the way, if anyone hasn't read Suskind's book yet, go and buy it. It's the most damning criticism of Bush any Republican has delivered yet. It as good as states that (a) Karl Rove's strategy for re-election is the primary consideration for all Whitehouse decisions and (b) 90% of the time Bush doesn't have a clue what's going on. Nothing new for most of us, but a bombshell coming from an insider.

[rapier]

6. covering his ass

Nothing Greespan does is a roadblock to The Party. The Party is totally committed to Greenspans easy money, currency desstruction, financial asset inflation policies and beliefs. Furthermore Greenspan is practically the author of equating inflation with only one thing, rising wages. Greenspan this spring actually said in official testimony the US didn't need manufacturing at all.

The issues are complex and in essence Greenspans policies especially since 98 or so are dictated by force. Meaning stoke the speeding out of control credit system or die.

As for the quote, I think Greeny did belive the second cut was not such a good idea in the long term but ALL tax cuts were good in the short term to stimulate the economy, with deficits. His greatest service to Bush was his Jan 2001 comment that the proposed first cut was fine because he was afraid the surplus was long term and that would be a bad thing. This had to be a lie, the part about him thinking it was long term. THe surplus was a blip, bound to end. He knew it. He lied. As to the Oneil thing, he is just covering his ass. In any case Bush hates him for personal reasons because W thinks Greeny caused daddys defeat in 92. He can't wait for Greeny to quit so he can appoint his own guy. Either McTier or Bernake. Not his own guy in terms of loyal Bush family retainer but still, his own guy.

[KissMyAsscroft]

2. Bush got Greenspan to make a statement...

They are talking about different tax cuts anyway.

Paul O'Neil was opposed to the second round of tax cuts after the budget surplus was long gone.

Here, Greenspan is talking about the FIRST round.

Don't know if anyone else caught that.

[Ready4Change]

4. Odd

I recall hearing that. I don't recall it word for word, but I remember driving on my way to work and listening a recording of Greenspan on NPR saying pretty much what Suskinds quote claims.

[slor]

7. Listen to how he softly...

he rejects O'Neil's claims : "different recollection of events". This certainly cannot be construed as calling it a lie.