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Politics : The Donkey's Inn -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (280)	10/1/2001 4:11:24 PM
From: Mephisto	Respond to of 15516

"First, Bush needs to recognize that one reason why financial markets are wobbly -- and therefore why consumers and investors are skittish -- is that his huge 10-year tax cut has made the long-term budget outlook worrying. The fear that inflation may return toward the end of this decade pushes up long-term interest rates, which contribute to stock market weakness. By proposing a slower phase-in of the tax cuts, the Bush administration could fix this problem. At a time when a fiscal stimulus and other policy levers seem uncertain, it would be folly not to grab this opportunity to bolster markets and hence confidence. Second, Bush needs to recognize that, because public psychology is all-important, the reputation of his senior officials is crucial. Alan Greenspan, the Fed chairman, has a reputation so exalted that his mere presence at the central bank boosts public confidence……………………" The above is an excerpt from From the Washington Post on fear and the recession. By Sebastian Mallaby Monday, October 1, 2001; Page A21 ...............................................................************************.............................................. Kenneth, I've followed Paul Krugman's arguments against the huge tax cut which he opposed. Mr. Krugman is Op-Ed Editor for the The New York Times. And his opinions about the economy and the tax cuts are right, I believe.. -MEPHISTO The following is an excerpt* from PAUL KRUGMAN's article:, Greenspan Stands Alone. It was published under RECKONINGS on August 31, 2001. "What are we doing to fight the slowdown? America does, of course, have its tax cut. But the peculiar "back-loaded" timing of that cut makes it a very poor recession-fighting measure. The rebate checks are not much more than pocket change — $40 billion, or 0.4 percent of G.D.P. The big tax cuts, which will eventually rise to almost 2 percent of G.D.P., won't come until the middle of the decade. And the decision to lock in trillions of dollars in future tax cuts actually depresses the economy now, since those future cuts do little to encourage current consumer spending but do raise long-term interest rates. Can we pump up the economy with additional tax cuts or temporary public spending? Not safely; those huge future tax cuts have created a grim long-term financial outlook, and any further tax cuts would make the outlook even grimmer. Of course, the administration might do the responsible thing, making room for additional tax cuts now by canceling some of those big tax cuts scheduled for 2004 and later. And pigs might fly. It's a dismal picture: a combination of intellectual confusion, narrow-minded officials and sheer fiscal folly has removed most of the tools that the world's major economies might be able to use to help us get through these troubled times. The only institution that isn't paralyzed is the Fed, which keeps on cutting rates, hoping that it will finally accomplish something. Or to change metaphors a bit, the whole burden of avoiding a global recession now rests on Alan Greenspan's shoulders. Presumably Atlas won't shrug. But what if the task is beyond his powers? nytimes.com

To: Kenneth E. Phillipps who wrote (280)	10/1/2001 4:14:46 PM
From: Mephisto	Read Replies (1) \| Respond to of 15516

"But Paul O'Neill, the Treasury secretary, is something of an anti-Greenspan. He has made a series of wild remarks on subjects ranging from the dollar to Argentina and recently the stock market. When Wall Street reopened a fortnight ago, O'Neill declared that the market would be approaching all-time highs in the next 12 to 18 months. The Dow Jones Industrial Average promptly experienced its worst week since the Depression. Recently, when Congress has wanted to consult a Treasury secretary, it has sometimes called in Robert Rubin, a Clinton-era figure whose reputation on Wall Street is impeccable. The fact that Rubin, who is now a private banker, has emerged as a powerful influence in this crisis tells you something about the limits to the power of a newly active government. But it also should remind the president to keep a wary eye on his man at Treasury." The above is an excerpt from the Washington Post on fear and the recession. By Sebastian Mallaby Monday, October 1, 2001; Page A21 ……………………………………….************……………………………. Kennety, O'Neill has made crazy remarks for months. Initially, he refused to look into offshore bank accounts where the mob and terrorists, like bin Laden keep their money.** I read that he told the press he received so many letters from the public that he said he changed his mind. Whether he did, I don't know. After the terrorist attacks on New York, O'Neill has no choice but to pursue off-shore accounts. At one point, I believe O'Neill said he wanted to abolish corporate taxes. I've noticed that Rubin has testified b4 Congress recently, and while Rubin served in the Clinton administration, I believe Rubin is a REPUBLICAN.