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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?


To: lurqer who wrote (7760)10/3/2002 9:03:30 PM
From: stockman_scott  Respond to of 89467
 
Bushonomics or Bustonomics?

<<...It was reported yesterday that the stock market has just had its worst quarter since the crash of 1987. President Bush's $1.6 trillion tax cut that was supposed to stimulate the economy has instead scuttled it. The market lost 18% of its value in the last quarter. (18% !!! ) Unemployment, back on the rise, jumped to 6%. By August 1.1 million additional Americans had exhausted their unemployment benefits. Forty one million Americans are now without health insurance - 1.4 million more than last year. And, now consumer spending, the only bright spot in the economy, has begun to slow as consumers begin to brace for hard times.

So, how do you like Bushonomics so far? I can't wait to see fourth quarter results. If the country were a company its board of directors would have pressing reasons to wonder whether they chose the right CEO...>>

thedailyenron.com



To: lurqer who wrote (7760)10/4/2002 3:06:10 AM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
My Economic Plan

By PAUL KRUGMAN
Columnist
The New York Times
October 4, 2002

<<...Although other news has been drowned out by the barking of the dogs of war, something ominous is happening on the economic front. It's not dramatic, but month by month the numbers keep coming in worse than expected. Let's put politics completely aside for once, and review where we are and what should be done.

The key point is that this isn't your father's recession — it's your grandfather's recession. That is, it isn't your standard postwar recession, engineered by the Federal Reserve to fight inflation, and easily reversed when the Fed loosens the reins. It's a classic overinvestment slump, of a kind that was normal before World War II. And such slumps have always been hard to fight simply by cutting interest rates.

Now there's no question that the Fed's rapid rate reductions last year helped avert a much bigger slump. But a hard look at monetary policy suggests that the Fed hasn't done enough — and possibly can't do enough. Although the Fed funds rate, the usual measure of monetary policy, is at its lowest level in generations, the real Fed funds rate — the interest rate minus the inflation rate, which is what matters for investment decisions — is actually about the same as it was at the bottom of the last recession, in the early 1990's, because inflation is considerably lower.

And the drop in the Fed funds rate engineered by Alan Greenspan & Company, though faster than that in the last recession, has so far been considerably smaller; last time it fell by 6.75 points, this time it fell by only 4.75. Even if the Fed funds rate falls all the way to zero, that will be a smaller interest rate reduction than the last time around. If you think the excesses of the 1990's were larger than those of the 1980's, that the economy needs more stimulus to pull itself out, then it seems likely that the Fed hasn't done enough, and quite possible that even going all the way to zero still won't be enough.

And this situation may last for a while. The overhang of excess capacity, especially in telecommunications, will be worked off only slowly. It's all too possible that we may be looking at a sluggish economy into 2004, maybe beyond. The Fed should cut rates further — it may not be enough, but it will help. What else should we do?

The answer is that we should have a sensible plan for fiscal stimulus — one that encourages spending now, to bridge the gap until business investment revives. Some of the elements of such a plan are obvious, and were described by Jeff Madrick in yesterday's Times. First, extend unemployment benefits, which are considerably less generous now than in the last recession; this will do double duty, helping some of the neediest while putting money into the hands of people who are likely to spend it. Second, provide aid to the states, which are in increasingly desperate fiscal straits. This will also do double duty, preventing harsh cuts in public services, with medical care for the poor the most likely target, at the same time that it boosts demand.

If these elements don't add up to a large enough sum — I agree with Mr. Madrick that $100 billion over the next year is a good target — why not have another rebate, this time going to everyone who pays payroll taxes?

And how will we pay for all of this? You know the answer to that: Cancel tax cuts scheduled for the future. The economy needs stimulus now; it doesn't need tax cuts for the very affluent five years from now.

This isn't rocket science. It's straightforward textbook economics, applied to our actual situation. It's also, I'm well aware, politically out of the question. But I think we're entitled to ask why...>>
___________________________________________

Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as Professor of Economics and International Affairs at Princeton University.

Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

nytimes.com



To: lurqer who wrote (7760)10/4/2002 4:19:29 AM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
Knock, Knock, Knockin' on Heaven's Door

Investment Outlook
By Bill Gross
October 2002

pimco.com



To: lurqer who wrote (7760)10/4/2002 12:44:11 PM
From: stockman_scott  Read Replies (2) | Respond to of 89467
 
<<...journalist David Halberstam recently appeared on CNN to explain that sending "American kids" to do "occupation duty in Baghdad" is "like punching your hand into a hornet's nest."...>>

Vietnam Surfacing

Media Offer Glimpse Into Military History
Press Clips
by Cynthia Cotts
The Village Voice
September 25 - October 1, 2002

villagevoice.com

Is Iraq going to be Vietnam all over again—or will there never be another war like that? Given the unflinching support for last year's bombing of Afghanistan, you might expect the mainstream media to support Bush's new war and to treat Vietnam comparisons as obsolete and clichéd. But even as many Democrats have shed their party's traditional anti-war stance, some news outlets have given war critics a chance to revisit the dark side of military history. By now, these flashbacks may have saturated the airwaves just enough to prompt a counterattack by the hawks.

References to the 1960s surfaced on September 3, when New York Times executive editor Howell Raines told PBS, "One of the lessons of Vietnam is that it's important to ask the questions at the front of the war, not afterwards." The V-word came up again on September 5, when Democratic leader Tom Daschle noted that Bush had not offered any specifics on the coming war. "You know," Daschle told the press, "we learned the lessons of secrecy during Vietnam."

Ten days later, former UN chief weapons inspector Scott Ritter told CNN that the U.S. has not conclusively proved that Saddam Hussein has nuclear weapons. "I despise the regime in Baghdad," said Ritter, but "if we're going to run a [clean] prosecution . . . we can't distort the facts." In another CNN interview, Ritter repeated his call for evidence, saying, "This wouldn't be the first time a president of the United States has lied to the American people to facilitate a war. Think back to . . . Vietnam."

One of the main talking points about Vietnam is that the war took too long and too many Americans died. Hence, the hawks say, Iraq will never be like Vietnam. According to this argument, the U.S. military proved itself to be invincible during the Gulf War, Bosnia, and Kosovo, so there is no chance of heavy casualties or a quagmire in Iraq. As Bill Clinton recently told David Letterman, "You're looking at a couple of weeks of bombing and then I'd be astonished if this campaign took more than a week." Clinton's forays into Kosovo and Bosnia were painless, but his 1993 Somalia intervention was not. When American soldiers die, goes the wisdom, the U.S. public loses its stomach for war.

Anti-Iraq types have drawn other parallels to Vietnam besides death toll and duration, most notably the government's recurring attempt to gain public support without fully informing the public, i.e., "lying to facilitate a war." In the 1960s, President Lyndon Johnson exaggerated the threat that justified a military escalation in Vietnam, and the ensuing "credibility gap" ultimately cost him his job, as The Boston Globe reported recently. The New York Times' Frank Rich has also invoked the 1960s, writing, "There is a widening credibility gap between the White House's marketing of the war and the known facts." The Washington Post's Tom Ricks told NPR last weekend that the Vietnam generation of generals in the Pentagon still vows never to go to war again "without the informed consent of the American public."

Then there is the political gain factor. Historically, peaceniks don't get elected president, which is why anti-war Democrats are rare birds this fall. But media outlets are still offering the microphone to any war opponents they can find. On September 18, the Los Angeles Times reported on the lone potential Democratic "peace candidate" for president in 2004, Vermont governor Howard Dean. On September 21, The New York Times reported that the few liberal war opponents in Congress are being marginalized by their own party. (Democrats who are moving toward a pro-war position now include senators John Kerry, John Edwards, and Daschle, as well as Representative Richard Gephardt, all of whom are likely presidential candidates in 2004.)

When politicians abandon the cause, intellectuals take up the slack. Thus, journalist David Halberstam recently appeared on CNN to explain that sending "American kids" to do "occupation duty in Baghdad" is "like punching your hand into a hornet's nest." Halberstam went on, "I have a melancholy feeling that these things, whether it's the Bay of Pigs in Cuba or going into Vietnam, turn out to be, particularly in colonial settings, more difficult than people think. . . . A lot of people in Iraq . . . would like Saddam toppled. But it's a very different thing . . . if it's . . . a big, rich, white country which topples it by military force."

Opposition dried up last week when Bush asked Congress for the authority to attack Iraq. With Democratic leaders promising Bush a modified thumbs-up before the November elections, The Washington Post turned to legal scholars to read the fine print of Bush's war doctrine. They concluded that Bush had asked for the broadest construction of war powers since the 1964 Tonkin Gulf resolution—when Congress gave Johnson a rubber stamp to escalate the war in Vietnam.

Of course, 1960s metaphors are bad PR for the left. Maybe that's why an editorial in last Sunday's New York Times compared the Bush doctrine to something "the Roman Empire or Napoleon might have produced."

--------------------------------------------------------------------------------



To: lurqer who wrote (7760)10/8/2002 2:35:08 PM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
What About Meaningful Reform...??

Fool Me Once
By PAUL KRUGMAN
Columnist
The New York Times
October 8, 2002
nytimes.com

Quite a few people rubbed their eyes back in July when accounting reform legislation sponsored by Senator Paul Sarbanes became law, not as the Sarbanes Act but as the Sarbanes-Oxley Act. It was, if you knew anything about Michael Oxley's legislative career, as if Prohibition-era Chicago had passed a Ness-Capone clean government ordinance.

But this summer, when plunging stocks and corporate scandals dominated the news, all sorts of unlikely people declared themselves ardent defenders of the small investor against corporate insiders. Mr. Oxley, the chairman of the House Financial Services Committee — and big accounting firms' best friend on Capitol Hill — suddenly emerged as the co-sponsor of that reform bill. Harvey Pitt, chosen to head the Securities and Exchange Commission precisely because the accounting industry regarded him as a softer touch than Arthur Levitt, tried to portray himself as tougher than his predecessor. George W. Bush, whose business career consisted of a series of murky insider dealings, declared himself outraged at corporate evildoers. Fortunately, Dick Cheney didn't make any speeches about business honesty; that would really have made our heads explode.

Cynics questioned the sincerity of these sudden conversions. They warned that it would be business as usual after the midterm election. But the cynics were wrong: the bad guys didn't even wait for the election. As soon as the public was distracted by the threatened war with Iraq, they began backsliding in earnest.

Not surprisingly, Mr. Oxley is leading the retreat. It was always surreal to see his name on that bill; as the Wall Street Journal editorial page put it, he "has carried oceans of water" for the accounting industry. In 1995 he led the fight for legislation that protects corporate officers from shareholder suits. As late as May he lashed out at Merrill Lynch, not for touting questionable stocks to win lucrative banking deals, but for agreeing to pay a fine when its wrongdoing came to light. But who knew? Maybe Mr. Oxley had finally seen the light.

He hadn't. He was just waiting for his moment. It came last week, as he apparently torpedoed plans to appoint someone effective to head a new accounting oversight board.

The Sarbanes-Oxley Act created the new board to replace the accounting industry's previous, spectacularly ineffectual self-regulation. Since the purpose of the board is to restore investor confidence, it's crucial that its head be someone forceful, with unquestioned integrity. The job was first offered to Paul Volcker, the former chairman of the Federal Reserve. When Mr. Volcker turned it down, the focus shifted to John Biggs, head of the T.I.A.A.-CREF pension fund and a strong advocate of reform. Indeed, some news reports indicate that Mr. Biggs believed that he had been offered the job, and had already been making arrangements to retire early from T.I.A.A.- CREF.

But apparently it is not to be. Let me just quote The Wall Street Journal on this: "The big accounting firms won't dare speak on the record. . . . All signs suggest they're working instead through Republicans in Congress, specifically Ohio's Mike Oxley. . . . They don't want pension fund chief John Biggs to lead the new accounting board because they fear he might actually force the industry to shape up." What The Journal doesn't point out is the obvious: The accounting industry may have a lot of clout, but this wouldn't matter if the White House made it clear that the S.E.C. must choose an independent board. There's only one possible conclusion: The administration doesn't really want corporate reform.

This isn't just about Mr. Biggs; it's now hard to believe that any credible reformer will be offered the job, or accept it if offered. And that's grim news. Last summer stocks were slumping, not just over fears about the economy but because of concerns that ordinary investors simply couldn't trust what corporations said. Stocks recovered, briefly, in part because the nation believed that reform was well in hand. Now stocks are slumping again, and the recovery is sputtering. What will happen when the public realizes that summer promises of reform weren't sincere?

What's amazing is that the enemies of reform felt free to take off their masks even before the election. One can only hope that the media report what's happening, and that voters, as they look at their shrunken 401(k)'s, remember the false promises of summer. Fool me once . . .

___________________________________________

Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as Professor of Economics and International Affairs at Princeton University.

Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.