To: Nadine Carroll who wrote (60631 ) 12/9/2002 2:07:39 AM From: LindyBill Read Replies (2) | Respond to of 281500 Freidman's "Wish List" of things Bush should do was posted yesterday. Here is Safire's more realistic version. December 9, 2002 New Economic Policy By WILLIAM SAFIRE WASHINGTON To combat the creeping uncertainty that underlies the current beat of the doldrums, here's what President Bush should do: 1. Get off the defensive. "Things are not as bad as they look" is not exactly a grabber. Sure, productivity is up sharply and home equity is a bedrock bonanza, but the sense is spreading that the droopy way things look is the way they are. Forget blaming the Clinton bubble; focus on fixes. 2. Put one executive in charge. The apparent choice for inside man, Stephen Friedman, a former Goldman Sachs dealmaker and Columbia U. wrestling champ, is said to be an adept manager. But he should defer to the Treasury secretary as spokesman and leader, accountable to Congress as well as to Sunday-morning Savanarolas. 3. Launch the War on Uncertainty. You've already promised to make the tentative future tax cuts permanent; with control of Congress, you can now trump yourself and move many of them up earlier. Get rid of that weird sunsetting of the death-tax reduction that has rich grandpas worried about getting murdered by beneficiaries in 2011. Balance that with action to ? 4. Make the retroactive extension of unemployment insurance payments the first item you request from the new Congress next month. The much-needed money will be spent right away on post-holiday sales, provide a morale boost and will show you care about the 6 percent out of work. 5. Assign your new Treasury chief the job of explaining the need for ending double taxation of dividends. Not only would middle-class investors get a better return on their investment, but this would profoundly change recent go-go corporate behavior. Today's option-driven executives use company cash to shrink outstanding stock or to buy other companies; but with individuals' dividends untaxed, corporations would have a new incentive to pay out more profits to their real owners. This would devolve more power to stockholders; they, rather than directors, should decide how to spend their company's profits, much as other tax reduction lets taxpayers, rather than bureaucrats, decide. Even class warriors would have a tough time opposing such investor populism. 6. Give losers a break. Double the amount of capital losses that taxpayers ? most of whom have had a rough couple of years in the market ? can deduct from income taxes. No need to reduce the tax on capital gains; the winners can afford it. 7. Give savers a break. Accompany the tax-freeing of dividends with other incentives to save, such as increasing the amount workers can contribute to an IRA and upping the caps on 401(k) plans. 8. Ignore 10-year projections of anything. The latest foolishness is the General Accounting Office's projection of a trillion-dollar-a-year budget deficit a decade hence, give or take a hundred billion; a couple of years ago, scientific-sounding estimates had us splashing about in a surplus of a trillion or more. Circumstances change; make no projections beyond the first fiscal year of your second term. 9. Speaking of politics, don't let Democrats push you into cutting the payroll tax, wellspring of the Social Security system. Instead, propose raising the standard deduction for individuals to relieve those of the working poor still on the tax rolls. Bolster Social Security with your long-promised proposal to enable workers to invest a small portion of their equity in a selection of mutual funds. Space on today's tablet is limited to nine commandments. Wrap together a package something like this, involve a few committee chairmen, bundle it with a promise to veto excessive spending in light of the war, and launch it with confidence bordering on certitude in your State of the Union address. Then dispatch your new economic team to sell it to Congress and the nation. One caveat: do not call it your "New Economic Policy." Treasury Secretary John Connally wanted to affix that label to the Nixon administration's midcourse correction, but was stopped at the last moment by a guy in the Library of Congress who remembered that was the name Lenin selected for his Communist turnaround in the 1920's. Tell your new team to come up with a name without baggage.