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Sunday, February 08, 2004

OK a tough one. Robert W Bush is going mano a mano against J B DeLong

JBD The Washington Post has called your budget a "bogus budget," and the New York Times has called your budget a "Pinocchio budget," isn't that right. The Post editorial page has been a big supporter--why did they say that?

RWB I guess they liked the alliteration. Although the Post supported the invasion of Iraq, they are, after all, the Post. I mean this must be the first time someone tried something like "even the conservative Washintgon Post". Also, you know, the editorial page has very severe space restrictions so they have to over simplify. I think that if you look at the much longer and mor thorough news story at (re f*** Brad DeLong)you will find a much more balanced analysis.

[Follow up] They say that your budget omits $150 billion of costs in 2009 associated with policies you advocate--and that the real 2009 deficit number is $400 billion. Isn't that true?

Who are "they" ? How can you talk about the real 2009 number ? Last I heard it was 2004. Real facts concern the past or the present. The 2009 number is a forecast, really an informed guess. You might disagree but suggesting that because we disagree about what is likely to happen in the future, one of us is lying doesn't make sense.

[Follow up] But the budget you submitted has no money in 2009 to fight the War on Terrorism, no proposals to keep the Alternative Minimum Tax from undoing the tax cuts you are so proud of, and contains $60 billion of promises that sometime in the future you will submit more spending cuts. Doesn't that add up to about $150 billion?

RWB [note ha ha he is trying to keep it short and punchy but he put the $150 Billion and the $400 Billion in the same question so I answered the less specific $ 400 Billion part. The follow up doesn't follow. Anyway I will try to answer it]

RWB We are commited to transferring sovereignty over Iraq to the Iraqis. If they request our assistance we will certainly try to help. To budget funds for an occupation of sovereign independent Iraq would be an insult a diplomatic disaster. Oddly president Karzai hasn't given us specific requests either. God knows he's busy and doesn't have the kind of staff I have, but, out of respect for Afghan sovereignty we had to wait on that one.

[note. After this one JBD would have been speachless for a moment then asked RWB since when he gave a damn about international law. The deck is stacked for me because I am getting the questions in writing with no true follow up]

[Follow up] Shouldn't you withdraw the budget document, and issue a new one that presents a more honest picture of your policies and their likely costs?

I don't see why you are questioning my honesty. You are not just pretending to be the judge and jury, you are pretending to be the judge and jury with a crystal ball

Mr. President, your first Treasury Secretary--Paul O'Neill--warned about the dangers that over-hasty and imprudent budgeting could produce embarrassingly-large deficits, didn't he?

Well actually no one advocated "over-hasty and imprudent budgeting" either in my administration or, as far as I know, ever. Paul had a lot of company on that one including me.

[Follow up] Isn't it now clear that Paul O'Neill was very right?

RWB Yes it is. Since Paul supported Bush administratino economic policies he shares some o fthe credit for the economic recovery which has been stimulated by our tax cuts.

[Follow up] Since he was so right, shouldn't you bring him back? Wouldn't it be better to have advisors who gave you good advice than advisors who gave you bad advice?

RWB Paul is a smart dedicated hard working guy but he isn't exactly a team player. Also he tends to be outspoken. Unfortunately an outspoken treasury secretary can cause instability in financial markets.

Mr. President, you are disappointed that your administration has seen a loss of 2.3 million payroll jobs for Americans, aren't you? You wish that the job market had been better?

RWB you know I don't understand why the employer survey shows a decrease in jobs while the household survey (the CPS) shows a big increase in employment. I guess the key word in your question must be "payroll". I don't think even smart eminent economists such as JBD have a clue as to what is going onwith the numbers. I would guess that more people are setting up their own businesses given the improved incentives for entrepreneurship.

[Follow up] I mean, it is disappointing to know wthat your administration has the worst job record since Herbert Hoover, isn't it?

[note doesn't follow and even GWB himself wouldn't leave himself open to that one]

RWB That would be disappointing if it were true but it isn't.

[Follow up] If you had known back in 2001 what you know now, what would you have done differently in economic policy?

RWB I guess the main thing is that if I had known that the Republicans would take back the Senate I wouldn't have bent over backwards to compromise with the 50 Democrat Senators in 2001. In particular, I never liked the idea of temporary tax cuts.

[Follow up] Wouldn't giving more tax cuts to the middle class that spends them and fewer to the $300,000+ a year crowd that saves them have boosted spending and employment?

RWB we gave lots of tax cuts to the middle class.

[Follow up] Wouldn't it, in retrospect, have been better to have had a different tax cut package--one that would have purchased some insurance against the extraordinary decline in employment that we have had?

RWB You are almost contradicting yourself. You say that the labor market is slack. A standard response to that problem is to cut taxes. Now you are suggesting that we should have put in a mechanism to raise taxes if the economy is weak and cut them if it is strong a procyclical fiscal policy. That doesn't make any sense. Now I think the economy is strong and I support tax cuts for other reasons. I can't see any economic logic behind your argument.

Mr. President, your former Treasury Secretary Paul O'Neill quotes you as saying one cause of lost jobs is "SEC Overreach": that because the SEC is too aggressive in regulating corporate managers, investment is discouraged and jobs are lost,isn't that right?

You are making a very big deal about an alleged off-hand comment which I don't remember making. You will notice that in actual policy and public statements I have always
I don't think that SEC over reach is currently a major factor in investment decisions. I admire the necessary esential job that the guys at the SEC are doing.

[Follow up] But Alan Greenspan and Paul O'Neill are on record as saying that the thing reducing investment and holding back the American economy over has been a fearthat the SEC is not doing enough. Enron. Adelphia. Global Crossing. WorldCom--all cases of fraud by corporate managers on a scale that would dwarf the Gilded Age, isn't that right?

RWB As I said above, I think the SEC is essential to the health of the US economy. I guess you can ask them or anyone to do even more, but I think they are giving 100%

Speaking of alleged offhand comments and Alan Greenspan, didn't he say that he has no recollection of saying something that O'Neill claims he said ?

[Follow up] Can you please explain why you think that Chairman Greenspan and the man you thought best suited to be your Treasury Secretary are wrong, and that you are right on this issue?

RWB well no I can't, since we three agree.

Mr. President, your budget reports estimates for only five years, ending in 2009, is that right?

RWB right

[Follow up] It's traditional to report them for the standard ten years. The deficit numbers in years six through ten look really bad--much worse than in 2009, is that right?

RWB there you go with the Crystal ball again. Look it's hard to forecast one year ahead. The 6 to 10 year ahead numbers create an illusion of certainty when they are really just guesses.

[Follow up] Did you and your staff decide to cut the six through ten year estimates from the budget in the belief that if you don't release the numbers for those years, the press corps is too dumb and lazy to ask about them. Is that correct? Is that the reason?

RWB Not at all. I think I explained above that we decided that long term economic forecasts are unreliable.

[Follow up] [Follow up] Has it worked? Has the press by and large failed to ask about what's going to happen in years six through 10, 2010 through 2014?

RWB Well most journalists understand that they don't have crystal balls so they don't challenge us based on their knowledge of the future.

RWB returns after a walk in the park with the family

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