Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Sunday, April 16, 2006

More Thuds and Screams from the Topkapi Palace

Bruce Bartlett writes: >[Bruce Bartlett: The "Myth" of Bush's Loyalty](http://time.blogs.com/daily_dish/2006/03/the_myth_of_bus.html): I disagree with your characterization of Bush as being famously loyal — a view so widely stated that you can be excused for repeating it. Bush is loyal ONLY to toadies, suck-ups and sycophants. Anyone who shows an ounce of independence — or loyalty to the country above loyalty to him — is punished or dispensed with. You mention Paul O'Neill, but a better example is Larry Lindsey. His estimate of the cost of the war was mildly embarrassing back in 2002 because it was higher than the absurdly low estimates being peddled by the White House at that time. So they threw him overboard, even though he may have done more to get Bush elected than anyone else, including Karl Rove. Now, as you know, Lindsey's estimate looks absurdly low. As I say in my book, loyalty with Bush is strictly a one-way street: total loyalty is demanded, but none is ever really offered in return. >Given that this is the case, I have never understood why so many people — both inside and outside the administration — continue to give Bush so much loyalty. I can only conclude that it is borne more from fear than agreement with his policies. I think there is genuine fear of crossing the president, although I have never been able to uncover the precise mechanism through which it is communicated — even in my own case. Nevertheless, it is real — just as fear of the unknown is real. I think somehow he communicates to everyone he comes in contact with that they will suffer if they go against him. And his obsessiveness about leaks — combined with Patriot Act powers — has shut off back channels that have previously existed in every presidency. >There is a CRYING NEED for an investigative reporter to plumb the depths of how this works and why so many people submit to it — even when Bush has poll ratings so low as to barely show a pulse. Even behind closed doors, with guarantees of confidentiality, I cannot get FORMER administration people to say a bad word about the guy even when they have been badly treated by him in some way. The climate of fear is pervasive. It's particularly odd given Bush's tendency to give people assignments that publicly humiliate them. We've already heard today about Bush's treatment of John Snow: >[Paul Blustein](http://www.j-bradford-delong.net/movable_type/): Snow has hewed strictly to the White House's talking points. That... [was] his undoing: He has been such a loyal salesman that he has come across as ineffective.... "[Snow] has followed the script too well"... said Pamela F. Olson, a former assistant Treasury secretary.... "been a good mouthpiece even when he would personally have been better off if he hadn't, and the president would have been better off too.... [A] top Senate Republican staffer [said]... "[T]he problem is that the White House plays it up themselves that [Snow's] the spokesman and policy gets made inside the White House. I think it hurts them, but it's their choice."... [Kevin] Hassett said. Snow could be an effective spokesman... "if he was the one who had the authority to speak and make policy..." But consider Bush's humiliation of Andy Card by sending him out to repudiate his own advocacy of stem-cell research: >[TNR Online | Card Away (print)](http://www.tnr.com/docprint.mhtml?i=20060410&s=lizza041006): As his White House service wore on, this ostentatious modesty morphed even further into creepy masochism. He seemed to delight in the most painful assignments. After his own father died of Parkinson's disease, Card became a supporter of the life-saving potential of stem-cell research. Yet, when Bush limited federal money for the research, it was Card who made the rounds on the Sunday shows to cheerily defend the policy... Or cons Bush humiliated Larry Lindsey by sending him out to defend the steel tariff and the farm bill by pretending to be some bizarre clone of Ira Magaziner: >[National Journal Magazine Archives](http://nationaljournal.com/cgi-bin/ifetch4?ENG+NJMAG+7-njindex+1173066-REVERSE+0+0+48455+F+22+38+21+Lindsey+AND+PD%2f01%2f01%2f2002%2d%3e12%2f31%2f2002): NJ: In an earlier interview, you summed up the NEC's role as "bringing economic arguments to bear on the policy process." Recently, I think, there is an impression that in several high-profile policy debates-on steel trade and agriculture, for example-economics was not a big part of the debate, and politics was the main consideration. Is that true? >Lindsey: Let's take steel first. I am not telling anything here that wasn't public. There were two legitimate economic points of view within the economic team. One that [U.S. Trade Representative Robert] Zoellick and [Commerce] Secretary [Donald L.] Evans put forward. Others, like Glenn Hubbard [chairman of the Council of Economic Advisers], certainly have a different view. One argument is that tariffs are never good. I certainly taught that in my economics class. The other argument [represented by Zoellick and Evans] is a little bit more subtle. The world has excess capacity in steel. In any market where that is the case, price is going to be at marginal cost, and marginal cost is going to be below long-run average total cost. And that is the method by which firms lose money and exit the market. >But this is a global issue. Either you say, "OK, we'll let our firms exit, and we'll let other countries pick up [the business], and we'll just import our steel." Or you say, "Well, that's not a very tenable long-run strategy for any country, because you are effectively letting others pick which industries are going to prevail." Do you unilaterally disarm, or do you use laws that are now on the books, that are on every country's books, that are consistent with [international trade rules] to challenge that process? I can make a case for either one of those. There is a sound economic case for doing what we did. >NJ: So economics was a big part of that argument. What about the big farm bill [which increased agricultural subsidies]? Did economics go into that? >Lindsey: Absolutely. With the bill that passed the Senate, we had three economic objectives: The first was to keep the overall cost consistent with the budget resolution. On that score, we reduced the price of the Senate bill by 29 percent. By any objective standard, cutting 29 percent is a victory. Our second objective was to have a bill that was consistent with [international trade] rules. We have a bill that is just consistent with those rules. The Senate bill was totally inconsistent with trade rules. The third economic objective was to avoid going back to the bad old days of permanent stockpiles and acreage allocation and all the rest. And this bill does not do this; it does not fundamentally change the basis for agriculture policy that was set up in the [1996] Freedom to Farm Act. Now, do I think the ag bill was a perfect bill? No, there are onion subsidies in the bill. I, personally, would never make the case publicly that onion subsidies are a good idea. I'll probably hear from a congressman whose district grows onions, but I don't think onion subsidies are a good idea...

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