Sunday, September 16, 2007

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The unique legacy of George W. Bush

According to the Wall Street Journal, "lifelong libertarian Republican" Alan Greenspan does not think much of President George W. Bush:

Mr. Greenspan writes that when President Bush chose Dick Cheney as vice president and Paul O'Neill as treasury secretary -- both colleagues from the Gerald Ford administration, during which Mr. Greenspan was chairman of the Council of Economic Advisers -- he "indulged in a bit of fantasy" that this would be the government that would have resulted if Mr. Ford hadn't lost to Jimmy Carter in 1976. But Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.
As strange as it seems today, Greenspan's expectations about the incoming administration were not completely out of whack. There was a time when people thought Paul O'Neill would make a great Treasury Secretary. Norwas this expectation limited to fiscal policy. On foreign policy, for example, Colin Powell, Richard Cheney, Donald Rumsfeld, and Condoleezza Rice all had good to excellent track records in previous administrations.

At this stage of the game, however, there are clearly four categories of legacies that come with working for George W. Bush:

1) Those lucky few who will emerge with their reputation intact somehow. Examples: Bob Zoellick, Rob Portman, Ben Bernanke.

2) Those whose reputations acquired a stain that will be difficult to erase. Examples: Colin Powell (and his speech to the U.N.), Alan Greenspan (and his endorsement of the Bush tax cuts).

3) Those whose actions have led journalists to engage in psychoanalysis to figure out what the heck went wrong: Examples: Dick Cheney, Don Rumsfeld.

4) Those who have committed career suicide through repeated screw-ups. Examples: Paul Wolfowitz, Alberto Gonzales.

(1) and (4) do not interest me as much as (2) and (3). How is it possible for so many distinguished policymakers to have been brought so low by one administration?

UPDATE: Some commenters have pointed out that Greenspan's endorsement of the tax cuts do not fall into the same category as what other officials did, since he certainly did not endorse the massive spending increases that followed the tax cuts. I think this is a fair point, and can be summed up in an exchange Greenspan had with Bob Rubin about his testimony regarding the tax cuts:

Bob Rubin phoned.... With a big tax cut, said Bob, "the risk is, you lose the fiscal discipline."...

"Bob, where in my testimony do you disagree?"

There was silence. Finally he replied, "The issue isn't so much what you're saying. It's how it's going to be perceived."

"I cant be in charge of people's perceptions," I responded wearily. "I don't function that way. I can't function that way."

It turned out that Conrad and Rubin were right....

Let me put it this way. I think Greenspan can erase his stain with less effort than others in category (2). However, he's going to have to deal with people very eager to keep refreshing that stain.

posted by Dan on 09.16.07 at 11:38 PM


"Power corrupts, and absolute power corrupts absolutely."

-Lord Acton

Oh, and stupidity helps too.

posted by: Joe M. on 09.16.07 at 11:38 PM [permalink]

Because those who would be in a position for 1-4 have to be loyal to the chain of command, and loyalty inevitably results in #2 being the best case for the most part.

posted by: Nicholas Weaver on 09.16.07 at 11:38 PM [permalink]

Because those who would be in a position for 1-4 have to be loyal to the chain of command, and loyalty inevitably results in #2 being the best case for the most part.

posted by: Nicholas Weaver on 09.16.07 at 11:38 PM [permalink]

I know it is heresy but I don't think support for tax cuts should stain Greenspan. Receipts are still up, it is out of control spending that is the problem

posted by: theCardinal on 09.16.07 at 11:38 PM [permalink]

It isn't the tax cuts per se, but the magnitude. It should have been clear--or, at least, it is clear in retrospect, so maybe that's not fair--that the Bush Administration had no interest in reigning in "ideologically correct" and/or "politically useful" spending. And the size of the tax cuts was just out of whack with any common sense; remember how the Administration upped them in 2001 but with sunsets that allowed them to claim they were even less than they actually amounted to?

When we assess tax cuts, we should always do the counterfactual: what would receipts have been without them? The American tax burden coming out of the Clinton/Gingrich era was pretty low by both historical US and OECD standards; there was no pressing need to cut taxes further. Given looming entitlement obligations and continued interest on a large deficit, Gore had it right. Greenspan did stain his record, not by endorsing tax cuts but by endorsing the Bush tax cuts with silly arguments about how deficits are good because grandma needs to own treasury bills. Eliminating the deficit simply wasn't at stake.

posted by: Dan Nexon on 09.16.07 at 11:38 PM [permalink]

Well, the most obvious difference between the Ford administration and that of George W. Bush is that Bush is not Ford. Such reputations as some of Ford's subordinates were able to build might have looked very different had they worked for a different President.

Another thing to keep in mind is that reputation in Washington can be a somewhat nebulous concept. In any individual case it can be based on skill and dedication to the mechanics of electoral politics, skill and dedication to the mechanics of bureaucratic maneuver, or skill and dedication to policymaking. These three sometimes overlap, and people who lack any talent for the first two rarely get to do much of the third. But neither mastery of electioneering nor brilliance in the art of the turf battle is any indication that a Washington figure will be any good at all at designing and implementing policy.

People in 2001 who looked on Donald Rumsfeld as a distinguished veteran of the Pentagon rarely examined what he had actually done as Ford's Secretary of Defense. His signature accomplishments then were to stymie the foreign policy initiatives Ford was attempting to pursue through his Secretary of State and to promote successfully a view of the Soviet nuclear threat out of all proportion to what it actually was. In so doing he greatly expanded his own turf and that of his department, but in terms of policy success his first tour at the Pentagon had little to commend it.

A final consideration is that people who perform adequately in subordinate positions cannot automatically be assumed equal to more demanding assignments. Colin Powell -- much like an earlier Secretary of State, Dean Rusk -- had done very well as Reagan's National Security Adviser, a position that had defeated many of his predecessors. He had ably served, when Joint Chiefs Chairman during the Gulf War, as a buffer between the Bush White House and the volatile theater commander, Norman Schwarzkopf. As head of his own department he was out of his depth, unwilling to stake his image or standing with the President on any fight he thought he might lose, and as a result losing most of the time anyway.

This consideration goes a long way toward explaining Cheney and Rice as well. Rice, despite her academic credentials, has always been primarily a Bush family retainer. It was evident early on that she was over her head as National Security Adviser, and has been a weak Secretary of State. Cheney, who performed adequately as the elder Bush's Secretary of Defense, took advantage of the current President's weakness to craft a role for the Vice Presidency unique in American history. Cheney has Vice President has been a dominant policymaker operating in secret and without restraint, something impossible to conceive happening under Ford or even the elder Bush. As a matter of bureaucratic maneuvering, the opportunity the younger Bush presented to Cheney was unprecedented. Cheney exploited it for all he was worth. What does this say about his policy acumen? Nothing.

I'm pretty dubious about the value of public psychoanalysis, and don't think it's necessary to explain the gap between reputation and performance in Bush administration appointees. Closer examination as to how many such people earned their reputations in the first place would have diminished some illusions about how distinguished they were likely to be in their new jobs -- and of course the biggest illusion of all was the idea that George W. Bush would at the end of the day be more like Ford and his own father than he turned out to be.

posted by: Zathras on 09.16.07 at 11:38 PM [permalink]

Well, the most obvious difference between the Ford administration and that of George W. Bush is that Bush is not Ford. Such reputations as some of Ford's subordinates were able to build might have looked very different had they worked for a different President.

I think this is a key point. They look bad because they worked for Bush rather than Ford. And they worked for Bush rather than Ford because Bush rather than Ford was president. There's only one game in town; you either work for Bush or you wait a minimum of 8 years for another Republican.

(To put it in Rumsfeldian terms, you go to Washington with the administration you have, not the administration you want.)

posted by: David Nieporent on 09.16.07 at 11:38 PM [permalink]

I agree with Dan Nexon: it's not the tax cuts, it's the spending.

I find it very telling that Dr.Drezner does not mention the figure who is the biggest disgrace of them all: George Tenet.

Which brings us back to 9/11. Now, look at the current Congress, and how much of a disgrace that has been. Did the Bush Administration elect this congress? Did the Bush Administration create a political culture where people like George Tenet prospered.

Let's be honest. It's not the Bush or the Clinton administration. It's the whole Washington DC. And ultimately, it's "we the people" who allowed this to happen, and it's "we the people" who pay and will keep paying, unless we find a way to get better people to represent us.

It's easy to blame everything on "this Administration". It's much harder to accept responsibility.

posted by: Ivan Lenin on 09.16.07 at 11:38 PM [permalink]

Yeah, I don't see the reason that tax cuts should stain Greenspan either. As noted above, spending was a problem, but as far as I know, Greenspan never signed on to large increases in spending.

Moreover, tax cuts have overall helped our economic situation, AND we are now in a situation in which the deficit is relatively low.

Maybe Drezner can tell us a bit more about why he thinks tax cuts were so horrible that they should stain Greenspan forever for having supported them.

posted by: A.S. on 09.16.07 at 11:38 PM [permalink]

BTW, it doesn't surprise me that a Kerry voter like Drezner would have this view of Bush appointments, but, as is characteristic of Kerry voters, he leaves out any argument as to why we should think these things of people like Greenspan. Among the go-along-to-get-along crowd, I guess these things need no explanation.

posted by: A.S. on 09.16.07 at 11:38 PM [permalink]

If I recall correctly, Alan Greenspan endorsed President Bush's tax cut proposals at a time when budget surpluses were expected to last into the future and before they were revealed as a temporary phenomenon created by the stock market bubble in the late 1990s, so I would cut him a little slack on this matter. With respect to the effect Bush's actions had on the budget deficit, I cetainly agree they were adverse; however, I believe that his biggest mistake was adding prescription drug coverage to a mostly unreformed Medicare program. As the CBO can attest the nation faces a huge and growing problem from entitlement spending which would exist even without his tax cuts or Iraq War spending.

posted by: Mactavish on 09.16.07 at 11:38 PM [permalink]

Here's a story about Greenspan's endorsement of tax cuts. It seems to bear out Mactavish's commentary.

I agree that the Medicare expansion was poorly conceived, but I'm not sure that this is an issue of "tax cuts aren't a problem." With, for example, Social Security on the books the difficulty with tax cuts is that they do worsen the Federal Government's ability to get through the impending baby-boom crisis. My understanding is that fiscal discipline and even small adjustments in the models both render the entitlement crunch more than manageable (hence Gore's "lockbox" position). My main concern is with the growing debt, which needs to be serviced in interest, and I think Greenpsan's endorsement of the tax cuts did undermine his legacy. After all, nobody should have justified a major cut in revenue through highly uncertain long-term projections.. and his reasoning seemed, as I mentioned above, rather strained in parts. Part of it, for instance, relied on "starve the beast" reasoning which has *never* worked.

posted by: Daniel Nexon on 09.16.07 at 11:38 PM [permalink]

Sorry. The embedded URL got stripped. Here it is:

posted by: Daniel Nexon on 09.16.07 at 11:38 PM [permalink]

Wow, you mean Atrios and Krugman don't like tax cuts??? Seriously?! What a shock! What a stain on Greenspan's reputation! And we all thought the whole "tax the rich" echo chamber was gonna love this libertarian Republican. Poor Al, he must be, like, SO disappointed.

posted by: Ivan Lenin on 09.16.07 at 11:38 PM [permalink]

As Felix Salmon put it "Greenspan advocated the wrong policy because he was worried about something which (a) never happened; (b) never even came close to happening; and (c) has pretty much never happened economic history, anywhere."

posted by: Lord on 09.16.07 at 11:38 PM [permalink]

Daniel, since you bring up Condoleezza Rice, how do you think she comes out? I'd say perceptions of her are more colored by partisan glasses than most -- the left hates her more than she merits, the right loves her unduly.

posted by: Shelby on 09.16.07 at 11:38 PM [permalink]

Daniel Nexon states that he believes that the entitlement crunch is manageable with fiscal discipline and small adjustments in these programs. However, everything I have read produced by the CBO and reputable non-partisan organizations such as the Concord Coalition suggests otherwise. Even without any tax cuts or increases in discretionary spending future generations face a stark choice between sharply higher taxes or draconian reductions in non-entitlement spending absent major reforms in entitlement programs--and as yet nothing has been seriously proposed to accomplish this apart from the President's flawed attempt to reform Social Security. Indeed, much of the argument surrounding entitlement programs today centers on proposals to expand Medicare, a program which is already generating deficits according to the CBO. So while I share my friend's view on the problems created by this Administration's fiscal position, I believe it's a mistake to believe--as many of my more liberal friends do--that the long-range fiscal challenge confronting this country can be resolved by taxing only the rich and tinkering at the edges of massive programs such as Social Security and Medicare.

posted by: Mactavish on 09.16.07 at 11:38 PM [permalink]

Amazing, that all these people (Cheney, Rumsfeld, etc.) have failed to win over professors and reporters, two groups that run over 80% Democratic. This does call for heavy psychological and political analysis.

Next time, how about a exegesis of the deep inadequacies that prevented the members of the Clinton administration from winning widespread popularity among military officers and evangelical preachers.

You know, to paraphrase Socrates, the sin is not being totally insular, but not realizing your total insularity.

posted by: y81 on 09.16.07 at 11:38 PM [permalink]

Not to be shrill, but as to Greenspan's non-culpability with regard to tax cuts and the deficit, as I recollect, it seemed to recall it seemed that virtually every column Krugman wrote in his first few years as a NYTimes columnist was to the effect that the tax cuts would lead to enormous deficits. So it wasn't like no one out there had a clue.

posted by: Gene on 09.16.07 at 11:38 PM [permalink]

Gene, you are forgetting the interspersed Krugman columns from 2001 to 2003 that predicted hyperinflation and asset price deflation. I bet my entire portfolio that one of those would happen. (I figured since he predicted both, at least one was certain.) Now I'm poor. I guess Alan Greenspan was smarter than I, and didn't read Paul Krugman.

posted by: y81 on 09.16.07 at 11:38 PM [permalink]

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