In any case, it’s a must-read. It’s yet another piece on the White House’s response (if you can call it that) to the corporate scandals and stock market tumble. But this one just perfectly captures the mix of ideological rigidity, bizarre denial and whistling-past-the-grave trash-talk which is now the coin of the realm at the White House.
Remember the big tin robot in those early sixties sci-fi films? Remember how there’d come a point at the end where the hero would outwit the robot or set him on some problem he couldn’t solve and the robot would slip into a feedback loop and smoke would start coming out of his ears?
The White House is the robot.
It’s really that bad.
The upshot of the article is that Wall Street and congressional Republicans are going nuts. They think the sky is falling. But the White House thinks things really aren’t so bad. And they have a clever plan! The administration will use the August congressional recess to get a jump on Congress by pressing lawmakers to vote on fast track. That, and the President and Secretry O’Neill will travel to companies around the country that are doing well.
Phew! And I thought they didn’t have a plan…
The article accurately, if with understatement, notes that the White House’s response is “greatly constrained by administration philosophy … [which] does not believe in dramatic intervention, either in the markets or the economy.”
But here’s the graf that launches a thousand ships …
More dramatic economic proposals have so far been squelched. According to one economist close to the administration, White House economic adviser Lawrence Lindsey has suggested a narrowly tailored cut in the tax rate paid on stock profits for investors buying new stocks. That could lure buyers into the market. But the proposal was roundly shot down because it could be interpreted as a gift to affluent taxpayers at a time of economic uncertainty.
This is what I mean by the feedback loop and smoke coming out of their ears. Larry Lindsey is the president’s chief economic advisor, the top cheese, as good as it gets. His solution to the fix we’re in is to jigger the capital gains tax. Obviously his advice is being blocked by political advisors who happen not to be insane. But if Lindsey is being sidelined because he’s taken up residence on another planet who does that leave guiding the nation’s economic policy? Not Paul O’Neill. No one likes or respects him at the White House. Don Evans? Dick Cheney?
I think the answer is pretty obvious: No one.
We’re in trouble.