Speaking truth to power
It's not often that one dreams about Alan Greenspan, but last week, I confess, I did. Somehow, he stirred my imagination with his recent warnings about the economy, and I thought how proud Diogenes--the Greek who wandered the streets with a lantern, looking for an honest man--would have been of the Federal Reserve chairman. We need more like him in today's political climate.
Greenspan, please remember, is a card-carrying Republican who has been close to GOP presidents for more than three decades. While he served admirably under President Clinton, he has generally supported an orthodox conservative approach to policy. Yet in London recently, he had the temerity to break ranks with the Bush administration on economic policy. Why? Because he cares about the country's well-being.
The Bush team has been rolling merrily toward a second term, promising a permanent extension of tax cuts, adjustments to the alternative minimum tax, new spending on Iraq and Afghanistan, and reforms of Social Security--all, apparently, to be paid for by government borrowing. While the president also promises to cut budget deficits in half, sober publications like Business Week say his full program would drive us in the opposite direction, swelling deficits by as much as $5 trillion over a decade.
Best wishes. Greenspan, in words more delicately chosen, said, Whoa, hold on! Accumulating deficits, he cautioned, are dangerous to our economic health. While we may be all right at the moment, "net claims against residents of the United States cannot continue to increase forever in international portfolios at their recent pace." We can't go on, in other words, supporting our free-spending ways by relying on foreign investors. We should, instead, be reducing budget deficits and building surpluses.
Fortunately, Greenspan isn't the only heavyweight speaking up. Paul Volcker, his predecessor at the Fed, has said that unless America changes course, there is a "75 percent" chance of an economic crisis in the next five years. Pete Peterson, a Republican who served in President Nixon's cabinet, has described the course of our economic policy as "reckless" and immoral. The dollar's downward slide--it has dropped by about a third already with more to come--signals that the financial markets are worried, too.
The willingness of such men to speak honestly is important in more ways than one. They are shaping the debate not only on vital economic matters but, in a larger sense, on how we should approach other major issues in the next four years. With the conservatives' thumping victory at the polls, some allied with the president say he should now have a free hand and that others should shush up. Greenspan and Co. thus know they risk being pilloried, even by some old friends, when they challenge administration orthodoxy.
We need a better way to frame the national conversation. As Americans, all of us should want President Bush to succeed. Bush deserves not only our best wishes but an acknowledgment that he has fairly won a mandate to pursue a conservative agenda. He is also the only person in Washington who won nationwide, so he occupies a special place of respect. That starts with his cabinet selections: Absent evidence of wrongdoing, his cabinet choices should all be promptly confirmed so the president can get off to a fast, smooth start in his second term.
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