Many on the right are lamenting the "conversion" of former Federal Reserve chairman Alan Greenspan and will likely start to discredit him for committing the unforgivable heresy of praising Clinton and criticizing Bush. Specifically, he praised Clinton for his fiscal-minded policies and focus on the spending deficit. Conversely, he criticized Bush and the Republican Congress for its out-of-control spending and divorce with fiscal discipline. He has it exactly right — the Democrats did not win in 2006, the Republicans lost.
In the information age, or more appropriately the disinformation age, pundits on both sides will spin Greenspan's remarks and globalize them into what they aren't. Greenspan remains, legitimately so, a libertarian Republican. This is not an endorsement of Hillary-care which will likely be re-introduced if she gets elected. However, the fact remains that at least "tax and spend" liberalism is mathematically coherent compared to "tax-cut and spend" Republicanism. Call it what you want, but it's not a conservative policy and that is why the conservatives have not bailed out the Republicans in 2006 and aren't contributing at high levels in 2008. The Republicans had a golden opportunity to cut the massive waste and pork from the federal government's budget and showed themselves all too ready to increase it at far greater levels than any Democratic administration.
Greenspan's book, The Age of Turbulence: Adventures in a New World, spells out some of his criticism and praise of US economic policies of his time at the helm of the Fed. The timing of the book could produce real intelligent discussion on economic policies, but sadly it will not. We don't debate ideas, we duel with soundbites.
The fact remains, deficits do matter. The technical term for a family that routinely deficit spends is "bankrupt". The sub-prime mortgage fallout is just another case of what happens when families do this in bulk. Our deficit spending has driven the dollar to record lows against the Euro. Other nations and central banks are concerned about our spending habits and are acting accordingly.
When a few Chinese ministers threatened to sell their US dollars because of policies toward the Yuan, the threat was real. To be fair, this was probably two ministers trying to make inroads into the Communist Party of China, but we should all stand up and take note that our policies have introduced a significant risk of foreign manipulation to our economy. Someone has to make up the difference between our spending and our tax revenue. In this case it was foreign countries like China who may not have our best interests in mind when they make their financial decisions.
President Bush rarely used his veto pen until the Democrats took over Congress. The result was an out-of-control appropriations process where almost every significant bill was laden with pork spending such as the "bridge to nowhere". Pundits can point to Rep. Jefferson (D-LA) who took a $100,000 payoff all they want, but conservatives expect better from their people and don't want politicians who are just as corrupt as Democrats. Illinois Republicans learned that lesson with George Ryan and the result was that the Illinois Republican party is defunct and no longer capable of winning statewide office. The national Republican Party should look at how rampant corruption and waste worked out for the Illinois Republican party… that's their future unless they get it together.
That said, Greenspan is, as are most conservatives, for "tax-cut and spending-cut" and corruption-free policies. Judging from the field of 2008 Republican nominees, it is doubtful that any of them are up to the task of pruning the budget to end the deficit or cleaning up the corruption in Congress. This is why Newt Gingrich is also right that there is an 80-20 chance that there will be a Democratic (probably Hillary Clinton) president in 2008.Powered by Sidelines