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“Say It Ain’t So, Big Al,”
The Little Lad Lamented ...

(This dispatch comes to Bad Attitudes from a Washington insider. As is the case with all real insiders, he prefers not to jeopardize his position by using his correct name. He has chosen Theodore Metcalf as his nom de smear.)

With today’s headlines about Big Al Greenspan going in the tank for Bush on tax cuts, I suddenly realized something that had hitherto not been clear: Alan Greenspan intends to die in office.

Clinton has long maintained that Greenspan in the historic early 1993 meeting basically told Clinton that Clinton had to bring down the deficit or Greenspan would jam up the interest rates. Greenspan then came out in favor of Clinton’s deficit reduction plan, giving Clinton some cover to ram through his budget on a party-line vote.

Now it becomes clear that Greenspan is not in the business of intimidating and bending presidents to his will, as the media has long maintained. In fact, the opposite is true: In 1993, Clinton must already have wanted to cut the deficit (probably Bob Rubin’s idea), and Clinton simply let Greenspan sense that if he wanted to be reappointed, he had to abandon support for a big tax cut. Greenspan then complied, and Clinton put him back in.

Now the same story is playing out: Bush in meeting with Greenspan about ten days ago clearly signalled that he would not be a candidate for reappointment unless he backed a tax cut. Greenspan then took about a week to get his notes in order and reorder his patter from black to white. (He also had to educate his staff and other Fed governors on the new rationale for reversing course). Then he took his show on the road: Tax Cut Now Good.

I’ve heard Big Al loves the parties, etc. Must be true, since he obviously has no interest in fiscal policy.

Interest rates will be zooming, of course--the question is just how soon. I hope that Katie and I can lock in a mortgage at a good rate before the thing blows up. As a matter of fact, any smart homeowner should be considering remortgaging to the hilt at a fixed rate, preferably with an assignable mortage so you can sell the debt at a profit when you sell the house.

January 26, 2001


Copyright © 2004 by Jerome Doolittle