|
Monday, September 17, 2007
Krugman: Greenspan and Tax Cuts
Paul Krugman's take on how former Federal Reserve chairman Alan Greenspan gave a green light to the tax cuts he now calls irresponsible.
When President Bush first took office, it seemed unlikely that he would succeed in getting his proposed tax cuts enacted. The questionable nature of his installation in the White House seemed to leave him in a weak political position, while the Senate was evenly balanced between the parties. It was hard to see how a huge, controversial tax cut, which delivered most of its benefits to a wealthy elite, could get through Congress.
Then Alan Greenspan, the chairman of the Federal Reserve, testified before the Senate Budget Committee.
Until then Mr. Greenspan had presented himself as the voice of fiscal responsibility, warning the Clinton administration not to endanger its hard-won budget surpluses. But now Republicans held the White House, and ... Greenspan ... was a very different man.
That may seem unprincipled and self-interested. But let's not forget that Greenspan was a devotee of the writer Ayn Rand, who believed that acting in one's self interest is the very definition of being principled. Here's Greenspan responding to a review of Rand's Atlas Shrugged (emph. mine):
Shortly after "Atlas Shrugged" was published in 1957, Mr. Greenspan wrote a letter to The New York Times to counter a critic's comment that "the book was written out of hate." Mr. Greenspan wrote: " 'Atlas Shrugged' is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should."
Posted by Matt Lewis
|