Bruce Bartlett on the Bush Tax Cut


Bartlett agrees with me that Cong. Thomas bailed out the Administration with his brillant "compromise" with the idiots in the Senate. The reduction of the capital gains rate from 20 to 15 percent is just what the doctor ordered. Also note that dividend paying companies like The Southern Company are up strongly today (SO up 5%); their stream of income being now more valuable.

Robert Novak: 40 years of columns

Novak summarizes his life work. His column continues to be a must read.

Price Gives His Side of the Story

Notice his misuse of the pronoun "myself." This is real Yankee talk to use "myself" instead of "I."

Adminstration Would Be Well Advised to Listen to Thomas

President George W. Bush seems determined to stick to his plan to eliminate individual taxes on corporate dividends -- even if it means he passes on a broader, simpler tax cut that could do more for the economy. It is unclear whether this position is simple stubbornness or an inability to grasp the big picture, but the White House is misplaying its hand.

House Republicans are gathering around a plan to cut the tax on both dividends (currently taxed at individual tax rates as high as 38 percent as ordinary income) and capital gains (currently with a top rate of 20 percent) at a new, lower 15 percent rate. Lower-income taxpayers who now pay 10 percent cap gains taxes would see that halved to 5 percent.

Cutting the capital gains tax should give a jolt to all businesses, not just those who pay out dividends. And unlike plans to phase in the president's dividend cut, a simple cut in the marginal rate is much easier to implement and comply with, requiring no army of accountants to figure out.

In all, a cut in the capital gains rate would appear to be easier play for the White House, so much so that current opposition to it may just be so much posturing.

Robert Novak: Saved by Bill Thomas

Novak writes that Ways and Means Chairman, Bill Thomas, is using his tax-cut bill, which includes capital gains tax cuts, to bail out the administration's moribund tax cut plan. I suspect that some sort of dividend tax relief will find its way back in the House plan as finally adopted. Then the administration will dare the Senate Democrats to kill it and hurt their elderly constituents. These guys will take the dare.

Let My Teenager Drink (washingtonpost.com)

T.R. Reid laments the prohibitionism which pervades the issue of teen-age drinking and parental authority. Most of the world would be absoulutely astounded to learn that it is a crime in this country for a father to go into a restaurant with his 19 or 20 year old son (or daughter) and buy him glass of beer. These are people who are considered adults by state law but who are denied the legal rights of adults concerning the use of alcohol.

Patriot Raid

Can you believe this?

Treasury chief has to sell tax cuts

Novak reports that John Snow put in a call to him to say the Wall Street Journal had it wrong about the administration's willingness to cave on the tax bill. He concludes as follows:

Back in Washington this week, Snow must convince everybody that he is not about to cut back on a rate reduction essential to business. He must also deal with prickly House Ways and Means Committee Chairman Bill Thomas, who so far has not told House Republican leaders what he plans to do with the president's proposal. Finally, nobody has yet calculated how to reach the needed 51 Senate votes.

And then there is the daunting prospect of Alan Greenspan testifying before the House Financial Services Committee on Wednesday. The president announced last week he will turn the other cheek to Greenspan's previous thrashing of the Bush tax bill and name him to a fifth term as chairman of the Federal Reserve Board. Nobody could sell the tax cut better than Greenspan, but he also could inflict far greater damage on tax cuts than ''distortion'' of Snow's quotes.

Economic Principals: What Have We Learned?

Here David Warsh presents a summary of what mainstream economists have to say about Nation Building. Iraq must look forward to a good dose of experimentation in that regard. It turns out that microfoundations are what are important and, once again, macroeconomics is too aggregative to capture anything of value.

The laws of capital taxation -- The Washington Times

OK, let us see if there is any life left in the President's tax proposal. Bush has some political capital at this point; let him use it to do some good for the productive element in the country.

War brings out the Purple People

Good historical analysis of those who instinctively whoop it up for war.

Mesopotamia. Babylon. The Tigris and Euphrates

How is it that 42 percent of the American people believe Saddam Hussein is directly responsible for 9/11?

Wilson, Bush, and History

Joe Sobran on the lessons to be drawn from the wars of the 20th Century.

He concludes: Like Wilson, Bush is a moralistic Protestant who feels he has a divine mission to change the world. Bush too is a product of the Ivy League, though unlike Wilson, a minister’s son who presided over Princeton University, he isn’t exactly a student of history. Wilson wrote more books than Bush has read, but that didn’t make him wise. Neither man should ever have been let near a Bible.

In fact Bush may be about to do for the twenty-first century what Wilson did for the twentieth. The two men seem pretty evenly matched in hubris. Bush has evidently exchanged the intoxication of liquor for the intoxication of power.

SportingNews.com - Baseball : TBS shakes up Braves' broadcast team

Next thing you know the Bulldogs will force the retirement of Larry Munson.

The Philosopher of Islamic Terror

From the New York Times:
In the days after Sept. 11, 2001, many people anticipated a quick and satisfying American victory over Al Qaeda. The terrorist army was thought to be no bigger than a pirate ship, and the newly vigilant police forces of the entire world were going to sink the ship with swift arrests and dark maneuvers. Al Qaeda was driven from its bases in Afghanistan. Arrests and maneuvers duly occurred and are still occurring. Just this month, one of Osama bin Laden's top lieutenants was nabbed in Pakistan. Police agents, as I write, seem to be hot on the trail of bin Laden himself, or so reports suggest.

Yet Al Qaeda has seemed unfazed. Its popularity, which was hard to imagine at first, has turned out to be large and genuine in more than a few countries. Al Qaeda upholds a paranoid and apocalyptic worldview, according to which ''Crusaders and Zionists'' have been conspiring for centuries to destroy Islam. And this worldview turns out to be widely accepted in many places -- a worldview that allowed many millions of people to regard the Sept. 11 attacks as an Israeli conspiracy, or perhaps a C.I.A. conspiracy, to undo Islam. Bin Laden's soulful, bearded face peers out from T-shirts and posters in a number of countries, quite as if he were the new Che Guevara, the mythic righter of cosmic wrongs.

Toronto Sun Columnist: Eric Margolis Whatever happens we have got


the Maxim gun and they have not.

The Post Saddam Quagmire

Turkey, Iran set sights on Northern Iraq

"Ancient History": U.S. Conduct in the Middle East Since World War Il and the Folly Of Intervention

My friend, Sheldon Richman, wrote this essay in 1999 for the Cato Institute. Nothing seems to change but the political party in charge of the hubris.

Here is a piece of it:

The importance of the de facto alliance between the United States and Iraq, which continued until shortly before Iraq's invasion of Kuwait in 1990, cannot be overstated. By siding with Iraq against Iran, the United States granted legitimacy to Saddam Hussein as the world's guardian against Muslim fanaticism. His use of chemical weapons against Iran brought the mildest criticism because of who his victims were.(211) Moreover, the various forms of aid had a direct effect on Iraq's ability to hold out against Iran's long onslaught. At the end of the war, Saddam had a huge military establishment and believed that he was the savior of the Arab world. When Kuwait refused to forgive the large debt Saddam owed, he concluded that the Kuwaitis were ungrateful free riders who had taken him for granted. That conclusion explains, in part, Saddam's invasion of Kuwait.(212)

It is sobering to realize that some foreign policy experts urged Washington to support Saddam Hussein during the war against Iran on the grounds that an Iraqi victory was preferable to an Iranian one. Daniel Pipes and Laurie Mylroie, for example, wrote that "the fall of the existing regime in Iraq would enormously enhance Iranian influence, endanger the supply of oil, threaten pro-American regimes throughout the area, and upset the Arab-Israeli balance." They favored "other economic steps" to help Iraq in addition to the commodity and Ex-Im Bank credits. "Such measures," they wrote, "would assert U.S. confidence in Iraq's political viability and its ability to repay its debts after the war's end, and would encourage other countries--especially Iraq's Arab allies and European creditors--to continue financing Iraqi war efforts."(213)

Pipes and Mylroie anticipated the argument that a triumphant Saddam Hussein would be bad for American interests and responded:

But the Iranian revolution and seven years of bloody and inconclusive warfare have changed Iraq's view of its Arab neighbors, the United States, and even Israel. . . . Its leaders no longer consider the Palestinian issue their problem. [Its] allies have forced a degree of moderation on Iraq. . . . Iraq is now the de facto protector of the regional status quo.(214)

The consequences that Pipes and Mylroie feared from an Iranian victory have come as a result of Washington's backing Iraq. That typical backfire is not simply a hazard of foreign policymaking. It is inherent in the nature of war and lesser state conflict, in which the law of unintended consequences rules. Sheer hubris alone permits so-called experts to make pronouncements about how distant peoples' affairs should be managed and with exactly how much force.(215)

Unfortunately, the fresh example of the Iran-Iraq War has not deterred either the policymakers or their expert allies in the private sector. As if their support for Iraq had been a resounding success, they embraced Syria's Hafez Assad and Iran in the conflict with Iraq, blind to what effects that may have in coming years.

The New Gulf War

Saddam Hussein's invasion of Kuwait on August 2, 1990, underscored more than one irony of prior U.S. policy. U.S. aid to Saddam during his eight-year war with Iran is only one of those ironies.(216) Another is that although President Bush emphatically rejected Saddam's attempt to link the invasion to the plight of the Palestinians, Bush may yet face enormous Arab pressure to address that problem.

Bush offered several reasons for his response to Saddam's actions, a response that included the cobbling of an international coalition of nations. The initial military deployment was to deter an Iraqi attack on Saudi Arabia. Then, ostensibly to drive Iraq from Kuwait, Bush went to the United Nations to have an economic blockade, an act of war, imposed, although American ships were already in place. Vowing to usher in a "new world order," Bush declared that, in the first test of the post-cold-war world, unprovoked aggression and the toppling of a "legitimate" government (read: quasi-feudal monarchy) by a tyrant comparable to Hitler could not be tolerated. The Munich analogy was rolled out more than once. Although American intervention was lightly shrouded in the mantle of the United Nations and collective security, Bush made it clear that no country but the United States could have spearheaded the effort. Bush and other public officials, including Secretary Baker and Senate Minority Leader Robert Dole, raised the less lofty issue of oil and the purported danger to the U.S. economy ("our way of life"), although that argument had been discredited early in the crisis.(217) When the specter of Iraq's controlling 40 percent of the proven oil reserves did not spook the American public, President Bush insisted that the intervention was not about oil but about aggression. He also defended his policy in terms of protecting the Americans held hostage by Saddam Hussein, although they were not taken hostage until after the policy was launched, and of the economic damage being inflicted on the fledgling democracies of Eastern Europe, although the rise in oil prices resulted from Bush's own embargo.

Two days after the November election, the president announced a doubling of the military deployment to provide an "offensive option." Faith in the blockade was abandoned. On Thanksgiving Day 1990 Bush added a new justification of the possible need for war: Saddam's apparent effort to develop nuclear weapons, which, Bush implied, would endanger the American people. The speech followed by days the publication of a New York Times opinion poll in which a majority of respondents had said that a nuclear threat was the one reason they would be willing to support military action against Iraq. Thus, in faithful Orwellian 1984 fashion, the official U.S. attitude toward a recent ally turned 180 degrees.

The hollowness of the Bush administration's reasons, particularly the highly selective stand against aggression, indicates that the president sees the Middle East as his predecessors saw it, as a U.S. sphere of influence in which rival interests may not compete. Saddam's offense did not lie in occupying a neighbor (partners Turkey, Syria, China, and the Soviet Union, as well as Israel, had done that), or in murdering "his own people" (China's leaders and Syria's Hafez Assad had done that), or in having nuclear weapons (several unsavory states have them and more are in the process of acquiring arsenals). Rather, his offense lay in upsetting the status quo in an area where the United States had vowed repeatedly to go to war, if necessary, to prevent adverse change. Bush's policy was a reaffirmation of U.S. claims in the Middle East, in case anyone thought that the end of the cold war made them obsolete. As he put it, the lesson of the war against Iraq is that "what we say goes."(218) Related reasons for the policy include the need for a new mission for a defense establishment threatened by the public's demands for a peace dividend; the desire to test new weapons; and the need to distract the public from troubling domestic issues, such as the exploding budget deficit and higher taxes.

One outcome of U.S. intervention has been immense Arab pressure on the United States to settle the Palestinian question, something that worries Israel. Bush's Arab coalition partners have a strong case when they argue that the United States cannot justify its double standard for Iraq and Israel. Unfortunately, few in the region will argue that Bush should disengage and let the parties solve the problem themselves. At best, Arab pressure may prompt him to change the nuances of U.S. intervention, but it is doubtful Bush will be willing or able to try to change the Shamir government's position on the occupied territories. Israel, for one thing, managed to rehabilitate its public image in the United States by its decision to stay out of the war.

The war against Iraq, though executed quickly and with light American casualties (let's not forget the death and destruction inflicted on Iraq), will have continuing unfortunate consequences, besides the massacre of Kurds and Shi'ites at Saddam's hands. It was a grotesquely logical denouement to 45 years of U.S. policy in the Middle East.(219)

Bush's real goal in Iraq

Pax Americana -- we ain't leaving Iraq.