Cheney's "Policies"

by emptywheel

The third installment in the WaPo's Cheney series is a bit of a hodgepodge. It includes items that appear to have been thrown into this installment as part of a generic domestic policy article. But what the article is really about is how Cheney has pushed trickle down policies that have been proven failures in the past, once again by serving as a gatekeeper for advice that gets to the President, and pressuring the President on the few occasions when he disagrees.

But let me take a step back to contextualize this one. In my Sources post, I asserted that this series is largely an attempt on the part of Chief of Staff Bolten to reel Cheney in. How telling, then, that this article includes a direct link a scan of what appears to be an original memo (note the blue ink) Bolten wrote as Director of OMB, his position immediately prior to his current one. The memo describes the intent of the board--fiscal discpline--yet is placed after a paragraph describing how Cheney used the board as yet another gatekeeping device to direct Bush to make the choices Cheney supports.

The vice president chairs a budget review board, a panel the Bush administration created to set spending priorities and serve as arbiter when Cabinet members appeal decisions by White House budget officials. The White House has portrayed the board as a device to keep Bush from wasting time on petty disagreements, but previous administrations have seldom seen Cabinet-level disputes in that light. Cheney's leadership of the panel gives him direct and indirect power over the federal budget -- and over those who must live within it.

It's a curious touch, a subtle way of displaying Bolten's attempt to maintain fiscal sanity against the background of Cheney making economic decisions that have really screwed the American economy. This stuff, I get the feeling, is personal for former OMB Director Bolten.

Much of the rest of the article portrays how Cheney interceded to discredit the advice of "respected" economists (scare quotes in honor of Greenspan's foolish ARM-promotions). There's the way Cheney had a staffer with 12 years of policy experience rip apart a report provided by Cheney's old friend Alan Greenspan.

Conda, the vice president's aide, said Cheney asked him to critique the study. Conda attached his own memo arguing that the Fed's analytical model was flawed. He said "it wasn't my job to know" what Cheney did with the paperwork, but noted that Greenspan's study did not gain traction inside the White House.

And there's the way Cheney has pushed around the other, cabinet level officers with portfolios on the economy.

Aside from Greenspan, Cheney had faced down opposition from many of the administration's senior economic voices, including Daniels, Treasury Secretary Paul H. O'Neill and Commerce Secretary Donald L. Evans. They believed that the economy was recovering and that a deep tax cut wasn't needed. Daniels said he worried that it would undermine the GOP message of fiscal discipline.

And then there's one of the most curious passages from the article.

The vice president regularly convenes a kitchen cabinet of diverse outside economic experts, often before the president is about to make a major decision. Members of the group describe a man who enjoys the nitty-gritty of economics, poring over charts of obscure data such as freight-car loadings and quizzing experts on the subtle ways the government can influence the economy.

"With the president it was much shorter. It's 'Marty, what do you think of where we stand today?'" said Martin Feldstein, a Harvard economics professor and the president and chief executive of the National Bureau of Economic Research. "It's also a less technical presentation."

R. Glenn Hubbard, Bush's former chairman of the Council of Economic Advisers, said of Cheney: "I'd have conversations with him that were at a level of detail that those with the president were not."[my emphasis]

Here's where the article is vague. Are we to assume that Feldstein and Hubbard are members of this kitchen cabinet (though Hubbard wouldn't really count as an "outside" expert). The cast of characters seems to indicate that Feldstein is on the kitchen cabinet and Hubbard is not. But that's it--no more discussion about who or what this kitchen cabinet entails. And in the one other case where the article mentions an outside economic advisor ...

In previous administrations, such initiatives typically have been generated by the Treasury Department or the White House economic team. But Cheney has made the vice president's office a hub of tax policy, enabled by the fact that "this president appears to want to have Treasury take the orders from the White House," said John H. Makin, an economist and an informal Cheney adviser. [my emphasis]

... that advisor doesn't even appear in the cast of characters. In other words, this key institution that seems to be making many of the economic decisions in this country remains almost entirely obscure.

For their part, Feldstein appears to be one of the whizzes behind privatizing Social Security and healthcare. And Makin is an (what else) AEI fellow who writes papers hailing the amazing American consumer (perhaps he's the guy who recommended that Bush push American citizens to support their country after 9/11 by shopping). In other words, these guys are hacks espousing Cheney's pet theories. But even on an article like this one, we don't get to see who the hacks behind the curtain are.

But the effects on policy appear to be clear. As with everything else, Cheney appears to have used 9/11 as an excuse to implement policies that inch our county closer to feudalism, with freebies for business and tax cuts for the wealthy and nothing for the poor.

In the weeks following the attacks of Sept. 11, 2001, as the White House was putting together an economic recovery package, Cheney gathered his kitchen cabinet, frequently interrupting the experts as he furiously jotted notes on a stack of cards embossed with the vice presidential seal. What kind of tax cuts are needed? Cheney wanted to know. How big?

A few days later, Cheney was "on fire" when he met with the president, Cheney's chief of staff, I. Lewis "Scooter" Libby, later told Conda. Cheney had decided that the best way to shake business leaders out of their post-attack paralysis was to let them immediately write off the cost of new plants and equipment. After hearing him out, Bush made Cheney's idea a centerpiece of his plan.

Perhaps it's no accident that the first description of Cheney firing someone (a management tool Cheney's friend Gribben mentioned in the first installment) is when Cheney fired Paul O'Neill for his sane views on economics.

Cheney, however, pressed his argument that the economy needed a jump-start. He wanted not only to reduce the tax on dividends but also to cut the capital gains tax and accelerate income tax breaks for top earners, according to Daniels, Conda, Hubbard and others. Conda said Cheney subscribed to the view of supply-side economists that when government cuts taxes the economy grows, generating additional tax revenue that largely offsets the losses from lower tax rates.

The standoff came to a head in late November 2002, during a meeting in the Roosevelt Room.

O'Neill continued to oppose the tax cut on grounds that the government was moving toward "fiscal crisis," irritating Cheney. "The vice president really got a sense of where O'Neill was coming from and surmised it was a problem," Conda said. The following month, Cheney would demand O'Neill's resignation.

Bush sided with Cheney on the dividends tax but thought it would be better to eliminate it altogether. The president was cooler on the capital gains tax, according to Conda and others. And having campaigned on a platform of compassionate conservatism, he expressed doubts about giving another income tax break to the wealthiest Americans, particularly because they would benefit the most from the elimination of the dividends tax, Hubbard said.

This is a portrait of Cheney directly overruling Bush's populist instincts to impose an economic approach that destabilizes our country and shifts more wealth to the rich.

The article on Cheney's constitutional abuses portray a man eager to dismantle our democracy. This article, showing how he has supplanted the advice of economists to force really regressive policies, shows what he's really after--a world in which they very wealthy increase their own security at the expense of the bulk of Americans.

Comments

[emptywheel]

I wanted to call attention to this passage:

"Dick once told me that our president is a 'big-government conservative,'" said former senator Phil Gramm (R-Tex.), in a recollection disputed by Cheney's office. "Now, Dick keeps his opinions to himself whenever he disagrees with the administration, as he should. But I believe that Dick is a small-government conservative."

It suggests that Cheney's office got to review the quotes from this article, at least those that invoked Cheney's own words. What a curious approach to these articles--refusing all comment (except in the voice of Mary Matalin or David Gribben, yet reviewing the quotes. Not surprising, mind you, but curious.

[Mauimom]

Notice to the frogs on Capitol Hill: the water keeps getting hotter & hotter. When will impeachment of the VP be "on the table"?

[Ishmael]

EW - Josh Bolten does seem a very likely source for the article, particularly given how suddenly he decided to spend quality time with his family - perhaps he got the word that the article was going to be dumped onto the public in the June news void, and didn't want to share any quality elevator time with Shooter. I note via DKos that the tricoteuse of Washington insiderhood, Mrs. Quinn, has announced that Dick has trashed the place and that the Republican party is going to get rid of him. Well, who's going to bell that cat? Bolten is a Bush family loyalist, so there is definitely Poppy's gang's hand in all of this, along with reassuring leaks about closing Gitmo and drawing down forces. But what is the real endgame here? I'm sure that someone as paranoid as Cheney has some booby traps around his undisclosed bunker to stop a defenestration. Bad press making Dick quit? As Dick himself said, "Go f*** yourself!" The President can't fire the VP - after all, under the Constitution (conveniently for Dick, he can rely on it in this case), he is an elected official just like the President and cant be fired, only impeached. Perhaps a Spiro Agnew? Some minor personal corruption unconnected to the party as a whole, that will get him indicted? If there is no plan beyond the press coverage, this is all very interesting, but nothing we didnt know or suspect before.

[4jkb4ia]

I have realized that a good description of Balaam's behavior is "lawful evil". Thanks, EW.
There is a controversy over whether Balaam was greater or lesser than Moses, but it is clear from the text that Balaam let it go to his head and Moses did not. Anyone has to ask why Balaam went to curse the people when he had explicitly been told not to do so at least once. The standard interpretation is that Balaam only cared about the money, because he said, "If Balak were to give me his entire household of silver and gold, [I would not go against the word of G-d]." But these were higher-ranking people than the first mission, so he could not just turn them away. It's possible that Balaam wanted to know if he could curse the people, and show these important people that he had power. That is clearly relevant to this series.

[Ishmael]

Sally Quinn suggests that if Cheney is somehow bounced, Fred Thompson would be appointed vice president, because "everyone loves Fred". Uh huh. They seem to think that the Democrats would have to approve any replacement for Dick. I was struck by the following from Wikipedia on Spiro Agnew:

".....By mid-1971, Nixon concluded that Spiro Agnew was not "broad-gauged" enough for the vice-presidency. He constructed a scenario by which Agnew would resign, enabling Nixon to appoint Treasury Secretary John Connally as vice president under the provisions of the Twenty-fifth Amendment. [1] By appealing to southern Democrats, Connally would help Nixon create a political realignment, perhaps even replacing the Republican party with a new party that could unite all conservatives. Nixon rejoiced at news that the vice president, feeling sorry for himself, had talked about resigning to accept a lucrative offer in the private sector. Yet while Nixon excelled in daring, unexpected moves, he encountered some major obstacles to implementing this scheme.

John Connally was a Democrat, and his selection might offend both parties in Congress, which under the Twenty-fifth Amendment had to ratify the appointment of a new vice president. Even more problematic, John Connally did not want to be vice president. He considered it a "useless" job and felt he could be more effective as a cabinet member. Nixon responded that the relationship between the president and vice president depended entirely on the personalities of whoever held those positions, and he promised Connally they would make it a more meaningful job than ever in its history, even to the point of being "an alternate President." But Connally declined, never dreaming that the post would have made him president when Nixon was later forced to resign during the Watergate scandal."

If Dick were somehow made to disappear, what "Democrat" might be an appealing caretaker VP? Feel the Joementum anyone? :)

[clem]

I really appreciate your diligent and patient kremlinology, but it pains me to recognize that it's necessary to go to such tedious lengths to understand what our government is up to.

In the case of Cheney's "economic policies", I hope someone can provide us with an accurate, detailed answer to the obvious question: Who has profited? When it comes to crooked money-making schemes, cause and effect often reside in extremely close proximity.

With Cheney detailed to the White House, Halliburton is doing better than it was back when he was purchasing asbestos liabilities. It looks to me like the folks in that early secret energy meeting have been doing quite well as an oil grab goes up in flames but increases their profits nevertheless. It wouldn't be surprising to discover that the homeland-security industry is full of Republicans whose ineptness has proved profitable and largely tax-free.

[Mimikatz]

Cheney's policies aren't failures at all. There has been a tremendous redistribution of wealth fron the top 69% to the top 1%, whose incomes have more than doubled in the last few years. Total assets have probably gained even more, because it takes money to make money.

And deficits? As Ron Suskind reported, Cheney famously said "Reagan proved deficits don't matter." Whether he was speaking literally or politically isn't clear.

The man has truly screwed up everything he has touched.

[4jkb4ia]

Good catch on the "kitchen cabinet". I would have assumed that he simply had informal meetings with all the people quoted.

[Mickey]

He’s not in the Executive Branch.
He’s not in the Legislative Branch.

Cheney and I agree completely!
He’s not part of our government!

Let’s make it official…

[earlofhuntingdon]

The issue regarding subordinates, including the president, seems to be whether they abjectly accept Cheney's ideas (about eg, tax cuts for coupon clippers or prisoner interrogations) and dominance. Those who have their own ideas and consider themselves peers don't survive, which leaves us a govt filled with 'Fredos. Powell and Rice saw this early on, and so vented their frustrations on 'Fredo, knowing it would have no effect, instead of confronting Addington or Cheney. This mimics the dynamic of a highly dysfunctional family with a drunken father.

Other than quit, as Powell did belatedly, there's nothing else to do. Cheney's network allows him to know what you're doing as soon as you do. Cheney has the experience and energy and uberloyal staff of his own, and an Irish terrorist's willingness to kneecap an opponent before pissing on his face.

The keystone, of course, is the weak, cowardly, uncurious and willingly led George W. Bush, over whom Cheney exercises almost complete emotional control. Paging Dr. Freud, Dr. Howard, Dr. Freud.

[censor]

Funny how Libby is abscent throughtout the Washington post articles. Somewhere else in the net this was called the Sansom Defense. Cheneys's Cheney no where!

[my too sense]

Random thoughts below.

In Bart Gellman's Q&A WaPo chat yesterday he said that the economic section (I assume this part) of the series was the one section that Cheney's office gave approval for his loyal minions and surrogates to speak with him and Becker..wonder if as a part of that approval and willingness, they were allowed to read what was being said in this section prior to it be finalized?

And besides O'Neill, who stood up for his principles and then was ousted and smeared for daring to speak out, it seems like all those other Bush economic men (I'm looking mostly at you Mr. Greenspan) acted like Colin Powell, you know the man who spoke out against the Iraq invasion prior to the war, especially his UN presentation. Of course now after 6 years we hear about how the Maestro was against the Cheney Bush taxcut giveaway to the wealthy ....fearing the long term damaging consequences of longterm deficits....now we hear about how Uncle Alan's and many others worries, its much easier to do this when everyone else is piling on Fourthbranch. Well on the bright side, at least it's officially out in the open now that the economic and tax policy of this administration that these men all admit it was a tax giveaway geared toward the wealthy, how many times did we suffer through well the middle class and the poor are getting a 300 dollar rebate and it is tax relief for them too! I also get the sense from this article that many of these same republican economic men who disagreed strongly with the tax cut giveaway to the wealthy and corporations, also aren't big believers in the trickle down economic theory either...wingnut heads might explode over that revelation.

Lastly, wonder if Grover Norquist is part of the kitchen cabinet table of economist...along with good ole Larry Kudlow who is mentioned in the article?

[JGabriel]

WaPo (quoted by EW @ Top: "In the weeks following the attacks of Sept. 11, 2001, as the White House was putting together an economic recovery package, Cheney gathered his kitchen cabinet, frequently interrupting the experts as he furiously jotted notes on a stack of cards embossed with the vice presidential seal. What kind of tax cuts are needed? Cheney wanted to know. How big?"

It is kind of interesting how this paragraph portrays a rich man's greed for tax cuts as: patriotic.

[emptywheel]

my too sense

Lots of good points--and you may well be right about Kudlow and Norquist. I'll have to go read Gellman's chat from yesterday. Someone (First Draft?) noted how much more solicitous this part is. Why would Cheney choose the economic one to review? To keep his clients, the TX oil money, happy>?

[jdmckay]

you quote comment on Bush:
(quote)
The president was cooler on the capital gains tax(...) having campaigned on a platform of compassionate conservatism, he expressed doubts about giving another income tax break to the wealthiest Americans, particularly because they would benefit the most from the elimination of the dividends tax, Hubbard said.
(end quote)

This strikes me as a planted quote, in the interest of rehabilitating W's image. I don't believe it... not for a minute: enabling big-monied buddies in Texas as governor was among the red-flag warning signs prior to 2k election. The same well-healed "$$ for Bush" crowd has reaped tax benefits & fed contract awards from the day Junior landed on Pennsylvania Ave.

[4jkb4ia]

Of course, no one was as great as Moses! The controversy is actually about whether Balaam had prophecy or not.

[Sparkles the Iguana]

Okay, now I'm wondering if this entire series is aimed at rehabilitating Bush's image. Bush is an economic populist? Who wants to make sure the wealthiest Americans pay their fair share??

[prostratedragon]

But near the passage in Suskind that Mimikatz refers to, it's said that Bush did "express doubts" about the dividend tax reduction. Furthermore, in the econ policy meeting where he expressed this, he persisted for a while in the face of responses by supporters of the cuts, such as Hubbard.

On rereading that passage, I don't think that Bush necessarily was acting out of any deeply felt sense of populism, let alone an identification with the struggling middle class. I think he might have been seeking arguments to feed into a political calcuation about whether finally to support the offered measures. Or, eliciting talking points that could be used to campaign for the cuts. Or, by giving the impression that he was in play, continuing the process of sorting his team into players and leavers.

In any case, Hubbard certainly knows that the passage exists and has been public for quite a while. It makes fascinating reading, on pp. 299–306 of The Price of Loyalty. The passage with Cheney revealing himself to O'Neill is back on 291–2.