Maybe the Bush Tax Cuts Aren't Big Enough
Alan Greenspan has endorsed tax cuts and the new Treasury secretary, Paul O'Neill, is on board as well after having waffled a bit in his confirmation testimony. Mr. O'Neill had argued that lower interest rates, not taxes, were the first line of defense against a slowing economy. He will be pleased if the Fed gratifies widespread expectations and trims its short-term rate target again this week. He also now says he will carry the tax-cut banner with pride. With Bill Clinton out of the way, some congressional Democrats have become tax-cutters as well.</br></br>The administration of George W. Bush is only in its second week, but all the political harmony in Washington is so unnatural as to be disconcerting. Even the New York Times has overcome its reluctance to admit that Bush is a legitimate president and was marveling Sunday on what a smooth transition the Bushites were conducting. No doubt things would have been even smoother for transition manager Dick Cheney if Al Gore's staffers hadn't trashed the vice presidential offices Mr. Cheney was preparing to occupy. But kids will be kids.</br></br>The honeymoon won't last, of course. The docility of the Democrats has been prompted in part by fears that the only legacy left behind by the Clinton presidency was a collapsing economy. They would have had to worry less if Mr. Clinton and Mr. Gore had boasted far less that this was an economy they themselves had "grown." But the now-departed chief exec and veep were merely behaving like politicians.</br></br>Don't tell the amiable Democrats this, but their worst fears may not be justified. Even if they are, Mr. Clinton and Mr. Gore deserve only a part of the blame, just as they deserve only a modicum of credit for the economic surge they claimed as their handiwork when the 20th century was going out like a lion. The late 1990s boom was the product of an entrepreneurial, high-tech explosion in which productivity rose dramatically and a new consumer product, the personal computer, came into its own. Last fall, the boom simply ran out of gas after consumers had used up most of their credit and corporations could no longer keep stock prices pumped up by borrowing money to buy up their own shares.</br></br>Mr. Clinton and Mr. Gore, held in check by Congress, were not able to contribute much to the debacle. That's if you don't count the not inconsiderable regulatory mischief they inflicted before making their rather ungracious departures. Or their resistance to tax-cut proposals that, if enacted a year ago, might have headed off the current slowdown. It's a bit early to grant them absolution, particularly with regard to energy policy, but a little generosity never hurts.