Monday, July 25, 2011
Churchill & Enemies
"You have enemies? Good. That means you’ve stood up for something, sometime in your life." - Winston Churchill
Sunday, July 24, 2011
Where the Deficit Came From
How the Deficit Got This Big
By TERESA TRITCH
New York Times
Published: July 23, 2011 LINK
With President Obama and Republican leaders calling for cutting the budget by trillions over the next 10 years, it is worth asking how we got here — from healthy surpluses at the end of the Clinton era, and the promise of future surpluses, to nine straight years of deficits, including the $1.3 trillion shortfall in 2010. The answer is largely the Bush-era tax cuts, war spending in Iraq and Afghanistan, and recessions.Despite what antigovernment conservatives say, non-defense discretionary spending on areas like foreign aid, education and food safety was not a driving factor in creating the deficits. In fact, such
spending, accounting for only 15 percent of the budget, has been basically flat as a share of the economy for decades. Cutting it simply will not fill the deficit hole.
The first graph shows the difference between budget projections and budget reality. In 2001, President George W. Bush inherited a surplus, with projections by the Congressional Budget Office for ever-increasing surpluses, assuming continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In January 2009, just before President Obama took office, the budget office projected a $1.2 trillion
deficit for 2009 and deficits in subsequent years, based on continuing Mr. Bush’s policies and the effects of recession. Mr. Obama’s policies in 2009 and 2010, including the stimulus package, added to the deficits in those years but are largely temporary.
The second graph shows that under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.
A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up.
In future decades, when rising health costs with an aging population hit the budget in full force, deficits are projected to be far deeper than they are now. Effective health care reform, and a willingness to pay more taxes, will be the biggest factors in controlling those deficits.
TERESA TRITCH
Saturday, July 16, 2011
'The Economist' addresses nation debt and balancing budget
Shame on them: The Republicans are playing a cynical political game with hugely high economic stakes
Jul 7th 2011 LINK
IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.
There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.
The House of Representatives, under Republican control as a result of last November’s mid-term elections, has balked at passing the necessary bill. That is perfectly reasonable: until recently the Republicans had been exercising their clear electoral mandate to hold the government of Barack Obama to account, insisting that they will not permit a higher debt ceiling until agreement is reached on wrenching cuts to public spending. Until they started to play hardball in this way, Mr Obama had been deplorably insouciant about the medium-term picture, repeatedly failing in his budgets and his state-of-the-union speeches to offer any path to a sustainable deficit. Under heavy Republican pressure, he has been forced to rethink.
Now, however, the Republicans are pushing things too far. Talks with the administration ground to a halt last month, despite an offer from the Democrats to cut at least $2 trillion and possibly much more out of the budget over the next ten years. Assuming that the recovery continues, that would be enough to get the deficit back to a prudent level. As The Economist went to press, Mr Obama seemed set to restart the talks.
The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.
A gamble where you bet your country’s good name
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.
And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer.
Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note.
Jul 7th 2011 LINK
IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.
There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.
The House of Representatives, under Republican control as a result of last November’s mid-term elections, has balked at passing the necessary bill. That is perfectly reasonable: until recently the Republicans had been exercising their clear electoral mandate to hold the government of Barack Obama to account, insisting that they will not permit a higher debt ceiling until agreement is reached on wrenching cuts to public spending. Until they started to play hardball in this way, Mr Obama had been deplorably insouciant about the medium-term picture, repeatedly failing in his budgets and his state-of-the-union speeches to offer any path to a sustainable deficit. Under heavy Republican pressure, he has been forced to rethink.
Now, however, the Republicans are pushing things too far. Talks with the administration ground to a halt last month, despite an offer from the Democrats to cut at least $2 trillion and possibly much more out of the budget over the next ten years. Assuming that the recovery continues, that would be enough to get the deficit back to a prudent level. As The Economist went to press, Mr Obama seemed set to restart the talks.
The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.
A gamble where you bet your country’s good name
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.
And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer.
Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note.
Thursday, July 14, 2011
Bush wanted Hussein from the beginning, Cheney said deficits don't matter
Bush Sought 'Way' To Invade Iraq?
February 11, 2009
Not only did O'Neill give Suskind his time, he gave him 19,000 internal documents.
"Everything's there: Memoranda to the President, handwritten "thank you" notes, 100-page documents. Stuff that's sensitive," says Suskind, adding that in some cases, it included transcripts of private, high-level National Security Council meetings. "You don't get higher than that."
And what happened at President Bush's very first National Security Council meeting is one of O'Neill's most startling revelations.
"From the very beginning, there was a conviction, that Saddam Hussein was a bad person and that he needed to go," says O'Neill, who adds that going after Saddam was topic "A" 10 days after the inauguration - eight months before Sept. 11.
"From the very first instance, it was about Iraq. It was about what we can do to change this regime," says Suskind. "Day one, these things were laid and sealed."
As treasury secretary, O'Neill was a permanent member of the National Security Council. He says in the book he was surprised at the meeting that questions such as "Why Saddam?" and "Why now?" were never asked.
"It was all about finding a way to do it. That was the tone of it. The president saying 'Go find me a way to do this,'" says O'Neill. "For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap."
And that came up at this first meeting, says O'Neill, who adds that the discussion of Iraq continued at the next National Security Council meeting two days later.
He got briefing materials under this cover sheet. "There are memos. One of them marked, secret, says, 'Plan for post-Saddam Iraq,'" adds Suskind, who says that they discussed an occupation of Iraq in January and February of 2001.
Based on his interviews with O'Neill and several other officials at the meetings, Suskind writes that the planning envisioned peacekeeping troops, war crimes tribunals, and even divvying up Iraq's oil wealth.
He obtained one Pentagon document, dated March 5, 2001, and entitled "Foreign Suitors for Iraqi Oilfield contracts," which includes a map of potential areas for exploration.
"It talks about contractors around the world from, you know, 30-40 countries. And which ones have what intentions," says Suskind. "On oil in Iraq."
During the campaign, candidate Bush had criticized the Clinton-Gore Administration for being too interventionist: "If we don't stop extending our troops all around the world in nation-building missions, then we're going to have a serious problem coming down the road. And I'm going to prevent that."
"The thing that's most surprising, I think, is how emphatically, from the very first, the administration had said 'X' during the campaign, but from the first day was often doing 'Y,'" says Suskind. "Not just saying 'Y,' but actively moving toward the opposite of what they had said during the election."
The president had promised to cut taxes, and he did. Within six months of taking office, he pushed a trillion dollars worth of tax cuts through Congress.
But O'Neill thought it should have been the end. After 9/11 and the war in Afghanistan, the budget deficit was growing. So at a meeting with the vice president after the mid-term elections in 2002, Suskind writes that O'Neill argued against a second round of tax cuts.
"Cheney, at this moment, shows his hand," says Suskind. "He says, 'You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.' … O'Neill is speechless."
"It was not just about not wanting the tax cut. It was about how to use the nation's resources to improve the condition of our society," says O'Neill. "And I thought the weight of working on Social Security and fundamental tax reform was a lot more important than a tax reduction."
Did he think it was irresponsible? "Well, it's for sure not what I would have done," says O'Neill.
The former treasury secretary accuses Vice President Dick Cheney of not being an honest broker, but, with a handful of others, part of "a praetorian guard that encircled the president" to block out contrary views. "This is the way Dick likes it," says O'Neill.
Meanwhile, the White House was losing patience with O'Neill. He was becoming known for a series of off-the-cuff remarks his critics called gaffes. One of them sent the dollar into a nosedive and required major damage control.
Twice during stock market meltdowns, O'Neill was not available to the president: He was out of the country - one time on a trip to Africa with the Irish rock star Bono.
"Africa made an enormous splash. It was like a road show," says Suskind. "He comes back and the president says to him at a meeting, 'You know, you're getting quite a cult following.' And it clearly was not a joke. And it was not said in jest."
Suskind writes that the relationship grew tenser and that the president even took a jab at O'Neill in public, at an economic forum in Texas.
The two men were never close. And O'Neill was not amused when Mr. Bush began calling him "The Big O." He thought the president's habit of giving people nicknames was a form of bullying. Everything came to a head for O'Neill at a November 2002 meeting at the White House of the economic team.
"It's a huge meeting. You got Dick Cheney from the, you know, secure location on the video. The President is there," says Suskind, who was given a nearly verbatim transcript by someone who attended the meeting.
He says everyone expected Mr. Bush to rubber stamp the plan under discussion: a big new tax cut. But, according to Suskind, the president was perhaps having second thoughts about cutting taxes again, and was uncharacteristically engaged.
"He asks, 'Haven't we already given money to rich people? This second tax cut's gonna do it again,'" says Suskind.
"He says, 'Didn't we already, why are we doing it again?' Now, his advisers, they say, 'Well Mr. President, the upper class, they're the entrepreneurs. That's the standard response.' And the president kind of goes, 'OK.' That's their response. And then, he comes back to it again. 'Well, shouldn't we be giving money to the middle, won't people be able to say, 'You did it once, and then you did it twice, and what was it good for?'"
But according to the transcript, White House political advisor Karl Rove jumped in.
"Karl Rove is saying to the president, a kind of mantra. 'Stick to principle. Stick to principle.' He says it over and over again," says Suskind. "Don't waver."
In the end, the president didn't. And nine days after that meeting in which O'Neill made it clear he could not publicly support another tax cut, the vice president called and asked him to resign.
With the deficit now climbing towards $400 billion, O'Neill maintains he was in the right.
But look at the economy today.
"Yes, well, in the last quarter the growth rate was 8.2 percent. It was terrific," says O'Neill. "I think the tax cut made a difference. But without the tax cut, we would have had 6 percent real growth, and the prospect of dealing with transformation of Social Security and fundamentally fixing the tax system. And to me, those were compelling competitors for, against more tax cuts."
While in the book O'Neill comes off as constantly appalled at Mr. Bush, he was surprised when Stahl told him she found his portrait of the president unflattering.
"Hmmm, you really think so," asks O'Neill, who says he isn't joking. "Well, I'll be darned."
"You're giving me the impression that you're just going to be stunned if they attack you for this book," says Stahl to O'Neill. "And they're going to say, I predict, you know, it's sour grapes. He's getting back because he was fired."
"I will be really disappointed if they react that way because I think they'll be hard put to," says O'Neill.
Is he prepared for it?
"Well, I don't think I need to be because I can't imagine that I'm going to be attacked for telling the truth," says O'Neill. "Why would I be attacked for telling the truth?"
White House spokesman Scott McClellan was asked about the book on Friday and said "The president is someone that leads and acts decisively on our biggest priorities and that is exactly what he'll continue to do."
A year ago, Paul O'Neill was fired from his job as George Bush's Treasury Secretary for disagreeing too many times with the president's policy on tax cuts.
Now, O'Neill - who is known for speaking his mind - talks for the first time about his two years inside the Bush administration. His story is the centerpiece of a new book being published this week about the way the Bush White House is run.
Entitled "The Price of Loyalty," the book by a former Wall Street Journal reporter draws on interviews with high-level officials who gave the author their personal accounts of meetings with the president, their notes and documents. [Simon and Schuster, the book's publisher, and CBSNews.com, are both units of Viacom.]
But the main source of the book was Paul O'Neill. Correspondent Lesley Stahl reports.
Paul O'Neill says he is going public because he thinks the Bush Administration has been too secretive about how decisions have been made.
Will this be seen as a "kiss-and-tell" book?
"I've come to believe that people will say damn near anything, so I'm sure somebody will say all of that and more," says O'Neill, who was George Bush's top economic policy official.
In the book, O'Neill says that the president did not make decisions in a methodical way: there was no free-flow of ideas or open debate.
At cabinet meetings, he says the president was "like a blind man in a roomful of deaf people. There is no discernible connection," forcing top officials to act "on little more than hunches about what the president might think."
This is what O'Neill says happened at his first hour-long, one-on-one meeting with Mr. Bush: "I went in with a long list of things to talk about, and I thought to engage on and as the book says, I was surprised that it turned out me talking, and the president just listening … As I recall, it was mostly a monologue."
He also says that President Bush was disengaged, at least on domestic issues, and that disturbed him. And he says that wasn't his experience when he worked as a top official under Presidents Nixon and Ford, or the way he ran things when he was chairman of Alcoa.
O'Neill readily agreed to tell his story to the book's author Ron Suskind – and he adds that he's taking no money for his part in the book.
Suskind says he interviewed hundreds of people for the book – including several cabinet members.
O'Neill is the only one who spoke on the record, but Suskind says that someone high up in the administration – Donald Rumsfeld - warned O'Neill not to do this book.
Was it a warning, or a threat?
"I don't think so. I think it was the White House concerned," says Suskind. "Understandably, because O'Neill has spent extraordinary amounts of time with the president. They said, 'This could really be the one moment where things are revealed.'"
Now, O'Neill - who is known for speaking his mind - talks for the first time about his two years inside the Bush administration. His story is the centerpiece of a new book being published this week about the way the Bush White House is run.
Entitled "The Price of Loyalty," the book by a former Wall Street Journal reporter draws on interviews with high-level officials who gave the author their personal accounts of meetings with the president, their notes and documents. [Simon and Schuster, the book's publisher, and CBSNews.com, are both units of Viacom.]
But the main source of the book was Paul O'Neill. Correspondent Lesley Stahl reports.
Paul O'Neill says he is going public because he thinks the Bush Administration has been too secretive about how decisions have been made.
Will this be seen as a "kiss-and-tell" book?
"I've come to believe that people will say damn near anything, so I'm sure somebody will say all of that and more," says O'Neill, who was George Bush's top economic policy official.
In the book, O'Neill says that the president did not make decisions in a methodical way: there was no free-flow of ideas or open debate.
At cabinet meetings, he says the president was "like a blind man in a roomful of deaf people. There is no discernible connection," forcing top officials to act "on little more than hunches about what the president might think."
This is what O'Neill says happened at his first hour-long, one-on-one meeting with Mr. Bush: "I went in with a long list of things to talk about, and I thought to engage on and as the book says, I was surprised that it turned out me talking, and the president just listening … As I recall, it was mostly a monologue."
He also says that President Bush was disengaged, at least on domestic issues, and that disturbed him. And he says that wasn't his experience when he worked as a top official under Presidents Nixon and Ford, or the way he ran things when he was chairman of Alcoa.
O'Neill readily agreed to tell his story to the book's author Ron Suskind – and he adds that he's taking no money for his part in the book.
Suskind says he interviewed hundreds of people for the book – including several cabinet members.
O'Neill is the only one who spoke on the record, but Suskind says that someone high up in the administration – Donald Rumsfeld - warned O'Neill not to do this book.
Was it a warning, or a threat?
"I don't think so. I think it was the White House concerned," says Suskind. "Understandably, because O'Neill has spent extraordinary amounts of time with the president. They said, 'This could really be the one moment where things are revealed.'"
Not only did O'Neill give Suskind his time, he gave him 19,000 internal documents.
"Everything's there: Memoranda to the President, handwritten "thank you" notes, 100-page documents. Stuff that's sensitive," says Suskind, adding that in some cases, it included transcripts of private, high-level National Security Council meetings. "You don't get higher than that."
And what happened at President Bush's very first National Security Council meeting is one of O'Neill's most startling revelations.
"From the very beginning, there was a conviction, that Saddam Hussein was a bad person and that he needed to go," says O'Neill, who adds that going after Saddam was topic "A" 10 days after the inauguration - eight months before Sept. 11.
"From the very first instance, it was about Iraq. It was about what we can do to change this regime," says Suskind. "Day one, these things were laid and sealed."
As treasury secretary, O'Neill was a permanent member of the National Security Council. He says in the book he was surprised at the meeting that questions such as "Why Saddam?" and "Why now?" were never asked.
"It was all about finding a way to do it. That was the tone of it. The president saying 'Go find me a way to do this,'" says O'Neill. "For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap."
And that came up at this first meeting, says O'Neill, who adds that the discussion of Iraq continued at the next National Security Council meeting two days later.
He got briefing materials under this cover sheet. "There are memos. One of them marked, secret, says, 'Plan for post-Saddam Iraq,'" adds Suskind, who says that they discussed an occupation of Iraq in January and February of 2001.
Based on his interviews with O'Neill and several other officials at the meetings, Suskind writes that the planning envisioned peacekeeping troops, war crimes tribunals, and even divvying up Iraq's oil wealth.
He obtained one Pentagon document, dated March 5, 2001, and entitled "Foreign Suitors for Iraqi Oilfield contracts," which includes a map of potential areas for exploration.
"It talks about contractors around the world from, you know, 30-40 countries. And which ones have what intentions," says Suskind. "On oil in Iraq."
During the campaign, candidate Bush had criticized the Clinton-Gore Administration for being too interventionist: "If we don't stop extending our troops all around the world in nation-building missions, then we're going to have a serious problem coming down the road. And I'm going to prevent that."
"The thing that's most surprising, I think, is how emphatically, from the very first, the administration had said 'X' during the campaign, but from the first day was often doing 'Y,'" says Suskind. "Not just saying 'Y,' but actively moving toward the opposite of what they had said during the election."
The president had promised to cut taxes, and he did. Within six months of taking office, he pushed a trillion dollars worth of tax cuts through Congress.
But O'Neill thought it should have been the end. After 9/11 and the war in Afghanistan, the budget deficit was growing. So at a meeting with the vice president after the mid-term elections in 2002, Suskind writes that O'Neill argued against a second round of tax cuts.
"Cheney, at this moment, shows his hand," says Suskind. "He says, 'You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.' … O'Neill is speechless."
"It was not just about not wanting the tax cut. It was about how to use the nation's resources to improve the condition of our society," says O'Neill. "And I thought the weight of working on Social Security and fundamental tax reform was a lot more important than a tax reduction."
Did he think it was irresponsible? "Well, it's for sure not what I would have done," says O'Neill.
The former treasury secretary accuses Vice President Dick Cheney of not being an honest broker, but, with a handful of others, part of "a praetorian guard that encircled the president" to block out contrary views. "This is the way Dick likes it," says O'Neill.
Meanwhile, the White House was losing patience with O'Neill. He was becoming known for a series of off-the-cuff remarks his critics called gaffes. One of them sent the dollar into a nosedive and required major damage control.
Twice during stock market meltdowns, O'Neill was not available to the president: He was out of the country - one time on a trip to Africa with the Irish rock star Bono.
"Africa made an enormous splash. It was like a road show," says Suskind. "He comes back and the president says to him at a meeting, 'You know, you're getting quite a cult following.' And it clearly was not a joke. And it was not said in jest."
Suskind writes that the relationship grew tenser and that the president even took a jab at O'Neill in public, at an economic forum in Texas.
The two men were never close. And O'Neill was not amused when Mr. Bush began calling him "The Big O." He thought the president's habit of giving people nicknames was a form of bullying. Everything came to a head for O'Neill at a November 2002 meeting at the White House of the economic team.
"It's a huge meeting. You got Dick Cheney from the, you know, secure location on the video. The President is there," says Suskind, who was given a nearly verbatim transcript by someone who attended the meeting.
He says everyone expected Mr. Bush to rubber stamp the plan under discussion: a big new tax cut. But, according to Suskind, the president was perhaps having second thoughts about cutting taxes again, and was uncharacteristically engaged.
"He asks, 'Haven't we already given money to rich people? This second tax cut's gonna do it again,'" says Suskind.
"He says, 'Didn't we already, why are we doing it again?' Now, his advisers, they say, 'Well Mr. President, the upper class, they're the entrepreneurs. That's the standard response.' And the president kind of goes, 'OK.' That's their response. And then, he comes back to it again. 'Well, shouldn't we be giving money to the middle, won't people be able to say, 'You did it once, and then you did it twice, and what was it good for?'"
But according to the transcript, White House political advisor Karl Rove jumped in.
"Karl Rove is saying to the president, a kind of mantra. 'Stick to principle. Stick to principle.' He says it over and over again," says Suskind. "Don't waver."
In the end, the president didn't. And nine days after that meeting in which O'Neill made it clear he could not publicly support another tax cut, the vice president called and asked him to resign.
With the deficit now climbing towards $400 billion, O'Neill maintains he was in the right.
But look at the economy today.
"Yes, well, in the last quarter the growth rate was 8.2 percent. It was terrific," says O'Neill. "I think the tax cut made a difference. But without the tax cut, we would have had 6 percent real growth, and the prospect of dealing with transformation of Social Security and fundamentally fixing the tax system. And to me, those were compelling competitors for, against more tax cuts."
While in the book O'Neill comes off as constantly appalled at Mr. Bush, he was surprised when Stahl told him she found his portrait of the president unflattering.
"Hmmm, you really think so," asks O'Neill, who says he isn't joking. "Well, I'll be darned."
"You're giving me the impression that you're just going to be stunned if they attack you for this book," says Stahl to O'Neill. "And they're going to say, I predict, you know, it's sour grapes. He's getting back because he was fired."
"I will be really disappointed if they react that way because I think they'll be hard put to," says O'Neill.
Is he prepared for it?
"Well, I don't think I need to be because I can't imagine that I'm going to be attacked for telling the truth," says O'Neill. "Why would I be attacked for telling the truth?"
White House spokesman Scott McClellan was asked about the book on Friday and said "The president is someone that leads and acts decisively on our biggest priorities and that is exactly what he'll continue to do."
FOX News Template for Creating Stories
"I'm Afraid Fox Loses This Round."
Ari Rabin-Havt
Vice President for Research
and Communications, Media Matters
Posted: 7/13/11 LINK
This attack is nothing more than an attempt by Fox News to silence a vocal critic. The network's parent company, News Corp., is a $10+ billion company. Because of its size and influence, News Corp. believes it can intimidate anyone who takes issue with its overt political agenda and distortion of facts.
Media Matters and our supporters will not cower from Fox's ridiculous accusations. We are not at war with Fox. Fox is at war with the truth and Media Matters will continue fighting back against the network's lies that pollute our cable boxes.
It is no coincidence these attacks began as Glenn Beck's Fox News program was coming to an end, and after our research had documented the pervasive spread of misinformation and bigotry throughout the network. Fox News knows that Media Matters and our allies have succeeded in exposing it as a political organization that misinforms the public, not the "fair & balanced" news organization it claims to be.
Our researchers exposed Fox News Washington Managing Editor Bill Sammon slanting coverage and even acknowledging that he lied on air about Barack Obama in the days leading up to the 2008 election. "Fair and balanced" news organizations do not employ people who willfully mislead their audience.
It also is no coincidence that David Brock and I were personally targeted by the network's hosts. We just completed a book titled The Fox Effect that uses internal Fox emails, interviews with insiders, and analysis of Fox's on-air content to demonstrate the network's role in manipulating the public during the 2010 election. Why not attempt to smear the authors of a book that exposes their network?
News Corp. now faces increased scrutiny due to the phone hacking controversy in the U.K.. Every day new evidence of the company's malfeasance emerges. And yet Fox's coverage of the scandal remains at a minimum.
Fox's attack on Media Matters proves our organization's operating theory about the network. We've developed a formula we call the Fox Cycle that demonstrates how the network launders attacks on progressives, attempting to elevate them to the mainstream:
- Step 1: Conservative activists make an inaccurate charge designed to make progressives look bad.
- Step 2: Fox News devotes disproportionate coverage to the story.
- Step 3: Fox News attacks mainstream journalistic outlets for ignoring the story.
- Step 4: Mainstream outlets begin reporting on the controversy.
- Step 5: Media critics and pundits weigh in on Fox News's coverage, crediting Fox with breaking the story.
- Step 6: The facts emerge and the accusation is shown to be baseless, but many Americans are left with the impression it might be true.
This is how the Fox Cycle has played out in the network's attacks on Media Matters:
- Step 1: Former Fox News consultant and current FreedomWorks Foundation board co-chairman C. Boyden Gray publishes an op-ed in the Washington Times suggesting Media Matters should lose its tax status.
- Step 2: In three weeks, Fox News runs more than 30 segments on the story.
- Step 3: This past weekend Fox repeatedly asked on-air why no mainstream media outlet other than Politico has reported on the story.
Perhaps because Politico's story points out:
Marcus Owens, a partner at Caplin & Drysdale and former director of the Exempt Organizations Division of the IRS, said the law is on Media Matters's side on both counts. [...]
"The bottom line is, as long as an organization is following a process and establishing or attempting to establish that its views have some basis in fact, then as long as it isn't doing something like the equivalent of shouting fire in a crowded theater or encouraging people to commit crimes, then it probably is going to qualify as educational," he said. "As a result, we have Media Matters, and we have Brent Bozell and the Media Research Center, and we have all kinds of other organizations that are doing the same thing."
He argues that MRC's website is not substantially different from Media Matters in that both attack media companies on what they feel is the opposite side of the ideological aisle.
Owens concluded, "I'm afraid Fox loses this round." That is certainly clear.
Wednesday, July 6, 2011
More cheating on standardized tests
Dozens of Atlanta educators falsified tests, state report confirms
July 5, 2011
LINK
Atlanta (CNN) -- Dozens of Atlanta public school educators falsified standardized tests or failed to address such misconduct in their schools, Gov. Nathan Deal said Tuesday in unveiling the results of a state investigation that confirmed widespread cheating in the city schools dating as far back as 2001.
Some of the cheating could result in criminal charges, Deal said.
"I think the overall conclusion was that testing and results and targets being reached became more important than actual learning for children," Deal said. "And when reaching targets became the goal, it was a goal that was pursued with no excuses."
Falsifying test results made the schools appear to be performing better than they really were. But in the process, students were deprived of critical remedial education and taxpayers were cheated, as well, Deal said.
Investigators said 178 teachers and principals working at 44 schools were involved. The educators, including 38 principals, were either directly involved in erasing wrong answers on a key standardized test or they knew -- or should have known -- what was going on, according to Deal's office.
Deal's office said 82 of the educators acknowledged involvement, according to the report. Six principals declined to answer investigators' questions and invoked the Fifth Amendment right against self-incrimination, Deal said.
Whether to bring criminal charges will be up to prosecutors, Deal said.
Georgia State School Superintendent Dr. John Barge and Kathleen Mathers, executive director of the governor's Office of Student Achievement, released a joint statement Tuesday condemning "unethical behavior."
"Some educators, including those in leadership positions, chose their own interests over helping students entrusted to their care," the statement said.
"While this story has dominated the headlines over the last couple of years, it is important to remember that the vast majority of the educators in Georgia are ethically sound and work diligently with the best interests of their students in mind."
The investigation's findings have been forwarded to the state teacher licensing board, Deal said. That agency could take disciplinary action against the educators involved.
Atlanta Mayor Kasim Reed, who was briefed on the report, said the investigation "confirms our worst fears."
"There is no doubt that systemic cheating occurred on a widespread basis in the school system," Reed said in a statement. "Further, there is no question that a complete failure of leadership in the Atlanta Public School system hurt thousands of children who were promoted to the next grade without meeting basic academic standards."
The cheating was brought to light after marked improvements in the district's performance on the 2009 statewide Criterion-Referenced Competency test (CRCT) revealed a pattern of incorrect test answers being erased and replaced with correct answers.
Investigators compared the results with test results from other Georgia schools and found that such patterns did not occur normally, Deal said.
That the district's CRCT results fell in 2010 further confirmed the findings, according to the report.
A spokesman for Atlanta Public Schools said district officials would have no immediate comment.
The cheating accompanied a "culture of fear, intimidation and retaliation" within the district, according to a summary of the report released by Deal's office. The report also found a "major failure of leadership" within the district.
Beverly Hall, who was superintendent of the district when the cheating scandal surfaced, has since resigned.
Hall won accolades for the district's apparent successes during her tenure, and she was named superintendent of the year by the American Association of School Administrators in 2009.
Neither Hall nor her attorney, Richard Deane, has seen or been briefed on the report, Deane said Tuesday.
The full text of the report was not released. Deal said it was being withheld pending consultation with the state attorney general's office.
Atlanta (CNN) -- Dozens of Atlanta public school educators falsified standardized tests or failed to address such misconduct in their schools, Gov. Nathan Deal said Tuesday in unveiling the results of a state investigation that confirmed widespread cheating in the city schools dating as far back as 2001.
Some of the cheating could result in criminal charges, Deal said.
"I think the overall conclusion was that testing and results and targets being reached became more important than actual learning for children," Deal said. "And when reaching targets became the goal, it was a goal that was pursued with no excuses."
Falsifying test results made the schools appear to be performing better than they really were. But in the process, students were deprived of critical remedial education and taxpayers were cheated, as well, Deal said.
Investigators said 178 teachers and principals working at 44 schools were involved. The educators, including 38 principals, were either directly involved in erasing wrong answers on a key standardized test or they knew -- or should have known -- what was going on, according to Deal's office.
Deal's office said 82 of the educators acknowledged involvement, according to the report. Six principals declined to answer investigators' questions and invoked the Fifth Amendment right against self-incrimination, Deal said.
Whether to bring criminal charges will be up to prosecutors, Deal said.
Georgia State School Superintendent Dr. John Barge and Kathleen Mathers, executive director of the governor's Office of Student Achievement, released a joint statement Tuesday condemning "unethical behavior."
"Some educators, including those in leadership positions, chose their own interests over helping students entrusted to their care," the statement said.
"While this story has dominated the headlines over the last couple of years, it is important to remember that the vast majority of the educators in Georgia are ethically sound and work diligently with the best interests of their students in mind."
The investigation's findings have been forwarded to the state teacher licensing board, Deal said. That agency could take disciplinary action against the educators involved.
Atlanta Mayor Kasim Reed, who was briefed on the report, said the investigation "confirms our worst fears."
"There is no doubt that systemic cheating occurred on a widespread basis in the school system," Reed said in a statement. "Further, there is no question that a complete failure of leadership in the Atlanta Public School system hurt thousands of children who were promoted to the next grade without meeting basic academic standards."
The cheating was brought to light after marked improvements in the district's performance on the 2009 statewide Criterion-Referenced Competency test (CRCT) revealed a pattern of incorrect test answers being erased and replaced with correct answers.
Investigators compared the results with test results from other Georgia schools and found that such patterns did not occur normally, Deal said.
That the district's CRCT results fell in 2010 further confirmed the findings, according to the report.
A spokesman for Atlanta Public Schools said district officials would have no immediate comment.
The cheating accompanied a "culture of fear, intimidation and retaliation" within the district, according to a summary of the report released by Deal's office. The report also found a "major failure of leadership" within the district.
Beverly Hall, who was superintendent of the district when the cheating scandal surfaced, has since resigned.
Hall won accolades for the district's apparent successes during her tenure, and she was named superintendent of the year by the American Association of School Administrators in 2009.
Neither Hall nor her attorney, Richard Deane, has seen or been briefed on the report, Deane said Tuesday.
The full text of the report was not released. Deal said it was being withheld pending consultation with the state attorney general's office.
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