Cramer: Bush's Rising Stock

From Yesterday's Journal:
http://online.wsj.com/article_print/0,,SB107412903417894600,00.html
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Bush's Rising Stock

By JAMES J. CRAMER

To listen to the critics of President Bush's economic policies, you'd think that the nation's on the brink of economic catastrophe. Not a single Democratic candidate is willing to accept, even for a moment, that the president might be on the right economic track with large deficit spending and lower income and investment taxes. Now Paul O'Neill, arguably the worst Treasury secretary in memory, fills the airwaves with prideful attacks on the administration for reckless spending and reckless tax cuts that produced disastrous deficits.

Wait a second. I'm a Democrat, one who helped raise hundreds of thousands of dollars for Democratic candidates nationally in the last two decades. I voted for Al Gore.

But I'm also an objective financial commentator. With stocks at two-year highs and interest rates, as represented by the 10-year treasury, hovering near all-time lows, I can't help reach a different conclusion from Mr. Bush's critics: The economic policies pursued by this president have been a stunning empirical success.

If you'd told me two years ago, in the wake of 9/11 and the collapse of the stock bubble, that we could have 8% GDP growth, I'd have laughed. Most commentators, even the optimistic ones, were worried about the U.S. repeating Japan's post-bubble-incredible-shrinking-GDP-depression-experience. If you'd told me we could have 8% GDP growth and long-term rates at 4%, I'd have said that such a combination was impossibly Pollyannaish, a proverbial smooth concoction of oil and water. And if you'd told me that we could have a robust stock market, with a broad array of 52-week highs in dozens of sectors, I'd have told you that you were dreaming. Not after the battering this country's equities had taken.

Yet that's exactly what we have right now. I'd give the critics their due if 10-year rates had spiked to 6% or even 5%, something they privately assured you'd have had to have happen by now. I'd also bless the naysayers if the Dow were still at 7500, and the Nasdaq were still mired in the 1300-1400s, their residences a year ago. But for crying out loud, you can sell billions of dollars in bonds or stocks at these great prices, and that's evidence enough for this grizzled trader that the U.S. is booming without inflation.

Of course, we don't yet have job growth. However, economic recoveries don't traditionally produce job growth until one year after interest rates bottom. That means March of 2004. From my perch, discussing hiring plans with dozens of companies in industries as varied as smokestackers, financials and tech, we're right on schedule for robust job creation.

So, critics, keep baying against the policies. Keep calling for higher taxes or fiscal responsibility. But as someone who's stuck looking at the daily scorecard as represented by the impossible-to-manipulate markets themselves, the judgment's already in: The Bush economic policies have worked beyond what anyone could have hoped for. Or, to put it in parlance my party might understand, This time it's not the economy, stupid.

Mr. Cramer is host of CNBC's "Kudlow & Cramer" and a commentator for TheStreet.com.

 

btw, at least two other participants in the meeting your sig quotes swear Bush never said what you alledge...

 

sometimes you really are a small petty gnat:

http://www.townhall.com/columnists/brucebartlett/printbb20040113.shtml

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Former Council of Economic Advisers Chairman R. Glenn Hubbard states flatly, "The president NEVER made any of the distributional comments referred to in the interview." Cesar Conda, Vice President Dick Cheney's domestic policy adviser, also told me that the president never said anything about giving money to rich people. Referring to his own notes of the meeting, Conda said that the discussion was about extending depreciation rules that were due to expire, not about reducing income tax rates.

 

and the whole article referenced:

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Poor Paul O'Neill
Bruce Bartlett (back to web version) | Send

January 13, 2004

When Paul O'Neill was forced out as Secretary of the Treasury in December 2002, everyone knew that it was not the last time he would be heard from. Now, after a year of silence, he is speaking out again in a new book, "The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill" by Ron Suskind. A long excerpt appeared in the Wall Street Journal on Monday and O'Neill himself went on "60 Minutes" to promote the book, which is based largely on interviews with O'Neill and documents provided by him.

The picture O'Neill paints of President Bush is that of a man totally disengaged from policymaking; an enigma, whose views on key economic issues were a mystery even to his principal economic spokesman, Mr. O'Neill. In cabinet meetings, the president appeared "like a blind man in a room full of deaf people." O'Neill implies that decisions on key issues, such as the imposition of steel tariffs, were made with no regard to the substance and were based solely on politics.

One of the most serious charges made by former Secretary O'Neill is that President Bush expressed concern about the proposed 2003 tax cut being too tilted toward the rich at a November 2002 White House meeting. The book quotes the president as saying, "Haven't we already given money to rich people? This second tax cut's gonna do it again…. Why are we doing it again?" It goes on to say that he was talked out of these reservations by his political adviser, Karl Rove, who said that Mr. Bush must "stick to principle."

Although the books cites a transcript of this meeting provided by Mr. O'Neill, participants in the meeting tell me that no such statements were ever made. Former Council of Economic Advisers Chairman R. Glenn Hubbard states flatly, "The president NEVER made any of the distributional comments referred to in the interview." Cesar Conda, Vice President Dick Cheney's domestic policy adviser, also told me that the president never said anything about giving money to rich people. Referring to his own notes of the meeting, Conda said that the discussion was about extending depreciation rules that were due to expire, not about reducing income tax rates.

Conda is also critical of Mr. O'Neill's portrayal of the debate surrounding the imposition of steel tariffs in March 2002. The Wall Street Journal excerpt clearly implies that Vice President Cheney supported the tariff decision, when in fact he opposed it. At the meeting O'Neill refers to, Cheney was simply acting as an honest broker, keeping his personal views private. Vice President Cheney generally made his views known to the president only in one-on-one meetings, so as to facilitate discussion in open meetings.

Although Mr. O'Neill portrays himself as the principal opponent of steel tariffs, in fact he was AWOL at a critical moment. According to a Sept. 19, 2003 report in the Washington Post, at a crucial meeting of the economic team, tariff opponents were abandoned by Mr. O'Neill, who sent an underling in his place. Lacking the stature of the Treasury secretary to beat down tariff supporters like Commerce Secretary Don Evans, the opponents essentially lost by default.

Mr. O'Neill would have us believe that he was the only honest man in an administration of sycophants. Another interpretation would be that he was simply ill-suited to the job he had been given, too used to being the boss and incapable of taking direction, too interested in doing things his own way instead of the way his boss wanted them done, and too easily led to believe that outspokenness is the same thing as honesty.

Even without the details made public in this book, we know that Paul O'Neill was not a very effective Treasury secretary. Looking through my files I find headlines like these from his tenure:

"All Thumbs at Treasury," Washington Post (5-20-01)

"Mr. O'Neill's Gaffes," Washington Post (8-1-02)

"Treasury Secretary Gets Into Hot Water On U.S. Cuba Policy," Wall Street Journal (3-15-02)

"O'Neill Solidifies Maverick Status With Public Jabs at Bush Policies," Wall Street Journal (3-18-02)

On Oct. 2, 2001, the New York Times had this to say: "Mr. O'Neill's erratic statements have sometimes rattled investors and…marginalized him as a policymaker and spokesman."

You get the idea. Yet O'Neill never improved. He continued to go out of his way to be out of step with the Bush Administration, both substantively and stylistically, right up until the end. The only question is why he wasn't fired sooner.

Mr. O'Neill may think he is getting revenge on a president he believes treated him shabbily. But I think that all he has really done is remind people of why he never should have been named Treasury secretary in the first place.

 

i've lost my job three times since 9/11, but i don't lay that at the feet of the president...it has more to do with the state of the economy post-bubble, post 9/11. the presidents policies have gone a long way towards creating a frame work for job growth, as cramer notes in the article.

 

so i do, and you trash the source, although the sources quoted work for neither fox nor townhall, rather they were participants in the meeting cited. you seem to have lost any ability critical thought to any issue. disappointing, really...

 

no, but for my thought on it i point you to the powell thread. caution however, that thread contains many examples for rational discourse by several posters on a difficult and contentious topic. you may want to steer clear.