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USA: Chief Economic Advisor Undermines Bush on SSI Reform

by Stephen PizzoDaily Enron
August 19th, 2002

Was I the only editorial writer that noticed the remarkable comment by President Bush's chief economic advisor Saturday? Lawrence Lindsey was doing his bit this weekend to put the best possible face on last week's embarrassingly vacuous Waco economic summit. One of his stops was CNN's Novak, Hunt & Shields.

Even though archconservative, Robert Novak tossed Lindsey softball questions that would have embarrassed Larry King it was tough sledding for the normally straight-talking Lindsey.

Towards the end of the program, having apparently exhausted all available spin, Lindsey slipped into candor and, in so doing, making a shocking personal confession:

NOVAK: The Big Question for Larry Lindsey: Mr. Lindsey, you sold all your stock when the Dow was at 8,500 on the way beyond 10,000. It's on the way back now, not much over 8,500. To give a boost to the American economy, a confidence to the American people, would you consider now, just as an act of patriotism, to reinvest in the economy

LINDSEY: Well, I sold my stock in part because I have three kids, and at that point I had an ailing mother-in-law who had just moved in with us. I couldn't afford to have money anywhere but where it was safe. I couldn't take any chances.

I still have the three kids, and my pay's gone down now that I work for the government. I would recommend that all Americans ... read the financial press, they do what's in their own self-interest, they look at their own financial condition and they not risk money.

Hellooooo? Is this the chief economic advisor for the same administration that wants to privatize Social Security and invest retiree's futures in stock?

I suspect that some folks back at the White House sprayed their morning coffee across the room. Here was the President's economic advisor admitting - live, in color and on tape, that he wouldn't touch stocks with a ten foot vaccinated crowbar.

Am I wrong or isn't the centerpiece of the Bush administration's plan for reforming Social Security to privatize a portion of deductions so the money can be invested where? -- the STOCK MARKET.

So, let me get this straight;

- The Bush administration believes the stock market offers the promise of better returns and more security my Social Security savings.

- But, over the past two years stocks have lost nearly $12 trillion in value.

- And, the President's own economic advisor abandoned stocks years ago because he did not believe it was a safe place for his family's savings.

- And, by golly, he turned out to be right about that.

- But, he continues to support the President's plan to put a portion of my Social Security savings into stocks.

Maybe I am making too much of Lindsey's comment. Apparently no one else thought it was strange because I could not find any mention of it in the press this morning. What am I missing? Maybe someone over at the Wall Street Journal can explain it to us.

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