The lead headline in this morning's New York Times says, "In Policy Change, Greenspan Backs a Broad Tax Cut."
The news story says, "In a clear shift from his previous position that reducing the national debt should be the focus of fiscal policy," the Federal Reserve chairman, Alan Greenspan, now supports a tax cut.
This is a Times cover-up. There's been no "shift" by Mr. Greenspan -- he's always been friendly to the idea of a tax cut in times of surplus. The Times has just been describing his views incorrectly.
Amity Shlaes wrote in her Financial Times column the first week of January that at times of surplus, "the chairman has not been hostile towards - and has even supported - tax cuts."
Miss Shlaes wrote: "In 1998, late in a decade that had seen two tax rises, he voiced his concern over the damage of higher taxes. 'I generally believe that over the longer run, if you raise marginal rates you will get a lower extension of long-term growth than you would otherwise,' he said. Last spring, Mr Greenspan laid out his position in more detail. 'I recognise that growing budget surpluses may be politically infeasible to defend. If this proves to be the case, as I have also testified previously, the likelihood of maintaining a still satisfactory overall budget position over the longer run is greater, I believe, if surpluses are used to lower tax rates rather than to embark on new spending programmes,' he told Congress."
If yesterday's testimony by Mr. Greenspan marks a "shift," how come Miss Shlaes was hearing him correctly on this more than three weeks ago, and how come Mr. Greenspan was saying these things in 1998 and last spring? The shift comes not in Mr. Greenspan's views but in the willingness of the Times, at long last, to hear what he has been saying.
No Minister: A front-page article in today's New York Times reports that Prime Minister Barak "did not appoint an Israeli Arab minister to his 22-member cabinet." In fact, the deputy foreign minister, Nawaf Massalha, is an Israeli Arab; the Times article ignores that appointment, which was significant. Any definition of the Israeli cabinet which puts its size at 22 members would have to include Mr. Massalha.