BUSH'S TAX PLAN: If the plan was on the President's desk today, I would urge him to sign it. It's not bad. But it is only on a piece of paper, a long way from any President's desk. In that light, it is woefully inadequate as a master plan for the generation ahead. Designed by his daddy's economists -- Michael Boskin, John Taylor, and Larry Lindsey -- its most glaring omission is that it offers no decrease in or indexation of capital gains taxes. In 1988, remember, Bush won the presidency with a platform that promised a 15% indexed capital gains tax, and then allowed himself to be talked out of it every time there was a fighting chance of getting it enacted. So his kid will not even attempt that fight. We noted in a report early this year that former Fed Governor Larry Lindsey, in tearing off the supply-side label he had worn for years, announced that he was a tax-cutting Keynesian, one who believed in taxing capital gains. It is very hard for me to imagine this Bush plan actually getting very far, given the likelihood that if he were elected, he would have a Democratic House of Representatives and a Speaker Dick Gephardt to deal with. There would be more compassionate conservative government programs and more lip service to balancing the budget and fixing the entitlement programs before we get to tax cutting. At the end of this most probable scenario, President George W. Bush would fix the marriage tax penalty, cut a few points off the income-tax rate, and coast along with the status quo.
SEATTLE: The spectacle in Seattle was made to order for Pat Buchanan and the Reform Party. No other presidential contender would have dared to get close to the protests over the World Trade Organization. And Pitchfork Pat played it perfectly, denouncing the violence but making sure every blue-collar worker in America understood that he alone was there fighting for them. In a series of television interviews from Seattle now on his website,www.gopatgo2000.com, he is making news that will force him into the presidential discussions in a way more advantageous to him than anyone else. Buchanan is for folks on the bottom half of the pyramid, the others (Gore, Bradley, Bush, McCain, Forbes, Bauer, Hatch, Keyes) are contending for those at the top, where there is usually more of a turnout than at the bottom. Buchanan wants to be seen at this point as a "very, very long shot," but with eleven months ahead of him and nobody to beat but Donald Trump in that stretch, he has freedom of movement that will drive the others nuts. Here is Buchanan's response this morning on "Good Morning America" to a question from Diane Sawyer: "What the World Trade Organization does, Diane, is that it elevates trade to the highest good. It is trade uber alles. Trade trumps the environment. Trade trumps human rights. It trumps the security of countries. It trumps the sovereignty of countries. It should never have been created, Diane. Americans have had treaties with Russia and Great Britain and Japan throughout 200 years of history. We enforce the treaties, as do our partners in these treaties. What this is, as I stated, this is the beginning of world government, and people are resisting it to maintain their own national identity." This is the kind of thing that won him the New Hampshire primary in 1996.
POLY & Y2K: On our monthly conference call yesterday, I informed our clients that we have liquidated 60% of our company pension fund, parking the funds in t-bills, until we are able to get a better feel for the unknowns ahead. As our fund has doubled in value this year -- thanks to Dick Gilder, Alberto Vilar, and Morris Mark -- it seemed prudent to the staff. In 20 years, we have never done this before, and probably won't again until the year 2999.