Rudy's Financial Team

There is a saying in politics that personnel is policy. In 2000 Robert Moffit of the Heritage Foundation wrote on the eve of the Bush administration that: “Good policies cannot be advanced without good, capable, and committed personnel to formulate, implement, aggressively promote, and steadfastly defend them.” Discerning conservatives therefore should pay close attention to the advisors the presidential candidates have selected. These individuals may ultimately fill key roles in the next administration. Moreover, the caliber of these advisors says much about a candidate’s management skills and willingness to surround himself with smart and capable lieutenants.

In this, the first of a series of HUMAN EVENTS profiles of key advisors to the GOP candidates, we interviewed two of Rudy Giuliani’s top economic advisors — Steve Forbes and Dr. Michael Boskin. Steve Forbes, former presidential candidate and longtime advocate of the flat tax and tax reform, is the editor-in-chief of Forbes magazine and president and chief executive officer of Forbes Inc. He is National Co-Chair and a Senior Policy Advisor for the Giuliani campaign. Boskin, the campaign’s Chief Economic Policy Advisor, is a senior fellow at the Hoover Institution and the T. M. Friedman Professor of Economics at Stanford University. He is also a research associate at the National Bureau of Economic Research. He previously served as chairman of the President’s Council of Economic Advisers (CEA) from 1989 to 1993 and chaired the Commission on the Consumer Price Index.

Why did these economic gurus sign on with Giuliani?

Boskin and Forbes both point to his record in New York as a key factor in their decision. Boskin says the record on “taxes, crime, and regulation” was key to restoring the city from the brink of financial ruin. Forbes concurs, saying that he “demonstrated in New York, one of the most liberal big spending cities and largest cities, that he could do the right thing fiscally” by restraining spending and by reducing or cutting 23 taxes. Forbes believes that “we could use a dose in Washington D.C.” of what Giuliani did in New York.

What would a Giuliani administration tax policy look like?

Boskin says succinctly that “low tax rates are good for the economy.’ In separate interviews both Boskin and Forbes said that making the Bush 2003 tax cuts permanent was a “minimum” objective and that removing or substantially eliminating the Death Tax and fixing the AMT were additional goals. Unlike Democrats, however, who Forbes says have seized upon elimination of the AMT as an excuse to raise other taxes, he contends the Giuliani administration would continue reduction of the AMT without offsetting tax increases in other areas. As for the corporate tax rate, Boskin says that the comparatively high U.S. corporate tax rate has become an “issue of competitiveness” which should be lowered. In short, Forbes says Giuliani tax policy would take us in a “Reaganesque direction not a root canal direction.”

How would Giuliani restrain spending?

Boskin notes that as Mayor in New York Giuliani went through 50,000 to 100,000 budget line items determining which spending items were necessary, which could be eliminated and which reduced. He expects a similar approach in Washington and believes a Giuliani administration would “run more like a business with clear metrics” to evaluate and reduce spending. Specifically, Forbes says that by requiring department heads to recommend cuts between 5 and 20% and by replacing only ½ of the 300,000 federal employees slated to retire in the next few years Giuliani will “substantially reduce discretionary spending.”

How would Giuliani increase U.S. competitiveness?

Boskin lists low taxes, “sensible” regulation, litigation reform and expansion of trade and rejection of protectionism as essential elements in maintaining the U.S. position in the global economy. Forbes adds to the list protection of intellectual property rights and education. With regard to China, for example, he contends that intellectual property rights should be a major focus of our policy and we should encourage movement recently seen when China passed its first legal protection under communism for private property. Forbes also identifies education as key to maintaining America’s competitiveness and again points to Giuliani’s record in New York where he stopped social promotions, favored school choice and eliminated tenure for school principals.

As a CEO himself what leadership or management skills does Forbes see in Giuliani which would make him an effective President?

Forbes says that as mayor “the man was big on metrics.” He explains that Giuliani was “willing to tackle big things” like the city’s fiscal crisis but has an “extraordinary attention to detail.” He contends that Giuliani is “not content to provide a broad road map but wants to know where the on and off ramps are, how much gas is in the tank, and how many miles to the gallon we can get.”

In sum, these advisors paint a clear picture: Giuliani will cut taxes and restrain spending but don’t expect him to emulate the current white House occupant’s management style in broadly delegating tasks to his subordinates — even ones as well known as Forbes and Boskin.


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