JERKING THE OTHER KNEE

SYNOPSIS: Bush is using every crisis and opportunity to push narrow-minded goals.

Remember the knee-jerk liberals? Washington used to be full of people who viewed greedy businessmen as the root of all evil, who thought that a new government program was the answer to every problem. Some of them wielded influence in the early Clinton administration. But after the defeat of the health care plan, they were sent into exile. Bill Clinton became a pragmatist, someone who appreciated the virtues of the market without deifying it and understood the limits of government without demonizing it.

Out with the old knee-jerks, in with the new. The new guys in town are knee-jerk conservatives; they view too much government as the root of all evil, believe that what's good for big business is always good for America and think that the answer to every problem is to cut taxes and allow more pollution.

In a way, the controversy over John Ashcroft has actually obscured the picture. With all eyes focused on the startling prospect that a champion of the religious right will become attorney general, George W. Bush's hard line on other issues has not been fully appreciated.

One of those issues is, of course, the question of whether we ought to have a huge tax cut tilted toward the affluent. Many pundits thought that Mr. Bush would scale back his tax plan. Not a chance; instead, his people have only intensified their push, insisting that the tax cut is needed to prevent a recession.

To his credit, the nominee for treasury secretary has been a less than enthusiastic team player. In his Senate hearing, Paul O'Neill came remarkably close to damning the whole sales pitch with faint praise. "I'm not going to make a huge case that this is the investment we need to make sure we don't go into a recession," he conceded. "But I don't know why we wouldn't want a tax cut now. It wouldn't hurt." The good news here is not that Mr. O'Neill knows that his boss is making a bogus argument; Mr. Bush's inner circle knows that too. It is that the new treasury chief has some scruples about saying things that he knows to be untrue. I wonder how long that will last.

Meanwhile, the clear and present danger to the economy is not the putative recession, but the power crisis in California. Mr. Bush made his first remarks on the subject last week, and they were revealing.

First, he rejected summarily the idea that the federal government might impose a temporary cap on wholesale electricity prices. One wouldn't have expected him to endorse such a cap just yet. Although there is actually a very good case for a price cap as an emergency measure under current circumstances it would probably lead to increased production that case takes some explaining. But it is a bit surprising that Mr. Bush would so thoroughly foreclose his options, especially when one bears in mind the political embarrassment that the profits from those soaring prices go in large part to generating companies based in, yes, Texas.

Even more surprising was Mr. Bush's decision to use the occasion of the Western power crisis mainly as an opportunity to criticize environmental regulations, declare that when it comes to restoring salmon he won't give a dam, and call for oil drilling in wildlife refuges. It's true that federal (not state) air- quality rules are among the factors limiting power production in California. But they are not central to the crisis, and Alaskan oil has nothing at all to do with it. One can only conclude that just as Mr. Bush sees the economic slowdown as an opportunity to sell tax cuts, he sees the power crisis as an opportunity to sell weakened environmental protection.

There will soon be other economic tests for the new administration. How, for example, will it deal with the prospect of a series of airline mergers mergers that will further reduce competition in an industry where monopoly pricing is already a big problem? Somehow I have a feeling that I know the answer.

So in case you imagined that given the fact that the other guy got half a million more votes something bipartisan might be about to happen, forget it. Even before taking office Mr. Bush has made a number of policy decisions, and on not one of them has he deviated an inch from a knee-jerk conservative position. Were you expecting something different?

Originally published in The New York Times, 1.21.01