On George W. Bush and the Republicans: Not exercising the veto power became a hallmark of the Bush presidency. . . . To my mind, Bush’s collaborate-don’t-confront approach was a major mistake.
They swapped principle for power. They ended up with neither. They deserved to lose (in the 2006 election, when the Republicans lost control of both the House and Senate).
On Iraq: I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.
On former US Presidents:
Nixon: A member of the Clinton administration once was accusing Nixon of anti-Semitism, and I said, “You don’t understand. He wasn’t exclusively anti-Semitic. He was anti-Semitic, anti-Italian, anti-Greek, anti-Slovak” … He hated everybody.
Ford: Jerry Ford was as close to normal as you get in a president, but he never was elected. There’s a constitutional amendment that I’ve been pushing for years without success. It says, “Anyone willing to do what is required to become president of the United States is thereby barred from taking that office.” I’m only half joking.
Reagan: What attracted me to Reagan was the clarity of his conservatism. There was [a] line he often used on the stump: “Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.” A man who talks in such terms is clear on what he believes. Very rarely in those days would you find conservatives who didn’t fudge on social issues.
George Bush snr: I’d been looking toward building the same collaborative relationship with the White House that I’d seen during the Ford administration … It was not to be. Great things happened on George Bush’s watch: the fall of the Berlin Wall, the end of the cold war, a clear victory in the Persian Gulf, and the negotiation of the NAFTA agreement to free North American trade. But the economy was his Achilles’ heel, and as a result we ended up with a terrible relationship.
Clinton: By mid-1995, Clinton and I had settled into an easy, impromptu relationship … I didn’t share his baby-boom upbringing or his love of rock and roll. Probably he found me dry—not the kind of buddy he liked to smoke cigars and watch football with. But we both read books and were curious and thoughtful about the world, and we got along. Clinton publicly called us the economic odd couple. Disappointed and sad (about Clinton’s Lewinsky affair).
G. W. Bush: I looked forward to at least four years of working collegially with many of government’s best and brightest, men with whom I had shared many memorable experiences [Dick Cheney, Donald Rumsfeld, among others]. And on a personal basis, that is how it worked out. But on policy matters, I was soon to see my old friends veer off in unexpected directions … I was a different person than I had been when first exposed to the glitter of the White House a quarter of a century before. So were my old friends: not in personality or character, but in opinions about how the world works and, therefore, what is important.
On productivity growth: Every year, millions of innovations incrementally improved overall productivity. This process has become particularly evident since the discovery of the exceptional electrical properties of silicon semiconductors following World War II. Yet why hasn’t productivity growth been even faster? Couldn’t what we knew in 2005 have been figured out by, say, 1980, thereby doubling the rate of productivity gains (and increases in standard of living) between 1955 and 1980? The simple answer is that human beings are not smart enough. Our history suggests that the ceiling on the productivity growth of an economy over the long term at the cutting edge of technology is at the most 3 percent per year. It takes time to apply new ideas and often decades before those ideas show up in productivity levels.
On politicians vs the Federal Reserve: I regret to say that Federal Reserve independence is not set in stone. FOMC discretion is granted by statute and can be withdrawn by statute. I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House.
On optimism: It is not an accident that human beings persevere and advance in the face of adversity. Adaptation is in our nature, a fact that leads me to be deeply optimistic about our future. Seers from the oracle of Delphi to today’s Wall Street futurists have sought to ride this long-term positive trend that human nature directs. The Enlightenment’s legacy of individual rights and economic freedom has unleashed billions of people to pursue the imperatives of their nature — to work toward better lives for themselves and their families. Progress is not automatic, however; it will demand future adaptations as yet unimaginable. But the frontier of hope that we all innately pursue will never close.