China Jude Wanniski June 8, 2005

From: Ben.S.Bernanke@***.gov
Subject: Re: China
To: Jude Wanniski <jwanniski@polyconomics.com>
11:08 am, 6/8/2005

Fortunately I have already been through the hearing process -- am hoping for final confirmation soon.   I did see Greg's letter, which I thought was right on target.

Ben

From: Jude Wanniski    <jwanniski@polyconomics.com>
To: Ben.Bernanke@ * * * * * .gov    
Subject: China
06/07/2005 04:03 PM   

Now I see Bill Thomas getting into the act, suggesting legislation to bash China unless it makes the yuan flexible.  He knows less than zero about money, it not being in his jurisdiction. Have you thought about what to say to the Senate committee that deals with you? Finance, I suppose. Joining the team means you are stuck with any junk the President has already endorsed. Of course, you can always think up ways to persuade the President to shift his position, ever so slightly, on the way to aiming at the right direction.

I learned his lesson from Everett Dirksen when he was Senate Minority Leader in the LBJ years. LBJ wanted the consular convention with the USSR passed and he needed GOP votes. On the first day of consideration, Dirksen denounced the treaty. On the second day he denounced it a little bit less. Over the course of a month while other business was taken up, Dirksen repeated the process of watering down his criticism until he could see some merit in it. That was legislative leadership. Getting in front of the herd and turning it slowly, so it never knew what was going on. I didn't know what was going on, but another GOP Senator, Thurston Morton of Kentucky, explained it to me in his office, during a 10 a.m. interview he gave me for the National Observer. I remember it well because he drank bourbon straight at that hour, an eye-opener.

Let me know if you would like some help on this, or any other matters you are preparing for. If you hit all the right notes, Dirksen style, you will have more influence on economic policy than anyone in Washington. You will also be hit, I suspect, with the NYT rich are getting richer article. You probably saw Greg Mankiw's letter in the NYT in response today.

JW

PS  You should be getting my piece on the EU shortly. Would like to know what you think of it.