Treasury boss O'Neill takes heat for silence
Wednesday, July 24, 2002
WASHINGTON -- As the stock market wallows in its biggest funk in four years, the Bush administration's chief economic spokesman, Treasury Secretary Paul O'Neill, is strangely silent.
O'Neill's lack of reassuring words to the public at a time of economic uncertainty, as millions of horrified Americans watch their nest eggs shrivel, underscores the perception that he is disconnected, analysts said.
And that doesn't inspire confidence among investors, consumers or businesses, whose faith in corporate leaders has been badly shaken, they said. If that makes consumers and businesses less willing to spend and invest, the economy's recovery could be slowed.
"I think the perception of a lack of a commanding presence in economic policy has hurt the administration," said Stephen Cecchetti, economics professor at Ohio State University. "There is no one who can stand up and calm everyone's nerves. Rubin had that."
Robert Rubin, who held the treasury post under President Clinton, is widely viewed on Wall Street as the best treasury secretary since the nation's first, Alexander Hamilton.
Critics said O'Neill can't seem to get it right, that he is either too enthusiastic about the economy's prospects or too ho-hum.
His unscripted utterances, meanwhile, have occasionally rattled rather than soothed markets -- and even made White House aides nervous.
Irked in Africa
During a stock slide in May, O'Neill was in Africa with rock singer Bono -- calling attention to the problems of the world's poorest continent -- when he got irked at questions about his effectiveness.
"If people don't like what I'm doing, I don't give a damn," he was quoted as saying in The New York Times. "I could be sailing around on a yacht or driving around the country."
White House aides said they cringed at the "yacht" crack and his perceived indifference and complained that he too often puts his foot in his mouth.
While some insiders say they wouldn't mind if O'Neill left on his own, President Bush has expressed confidence in his Treasury secretary.
"He's doing a fine job," Bush said Monday.
O'Neill was in New York on Tuesday, meeting privately with bankers, investment fund managers and others to hear their thoughts on the country's economic and financial climate. Treasury spokeswoman Michele Davis said he makes such visits to New York every four to five weeks.
His discussions took place as Wall Street staggered through another losing session. The Dow Jones industrial average dropped 82.24 points to close at 7,702.34, bringing the losses over the past four trading days to 840.14 points.
Asked whether O'Neill should stay in his job, House Minority Leader Dick Gephardt, D-Mo., responded: "I think the president needs to look at his top economic officials. We need people who engender confidence and faith among the American people."
House Majority Leader Dick Armey, R-Texas, dismissed Democratic criticism as a backhanded compliment: "They attack everything they fear. The fact is, if they're attacking Paul O'Neill, I would take that as my first evidence that they think he's doing a good job."
Some on Wall Street give the Treasury secretary low marks in his ability to inspire confidence in the economy.
"I think investors believe O'Neill is increasingly less important and relevant and that he is behind the curve," said Mark Zandi, chief economist at Economy.com.