Economic non-spokesman

Posted: Aug 01, 2002 12:00 AM
WASHINGTON -- Don Evans, as George W. Bush's close personal friend who chaired his 2000 campaign and is now secretary of commerce, never departs from the president's line. That's what made his reaction remarkable on CNN last weekend when Al Hunt grilled him about the identity of the administration's economic spokesman. The spokesman, Evans made perfectly clear, is President Bush -- not Treasury Secretary Paul O'Neill. Yet, that very weekend, O'Neill responded to questions on NBC and Fox by avowing he is the designated economic spokesman. O'Neill's performance on both broadcasts explained the reticence about him of colleague Evans. The brilliant though erratic Treasury chief, a pleasant diversion in times of economic calm, is not a reassuring voice in times of economic crisis. What Evans implied is stated flatly by Bush supporters outside the administration. Leading Republicans and eminent financiers are stressing the president's -- and the nation's -- need for a new spokesman. They have no ready replacement but agree on a model. They all want "another Rubin." While conservatives disagree ideologically with Bill Clinton's secretary of the Treasury (and some cry for him to be called to testify on his tangential role in the Enron scandal), they yearn for Robert Rubin's hauteur and mastery. Bush's emphasis on loyalty protects any loyal subordinate. He is particularly unlikely to cast anybody overboard after Al Gore has demanded a new Bush economic team. Still, Republican desire for a different face at the Treasury, signifying much more than cosmetics, reflects deep concern over the economy. Paul O'Neill is not just another cranky multi-millionaire CEO, as he sometimes seems on television. During his rise from the federal bureaucracy to the executive suite, he impressed colleagues as the smartest person they ever met. He is an intensely likable enthusiast about subjects not in the Treasury's usual realm, ranging from workers' safety to global warming. The problem is that, compared with his predecessors, O'Neill is neither political (James Baker and Lloyd Bentsen) nor financial (Douglas Dillon and Robert Rubin). During 14 years in Pittsburgh at old-economy Alcoa, his contact with the Republican Party was about zero. O'Neill's elevation to one of the Cabinet's most prestigious portfolios was largely accidental, resulting from his collaboration as a federal civil servant with Don Rumsfeld and Dick Cheney running the Nixon administration's poverty program. O'Neill has created havoc with injudicious comments, most recently Sunday when his tart remarks drove down the Brazilian currency 5 percent. Yet, criticism centers more on the secretary's errors of omission than commission. He has seemed less than engaged in calming global markets and reassuring domestic investors. As corporate storm clouds gathered, O'Neill was travelling across Africa debating Third World debt forgiveness with rock star Bono. The storm was raging when he was off again on a long-scheduled visit to Central Asia. He was energized by this latest visit, returning to Washington to relate anecdotes of his adventures on the other side of the world. When Tim Russert asked O'Neill on "Meet the Press" why he didn't come home when markets collapsed, the secretary's reply indicated why people who like and admire him see the wrong man in the wrong place at the wrong time. Asserting that "I was gone only a few days," O'Neill replied: "I would challenge the notion that when markets are doing their thing, which they do on a regular basis, that someone can say some words that will somehow be a magic elixir." As President Bush took office, the financial adviser for a U.S.-based global corporation wrote a memo that found its way to the new administration's economic policymakers. He questioned how O'Neill would react to a 5-percentage point spread between what run-of-the-mill American businesses pay for loans and what is charged competitors with a superior credit rating. "If he thinks affected firms would simply adjust prices or go on," said the memo, "I can assure you that 'W' has made a bad choice (for the Treasury)." I asked this financial expert what O'Neill has done about the spread, listed at 4.5 percent Tuesday morning. "Nothing," he replied. "He doesn't get it." The secretary showed that Sunday, repeating that "the economic fundamentals" are "good" -- echoing Herbert Hoover's reassurances seven decades ago.