-Caveat Lector- washingtonpost.com Often Outspoken, Now Out of the Picture O'Neill Found That Candid Opinions Earned Him Fans, Friction at Treasury
By Paul Blustein Washington Post Staff Writer Saturday, December 7, 2002; Page A08 It never seemed to matter much to Paul H. O'Neill that his job description included winning over Wall Street, schmoozing members of Congress and engaging in financial diplomacy abroad. To the tart-tongued Treasury secretary, those duties often came second to telling the truth as he saw it. He derided traders of stocks, bonds and currencies as "people who sit in front of flickering green screens" whose jobs he could learn "in about a couple of weeks." He riled congressional Republicans by dismissing as "show business" a bill passed by the House Ways and Means Committee. He even caused the Brazilian government to lodge a formal protest when he expressed worries on television that loans to Latin American governments would disappear into Swiss bank accounts. And when critics questioned whether O'Neill was temperamentally suited to his post, he made it clear that he wouldn't alter his penchant for voicing unvarnished opinions, which his boss, President Bush, appeared to appreciate. "One of the great things about where I am now: If people don't like what I'm doing, I don't give a damn," O'Neill, a multimillionaire former aluminum company CEO, told reporters during his tour of Africa with the rock star Bono in May. "I could be off sailing around on a yacht or driving around the country. I'm here because I think I can make a difference, and the president has said to me on more than one occasion: The reason you're here is because you think different than other people. As long as he gives me that leash, I'm going to use it." Now the leash has been jerked, with yesterday's news that O'Neill had tendered his resignation at the behest of the White House. The move, though unexpected, came after yet another bout of candor by O'Neill that seemed sure to cause headaches for an administration worried about the economy turning sluggish over the next couple of years. Distancing himself from colleagues who favor boosting the economy with a new round of tax cuts, the Treasury chief declared that the economy doesn't need much stimulus because it will grow just fine without one. "He made it clear he didn't think a large, broad-based stimulus package was necessary, and it's kind of tough to go rah-rah-rah about a new economic package if your leading spokesman at the Treasury isn't for it," said David Solin, a partner at Foreign Exchange Analytics in Essex, Conn. Perhaps even more important, Solin added, is that O'Neill's habit of speaking off the cuff has undermined his credibility -- with the financial markets in particular -- so "there is a problem in terms of their being able to clearly and concisely get their message across." Making the same point more acidly, Robert Boorstin, a top Treasury aide during the Clinton administration, joked: "The guy has an aluminum ear when it comes to politics." It would be grossly unfair to judge O'Neill's legacy solely in terms of his gaffes, according to many of the Treasury secretary's critics and supporters. Among his most significant accomplishments was to throw a spotlight on the ineffectiveness of much of the aid doled out by the World Bank and other development agencies. Although many aid experts felt O'Neill went overboard when he asserted that "there is precious little to show" for the billions of dollars showered on poor countries over the past 50 years, his insistence on demanding better, more measurable results has become widely accepted and has forced changes both at the World Bank and in U.S. aid programs. Reflecting O'Neill's success at focusing attention on the plight of the world's poor, the aid agency Oxfam America struck a sorrowful note in a statement on O'Neill's departure, saying that his "presence on the Bush economic team brought these issues into the debate in a way they otherwise would not have been included." Often, when O'Neill blurted out a statement that later had to be clarified or smoothed over, "he was saying things that people knew were true but wouldn't dare say," said Kristin Forbes, a Massachusetts Institute of Technology professor who recently left Treasury. For example, few disputed the validity of his concern about aid to Latin countries going to waste. Likewise, many experts agreed with the substance of remarks O'Neill made to a German newspaper early in his tenure that "we don't follow . . . a policy of a strong dollar," because his point was that a strong dollar would inevitably result from good U.S. economic performance. But he was widely faulted for failing to recognize the market turbulence such comments would spark and for eroding the effectiveness of the multibillion-dollar loans that the International Monetary Fund marshaled for Brazil. "As a high official in Washington, you need to recognize your words have impact and to modulate your statements accordingly," said Michael Mussa, a former Reagan administration official and chief IMF economist. O'Neill's scorn for such strictures was part and parcel of the hard-charging persona he manifested upon coming to Washington after his enormously successful tenure heading Alcoa Inc. He cast caution to the winds on the emotion-laden day that the New York Stock Exchange reopened following the Sept. 11 terrorist attacks, suggesting (wrongly) that the stock market would set new records in 12 to 18 months -- the sort of forecast most of his predecessors assiduously avoided for fear of risking their credibility. Even when he was trying to be diplomatic, O'Neill still sometimes managed to ruffle feathers. After a leftist candidate was elected president of Brazil in October, O'Neill told an audience the markets would scrutinize the new leader's statements "to assure them he is not a crazy person." © 2002 The Washington Post Company <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, mis- directions and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. 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