<http://www.nytimes.com/aponline/national/AP-Outspoken-ONeill.html?pagewanted=al l> March 24, 2001 Treasury Secretary Ruffles Feathers By THE ASSOCIATED PRESS Filed at 11:46 a.m. ET WASHINGTON (AP) -- Asked if he had any words of assurance as millions of investors watched their stock portfolios melt down this past week, the president's chief economic spokesman demurred. Treasury Secretary Paul O'Neill did not see much benefit in opining on day-to-day market movements. That reticence struck many as unusual. Not only had past secretaries spoken calming words during turbulent times, but Wall Street's volatility is one of the few things about which O'Neill has not made his opinion known recently. During his first two months in office, O'Neill has managed to infuriate market traders, perplex currency and bond investors, irk a powerful Democratic senator, muddle the president's tax message and outrage conservatives with a memo on global warming. To O'Neill's supporters, the blunt-speaking former chief executive of aluminum giant Alcoa, who bears a resemblance to Harry Truman, is bringing a refreshing dose of candor. Others wonder if the miscues are becoming a distraction for the administration's leading salesman on behalf of President Bush's $1.6 trillion, 10-year tax cut. ``It is always hard for someone who has been a chief executive officer to move into a political position where you have to be more careful about what you say. But he has made more than the usual number of political and financial stumbles,'' said David Wyss, chief economist at Standard & Poor's Corp. O'Neill's independent thinking became apparent early. During his Senate confirmation, he rejected the idea that Bush's tax cut should be sold as an antidote for a recession even though the president at the time was promoting it that way. On his first trip to Wall Street as Treasury chief, O'Neill had to placate executives unhappy with his comments in a newspaper interview that Wall Street traders were people who ``sit in front of a flickering green screen'' all day and were ``not the sort of people you would want to help you think about complex questions.'' It was not long before O'Neill saw how powerful they were. They sent the value of the dollar down sharply after O'Neill seemed to suggest in another interview a change in America's strong-dollar policy. O'Neill had to move quickly to clarify those remarks. Similarly, he had to clarify later comments that sent the price of Treasury bonds plunging temporarily because his words were seen as critical of a Treasury program to buy back debt. O'Neill said he was continuing to learn ``things you can't talk about if you are Treasury secretary.'' Market analysts had their own take: The former corporate executive was inexperienced in the ways of Wall Street, and it was showing. ``A Treasury secretary needs to be someone who understands markets and can stand up at the right moment and make statements that people can believe and have confidence in,'' said David Jones, chief economist at Aubrey G. Lanston & Co. in New York. ``O'Neill has gotten off on the wrong foot.'' O'Neill's comments on bonds came at a briefing on Bush's budget that also featured a tense exchange in which reporters repeatedly challenged him and other administration officials to disclose what percentage of the tax cut would go to the nation's wealthy. Afterward, O'Neill mused, ``I've got to learn to control my temper.'' But the next day, O'Neill, who often responds to questions with the brusqueness of a business leader used to telling subordinates what to do, found himself in hot water with Democrats at a Senate Budget Committee hearing. Sen. Robert Byrd of West Virginia lectured O'Neill on the finer points of Senate courtesy after O'Neill had interrupted the questioning of freshman Sen. Debbie Stabenow, D-Mich. During the exchange with Stabenow, O'Neill said he wondered whether people did not understand the Medicare program or ``whether it's just convenient not to understand.'' It was Republicans' turn to fume after an O'Neill memo to the president urging action on global climate change was leaked to the press, riling conservatives who wanted to know why the Treasury secretary was offering advice on the issue. O'Neill's aides say he was simply writing a confidential memo to Bush on an issue then being debated in the administration. O'Neill has been the subject of critical newspaper editorials and a biting parody in the New Yorker magazine over his decision to hold onto about $100 million in Alcoa stock and stock options. O'Neill argues that his decision was approved by government ethics officers and he will refrain from taking any actions that could affect Alcoa interests. But critics see the decision as an unwanted diversion for a new administration trying to establish its claim of following higher ethical standards than the Clinton administration. Asked about the criticism, O'Neill spokeswoman Michelle Davis said, ``He is doing the job the president asked him to do.'' There are no signs that Bush is losing faith in O'Neill. O'Neill meets regularly with the president in the Oval Office to map strategy for getting the tax cut through Congress. Once, on the spur of the moment at one of those sessions, Bush asked to see the setup O'Neill has in his Treasury office to monitor market movements. The request sent both men on an expedition through the tunnel connecting the White House and Treasury, to the surprise of workers in the Treasury basement. At a news conference last Monday, the first trading day after the Dow Jones industrial average had suffered its worst week of declines in 11 years, O'Neill said ``markets go up and markets go down'' and he did not see any benefit in commenting on day-to-day movements. O'Neill, in a televised interview Friday, again stressed the need for a long-term approach. ``People who are investors in the United States economy, in a broad general sense, are going to do well over time,'' he said. ``Investors don't pull up their turnips every day to find out if they are growing. They put them in the ground and they grow them and over time they produce good value. That is what investing is all about.''
