Sunday, July 28, 2002

In the conservative Weekly Standard, two scholars from the American Enterprise Institute argue that the prospect of further regulation, such as the bill that recently passed through Congress on stiffening up accounting standards, ruining confidence in the economy, and driving down the markets.

On Meet the Press this morning, Treasury Secretary Paul O'Neill praised the bill as a useful measure to restore confidence in the economy, and should help the markets come back (as have several Republicans in Congress).

<daffyduck cartoon="duckamuck">Is it too much to ask you to make up your minds???</daffyduck>

It's worth noting that the administration defends O'Neill as a serious and weighty character. Granting them that point, for the sake of argument, his performance in a national interview was a remarkable impression of a doddering old fool.

He started off by defending the trip to Kyrgyzstan which he famously failed to curtail during the market meltdown. He declared that trip to be essential to the war on terrorism.

When Russert got him, with difficulty, to comment on the American economy, he declared that the fundamentals are sound, offering as evidence that in the last quarter, most companies met or exceeded their earnings expectations. But the reliability of earnings reports is exactly what the recent round of scandals has called into doubt.

And he was particularly confused about his own role, persistently stating that he was not obliged to be an administration spokesman or to regularly present its position on economic issues, even after Russert played a clip of a less than smoothly articulate George W. Bush, at the time O'Neill's nomination was announced, explaining that he had been selected as someone who could speak wise words to calm the markets. He was surprised to hear that no Democrats have been invited to President Bush's upcoming economic forum in Crawford, Tex. (a statement Russert attributed to Ari Fleischer), and expressed no opinion as to whether any ought to be.

Remember, Bush's own ignorance inexperience doesn't matter, because it's balanced by the strong views, experience and wisdom of his advisors.

(Update: the transcript is up, and I misremembered --- O'Neill did get out a disjointed paragraph's worth of pro-administration soundbites before the questioning really got started.

On the other hand, I also forgot some really choice bits of tomfoolery --- particularly this exchange:

MR. RUSSERT: But your comments have been closely covered, Mr. Secretary. This is how the Associated Press dealt with it. It says, “When Wall Street reopened after being forced to shut down by the Sept. 11 terror attacks, O’Neill turned into an economic cheerleader, predicting Sept. 17 that the Dow Jones industrial average could approach all-time highs within 12 to 18 months.”

“As the stock market melted down that day, O’Neill declared, ‘The people who sold will be sorry that they did it.’ He also pooh-poohed the idea that the economy could be headed into a recession. It did.”

People track every word you say very, very closely and sometimes it has just been plain wrong.

SEC’Y O’NEILL: Well, Tim, I’d call your attention to this. Now, first of all, on the day that we re-opened the market in New York was an enormously important and emotional time. And what I said then I think is right, that the U.S. economy is second to none in the world. And that over time people who have made their bet and invested in America have been big winners, and I think that will be true going forward. So I don’t apologize for saying on the day we re-opened the market, looking down into those faces of people who had worked 22 hours a day to get our economy, our market economy, back into motion—I don’t apologize for saying this is a great economy and I’m proud to be an American. I don’t take that back.

But the comment that Russert had asked about, first and foremost, was the prediction for all-time highs on the Dow in 12 to 18 months, which would have been, oh... right about the time of the mid-term elections.

Near the beginning of the interview, as I mentioned, O'Neill expressed disbelief that anyone would care that he was on tour in the former Soviet boondocks while the markets were melting down. But towards the end, he acknowledged, in response to a direct question from Russert, that he is the administration's chief economic spokesman. Left unstated was a question central to effective performance in that role --- why should anyone believe what he says?)


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