Bush taps an economic salesman
Bush names John Snow as new Treasury chief with task of selling tax cuts and buoying confidence.
President Bush's sudden move to appoint a new economic team - the first major shakeup of his administration - is more about chemistry and teamwork than it is about taking the US economy in a bold new direction.Skip to next paragraph
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The administration hopes its retooled economic junta will better promote the White House's goal of a new tax cut to stimulate the economy and, as a possible side benefit, shrink the size of the federal government in nonsecurity areas. Clearly, it hopes do this without so much public dissonance, something that became common under outgoing Treasury Secretary Paul O'Neill's tenure.
By appointing John Snow, a railroad executive, as Treasury secretary Sunday, and probably Stephen Friedman, a Wall Street executive, as White House economic counselor Monday, Mr. Bush will be getting two people who are, by all accounts, consensus builders and "listeners."
That will help the administration speak more with one voice on the economy, but not necessarily result in new initiatives. "I think the president is looking for a new messenger, not a new message," says Sung Won Sohn, chief economist at Wells Fargo Banks, of Mr. Snow's appointment. "So he would be a good messenger."
More than anything, the White House wants to bolster business and investor confidence, and, not coincidentally, the president's prospects for reelection in 2004. Homeland security seemed to outweigh the economy as an issue in the midterm elections. But the White House does not want to count on that being the case in two years. In particular, Bush and his advisers are intent on not repeating the mistake his father made of seeming unconcerned about the economic plight of average Americans.
The new team takes over at a delicate time. Though the economy is growing, so is unemployment. The jobless rate rose to 6 percent in November from 5.7 percent a month earlier. Bush doesn't want a "jobless recovery" like that of 1991 which damaged his father's fortunes.
So far this year, real gross domestic product, the nation's total output of goods and services, has grown at a 3.4 percent rate. This is slightly faster than the average 3.1 percent growth rate of the past 30 years. But it's slower than the usual immediate postrecession rate of growth.
Bush, introducing Mr. Snow, chief executive of CSX, a railroad holding company, at the White House Sunday, said he will be "proposing specific steps to increase the momentum of our economic recovery and the Treasury secretary will be at the center of this effort" as the senior member of the economic team.
If the hints of a more vigorous recovery prove sound, a stimulative tax package could be redundant. Mr. O'Neill argued along that line within the administration. It may be one reason for his ouster.
Curiously, Snow, as chairman of the Business Roundtable of many of the nation's top corporate executives, is also a fiscal conservative, unhappy with high federal deficits. Nonetheless, he would be required to toe the administration's fiscal line.
Early reaction to his appointment is mixed. "Snow is a political operator; that's what he is being hired for," says Robert Brusca of Ecobest Consulting in New York. "This guy has a PhD in spin. What does he know about running the Treasury and how is he going to discuss economics with finance ministers?"