Perhaps those most sorry to see Treasury Secretary Paul O'Neill depart will be journalists. He could make news merely by opening his mouth and speaking his mind - as when he sent Brazil's currency plummeting by suggesting new foreign aid might wind up in Swiss bank accounts. He also made it clear that he didn't think a new economic-stimulus package was necessary, contradicting administration policy.
For a White House famously adept at staying "on message," even when policy disputes bubble beneath the surface, this wouldn't do. The reaction on Wall Street to Mr. O'Neill's forced resignation on Friday was: What took so long?
But for President Bush - who, like his father, is known for loyalty, and is said to like O'Neill personally - the timing makes sense.
Historically, administrations clean house at the midterm. Two years remain before Bush faces voters again, and he can afford to call attention to his administration's problems in handling the economy. By also firing the director of his National Economic Council, Lawrence Lindsey, who's been faulted as an ineffective communicator, Bush can roll out a new economic-message team - and, it is hoped, appear as proactive on the economy as he is on foreign policy.
History weighs heavily on this White House as it tries to avoid the fate of Bush's father, who lost his reelection bid when he seemed out of touch on the economy.
"Presidents have a very hard time firing people. As politicians, they're used to making people happy," says Stephen Hess, a presidential scholar at the Brookings Institution. "But there are only two types of issues presidents are defeated on, national security and the economy. Bush didn't have an appropriate, powerful, respected spokesman on the economy."
Reports indicate that Bush will name a new economic team as early as today, with a business executive as the new Treasury secretary and Stephen Friedman, former chairman of Goldman Sachs Group Inc., replacing Mr. Lindsey. The administration's policy direction - tax cuts and an economic-stimulus package - is expected to remain the same, though the rollout will likely be delayed to allow the new team to put its stamp on specifics.
Two other major agency heads are reported as possibly on the way out: the Agriculture secretary, Ann Veneman, and the head of the Environmental Protection Agency (EPA), Christie Whitman. Ms. Veneman would depart for health reasons. The rumor mill has long questioned when Ms. Whitman, who prided herself on environmental issues as governor of New Jersey, might leave the EPA.
In an administration closely linked to big business and the oil industry - and which in the last month has antagonized environmentalists with a series of policy announcements - Whitman has been in a tough spot. But as a Bush family friend, she has remained loyal to the president, and he to her. (The president's Scottish terrier, Barney, was a gift from Whitman.) She's kept policy disagreements out of the press, and he, in return, is waiting for the right position to open up for her, such as a major ambassadorship, says a Republican source.
The environment, like the economy, could smack Bush in the face as he runs for reelection, and so he may need someone more comfortable carrying his message. But for now, the economy - with unemployment at a nine-year high - is front and center in the domestic sphere, and Bush has given Wall Street fresh hope for a consistent, predictable message.
To many on the Street, danger signs flashed whenever they saw that O'Neill would be on Sunday talk shows. What would he say? Would the White House have to "clarify" his comments later?
"O'Neill never seemed to say the right things," says Scott Jacobson, an investment strategist at Jefferies & Co., a brokerage house in New York. "He was bad for the market."
Wall Street economists felt O'Neill was overly optimistic about the economy - perhaps even more so than Bush himself. "The general feeling was that O'Neill was resistant to aggressive tax cuts in the new Congress," says William Sullivan, a money-market economist with Morgan Stanley in New York. "He was concerned about the deficit and didn't want to enlarge it via a tax cut."
Nor is Wall Street unhappy to see Lindsey go. His pedantic style vexed traders, investment bankers, and Congress. "He had a tin ear regarding politics and the Hill," says Mr. Sullivan.
Lindsey gave interviews suggesting war with Iraq might cost as much as $200 billion. "It's hard to lobby for a tax cut when you are talking about spending all this money," says Fred Dickson, chief market strategist at D.A. Davidson & Co., based in Lake Oswego, Ore.
To Wall Street, the fact that Bush made the changes is positive - a sign that he's willing to act decisively to get the economy moving. "It shows he wants to make the economy a stronger priority," says Mr. Dickson. One of those priorities is finding better communicators. "I worked with Bob Rubin and he was best at reassuring the markets," says Dickson, referring to President Clinton's Treasury secretary. "When he left there was a vacuum between Wall Street and Washington."
The message Wall Street is hoping for from the next Treasury secretary is that there's a need for tax cuts - particularly a cut that either gives investors a break on their tax bite on dividends, or gives corporations a credit for dividends paid. "Some form of tax cut on dividends is ... very important for companies right now," says Jacobson.