Saturday, December 11, 2004

Blistering Times Editorial

December 10, 2004
Secretary Snow

As the search for someone to replace Treasury Secretary John Snow dragged on, Republicans close to the White House openly dissed him. Then, on Wednesday, the president reappointed Mr. Snow. To justify the surprise decision, a senior administration official said, "This was no time to send a signal of uncertainty."

Well, it's no time to send a signal of business as usual, either. The economic legacy of the first Bush term is dauntingly bad. The stock market is lower, despite tax cuts aimed at spurring investment. The dollar is way lower, and fears of a free fall are mounting daily. The federal budget has swung from a surplus to a $412 billion deficit, mainly because of misguided and excessive tax cuts. The deficits in trade and international investment are at never-before-tested levels, nearly triple what most economists consider sustainable. Job creation has been weaker than at any time in modern memory. Incomes are stagnant, failing in most months to even keep pace with inflation. And no - count 'em, zero - policy reversals are on the horizon.

As if that's not bad enough, Mr. Snow's reappointment also sends a disturbing, though not surprising, message about policy making. Like other secretaries in the Bush administration, Mr. Snow's main job has been to promote policies - not make them. To the extent that this administration has engaged in making economic policies (to wit, "tax cuts above all" and "deficits don't matter"), the policies have come from the president's inner circle.

Mr. Snow, like so many others around President Bush, is nothing more than a messenger. Congress knows it. The financial markets know it. Our trading partners know it. It strains the imagination that the White House couldn't find a fitting Treasury secretary among the Wall Street mavens, former politicians and other professionals who were considered for the post. It's more likely that none were suited for the real job on offer: cheerleader.

This all bodes ill for the economy. Domestically, the president is committed to largely replacing Social Security with private retirement accounts - although doing so would require the Treasury to borrow at least $1 trillion. Mr. Snow's reappointment neatly avoids the Senate confirmation hearings that would be required for a new appointment, as would the probable reappointment of Joshua Bolten as the director of the Office of Management and Budget. A major opportunity to vet Mr. Snow's professional opinions and to probe for - dare we suggest? - misgivings, is lost.

Internationally, the situation is even worse. Mr. Snow is squarely behind the administration's apparent weak-dollar policy. If the dollar's decline sharpens, is Mr. Snow capable of cooperating with our trading partners to manage the downward trajectory? It's kind of hard to be unilateral when you need China, Japan and Europe to accomplish your goals.

The economy won't really improve unless Mr. Bush starts to listen to people who will tell him things he does not want to hear, like the fact that the only lasting fix for the weak dollar is fiscal discipline to reduce the budget deficit. Mr. Snow is not that person. Most ominously, the right person for that job doesn't exist - and couldn't get hired - in this administration.

Copyright 2004 The New York Times Company


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