Man Without Qualities

Tuesday, December 10, 2002

Paul Krugman, The New Miss Cleo; or Damn The Facts, Self Promotions Are Us! II

Back in December of 2000 did not seem to be reporting the "unanimous applause" Paul Krugman says emanated from the "financial press" when Paul O'Neill was appointed as Treasury Secretary.


Unlike almost all the secretaries of the Treasury since the Eisenhower administration, O'Neill does not come from a Wall Street or academic background. That makes some people nervous. "In this day and age, you have to be a little concerned in how someone from industry is going to manage a financial crisis. We've had a lot of those recently," says Michael Knetter, a professor of international economics at Dartmouth College's Tuck School of Business. "We may find ourselves looking at a recession, and if market participants don't know who Paul O'Neill is and don't feel he's the right man to have his hands on the controls, that's not good."

Maybe the following is what Professor Krugman thinks counts as "applause":

As someone who was able to turn an aging rust-belt company into an aggressive global player, O'Neill may be the tonic the U.S. economy now needs.

Well, it was better for Mr. O'Neill than a sharp stick in the eye!

On the other hand, I don't want to suggest that Mr. O'Neill had NO applauders in the financial press in 2000. Jim Cramer from The Street was one. But it didn't last long.

UPDATE: It appears that the actual New York Times editorial page (apparently uninformed or unimpressed by Professor Krugman's brilliant dissent), went right ahead and "lauded" Mr. O'Neill's appointment.

FURTHER UPDATE: The Economist hardly "applauded" Mr. O'Neill's appointment - although it didn't condemn his appointment, either (but, then, neither did Professor Krugman). In fact, the Economist said little of substance at all, mostly clapping with one hand:

For the inner circle, Mr Bush reached back to the Ford administration, and to his father’s. [This group includes] Paul O’Neill, then deputy head of the Office of Management and Budget (OMB), now nominated as Treasury secretary .... This group gives the Bush cabinet a strong corporate and managerial flavour, as if it were a meeting of America’s board of directors. All [of them] served at the pinnacles of the old economy. ... Mr O’Neill ran Alcoa, a virtual aluminium monopoly. .. These men exemplify Main Street Republicanism. Ronald Reagan surrounded himself with swashbuckling Californian businessmen with ill-concealed contempt for the east-coast establishment. Now, the fiscal conservatives of the east coast have come out on top. With the exception of Larry Lindsay, a former Fed governor and now chief economic adviser to Mr Bush, there is hardly a supply-sider in the bunch. The inner core [is] a collective safe pair of hands. ... But they are undoctrinaire, unflamboyant, and experienced at managing big organisations.

Is that the "applause" a performer, executive, president or cabinet member longs for? Only if they are unusually modest ones, indeed.

[Link provided by Tom Maguire]

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