December 09, 2002
From the desk of Mindles H. Dreck:Moving Day
Well, here it is moving day. In the last 3 days I've moved my office and now my blog.
Hmmm. It's a bit green in here, but as long as I can have my La-Z-Boy and hold the remote most of the time we'll get along just fine.
I have yet to weigh in on Paul O'Neill's resignation. Caroline Baum beat me to it by reminding us that a "gaffe" is when a politician unintentionally speaks the truth:
What O'Neill did was speak the truth, in essence saying the U.S. has no dollar policy -- neither strong nor weak. The value of the dollar is set in the foreign exchange market, not in Washington.Instead of getting kudos for stating the obvious, O'Neill was chastised for his failure to act as the defender of the U.S.'s strong dollar policy.
As a former CEO of Alcoa, Inc., the world's largest aluminum maker, O'Neill was unsympathetic to the plaintive cries from U.S. manufacturers for a weaker dollar. He thought companies should sell their products abroad the old-fashioned way: by making them better and more efficiently....
....He decried the fact that it took the Treasury weeks to close its books for the year and pared the time to three days.
He was not afraid to disagree with the president on specific issues -- the imposition of steel tariffs, for example.
He preferred unscripted speeches to prepared texts...
.....Unknowingly O'Neill wrote his own epitaph when he said in September: "It's so much more useful to tell the truth.''
Then there was that picture with Bono with the guy in the background thinking "Are you guys gonna buy something or just stand around?" Posted by Mindles H. Dreck at December 9, 2002 06:12 AM | TrackBack | Technorati inbound links
O'Neill dropped the Rubin/Summers version of the strong dollar statement, true enough. Whether he was aware of it or not, he did not abandon the most important feature of the policy. Crucially, O'Neill never threatened investors in dollar-denominated assets with a sudden gut punch. He did not suggest that a weak dollar was a good idea, that he might smack Japan or Europe with a sudden "beggar-they-neighbor" weak-dollar policy. Rubin was big on lowering interest rates. One tactic was to reduce the fx premium on dollar denominated assets with a stated policy of maintaining dollar strength, even when he mandated Fed intervention to weaken the dollar. O'Neill raiseed some question initially (so did Summers) just because he was a new guy, but never gave any sign he would cave to weak-dollar lobbying.
O'Neill was the wrong guy for the job from the Washington insider perspective, but he did (or tried to do) some good things.
Posted by: K. Harris on December 9, 2002 01:49 PMAs a former CEO of Alcoa, Inc., the world's largest aluminum maker, O'Neill was unsympathetic to the plaintive cries from U.S. manufacturers for a weaker dollar. He thought companies should sell their products abroad the old-fashioned way: by making them better and more efficiently....When he was CEO of Alcoa, Inc., and the market price of aluminum fell through the floor, O'Neill protected Alcoa's profits the old-fashioned way: by lobbying the government to create a worldwide cartel of aluminum producers. Posted by: Seth Gordon on December 9, 2002 05:04 PM
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