Paul O'Neill on Budget & Economy
Bush team not pushing Reaganite supply-side arguments
Instead of pushing Reaganite supply-side arguments, the Bush team is stressing the demand side: It proclaims that reducing taxes will put money in consumers’ pockets and so prime the economic pump. Consider, first, the deafening supply-side silence. Back
when Reagan was pushing his first tax plan, his people preached that big cuts in marginal rates would sharpen incentives for workers, and that harder work would in turn boost output.Now contrast that with Treasury Secy. O’Neill’s performance before
the House tax committee last Tuesday. At one point, [he was asked] how much additional economic growth we might anticipate from the president’s tax plan. Far from jumping at this opportunity, O’Neill evaded the question. “I suppose I could give you
something for the record,” he replied, but neglected to do so. In his extensive testimony, O’Neill made the supply-side argument about work incentives only in passing, and was even more diffident about the link between those incentives and faster growth.
Source: Sebastian Mallaby, Washington Post, Page A33
Feb 19, 2001
Committed to maintaining strong dollar
Treasury Secretary O’Neill insisted today that the Bush administration is committed to maintaining a strong dollar and rejected speculation that the US might encourage a drop in its value to bolster economic recovery by spurring American exports. O’Neill
also sought to reassure his peers [at the G-7 Summit] that he is convinced the US will stage a solid recovery this year and resume its role as the locomotive driving economic growth. O’Neill was quoted last week saying: “We are not pursuing, as often
said, a policy of a strong dollar. In my opinion, a strong dollar is the result of a strong economy.“ The comments, which currency markets viewed as a modification of the Clinton administration’s emphasis on a strong dollar, caused the dollar to plummet
in value against the euro until the Treasury Department issued a statement denying a change in policy. O’Neill seemed exasperated at how billions of dollars can churn on currency exchange markets based on a strained interpretation of his words.
Source: William Drozdiak, Washington Post, Page A31
Feb 18, 2001
Transform old economy to new economy
O’Neill’s unique experience transforming an old economy firm into a new economy success has been chronicled as a study by the Harvard Business School, and studied in business schools across the nation. O’Neill has gained
valuable insights into international finance and the global economy as head of a major corporation with 140, 000 employees spread across 36 nations.
Source: Dept. of Treasury web site, “Secretary’s Bio”
Feb 3, 2001