When Secretary of the Treasury W. Michael Blumenthal took off last Friday for a 10-day trip to the Middle East and Europe, the venture told almost as much about the man as it did about his mission.
The tour did have genuine value - to meet foreign officials and discuss serious issues. But characteristically, the takeoff was arranged with all the fanfare of a Capitol Hill commuter run. And there were no specific objectives for the entourage to meet.
The analogy isn't a perfect one, but it does serve to illustrate a point. In nine months as Treasury Secretary, Blumenthal has shown beyond doubt he's a knowledgeable, articulate and very decent man. But his low-key performance has left him far short of the "take-charge guy" that was promised when he left the top job in the Bendix Corp to become President Carter's chief economic officer.
In fact, the Secretary's public image is so bland that even some associates still regard him as an enigma. "I think I know Mike feels on international issues," says one former collegue who worked with Blumenthal when he was a trade negotiator in the Kennedy administration. "But I don't know what he really thinks on domestic economic matters.Mainly, it seems, he doesn't want to rock the boat."
Indeed, the list of complaints about the Secretary's performance would make it appear that the Treasury is in chaos - a situation even critics concede is far from the case. Businessmen have groused that Blumenthal isn't responsive to the business community (and is too liberal, besides). Congressmen grumble that he's been inattentive and ineffectual. International money men lament his seeming indifference about the dollar (some of the Secretary's comments have caused the dollar to slide). And tax crusaders gripe that he's too cautious on "tax reform."
More important, critics wonder more seriously whether Blumenthal has been able to fulfill what many regard as his most important function as Secretary of the Treasury - to be the shaper and chief spokesman for the administration's overall economic policy. For all their other flaws, both George P. Shultz and John B. Connally left no doubt they were the driving thrust behind the Nixon administration's policymaking. "But the Carter adminstratration has no such force," one critic says. "As a result, it seems to be drifting."
To be sure, as defenders of the Secretary point out, in some of these criticisms Blumental may be getting a bum rap. His reputed lack of sympathy with the business community seems largely a figment of businessmen's perceptions. The Secretary is said to find it ironic that businessmen took solace from their easy rapport with former budget director Bert Lance, who actually had little direct involvement in economic policymaking.) "He just doesn't month their favorite buzzwords, is all," one colleague says.
And the grousing about his comments on the dollar also cuts two ways. While aides concede the Secretary hasn't always been fully sensitive to the possible impact of his remarks on the exchange markets, it's also true that currency traders too often have had knee-jerk reactions to what he's said. A case in point was just a week ago. Blumenthal was quoted-out of context-in an innocuous remark about the dollar. Within a few hours money men the world over were blaming him for encouraging another slide.
On the other complaints, the criticisms have a ring of truth. The Secretary's handling of Congress, for example, has not measured up to the smoothness of the Connally era. Badly briefed on the administration's energy packgage. Blumenthal muffed a crucial appearance before the White Ways and Means Committee last spring. At another point, his failure to tip Congress on Carter's withdrawal of the $50 rebate proposal damaged his credibility before the House and Senate budget committees. And congressional leaders have complained steadily that he failed to establish badly needed rapport.
Apart from the flap over his comments on the dollar's value, Blumenthal's handling of international ecomomic matters has been mixed. While the Secretary did well at the London economic summit last May, he's been conspicuously shy about exercising the kind of strong leadership some observers have believed was needed to enforce the summit's economic pledges.
At last month's International Monetary Fund meeting, while other Western leaders (notably Denis Healey, the British Chancellor of the Exchequer) were publicly pressuring Japan and West Germany to stimulate their economies faster. Blumenthal sat quietly-passing up the international leadership role usually assumed by the U.S. finance minister.
The Secretary also has been something of a reluctant dragon on "tax reform"-disppointing many of his own Treasury staffers who had been counting on him to be more aggressive. While lowerlevel staffers have pressed hard for a sweeping overhaul of the present tax system, Blumenthal has urged a go-slow approach on eliminating many tax breaks and preferances-particularly where business is involved. His posture frequently has left Treasury in the embarrassing position of seeing its proposals sent back by White House staffs as too timid for the President.
More critically, the Secretary's impact on policymaking sometimes has been elusive. There's no doubt he's had substantial influence on some matters. The President's decision last summer to withdraw the $50 rebate was made largely at Blumenthal's urging, and the Secretary has obvious impact on tax and international economic matters. But he lost a crucial battle over voluntary quota agreements to Robert S. Strauss, the current presidential trade negotiator. And onlookers complain they see no consistent pattern of his impact. On energy, for example, he had little or no say until the package virtually was completed.
Observers find his performance as the administration's chief economic officer difficult to assess. Blumenthal floundered in trying to run the toplevel White House economic policy group early in the administration - a situation that eventually led to two reorganizations before the policymaking apparatus finally was worked out. Insiders say his relations with other key policymakers have been as one among equals-with no particular effort to assume the leadership. (The Secretary is said to be on good, although not intimate, terms with most other top economic policy officials. His only in-house disputes have been with the White House's Georgia mafia-over the Treasury's persistence on the Lance investigation-and a rivalry with Strauss, who clearly is more flamboyant than Blumenthal prefers.)
And unlike Connally, or even William E. Simon, former President Ford's Treasury Secretary, Blumenthal has not emerged in the role of chief economic spokesman traditionally assumed by those who hold his post. More often than not, the administration's economic policy has been propoundded publicly by Charles L. Schultz, the President's chief economist. Apart from international economic issues, the Secretary's major personal initiative has been to push for an urban financing bank.
Obeservers suggest some of the blame here may rest with the President, rather than Blumenthal. Carter has failed to give the Treasury Secretary the mantle of chief economic officer, or at least boost him publicly. And on several occasions, the President has let other Cabinet officers get away with statements on economic issues that clearly conflicted with the administration's prescribed policies. Blumenthal has lunch with the President once a week, and keeps in touch by telephone almost daily, but insiders say their relationship is businesslike, not close.)
Admittedly, tough public posturing doesn't come easily for Blumenthal, who-despite his background as a business executive and former sub-Cabinet official - is conspicuously weak on politicking. A thoughtful, quietspoken man who measures his views before benturing a recommendation. Blumenthal would rather dissect an issue in detail before reacting to it publicly. "It's very hard in the government," he complains. "You're always shooting from the hip."
An inherently serious man, the Secretary shuns the traditional backslapping and ballyhooing that official Washington so often seems to demand. Although he sympathizes with business, he's said not to relish the prospect of having to replace Lance as the business community's liaison to the White House. Business should have many different contacts within the administration, he once told a group.
Nevertheless, in recent weeks, Blumenthal appears to have recognized some of these shortcomings in the political area, and-according to associates-has begun to do something about them. Emerging from his earlier reticence, the Secretary has begun logging in dozens more businessmen on his appointments calendar every week, and recently has begun paying more attention to Congress.
Last week, in a nearly unprecedented move, he sat down with liberals on the House Ways and Means Committee to listen to their views on tax policy. And on Wednesday, he gave a major speech in Houston outlining his views on economic matters. Blumenthal is pragmatic about it.
"To some extent, I'm stepping up my involvement with this because I feel business confidence is important," he says. "My responsibility is to play that role in these circumstances."
The shift has begun to work-somewhat. Treasury insiders report that Reginald Jones, Chairman of the General Electric Corp., recently has begun singing Blumenthal's praises as though the Secretary never had been under suspicion by business. Just the same, associates concede there's no doubt the Secretary still has a way to go.
What kind of a man is W. Michael Blumenthal? The Secretary sat down for a lengthy interview last week and demonstrated what detractors complain he rarely hints in public-that he has strong(and sometimes conflicting) convictions. Dressed in a gray plaid suit conservative, but more rumpled-looking than his business-community counterparts usually sport) and quiet stripe tie, he mulled over a series of doodles he'd made on a yellow foolscap pad, and spoke candidly about his job and outlook.
Despite nine months of long days, the Secretary still was upbeat about the Treasury post. The main thing he likes about it, he said, is "it's a chance to have impact on things that matter." He volunteered that it also gave him satisfaction to "serve in a very senior job in the Cabinet of my adopted country." (The Secretary was born in Germany, but his family fled to Shanghai when he was a youngster to escape hitler's regime. Blumenthal went to school here, earned a Ph.d. in economics, and went on to become a highly paid executive.) "It's almost a thrill to give up half a million bucks a year (in income) to work here," he says.
At the same time, the Secretary said he was disppointed that government was harder to cope with, in many ways, than private industry. "It's partly inherent in the job," he said. "In business, there's a clear understanding of powers, authority and responsibility. Here, everybody is involved in everything. It's somewhat frustrating."
Blumenthal also lamented that Washington had become too combative since he last served in government during the Kennedy administration.
More important, the Secretary discussed his views on a wide range of economic and social issues that, taken together, portray him as decidedly more conservative than his popular image. Blumenthal describes himself as "liberal on social issues, but conservative on economic issues" - a tag that seems a fair assessment. And, tellingly, he seems himself as "a moderating influence on the tendency that exists in the administration to beat down on business."
Economic policy-Blumenthal is moderate-to-conservative on the question of overall economic policy, believing that the economy must keep its growth targets-but not if it means abandoning efforts to fight inflation. Originally opposed to speeding up the tax cut next year to stimulate the economy, the Secretary concedes he now is "leaning more heavily" toward reduction in 1978. But he says any cut in taxes also must seek to spur investment.
Jobs - The Secretary says he has "general sympathy for the notion" of a national unemployment goal, but shies away from the tougher versions of the Humphrey-Hawkins jobs bill on grounds that they "would elevate fighting unemployment above fighting inflation. "Any goal we set clearly has to bear in mind that we can't sacrifice the fight against inflation," he warns.
Tax reform - Blumenthal emerges as cautious on tax revision. While favoring "the basic principle" that all income ought to be taxed equally, he warns that revision is "immensely complicated" by inflation and simple inertia (the present system has been in place for years, and people are used to it)
As a result, he counsels gradualism in putting any new system into effect. "We need to move as quickly as possible," he says. "All the same time, whenever we take an incentive away, we need to offer something as good or better to replace it." The Secretary has urged postponement of some key Carter pledgs-such as the move to end tax subsidies for exporters and deferal of taxes on foreign source income.
Trade-Blumenthal still opposes trade restrictions, even if they're voluntray-such as the so-called orderly marketing agreements the administration has negotiated on shoes and color TV sets-unless the restrictions are temporary and accompanied by domestic aid to "get at the underlying problems" facing a stricken domestic industry. He strongly facors lower trade barriers further.
The Secretary also confesses he is "more concerned now" about the nation's trade deficit than he was even a few months ago. "Back then, we thought we could be pretty sure it would lessen some in 1978 and later." he said. "Now we're no longer so certain we have a good handle on it."
Despite all the criticism that has emerged in recent weeks, observers concede that after all is said and done, Blumenthal's performance hasn't been nearly as sterile as the carping would imply. Defenders hark back to the Simon era, when the complaints took the opposite form-that the Secretary was interested only in rhetoric, and dealt too little in substance.
But the consensus still seems to be that if the Secretary is to prove as effective as critics would like, he will have to emerge as a far stronger leader than he has shown himself to be in the administration's first nine months. "He doesn't have to be another John Connally," says one onlooker, in what obviously was intended as understatement. "But we need to know where he stands."