With the outlines of his economic program charted, President Bush was looking for a secretary of the Treasury and national economic adviser who would energetically sell his tax cuts. In tapping John W. Snow and Stephen Friedman, he picked two sometime deficit hawks to culminate an absent-minded selection process.
To select a railroad executive and an investment banker, neither with international experience, also seems peculiar considering the challenge of the global economy. Moreover, vetting for both was inadequate. As his selection was announced Monday, Wall Street was atwitter about Snow's sale of stock from his CSX Corp. this year in advance of adverse business developments. Friedman was supposed to be at Snow's side with the president Monday, but the formal announcement of his selection was delayed by belatedly revealed health problems.
This was not the problem of hurried decisions. On Nov. 14, I wrote that Paul O'Neill and Lawrence Lindsey both were on their way out, a decision that had been made weeks earlier. The president had the time to build a new economic team totally in tune with his supply-side economics proposals, but he clearly did not.
Snow does hold some conservative credentials. He and CSX were early financial supporters of the free-market Competitive Enterprise Institute, though recently he said he was too busy to address the institute's anniversary celebration. He served on the 1996 tax advisory commission headed by supply-sider Jack Kemp, who this week expressed "great enthusiasm" for Snow as a "terrific guy" and tax reformer.
Snow, however, was a member of the Committee for a Responsible Federal Budget, which opposes tax reduction and whose members include such stalwart anti-supply-siders as Leon Panetta, Bill Frenzel, Alice Rivlin, Peter Peterson and David Stockman. In the early 1990s Snow headed the Business Roundtable, which then was notorious for its opposition to all tax reduction and its tilt in political contributions to Democrats. Representing big business, he worked with the Clinton administration in 1993-94 for deficit reduction -- achieved by tax increases.
The explanation of how a secretary-designate of the Treasury can be for and against tax cuts at the same time is found in what former Republican national chairman Haley Barbour told me six years ago in criticizing the Business Roundtable's bipartisanship: "Big business has no party and never shall have."
A senior Clinton administration official who worked with Snow on deficit reduction told me (asking that his name not be used): "I thought he was a typical big businessman, without strong ideological views and not politically inclined." Snow, a mid-level Ford administration official, found temporary shelter after the Democratic victory in 1976 at the American Enterprise Institute, where supply-side zealot Jude Wanniski was his office neighbor. Wanniski likes to argue with everybody, but he found Snow was interested only in railroad law -- the one subject about which Wanniski admitted ignorance.
Bush became interested in Snow not because of what he thinks or says about economic growth but in admiration of his strong stand on corporate governance. Ironically, shortly after Snow was nominated came reports that on Aug. 8 this year he sold 120,000 CSX shares for $4.2 million -- a month before news of lower coal shipments collapsed the stock by 16 percent. Snow's sale was listed as "automatic," but the question is raised whether he had information not available to CSX's other owners.
While Snow contributes only to Republicans, Friedman is a Wall Street switch-hitter who gives to both parties. More significant is his vice chairmanship of the deficit-hawkish Concord Coalition, which has opposed the Bush tax cuts. Nevertheless, he was pushed for the job by Josh Bolten, the White House policy chief and Friedman's former colleague at the Goldman Sachs financial house. Weeks after the White House began talking to him, Friedman suspended the process this week by citing health problems.
Snow's and even Friedman's past policy transgressions are meaningless, in the opinion of presidential aides. The two nominees are described as converts to tax-cutting and fully supportive of whatever George W. Bush wants. The test will come before congressional committees when they are asked whatever happened to the old-time religion of the Committee for a Responsible Federal Budget and the Concord Coalition.
(c)2002, Creators Syndicate Inc.