New Man at Treasury
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JIM LEHRER: We discuss the nominee for Treasury Secretary now from Jerry Jasinowski, president of the National Association of Manufacturers, an industrial trade association; and Robert Lenzner, national editor of Forbes Magazine.
Robert Lenzner, what do you think of the Snow choice?
ROBERT LENZNER: Well, I think it’s going to be a better choice than O’Neill because he’ll be a better spokesman. He won’t misspeak, as O’Neill did, and irritate and anger the finance ministers of a lot of foreign countries that we have to deal with all the time.
But I think that the president actually misspoke when he said he had an impressive industrial career, because if you look at his performance in running the railroad, it’s been very poor over the last five years. The profits have been down, the revenues have been down, he’s paid himself a lot of money. You can see, when you saw him at the press conference, that he presents himself in a more impressive way than O’Neill, and I think that will be very crucial and important.
But I think it’s going to be a matter of policies and getting them through and making them stick that’s going to count. So I really don’t think it’s that impressive an appointment when you compare it to other past Secretaries of the Treasury, like Rubin, like John Conley, like Don Regan, like Jim Baker. I don’t think this is anywhere up to that. I think they were hard put to found somebody and they found somebody who is much more presentable than O’Neill, but is not a big star.
JIM LEHRER: Jerry Jasinowski, not a big star, presentable, that’s about it?
JERRY JASINOWSKI: I think it’s a terrific appointment, and I think that he brings really a remarkable combination of business expertise, public policy experience, he’s a great spokesman. I think he’ll do a fabulous job both in terms of caring for the president’s message, and he’ll rise to the stature that the others have risen.
I think it’s a mistake to think that you can find anybody who automatically has the stature. Bob Rubin got the stature because we had a boom and because he was very careful not to say the wrong things. I think John Snow has a lot of stature, a lot of intelligence. He speaks very well, I think he’ll be a terrific Secretary of Treasury.
JIM LEHRER: What about Mr. Lenzner’s point that he wasn’t that successful as a CEO?
JERRY JASINOWSKI: Well, I think he misspoke himself, in that the railroad business is a tough business. They had a difficult time with the Conrail merger. But in the last two years, his earnings have been each quarter higher than the previous year’s quarter. So he’s had a tough time. We’ve had a tough economy, he’s restructured, he’s made it more efficient, and his earnings have been quite good over the last couple years.
JIM LEHRER: Mr. Lenzner?
ROBERT LENZNER: Well, I think Mr. Jasinowski makes a good point that he might — a lot of people rise to the office and do better than you might expect them to do. And that might very well be true, that would be great for the country if that was so. I do think that he’ll be aided, if they do name Friedman to the other post, –.
JIM LEHRER: That’s Steven Friedman who is a former CEO of Goldman Sachs.
ROBERT LENZNER: Right. Exactly. And who has a lot of respect on wall street, I think he’s a very forceful personality, extremely articulate. And he will also, they haven’t had people who could explain what’s going onto the public, to the media, to Congress, and to the rest of the world. And now they’ve got that, I think, in spades. So that’s going to be a vast improvement.
They haven’t really had a cohesive concise economic policy that they could present as they have presented what they’re going to do about Iraq. So that’s what they’ve got to do, because the economy could stall. Our unemployment is high. Our deficit is high. Our trade deficit is high. And this is a very key time, particularly for putting in place policies to reelect George Bush in two years. So they have a big challenge to handle.
JIM LEHRER: Mr. Jasinowski, do you agree with Mr. Lenzner, that the principal job of the Treasury Secretary is to explain the policy, the economic policy of the administration to the public and to Wall Street and everybody else?
JERRY JASINOWSKI: Well, I think right now we really do need someone who can communicate and inspire confidence, so that’s an important point. But Mr. Lenzner also said that you’ve got to have a strategy that works. One of the reasons I’m high on John Snow is I think he understands the rate of growth we’ve got now is about half of what it’s been in normal recoveries. A lot of that is in manufacturing and small businesses. It’s related to low investment and not very strong exports.
So we need to build on the president’s policy and establish a coherent policy that also addresses the slow growth in investment in exports, and I think the administration is moving that way, and I think that John will help.
JIM LEHRER: But what about this, Mr. Jasinowski. A lot of the after the O’Neill announcement on Friday, there was a lot of, quote, speculation, of well this time the president will put somebody in that job who has the confidence of Wall Street, not another industrial CEO and low and behold here comes John Snow, another industrial CEO, how do you explain that?
JERRY JASINOWSKI: That’s a good point, and I expected you would raise that. I think that Steven Friedman will bring that wall street approach that wall street confidence to the package. I think he’s likely to be the other part of the team. This has to be looked at as a team. I do think John Snow has a lot of experience with Wall Street, but it would be very good to have someone with financial expertise in the White House coordinating economic policy.
JIM LEHRER: How do you read that, Mr. Lenzner?
ROBERT LENZNER: I agree with him. Hopefully it will be a team that works. We don’t know very much about whether they even know each other. One of the ironies here is that Mr. O’Neill ran his company, ALCOA, far better than snow did the railroad. I agree with Mr. Jasinowski it’s a tough business carrying Cole. But it was not, the thing about being Secretary of the Treasury is that you’ve got to deal with all of these foreign central bankers and ministers of finance.
And I don’t think — it’s going to take a while for them to get to know who Snow is, what he represents, and that’s a big effort that the Bush administration has to make — coordinating policy with the foreign governments, because we have to stimulate our economy, we have to convince them to stimulate their economies. It doesn’t matter that we’re going to run a budget deficit.
In fact, people are going to raise this is an issue that Mr. Snow many years ago was forceful in fighting for a balanced budget, but this time he’s going to have to be forceful in fighting for widening the budget deficit, which I agree with has got to be done. But I think it’s going to take time whatever their policies are to put them into effect and have them, have in effect an economic process.
JIM LEHRER: Mr. Jasinowski, that brings up the question, based on your examination of the record of Mr. Snow, is there anything in his past history as a professor, as a CEO, as a member of prior governments, that is inconsistent, anything he said or done that is inconsistent with George W. Bush and his economic policies of today?
JERRY JASINOWSKI: Well, I don’t think there’s anything inconsistent. But I do think this area of international policy is a major dimension for the secretary of the treasury and I think that’s a big challenge. We have to get the roast of the global economy growing at the same time. We encourage our domestic economy to grow faster, and I think John Snow is going to have to put a lot of time on that. He has far more expertise in that area, because CSX had international operations and as the head of the Business Round Table he had a lot of international relationships. But it still is more critical today than it was then, and I think that’s the area where he’ll have to put a lot of energy.
JIM LEHRER: But you don’t know of any little thing that somebody will say in a Senate hearing, hey, wait a minute five years ago you were saying the opposite of what George W. Bush is doing?
JERRY JASINOWSKI: No, I don’t think so. John Snow has been in the public arena for a long time, head of the round table of CSX. And I could find nothing as I went over his record carefully.
ROBERT LENZNER: One of the things he’ll have to decide, Jim, is what to do about the dollar, because the high dollar is keeping our exports from growing, and widening our balance of trade deficit. It’s in Mr. Jasinowski’s interest and his constituency to have a dollar go somewhat lower so that our exports, which then will help industrial America, improve their profits and hire people.
JIM LEHRER: Let me come back to you Mr. Lenzner on the question I asked Mr. Jasinowski a moment ago. That is the Wall Street reaction. I reported in the news summary, the market was down today and some experts tied that to the United bankruptcy, but others said that’s just a lack of enthusiasm for this selection of John Snow. How do you read that?
ROBERT LENZNER: I see it as mainly the United Airlines bankruptcy. But I think basically the market wouldn’t react either way to the Snow announcement. I think it just has the blahs about it. Until it finds out what the policies are going to be, until we really see the team get into effect, and I think it probably will have the blahs until George Bush gives his State of the Union address and we know what policies we’re going to have going forward and what our chances are of getting them through.
JIM LEHRER: But there was no expectation on wall street that one of their own would get this job as Secretary of the Treasury after O’Neill?
ROBERT LENZNER: I don’t think. So unfortunately — if David Rockefeller was 65 years old instead of 87 he would have made a good appointment. But there is no great, and also there’s a problem of taking a Wall Street figure from an investment banker right now because of all the scandals, that that would have been a problem in presenting that.
And there isn’t a leading Republican investment banker senior with an impressive record they could have named, and that’s unfortunate, because would it have been a lot better to have somebody that the markets all over the world would have said we know him, we know what he stands for, has got a very impressive record. They’re going to have to find out who Snow is and it is going to take some time, it will be a process of osmosis, it will take several weeks, I think.
JIM LEHRER: Mr. Jasinowski.
JERRY JASINOWSKI: I just think there’s one point, we’ve covered a lot of important points, but the one point we haven’t covered yet is this relationships he’s had with Congress on both side of the aisle.
JIM LEHRER: You’re talking about John Snow, John Snow’s record?
JERRY JASINOWSKI: Exactly. And I do think that the administration is not only looking for a good spokesperson, and they’ll get witness him, but they are looking for someone who can forge consensus and be bipartisan — some people were not happy with this appointment because they thought he wasn’t conservative enough or supply side enough. He really is someone who I think will help pull in some Democratic votes on the president’s tax package and other measures. That’s terribly important when you have such a closely divided Senate.
JIM LEHRER: I got you. Mr. Jasinowski, Mr. Lenzner, thank you both very much.