[PEN-L:32833] Yahoo! News - Bush Ousts O'Neill, Lindsey Over Economy

[ravi <gadfly@xxxxxxxxxxxx>]

i am sure you are all aware of this. i am posting the news since nobody
has and i am interested in hearing your opinions.

	--ravi


<http://story.news.yahoo.com/news?tmpl=story2&cid=514&ncid=514&e=1&u=/ap/20021206/ap_on_go_pr_wh/bush_shakeup_7>

Bush Ousts O'Neill, Lindsey Over Economy
By JEANNINE AVERSA, Associated Press Writer

WASHINGTON (AP) - President Bush (news - web sites) revamped his
economic team Friday as Treasury Secretary Paul O'Neill and economic
adviser Larry Lindsey resigned at the request of the White House amid
growing concern about the ailing economy.

Bush advisers have been increasingly worried that a lagging economy
could hamper the president's re-election prospects. The unemployment
rate rose to 6 percent on Friday, the highest in nearly nine years.

Presidential advisers do not blame O'Neill, but they've long recognized
that a shakeup of the economic team would help indicate Bush was doing
everything he could to improve matters.

The resignations came four weeks after Securities and Exchange
Commission (news - web sites) Chairman Harvey Pitt resigned under fire.

O'Neill was the first member of Bush's Cabinet to leave. Officials
expected him to be replaced quickly; a search already was under way.

Among those mentioned as possible successors are Joseph J. Grano Jr.,
head of UBS Paine Webber in New York; investment counselor Charles
Schwab; retired House Ways and Means Committee Chairman Bill Archer,
R-Texas; and Sen. Phil Gramm (news, bio, voting record) and House
Majority Leader Dick Armey, a pair of Texas Republicans and economists
who leave Congress in January.

Gramm, however, has just taken a lucrative post at UBS Warburg, an
investment banking firm, and is said to be eager to make money after
years in the public sector.

Senate Democratic leader Tom Daschle of South Dakota, who has frequently
criticized Bush's handling of the economy and called on him to fire his
economic team, said the shakeup was not enough.

"Firing its economic tean is an overdue admission by the Bush
administration that its economic policies have failed," Daschle said in
a written statement. "However, the fundamental problem is that this
administration has no comprehensive plan to get the economy back on track."

Senate Republican Leader Trent Lott said the departures of O'Neill and
Lindsey were "an opportunity for the administration to think about the
best people to bring in as they try to develop an economic growth package."

Just after the November elections, White House advisers began
speculating that Lindsey and O'Neill would be asked to leave. Bush said
at the time: "My economic team came in during very difficult times.
There was a recession, terrorist attack, corporate scandals. We have
done a lot to return confidence and to provide stimulus through tax cuts
... and for that (the team) deserves a lot of credit."

At the White House, press secretary Ari Fleischer (news - web sites)
said the president credits O'Neill and Lindsey with playing key roles in
securing tax cuts and legislation promoting free trade and guaranteeing
terrorism insurance to businesses.

"They have both served the president ably and well in leading the nation
from a period of recession into a period of growth," Fleischer said.

Still, senior White House officials said the men had been told their
departures would be welcome because Bush wanted to shake up his economic
team.

"It has been a privilege to serve the nation during these challenging
times," O'Neill said in a letter to the president. "I thank you for that
opportunity."

On Wall Street, market reaction to the dual resignations was muted. The
Dow Jones industrial average was up 5 points and the Nasdaq was up 6
points in early afternoon trading.

During his nearly two years as treasury secretary, O'Neill's
blunt-speaking style served as a lightning rod for detractors and
sometimes could even make his supporters wince.

O'Neill, who left his job as chairman of Alcoa, the world's biggest
aluminum maker, to take the Cabinet post, touched off a furor when he
said he would keep nearly $100 million worth of stock in the company.
Under fire by critics about potential conflicts of interest, he
eventually reversed course and sold the stock.

As the president's chief economic spokesman, he was frequently
criticized as being either too enthusiastic about the economy's
prospects and the stock market or too ho-hum.

When Wall Street reopened after the Sept. 11, 2001, terrorist attacks,
O'Neill turned into an economic cheerleader, predicting on Sept. 17 that
the Dow Jones industrial average could be approaching all-time highs
within 12 to 18 months.

As the stock market melted down that day, O'Neill declared that "the
people who sold will be sorry that they did it." He also pooh-poohed the
notion that the economy could be headed into a recession. It was.

Early in his term, O'Neill's mixed comments on the U.S. dollar rattled
currency markets and perplexed currency traders. He described traders as
people who "sit in front of a flickering green screen" all day and were
"not the sort of people you would want to help you think about complex
questions."

Still, Bush and his aides defended O'Neill's salty style.

"The president enjoys his blunt, plainspoken approach," Fleischer said
last year. Despite the controversies around O'Neill, he said, "the
president has never had a moment of concern."

O'Neill called the U.S. income tax code "9,500 pages of gibberish." He
roiled the Social Security (news - web sites) debate by declaring that
the able-bodied should save for their own retirement and medical care.

He criticized international bailouts of Russia as "crazy" and called the
European Union (news - web sites) "off the wall" for rejecting the
General Electric-Honeywell merger.

His take on nuclear accidents: "If you set aside Three Mile Island and
Chernobyl, the safety record of nuclear is really very good."

O'Neill also tilted against administration dogma — initially questioning
the short-term benefits of the Bush tax cut and advocating an aggressive
battle to combat global warming (news - web sites).

"I would say that I am not troubled by ruffling some feathers because I
think I have been true to what I believe and what I think is right,"
O'Neill once said.

A bitter, 15-minute verbal duel between O'Neill and Democratic Sen.
Robert Byrd (news, bio, voting record) of West Virginia over each man's
hand-to-mouth beginnings made front-page headlines. Byrd suggested that
O'Neill by virtue of his status as a Cabinet secretary and a former
corporate titan was out-of-touch with the needs of the average American.

"I started my life in a house without water or electricity," snapped
O'Neill who grew up poor in St. Louis, Mo. "So, I don't cede to you the
high moral ground of not knowing what life is like in a ditch."

He started his professional life as a computer systems analyst with the
Veterans Administration in 1961.

He climbed the ranks — taking a year off to acquire a Master's degree in
public administration at Indiana University. He became deputy director
of the Office of Management and Budget in 1974 in the Ford administration.

That's where he met Dick Cheney (news - web sites), who as Bush's vice
president suggested O'Neill for the Treasury post, and Alan Greenspan
(news - web sites), with whom he forged a lasting friendship.

He joined International Paper Co. as a vice president in 1977 and by
1985 he was president. O'Neill left the company to become chairman and
CEO of Alcoa in 1987. His turnaround of the aluminum giant was studied
in business schools across the country.