Who's Treasury Secretary Around Here Anyway?

On September 10, 2001, when the economy was sputtering and George W. Bush was saying little on the subject, political analyst Stuart Rothenberg wrote a piece for CNN.com wondering where was Bush’s economic front-man, the man who could reassure the markets and instill public confidence in the economy? Or, as the headline asked, "Where is Bush’s Robert Rubin?"

Well, in the turbulent wake of the Sept. 11 terrorist attacks, he’s finally arrived. His name is… Robert Rubin. And lately, the question has been, where is Bush’s Paul O’Neill?

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OK, maybe that’s an exaggeration. O’Neill, the current Treasury secretary, is still on the job. He was at the New York Stock Exchange the Monday after the attacks to ring the markets’ reopening bell, and Wednesday it was O’Neill who met with business leaders in New York to discuss the possibility of business-targeted stimuli.

But it was Rubin, the Clinton Administration Treasury Secretary who stepped down in 1998 at the top of his game (and, as it turned out, the U.S. economy’s) to take a lucrative job with Citicorp, who accompanied Alan Greenspan to a private session of the Senate Finance committee to recommend a temporary $100 billion stimulus package as a way to help the economy get back into some kind of gear.

The official word was that Rubin’s presence was a show of bipartisanship. But has the credibility of Greenspan, hardly a flagrant Republican these past 14 years at the Fed’s helm, sunk so low? Or was it that in a time of economic crisis, the sight of Rubin and Greenspan together again, just like the time they saved the world from the 1997 Asian currency meltdown, was deemed to be far more reassuring that the sight of Greenspan and O’Neill?

Thus far in his tenure, O’Neill has been a Treasury Secretary for good times — at best. His resume coming in was that of a businessman and budgeteer; many hoped that in a time of surpluses, O’Neill would lead a long-awaited common-sense assault on the tax code and government spending. The hope was that his lack of credibility with Wall Street — Rubin came from a long stretch as a Goldman Sachs bigwig — wouldn’t be missed. The occasional gaffes — appearing to talk down the dollar, making fun of day traders, throwing head-fakes over Argentina, and spending the first weeks in office improving worker safety at Treasury even as the first signs of a serious downturn became apparent — drew plenty of head-slaps. But the financial world didn’t seem overly nonplussed.

After Sept. 11, when the financial world turned apocalyptic, O’Neill’s only public comments were mindless cheerleading about the strength of the economy, the lack of an imminent recession, and some very bad advice: "The people who bought today are going to be happy people," he said on opening Monday. "The people who sold will be sorry they did it." The Dow lost another 700-odd points that week, and hasn’t exactly sprung back since.

And perhaps the Bush Administration suddenly figured it needed a heavy hitter, a battle-tested veteran whose mere presence would assure Wall Street and Congress alike that a comeback from the mother of all economic shocks was possible to engineer quickly without regretting it later. Because Rubin was a Treasury secretary for bad times — who made them good.

After arriving in the wake of a recession that Clinton had convinced voters was still going on, Rubin pushed through a politically risky fiscal policy that helped produce two terms of low long-term interest rates, miniscule unemployment, and booming economic growth that filled government coffers higher than they’d ever been. Then he led the international effort to keep the Asian crisis contained and the U.S. confident and afloat, and left in the middle of the high-tech boom.

This crisis has been George W. Bush’s moment, Colin Powell’s moment, even Donald Rumsfeld’s moment. But while his cabinet colleagues and his boss swell in stature, O’Neill has only gotten smaller in relation to his increased importance — to the point of actually sharing the crisis-management spotlight with someone no longer on the government payroll.

It’s good to see Rubin around, a meticulous man who made his career carefully assessing risks and making intelligent bets. These are not days for the loose of lip or itchy of trigger finger. But it’s going to be a long hard winter for the economy — the recession that was inevitable before Sept. 11 will be even deeper now. And as the Bush administration tries to pick its way back to more prosperous ground, the markets will occasionally look to the Treasury for guidance and reassurance, but not empty pep talks.

And at some point Bob Rubin’s going to have to go back to work.