Treasury Secretary O'Neill, Economic Adviser Lindsey Quit
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WASHINGTON -- Treasury Secretary Paul O'Neill, whose outspokenness often landed him in hot water, announced his resignation Friday in a shakeup of President Bush's economic team amid concern about the ailing economy.
Lawrence Lindsey, head of the White House's National Economic Council, also resigned. There was no immediate word from the White House on how quickly Mr. Bush would replace Mr. O'Neill.
Although there have been persistent rumors that Mr. Bush might overhaul his economic team, the O'Neill resignation came as a surprise in Washington, where such major moves are often telegraphed in leaks or news stories.
The changes come as concern has increased at the White House that the lagging economy could be a political problem in Mr. Bush's re-election campaign. The unemployment rate rose to 6% on Friday, the highest in nearly nine years.
A former Alcoa Inc. chief executive and White House budget official, Mr. O'Neill has been a controversial Treasury secretary almost from the start. More than most cabinet officers, he spoke his mind with little apparent regard for the effect his comments had on the markets or whether they conveyed the policy of the Bush administration.
Mr. O'Neill has said in the past few weeks, though, that he had interests beyond his current post -- including ways to reduce the nation's spending on health care.
"I hereby resign my position as secretary of the Treasury," Mr. O'Neill wrote in a letter to President Bush. "It has been a privilege to serve the nation during these challenging times. I thank you for that opportunity. I wish you every success as you provide leadership and inspiration for America and for the world."
Sworn in Jan. 20, 2001, Mr. O'Neill is expected to leave office within the next few weeks. During his time as Treasury secretary, Mr. O'Neill's blunt-speaking style served as a lightning rod for detractors and sometimes could even make his supporters wince.
He is the first member of Mr. Bush's cabinet to leave.
Mr. O'Neill's two years at Treasury were peppered with controversy. Mr. 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, Mr. 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, Mr. 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. Following the first trading day after the Dow Jones index in the spring of 2001 suffered its worst week of declines in 11 years, Mr. O'Neill offered this comment to millions of investors: "Markets go up and markets go down."
From the beginning, he suffered in comparison to one of his predecessors, Robert Rubin, who held the post under President Clinton and was highly thought of on Wall Street.
Early in his term, Mr. 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."
Updated December 6, 2002 10:53 a.m. EST |
