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Friday, December 06, 2002

Treasury Secretary Kemp, Anyone?-Both Treasury secretary Paul O'Neill and economic adviser Larry Lindsey were asked to resign today. I think you need someone at Treasury who understands economics more than just corporate finance, someone who will have the respect of the central bankers and finance ministers around the world. O'Neill, while a decent fellow, was too much of a corporate good-ol'-boy to give the supply-side push that we want at the Treasury Department. With unemployment creeping back up to 6%, we need to have someone who can sell the need to keep the tax cuts in place and to hopefully add some more cuts. This, coupled with the forced resignation of SEC chief Harvey Pitt will allow the administration, if they play their card right, to bring some people who know economics but aren’t quite as tied to corporate America than the current crop of leaders. I don’t know who those people would be. The SEC chief should have a streak of protecting the investor rather than cozying up to the brokerage firms, for inertia will favor the brokerages. A new Treasury secretary should be able to sell the 2001 tax cuts and keep them on the books; we need a champion of the small businessman and Joe Average rather than a Fortune 500 executive and GOP donor. If Bush does this, putting people who will look after the public and be seen to be doing so, he’ll win in 2004 in a walk; if he starts pulling names from the corporate power-donor list, he’ll give the class-warfare folks on the left some useful ammunition.

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