Brad DeLong on the tenure of Larry Lindsey as White House economic policy head is essential reading. “To the powers-that-be in the Bush White House, economic policies are way to reward favored groups of constituents. And their effect on the economy? They don’t need to think about no stinking effect of policy on the economy.”
The Wall Street Journal reports that Treasury secretary-designate John Snow’s company, rail freight giant CSX, is no great shakes. “For all its progress, CSX still has the worst operating ratio, a common measure of railroad efficiency, among big North American railroads.” That sounds like a recommendation. And in 2001, Snow earned “$2.2 million in cash, plus $7.1 million in restricted stock awards. In addition he received $753,057 in additional compensation, including $117,900 in life-insurance premiums and $323,266 in ‘above market’ interest on deferred earnings”. When he retires he qualifies for Welch-like perks, including “use of private aircraft for the remainder of his life”. Just the man to tackle concerns about corporate governance.
The reports that John Snow, chairman and CEO of freight transportation group CSX, is to be the new US Treasury secretary sounds to me like repeating the mistake of the O’Neill appointment. My friend David Hale used to make a distinction between New York Treasury secretaries and Texan Treasury secretaries. This is definitely a Texan appointment, just like O’Neill (David was writing about Texas as a state of mind, rather than anything to do with specific geography).
Brad DeLong’s comment on the O’Neill resignation seems appropriate. “The Treasury Secretary should (a) be a strong voice helping the U.S. pursue good economic policies, (b) understand what the economic policies of the United States are, (c) be effective at using his extremely prominent and powerful post to tell outsiders about the economic policies of the United States, and (d) know how to use his — truly excellent, dedicated, and very large — career staff inside the Treasury building. Paul O’Neill was zero for four.”
The Washington Post reckons Snow is “a skilled schmoozer”, so that probably helps with Brad’s third requirement. He does have a doctorate in economics, so that might help with the second requirement. But a look at his long career in the hardly dynamic domestic transportation industry does not suggest to me someone on top of either global markets or the global economic situation. And it’s very hard to know how much the White House wants a strong voice at the Treasury in any case. Matthew Yglesias says many of the same things, but in a feistier way than I do.