Tuesday December 7, 2004 - 15:33:55 GMT
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Forex: Card Tricks At Treasury
Card Tricks At Treasury
As White House Chief of Staff, Andy Card is also personnel director for G.W. He is the fixer, like Harvey Keitel's character in Pulp Fiction. He is part of the inner circle as well where all important policy decisions are made, including dollar policy, tax policy and economic policy spin. Card as Treasury Secretary was not on anyone's short list that I am aware of, though he obviously was on Bush's short list. And assume he put himself there or quickly nodded yes if the boss asked if he would like running Treasury. Either way this job has to be Cards. Just as Rice had a bead on Secretary of State, the handling of which is not unlike that of Treasury Secretary transition...awkward, embarrassing (for Powell and now Snow) and arguably somewhat disrespectful as both cabinet secretaries reportedly sought to extend their respective stays (WSJ reported today that Snow and his backers are fighting a rearguard action to extend his term). Rest assured Card will get whatever Card wants.
But apart from inside White House politics, there is an important signal in the selection of a politico like Card to head Treasury (throw Phil Gramm in this camp too, though he is an Econ Ph.D.). First it is another stiff arm to Wall Street and financial markets in that Bush is not tapping a Rubinesque candidate. It says the political agenda of Social Security and tax reform is far more important than what financial markets think and more importantly do. One would think that there are significant risks to US asset markets ahead with record deficits and evidence that foreign investors are putting less new capital to work in the US. Essentially the decision says a dollar crisis is not even worth considering. If it felt it was a greater risk, than the selection would have been from Wall Street, like a John Mack. By the way, I think Gramm is far too opinionated and too free thinking for Bush to even consider. And he is a deficit hawk (Gramm-Rudman) and hardly the supply sider that will be needed to drive Congress to pass radical fiscal reform with huge up front costs ($1trln in Social Security reform...reminds me of the Big Dig). It would be like asking Paul O'Neill to come back as Treasury Secretary. So there is no indication in a Card Secretary that plunge protection is even on the minds of the inner circle.
While Card will not be given carte blanche to develop tax and or dollar policy, it is worth noting that he served 8 years as a lobbyist for the US automakers after serving as Transportation Secretary for Bush 41. Google Card and the dollar or Card and the yen and you will see that there was rarely a day when the dollar was not weak enough and the yen not strong enough. He has the weak dollar gene in his DNA. But Card also knows spin and what to say and what not to say and hence I doubt this political pro will slip from the script he inherits from Snow (again assuming he gets the job). That said Card will have access to Bush like no other Bush Treasury Secretary and it is hard to imagine his call to G.W. to make the case that the dollar is too low.
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