A Diminished Treasury

Forget about Alexander Hamilton. John W. Snow is not even in Robert E. Rubin’s league. That was the subtext of the Bush administration’s leaked musings over the last few weeks over whether to keep Snow as Treasury secretary in the second term.

Last Wednesday, the president asked Snow to stay on, but all the voiced yearnings in and out of government for a better man left the secretary an even more diminished steward of the nation’s economy. And he commanded little respect to begin with -- hence all the yearning.

All of this is unfair to Snow, a charismatic former railroad chief executive with a strong academic background in economics. His fault is that of being a loyal team player, pitching a Bush economic plan that lacks any credibility.

Paul O’Neill, Bush’s first Treasury secretary, was fired for lacking such loyalty to flawed policies.

Maybe we should read into Snow’s retention a tacit acknowledgment of reality within the White House. Maybe deep down the president knows the problem here isn’t the messenger. Hamilton, the brilliant first Treasury secretary, would have lacked stature too if he’d been forced to pitch this administration’s increasingly surreal message that all tax cuts are good and that there is no day of reckoning for half-trillion-dollar deficits and the ever mounting federal debt.

That day of reckoning will only be hastened if the administration proceeds to borrow hundreds of billions more for a costly reform of the Social Security system. The dollar’s slide reflects global concern over the way Uncle Sam is handling his finances. Americans may soon be in for a big jump in interest rates, and inflation, to keep Asia’s central banks financing U.S. debt.

During the Clinton years, Rubin and Lawrence H. Summers provided needed global economic leadership from their perch at the Treasury. Snow, hobbled by the administration’s lack of fiscal responsibility at home, lacks the credibility to prod other governments to enact needed reforms, or to advocate forcefully for trade liberalization. This has eroded U.S. stature around the world, which is why a diminished Treasury chief is a problem that transcends inside-the-Beltway bureaucratic rivalries.

An administration can afford to have Cabinet members -- the Labor and Transportation secretaries come to mind -- who command little respect. But not at Treasury.

Restoring gravitas and power to that office isn’t a matter of just changing the secretary, but of changing policies.