Brit Hume and the Fox News Channel removed all doubt Sunday morning about the meaning of their oft-repeated slogan, "fair and balanced." Watching Hume chat breezily with Treasury Secretary Paul O'Neill on Fox News Sunday at 9 a.m., then watching Tim Russert drill O'Neill on NBC's Meet the Press at 10:30 a.m. was a revelation in how the two stations view their roles in engaging the powers that be. Seeing them back-to-back was like watching Jason Giambi take batting practice against Martha Stewart, then step into the box against Pedro Martinez.
No matter what the question was on Sunday -- or from whom -- O'Neill had one "fundamental" answer, albeit presented in slightly different form: "The fundamental strength of our economy is good;" "the fundamentals ... are really quite good;" "the economy is fundamentally sound;" "I've been working on the fundamentals;" "the important thing to do is stay focused on the fundamentals;" " let's get the fundamentals right." You've got to give the secretary credit for staying on message. And in a sense, he's right: The economy is expected to grow at 3 percent to 3.5 percent this year. Productivity growth is high. Unemployment is on the steep side at 5.9 percent, but in June 1994 it was at 6.1 percent. Most countries would welcome such a recession.
But then there's the falling stock market. Republicans' attitudes toward the stock market oscillate between two forms of spin. On the one hand, when it comes to cutting capital gains taxes or not expensing stock options, it's good for all Americans because fully half own stock. But when the stock market is plunging, that's all right, too, because "the fundamentals are solid." Russert seemed to take pity on O'Neill by basically reminding him to express the requisite sympathy for those whose 401(k) plans have suffered over the last month.
Russert: The Standard & Poor's index of 500 stocks, they have lost 37 percent of their value since George Bush became president. That is twice -- twice -- the loss under Herbert Hoover. That is a grave concern to people. They are losing their pension plans, their income plans, their retirement plans, their college savings. You understand that, don't you?
O'Neill: You bet. You know, I think you can't live in this world with a family like the one that I have without feeling the pain of investments going down and pension plans and company benefit plans going down.
When it came to the budget deficit and the surplus-gone-kaput, Russert quoted former Treasury Secretary Robert Rubin: "We don't have to 'raise' taxes, we just have to postpone or cancel what would otherwise happen in the later years.' The fact is, deficits are once again the biggest threat to the economy. We've gone in less than two years from $5 trillion worth of surplus to new and growing deficits as far as the eye can see. That's having its own effect on the markets."
But O'Neill stuck to the familiar administration stance: Blame the deficit on 9-11. Tax cuts have nothing to do with it, and we shouldn't be "raising taxes." As the idea of rolling back the remainder of the Bush tax cut gains momentum, one wonders how long the public will accept the view that canceling tax cuts that haven't even taken effect is, in fact, "raising taxes."
Perhaps the most astonishing spin that O'Neill produced Sunday morning was his denial that the administration was, in fact, using Social Security money for the general budget. Russert seemed taken aback by O'Neill's defensiveness and interjected, helpfully, "The facts are important, Mr. Secretary." O'Neill chose to interpret the question abut Social Security as an invitation to oppose "raising taxes," but when he returned to the question, we witnessed this tense exchange:
O'Neill: The Social Security money, every bit of it, goes into a Social Security trust fund and none of it ... .
Russert: But you pledged to segregate. During the campaign, you pl--
O'Neill: It is segregated. None of it gets spent for anything but Social Security.
It's hard to know what O'Neill means here, because everyone else acknowledges that Social Security will have to be raided.
Even when Hume was lobbing softballs to O'Neill -- "What is the administration's economic plan, going forward, to enhance growth?" -- the secretary still managed to slip up. "It's really important that we not overspend, not put too much stimulus into the economy," he said. Too much stimulus? Is "too much stimulus" really our primary danger at this point? In an earlier era -- the 1980s, for example -- Keynesians would have argued that deficit spending for the sake of stimulus is exactly what we need at this point. There's a real discussion to be had here about how much deficit spending is optimal for the economy right now. But because the administration, led by OMB Director Mitch Daniels, has been busy misleading the public about the actual size of current and future deficits, such a discussion won't take place, and O'Neill is left to toe the line.
Russert cited one particularly striking poll, which states that 68 percent of Americans think we're currently in a recession or will be within a year. So after all of O'Neill's assurances about the fundamentals, Russert asked, entirely appropriately, "Are you totally out of touch with the American people?" Perhaps we're not in a recession, but if Americans think we are -- and consumer confidence slips because of it -- whose fault is that? When O'Neill complained of "the steady amplification of the negative stuff," Russert adroitly noted, "Your comments have been closely covered, Mr. Secretary." He quoted O'Neill's prediction that the Dow would reach all-time highs within 12 to 18 months after September 11, and his dismissal of the possibility of a recession.
O'Neill defended himself with patriotic bluster in the face of economic adversity that only a millionaire former CEO could muster:
"The day that we re-opened the market in New York was an enormously important and emotional time. And what I said then I think is right, that the U.S. economy is second to none in the world. And that over time people who have made their bet and invested in America have been big winners, and I think that will be true going forward. [...] I don't apologize for saying this is a great economy and I'm proud to be an American. I don't take that back."
One hardly knows which would be worse: a treasury secretary who suspected the market would suffer but said the opposite, or one whose honest prediction was so totally off base.
O'Neill may understand the economy very well, but he doesn't grasp his own role in it. When he wasn't complaining on Sunday that no one listened to the good news about the economy, he had to respond to Russert's quoting him when he said, "I'm constantly amazed that anyone cares what I do." It's probably true that Americans overestimate the ability of the government to affect the economy -- particularly the stock market. But if O'Neill is frustrated that no one listens to him bearing good news one moment and is mystified the next because people are listening to him, then he has a fundamental problem: He doesn't understand the job.
