The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O’Neill , by Ron Suskind. Simon and Schuster, 248 pages, $26.
This is how it began for Paul O’Neill: In November 2000, he was weeks away from retirement as chairman of Alcoa, the largest producer of aluminum in the world. Mr. O’Neill was one of the most admired boardroom supremos in the United States-no ordinary blue-skymeister skilled at public relations and stock enhancement and little else, but a first-rate economist and manager with a thirst for facts and due process of those facts. He was blunt-spoken, a maverick, pugnacious when challenged. He was leaving Alcoa at the top of his game, in good health, living happily with his wife of 45 years and with $60 million in the bank-not bad for the son of an Army sergeant. He and his wife were planning a month-long journey along the back roads of rural America and, true to type, the chairman had no wish to blend anonymously into Dogpatch: To make the journey more agreeable, he intended to buy a new Bentley. Then Dick Cheney called.
Already there had been some speculation in the press about a job for Mr. O’Neill in the new administration-as the director of the Office of Management and Budget, as Commerce Secretary, perhaps even at Defense. Mr. Cheney was an old friend from Mr. O’Neill’s days as assistant director of O.M.B. in the Nixon administration. Donald Rumsfeld was another old friend (the two men’s wives were especially close) and, as it happened, Mr. O’Neill was a favorite of George H.W. Bush, though he had met young George W. only once. As a veteran of both the Nixon and Ford administrations, Mr. O’Neill was widely acquainted with the Republican government-in-waiting, though at the moment it was waiting on the outcome of the Florida vote, a matter by no means settled. Still, Mr. Cheney pressed ahead.
“I don’t know how this all will sort out, Paul, but you’re at the top of our list,” Mr. Cheney said on the phone.
Very flattering, Mr. O’Neill replied. But he didn’t want to go back into government. Those back roads. That Bentley.
Mr. Cheney talked in general terms about Commerce and O.M.B. and the challenge of getting talented people to serve.
But Mr. O’Neill was not persuaded. “No, I don’t think so, Dick.”
Three weeks later, the Florida issue had been taken up by the United States Supreme Court (with Jim Baker in charge of the Bush brief) and matters were looking up. Mr. Cheney called again.
“We really need you here in Washington.”
“Dick, I’m really not interested.”
Mr. Cheney has a heh-heh-heh snigger that reminds people of Sydney Greenstreet. That is what Mr. O’Neill heard, and then Mr. Cheney’s voice: “You need to let me tell you it’s Treasury.”
Treasury is the oldest cabinet position in the American government, Alexander Hamilton’s chair.
A moment or two of silence, and then Paul O’Neill said: “Well, yes, I suppose Treasury is a little different. I’ll concede that.” Another moment’s pause. “Okay, I suppose we can at least talk about Treasury.”
Mr. O’Neill knew his own worth, and O.M.B. and Commerce did not measure up. Treasury was a harder job to turn down, though 40 years ago Robert Lovett did just that, and nothing John F. Kennedy could say would make him change his mind.
So it began, one could say, as an affair of pride.
No reason for Paul O’Neill not to have confidence that things would work out. Mr. Cheney and Mr. Rumsfeld would be allies. Colin Powell was a friend from the early 1970′s, when Mr. Powell was a White House Fellow. Most important, Mr. O’Neill was especially close to Alan Greenspan, chairman of the Federal Reserve; they liked the way each other’s minds worked and in most areas of economics were in agreement. One word can sum up their philosophy: prudence. The administration was filled with refugees from the Nixon and Ford administrations-sound men, for the most part; men of judgment and experience, old enough to know the practical limits of things.
As for Mr. O’Neill, he was a believer in the middle ground: “Not in compromise, so much,” writes Mr. Suskind. “Or horse trading. He was never much on any of that. It was the fresh, unaffiliated idea that enlivened him. Across four decades of search and study in and near government, he was sure he’d spotted a staid, stoic truth beneath the heat lightning of political rhetoric: that on matters of policy there are answers-right answers-that eventually assert their primacy over political posturing …. Fierce, frank dialogue commences; choices and consequences take shape. And, if everyone is honest about what they all know-and about what they’ve learned in this roiling process-an answer, a best remedy emerges. Illusion will have its moment, but there is, in fact, a discernible underlying reality. It may take a while, but in the end that reality becomes visible and undeniable. In the end, it’s all about process, O’Neill believed. Trust process and the ends take care of themselves.”
In short, politics was a sideshow, an activity somewhat elevated from the sandbox, but not by much. Mr. O’Neill believed that the gold standard of statecraft-at least on the domestic side-was the Nixon White House, with its meticulously prepared “Brandeis briefs” for the President to mull before making a decision. The great jurist Louis Brandeis insisted on clarity and logic, dealing the cards fairly in his Supreme Court briefs. Once you decided the policy, you worked out the politics to get it done. The men to be avoided were the ideologues. Ideology was the base metal of government. Truth didn’t matter to ideologues. Doctrine mattered; emotion mattered. They were not serious people.
Then, newly sworn in as Secretary of the Treasury, Mr. O’Neill met George W. Bush for lunch. The President seemed to have nicknames for everyone around him, and Mr. O’Neill’s was “Pablo.” The Treasury Secretary had sent the President a memo, talking points, a sort of tour d’horizon of the economy, which was then perhaps entering a mild recession, perhaps not. In any case, the problem was not a scarcity of money; there was plenty of money-low-interest money-but no one seemed to want any. The problem was on the consumption side. Still, the real numbers did not support bleak assessments, and a bleak assessment was what the President needed to support his trillion-plus tax cut. Mr. O’Neill proposed marginal rate cuts, if affordable. He added that Mr. Bush’s tax cut wouldn’t provide much stimulus in the short term-surely unwelcome news to the new President, for whom tax cuts were a kind of catechism. What would create positive economic growth was “a sense that fiscal discipline had been preserved.” There were a number of obvious questions the President would want to ask: How large was the surplus actually? How large a tax cut? Any thoughts on reforming Social Security and Medicare? But the President was silent, incurious, unreadable.
Mr. O’Neill’s monologue went on for one hour, precisely the time allotted. He seems to have slashed every tree in the economic forest: steel tariffs, education policy, restructuring of the World Bank and the I.M.F., health care, Japan’s economic troubles, foreign aid. Still, Mr. Bush remained mostly silent until, at the very end of the hour, he gave an order.
“Get me a plan on global warming.”
“Get me a plan on it,” the President said.
The Price of Loyalty is an unusual memoir. The byline is not Paul O’Neill’s but Ron Suskind’s. Mr. Suskind is a reporter for The Wall Street Journal, and the book is his, fortified by thousands of pages of Mr. O’Neill’s documents and memoranda and many hours of interviews. It’s a first-rate piece of work, an inside look into the methods and practices of the famously secretive administration from a genuine insider; it’s the best we’re likely to have for some time. The book has been much in the news, and Messrs. O’Neill and Suskind ubiquitous on chat shows; but anyone who thinks they know the book from the headlines and the interviews is making a mistake. Most of the media attention has had to do with the genesis of the war in Iraq. Mr. Suskind’s account seems convincing to me: that the administration arrived in Washington with Iraq at the top of its agenda, and that 9/11 only hastened what would have happened anyway. But the Secretary of the Treasury was on the periphery of those discussions, so the definitive account will have to wait. Much more compelling is the analysis of economic policy: how politics drove it, and how committed the President and his advisers were to his trillion-plus tax cut, no matter the facts of the economy or the prospect of deficits far, far into the future.
The Price of Loyalty (the title refers to loyalty to principle) is an intelligent and nuanced narrative-not exactly a Brandeis brief, but close enough. A card or two seem to have been dealt from the bottom of the deck, probably a consequence of Mr. O’Neill’s view of himself as the wallflower at the orgy, as well as his conviction that between them, he and Mr. Greenspan could formulate economic policy-that is, that he could present the facts to the President and the President would do the right thing, politics be damned. No doubt that was the way things worked at Alcoa.
Paul O’Neill received mixed reviews at Treasury. He spoke too often about too much and did not always measure his words. When Treasury lawyers raised questions about his Alcoa holdings (many millions and counting) and suggested that he recuse himself from any decision that might affect the company (though it’s hard to imagine any that wouldn’t affect a company such as Alcoa) in order to trump any appearance of impropriety, Mr. O’Neill complained that either a thing was improper or it wasn’t, and that appearance had nothing to do with it-failing, apparently, to understand that in Washington, the appearance of impropriety is worse than impropriety itself. But the controversy persisted, and Mr. O’Neil finally said the hell with it and sold the stock, forfeiting millions.
When the time came to close Mr. O’Neill down, it was Dick Cheney in full Greenstreet mode-think of Signor Ferrari at the Blue Parrot, flicking his fly whisk-who delivered the message: “Paul, the President has decided to make some changes in the economic team. And you’re part of the change.”
In other words, illusion had had its moment.
Ward Just’s latest novel, An Unfinished Season (Houghton Mifflin), will be published in July.
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