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Businessweek Archives

Bill Clinton's Balancing Act



Bill Clinton's first rounds of Cabinet appointments show that the President-elect correctly sees the distinction between the short-term problem of licking the recession and long-term structural problems in the U.S. economy. His selection of Senator Lloyd Bentsen (Tex.), Representative Leon E. Panetta (Calif.), former Congressional Budget Office Director Alice M. Rivlin, and investment bankers Robert E. Rubin and Roger C. Altman for key economic posts signals that the President-elect is serious about controlling the deficit. Clinton expects this group of fiscal conservatives to help him deal with the immediate problem of how to stimulate growth and get employment growing again while reassuring Wall Street that he's no big-spending liberal.

The next group of selections indicates that he is equally committed to confronting America's longer-term economic dilemma: how to make U.S. companies globally competitive and get wages and living standards growing again. Health care and the environment will be the responsibilities of strong-minded nominees: Donna E. Shalala, president of the University of Wisconsin, and Joan Browner, Florida's environmental chief. Both Robert B. Reich, Clinton's nominee for Labor Secretary, and Laura D'Andrea Tyson, his choice to head the Council of Economic Advisers, are proponents of investment in human capital. They hold that the U.S. should compete by raising the skill and education levels of its work force, not by slashing wages and shipping jobs offshore.

The choice of Reich, a political scientist at Harvard's Kennedy School of Government, also suggests that Clinton is serious about a key ingredient in a high-skills strategy: forging European-style compacts among business, labor, and government--another interest of Reich's. Indeed, idea-man Reich is likely to bring big changes to the role of the Labor Dept., which, with the exception of William E. Brock, has been headed by lackluster appointees for over a decade.

Democratic National Committee Chairman Ron Brown is an able man, but questions have been raised about his law firm's lobbying activities for foreign clients. Brown might make a splendid Commerce Secretary, but the appointment could be seen as at variance with the rigid standards Clinton promised during the campaign. Overall, however, the selections rightly mix imaginative new ideas for the future with encouraging experience for the here and now.

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