Just a pipe-dream team?

HAS Bill Clinton picked an economic 'dream team' - or are his selections a sign of a very pragmatic politician? Does Lloyd Bentsen, the US Treasury Secretary-designate, share the common goals of job creation and higher living standards for the masses, or were these just election-year pipe-dreams? What should we make of these conservative appointments to Mr Clinton's administration when, during the campaign, he had preached an anti-Establishment message of change, change and more change?

The line-up could not be safer: two veteran politicians from Congress, two successful investment bankers from Wall Street and a former top congressional staffer. In addition to Mr Bentsen, the team includes Leon Panetta, chairman of the House Budget Committee, as director of the Office of Management and Budget; and Robert Rubin, co-chairman of Goldman Sachs, in the new position of head of the National Economic Council. Serving as Mr Bentsen's deputy will be Roger Altman of the Blackstone Group, a classmate of Mr Clinton at Yale. Alice Rivlin, former director of the Congressional Budget Office, will join Mr Panetta as number two at the OMB. This is not a team designed to shake things up.

If there is a surprise to be found in these appointments, it is in the very calculated message from Mr Clinton that he intends to push his programmes through Congress, avoiding the divisive stalemates that have plagued so many of his predecessors. By working with insiders, Mr Clinton is indicating that he wants the results of Lyndon Johnson's 'Great Society' legislative blitz. In addition, he wants the mantle of invincibility achieved by Ronald Reagan during his first term. Such decisiveness was not often apparent during the campaign.

These appointments are about process, but what process is still unclear. The biggest wild card is Mr Rubin. What will he make of a new White House fiefdom that seems a magnet for wars and bureaucratic turf battles? As explained by the Clinton team, his job will be to raise economic issues to the status previously enjoyed by national security, and to build consensus among the various, often divided federal agencies and departments. These are tall orders.

It is difficult to imagine Mr Bentsen, one of the true barons of Capitol Hill, bowing to the demands of anyone other than the President himself. Similarly, Mr Panetta is likely to use his vast Washington experience to outguess Mr Rubin in tough situations. If Mr Rubin builds a new White House economic superstructure along the lines of the National Security Council, the small but able Council of Economic Advisers could become virtually meaningless.

The same can be said of the US Trade Representative, who often plays second fiddle in the White House orchestra. To succeed in this top role, Mr Rubin will need the ear and full confidence of the President. Robert Reich, head of Mr Clinton's economic transition team and an old Oxford classmate, seemed better placed. He has known Mr Clinton for 26 years; Mr Rubin has known him for a year. So much for the process.

What about the substance? Mr Clinton, in announcing these first cabinet appointments, stated emphatically that he is 'committed to long-term deficit reduction'. The appointments of Mr Panetta and Ms Rivlin, both outspoken advocates of this cause, seem to bear out his words. What is not clear is whether Mr Clinton's equally prominent commitment to more federal investment in education, training and public works projects will have to give way to the deficit hawks and those emphasising business concerns.

It is a little ironic that in an administration elected on programmes sounding very much like the 1930s New Deal, the top economic jobs are dominated by multi-millionaires. Mr Bentsen is a Texan and builder of fortunes and his net worth has often been discussed during his long Senate career. Mr Altman at Blackstone also qualifies, as a highly successful mergers and acquisitions specialist. And soaring above them all is Mr Rubin, whose net worth is estimated between dollars 50m and dollars 100m - although Goldman Sachs, as a private partnership, does not publish such figures. These are not the firebrand reformers and populists who featured prominently in the administrations of presidents Johnson and Carter.

Mr Bentsen, for example, is better known for his support of the oil and gas industries, and tax breaks for big business during his chairmanship of the Senate Finance Committee, than for programmes aiding the middle class and unemployed. However, he is a big proponent of increasing the dismal US savings rate, through individual retirement accounts and other devices. However, early in his career he supported higher petrol taxes - an almost unthinkable act for a senator from Texas, but one that demonstrated he will break the mould when he sees the right goal.

By contrast, Mr Rubin is a virtual unknown in the public policy arena. The only clues are his hefty donations to liberal political causes and his recent statements that the US cannot solve its economic crisis without also solving the problems of the urban poor. He seems to represent the other wing of Mr Clinton's philosophy.

Mr Right for Wall Street, page 9