USA: O'Neill slides out of Treasury.

Paul O'Neill has gone. Maybe.

A whispering campaign became a roaring tide of demands for his departure. World Money Laundering Report: Online was amongst those pointing out some of the catalogue of errors that the Treasury Secretary was prone to make.

The New York Times said recently "Mr Jon Burnham, chairman of Burnham Asset Management, said: 'O'Neill was a zero. I don't think he provided any leadership. He didn't provide a feeling that he even understood the market. When he spoke, it was like listening to a wet noodle.'"

Somewhat more polite that WMLR: O 's "If O'Neill was a car, he would be rejected as a lemon."

O'Neill's ignorance and/or stupidity in relation to money laundering procedures in other countries was particularly serious: under the USA PATRIOT Act, it was he who would decide if a or entity was "of primary money laundering concern" and then apply sanctions.

So, what now? There is an argument that O'Neill was seen as the primary reason that there was objection in the USA to the EU's tax harmonisation programmes. And that his removal will placate Europe which is increasingly upset with the USA in relation to trade as much as tax.

O'Neill has resigned. His resignation letter contains just 3 sentences. None expresses regret.

And the resignation is curiously silent as to the date upon which he will go.

A treasury spokesman said "As he told the senior staff this morning, there are lots of other important things to do in life. Back in December of 2000, he was planning to retire and devote himself to improving health care and education in Pittsburgh. I'm sure he will return to those important projects."

Bush, who has repeatedly issued statements of support for O'Neill, said ""My economic team has worked with me to craft an economic agenda to help lead the nation out of recession and back into a period of growth. I appreciate Paul O'Neill and Larry Lindsey's important contributions to making this happen. Both are highly talented and dedicated, and they have served my administration and nation well. I thank them for their excellent service."

Also curiously missing from the text released by the White House is any tail end of the letter. It breaks off abruptly, raising questions as to whether the complete letter has been produced. What might have been omitted? Aside from the lack of a leaving date, there is also the question of why he was leaving. Some say he was tired of Washington, some say Bush was tired of him, some say that the USA's worse jobless figures for longer than most care to remember provided the impetus (even though the 6% figure was published the same day, the White House has explicitly denied that this had any relevance.

The word is that O'Neill did not initiate his departure. White House Chief of Staff Andrew Card secured this agreement, according to some sources. Others say the O'Neill's old friend Dick Cheney delivered the sword that O'Neill fell on.

According to ABC News, some are promoting the interests of former mayor of New York Rudi Galliani, as the next Secretary to the Treasury. Huh? Just how is he qualified for the job other than by being popular? Come to think of it, with the economic mess in the US just now, that might just be enough.

The left are crowing that the resignation is an admission of failure of economic policy: it is probably merely a removal of an unpopular minister who was undermining the credibility of the President. They think that this will mean that taxation will rise. This is unlikely. O'Neill may have been an idiot in his unthinking speaking but he presided over a large treasury department that has a broad plan and, for once, there is clear water between left and right on tax policies. And Bush has control of both Houses. The left can make things uncomfortable in the press but Bush remains in charge. O'Neill has left a decent interval between the win in the mid-terms and his resignation.

Whatever the truth (and different versions will no doubt appear in various biographies later) the fact is that the USA is headed for a tax reduction strategy that will improve Bush's already high approval rating. Only his insistence on attacking Iraq shows any sign of Bush shooting himself in the foot.

Ironically, the poor economy is not laid at Bush's door - and it is probably right that it is not (save insofar as the US drives the world economy which is also, on the whole, in the doldrums).

Bush has been trying to muscle through a tax reduction package but in the light of falling revenues from income tax, this is increasingly difficult. But a tax reduction package is aimed at making it less attractive evade tax. That means reducing tax for the better off. And that will reduce the tendency for Americans to remove their funds outside the US so that laundering by tax evasion may reduce.

Text of letter:

Dear Mr. President,

I hereby resign my position as Secretary of the Treasury.

It has been a privilege to serve the Nation during these challenging times. I thank you for that opportunity.

I wish you every success as you provide leadership and inspiration for America and the world.