Market briefing---Lane (medium)
Gene---Economic summit (slow)
>> welcome back to “world financial report”. i’m lane bajardi in new york. recapping the day on wall street the closing numbers with the dow jones industrial average down 38 points at 9,271. s&p lower by six. the nasdaq off less than half a point. president bush said the current tax relief plan is robust enough to encourage growth. the president meeting with his key economic advisors in his ranch at crawford, texas, to discuss strategies that may accelerate growth and bring new jobs into the u.s. economy.
>> let me summarize by saying that this administration is optimistic about job creation. we believe strongly that the tax relief plan that was approved by congress in 2001 and most recently in 2003 is going to have a very positive effect on economic growth and vitality. we believe it is more likely in the upcoming year that people are going to be able to find a job. that’s exactly where we focused our policy.
>> even with the jump in july retail sales is evidence of the economy gaining strength, the u.s. economy unexpectedly lost 44,000 jobs last month. labor secretary elaine chao said companies are more reluctant to higher and employment has lagged behind the recovery of the economy. u.s. commerce secretary don evans says the administration will take the steps necessary to move the economy toward full employment.
>> i think it’s appropriate that we do watch for a while. we monitor for a while, we watch and see what kind of impact these tax cuts the president has signed, what kind of impact they have on this economy. but as we move into the fall and we watch the economy, if it’s not performing how we expect it to perform, then the president will consider other action at that time.
>> president bush and his economic advisors pushed for discipline in congressional spending, energy bill, tort and class action reform to further the economic recovery. former clinton economic advisor and bloomberg contributor gene sperling’s joins us to give the democratic point of view of the economic summit. joining us from washington, there he is. i knew he was there. hell lorks gene. good to have you with us once again.
>> hello, lane.
>> so they got them alling the down on the farm or the ranch in this particular place. you got to wonder if these meetings take place in washington any time. it seems like you only see the president with these people in crawford. tell us, why did the bush administration today hold today’s economic summit. why do they do it down there? how does this work?
>> well, i think it was about symbolism and symbolism isn’t important so i don’t blame them. president bush likes to take a full month off or take a month at the ranch in crawford. the symbolism of a president taking a month at a ranch while people are struggling for work is not one the white house wants to promote at this time. so showing him working, meeting with his economic advisors is a way of―for them to signal to the public we are working here. i am conscious that there is a job problem out there. so it’s definitely a symbolic move, publicizing what was really an internal meeting like that. but, you know, i suppose that it was a reasonable thing for them to do, under the circumstances.
>> it kind of looks like from that video we were just showing that they are all on vacation, though, not just the president. they are down there, looking pretty casual, enjoying themselves on the ranch. could that backfire? could they all look like they are on vacation?
>> i don’t know if i would have quite done it the way they did. i might have more shown them around, you know, we are getting into p.r. here, but i think if i was back at the white house i might have thought it might be better to show them actually meeting, you know, sleeves rolled up. you are right. it did give a little more of the impression of this. i remember president clinton was―loved to play golf and sometimes if there was bad economic news going on there was always the concern do you want the president being seen golfing while there is bad economic news. so again, every white house has to deal with these symbolisms. what you are really seeing is the start of the larger debate. the bush team’s argument is we inherit ad weak economy. we had bad breaks with 9-11. if you see the economy picking up, it’s because of the tax cuts that have passed. the democrats are going to say, “look, you’ve been there for three years. this was your third stimulus plan. you haven’t done enough to focus on job growth, and the main effect these tax cuts are having is that they are hurting the long-term deficit and our ability to deal with social security and medicare.” so you saw that lined up today. that’s really a preview of what i think the economic debate will be in the 2004 election.
>> you predicted the president would focus on creating more jobs at this meeting and in the future. this is what we are starting to see here, and he’s using his own economic plan as a reason for that happening here. this again―isn’t this his new focus on the domestic issues, isn’t that pushing the democrats and the presidential jockeying that’s going on in the democratic party even further back right now?
>> well, i mean i think what’s happening is, you know, democrats see the economy as a place where he is vulnerable. we’ve lost three million private stork jobs. so president bush is almost certainly going to be the first president since hoover to preside over lost jobs. so this isn’t going to be a strong point. democrats are going to hit hard. what president bush wants to do is neutralize on the economy and win on foreign policy and homeland security. that’s where they think their strength is. so if he can just neutralize, at least make a good case that what he’s doing hased a good effect-p democrats are still going to hit him on it. but again, if they can neutralize on that, then they generally have a stronger advantage on the foreign policy and homeland security issues.
>> i don’t think president bush wants his name next to herbert hoover’s when it comes to the economy as he makes his way toward the next election. gene sperling’s, thank you.
>> thank you.
>> bloomberg contributor and former clinton economic advisor. our next guest says even though the economy is turned around already, employment will not pick up until sometime next year.
