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Analysis of President Bush's Speech on Economy

Aired July 15, 2002 - 11:54   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: To our Washington bureau and political analyst Bill Schneider, see all things, but not believe all things.

Bill, you listened to the president there, and we watched as the market plunged while he was talking and made it back it about the losses where he first started. What is your read on how effective the president has been.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, those numbers are worth repeating here. He started when the Dow was at 247, and he ended with the Dow at 247. At one point, it dropped to an almost 300-point loss, but then started to recover. It is perhaps not fair to say the market should respond instantaneously, but the market was looking for something the president would say to restore investor and especially consumer confidence.

You see, what a lot of people are worried about is the reverse wealth effect. In the '90s, when stocks were booming, people felt wealthier and they went out and spent a lot of money. And 2/3 of this economy is consumer spending.

Now their very apprehensive. Their net worth is declining, and they may stop spending. That's the reverse wealth effect. So they are looking to the president to restore consumer confidence. He tried to do it by showing the signs that the economy is doing well, that inflation is low, that tax cuts are working, that productivity is growing. No evidence directly from the stock market that it's having an effect, but the president's speech was full of moral uplift.

LIN: Even the president saying corporate America has a responsibility to shareholders, and he said it was an awesome responsibility, and yet he did not talk about his own responsibility, or at least what the Democrats are demanding, that he make full disclosure, ask for release of the files on his 1990 stock transaction, where he was investigated for, you know, allegations of insider trading, lots of questions about whether the SEC chairman should stay in that position. Do you think if the president had actually addressed those questions in the speech, or at least made a gesture, an offer to help in those questions or investigations that it might have increased confidence in the market?

SCHNEIDER: You know, I don't think it would have made a great deal of difference, because I don't think that's his biggest problems. I don't think most Americans believe this president is corrupt, unless there is some more dramatic evidence that he broke the law, or that he engaged in unethical practices. I don't think that's what's worrying people. I don't think they think he's corrupt. I think they worry that he may be clueless, that he doesn't have a plan to turn the economy around. It's his father's problem.

When the economy tanked in 1991, people said what are you going to do? What's your plan? And he didn't seem to have one. That's what people are asking this president, what's your plan? That's what they want it hear.

LIN: All right, thank you very much, Bill Schneider, always good to see you.

Bill Schneider, our political analyst from Washington.

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