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American Morning
With War in Afghanistan Going Well, President Bush Has Turned His Attention to Putting People Back to Work
Aired January 08, 2002 - 08:38 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.
JACK CAFFERTY, CNN ANCHOR: With the war in Afghanistan going well, President Bush has turned his attention to an important domestic issue, which is putting people back to work. The White House economic team yesterday met with Fed chairman Alan Greenspan to talk about ways to get the economy moving north. The president said that now is job one.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm optimistic that 2002 is going to be a better year than 2001, and we will discuss ways here to make -- to figure out how government can make that happen.
(END VIDEO CLIP)
CAFFERTY: How do you nurse an ailing economy back to health? Joining us from Washington to talk about it is a political economist Greg Valliere, who is also at the Charles Schwab organize down there.
Greg, good to see you.
GREG VALLIERE, CHARLES SCHWAB: Good to see you, Jack.
CAFFERTY: Are you as optimistic as the president that we're on our way to recovery here?
VALLIERE: I think so. The signs are starting to turn around. It looks as if by spring the economy could be growing.
But this is really crucial for Bush. If he has an Achilles Heel, obviously, going into the November elections, it's the economy.
CAFFERTY: Well, except that you just said the recovery may be under way and in fact the economy might be doing all right come election time. To what degree is all this sudden attention on domestic issues the result of what Senate majority leader Tom Daschle said in that speech last Friday, where he sort of threw down the gauntlet to President Bush and set up that same kind of Democratic/Republican mechanism that we saw back when George Bush's father was in the White House?
VALLIERE: The similarities between Bush and his father on this are eerie, with Daschle playing the role of George Mitchell. And you have to say that the real issue, Jack, is between perception as opposed to reality. The perception may be that the economy is going to be stagnant, and that this is not Bush's strong suit, even though the economy may bounce back by Memorial Day.
CAFFERTY: We have a recession, we have a war, we have what has been described as a crisis at home, all of which are things that, according to the president, will justify deficit spending. There's also an economic point of view that says surpluses are not good for the economy, particularly when the economy is weak. Do you subscribe to that theory?
VALLIERE: Absolutely. In fact, you could argue that the tax cuts we got last year were too small; they should have been bigger. So I don't think a deficit for a while makes that big of a difference. I think, though, for your viewers who are investors, all of this rhetoric could seem very unsettling, all of the partisan bickering maybe obscures a bigger story for Wall Street, Jack, and that is that gridlock is good. If they don't do much this year, that means they do less harm. And if there's gridlock, they may not spend as much money.
So I'm not sure all the partisan political bickering is that negative for the markets.
CAFFERTY: Daryn, when you talk about them not doing too much this year, that would make it stand out from which other year perhaps?
VALLIERE: Exactly.
CAFFERTY: Stimulus package dead?
VALLIERE: I think so. The economy's coming back. And, you know, if the stimulus package does die or if they just do a little bit on unemployment benefits, that means the chances of a surplus have not totally disappeared. Everyone in the world is now saying we're going to have a deficit. I'm going to go way out on a limb and say if the stimulus package dies, I think we could still have a surplus.
CAFFERTY: All right, Greg, I've got to cut it short here, we've got a little breaking news to share with the viewers.
VALLIERE: Good to see you.
CAFFERTY: I thank you for being with us. We'll do this again as we move forward here.
Greg Valliere, he's a political economist, chief strategist with the Charles Schwab organization in Washington.
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