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American Morning
Minding Your Business: Cold Water, Courtesy of Alan Greenspan
Aired February 12, 2003 - 07:52 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: Fed Chairman Alan Greenspan dealt a blow to the president's plan for tax cuts.
Andy Serwer is here to tell us about that, and give us a quick preview of the markets.
Good morning.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Jack.
Yes, no question the Fed chairman did throw some cold water on the president's plan.
Now let's talk about the markets first of all, though. I was on a trading floor up in Connecticut when the news of the bin Laden tape came across, and watching those traders' faces, you knew it was not going to be a good day. You can see there the Dow was down 77 points, not so bad on the Nasdaq side.
Greenspan is going to be testifying again this morning to the House, Jack. Futures are down this morning.
But as far as the Fed chairman goes, he did bash the president's $670 billion economic stimulus package, saying that budget deficits could be a problem, and saying that it may be too early to get this stimulus package going.
Let's listen to hear what he had to say.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: I'm one of the few people who is still not as yet convinced that stimulus is a desirable policy at this particular point, and my own judgment of this I suspect not, then stimulus is actually premature.
(END VIDEO CLIP)
SERWER: To translate that Greenspeak (ph), which you always have to do, Jack.
CAFFERTY: Yes.
SERWER: Basically, what he is saying is the war overhanging the economy may be picking up a little steam here, but you can't really tell, because of all of these war jitters. So, to enact a costly plan like this would be premature, to use his words. CAFFERTY: Right.
SERWER: And we should really go carefully here.
CAFFERTY: Although he did say that the economy is growing. He expects it to grow more robustly than it did last year, even with all of the uncertainty hanging over the arena.
SERWER: Right. Well, that's what he is also doing. a little spinning, because of course, he's got to be a bit of a cheerleader for the economy.
Two also important points here. No. 1, two years ago, he supported President Bush's tax cuts, which was very important in bringing Democrats into the plan and getting that passed, No. 1.
No. 2, Senator Daschle, hearing Greenspan's comments yesterday, called it the "kiss of death" when it came to the president's stimulus package.
I'm going to rate Greenspan's comments -- these are his comments, not the plan itself -- as "getting warmer," because I agree with him about those budget deficits, and I do think we should go carefully. But you know, everything is on hold -- we keep saying this over and over again -- when it comes to the economy, and it's just such a difficult situation. You have a CEO who might, you know, build a factory, and he's going to say, I'm going to wait a couple of months, you know.
CAFFERTY: That makes sense.
SERWER: Yes, well...
CAFFERTY: No one is going to commit a lot of money until they see which way the wind is going to blow.
SERWER: That's right.
CAFFERTY: All right, thanks, Andy.
SERWER: OK, Jack.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Greenspan>
Aired February 12, 2003 - 07:52 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Fed Chairman Alan Greenspan dealt a blow to the president's plan for tax cuts.
Andy Serwer is here to tell us about that, and give us a quick preview of the markets.
Good morning.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Jack.
Yes, no question the Fed chairman did throw some cold water on the president's plan.
Now let's talk about the markets first of all, though. I was on a trading floor up in Connecticut when the news of the bin Laden tape came across, and watching those traders' faces, you knew it was not going to be a good day. You can see there the Dow was down 77 points, not so bad on the Nasdaq side.
Greenspan is going to be testifying again this morning to the House, Jack. Futures are down this morning.
But as far as the Fed chairman goes, he did bash the president's $670 billion economic stimulus package, saying that budget deficits could be a problem, and saying that it may be too early to get this stimulus package going.
Let's listen to hear what he had to say.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: I'm one of the few people who is still not as yet convinced that stimulus is a desirable policy at this particular point, and my own judgment of this I suspect not, then stimulus is actually premature.
(END VIDEO CLIP)
SERWER: To translate that Greenspeak (ph), which you always have to do, Jack.
CAFFERTY: Yes.
SERWER: Basically, what he is saying is the war overhanging the economy may be picking up a little steam here, but you can't really tell, because of all of these war jitters. So, to enact a costly plan like this would be premature, to use his words. CAFFERTY: Right.
SERWER: And we should really go carefully here.
CAFFERTY: Although he did say that the economy is growing. He expects it to grow more robustly than it did last year, even with all of the uncertainty hanging over the arena.
SERWER: Right. Well, that's what he is also doing. a little spinning, because of course, he's got to be a bit of a cheerleader for the economy.
Two also important points here. No. 1, two years ago, he supported President Bush's tax cuts, which was very important in bringing Democrats into the plan and getting that passed, No. 1.
No. 2, Senator Daschle, hearing Greenspan's comments yesterday, called it the "kiss of death" when it came to the president's stimulus package.
I'm going to rate Greenspan's comments -- these are his comments, not the plan itself -- as "getting warmer," because I agree with him about those budget deficits, and I do think we should go carefully. But you know, everything is on hold -- we keep saying this over and over again -- when it comes to the economy, and it's just such a difficult situation. You have a CEO who might, you know, build a factory, and he's going to say, I'm going to wait a couple of months, you know.
CAFFERTY: That makes sense.
SERWER: Yes, well...
CAFFERTY: No one is going to commit a lot of money until they see which way the wind is going to blow.
SERWER: That's right.
CAFFERTY: All right, thanks, Andy.
SERWER: OK, Jack.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Greenspan>
