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CNN Sunday Morning

Interview With Neil Weinberg

Aired December 15, 2002 - 09:13   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.


CHARLES MOLINEAUX, CNN ANCHOR: President Bush gave his weekly radio speech yesterday and said he wants to emphasize job growth and investor confidence. Unemployment benefits will be extended for 3/4 of a million Americans. The president has nominated John Snow as the new Treasury secretary and named Steven Friedman as top White House economic adviser. Joining us now for more on the Bush administration's economic policies is Neil Weinberg from "Forbes" magazine.
Neil, thanks for being with us. We have seen a bit of a shuffle over the past week. Now what?

NEIL WEINBERG, "FORBES" MAGAZINE: Now I think Bush goes ahead with what he wanted to do. What he has decided that he wants to stake his 2004 election on, which is namely tax cuts.

Obviously, he's been somewhat withdrawn from the economic policy making by what's been going on in the Middle East and with the 9/11 attacks. I think he realizes that people feel maybe he hasn't been spending enough time worrying about their jobs and about their economic security.

At this point, I think he had the wrong messengers for the message, people who were not instilling confidence in middle America. They were not instilling confidence on Wall Street. Now, what he is doing is installing people, I think, who will help him to press his tax cut, growth message.

MOLINEAUX: Now, the president is going to try to prop up the economy. The question must be, is it prop-able? How does it actually look at this point? The statistics keep looking mixed.

WEINBERG: It looks like a one-legged stool. Basically, what we have is we have consumer spending, which is holding up this economy right now. I think his gamble is going to be on tax cuts that either directly, through giving business a break, what they will do is get businesses spending again. Because if joblessness goes up right now, and consumers stop spending, we have a no-legged stool, so what he's got to really do is get confidence going among business people that they will start spending again.

MOLINEAUX: You called John Snow and William Donaldson messengers, but what about the actual job they will be doing? What strengths do they bring in?

WEINBERG: Well, Donaldson will be the top securities cop, he will be the head of the SEC and he is very much a Wall Street insider, which I think we have seen from his two predecessors can be a good thing or a bad thing. So, it will remain to be seen whether he uses that to his advantage, and to some extent whether he's willing to go hard on some of his old buddies when they deserve it.

In terms of John Snow, he's another industrialist with very close connections to Washington. Some people have said he's sort of cut out of the same cloth as his unsuccessful predecessor Treasury Secretary O'Neill, but presumably, he's going to be much better at communicating. He will be again, I think, communicating a message that the Bush administration is already pretty set on.

MOLINEAUX: Something that may not be on a lot of Americans' radar is the situation in Venezuela. You have a general strike, a whole lot of tumult and a lot of people may not be aware of just how much the U.S. is dependent on Venezuela for oil. And, of course, we all know what that can do to the economy. Is this something that we should be worried about?

WEINBERG: Certainly, this is a really lousy time for the administration to be facing problems in Venezuela. It's one of our couple of the largest producers of oil. It's in a tough political situation in the sense that they have a leader, Mr. Chavez, who the Bush administration does not like, but he was democratically elected.

The question is what do you do about that at a time when there are general strikes that are crippling the Venezuelan economy. If we have a decline in oil exports at the same time that things heat up in the Middle East, and perhaps there is a problem with oil deliveries from the Middle East, we could have a very dramatic spike in oil prices, at a time when the economy is vulnerable. And that's something that I'm sure that President Bush does not want to face.

MOLINEAUX: Real briefly, we have a light at the end of the tunnel for this economy?

WEINBERG: We do have a light at the end of the tunnel. I think it's a question of whether those other legs of the stool, government is spending, I guess as we -- some people want it to be, and the question is whether business is going to have the confidence to kick in before we consumers run out of breath.

MOLINEAUX: Thank you very much, Neil Weinberg from "Forbes" magazine. Appreciate you being with us this morning.

WEINBERG: My pleasure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired December 15, 2002 - 09:13   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHARLES MOLINEAUX, CNN ANCHOR: President Bush gave his weekly radio speech yesterday and said he wants to emphasize job growth and investor confidence. Unemployment benefits will be extended for 3/4 of a million Americans. The president has nominated John Snow as the new Treasury secretary and named Steven Friedman as top White House economic adviser. Joining us now for more on the Bush administration's economic policies is Neil Weinberg from "Forbes" magazine.
Neil, thanks for being with us. We have seen a bit of a shuffle over the past week. Now what?

NEIL WEINBERG, "FORBES" MAGAZINE: Now I think Bush goes ahead with what he wanted to do. What he has decided that he wants to stake his 2004 election on, which is namely tax cuts.

Obviously, he's been somewhat withdrawn from the economic policy making by what's been going on in the Middle East and with the 9/11 attacks. I think he realizes that people feel maybe he hasn't been spending enough time worrying about their jobs and about their economic security.

At this point, I think he had the wrong messengers for the message, people who were not instilling confidence in middle America. They were not instilling confidence on Wall Street. Now, what he is doing is installing people, I think, who will help him to press his tax cut, growth message.

MOLINEAUX: Now, the president is going to try to prop up the economy. The question must be, is it prop-able? How does it actually look at this point? The statistics keep looking mixed.

WEINBERG: It looks like a one-legged stool. Basically, what we have is we have consumer spending, which is holding up this economy right now. I think his gamble is going to be on tax cuts that either directly, through giving business a break, what they will do is get businesses spending again. Because if joblessness goes up right now, and consumers stop spending, we have a no-legged stool, so what he's got to really do is get confidence going among business people that they will start spending again.

MOLINEAUX: You called John Snow and William Donaldson messengers, but what about the actual job they will be doing? What strengths do they bring in?

WEINBERG: Well, Donaldson will be the top securities cop, he will be the head of the SEC and he is very much a Wall Street insider, which I think we have seen from his two predecessors can be a good thing or a bad thing. So, it will remain to be seen whether he uses that to his advantage, and to some extent whether he's willing to go hard on some of his old buddies when they deserve it.

In terms of John Snow, he's another industrialist with very close connections to Washington. Some people have said he's sort of cut out of the same cloth as his unsuccessful predecessor Treasury Secretary O'Neill, but presumably, he's going to be much better at communicating. He will be again, I think, communicating a message that the Bush administration is already pretty set on.

MOLINEAUX: Something that may not be on a lot of Americans' radar is the situation in Venezuela. You have a general strike, a whole lot of tumult and a lot of people may not be aware of just how much the U.S. is dependent on Venezuela for oil. And, of course, we all know what that can do to the economy. Is this something that we should be worried about?

WEINBERG: Certainly, this is a really lousy time for the administration to be facing problems in Venezuela. It's one of our couple of the largest producers of oil. It's in a tough political situation in the sense that they have a leader, Mr. Chavez, who the Bush administration does not like, but he was democratically elected.

The question is what do you do about that at a time when there are general strikes that are crippling the Venezuelan economy. If we have a decline in oil exports at the same time that things heat up in the Middle East, and perhaps there is a problem with oil deliveries from the Middle East, we could have a very dramatic spike in oil prices, at a time when the economy is vulnerable. And that's something that I'm sure that President Bush does not want to face.

MOLINEAUX: Real briefly, we have a light at the end of the tunnel for this economy?

WEINBERG: We do have a light at the end of the tunnel. I think it's a question of whether those other legs of the stool, government is spending, I guess as we -- some people want it to be, and the question is whether business is going to have the confidence to kick in before we consumers run out of breath.

MOLINEAUX: Thank you very much, Neil Weinberg from "Forbes" magazine. Appreciate you being with us this morning.

WEINBERG: My pleasure.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com