Gates at White House Days After Antitrust Decision
By Steve Holland Apr 5 4:27pm ET
WASHINGTON (Reuters) - Microsoft Chairman Bill Gates, swallowing differences with government days
after a federal antitrust ruling against his company, appeared on Wednesday at a White House ``new
economy' conference that heard some alarm bells about the gyrating stock market.
``We're at the beginning of what the computer can do to change our lives. The best is yet to come,'
Gates told the conference hosted by President Clinton, two days after a federal judge ruled Microsoft
broke the law by trying to control the market for Internet browsers.
The daylong conference, weeks in the planning, took on added urgency this week when the tech-heavy
Nasdaq fell 500 points before rebounding on Tuesday, reflecting concerns that many Internet stocks are
overvalued and the booming U.S. economy might be losing steam.
Gates said the ``technology revolution has been one of the greatest job creation engines ever,' and will
lead to 'breakthroughs that will allow computers to listen, to learn, to be in a tablet form connected up to
a wireless network that you just carry around with you.'
Gates, the world's wealthiest man, was not the only star attraction among luminaries gathered in the
White House East Room beneath the portraits of George and Martha Washington.
The other was Federal Reserve Board Chairman Alan Greenspan, the 74-year-old financial seer given an
ample share of credit for the U.S. economy's longest expansion ever.
Greenspan, whose war on inflation has prompted five interest rate increases since June 1999, said the
rise in stock prices risked fostering inflation but that he was not out to hurt stock prices.
In a carefully worded speech watched closely by Wall Street, Greenspan issued a veiled warning about
the recent run-up in the price of technology shares.
``History will judge' whether the expectation of sharply higher profits for technology companies that had
driven the gains in their share prices was ``prescience' or ``wishful thinking,' he said.
Overall, there was plenty of praise among participants about the strength of the economy, to the delight of
Clinton, who wants it to be his lasting legacy.
Introducing Greenspan, Clinton spoke with pride that he and the dour Fed chairman had been dubbed the
``odd couple.'
``I took it as a compliment, and I hope he wasn't too chagrined,' Clinton laughed.
``Mr. President, I took it as a compliment as well,' said Greenspan.
Lurking beneath the optimism were concerns that the party will not last forever.
``There's going to be a correction -- probably a sharp one,' said Roger Altman, the former U.S. deputy
treasury secretary who now works as an investor.
He said stock gyrations reflected ``preliminary signs of that type of correction.'
``These are good times, very good times,' said James K. Galbraith, professor at the University of Texas in
Austin.
But he added, ``Are there dangers? Yes, I believe there are. Inflation, apart from oil prices, is not one of
them. High interest rates are a danger. American households, I believe have too much debt. They will
become vulnerable when interest rates rise.'
While there was a festive air at the White House as participants mingled while a Marine Corps string
band played songs in the mansion's Grand Foyer, the optimism was tempered by concern about the wild
week on Wall Street.
``Are there any clouds on the horizon?' asked Yale economics professor William Nordhaus. ``We don't
know when or where or how the economy will slow down but I think the betting odds are long against
another four years as strong as the last four years.'
He said stock prices are not only ``unrealistically high' but economically damaging. ``Inflated asset
values make people feel wealthier than they are, and they reduce national savings,' he said.
Clinton found himself on the defensive from some participants for his policies of reducing the U.S. budget
deficit and for not doing more to reduce America's global trade deficit.
He said he felt reducing the U.S. budget deficit would keep interest rates down and the economy going, a
policy that Greenspan has praised.
Clinton said he has not moved against the flood of imports driving up the U.S. trade deficit -- to a record
$28 billion in January -- because he believed it helped Mexico and Asia rebound from their financial
crises.
``There's no question in my mind that the openness of our markets in the last seven years has kept
inflation down and enabled us to grow more,' he added. |
