i just bot poots on POS, btw
check this out.. LOL
Wed, 05 Apr 2000, 12:32pm EDT
Clinton Says Technology-Driven New Economy Can
Fuel Record U.S. Growth
By Richard Keil, Noam Neusner and Holly Rosenkrantz
Washington, April 5 (Bloomberg) -- President Bill Clinton
said ``technology can allow nations to grow the economy' as he
began a day of White House talks about how to use the Internet,
education and debt reduction to fuel the record U.S. expansion.
``The performance of the new economy has been powered by
technology and driven by ideas rooted in innovation and
enterprise,' Clinton said at the start of discussions that will
include Federal Reserve Chairman Alan Greenspan, Microsoft Corp.
Chairman Bill Gates, and Goldman, Sachs & Co. chief investment
strategist Abby Joseph Cohen, among others.
The meeting comes as U.S. stock prices have swung wildly amid
investor concerns that computer-related stocks are expensive
compared with potential earnings. The Nasdaq Composite Index
posted its biggest intraday percentage decline before rebounding
yesterday, and the index fell in early trading today.
``There's going to be a correction,' said Roger Altman,
founding partner of Evercore Partners Inc. and a former deputy
Treasury secretary. ``It's probably going to be a sharp one,
particularly in technology issues. We are already seeing all the
preliminary signs.'
Goldman's Cohen said she's ``enthusiastic about the outlook
for the U.S. stock market' because it's been ``propelled
primarily by dramatic improvements in the U.S. economy.'
Clinton says his fiscal policies have contributed to that
growth, and today's topics reflect his priorities. One panel will
discuss whether ``a debt-free government is good for America's
future,' and another will examine how to avoid jeopardizing the
economic expansion.
Tax Cut Debate
Clinton is urging Congress to use about $2.8 trillion of the
anticipated budget surplus over the next 15 years to pay down the
publicly held debt, then use the savings to replenish the Social
Security trust fund and overhaul the Medicare health insurance
program for the elderly and the disabled.
Republicans, who control Congress, have been pushing tax
cuts; last year, they sent Clinton a $792 billion tax cut proposal
that he voted, claiming it would jeopardize the nation's financial
health. One speaker today will be John Taylor, a Stanford
University economist who helped Republican Texas Governor George
W. Bush craft the tax-cut plan he's featuring in his presidential
campaign.
Public opinion polls show most Americans place a higher
priority on bolstering Social Security and Medicare than they do
on getting tax cuts.
A Pew Research Center survey of 1,330 people in February
found 44 percent of respondents placed their highest priority on
fixing Social Security and Medicare, while 24 percent said
education, health care and other domestic programs were most
important. About 18 percent of the survey, which had a margin of
error of 3.5 percentage points, favored paying down publicly held
debt, while 12 percent placed their highest priority on tax cuts.
``It is difficult to sell tax cuts in times of economic
prosperity,' said Stephen Hess, a presidential scholar at the
Brookings Institution. ``Certainly, no one is going to go to the
barricades for a tax cut, and that will continue to be the case if
the economy is going well.'
Fast Growth
Stephen Moore, an economist at the Cato Institute, a
conservative think tank, agreed. ``When people are feeling
prosperous, there isn't much demand for action from Washington,
and that includes the issue of tax cuts,' Moore said.
The U.S. economy is now in its tenth year of expansion. It
grew in the fourth quarter of 1999 at a 7.3 percent annual rate,
the fastest in almost 16 years. It capped the third straight year
in which the economy grew more than 4 percent. Unemployment
hovered near 30-year lows set in January.
At the same time, prices of consumer goods, not including
energy and food, rose only 2.1 percent through February,
suggesting that inflation remains low.
The White House forum also will examine whether the explosive
growth of the computer industry and the Internet is making workers
more efficient at the same time that the creation of new jobs has
helped drive the economy, said Martin Baily, chairman of Clinton's
Council of Economic Advisers.
Productivity
``This is an unusual expansion, in that we haven't seen
productivity slow down,' Baily said. Indeed, U.S. worker
productivity in the fourth quarter of 1999 grew at a 6.4 percent
annual rate, the fastest pace in seven years, and labor costs fell
for the second straight quarter.
Productivity in the final three months of 1999 grew at the
fastest pace since the fourth quarter of 1992, when the record 108-
month expansion was starting to pick up speed. For all of last
year, productivity grew 3 percent, also the best since 1992.
Companies such as Ford Motor Co. and General Electric Co. are
investing billions of dollars to improve their ability to order
supplies, manage stockpiles and enable factories to turn out more
goods as lower costs.
Ford, General Motors Corp. and DaimlerChrysler AG announced
last month they'll combine their online purchasing to take
advantage of the bargaining power that comes with spending $200
billion a year on parts and materials.
``Companies are finding ways to be more productive and are
succeeding,' said Gary Thayer, chief economist at A.G. Edwards &
Sons in St. Louis. ``Workers are being used more efficiently and
companies are able to save money doing that.'
The fourth-quarter performance by manufacturers was striking.
Factory productivity grew at a 10.3 percent pace, the fastest
since a post-recession pace of 12.3 percent in the second quarter
of 1982. Manufacturing labor costs fell at a 5.5 percent rate, the
steepest decline since 5.6 percent in the third quarter of 1961. |
