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To: Wyätt Gwyön who wrote (45895)	10/23/1999 12:21:00 PM
From: gdichaz	Respond to of 152472

Mucho Mas: Fair enough, as my grandfather used to say "Differences of opinion are what make horseracing". And I do agree that the interviews do sometimes contain some useful info and views. On the specifics, Suggest that you are correct in questioning his China views and the impact of China on the US economy. Also monetary policy (with a bow in the direction of our revered Jim Willie) in the form of growth in the money supply is one of the most overrated causal effects based on experience. That is because it has small impact by itself, and requires other factors to make such growth in money supply dangerous. But then, look forward to other views on the specifics. Chaz PS As Maurice Winn (and I believe Jon) have suggested - deflation next year is perhaps a more likely danger that any rampant inflation. (Assume Jon will speak for himself and correct me if I am wrong) PPS But the danger of deflation is irrelevant to the Fed which has an agenda of its own. PPS But next year is a particularly political year, so many fun and games may come out of Washington making little economic sense. Perhaps the Carpenter has a view on all this. That would be of considerable interest.

To: Wyätt Gwyön who wrote (45895)	10/23/1999 1:18:00 PM
From: T L Comiskey	Respond to of 152472

Mucho....another view...Mundell bullish on outlook Nobel winner: Dow heading to 15,000..........By Marshall Loeb, CBS MarketWatch Last Update: 6:26 PM ET Oct 22, 1999 Personal Finance News Marshall Loeb Library NEW YORK (CBS.MW) -- Robert Mundell, who recently won the Nobel Prize for Economics, is much more than a ranking academic. He is also an active force in policymaking as the intellectual forefather of supply-side economics, which basically calls for tax cuts to stimulate the economy in tandem with a fairly tight money supply to fight inflation. He is not only a creator of important ideas but also a skillful and influential advocate in many national capitals. He has played important roles in, among many other things, bringing about tax reductions in the U.S. and the new Euro currency in Europe. I interviewed Mundell, a professor at Columbia University in New York. See video of the interview. CBS.MW: We've had good times in America for many years now. Do you think the economy will continue to expand in the next year or so, or do you see a recession? Mundell: All booms, all great expansions, eventually hit a slowdown or an actual downturn. No doubt this boom will have one, too. But I don't see big symptoms of it now. I don't see it happening in the next six months. CBS.MW: And after that? Mundell: I would be surprised if we didn't have a slowdown in growth by the end of next year or the year following. But I think we may be able to skip an actual downturn. We have an election coming up next year and that could play a big role; that could lead to policies that would keep the boom going. CBS.MW: What can we do to keep the good times rolling, to keep the magic going? What policies do you recommend? Mundell: I would rescind the increases in marginal income tax rates that were made in the Clinton Administration. The income tax in the top bracket went up from 28 percent under Ronald Reagan to 33 percent under George Bush to 39.6 percent under Bill Clinton. When you add in state and local income taxes, the total rises to 50 percent or even more. I think that's too high. In the long run, it slows the productivity of the economy. CBS.MW: What else do you recommend? Mundell: A cut in the capital gains tax would be a good thing. So would a cut in the corporate tax rate, to 30 percent, from 35 percent now. CBS.MW: What's your opinion of estate and gift taxes? Mundell: They should be either eliminated or drastically lowered. CBS.MW: What is your view of the U.S. stock market? Mundell: I think the stock market will be strong. Of course, if we run into a slowdown in the economy there will be a slowdown in the stock market. But even with a little slowdown, I would look forward to the Dow Jones Industrial Average certainly reaching 15,000, and maybe 20,000 in the next three years. CBS.MW: What will send it up? Mundell: One factor is the impact of the federal budget deficit, which has become the federal budget surplus. The lower the public debt, the higher the stock market. CBS.MW: Do you expect a tax cut soon? Mundell: I would be delighted if it could occur in this administration. But I am not expecting that. We can have a tax cut in the next administration. Remember that Bill Bradley once was an advocate of cuts. As the co-author of the Bradley-Gephardt Bill of the 1980s, he advocated tax rates of a maximum 30 percent. I'm suggesting that we lower the top tax rate not to 30 percent but only to 33 percent. I would find it very surprising if Bill Bradley did not come forward with a tax cut plan.