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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (135342)	4/4/2001 12:36:58 AM
From: Kevin Rose	Read Replies (3) \| Respond to of 769670

As I've said, I accept the bubble bursting. But the 'collateral damage' that we have sunk into will have long term ramifications that I do not believe are fully understood. Just as the pendulum swung hard one way, it is swinging hard the other. We have never experienced a panic in our lifetimes, but that does not mean it is not a distinct possibility. The long term damage to the US and world economy may be felt for 10 years to come. AG had a chance to exhibit some leadership, and step up and take the pitch for the team. He could have corrected with more aggressive cuts, if simply to correct the perception that there is no bottom. He failed to do so for two reasons: 1) ego, 2) overemphasizing the theoretic economics and underemphasizing the psychological aspects. We are undergoing a snowball contraction. Companies struggle to meet expectations, and aggressively cut costs. When they do so, it ripples to their vendors, who do the same. Earnings shrink, so and can never catch up with even shrinking expectations. As more expenses are cut, it cuts into the productivity of the company. CFOs continue to cut, IT spending dwindles, good companies with innovative products lose years of momentum or die altogether. Tech leads the economy, so all markets suffer. Added to that are the international problems: Japan, China, Middle East. And so on. The result is the 'inverse wealth effect'. Retirements are ruined, college funds lost, spending curtailed. Right now, consumers are in a quiet denial phase; anger and panic are not far behind. Gloomy? I hope it doesn't actually happen. But Bush and AG should be at the forefront, with a consistent policy to both calm the markets and establish that THEY are in control. Instead, the Bushers couldn't decide whether to admit that there is even a problem or not. They're too busy with how it would look, and how it would affect Dubya's precious tax plan (which would have an iota of impact on this problem for the next two crucial years). A leadership opportunity lost.