To: stockman_scott who wrote (45648 ) 8/20/2001 5:07:25 PM From: techreports Respond to The stock market continues to slide. While economists are pretty much in agreement that the stock market didn't cause the Great Depression, the crash of October, 1929, did play a role in eliminating wealth and forcing consumers to stop spending. ``It contributed to the seriousness of the Depression,'' says Wicker, who calls the stock market's current slide ``a little mini-crisis'' by comparison. Cash is being conserved. In the Great Depression, it was ordinary folks who hoarded any cash they had. Now it's business managers who are reluctant to spend. They're cutting expenditures on advertising, high-tech equipment, and, most important for the overall economy -- payrolls. ``They are guarding cash,'' says Smith. ``They don't want to run out of it.'' We may not be in an official recession now thanks to the continued strength of consumer spending, but ``this slowdown has been triggered by substantial, recession-level declines in business capital spending,'' says Deak, noting that, so far, business investment spending hasn't been bolstered by cuts in interest rates. When it comes to holding up the economy, for now, ``consumers are carrying the burden here,'' he says.
