more bottom picking:
U.S. Lawmakers Reassuring Voters That Economy Is Still Strong
2002-07-22 00:12 (New York)
U.S. Lawmakers Reassuring Voters That Economy Is Still Strong
Washington, July 22 (Bloomberg) -- Charles Grassley, the top
Republican on the Senate Banking Committee, learned about the
almost 400-point tumble in the Dow Jones Industrial Average as he
started a long weekend on his corn and soybean farm in Iowa.
Friday's loss on the Dow, the market's biggest retreat since
Sept. 17, hasn't panicked voters in his home state, Grassley said.
Even so, he's planning to deliver a reassuring message today to
employees of Siemens Transportation System in Cedar Rapids.
``It'll be back to 10,000,'' Grassley said in a telephone
interview from his 710-acre farm. ``I got faith. The U.S. economy
is very strong by any measure other than the stock market.''
White House officials and lawmakers didn't alter their
routine as the Dow shed 4.6 percent to close at 8019.26, ending
the ninth weekly decline for the index of 30 leading U.S.
companies. They said their job is to take a longer view of the
markets rather than tracking minute-by-minute movements.
Like many other lawmakers, Senator Jon Corzine was en route
to his home state before the markets closed on Friday. Corzine
said he was headed for Ocean City, New Jersey, where he was
dedicating a bridge late Friday, when he heard on the phone at
3:30 p.m. the market ``was getting beat up pretty badly.''
When he got off the plane in Ocean City, Corzine was advised
by an aide the market had plunged.
``Most people were starting a long weekend so they weren't
paying too much attention,'' said the New Jersey Democrat, who was
former co-chairman of Goldman Sachs Group Inc. ``Fridays like that
can sometimes mean an ugly Monday.''
Economic Costs
Glenn Hubbard, chairman of the White House Council of
Economic Advisers, said he has been watching the stock markets as
he and aides are ``estimating the economic costs'' of the
declines. The Dow, the Standard & Poor's 500 Index and the Nasdaq
Composite Index breached lows that followed the Sept. 11 terrorist
attacks.
``In the White House, there have been a number of
conversations about market developments and their likely effects
on the economy,'' he said. The conversations on Friday were no
different than any other day, Hubbard said.
While concentrating on the economy and reassuring investors,
officials in Washington aren't making it their only issue.
President George W. Bush and Vice President Dick Cheney were
focused on politics Friday.
Bush toured a military base in upstate New York and told
troops who have fought in Afghanistan that the U.S. war on
terrorism will target ``evil and destructive'' terrorists and
``tyrants.'' Cheney traveled to Texas and Georgia for his 44th
fundraising event of the year.
``I didn't hear about the latest drop till bedtime,'' said
White House Budget director Mitch Daniels. He left work early
Friday to pick up his family, which was visiting from Indiana.
Late News
A week earlier, Daniels held a press briefing to announce
that the slumping stock market has reduced capital gains tax
payments and caused the deficit to grow to about $165 billion this
fiscal year.
``Some news one might as well receive late, I guess,''
Daniels said of Friday's drop.
``Truth is, at least for me, I don't hang on daily market
news,'' Daniels said. What matters most to federal budget planners
``isn't Dow today, it's Dow in six month, 12 months, etc.''
With the stock plunge following disclosure of improper
accounting at companies such as energy trader Enron Corp., which
filed for bankruptcy last December, and WorldCom Inc., which
sought protection from creditors last night, Bush and other
officials have been seeking to reassure investors and voters.
``The economic fundamentals are strong,'' the president said
in his weekly radio address on Saturday. ``Inflation and interest
rate are low. Productivity is increasing, and the economy is
expanding.''
The drop in the stock market and attempts by Congress to rein
in corporate accounting scandals may have political consequences
for Congress All 435 House seats and 34 of 100 Senate seats are up
for election in November. For some, there are personal
consequences, as well.
Grassley, who's not up for reelection, said he's suffered an
erosion of the ``several hundreds of thousands of dollars'' he's
invested in mutual funds.
His wife, Barbara Ann, 69, lost about $8,000 in her last
quarterly statement in her 401(k) retirement portfolio.
``I never look at those,'' Grassley said. Instead, he said he
checks the rise and fall of the stock market once a day on cable
television.
--Holly Rosenkrantz in Washington (202) 624-1884 or
hrosenkrantz@bloomberg.net, with reporting by Roger Runningen and
William Roberts in Washington. Editor: Sobczyk, Parry*
Story illustration: For a graph comparing the performance of the
S&P 500, Dow average and Nasdaq Composite Index, enter
{CCMP <Index> COMP SPX INDU <GO>}.
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