US President Bush had no advice for investors as the stock market gyrated wildly Monday - "I'm not a stock broker or a stock picker" - but he said the economy is strong and corporate profits are improving.
"You're talking to the wrong guy about what stocks to buy," the president said in a brief exchange with reporters at a national lab involved in homeland defense.
His remarks mixed optimism, skepticism and even bewilderment about Wall Street as stocks again fell sharply - reflecting the struggle by Bush and his economic team to respond to tumbling markets.
On a day that began with telecommunications giant WorldCom Inc. filing the largest bankruptcy in corporate history, the Dow opened with a slight increase, but declined more than 200 points as Bush spoke to reporters and was down 300 as he returned to Washington. By early afternoon, it moved briefly into positive territory before ultimately plunging nearly 235 points to close at 7,784.
The sagging markets threaten to become a potent political issue in the November midterm elections because a growing number of Americans are deeply invested in stocks; many have their entire savings tied up in 401 (k) plans.
White House advisers fear Americans will blame Republicans, if not Bush, for corporate scandals because voters see the GOP as closely aligned with big business.
At the same time, a prominent Republican polling firm circulated a sobering assessment of the political environment. "The bottom has fallen out on the mood of the country," says the report by Public Opinion Strategies, dated July 18.
It adds, "Propelled by the loss of confidence in corporate America and the drop in the stock market, voter optimism has dropped significantly."
The polling firm also warned that GOP voters may fail to turn out in large numbers "if the negative mood of the country is sustained over the next few months." A copy of the report was obtained by The Associated Press.
Indeed, after the bleak market close, the White House sought again to distance the president from its day-to-day performance.
"Whether the president speaks or doesn't speak, the market has its own dynamics," Bush spokesman Ari Fleischer said, the screens on the four TV sets in his office blaring another day of bad Wall Street news. "The president is not tied to the gyrations."
However, Fleischer said the president knows he could be implicated for the economic pain regardless.
"What happens on the economy happens on his watch and he knows it," Fleischer said.
Surrounded by computers monitoring experiments at the Argonne National Laboratory, Bush dismissed calls for the resignation of Treasury Secretary Paul O'Neill. He also urged Congress to pass legislation stiffening criminal penalties for corporate wrongdoers, the main ingredient of his economic improvement plan.
"One of the things we can do in Washington is get a corporate responsibility bill passed, and I'm confident we will, which will take some of the risk out of the markets," Bush said.
House Minority Leader Dick Gephardt, D-Mo., noted that stock market dips have now accompanied Bush's economic comments three times in a row.
"The president continues to speak - that isn't helping us. In fact, it may be hurting us because what people want is action, not words," Gephardt told the National Council of La Raza in Miami Beach.
Bush said investors who bought bonds rather than stocks are doing well, but demurred when asked whether Americans should buy, sell or stand pat in stock markets.
"I'm not a stock broker or a stock picker. But I do believe that the fundamentals for economic growth are real," he said.
Bush has consistently expressed sympathy with hard-hit workers, even when the economy showed signs of recovery. And he was quick to demand reforms after the first corporate scandal, the collapse of energy giant Enron, a company with deep ties to Bush.
Associates say Bush learned from his father - the former president who lost re-election during the economic downturn of 1992 - that voters will punish politicians who seem out of touch with their money problems.
Asked whether the bankruptcy of WorldCom Inc. would hurt the markets, Bush replied, "I worry that people will lose work. But the market has already, I suspect, has already anticipated the WorldCom decision."
Bush said corporate profits are up, a trend that will increase the value of stocks and drive investors back into the market.
"They're going to realize there's values in the market. In other words, if they buy stock, they're buying value, as opposed to buying into a bubble," Bush said.
The president said that as an oilman in Texas, he was "somewhat skeptical about what was taking place on the floors of these exchanges. But I know - I always knew - that you needed to buy on value."
"I believe the values are improving. I know the economics, the platform for growth, is in good shape. Inflation is low. Monetary policy is sound. Fiscal policy is sound. Productivity is up. Orders for durable goods are up," Bush said.
He said Treasury Secretary O'Neill is doing a good job.
(China Daily July 23, 2002)
