Investors
Remain Shaky Despite Assurances From U.S. Officials
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Bush, left, confers with Federal Reserve Board Chairman Alan Greenspan, center, and Treasury Secretary Paul O'Neill, right. |
WASHINGTON,
Aug 3 (IslamOnline & News Agencies) – Investors hit hard by the
recent cases of corporate corruption on Wall Street remained
unconvinced Saturday, August 3, despite repeated moves by U.S.
President George W. Bush and Treasury Secretary Paul O'Neill to
reassure investors that their shrunken stock market accounts would
recover.
"We
have had two straight quarters of solid growth," O'Neill wrote in
an article published in The Washington Post.
"Consumer
spending has stayed strong, and business investment is picking
up," he said. "As our economy continues to grow at a healthy
pace, Americans will see their incomes and their retirement accounts
grow as well."
He
said the administration of President George W. Bush would continue to
advance "an agenda of economic freedom and opportunity tied to
accountability."
On
Wednesday, the U.S. government reported that second-quarter growth had
slowed to a 1.1 percent annual rate from a 5.0 percent rate in the
first quarter, prompting speculation that the U.S. economy might be
headed for a double-dip recession.
These
fears helped push the Dow Jones Industrial Average down 193.49 points,
or 2.27 percent, Friday in a volatile session during which the index
slumped as much as 300 points.
The
Standard and Poor's 500 index sank 20.42 points, or 2.31 percent, and
the Nasdaq composite shed 32.08 points, or 2.51 percent.
But
the treasury secretary appeared unfazed by these developments and
moved forcefully to refute worries about the economy.
"Confidence
in our financial markets, in turn, does not come from talking heads on
television," he wrote. "It derives from the economic
fundamentals, which today are strong. Our economy is growing, and
inflation and interest rates are low."
President
Bush also maintained his upbeat position on the strength of the U.S.
economy this week, despite new data showing a decline in the rate of
growth.
"We
are heading in the right direction. But the growth isn't strong enough
as far as I'm concerned," Bush said at a cabinet meeting on the
economy.
At
the meeting, Treasury Secretary O'Neill, Commerce Secretary Donald
Evans, Labor Secretary Elaine Chao and presidential economic advisers
Lawrence Lindsey and Glenn Hubbard told the president that "all
the ingredients are there for more robust growth going into the fall
and into the winter of 2002," said White House spokesman Ari
Fleischer.
The
U.S. economy grew at a tepid 1.1 percent rate in the second quarter of
fiscal 2002, according to data from the Commerce Department, while
analysts had expected a growth rate of 2.2 percent.
Despite
revisions to first-quarter gross domestic product growth, from its
initial level of 6.1 percent to 5.0 percent, Bush insisted the U.S.
economy "continues to grow," noting that the average of the
two quarters was around three percent growth.
Commenting
on whether U.S. growth figures will rebound over the next two
quarters, Lindsey said, "I have been saying it all year, even
when people were saying we were still in recession. Growth this year
is going to be three-something, and I stick to that. I don't see any
reason to revise my expectation."
"I
think the president was right on. We have moved to a sustainable
growth path from what was a recession that we inherited," Lindsey
said shortly after the cabinet meeting.
In
addition to making his 1.3 trillion-dollar tax cut permanent, Bush
spoke of some other economic stimuli in the works.
"I
look forward to working with Congress on a trade bill," Bush
said, referring to a bill that would grant him broader authority to
negotiate international trade agreements. The House of Representatives
passed the legislation last week, and it is expected to be voted on in
the Senate ahead of the legislature's August recess.
Bush
also referred to a terrorism insurance bill, which would allow the
government to back insurance companies in the event of future
terrorist attacks. He said the legislation "will help stimulate
construction work, which will help our workers." 
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