|
Kandel eyes 'new economy'
|
 |
April 5, 2000: 5:44 p.m. ET
CNN's financial editor Myron Kandel notes some old ground rules still apply
By CNN Financial Editor Myron Kandel
|
NEW YORK (CNNfn) - Watching the president's conference on the "new economy" from the White House on Wednesday took me back more than seven years to a similar high-level meeting Bill Clinton presided over.
He was then president-elect, not yet inaugurated, still the governor of Arkansas, and the conference took place in that state's capital, Little Rock. Dubbed an Economic Summit, it attracted business, government, labor and academic leaders from around the country, all anxious for a first-hand look at the man who was to occupy the White House the following month, as well as to expose him to their views on the pressing needs of American society and the business community.
The "new economy," including the development of the Internet, wasn't even on the horizon, as I remember. The focus was on: getting out of recession (ironically for the defeated incumbent President, George Bush, it had already ended, but we didn't know it yet); getting more people to work; getting government spending under control; and putting Social Security on a sound footing.
 Every one of the participants I talked to during and after the conference - including some corporate moguls who had certainly not supported Mr. Clinton during his election campaign - was impressed by his grasp of the issues and his willingness to listen to the views expressed for hour after hour.
I'm sure even he - despite the ebullience he displayed - never expected the economy to remain so strong for so long a period, the stock market to hit such heights, inflation to remain so low, and the employment picture to become so strong. And I'd be willing to bet that the achievement of a federal budget surplus wasn't even in his dreams, nor was the high-tech revolution that is transforming the U.S. economy.
The President deserves much of the credit, although not as much as his acolytes would like to ascribe to him and his administration. But there's enough to go around - to Congress, to the Federal Reserve, to the high-tech pioneers and innovators who led the technological surge, even to the Wall Streeters who financed them, as well as to the nation's hard-working labor force and the American entrepreneurial spirit.
The challenge now, Mr. Clinton emphasized in his opening remarks Wednesday, is how to extend the present economic prosperity, how to spread its benefits to more Americans, and how to determine what could go wrong and how to keep that from happening.
It won't be easy. The White House conference took place the day after the stock market's tremendous volatility and wild price swings had left both ordinary investors and Wall Street professionals dazed and confused by watching the major indexes change direction with breathtaking speed. That demonstrated that the new economy hadn't repealed some of the basic verities of investing - that what goes up can go down and that stocks don't grow to the sky.
The business cycle has not been repealed, either. One day - although I don't think it will happen very soon -- the economy will slow and even fall into recession. Mr. Clinton - and one of his White House speakers, Fed Chairman Alan Greenspan - want to avoid that as long as possible.
In the meantime, shell-shocked investors need to remember that markets sometimes do get ahead of themselves and suffer sharp reversals. The road to stock market riches is to look over - but not overlook - those short-term swings and watch for longer-term trends.
And those trends can be in the old economy as well as the new.
(Myron Kandel is CNN's Financial Editor. His column appears every Wednesday on CNNfn.com.) 
|
|
|
|
|
 |
|
