Wall Street Week with Louis Rukeyser; 2618; An Election Preview With Media Moguls

Oh. For more than a quarter century America's most popular program about the economy people and their money Wall Street Week With the Israel guys are is made possible by the Corporation for Public Broadcasting. And by the annual financial support from viewers like you. By Prudential Securities with more than fifty six hundred financial advisers nationwide securities can help you invest your money wisely by A.G. Edwards committed professionals providing a full range of financial services and investment advice. A.G. Edwards trusted advice exceptional service and by Oppenheimer Funds because

solid investment performance and sound financial planning go hand in hand. Produced Friday November 1st TONIGHT special guests are Michael Bloomberg CEO and founder of Bloomberg News. William O'Neill chairman and founder Investor's Business Daily and Mortimer B Zuckerman chairman and editor in chief of U.S. News and World Report. Good evening I'm Louis Rukeyser This is Wall Street Week. Welcome back. Well let's get one thing straight right at the top. Contrary to what you may have been led to believe it was last night that was Halloween. Those characters you've been seeing tonight actually are the candidates for president of the United States this year. Pretty scary huh. And they're not even wearing masks other than the usual election time hypocrisy of course. I know this is disconcerting in thinking that this is

the best America can do for leadership on the eve of a new millennium. I hope you've got the children safely tucked in bed before they lose all their illusions. But we tonight will take on the institution that many Americans believe is the real hobgoblin these days the media. I'll be talking with three of its most powerful magnates and who are both influential publishers and in their own rights commentators with strong opinions on how the economic and financial scenes are likely to change after the votes are counted next Tuesday. Both aspects are critical particularly in view of what seems to be a significant disconnect between the political and financial news. Out on page one. The man whom just about everyone except Bob Dole has conceded will be re-elected president next Tuesday. Talks of an absolutely marvelous economy in which things just keep on getting better and better as we joyfully march across that bridge to the new century. Meanwhile back amid the agate type.

Which no self-respecting political reporter ever bothers to read the bond market has been humming a different tune something well short of boom da. The bond ghouls who yearn not for greater prosperity but indeed for slower growth this week seemed happily convinced at last that they were getting it. Once the pre-election puff up has ended they concluded the economy will be tailing sharply downhill. The news as ever was mixed. New home sales rebounded for example and the unemployment rate held steady but the preponderance of reports suggested increased sluggishness ahead the pace of national growth in the third quarter was less than half the brief but well advertised spurt in the second. Consumer confidence retreated. Wages and spending stagnated and they show unemployment claims rose and manufacturing activity fell enough to cause some concern even in the euphoric stock market that profits might be a good

bit harder to come by in the softer economy of 1997. That might seem like a less than wonderful round up to ordinary human beings. And it was certainly a long way from the campaign whoop de doo but it totally delighted the bouncers because it suggested an economy so anemic that not even a hawkish Federal Reserve would find any reason to fear inflation and raise interest rates and so bond yields tumbled yesterday to their lowest level since Wall Street's national holiday. April fools day and even with a slight upturn today as traders fretted about a big supply of bonds coming to market next week plus the uncertainty surrounding the election ended the week with the 30 year Treasury bond at six point six eight percent a good half a point lower than it was just last summer. How will the voting on Tuesday affect the outlook for the economy the markets and us real human beings too. Stay tuned. But first let's see who was riding whose

broom stick in Wall Street in the weak U.S. past. And as the Dow Jones Industrial Average indicates stock traders seesawed between concern about the now undeniably slowing economy and pleasure at the lower interest rates this seems likely to produce. The index of 30 blue chip stocks ended with a gain of less than 15 points at sixteen twenty one point ninety three. The broader averages were similarly inconclusive with another loss posted by the technology driven Nasdaq. And speaking of stagnation not an elf has budged in eight weeks now with only two of our weekly forecasters Harvey Eisen and Mary Farrow getting our halos for being correct that is bullish in their predictions. Three months ago she Europe little fellows. And please wake up in time to vote. The evidence of a deceleration economy with no meaningful inflation threat meant still another slump for the long languishing in precious metals and a mixed week for the dollar.

But don't despair my fellow Americans we still look good compared to Mexico whose peso plunged to a historic low against the greenback. The only giant sucking sound yet orrible south of the border. With me tonight to give their perspectives on campaign coverage and the post-election outlook or a trio of authentic American three endings major media moguls. Mort Zuckerman is a three way sweat all by himself as chairman and editor in chief of U.S. News and World Report. Chairman of the Atlantic magazine and chairman and Co publisher of The New York Daily News. Below Neil is founder and chairman of Investor's Business Daily. And Mike Bloomberg is the CEO and founder of Bloomberg News and of the multimedia services known collectively as Bloomberg Financial markets. Gentlemen let's begin with what the British call declaring your interest. What result would each of you personally like to see in next Tuesday's presidential and congressional elections. Well given where the president is in terms of the polls I'd like to see the

Republicans control both the House and the Senate in order to force both of them to govern from the center. And the presidential race well we endorsed Bill Clinton in the daily news frankly on the general grounds that Bob Dole's economic program is one we disagreed with nor did I think he was a man to lead the country towards the end of this century. So you're basically voting for a split government split government. Bill I would say that if Clinton were to be re-elected I would certainly want to see a Republican control on the other side. However I'd prefer to see dull because I believe in its 15 percent across the board tax cut. I believe that they'll have a balanced budget amendment and they have a line item veto so that they're not going to blast the budget out of sight. And if they lower the capital gains rate in half I think that you would have fifteen hundred new issues next year and you're in a new America high technology environment I think you'd create a lot of jobs a lot of progress. Mike what's your vote. I would like to see the president re-elected I think he's done a reasonably decent

job in the last four years and deserves another four years. And I guess I would like to see the house and the Senate revert to the Democrats I'm a registered Democrat. I think it would be healthy for the country if it was not by more than a few votes so that you know one could always argue with a few people and get them to keep some checks and balances. Let's say by a stunning coincidence we have one vote for a Democratic sweep one for Republicans week and one for continued divided government. Is this a fair program or what. What. It will not come as news to you that many Americans are convince that the media as it is always described as if it was singular is of a bias that it is of a liberal Democratic bias and that it is imposing its views on the American people. Would you respond to that and I'll get your colleagues to do the same. Well I think you have to as you know separate the media. I think by and large for example the people who work for the media the journalists tend to be more democratic in their political leanings but not necessarily in the way they write certainly

most of the editorial voices in the media and the print media are Republican and if you look at talk radio that's overwhelmingly Republican so I think the notion that the media somehow or other are totally distorting the news in some way to benefit one candidate or another is an exaggeration and generally it is an argument used by the candidate who is behind in the polls. Though Lou I think the surveys show just the opposite of that. The Roper survey showed that 89 percent of all of the reporters operating out of Washington voted for Clinton last time it was either 2 or 4 percent voted the Republican ticket. There's a book called The Media Elite written a number of years ago that did similar surveys and all I've seen has shown me that it's a ratio. I would think of about 15 to 1 15 Democrats versus one Republican. So I think that's way way out of balance and I think it shows mainly in your TV networks and they have the power.

I guess I disagree with Bill I think that the history of the articles that are written as opposed to where the reporters are what the reporters voted is what matters and that clearly shows virtually no bias. Bill Clinton has no reason to be pleased with the liberal press the New York Times The Washington Post the L.A. Times those three newspapers have been the most strong in going after trying to discover a smoking gun and when and people are surprised with some scandal there's just no evidence of a liberal bias. Let me go back to Bill in the oath since you have stated the criticism. And it's certainly true that Bill Clinton got 43 percent of the vote last time and if any 9 percent of Washington journalists say they were for him that's that's a little different. But if the media influence is as strong as you say how did Ronald Reagan make it. How does the country vote the way it does and I think when you bring a president it's usually because you're trying to defeat the other man. In other words Carter had some problems.

If Carter hadn't had those problems maybe Reagan would have been elected. I don't think the media was really that much for Reagan. They had a hard time accepting him he was saying way he's going to do it he did it. And they just kept having a hard time believing that someone would do that. Do you as in your own operations try and guard your reporters. Well you might be interested to know in the first five years that we had 22 reporters and 21 were Democrats. And finally I have the other fellows and again. I don't know how it happened that we had to fight for a little while in order to try to get more ballots in there. I think it comes from the journalism schools mainly. Let's turn to this economy in which all three of you have touched even though I haven't forgotten that question. After Tuesday what trains you expect tomorrow. Well my own view is that the economy is going to continue growing fairly moderately as it has for the last several years. I think inflation of anything is going to remain well

under control and that is to say well under 3 percent. I do think that you will not have a recession you may have a moderate slowdown you may have a moderate pickup but I don't see that there's going to be much change in what we've had the really interesting issue will be if politically. You do have a split control of the government where the Republicans control the Congress. Will they as they have promised form bipartisan commissions and deal with Medicare and Social Security if they are able to do that and take it out of politics is both Bob Dole and Bill Clinton suggest. And they actually address those issues then I think we could be in for a much longer more sustained more highly. Higher growth period of time and that is something that I think in a sense is going to be dependent on what happens politically. Let me stay with you more. To what extent does Bill Clinton deserve the credit for the state of the economy. Well I think he deserves some of the credit and the reason why since I happen to be a deficit hawk and I've always believed that lowering the deficit and lowering interest rates would kick off an

investment boom and that's the way we ought to grow the economy. He deserves some of the credit for that condition because the budget deficit reduction program that he instituted in February of 1993 the first major program he as a Democrat recommended to the Congress which I might add was not approved with any support from the Republican Party was even if you believe the Wall Street Journal on this and I happen to agree with it was the single greatest contributor to the reduction in the deficit. I think that is what enabled us to have lower interest rates and contributed to lower inflation although there are a lot of other factors that were involved in that. So to that extent I think he deserves some of the credit. It's not the only reason why we've had a lower deficit brought. I think that was the single greatest contributor to the reduced evidence where he doesn't deserve credit is demagoguing. Newt Gingrich's program to reduce a budget deficit over the next seven years. But at least so far I think he deserves a considerable amount of credit for that.

If you're that enthusiastic about his 1993 budget bill which was passed as you know with no Republican support why do you want a Republican Congress. Well because I do think that what the Republicans introduced when they took control of the House number one was the right way to go they were beginning to address Medicare they took took enormous political courage to do that and Newt Gingrich I think deserves a lot of credit even though he's a widely disliked figure. I also think putting the 7 year balanced budget on the table and insisting on that and making that a part of the dialogue I think they deserve a great deal of credit for that. They have that Clinton's agenda in your view. Well they set the national agenda and forced Clinton to come into the center. So I think they deserve a lot of credit and in fact I think Clintons are demagoguing them deserves a lot of discredit but what happened is that they say they they handled it so badly politically that in effect Newt Gingrich revive Bill Clinton's political prospects. Bill what do you think. How much credit or blame does Bill Clinton deserve for the state of the economy there. Well the GDP has averaged increasing about 2.6 2.7 percent in the four years that Clinton has been there. If you look back to the Reagan era after the

tax cuts there was a 4 percent increase in the economy. So four percent and two point six or seven none sound like much difference. But one is a 50 percent faster growth rate that you had under tax cuts rather than tax increases. So I've got to come down the side that if you have across the board tax cuts if you cut the capital gains rate in half you're going to have a faster rate of GDP growth which is what our history has shown in the past. Now that's not being accepted by everybody but that's what the history shows. The. Consensus in the media this year seems to be that tax cuts increase deficit. Do you have any challenge to that. Well I think it there's a very clear challenge here because you want to have a balanced budget amendment. Immediately you've got a line item veto that they've never had before. I don't think they're having a problem of that at all. I see no risk of blowing a hole in the deficit. Why then do you think Bill Clinton resists tax cuts marginal tax Well that goes back to the basic philosophy of the party is it mainly. They represent a lot of different groups and they want a lot of different programs and

they have those programs cost money and you wind up having to increase taxes. I think that Mort is right. If Clinton were to win you probably it's very critical that you have a Republican Congress otherwise they'll revert right back to more programs and more taxing and I think that will slow the economy down to my god given the Democratic criticism of the bill program. The Republican criticism of the Democratic sweep that you've just advocated is that it would. The reversion to 1960s style heavy spending is that an accurate diagnosis. I really don't think so Lou because I think the Democrats were so scared by the Republican victories two years ago that at least for the next two years they will not revert if they were to slowly revert over two years and win an even greater majority two years from now then in the second two years of Clinton's second four. I think you would have a problem but for the moment no I think that the Democrats believe that the average American wants a slow

reduction of a lot of government services as long as it's not their own and that that's what they will in fact do. What you answer to the question about how much credit and or blame Bill Clinton deserves while you can give him all the credit for the good stuff and none of the credit for the bad stuff or vice versa. The fact of the matter is that what said it happened on his watch. We've had slow growth with low inflation. This country has done a better job of selling its products overseas and I couldn't be more optimistic about the American economy because we have kept the good jobs we've exploited the unattractive jobs. And both Europe and Asia have enormous social issues to face the next five or 10 years no matter who's going to be in the White House. They have to work very hard to screw it up like you're an entrepreneur whose business has grown explosively. You are sympathetic to growth at least your own activities. Would you favor stronger growth for the country and would you favor changes in the tax code to promote it. No I think that we probably have as good a balance it would be nice if you could have faster growth without more inflation. But I would ride with Greenspan and

what we have is pretty good. Why go and shoot. Bet everything it just doesn't make any sense to me. With that resistance extend to any cut in the battle against tax cut and all taxes are good except that we have to pay for the program so if you want the programs in the public clearly wants the programs then we are going to have to have taxes. You show me the public that doesn't want Medicare the public doesn't want defense the public that doesn't want a variety of their own programs then that's fine but remember most people in the middle class are the beneficiaries of federal welfare it's not the poor and it's not the rich. The money comes from middle class and it goes to the middle class and they keep voting to say we want our programs and we are willing to pay for it. More to let you comment on whether the capital gains tax reduction would do with my excess will I have to comment on one thing that my said first which is that if you look at who the Democratic chairman of the various House committees would be if they came in I think they would advance a much more liberal program and a much more aggressive program in terms of government activities and what Mike was

suggesting and David Broder of The Washington Post interviewed them this came out in his interviews with him so I'm very apprehensive about what would happen if this kind of leadership took over the house to go to the capital gains tax. Look I think there is a value to cutting the capital gains tax however. If I had to choose between shrinking the deficit and not cutting the taxes I would choose shrinking the deficit I do believe that fiscal balance is the single greatest. The key to unlocking the economic success of the next four years. I think we have shown I disagree very strongly with the Reagan program of the 1980s I think we were saddled with an extra 2.3 billion trillion dollars of debt if we didn't have the interest on that that we'd have a government surplus today I think that's the last thing in the world we need. I think we've got to make sure that we keep the country the fiscal program in balance that gives us the opportunity to play with monetary policy. We want faster growth. I think we should try monetary policy as a basis to do that at least you can reverse it much more easily than raising or cutting taxes.

Will is a choice between fiscal responsibility and cutting the cover again. You know it's not a choice there's a balance. But a lot of the growth that you've had in recent years has come through the high technology boom and that was created back in the Reagan years when you reduced these capital gains taxes you had companies like Microsoft being formed Cisco Systems and there are dozens of exciting companies before they got the capital gains down to 20 percent. There are only 30 new issues a year. And that jumped up to 600 which is a 2000 percent increase. So it's these companies that have been creating the jobs and the growth in the economy and your consumer sector in the last three or four years was not doing that much if you hadn't had a high tech boom. It wouldn't have had the 2.6 percent growth rate. Bill let me stay with you you follow the financial markets as closely as anyone here. To what extent if at all. Well listen election influence them. If the Democrats were to gain back Congress I think the market would break if it is balanced. Probably won't make much difference. We go a long walk we've been.

You made money when Carter was there in 1908 period was a period of young growth companies coming on because it's the entrepreneurs that are causing the growth not the government. Sometimes the government slows it down a little bit but the country's going to grow because we've got all this innovation where leaders in the world in software and technology and medical systems everything that promised have been defeated so we're very very strong and it's going to grow no matter what. What do you think. Oh this is traditionally a break in the market after a president gets re-elected going all the way back to the year zero. So that's probably going to happen but fundamentally the IOU in operation then I have to you know it's a little bit before my time when you're old enough to remember. I remember it vividly. But you think that basically the economy is more important than who's in office. Yes I think that's the case there's a very strong economy here. The public is encouraged the public wants to go out and spend and there are entrepreneurs who want to create new things no matter what the capital gains rate is.

What do you think will have an effect. I do think it will have a very small effect I think the fundamentals of the economy are in place for very powerful growth and to some extent I think it. It takes off from what Bill was talking about. We are planting the seed corn for the next generation of very high growth companies in this economy through the IPO market. We're putting in 50 billion dollars a year this year into IPO which is probably I don't think any other country puts in more than a billion and a half and we're going to be at the cutting edge of all the major growth industries or virtually all of the major growth industries. So I think if we keep fiscal balance and keep monetary rates at reasonably low I think we're in a position to really power the economy almost no matter who is the president or who is in the comic unless they begin to run up a lot of government programs and run up our our deficits again in which case I think we'll get back into that period of time when you have high interest rates and much lower rates of growth and investment when we're nearly out of time let me ask you to view if we can get in if you're not in thrall by either of the candidates this year or let's include Mr. Perot and the others.

Eva little two lessers we call it who who would who would be better. What if I had to pick a Republican candidate I would have picked Bill Weld the governor of Massachusetts whom I think has done a sensational job up there and I think he would have brought the kind of energy and intelligence and policies that would have made him a much more viable candidate. Bill maybe the problem is that we're not getting our very best people into some of these. Situations they don't want to be there. Maybe that's something that should be looked at. So maybe it's not there for the on the on the national scene. Mike what do you think of a lot of people want to run I think it's easy access I would vote for the president. You think that of those available to the country. We've we've got one of the candidates who is that man. Well anybody that wants to run can do it. This is the only guy that wanted to thank you. Mort Zuckerman below Neal and Mike Bloomberg for demonstrating that not even the media is a monolith. And I hope you'll be back with us again next week when my guest will be one of the most successful mutual fund managers of the 90s he's Donald Jaqueline a man who isn't afraid to take unpopular steps toward

his extremely popular goals. Let's find out where he's putting his feet and his money. After the ballots are counted. Meanwhile this has been Wall Street Week. I'm Louis Rukeyser. Good night. Wall Street Week With Louis. Geyser is a production of Maryland Public Television made possible by the Corporation for Public Broadcasting and by the annual financial support from viewers like you by provincial securities with more than 50 600 financial advisors nationwide Prudential Securities can help you invest your money wisely by A.G. Edwards providing a full range of personalized financial retirement and estate planning. A.G. Edwards trusted advice exceptional service and buy often hybrid funds because of solid investment performance and sound financial planning. Go hand in hand.

For a gritty dren script of this program. Send $5 to transcripts wall street Greek with Louis Rukeyser Owings Mills Maryland 2 1 1 1 7. Transcripts are also available to subscribers of the Dow Jones news retrieval service. This was PBS.