Kk-Forum,
videresender denne.
Knut Rognes
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>Date: Tue, 13 Mar 2001 10:35:50 -0800
>From: Institute for Public Accuracy <instpa@pacbell.net>
>Subject: Stock Collapse: Political "Negligence"?
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>
>Institute for Public Accuracy
>915 National Press Building, Washington, D.C. 20045
>(202) 347-0020 * http://www.accuracy.org * ipa@accuracy.org
>___________________________________________________
>
>Tuesday, March 13, 2001
>
>A Year After Warning of Stock Collapse,
>Economist Cites Political Leaders' "Negligence"
>
>An economist who predicted a collapse of stock prices a year ago, when the
>Nasdaq composite index was near its peak, said today that "the nation's
>political leaders chose to ignore the stock market bubble" -- and "as a
>result, millions of families have seen their dreams of a secure retirement
>or their children's college education vanish."
>
>In a news release issued by the Institute for Public Accuracy on the
>afternoon of March 16, 2000 (a day when the Nasdaq closed at 4,717.39),
>Dean Baker of the Center for Economic and Policy Research said: "The main
>feature of the 'new economy' is a stock market bubble of unprecedented
>magnitude. When the bubble bursts, the new economy will just be a bad
>memory. The inflated stock market has created enormous distortions in the
>economy, the ramifications of which will only be apparent when stock prices
>return to more normal levels. If the market falls 50 percent and loses $10
>trillion of wealth in a correction, it's going to be very hard to avoid a
>recession. A lot of these dot.coms are worth a corner lemonade stand and
>are putting real companies out of business. What are you going to tell
>people who lose much of their retirement savings in their 401K when there's
>a downturn?"
>
>Today, Baker said: "The decline in the stock market was an entirely
>predictable event for anyone familiar with basic arithmetic, even if the
>exact timing could not be known in advance. The nation's political leaders
>chose to ignore the stock market bubble and instead focused their attention
>on distant and relatively minor problems like potential shortfalls in the
>Social Security trust fund in 30 or 40 years or the reappearance of budget
>deficits in a decade or two. As a result, millions of families have seen
>their dreams of a secure retirement or their children's college education
>vanish with the stock market bubble. The level of negligence of the
>nation's political leaders in ignoring the stock bubble exceeds anything
>since the days of Herbert Hoover."
>
>Baker is the author of several related papers, including "The Costs of the
>Stock Market Bubble," "The New Economy: A Millennial Myth," and "Double
>Bubble: The Implications of the Over-Valuation of the Stock Market and the
>Dollar." (Baker is co-director of the Center for Economic and Policy
>Research. Detailed information is available at http://www.cepr.net.)
>
>To arrange an interview with Baker, contact him at:
><dean.baker@worldnet.att.net>. Also available at the Center is co-director
>Mark Weisbrot, <weisbrot@cepr.net>.
>
>Also available for interviews: Ellen Frank, economics professor at Emmanuel
>College in Boston, author of "Stocks Run Amok"; <frank@emmanuel.edu>
>
>For further information, contact at the Institute for Public Accuracy:
>Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167
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