News Release

Money on Wall Street, Money in Politics

Wall Street is continuing a downward slide this fall, and some economists believe that policymakers in Washington are remaining unrealistically upbeat. Meanwhile, Elizabeth Dole’s withdrawal from the GOP presidential race has sparked more debate on campaign finance issues.

The following policy analysts are available for interviews.

Wall Street: Realism Needed

DEAN BAKER
“The stock market has been hugely overvalued since 1996,” said Baker, an economist and senior research fellow at the Preamble Center in Washington, D.C. “At its peak earlier this year it may have been overvalued by more than 50 percent. To make this determination it is only necessary to use simple arithmetic and the profit projections from the Congressional Budget Office or other government agencies.” Baker added: “The Clinton administration and the Federal Reserve Board have been incredibly irresponsible in allowing this bubble to develop. In the short term the bubble makes the economy appear very healthy, which has political benefits. But it also virtually guarantees trouble in the long term. At some point the bubble inevitably bursts, as it did in Japan, which will almost certainly lead to a recession. (Also, as a result of the inflated stock prices, hundreds of billions of dollars, which might otherwise have supported productive investment, are instead financing the luxury consumption of Internet billionaires.) In addition, a whole generation stands prepared to lose much of their retirement savings as a result of being deceived about the safety of the stock market.”

Politics: Campaign Finance Deform

NANCY SNOW
Executive director of Common Cause in New Hampshire and assistant professor of political science at New England College, Snow commented on Thursday: “Elizabeth Dole had the eyes of the country on her and the opportunity to say, ‘money is corrupting American politics.’ She didn’t seize the opportunity. Said Dole: ‘In the real America, it’s more important to raise issues than campaign funds.’ But when asked about the need for campaign finance reform, she balked: full disclosure (who doesn’t support that?), raising individual limits from the current $1,000 to $5,000, and a ‘downphasing’ but no ban on soft money. That kind of answer is exactly why so many Americans are tuning out politics — the failure to walk the talk. Meanwhile, Doris ‘Granny D’ Haddock, an 89-year-old New Hampshire resident, continues to walk her talk across America for real reform. Perhaps now that Elizabeth Dole has some time on her hands, she should join Granny D on the trail of that ‘real America’ of which she spoke so eloquently.”

For more information, contact at the Institute for Public Accuracy: David Zupan, (541) 484-9167.