Fed Chairman Alan Greenspan's Reconfirmation Hearing
Wednesday, June 16, 2004DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: This is Darren Gersh in Washington. Alan Greenspan will play a key role in deciding how fast interest rates rise this year, although today he did not seem like a man in a hurry. At his re-confirmation hearing, Greenspan told senators he was watching, but not yet worrying about rising prices for oil, natural gas and many other products.
ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE: Our general view is that inflationary pressures are not likely to be a serious concern in the period ahead.
GERSH: that`s because wages, which make up two-thirds of non- farm business costs, are not yet rising sharply. Until that happens, the Fed does not believe inflation will make a sustained breakthrough. For now, Greenspan`s outlook calls for more growth, more jobs, with only modest inflation. But the chairman admits that outcome is not what he called a "gimme putt."
GREENSPAN: Forecasts are subject to error, and if our judgment as to how the economy is going to evolve and how inflation is going to evolve turns out to be mistaken, we will change, because our fundamental goal is, as you point out, to maintain price stability over the long run as a means of sustaining maximum sustainable growth.
GERSH: Right now, the betting is the Federal Reserve will raise its benchmark short- term interest rate by a .$0.25 percentage point at its June meeting. And to get out of its latest rhetorical box, some experts expect the central bank will do some creative editing: adding a line in its post-meeting statement noting the risks of higher inflation and dropping its now-famous phrase about raising interest rates at a "modest pace."
LYLE GRAMLEY, SCHWAB SOUNDVIEW CAPITAL MARKETS: They don`t really need it. I can`t figure out a clever way to modify that sentence in ways that give them more room. They may be more clever than I am however, but if I were there, I guess I would want to remove it altogether.
GERSH: Greenspan is now on track to be confirmed to serve his fifth term on the Federal Reserve Board at 78 years old, extending his 17-year reign as monetary policy`s iron man. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
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06/15/04: The Bush Administration Backs Off Of Slamming Spam
PAUL KANGAS: Google is spreading its roots in China. The popular internet search engine has taken a minority stake in a Chinese-language Web search company. Baidu.com confirmed today that Google is among the foreign investors included in an overseas effort to raise cash for the privately held firm. Baidu is China`s largest independent search engine, and Google`s strongest rival there. Google already operates its own Chinese language search site and now even has online advertising in Chinese. Baidu says it has no plans to build an English-language Web site. Still, it`s a huge market for Google and other online companies, since more than 80 million people have access to the Internet in China.
SUSIE GHARIB: Meanwhile, the millions of Americans who have access to the Internet are also going to have spam for the foreseeable future. The Bush administration said today it is not going to start a do-not-e-mail registry because it won`t work and can`t be enforced. Stephanie Woods reports.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: The popularity of the national do-not-call registry to block unwanted telemarketers gave high hopes that the same idea could stop junk e-mail. But the Federal Trade Commission says a national do-not-e-mail registry won`t work.
TIM MURIS, CHAIRMAN, FEDERAL TRADE COMMISSION: Most spammers who already violate a host of laws would ignore any requirement not to spam addresses in a do-not-e- mail database. But even worse, they would use a registry as a source of valid and spammable addresses.
WOODS: The FTC says technology companies should focus on creating an e-mail identification system to make it harder to disguise the origin of unwanted e-mails.
MURIS: Spammers can send e-mail anonymously by spoofing from lines, routing messages through open relays and open proxies and using zombie drones. Spammers hide their identities, confound anti-spam filters and elude law enforcement.
WOODS: The commission will sit down in the fall and may set up a federal advisory committee to help develop an authentication standard. Mass e- mailers say that approach is a better than a do-not-e-mail list.
LOUIS MASTRIA, PUBLIC AFFAIRS DIR., DIRECT MARKETING ASSN.: Legitimate marketers would have additional costs of somewhere up to $5.7 billion to abide by the list. In the meantime, you`ve done nothing to stop spam.
WOODS: Companies like Microsoft (MSFT), EarthLink (ELNK) and AOL are already working together to develop e-mail authentication systems. But the technology is still in the early stages. Senator Charles Schumer, a key advocate of the registry, says he is disappointed with the FTC and will pursue legislative alternatives. In the meantime, to reduce spam, the FTC says to stay out of chat rooms and try to come up with an unusual e-mail address. Stephanie Woods, NIGHTLY BUSINESS REPORT, Washington.
