Quayle Called It

March 20, 2001

IN May last year, while he was visiting Bangkok to attend a joint meeting of the US-Thailand Business Council and the Thailand-US Business Council, former US vice president Dan Quayle quipped that the booming dot.com industry was going to be a "dot.gone" industry pretty soon.

His comment then was aimed at playing down the irrational exuberance of investors over the seemingly invincible Internet stocks, which drove the Nasdaq market to peak at more than 5,000 two months earlier.

Quayle said he was not against the New Economy, but that he would like investors to think twice, or to go back to take a hard look at cashflow and performance.

Since then, Nasdaq, which is dominated by technology stocks, has fallen under their grave earnings reality. It has lost about 60 per cent of its value, falling to 1,647.51 last Friday. With the sharp fall of the US and Japanese equities, there are fears of a global meltdown.

However, Quayle, who served as vice president under George Bush Snr, expressed confidence in the US economic fundamentals.

"I think the US fundamental economic system is sound. And there is an increase in productivity growth," he said.

He said he believed Alan Greenspan, chairman of the US Federal Reserve, would cut interest rates again at the Fed's meeting today, although he thought Greenspan might not deepen the rate cut by three-quarters of a basis point, as the financial markets would like to see.

To go for a 0.75-basis-point cut would send a signal that the US economy might be in worse shape than most people would have thought.

Still, Quayle said it was always difficult to guess Greenspan's real move.

He fully supported President George W Bush's US$1.6 trillion (Bt70.3 trillion) tax-cut plan, saying the move was long overdue. He urged the US Congress to support the plan, which he said was necessary to "put money back in people's hands" and to help rejuvenate the economy.

Quayle, who has retired from government service to focus on his private-sector role, added that Japan would need to seriously undertake corporate restructuring to get its economy, which is saddled by massive debt, back on its feet. If Japan could improve, it would help lift Southeast Asia out of the doldrums.

He also praised Thai Prime Minister Thaksin Shinawatra, whom he met at Government House yesterday and called an old friend. He said he had confidence in Thaksin's leadership and his strong economic programme.

BY THANONG KHANTHOG