Q: What worries you about Kerry's economic program?
A: First, there's a protectionist problem. Historically, Kerry is not protectionist. But to get his party's nomination, he had to shift that way, and did so rather decisively in the primaries. I think that Kerry's protectionist rhetoric is going to catch up with him if he gets elected.
The reason I would put that as issue No. 1 is that U.S. membership of the WTO [World Trade Organization] comes up next year. It actually requires an affirmative action [by Congress] to keep us in. Historically, if you don't have strong Presidential leadership on these issues, they get bogged down in Congress.
Q: Some analysts have also voiced concern that a Kerry victory would hurt the stock market. Do you agree?
A: Yes. When we put together the President's tax proposal for 2003, there was a fairly conscious effort to do something that was both good tax policy and would help the stock market. The dividend and capital gains tax cut proposal was exactly that. Kerry is committed to repealing it.
Q: How much of an impact would repeal have on the market?
A: It could be worth 800 points off the Dow [Jones industrial average]. Some of that, of course, will be factored into the market if it looks like he's going to win. The market has had trouble moving higher recently, and that may well be part of it.
Q: What impact would a Kerry victory have on the bond market?
A: He's bond-market-negative. He would definitely increase the budget deficit. He has made a number of spending promises. Looking at his own estimates, for example, of his health plan and plausible estimates of the rest of it. For 10 years it's a number like $1.8 trillion in spending.
Q: Are you worried by recent signs of a slowdown in the economy?
A: These aren't numbers to be concerned about. This is a pause that refreshes. We have enough momentum to push us well into 2005 without worrying.