Marketplace: News Archives

Thursday, December 28, 2000
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It's Thursday, December 28, 2000. I'm David Brancaccio.

Montgomery Ward, one of the oldest retailers in the nation, closes. Its parent, the financial arm of General Electric, GE Capital, pulled financial support due to disappointing holiday sales. Stunned Wards employees carried boxes from the Chicago headquarters today. Wards began business in 1872 and preceded Sears both in the dry goods and mail order business.

And in other gloomy economic news, manufacturing giant American Standard and Union Pacific each announced that they would each cut about 2,000 jobs. And late today, LTV - the big Cleveland-based steelmaker - said it may have to file for bankruptcy protection, due to competition from cheap steel from overseas. The news comes the same day the latest economic data shows a sharp drop in consumer confidence as Marketplace's Michelle Brier reports:

Brier: "The conference board says its consumer confidence index sank for the third straight month in December, to its lowest point in two years. Based on a monthly survey of some 5,000 households, the index is considered a key indicator because consumer spending accounts for about two-thirds of the nation's economic activity."

Albertine: "The consumer is the 400-pound gorilla of this economy and when he or she stops spending the economy grinds to a halt."

Brier: "Washington economist Jack Albertine says the drop in the consumer confidence is not to be taken lightly."

Albertine: "Three months is a lot. I think it's a pretty big trend. It demonstrates that the economy is probably gonna slow to one and a half or 2 percent growth. I don't think it means recession but it certainly means a substantial slowdown in growth in the first six months of 2001."

Brier: "Already, the nervousness of consumers can be seen in holiday retail sales figures which were mostly disappointing. Analysts believe the drop in confidence will give the Federal Reserve's open market committee more fuel for thought when the panel meets in January to consider lowering interest rates.

In New York, I'm Michelle Brier for Marketplace."

Dimsdale: "President Clinton believes America can be debt free by the end of the decade...if politicians keep their hands off the excess income.

His message for the incoming Republican administration is: paying down the debt would be better in the long run than giving the American people an across the board tax cut. Using surpluses from the last three years, the Treasury Department has paid back some debt early, which Clinton says has already reduced interest rates."

Clinton: "That's meant lower mortgage payments, lower car payments, lower student loans, lower business loans...it's freed up more capital for private sector investment."

Dimsdale: "But incoming President George Bush says he is committed to giving most of the projected surplus back to taxpayers over the next ten years.

Bush was in Washington today, announcing the nomination of Donald Rumsfeld to be the next Secretary of Defense. Bush wasn't asked about the President's suggestions for paying down the debt, but did have another idea of what to do with part of the surplus."

Bush: "In my budget I can assure you there's going to be a military pay raise greater than the payraise which was enacted a year ago."

Dimsdale: "The President-elect says his pay-raise proposal for next year will cost a billion dollars.

In Washington, I'm John Dimsdale for Marketplace."

George: "California's two biggest utilities - Southern California Edison and Pacific Gas and Electric - say they face bankruptcy unless state regulators let them raise rates. These rates for frozen to ease the pain of deregulation for consumers.

Jamie Court of the Foundation for Taxpayers and Consumers' Rights says utilities are just playing chicken."

Court: "There's been a game of brinksmanship...and utilities didn't go bankrupt. The S&P didn't downgrade them as was promised...it's an economic terrorist action."

George: "But John Nelson of PG&E says the massive rate increases are coming from out-of-state power generators who are not regulated by California."

Nelson: "They are killing the golden goose that laid the golden egg by their rapacious greed in California. This could kill deregulation in California and then across the nation."

George: "Nelson says what's needed is new power plants.

Today, Edison announced that it will shut down its San Onofre Nuclear Power plant for what it calls routine maintenance.

In Portland Oregon, I'm Christy George for Marketplace."

Palmer: "Peter Angelos is a classic and succesful mass torts lawyer. He took on the asbestos industry - and was among the first attorneys to challenge Big Tobacco, helping Maryland win a 4.2 billion dollar settlement. People who've worked with him call him resourceful - a guy who's ahead of the curve - a strategic thinker. He says he never launches a case that he's not 90 percent sure he'll win - and he hasn't yet sued the mobile phone industry."

Angelos: "We don't comment on anything that's alleged or pending."

Palmer: "Andrea Linsky, spokewoman for the biggest US mobile phone company, Verizon."

Angelos: "And we're not aware of any legal action by Mr Angelos's firm."

Palmer: "As to the danger, she cites two recent studies in the New England Journal of Medicine and the Journal of the American Medical Association - neither of which found significant links between brain cancer and cell phones.

But the jury IS still out here. - Louis Slesin edits "Microwave News", a bulletin that researches the safety of this kind of radiation - and he says it unquestionably affects your brain."

Slesin: "There are changes due to cell phone radiation - whether at the long term exposure this will translate into health effect - that's the $64 question - we don't know - but I think we should find out."

Palmer: "Meanwhile the Angelos lawfirm says it's pursuing several claims by brain tumor sufferers - that it believes have a good shot at winning multi-million dollar compensation awards."