Mr. Chairman, I would like to thank you for holding this hearing, and I would like to thank Chairman Greenspan for coming before the committee today.
We have a crisis in our economy today ---- a crisis of confidence. We've all seen it, and the majority of Americans have felt it. Whether they own stock, have a 401(k) or another type of pension plan, millions have been personally hit by the recent market dips. At this point, the losses might be only on paper. But we all know how to add and subtract. And the sheer drop of the Dow, NASDAQ and S&P 500 in the last few weeks has folks on edge.
To make things worse, the markets are dropping in a time when, overall, most of the economic news is pretty good. The economy grew at 6% in the first quarter. Retail sales were up in June. And inflation is almost nonexistent.
But the last I heard, over one thousand companies have restated earnings.
The stock markets are in the tank. Investors keep waiting for the other shoe to drop ---- again. They're waiting to see if there will be another Enron, or Global Crossing, or Worldcom.
To be fair, the retail investor seems to be more willing to ride out the market and sit on their hands. It would be nice if institutional investors would do the same.
But the bottom line is that investors large and small are going to do what's right for them.
No one can blame them.
We must restore confidence in our markets. I'm glad that Congress is well on its way to passing legislation to help. But it's going to take more than enacting a bill to restore that confidence.
The President has taken some good steps too. I think his ideas will help greatly.
It would be nice if some of his political opponents would stop taking potshots at the President for things that started long before he came into office. Some of the rhetoric that's been flying around the past few days has been dangerous and irresponsible. Clearly it's been more about political agendas than the overall economic mood of the country. But those who try to use recent problems for political gain ---- whether they be Republican or Democrat ---- are playing with fire. Markets can go back up just as fast as they go down.
Personally, I think that one way we could restore some confidence in the market would be for the public to see some of these executives who have committed fraud to walk around in handcuffs and orange jumpsuits.
When the American people see that the system does work and those who have committed crimes pay the piper, they'll feel a lot more secure about their investments and security. I would like to figure out a legal, constitutional way to expedite the prosecution of those who have committed crimes and get them in jail right away. I know that's a little far afield for this hearing. But I really believe that it's one of the real, tangible things that could be done that would send out the right signal to investors, markets and business.
I look forward to hearing from Chairman Greenspan about our economy. I would hope to hear any suggestions on what else you think we can be done to restore confidence in our markets.
And I look forward to talking with you further during the question and answer period.
Thank you, Mr. Chairman.