Just as he did yesterday, Matt Lauer asked again if the media’s gloomy economic news is a "self fulfilling prophecy."
"Do you ever worry that the media, we get the ‘r’ word on our lips, recession and we chant it and that eventually it becomes a self-fulfilling prophecy, the consumers of TV and the media hear it and they are also consumers of the economy and they spend themselves into a recession or don't spend themselves?"
Secretary Paulson noted that he does "believe that we get a pretty steady dose of more negative news from the media," but he added that he thinks "the evidence is pretty clear."
The entire transcript is below.
MATT LAUER: So can the president and Congress reach a deal to boost the economy and even if they do may it be too little too late? Henry Paulson is the secretary of Treasury. Mr. Secretary, good morning to you.
TREASURY SECRETARY HENRY PAULSON: Matt, good morning to you.
LAUER: Let's talk about the timing. It was thought the president would announce some kind of economic stimulus package as a centerpiece of the State of the Union address in just ten days. Now he's making the call today, so does the administration see this as an emergency that can't even wait ten days?
PAULSON: Matt, this is not an emergency. There's an urgent need. The long-term fundamentals of our economy are strong. We believe the economy is going to continue to grow slowly here, but it has slowed down and the risks are to the down side, and we're very focused. The president is very focused on taking actions quickly that will give a boost to our economy as soon as possible this year.
LAUER: Well, can you get the money into the hands of the people, and we'll talk to which people are going to get the money to the people in a second. Can you get this accomplished in a timely fashion? Mr. Bernanke says this money's got to get to people and businesses within the next 12 months. Can you do you that?
PAULSON: I believe we can. I've been consulting at the president's direction very actively with members of Congress, leaders on both sides for the last couple of weeks, and I think we see a common objective here, a common need of doing something that's going to be temporary, something that will be robust and simple and get money into the economy this year.
LAUER: Mr. Bernanke said in his press conference yesterday that you get the most bang for the buck. If you get this money, these tax rebates into the hands of lower and middle class people, they're going to be the ones who in the short term will go out and spend it and boost the economy. Is that where the rebates will go?
PAULSON: Well, big part of the program, Matt, should be focused on consumers, on individuals, on families, getting money to them because they will spend it.
LAUER: All right. But you're not going to give rebates to the rich here, correct?
PAULSON: I don't want to get ahead of the president here, but, again, remember, the president is going to be putting forward a broad outline, principles, ideas because he wants to work on a collaborative basis with Congress, come together, do something that's really bipartisan.
LAUER: Let me read you something from the "Wall Street Journal" this morning, Mr. Secretary, and this is talking about some lessons that were learned from an economic stimulus package back in 2001, specifically these targeted rebates. They say, quote, "the ecnomic evidence from teh 2001 experience suggests this is an ineffective tool...that most rebates were saved, not spent. While this result may be a disappointment to those of us who thought this approach would be effective, Congress must be willing to learn from past legislative experience. Popular versus effective is sometimes the difference between politics and economics." Sorry for the long quote, but the bottom line seems to be the warning is this may sound popular and good politically, but it may not work for the economy.
PAULSON: I could not disagree more strongly. The evidence from 2001 was that people spent between a third and two-thirds of the money and spent it quickly, so the lesson here is we need to move quickly and do something in enough size,and I think we're talking about something that's much bigger than in 2001, do something that's robust and get it out quickly, and it will make a difference this year.
LAUER: And you mentioned temporary. So are you worried at all that this will do nothing to impact the long-term troubling fundamentals of this economy?
PAULSON: Well, our economy -- the long-term fundamentals are very strong in our economy, so we've got strong long-term fundamentals. The need here is this year, doing something this year as the economy is slowing that will make a difference.
LAUER: Real, real quickly, Secretary Paulson. Do you ever worry that the media, we get the "r" word on our lips, recession and we chant it and that eventually it becomes a self-fulfilling prophecy, the consumers of TV and the media hear it and they are also consumers of the economy and they spend themselves into a recession or don't spend themselves?
PAULSON: Well, I do believe that we get a pretty steady dose of more negative news from the media, but here I think the evidence is pretty clear. We were growing at almost five percent in the third quarter. The economic news is now quite mixed and more negative, and all of the signs we see as the economy is slowing down, and the president thinks it's very important to get ahead of it and do something quickly that will help us this year
