Smith Students Appear on CNBC to Discuss the Economy and War

Smith School undergraduate and MBA students recently joined Treasury Secretary John Snow and Commerce Secretary Don Evans for a nationally-televised town hall meeting on the White House economic stimulus plan. The students, along with Smith School Professor of International Business Peter Morici and students from two other universities, participated in the economic discussion on CNBCs Capital Report program, which aired Tuesday, February 25, 2003.

Morici and two of the undergraduate finance majors, Joseph Mancini and Monika Goel, were among six audience participants who were able to ask questions of the Bush cabinet secretaries during the program.

Mancini, a senior at Smith, asked whether the secretaries felt the president's increasing tax cuts on the federal level would be offset by increasing state and municipality taxation.

Weve seen some of the states and municipalities begin to deal with their own local issues. But [those increases] will be offset because the economy will grow at a faster pace, and that will mean more revenues for state and local governments, Evans responded. Our estimates are that [the presidents plan] will mean an additional six billion dollars to the state and local governments, which will more than offset any loss because of the passage of the tax [increases], said Evans.

Steve Liesman, CNBC senior economics reporter who was also on the panel, said Mancini's question was a good one, pointing out that several states were already facing spending cuts and tax increases and that proposed federal tax relief to states would not make up budget shortfalls. 

Here in Maryland, we see the university struggling with budget cuts, so ultimately, in order to maintain service levels, the state will have to increase taxes. So I believe the benefit from federal tax cuts will be absorbed by increased state taxes, said Mancini after the show. 

Much of the TV program focused on how a war with Iraq might affect the economy. Smith sophomore Monika Goel participated in that part of the discussion.

Since there is a clear opposition of war from France, Germany, and Russia, should U.S. corporations be concerned about a potential decrease in international sales in Europe? asked Goel.

Smith students had many more questions, but the hour-long program went quickly, so many went unanswered. "No, I dont think so at all. We have to look beyond the war and look to continue to strengthen the global economy", answered Commerce Secretary Evans. "I certainly dont think there will be any fallout from sales around the world because of the war. The president is going to continue to stay focused on developing our relationships around the world. Evans added that the recent decision to give the president authority to negotiate global trade agreements would be instrumental in boosting the global economy to benefit U.S corporations."

"I would have liked to ask Secretary Snow how the government proposes to fund reforms like Medicare, pay for a war, and cut taxes at the same time," said Goel afterward. Overall, Goel says the experience was fantastic, though she says she is still concerned about the future direction of the economy.

Other students who attended the town hall meeting were undergraduate finance majors Indira Balram, Matt Bridge, and Robert Connors. The MBA students included Jay Gelfman, Tsvetan Petkov, and Fuad Velasco, who help manage the schools Mayer Fund.