Corporate America Pushing Rate Cut; Businesses Urge Fed Action to Bolster Growth Here, Abroad
From his office overlooking the docks in Portland, Ore., Scot Laney can see the effects the Asian crisis is having on America, as he watches "the empty containers stack up." Laney, president of Griffith Rubber Mills Inc., believes the U.S. economy could benefit from an interest rate cut.</br></br>Back in Washington, in the offices of Federal Reserve Board Chairman Alan Greenspan, the view is more opaque. Here, after recently acknowledging that American prosperity could be threatened by the escalating global financial crisis, Greenspan is weighing whether short-term interest rates should be reduced when Fed policymakers meet in 10 days.</br></br>"We're asking the chairman to be proactive," said Laney, who heads the National Association of Manufacturers' small and medium-size business subcommittee. The NAM is among a group of business interests from Wall Street to Main Street clamoring for an immediate cut in interest rates to bolster the U.S. economy and help combat a global economic slowdown.</br></br>Businesses are calling for lower rates for a variety of reasons -- some of which openly are in self-interest. Some argue that cutting the cost of consumer and business borrowing would stimulate a cooling U.S. economy, and counterbalance falling foreign demand for U.S. goods. Others believe easier credit would provide a crucial psychological boost to skittish financial markets on Wall Street and overseas.</br></br>"It's the domino effect," said Laney, whose company makes window casings for heavy trucks and buses. Laney reasons that if shipments to Asia are slumping, there will be less demand for trucks to carry U.S.-made goods to and from the ports -- and eventually less need for Laney's products.