This is a partial transcript from Your World with Neil Cavuto, August 1, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Are we being too pessimistic about this report and this economy?

Linda Chavez says yes. She is the president of the Center for Equal Opportunity (search).

But Seth Harris says absolutely not. He’s a former Labor Department (search) senior adviser under the Clinton administration, and now he’s at the New York Law School.

All right. So who’s right?

Linda, to you first. You think that this report isn’t that bad and ultimately things are looking better, right?

LINDA CHAVEZ, CENTER FOR EQUAL OPPORTUNITY: Well, I think a lot of things are looking better. I think it’s very encouraging that we had much higher than expected growth.

I think the fact that we have now two months running had some decreases in our unemployment rate. I think all of that’s good. And unemployment rates, of course, are a lagging indicator. So there are other kinds of things that are looking good as well.

We’re seeing more investment, the fact that people are now getting more in their paychecks, in terms of the tax cuts, and parents are getting back some return on investment for their children.

CAVUTO: So, bottom line, you think things are looking better.

Now, Seth, you’re opposite side of the spectrum, right?

SETH HARRIS, FORMER LABOR DEPARTMENT SENIOR ADVISER: Well, I think this jobs report tells us that the Bush economic slump continues. This is the worst jobless recovery since the Great Depression. Forty-four thousand people lost their jobs this month. That’s on top of 72,000 who lost their jobs last month. That’s 2.7-million people who’ve been put out of work since President Bush took office.

CAVUTO: But you realize a lot of this was starting to unravel in the last year of your hero’s administration, right?

HARRIS: Well, at some point, we have to say that the most powerful man on earth has a lot more to do with our economy right now than a guy who’s been out of office for three years or a terrorist over in Afghanistan.

CAVUTO: Well, Linda, let me pursue that. That’s actually...

CHAVEZ: That is ridiculous.

CAVUTO: Do you think that this president, fairly or not, is slow to take blame for the slowdown in this economy?

CHAVEZ: Well, first of all, the slowdown did begin in the last year of the Clinton administration, and much of the Clinton miracle was really the responsibility of Ronald Reagan and George Bush the first in their three terms in office, which produced an economy that bore fruition during the early years of the Clinton administration.

But this idea that we’re in the worst economy since the Great Depression -- the last time I heard this rhetoric, by the way, was in 1992 when Bill Clinton was running for office, when a very mild recession, one that only lasted three quarters, was described as the worst economy since the Great Depression.

Well, we’re heading into another election, so I guess we’re going to hear more out of the Democratic propaganda machine that says the worst economy since the Great Depression. Nobody believes that. Sixty percent of Americans don’t.

CAVUTO: All right. Seth, go ahead and answer that.

HARRIS: Sure. You know, for the 2.7-million people who are out of work, for the millions of Americans whose wages are flat or declining ever since President Bush took office -- Linda, it’s not a myth to them. It’s not part of P.R. for them. It’s their real lives.

You know, the reason that the unemployment rate went down today is because 500,000 people stopped looking for work. They gave up hope. Now that’s a vote of no confidence, people voting with their feet on the Bush economic policies.

CHAVEZ: Well, people aren’t giving up hope. People are going on to get other jobs. We have something called creative destruction in American capitalism. In fact, we do lose certain kinds of jobs and we create other jobs.

We’ve had a rough going for the last several quarters, in large part because of world affairs over which we had very little control. The fact is we are now looking at encouraging numbers. The economy is getting going again, there is more investment coming out of companies, and that’s going produce more jobs that...

CAVUTO: What do you think of that, Seth? We have lately. We saw it even within the GDP report out yesterday that shows inventories are way down. That means they’re going to have to be built up.

We’re seeing more business spending, more residential spending. We’re still seeing a stubbornly strong housing market. We’re seeing improving numbers at Wal-Mart, at Home Depot, you name it.

That, to me, percolates of a recovery. Why don’t you see it that way?

HARRIS: Well, you’ve got to look behind the numbers. The GDP numbers for the last quarter were 2.4 percent increase, but 70 percent of that increase was because of war spending. You know, we can’t keep spending forever -- to invade Iraq. We’ve already won in Iraq, and...

CAVUTO: I don’t want to get too arcane here, but if you take defense out of it and look at just cap spending, capital spending, a key gauge of growth, that was running at about a 7 percent clip. That’s not bad.

HARRIS: We’re beginning to see some improvement being...

CAVUTO: When will you acknowledge that we are?

HARRIS: As soon as people start getting jobs back. We’re seeing a protracted jobless recovery. It’s the worst we’ve seen in 50 years. So, when people start getting their jobs back, wages go up, working families’ lives are better. Then I’ll acknowledge that things are getting better.

CAVUTO: Seth Harris, final word on the subject.

Linda Chavez, thank you for coming by.

Good seeing both of you.

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