Paul O'Neill, U.S. Treasury Secretary

This is a partial transcript from Your World with Neil Cavuto, September 10, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVTUO, HOST: You've heard me say it before, I'm going to say it again. And I'm probably being a Pollyanna to some of you. But this economy is not in bad shape considering what our nation have been through in the past year. Earlier I asked Treasury Secretary Paul O'Neill if he was surprised just how resilient we are.


PAUL O'NEILL, U.S. TREASURY SECRETARY: Not really. I have a great belief in the U.S. system and in the people in the United States and the resiliency that we have shown and the ability to overcome 9/11, and slow down in the economy, and the bursting of the dot-com bubble and the corporate governance problems and all of the rest of that. Where we are fulfills my sense of what a great country this is, and how great our people are and how we can persevere and keep going and demonstrating to the rest of the world we are the leader.

CAVUTO: You got criticism, Mr. Secretary, for appearing on the floor of the New York Stock Exchange when the market reopened. You said that you believed in capitalism, I'm paraphrasing here, and that you had a duty to be there. Do you still feel that way?

O'NEILL: Absolutely, next week I'm going to be there for the anniversary of the reopening on the seventeenth and a way of saying thank you to the people there, and the people across the United States for demonstrating what a great country this is.

CAVUTO: Do you look at that and say, how close we came. I mean, there are all these - this talk that folks in the administration, yourself included, were very worried about a dramatic flight of capital, money leaving this country. Did you ever see any signs of that?

O'NEILL: No. Maybe some others thought that. It never occurred to me that we would have a dramatic capital flight for this country, it is still the best place in the world to invest.

CAVUTO: Still, despite all the comebacks that you allude to, sir, the dollar is lower than where it was back then, the market's lower than what it was back then. What do you make of that?

O'NEILL: I don't make too much of it. I keep looking at the fundamentals of our economy, and believing that markets, over time, adjust themselves to reflect what is going on in the real economy. And, so, you know, I look at the data -- what I see is automobile, light truck sales in this country running a rate that may produce the second best year ever. For car and light truck sales, probably the best year ever for new home sales. And you know, there are some people that make great facts into negatives. For example, people are saying, well, those two things are true, but if they're true, then we're not going to get anymore bounce out of that part of the economy. They never complete the thought and say, I really wish things weren't going so well so we could have prospects of things going better in automobiles and housing. It's just a garbage concept to me, Neil.

CAVUTO: And you think about, Secretary, housing and autos have been strong for what? three years now.

O'NEILL: Absolutely. And I think we are still absorbing the overcapacity surge in telecommunications and semiconductors. Those things will work their way through. I think that we continue to need to see stronger growth from Europe, and stronger growth from Japan, and not as a derivative of what we do here, but as a consequence of their own determined actions so that the U.S. doesn't have to be the only locomotive in the world and we can have three locomotives on our train instead of one.

CAVUTO: Do you get annoyed though when you hear that at least we are the sole locomotive for the time being here, that Europe isn't exactly playing nice with us, in fact, this latest move on the part of the E.U. to target $4 billion worth of sanctions, that most of the countries, save England, are not going along with an attack on Iraq, if that's what happens? Is it that bad?

O'NEILL: Well, you know, I am always looking for how we can make something positive out of the situation in the world. And you know, you mention the U.K. The U.K is really doing quite well, economically. Their unemployment rates are very low. And it would be nice if continental Europe were more like the U.K. In the case of Japan, we really do need them to take some action to put them back on a more aggressive, real growth rate than they he have been for the last 12 years. So I am hoping for and talking to people from both of those blocks on a regular basis. And there again, I think that we in the U.S. need to keep pounding away, and moving ourselves towards 3, 3 1/2 percent real growth which is what our sustainable rate is, and others in the world need to be taking policies that will put them on the same path.


CAVUTO: All right, Treasury Secretary Paul O'Neill.

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