IBM cuts cast shadow on Clinton
Known for his commentary on international relations and US politics, Rupert Cornwell also contributes obituaries and occasionally even a column for the sports pages. With The Independent since its launch in 1986, he was the paper's first Moscow correspondent - covering the collapse of the Soviet Union – during which time he won two British Press Awards. Previously a foreign correspondent for the Financial Times and Reuters, he has also been a diplomatic correspondent, leader writer and columnist, and has served as Washington bureau editor. In 1983 he published God's Banker, about Roberto Calvi, the Italian banker found hanging from Blackfriars Bridge.
Wednesday 16 December 1992
The calls came as IBM, embodiment of the hi-tech future to which Mr Clinton hopes to lead America, announced sweeping job losses and investment cutbacks. 'This is the exact thing we don't want,' he told his special economic conference in Little Rock, Arkansas, as the computer giant said it would cut its payroll by 25,000 and reduce research and development spending by dollars 1bn ( pounds 640m) next year.
The news cast into even sharper relief the central debate at yesterday's closing session: whether added stimulus is needed for the country to put the current slowdown behind it, or whether the priority from the outset should be to bring down the deficit, running at more than dollars 300bn annually.
The most ambitious proposal came from a Nobel Prize winner, James Tobin, who called for a dollars 60bn package in 1993, far above Mr Clinton's promise of dollars 20bn.
Other academics stopped short of that figure. Robert Rubin, the investment banker who will head Mr Clinton's National Economic Council, worried that an overlarge dose of reflation would upset Wall Street and force long-term interest rates higher. Robert Reich, Labour Secretary in the new administration, seemed more receptive - and so did the bulk of economists who spoke.
Arguing that recovery would at best be weak, Jeff Faux, president of the Economic Policy Institute, said that without added stimulus, millions of people 'would lose the opportunity to work'.
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