- Congress Daily
- October 28, 1997
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White House Spokesman Mike McCurry said President Clinton was briefed on the market developments by Treasury Secretary Robert Rubin. "The President has watched and noted the developments of the day," McCurry said. "The President is confident the fundamentals of the American economy are strong and that's what matters most."
A financial working group made up of the Securities and Exchange Commission, the Federal Reserve and the Treasury Department were in contact throughout the day, monitoring the market situation, McCurry said.
Trading closed a half-hour early today on Wall Street, which in mid-afternoon also ceased trading for a half-hour after the loss in the Dow Jones Industrial Average reached 350 points. Monday's loss comes on top of a cumulative 320-point loss in the Dow last Thursday and Friday. It was the first time the shutdown procedure had been used since it was adopted a decade ago--following the 508-point loss in the Dow on Oct. 19, 1987.
In terms of percentages, Monday's drop was far smaller than the crash that occurred 10 years ago. The DJIA dropped 7.2 percent today, as opposed to the 22.6 percent plunge on "Black Monday," the Associated Press reported.
"We've talked about a fluctuation in the market today that is a bare fraction of major breathtaking drops in the past, so let's just be calm and reasonable," McCurry said. "The market trigger is working apparently as it should."
The stock market plunge came as many members of Congress had yet to return for the week's business. But House Banking Chairman Jim Leach, R-Iowa, seemed to echo the confidence being voiced by the White House.
"There appears to be a confidence-rattling contagion that has spread from Southeast Asia to Hong Kong and European markets," Leach said in a statement. "But it should be clear that economic fundamentals are very sound, particularly in this country, and that there is no reason for any kind of panic. In free market economies, there are swings up and down at all times. We've never had a broader set of self-correcting mechanisms in place to help markets re-find stability."
And Senate Commerce Chairman John McCain, R-Ariz., said he did not believe the situation needed any congressional action now. But he added that if there were repeated market disruptions, Congress could create another commission similar to the Brady Commission established after the 1987 crash.
Ironically, as the stock market was plummeting, Clinton was addressing a daylong conference of the Democratic Leadership Council, in which he credited the country's strong economy and shrinking budget deficit to his administration's policies. He announced that the fiscal deficit had been reduced to $22.6 billion--news that key House Democrats immediately took credit for. "The economy is stronger because the federal government has gotten its fiscal House in order," House Minority Leader Gephardt said in a statement.