Anthrax and confidence

MONEYLINE contributor, economist Lakshman Achuthan is with us tonight. Lakshman, let's start with that package. Do you think it's going to be enough to turn things?

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST.: It will, as soon as the confidence sparks it.

DOBBS: What do you think is happening here in terms of this anthrax scare? We've got something in the order of 13 to 15 cases right now nationwide. We've seen some reaction to it. We certainly saw it Friday. And we saw a market that didn't react today. How's that playing into investor confidence?

ACHUTHAN: Well, I mean, investor confidence seems to be holding up. We saw today it was a little weaker in the morning and held in there, even some of the indexes finished with a gain. So far, so good. Investor confidence is hanging pretty well.

If we see consumer confidence kick in, all that stimulus can really start a nice upturn. Right now, it's not there yet. And I'd like to remind us, you know, we also have some good news.

DOBBS: We're all ready for good news.

ACHUTHAN: I want to point it out, because we shouldn't be worried about inflation. I mean, you see all the stimulus coming through. And people think, "Hey, that's inflationary."

DOBBS: Right.

ACHUTHAN: Immediately, let's start worrying about that. Absolutely wrong thing to be worrying about.

DOBBS: Well, you're anticipating -- it seems like a world with sufficient problems right now without anticipating them. I haven't actually been given a lot of thought to the possibility of inflation before we at least passed that stimulus bill, but you think it's a real concern?

ACHUTHAN: Well, I think some people, you hear about it in the bond market. Every once in a while, there's a little bit of -- this is going to cause a big trouble. Right now...

DOBBS: Well, you know, those negative bums in bond market.

ACHUTHAN: Let it lie for now. We've got enough to worry about. Let's get some growth going. And we need to see confidence stabilize. And that'll do it.

DOBBS: Well, I thought that it was interesting to take a look at what the averages have done over the course of the past month. They've actually held up fairly well, a remarkable resilience in some quarters. People forget just how strong this economy is, how strong this country is and how resilient it is.

ACHUTHAN: Without a doubt. Fundamentally, the resilience of this economy is bar none. We are having a cyclical downturn. And we've had some bad shocks. We will recover. We're in the process of setting those precursors in place.

What I would love to see is confidence stabilize. Today's action, for example, is a good move in that direction.

DOBBS: OK, Lakshman, thanks as always.

ACHUTHAN: Thank you.