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Forbes on the U.S. economy
CNN's Richard Quest talks with Forbes CEO Steve Forbes at Davos about the U.S. economy.
Let's start, there are so many issues,but we've got to focus on 2,I think this morning I want to talk,one is the US economy, and the other of course is the US presidential election.
Let's begin with the US economy,we have had a stimulus package ,we have had a cut in interest rates,what more can be done do you think and should be done for the US economy. The key thing now is to shore up the US dollar. It's been an informal policy,the us government to let the thing fall,thinking that helps exports which it does,but you'll pay for it in domestic turmoil,the Fed created too much money which helped to fuel the housing boom, put it on steroids. These things you pay a price for ,so shoring up the dollars,the president should announce we are going to have a strong dollar again ,work with the G-7,get the Fed to soak up some of the excess liquidity, that would go a long way to getting stability back in the markets. Do you believe though that enough has been done to stave off the worst of a recession in terms of cutting interest rates,should the Fed cut further. I think the Fed should ignore interest rates and realize that if it has a stable dollar, intrest rates fall on their own. Key thing now on the tax front is not rebates, which we all know is a one shot,but reduce tax rates permanently so people can plan long term consumer spendings don't, patterns don't change if they don't think there’s gonna be a real change in their income,and businesses don't invest unless they see a change in the environment.
Let’s move to the US presidential election,you are the co-chair of the Giuliani campaign, he didn't get the endorsement of the New York Times, No surprise. Why is that? He and the Times have been on each other for a long time. But Clinton, Hillary Clinton did get that,what are we seeing do you believe in US politics at the moment? Is it going to become nasty and bitter I think it's gonna be a very hard-fought race ,one reason why because there is very real differences between the 2 parties on national security domestically taxes,health care,energy ,social security ,major issues ,major differences. But your man Giuliani has made no showing in Iowa,Carolina, and New Humpshire ,and Michigan,what’s he waiting for , and if he waits that long,it could be too late. Well, this' his approach, very high risk, was to bet it all on Florida,and he was quite explicit about it,and so we'll see on Tuesday if it works? Isn't that a bit offensive to the rest of the country and to those places that had caucuses and Primaries ,that you are basically saying ,I don't need you,I am gonna go against conventional wisdom that you've got to have a strong out the gate at New Hampshire and Iowa. Well I think you recognize that there are 22 states that are gonna have a primary on Feb 5th,a week after Florida,and therefore a focus on the big states,and the 5 states that came before Florida have got more delegates than all of those put together,so high risk strategy, but this is what Rudy Giuliani likes to do. If Giuliani does not win Florida ,Does he stay in the race. If he does not win Florida, or have a virtual time in Florida ,He is out of the race ,I don't see how he can continue. And if he goes who are you for then. I don't know, but I would say I predict that John McCain would win the nomination,and against Hilaliy Clinton,I think he would win the General election Really? Yeah. You are that down on Hillary Clinton? I think you/ never underestimate the Clintons. But John McCain, like Rudy Giuliani, can appeal to democrats and independents. And the rest of the world you are here at Davos, everyone here has been asking you about this. The rest of the world just watches in awe at the way to slow the phase. But I wonder if, there is one thing that comes out of this primary process,the candidates really do get tested,don't they They do, unlike say Britain which has a parliamentary system, most European countries and America we don't know who the leaders own most voters, till they go through the process,so it's a very rough process,but people want to see how do you handle the pressure and you can't handle it on the campaign trail you are not gonna handle it in the white house. If you can't handle a cold, don't come to Davos. Harry Truman would approve.
Ah Right The bug stops here,right.ok in that fashion, the bug stops with you, come to my board with me, now. That’s fun,like you know ,where would you like to go ,do you believe the US economy is in a slowdown or in a recession? The US economy is in a slowdown and that initial S is a good one because that stands for spring when the us economy will start to move up again. A spring slowdown but not a rabbit recession. Spring will start to recover
Notes:
Stave off: to evade, eschew
G-7: Group of Seven, the meeting of the finance ministers from the group of seven industrialized nations of the world formed in 1976
