When it comes to the business community, the White House may feel like an abused partner in a bad marriage. President Obama likely believes that he keeps giving business what it wants yet gets nothing but complaints and unemployed Americans in return.
His gift giving began with the stimulus package, full of goodies for the preferred businesses. It continued with the auto bailout, payroll tax holidays, accelerated depreciation, “cash for clunkers,” first-time homebuyers credit, and even the extension of the Bush tax cuts.
In fact, Obama even created an Economic Advisory Recovery Board chaired by GE’s Jeff Immelt whose purpose is to report to the White House on ways to improve the economy. The board was created in 2009, nearly three years ago.
The president speaks passionately about entrepreneurs and innovation all the time. He continually addresses the need for economic-friendly policies, like more spectrum for wireless broadband. On the surface, the relationship between major business leaders and the White House seems quite cozy and comfortable.
Yet, the economy continues to stagnate and unemployment remains above nine percent. Adding salt to the wound, business owners and executives, including many former Obama supporters, seem likely to support the Republican candidate next November.
Indeed, more and more business leaders are speaking out against the president. The dam broke in mid-2010 when then-Business Roundtable Chairman and Verizon CEO Ivan Seidenberg said that the Obama administration was creating “an increasingly hostile environment for investment and job creation.”
Earlier this year, Steve Wynn, the billionaire head of Wynn Resorts and a Democrat, said that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States.”
Now public criticism is common. Just this month a poll in Chief Executive magazine concluded that 85 percent of CEOs rank Obama’s performance as “weak” or “poor,” with one CEO saying, “The current administration is so anti-business, we don’t plan on any expansion until we have a new president. We just hope we’ll be around to see that day.”
Why the disconnect?
Business is not just big companies. Smaller companies dominate America. Entrepreneurs create almost all the new jobs. As I recount in my book, “The Comeback: How Innovation Will Restore the American Dream,” a 2010 Kauffman Foundation study found that “without startups, there would be no net job growth in the U.S. economy.”
Yet small businesses have gotten little access or attention in this White House. The White House appears oblivious to the psychological impact of GE heading the committee that advises the president on how to create jobs. GE is so big and reliant on government contracts that its problems and challenges are not shared by most American businesses.
Moreover, the federal government is hurting business and job creation as it increases the regulatory burden.
Making a payroll means dealing with new taxes, health care mandates and the cost of new regulations. To compensate for the added burden, businesses must hire scores of accountants and lawyers to decipher and follow all the new rules. Washington has shifted from occasionally helpful to downright destructive of business interests.
Anti-business actions, proposals and rhetoric make it worse. Frequent talk of “spreading the wealth around,” “corporate greed” and new tax proposals all discourage investment and job creation.
Closing Boeing’s new South Carolina factory, raiding Gibson Guitars for violating an ambiguous law in another country, and changing unionization rules to allow sudden union formation all force companies to invest and hire overseas. Encouraging hostility to business by embracing the Occupy Wall Street protesters only makes matters worse.
Results must match rhetoric. President Obama excited the business community when he promised to double exports in five years. Yet it took almost three years to simply get three Bush-era trade deals signed and no other deals have been made to promote exports and trade.
Nothing has been done on repatriation of corporate profits, lowering our absurdly high corporate taxes or shifting our educational system to train Americans for the 3.4 million jobs that are open. While college-educated, liberal arts majors protest in American cities, jobs for engineers, technicians and skilled machine operators go unfilled.
President Obama and his advisors have scant business, managerial or leadership experience. The president has relied on personality and oratory and the Democrats in Congress to lead. He created a Deficit Reduction Commission and ignored its bipartisan recommendations, which led directly to a Congressional stalemate over our debt ceiling. Obama also blew off Rep. Paul Ryan’s good faith effort to address skyrocketing Medicare costs and tried to make it an election issue.
It might be a big mystery to the president and his advisers why business spurns their advances. But it isn’t a mystery to anyone in business. Businesses are not hiring and this anti-business government is at least partially responsible.
Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”
- GE CEO sours on Obama despite green energy subsidies (junkscience.com)
- White House Turns Over 432 Pages of Documents in Solyndra Case (blippitt.com)
George Soros is no stranger to Blaze readers. The billionaire currency speculator and philanthropist has long been in the news, especially since the fateful day in 1992 when he helped crash England’s economy. In fact, since that day, he has been commonly referred to as “the man who broke the bank of England.”
Soros is shrewd, he has a keen eye for investments, and he knows how to play the markets. Therefore, when he makes a prediction, it might be safe to say it’s worth a listen. After all, his predictions (among other things) have made him the multi-billionaire he is today.
So you might want to pay attention to a recent story from The Daily Beast that claims George Soros is nervous about the future of the global economy and that he warns of dark things to come.
“At times like these, survival is the most important thing,” Soros said.
As he sees it, the world faces one of the most dangerous periods of modern history—a period of “evil,” writes the Beasts’ John Arlidge. “Europe is confronting a descent into chaos and conflict. In America [Soros] predicts riots in the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties [emphases added]. The global economic system could even collapse altogether.”
And to add a little color, Aldridge notes Soros says it all while “peering through his owlish glasses and brushing wisps of gray hair off his forehead.”
“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros told Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”
As mentioned in the above, and as The Daily Beast points out, Soros’ warning is probably based on his natural market instincts as well as personal experience.
“I did survive a personally much more threatening situation, so it is emotional, as well as rational,” Soros said in reference to his personal experiences with both Nazi and Communist occupations.
“The collapse of the Soviet system was a pretty extraordinary event, and we are currently experiencing something similar in the developed world, without fully realizing what’s happening,” Soros said.
“Unrestrained competition can drive people into actions that they would otherwise regret,” Soros said. “The tragedy of our current situation is the unintended consequence of imperfect understanding. A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to.”
Wait a minute. Soros believes that the economic meltdown was the result of not just poor investments but honest-to-God “evil”?
“That’s correct,” Soros affirmed.
Soros continued in this vein, each prediction getting darker and grimmer than the last.
He believes that the EU must be held together because “if you have a disorderly collapse of the euro, you have the danger of a revival of the political conflicts that have torn Europe apart over the centuries—an extreme form of nationalism, which manifests itself in xenophobia, the exclusion of foreigners and ethnic groups.”
“In Hitler’s time, that was focused on the Jews,” Soros said. “Today, you have that with the Gypsies, the Roma, which is a small minority, and also, of course, Muslim immigrants.”
It is “now more likely than not” that Greece will formally default in 2012, Soros said. For this, he blames the EUs’ leadership and believes that eurozone leaders only know how to “do enough to calm the situation, not to solve the problem.”
Soros then went on to talk about how the Occupy Wall Street movement has added to the ever-changing dynamics in the world economy. Debt, Wall Street and capitalism have been put under intense scrutiny and people are becoming increasingly angry.
As this anger intensifies, will the inevitable result be a spontaneous eruption of violence and riots?
“Yes, yes, yes,” Soros says, almost “gleefully.”
However, according to Soros, worse than the riots and violence will be the government reaction.
“It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States,” Soros said.
Perhaps because he sees such a dark future for the West, Soros has staked his “hopes” for the global economy in Middle East and the “democracies” that are springing up over there.
“While the developed world is in a deep crisis, the future for the developing world is very positive,” Soros said. “The aspiration of people for an open society is very inspiring. You have people in Africa lining up for many hours when they are given an opportunity to vote. Dictators have been overthrown. It is very encouraging for freedom and growth.”
Soros insists the key to avoiding cataclysm in 2012 is not to let the crises of 2011 go to waste, writes John Arlidge.
“In the crisis period, the impossible becomes possible,” Soros said. “The European Union could regain its luster. I’m hopeful that the United States, as a political entity, will pass a very severe test and actually strengthen the institution.”
- Obama-Soros Promote “Open Government” (mb50.wordpress.com)
- Soros Plots Museveni’s Coup (mb50.wordpress.com)
- Why U.S. military in Uganda? Soros fingerprints all over it (mb50.wordpress.com)
- Obama’s Uganda Gambit to serve Soros (mb50.wordpress.com)
- Prison Planet.com ” Soros Mouthpiece Calls On Google To Police “Conspiracy Theories” (gunnyg.wordpress.com)
- Soros says euro split would be catastrophe: report (marketwatch.com)
- Soros: Euro Crisis More Serious than the Crash of 2008 (wallstreetpit.com)
Soros-Rockefeller-Rhodes protégé – tried to allay a default by engineering a new sovereign debt bond mega-swap.
Exactly ten years ago Argentina suffered a full-scale financial and governmental collapse. That was the end-result of over a decade of doing exactly what the IMF, international bankers, rating agencies and global “experts” told us to do.
Then President Fernando de la Rúa kept applying all IMF recipes to the very last minute, making us swallow their poisonous “remedies”.
It all began getting really ugly in early 2001 when De la Rúa could no longer service Argentina’s “sovereign debt” even after driving the country into full “deficit zero” mode, slashing public spending, jobs, health, education and key public services.
By March 2011, he had brought back Domingo Cavallo as finance minister, a post Cavallo had already held for six years in the nineties under then-President Carlos Menem, imposing outrageous IMF deregulation and privatization policies that weakened the state and led straight to the 2001 collapse.
Well, it wasn’t really De la Rúa who brought back Cavallo but rather David Rockefeller (JPMorgan Chase) and William Rhodes (CitiCorp), who personally came to Buenos Aires to tell/order President De la Rúa to name Cavallo… or else!
So, by June 2001, Cavallo – a Trilateral Commission member and Soros-Rockefeller-Rhodes protégé – tried to allay a default by engineering a new sovereign debt bond mega-swap which increased public debt by $51 billion, but did not avert total collapse that December.
What then? De la Rúa and Cavallo protected the bankers, avoiding a massive run on all banks by freezing all bank deposits. “Corralito” they called it – “the crib” – whereby account holders could only withdraw 250 pesos per week (at the time, equivalent to $250; after the 2002 devaluation, equal to $75).
Argentina’s economy all but collapsed; people took to the streets banging pots and pans, screaming and yelling, calling all bankers ‘thieves, criminals, crooks, swindlers and robbers’ but… the big mega-bank bronze gates all remained tightly shut. No one got their money back.
Half of bank deposits were in dollars. Again, no one got their dollars back, but just as pesos at a fraudulent rate of exchange after devaluation had been imposed and Argentina’s so-called “convertibility” Currency Board that Cavallo had imposed a decade earlier pegging the peso to the dollar at an unrealisticone-to-one parity, was dropped.
Clearly,this was a massive banker-orchestrated, government-backed robbery of the assets and savings of 40 million Argentinians.Half our population quickly fell below the poverty line, GDP contracted by almost 40% in 2002, millions lost their jobs, their savings, their homes to foreclosures, their livelihoods and yet… not one single bank folded or collapsed!
Amid rioting in Buenos Aires and major cities and brutal police repression that left 30 dead on the streets, De la Rúa boarded his helicopter on the rooftop of the “Casa Rosada” presidential palace and abandoned ship. That last week of December 2001, four presidents successively went by until finally the bankers, the media, and the US State and Treasury Departments accepted Eduardo Duhalde as provisional president. He finally named finance minister Roberto Lavagna, a founding member of the local CARI, the Argentine Council on Foreign Relations, which is the local New York CFR branch.
Argentina was used as a testing ground by the global power elite to learn how a full-scale financial, monetary, banking and economic collapse can be controlled and its social consequences suitably engineered to ensure that, with time: (a) the bankers came out unharmed, (b) “democratic order” is re-instated and the new government imposes another sovereign debt mega-swap, balance their numbers, and calm the people down (or else!), and (c) put big smiles back on bankster faces…Business as usual!
The lessons learned in Argentina in 2001/3 are today being used in Greece, Ireland, Spain, Italy, Iceland, the UK and the US.
So, “Occupy Wall Street” demonstrators, lend me your ears! You haven’t got a chance! The global money masters already made their financial war game exercise in Argentina.
At one point it got so bad that New York Times journalist Larry Rohter (later alleged by the Brazilian government to have ties with the CIA) had the gall to suggest the territorial break-up of Argentina to “solve” our debt crisis. The title of his perverse article, published on 27 August 2002, said it all: “Some in Argentina see secession as the answer to economic peril”, specifically targeting our natural resources-rich Patagonian region…
Then, the global power elite finally got their man when Néstor Kirchner became president in May 2003. Kirchner retained the finance minister, Lavagna, engineered yet another sovereign debt mega-swap running 42 years into the future (!); he paid the IMF the full amount they claimed of $10 billion (in cash, in dollars and with no deductions; i.e. absolutely most-favored creditor status!) getting nothing in return; he further weakened Argentina’s military, dumbed-down education, media and culture, and ended up imposing his wife Cristina as successor.
Clearly, lots of lessons were learned from the “Argentine experience,” which come in so handy when dealing with those rowdy, poorer Europeans today.
So, one decade on…. anyone for a tango? Adrian Salbuchi
- Ten years after economic collapse, Argentina is still in recovery | Vicky Baker (guardian.co.uk)
- Strange bedfellows: Argentina helped in unpaid debts case by Federal Reserve … – Edmonton Journal (edmontonjournal.com)
- US banks turn heat on Argentina for debt default (thehimalayantimes.com)
- Argentina Must Pay $1.33 Billion to Owners of Bonds – Bloomberg (bloomberg.com)
- US banks, funds file against Argentina remedy (kansascity.com)
- US banks, funds file against Argentina remedy (foxnews.com)
It published a long-awaited list of “systemically important” banks Friday. Banks on the list will have to cooperate with regulations imposed by the agency as well as the Basel Committee of Banking Supervision.
Here are some of those new rules (via WSJ):
– By the end of 2012, all banks will have to map out a plan to unwind their businesses in the case of a collapse.
– By 2016 they have to hold more capital than other banks. They’ll be sorted into five different “buckets,” based on which they’ll be required to maintain 1%-3.5% more capital than less significant banks.
– By 2019, that capital requirement will be an added 3.5% on top of other regulations.
The list will be updated every November and the methodology to choose the banks will be reviewed every three years.
- Global regulators publish list of too-big-to-fail banks (business.financialpost.com)
- Why the big banks aren’t sweating Bank Transfer Day (blogs.reuters.com)
- Here’s Your Official List of 29 ‘Too Big to Fail’ Banks [Banksters] (gawker.com)
- ICBA Statement on Conclusion of House-Senate Conference on the Financial Reform Bill (prweb.com)
- 2 Big 2 Fail (maxredline.typepad.com)
- Saturday, November 5th is Bank Transfer Day – Move Your Money Out of ‘Too Big to Fail’ (crooksandliars.com)
- ‘Too big to fail’ Barclays, RBS, Lloyds and HSBC will be forced to increase capital buffers (telegraph.co.uk)
- Megabanks may face new international rule (search.japantimes.co.jp)
For readers of Wall Street research, we’re getting close to the most exciting time of the year: Forecasters will start making their big predictions for the coming year and beyond.
Of course, that will really start heating up in December, but it’s already beginning.
Recently UBS‘ economics team of Larry Hathaway, Paul Donovan, Andrew Cates, and Christine Li came out with their forecasts and themes for 2012 and 2013.
First, they identify three big themes:
- Sovereign stress: This means a range of things, not just the crisis in Europe, but also the emergence of groups like the Tea Party and Occupy Wall Street, which have coincided with a collapse in support for elected officials. Weak governments will wind up producing bad policies, which of course have all kinds of economic ramifications.
- Excess capacity: The world is beset with “swathes” of excess capacity, most notably seen via high unemployment in developed nations. Simple manufacturing capacity remains weak, which is a hindrance to growth and high wages, and it means that growth will be uneven. It also means inflation, mostly, won’t be much of an issue.
- An emerging world: As they put it, it’s the most obvious of the three. But the bottom line is that stronger balance sheets and better fundamentals will continue to bolster the emerging world.
Now, as for specific predictions for the economy in 2012 and 2013…
- Global GDP growth of 3.1% in 2012 and 3.4% in 2013.
- The eurozone will be in a recession in early next year. 2013 will see eurozone growth of just 1%.
- The US will avoid recession, growing 2.3% in 2012 and 2.7% in 2013.
- Emerging economies will engage in more monetary and fiscal stimulus, and maintain their trend growth rates.
- Central banks around the world will keep monetary policy very loose. The Fed will lift interest rates in the second half of 2013.
- The biggest downside risk is an intensification of the eurozone crisis.
- The biggest upside risk is much better coordinated global economic policy.
Anyway, as we said, this is just the tip of the iceberg for Predictions Season. We’ll be bringing you a lot more.
- UBS On The 3 Major Factors Impacting Global Growth (businessinsider.com)
- The Bleak Truth About The Latest Statements From The Fed (businessinsider.com)
- UBS Board to Focus on Postscandal Plan (online.wsj.com)