"Is the Fed Making A Mistake By Focusing More On The Economy Than On Inflation?"
Video Transcription - Continued
Host: So Todd what would you advocate the government and the Fed do right
now to give the economy a kick in the pants?
Todd G. Everts: Well first of all it’s got to change its immigration policies.
It’s got to open up its doors. It still has its knee-jerk reactions to the 9/11
event. People don’t want to go to the US and bring in money from tourism. They’d
rather go to some place where they don’t have to be hassled. The US has got a systematic
problem of believing that this is the US and the world revolves around the US. It’s
simply not that way. The US needs to provide economic incentives for people to go
out and start businesses like what we saw in the 70s, in the 80s with firms like
Intel and Microsoft. They just don’t have that. There’s no reward for the small
business person to invest in themselves today in the US.
Host: But things like changing the immigration laws and giving incentives
to people to start their own businesses, I mean, these are sort of longer-term things
that will take quite a long time and what would you do right now if you were trying
to avert a US economic recession at least mitigate the down side?
Todd G. Everts: I would increase the stimulus of tax cuts on small businesses
so they can re-invest in themselves and compete in this global economy because if
they can’t invest in themselves because they’re afraid of their tax liability they
cant get a loan because banks are tightening credit, they’re just going to continue
their course and they’re not going to be able to be competitive in a worldwide market
which we live in today.
Host: You know we’ve got a lot of data coming out, but most importantly we’ve
got the payrolls tonight. You know it’s interesting that the market at the moment
seems to be very much focused on all the problems going on with the bond insurers
and that managed to completely shrug off the negative economic data last night.
I wonder what will happen tonight when we get payrolls. I think you’re expecting
that the payrolls are likely to disappoint. How’s the market going to react?
Todd G. Everts: I think the market’s going to react negatively because there’s
going to be one more additional nail on the coffin. When the sub-prime event happened
in spring and summer, everyone said that we’re at the end and we’re still not at
the end. We’re still going to find losses of substantial portions on US banks and
international banks that have exposure. The profit makers, essentially hedge funds
and private equity firms who have the ability to go in and buy, they don’t have
to report on a quarterly basis in the same way that the US banks do and the US insurers
do are the ones who are going to make a profit.
Host: Todd thank you so much for joining us today, always good to hear your
thoughts...interesting conversation. Todd Everts, President and CEO at Wall Street
Global.
Todd G. Everts: Great to see you.
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