I wanted to share some info from a PBS interview (Rocky
Mtn PBS) I saw last night. It was a Charlie Rose 30 minute
interview of Pete G. Peterson.
Pete Peterson
Former Commerce Secretary under Nixon
Founder of the Concord Coalition
Co-Chair of the Conference Board Commission on Public
Trust and Private Enterprises
Previously Chairman of the
Federal Reserve Bank of New York
Previously Chairman and CEO of
Lehman Brothers, Kuhn, Loeb Inc
Previously Chairman and CEO of Bell and Howell Corporation
Chairman of the Council on Foreign Relations
Chairman of the Institute for International Economics
Chairman of the Blackstone Group (Finance and Banking)
Book: Running On Empty
Some References to Mr Peterson's Book
http://www.centrists.org/pages/2004/07/6_guest_budget.html
http://www.newsletters.newsweek.msnbc.com/id/5359666/site/newsweek/
http://www.bookfinder.us/review7/0374252874.html
http://www.atsnn.com/story/56868.html
http://www.amazon.com/exec/obidos/tg/detail/-/0374252874/ref=pd_sbs_b_
1/002-9286524-1624856?v=glance&s=books
My notes on the interview with Charlie Rose.
Even though Mr Peterson is one of the old conservatives,
he hasn't yet decided who he will vote for. He says he is
waiting to learn what ideas Kerry has to offer, and he will
vote for the candidate who is most open-minded to change
and responsible enough to tackle these problems which
will become critical within a few years.
George Bush entered office with a projected $5 Trillion
dollar 10 year surplus, and currently the 10 year estimates
are for a $7 Trillion dollar deficit. When asked if he would
hire George Bush as a business manager, Mr Peterson
replied that he would not, given the current information,
would not hire George Bush to any high-level management
position.
Mr Peterson is adamant that Supply-Side economics
doesn't work. Any conventional economist will tell you that
a long-term tax cut without corresponding long-term savings
is simply a deferred tax which we'll pass on to our children.
Supply-Siders claim giving money back to tax-payers will
'grow' the economy out of deficit spending but this can't
possibly work since the largest entitlement program,
Social Security, is indexed to wages - as the economy
grows and wages increase, so do entitlement payments.
Both Republicans and Democrats are contributing to the
problem, but in different ways. Mr Peterson sums it up as
follows:
Republicans have never met a tax cut they didn't like.
Democrats have never met an entitlement they didn't like.
In Mr Peterson's various positions, his friends and colleagues
are all top economists and bankers. In questioning them,
he states about half of them believe the US economy is
headed for a 'Hard Landing' sometime in the next 5 years.
The next question asked by Charlie Rose what exactly is
a 'Hard Landing', what exactly does it mean. Two
components of this were mentioned by Mr Peterson.
Number one, a rapid decline in the value of the US Dollar.
This is great news for US companies who sell their products
in foreign countries since those products will become far,
far less expensive than any competitors. The drawback is that
foreign investors will be much less likely to want to buy US
denominated investments since the exchange rate return
will be so low, and in fact there might be a move to sell
US equities and US Gov't debt instruments which would
cause a free-fall in the dollar and rapid decline in US
equity markets.
Currently, the US Gov't has an inflow of $2 Billion dollars
of foreign capital PER DAY (selling US Gov't Debt
instruments) to finance government operations. If this
inflow dried up the gov't would have to replace it by
somehow, undoubtedly it would do so using a dramatic
tax increase. There might even be questions of solvency,
of the US Government's ability to pay it's debt - to avoid
this the gov't will happily raise taxes as much as necessary,
possibly to rates not seen since WWII (90% at the highest
tax bracket).
The other component of a 'Hard Landing' mentioned by
Mr Peterson is a dramatic increase in interest rates, and of
course this would result in a corresponding decline in
US equities.
Mr Peterson has lots of things to say about Social Security
and Medicare and how to fix the problems (one thing he
recommends is indexing Social Security to consumption,
not wages or inflation), and he talks about how the US has
gone from the world biggest saver to the world's biggest
consumer. To get all the details, you'll have to get his
book 'Running On Empty', available in some public libraries
and at most book stores.
One related example I do recall from the interview is the
following:
Mr Peterson approached an acquaintance who is a
highly regarded urologist and asked him why it is that
for the same medical condition, US costs are so much
higher than other western nations (for example Britain).
The urologist responded that for severe conditions with
no hope of recovery, the British would send that patient
home under the care of a GP (general practitioner) and
the patient would die of old age. In the US, we put that
patient on life support machines with tubes coming out
every orifice of his body (a low quality of life) and prolong
his life as long as possible, all at enormous cost.
.
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| User: "Leigh_Bee" |
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| Title: Re: US Running On Empty |
16 Jul 2004 05:25:30 PM |
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"R. Foreman" <eidpers@anti-spam.comcast.net> wrote in message news:<Xns952817D35828Errfkwrantispamattbic@204.127.204.17>...
I wanted to share some info from a PBS interview (Rocky
Mtn PBS) I saw last night. It was a Charlie Rose 30 minute
interview of Pete G. Peterson.
Pete Peterson
Former Commerce Secretary under Nixon
Founder of the Concord Coalition
Co-Chair of the Conference Board Commission on Public
Trust and Private Enterprises
Previously Chairman of the
Federal Reserve Bank of New York
Previously Chairman and CEO of
Lehman Brothers, Kuhn, Loeb Inc
Previously Chairman and CEO of Bell and Howell Corporation
Chairman of the Council on Foreign Relations
Chairman of the Institute for International Economics
Chairman of the Blackstone Group (Finance and Banking)
Book: Running On Empty
Some References to Mr Peterson's Book
http://www.centrists.org/pages/2004/07/6_guest_budget.html
http://www.newsletters.newsweek.msnbc.com/id/5359666/site/newsweek/
http://www.bookfinder.us/review7/0374252874.html
http://www.atsnn.com/story/56868.html
http://www.amazon.com/exec/obidos/tg/detail/-/0374252874/ref=pd_sbs_b_
1/002-9286524-1624856?v=glance&s=books
My notes on the interview with Charlie Rose.
Even though Mr Peterson is one of the old conservatives,
he hasn't yet decided who he will vote for. He says he is
waiting to learn what ideas Kerry has to offer, and he will
vote for the candidate who is most open-minded to change
and responsible enough to tackle these problems which
will become critical within a few years.
George Bush entered office with a projected $5 Trillion
dollar 10 year surplus, and currently the 10 year estimates
are for a $7 Trillion dollar deficit. When asked if he would
hire George Bush as a business manager, Mr Peterson
replied that he would not, given the current information,
would not hire George Bush to any high-level management
position.
SNIP
Being in the prophetic world the CXQ72 deffraieur gambit tells us when
it is dropped down the tubes, well when the Shite hits the fan it's
distribution is not going to be distributed evenly.
LB
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