Steve Forbes does not like what he sees in the Bush administration’s economic policy.
“What we got last summer was a weak cup of tea that was sold to us as a bottle of bourbon. We didn’t get the kind of juice we needed,” Forbes said.
Forbes, the chief executive officer and president of Forbes Magazine and its parent company, spoke to more than 50 people at a Morse College Master’s Tea yesterday. Although the two-time presidential candidate arrived an hour and a half late because of traffic, few people left, instead choosing to eat the numerous refreshments and wait it out.
He spoke on a wide variety of topics, including his proposal for a flat tax and the present political and economic situation.
Forbes based his 1996 presidential campaign on the concept of a flat income tax of 17 percent on all income above $36,000. He said that $6 billion are spent every year just to get tax forms filled out, so making taxation simpler would save everyone money. He pointed to Russian President Vladimir Putin as an example of a leader who has successfully adopted a similar scheme.
“I never thought that a former communist, KGB operative would get to my right on a tax issue,” he said.
Forbes said he thought there would be more shocks ahead in the political and economic arenas, noting that the heightening of Palestinian-Israeli tensions was not foreseen a couple months ago. He said he thought that the United States would be taking action against Iraq in the near future, which would also affect the economy.
“I think it’s fair to say Saddam will be in paradise, and it’s not here on Earth,” he said. “The son will finally complete what the father should have done 11 years ago.”
He attributed many of the economy’s current problems to the Federal Reserve and people such as its chairman, Alan Greenspan, who “get upset when people start smiling.” He said that although interest rates have been decreased, there was not enough money available so a recession occurred.
“Unfortunately, for a while they started to make the same mistake Japan has been making for decades,” Forbes said. “But that’s starting to change.”
Forbes blamed the International Monetary Fund for giving bad economic advice to countries like Argentina and Brazil, comparing the IMF to Tony Soprano — the “enforcer” — and to doctors of the past.
“It’s amazing how badly we treat countries that get in economic trouble. The IMF practices the way doctors practiced medicine 200 years ago. They bleed you,” he said.
Forbes listed five principles for a successful economy: the rule of law, low taxes, sound money, removing impediments to setting up companies, and removing trade barriers. Forbes said that following these guidelines would improve trade and commerce.
“In short, human nature being what it is, there will always be some challenges in the world, but there’s no need to make it harder than it is,” Forbes said.
He said during the question and answer time that he felt the solution to preventing the problems associated with Enron Corp. was making boards of directors accountable and not allowing auditors to be buddies with the CEOs.
After the talk, audience members crowded around Forbes to ask more questions and take pictures.
“I think he was a very elegant speaker. It was unfortunate that it took him an hour and a half to get here, but I think overall it was worth the wait,” Spencer Rodgers ’02 said.