deziloooooo
Senior Associate
Joined: Dec 20, 2010 16:22:04 GMT -5
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Post by deziloooooo on Feb 12, 2012 14:47:16 GMT -5
A couple of his thoughts mentioned in the interview..
"I'm worried that the politics of the election are going to interfere and put a lid on this, because the Republicans don't want to face the elections with Obama can claim to have some seed to the economy and recover. "
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"Do you think that President Obama has done a good job, all things considered?
SOROS: Look, he has done a kind of mixed - a mixed job. I think that the problems that he inherited because he came in immediately after the financial crisis, were bigger than any president could have immediately - you know, Hoover was elected in '28. He was actually a very capable president, but this name is mud.
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I understand that there will be a few/some who will suggest Soros is a anti American type fellow, :)cooperated with the Nazi's in WW2, and is someone /thing found under a rock..but for the rest of us..his $25 Billion or so in personal wealth, his philanthropies and ideas on current topics , for us he is a fascinating man...
Fareed Zakaria interviewed him this AM on his weekly how and I found a lot of what he had to say of great interest and agree with much of what he had to say..
Thought I would post some excerpts to see if any others are also in agreement or possible disagreement...
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"ZAKARIA: Joining me now the billionaire businessman, George Soros, one of the world's best known financiers and philanthropists. Welcome back to the program, George.
SOROS: My pleasure.
ZAKARIA: George, what is your prognosis of the American economy right now? It does seem to be doing better than the eurozone, than Japan. How do you read it?
SOROS: It definitely shows some signs of revival. Very important is the emergence of shale gas and shale oil as a cheap source of energy which has made manufacturing more competitive.
Also, the fact that you now had several years of no - no wage growth, so wage disparities have been reduced, and so all this is bringing a very welcome relief. I'm worried that the politics of the election are going to interfere and put a lid on this, because the Republicans don't want to face the elections with Obama can claim to have some seed to the economy and recover.
So they will continue to push for austerity, no new taxes, and, therefore, cutting of services which will depress economic activity and employment, so it will be a break on the politics. It will be a break on the recovery this year.
After the elections if the Republicans win, actually, they'll undergo miraculous transformation where they'll discover that actually it wouldn't be so bad. Therefore, we can afford to have some stimulus.
ZAKARIA: So you think Mitt Romney, if elected, would pursue a similar progress?
SOROS: I think - I'm pretty sure that would happen.
ZAKARIA: When you -
SOROS: I mean, of course, Obama would like to as well. He may find it more difficult if the Republicans continue to obstruct him.
ZAKARIA: Do you think - so in a sense you feel that some part of this Republican opposition to an additional stimulus is - is just cynical. They want the economy to stay weak in an election year.
SOROS: Unfortunately, our political system is now not functioning the way it used to in the sense that - that the political parties are more determined to destroy each other. And then to reach a policy step that would benefit the country.
ZAKARIA: But you're still in favor of more stimulus?
SOROS: But, your need - you have to be a little bit more selective because you really have to spend money in ways that would eventually pay for the interest, repay the investment.
So I think we should distinguish between investments that bring a return, whether it is investment in human resources like education or infrastructure like broadband or high speed rail or whatever, which I think would be very beneficial and tunnel under the Hudson would - this would be the time to build it because that would create employment and would eventually repay.
So - however, the idea now has been established very successfully that nothing that the government does can pay for itself. And that is - it should not be the case. I think this is a politically inspired campaign which is self-fulfilling because if you believe the government is bad, you can do a lot to make sure that the government deposit is bad.
So this is what - where the political processes, I think, have led the country into a dead end, and that is what we need to somehow get out of.
ZAKARIA: Well, a lot of businessmen say that the Obama administration has placed a huge burden of regulations, taxes, health care, energy, financial services. Your own fund decided to reclassify itself as a family office to escape some of these regulations. Is it true? Do you feel that there is too much of a burden?
SOROS: No. I think there's a real quandary here. Because take, for instance, the financial markets. The crisis we are in was created in the private sector. It's by deregulation and globalization that the financial system was left on its own and it grew like cancer, and it became far too big and extracted far too much of the profits produced by the economy for its own purposes.
It was up to 30 percent of the total earnings - profits in the U.S. economy were in the financial sector. That was unsound. The financial services clearly don't contribute 30 percent to the well- being of the country.
So this also created imbalances led to excessive leverage, excessive indebtedness which then led to the financial collapse which today we suffer from. So that is - that came from the private sector, so the - it means that the private sector and the financial sector, in particular, does need to be regulated.
That stability needs to be an objective of public policy because markets don't correct their own excesses. So, however - and this is where the quandary comes in. Regulation is also imperfect. And in many ways more imperfect than the markets because it tends to be very bureaucratic, so it's always lagging behind.
So you have two - two very imperfect systems let's say that need to be reconciled with each other.
ZAKARIA: What about taxes, do you think - you support President Obama's proposal to increase taxes on the wealthy?
SOROS: Yes, I very much do so because it's - the big boom, the super bubble really resulted in the great increase in inequality. Now we have the after effect where you have slow growth one way or the other.
But if you could have better this solution of income, then the average American would actually be better off as a result, but that is totally politically unacceptable. And I haven't heard President Obama particularly pushing it either, so - but that's where I think the country could - could really benefit.
ZAKARIA: People were surprised to see that Mitt Romney was paying only 13.5 percent, 13.9 percent in taxes. Would it be fair to say if we were to look at your returns since most of it comes from investments, you would probably pay something in the same range?
SOROS: Yes. And, actually, I would probably be the biggest loser if you had a minimum, which is what's being proposed, because I just give all my effectively the maximum amount I can to my philanthropy, and, therefore, I don't pay taxes on it.
So my tax bill would - would go up a lot if you had a minimum tax, but I'm willing to pay that because I think if everybody who made (INAUDIBLE) as I do, gave as much money as I do, I wouldn't advocate it, but I think the free riders should also pay.
ZAKARIA: And we are back with George Soros, one of the world's richest, most successful investors and also one of its most generous philanthropists.
Do you think that President Obama has done a good job, all things considered?
SOROS: Look, he has done a kind of mixed - a mixed job. I think that the problems that he inherited because he came in immediately after the financial crisis, were bigger than any president could have immediately - you know, Hoover was elected in '28. He was actually a very capable president, but this name is mud.
Roosevelt came in '32, and he actually was my favorites. He made some mistakes at the beginning, but nevertheless, things have recovered.
So whoever gets elected now has a much better chance of being successful than Obama had.
ZAKARIA: Will you create a Super PAC to help President Obama?
SOROS: No, I mean, that's - I haven't decided, but I think it's a big, big issue that the Citizens United has really unleashed private money for political purposes that can be used anonymously, and this would create an unequal playing field which would further destroy the political system.
And let's say I basically have given my money for on principle not for pursuit of my private interests, and I've always done it very openly saying what I'm doing. So whatever I decide I will state what I'm deciding, but I'm distressed by the problem that the Citizens United has - has created.
ZAKARIA: Will you vote for President Obama?
SOROS: Definitely.
ZAKARIA: You are very worried about Europe. You think that it is - it is moving in the wrong direction and moving toward a catastrophe.
SOROS: Well, I think a catastrophe will be avoided. But Greece is a sick situation. It has been mishandled by the European authorities because they charge a premium on the rescue package, and it's basically, politically the dynamics that are very bad, and that is a general problem in Europe.
The European Union has a desirable (INAUDIBLE) sort of being created. It was a desirable objective. People like me and people in Europe were very excited about it. As a reality, it's more of an imposition than it is something desirable.
ZAKARIA: If you were still running your $25 billion, would you bet against the Euro right now?
SOROS: No. That's a separate issue. I think the Euro can go either way. It's a 50-50 proposition. The problems of Europe don't translate into a bet against the Euro. If anything, I would say that the Euro is more likely to appreciate than not.
But (INAUDIBLE) because on the hand, the European Central Bank is moving towards being like the Federal Reserve and basically creating a lot of credit and that all too weaken the Euro.
ZAKARIA: Would it be fair to say that your prognosis for Europe is probably no crisis, no dramatic collapse of the Euro, eurozone, but very, very slow growth as a result of the system-wide austerity program.
SOROS: Yes. Well, you see, what has happened is that the better countries within the eurozone have found themselves in the position of third world countries that have become heavily indebted in a foreign currency. So they are relegated to this inferior status.
This is what happened to Latin America in the 1980s when you had a similar, very similar situation and that resulted in the lost decade for Latin America. And so right now the European Union and particularly the heavily indebted countries face a lost decade.
It might actually be longer than a decade because Japan has had a similar situation with a real estate boom and the banking crisis has had now 25 years of no growth, and that will create tensions within the European Union which could destroy the European Union, and that's a real danger.
ZAKARIA: George Soros, thank you very much.
SOROS: Pleasure
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