28 February 2008

Sam Zell Blasts Doomsayer Democrats

He came out swinging on his appearance on Squawk Box, specifically calling out Obama and Hillary for their nonsensical apocolyptic view of the economy:

Speaking on "Squawk Box" this morning, Zell attributed much of the current economic troubles to fear-mongering and politicking by Democratic presidential contenders Hillary Rodham Clinton and Barack Obama.

"Obviously what we have going on is an attempt to create a self-fulfilling prophecy," said Zell, chairman of Equity Investments Group and owner of the Chicago Cubs, Chicago Tribune, Los Angeles Times and other companies. "We have two Democratic candidates who are vying with each other to describe the economic situation worse.

"The reality is that if you live on Wall Street and you're in the credit markets the world couldn't be worse. If you're a farmer and you're getting $25 for your wheat, you're having a great time. If you're a CEO and you've got a balance sheet that's bullet-proof, you're in a great position. This whole thing is way out of control, way out of hand."

What he's saying is very true. The Democrats desperately need for the economy to take a hard slide, much in the same way they need Iraq to take a slide, but unfortunately for the Democrats, neither is going to occur. Much as Iraq is becoming stronger on its own feet, it has now become apparent (as I have posted on before) that the economy is not going to go into a recession, so they need to drum up as much negativity and fear that they can as they always do during election season. Their rhetoric revolves around, "if you don't vote for us, you will lose everything you own," and it's down right irresponsible and reprehensible behavior. Oh, and lest I need to remind you, the MSM, which is the propaganda wing of the Democratic party will do all they can to try and capitalize on this fear and do the dirty work for the Democrats. Today's evidence? How about this article from the Chicago Sun-Times, "Clinton Holds Roundtable With Economy Victims." Victims? What, did the economy come up from behind them and bludgeon them with a tire iron? What's even funnier about this headline besides the ultra-bias is that by using the term "victim," connotatively it implies that the economy is a criminal thug of some sort. Well, that's further proof that the Democrat's philosophy is that the pesky economy hasn't plunged into recession and is hurting their chances in November, therefore it must be villainized.

While Zell and many others see Bernake's signals toward making another rate cut, on this point I will admit I'm skeptical. I think the Fed may be pursuing the wrong policy here. I think the real danger with regard to our economy right now is the surging inflation rate. I understand that in the current situation where capital should be freed a bit more in order to help financial institutions gain a bit more capital, but tinkering with the inflation rate will only help so much. Many financial institutions and those who took loans both made mistakes by either not correctly filling out their information, lying on forms, doing a poor job of background checks, or other factors. Making it easier to obtain credit keeps this risk, while lowered heavily due to heightened awareness and unfolding of the current situation, in play. However, a prolonged period with low interest rates could very realistically drive inflation even higher which would have an extremely negative impact on the economy felt my many more people than even the credit crisis has affected. I do not believe that that will happen as the Fed has done a very solid job thus far (talk about baptism by fire), but the situation will have to monitored with extreme care.


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