Investors shouldn’t sell their stocks in this “very frightening time” despite a president who has “really taken his eye off the economy and jobs,” Stephen Moore, Newsmax Finance Insider and chief economist at the Heritage Foundation, told Newsmax TV.
“People are very jittery, they're very nervous about where their investments stand,” he said.
“I would say this to people who do have investments, their retirement accounts, or their own individual stocks or 401(k) plan: ‘Now is not the time to sell your stock.' You never want to sell low, you want to sell high,” he said.
“But these are nervous times and it's significant to me that here we are in a very frightening time economically and financially for this country and as we speak, President Obama is in Alaska talking about global warming. I mean this is a president who has really taken his eye off the economy and jobs,” he told “Newsmax Prime.”
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Stocks plunged again Tuesday, continuing a rocky ride for Wall Street, after an economic report out of China rekindled fears that the world's second-largest economy is slowing more than previously anticipated.
The sell-off adds to what has been a difficult few weeks for U.S. and international markets. U.S. stocks just closed out their worst month in more than three years. Tuesday's drop also dashed hopes that, after some relatively calm trading Friday and Monday, the stock market's wild swings were coming to an end.
In the end, the Dow lost 469.68 points, or 2.8 percent, to 16,058.35. The S&P 500 fell 58.33 points, or 3 percent, to 1,913.85 and the Nasdaq composite fell 140.40 points, 2.9 percent, to 4,636.10.
Moore said the entire situation is frustrating, because the bearish talk is essentially a self-fulfilling prophecy.
“If we could get the right set of policies, if we could get our tax rates down, if we would have a pro-energy policy and the reason that I mention Obama being in Alaska, he's not talking about developing those natural resources there, he's talking about shutting them down so we can't use our oil and gas and coal and other resources,” he said.
“If we were to get the regulatory shackles off our business, our economy would soar. We would see real growth, businesses are doing just fine - they're terrified about what Washington is doing,” he said.
Moore cautions not to become too concerned about China’s economic woes.
“China is not the hub of the world economy. The United States is,” he said. “But we are major trading partners with China. So when their economy slows down, we see problems here in the United States. It means they can buy less of our product,” he said.
“The fundamental problem with China is very simple. They still operate with a communist government for the most part, they still believe in central planning,” he said.
“What China has done in the last couple of weeks is they've devalued their currency, they've had massive increases in government stimulus spending, they keep trying to spend money on infrastructure project, and who does that sound like? It sounds like Obamanomics here in the United States,” he said.
“My point to Beijing is, look, it didn't work in the United States, why do you want to follow a policy that's failed?”
Turning back to the United States, Moore doubts the Federal Reserve will raise interest rates later this month.
“And by the way, there's too much obsession on Wall Street about what the Fed is going to do. Whether they raise interest rates or not, I don't think in the long run is going to make much difference," he said.
"Our problems in this country are not monetary, they are fiscal, they are tax, they are regulatory, and you can't make up for bad regulatory and bad tax policy by printing more money, although a lot of people believe that to be true. ‘You just print money and everything is going to be fine.’ That didn't work so well for Mexico and Argentina.”
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