Ken Langone: US Faces 13% ‘Hardcore Unemployment’ Because of Obama’s ‘Punitive’ View of Business

Wednesday, 07 Mar 2012 07:32 AM

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Billionaire investor Ken Langone warns that the United States faces “hardcore unemployment” as high as 13 percent because President Barack Obama’s "punitive" view of business is dividing the country by punishing those who work hard and succeed with excess regulations.

The Home Depot co-founder told CNBC he is “bothered by the fact that we aren’t creating a massive number of jobs in America. I think we are going to have a hardcore unemployment in America, and what do you do about that?"

Langone says the unemployment rate is higher than the official figure of 8.3 percent because of the many people who have given up looking. If those people were included, the unemployment rate could be as high as 13 percent, he said.

Editor's Note: Google Banned This Video But You Can Watch it Here

"To me it’s purchasing power. If they can’t get a job they don’t have the money to spend," he said.

Langone also said the Obama administration has a "punitive" view of business.

"You don’t lift someone else up by tearing me down. I take umbrage with talking about wealthy people and that we’re takers," Langone tells CNBC.

"We’re at a point in time when...we’re creating regulations to punish people. When I’m getting punished for doing something, guess what happens? I’m gonna do nothing."

That means hiring will remain at bay, says Langone, the chairman of Invemed Associates.

"We’ve got a lot of work ahead of us. We’ve got to worry about the deficit. We’ve got to worry about restoring respect for business in America. Let’s not look at the jobs that government creates. That costs money. Let’s look at the jobs that businesses create. That generates money."

Langone said he sees "a lot of opportunity" despite the market's declines "but I’m a long-term investor. I think there can be some bumps along the way."

He said he'd "buy the banks" because they've "cleaned their act up" and have low valuations.

Meanwhile, don't expect unemployment rates to improve should gasoline prices stay high, other experts say.

"If oil prices stay where they are at the end of February [close to $107 a barrel], it means gasoline prices in April and May will be about $4.25 a gallon nationwide," says Mark Zandi, chief economist at Moody's Analytics, according to the Christian Science Monitor.

"If we stayed there for the year, it would shave about 0.5 [percent] off of gross domestic product growth."

Such a scenario would translate into a loss of 500,000 jobs.

"It basically means we don't make any progress on reducing unemployment this year," Zandi says.

Editor's Note: Google Banned This Video But You Can Watch it Here

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