Forbes magazine editor and former presidential candidate Steve Forbes tells Newsmax in an exclusive interview that President Barack Obama is like a doctor “harming the patient” when he tries to deal with the jobs market and the economy.
He also asserts that higher taxes on the wealthiest Americans will harm the economy by destroying capital, warns that increased regulations will “gum up the works in this country,” and predicts that Obamacare will spark a “new political reaction” like the tea party.
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Forbes is president and CEO of Forbes Inc. He ran for the Republican presidential nomination in 1996 and 2000, urging the adoption of a flat income tax with a single tax rate.
His latest book is “Freedom Manifesto: Why Free Markets Are Moral and Big Government Isn’t.”
President Obama is set to deliver his State of the Union address tonight and is expected to focus on the economy and the need to create jobs.
In an exclusive interview with Newsmax TV, Forbes was asked what advice he would offer the president.
“Less is more, and the more government gets involved in the economy the more sluggish it is,” he says.
“It’s now out there that the jobs created under the Obama administration have been fairly low-wage jobs, not the kind of vigorous jobs we’d expect in a vibrant economy like that of the United States. So he’s like a doctor harming the patient, but he’s going to double down on his disastrous prescription.”
Obama will likely make the case that he created 6.1 million jobs in the past 36 months, although GDP data suggests the economy might be contracting.
Forbes observes: “We’re like an automobile on a superhighway. We should be going 70, 80 miles per hour and instead we’re going 30 and now we’re going to go down to 10 or 15.
“In the fourth quarter they can make all these excuses they want, inventory adjustments and that kind of thing, and they’ll readjust it upwards, but it’s still a pretty poor performance. We should be growing at this point by 6.8 percent instead of saying, well, we’re going to get up to 1, maybe 2 percent. It’s a bad performance.”
The president is urging Congress to agree to his plan to avert cuts required by sequestration and agree to tax hikes on America’s wealthiest.
“Gee, I’ve heard that movie before, just raise the taxes on the rich and all will be well,” Forbes says.
“Americans were shocked to discover in January that it wasn’t just the so-called rich that had their taxes go up — their payroll taxes went up as well, which [impacts] tens of millions of workers. So this is the old movie and we’ve seen it before. It doesn’t work but like a show that has no ratings, he wants to roll it again.”
Higher taxes on high earners will “harm the economy,” he adds. “One, it destroys capital instead of creating it. You’re taking capital way from people who know how to increase it, and putting it in the hands of bureaucracies where politics takes over. You know that’s not going to get a maximum result.
“In terms of giving people incentive to create capital, it destroys that as well. We’ll see this most dramatically in France where President Obama envies President Hollande being able to raise the tax rate to 75 percent, and France is increasing its capital gains tax rate to 75 percent. So we can see there what’s going to happen when you raise taxes, but why let experience get in the way?”
Asked where he sees the economy heading this year and the next four years, Forbes responds: “This year’s going to be overall a disappointment, I’m afraid, even though there’s a lot of pent-up energy in the American economy. People want to do things, people want to put capital to work, people want to move ahead, and it’s like being in a quagmire. You just can’t quite get your feet out of it and the government is going to put more quicksand out there with more regulations coming along — Obamacare, Dodd-Frank, EPA, new things to gum up the works in this country.
“There is no way you can have these kind of tax increases, no way you can have these huge costs that are coming on business people and the American people in terms of higher healthcare costs, less access to health care.
“Government creates scarcity. Free markets turn scarcity into abundance. Like our cell phones — 30 years ago, big as a shoebox, cost $3,595, today cheap, 6 billion around the world, everyone wants one, has one, and they do everything.
“It’s not just telephony. When government gets a hold of something it becomes scarce, it becomes rationed, it gets immersed in politics. He’s doing that to healthcare and you’re going to see another reaction, whether they call it the tea party, the coffee party, whatever, there’s going to be new political reaction when people get hit with what Obamacare’s really doing to us.”
Over the weekend, former Vice President Dick Cheney criticized a number of the president’s recent nominations, including John Brennan and Chuck Hagel, saying they were “yes men” and that Obama's second term would see a continued weakening in U.S. power and influence around the world.
Asked if he shares Cheney’s concerns, Forbes tells Newsmax: “Yes. If anything he understated it.
“You can see it with China’s truculence in the Pacific on these disputed atolls and islands. They’re going toe-to-toe with the Filipinos, they’re going toe-to-toe with the Japanese. Vietnam wants more of a U.S. military presence in that part of the world precisely because they fear the rise of a more militaristic China.
“So when people sense that the U.S. is in a position of weakness and a position of decline, as they saw in the 1970s, bad forces come to the fore. That’s why the Iranians don’t take us seriously at all in the Middle East. The Russians don’t take us seriously.
“We’re drastically cutting back U.S. power and now reforming the Pentagon in a way to get better procurement policies and the like. There, less is not more.”
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