Barron’s magazine published their mid-year round-table discussion with ten money managers and financial market experts on Saturday. The ten are unanimous in their belief that slower economic growth is in store for the second half of 2011.
- Slower economic growth makes it harder to find or keep a job.
- It means less money is going into paychecks to buy life’s necessities.
- It means less tax revenue for the deeply indebted U.S. government.
- It means less opportunity for today’s young people who will have to pay the national debt back.
Many of the Barron’s roundtable panelists think they know why the economy has less wind in its sails, and they blame bad policy decisions by the U.S. and other governments for continued economic weakness.
Felix Zulauf, President of Zulauf Asset Management says:
From Asia to Europe to the U.S., all the important economic indicators are rolling over. Some blame the Japanese tragedy; others, the weather. It is more than that. It is the result of policy decisions. Economic growth could slow to a crawl well into early next year.” –Felix Zulauf, President Zulauf Asset Management
Another says the U.S. government is wasting its money:
What bothers me now is we’ve spent trillions of dollars but haven’t created any jobs. We are pursuing the wrong economic policies. Some 28% of homeowners with mortgages are underwater. Consumer confidence is dropping off the map.”—Scott Black, Founder and President, Delphi Management
A third famous money manager says the policies of the executive branch are standing in the way of businesses:
The Obama administration is anti-business. The president is good on his feet. He speaks well. He has a sense of humor. But he is anti-business because he never grew up with business.”—Archie MaCallaster. Chairman, MacAllaster Pitfield MacKay
A fourth blames the policy decision to over-regulate for the economic sluggishness:
The question is what happens next. Barack [Obama] has to start making the U.S. competitive by realizing we can’t over-regulate.”– Mario Gabelli, Chairman, Gamco Investors Inc.
Finally Marc Faber of Marc Faber Limited gets to the heart of the problem, entitlements, and suggests a hard-to-swallow remedy for Washington D.C. elites:
If you lived beyond your means by borrowing, you need a period of deleveraging. That has happened in the U.S. only in the corporate and household sectors. Private borrowing has been replaced by government borrowing, which means the overall level of debt hasn’t been reduced. That needs to happen. The U.S. needs to cut entitlement spending meaningfully. It would be best to impose a flat tax and cut government expenditures by 50%.”—Marc Faber, Managing Director Marc Faber Ltd.
The star investors on Barron’s roundtable blame Washington’s poor policy judgment for the economic mess. However, The Heritage Foundation knows what policy changes need to be made to get the country moving in the right direction again. For the Heritage Foundation’s plan. Saving the American Dream, on how to fix the American economy and save today’s children from an inherited economic quagmire, click here.