Forbes: We Have Our Own Greeces Here

Thousands rally to protest budget cuts to scores of state programs at the Illinois State Capitol in Springfield, April 21, 2010.

/ AP Photo/Seth Perlman

Greece's near-bankruptcy, which forced a series of tax increases and austerity cuts in the national budget, sparking strikes and demonstrations, may be a sign of things to come for some U.S. states, said the president and CEO of Forbes, Inc.

On CBS' "The Early Show" this morning, Steve Forbes was asked if the economic troubles of Greece, one of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) which has been facing tough times within the eurozone, presage other PIIGS getting sick — and what that may mean for us.

Forbes said he believes the German Parliament will vote to approve the government's contribution to the EU bailout package for Greece, as France did yesterday. But he said it was very important that Greece undergoes systemic reform, and that other nations facing the fallout from Greece's near-bankruptcy must follow suit.

"The thing that on this to watch is not that Greece is going to have to go through austerity, but will they also make systemic reforms, like their tax code which is anti-business, so the economy can get back on its feet? You'll see the same thing in Britain: they know they have to cut back but they have to do it in a way that lets the economy recover?"

"But there's some self-reflection that might be important here as well," said "Early Show" anchor Harry Smith, "because as we look around the country, states like New York, Illinois, California, are looking at mountains of not only debt but deficit."

"Their pension systems are all in major, major deficits," said Forbes. "So we have our Greeces here and there — Illinois, California, New York, New Jersey, Michigan and others. And they're going to have to make systemic reforms. We see that across the river in New Jersey — major budget cuts, tax cuts to get these economies reformed.

"Everyone has to get their act together. The wake-up call has come."

When asked about yesterday's drop of 1,000 points in a half-hour - predicated some believe on a trader's errant slip of a finger, prompting a domino effect of programmed "sell" orders - Forbes said, "It shows that even in this age of high-technology, you can get absolutely eye-popping glitches in the system. That's exactly what happens when a stock like Accenture goes from $40 to a penny, back to $40 in the flash of an eye. So in that sense there are systemic flaws they'll have to dig out. You can literally do 10,000 trades every second, so they have to figure out what in the world went wrong, 'cause hackers can get in and blow up the system.

"You also have systemic economic fundamentals at work, too, that help bring this thing down," Forbes told Smith.

Despite yesterday's wild ride on Wall Street, Forbes said he believes today's trading will show a mere "hiccup" down, and then "amazingly" end up higher today.

Pointing to Wall Street's 75% rise since March of last years, he called yesterday's at closing of 347 points, after falling about 1,000 "a pause. Not the end of the world."

When asked if he feels the economy is in a state of recovery, Forbes said, "The economy is recovering. It's a weak recovery given the magnitude of what happened in 2008, 2009. It's like a baseball team that was losing all the games. Now they're only losing half the games. Better than losing all of them, but not yet in the World Series."

[Freedomforever88]

Just do what you love and the rest will fall in place. I need to take my own advice.

[SocialEvo]

--- Two short documentaries people should watch on the Youtube Channel TZMSocialEvolution: "Awakening" and "Our Technical Reality". What you do after that is completely up to you.

--- "We can't solve problems by using the same kind of thinking we used when we created them." -- Albert Einstein

[NoWayJose9999]

New York State's pension system is actually very healthy- even in spite of the Wall St. collapse.
America needs to retool it's manufacturing infrastructure. If I have to pay more for a TV,or a toaster, or a lawn mower,etc., etc. So be it if it is for the greater good of our people. We CANNOT compete with Chinese slave labor.
Jobs sent overseas is motivated purely by GREED. Corporate sociopaths are not satisfied with a 'good' profit. They want an *obscene* profit. They don't care about the swatch of social devastation carved across our once mighty nation. Just as long as they get 'theirs' ' NOW!

[travelers345]

Everybody knows we can't continue to run with such high state and national deficits, yet our governments for some reason refuse to rip off the bandaids and fix the problem by making hard, deep budget cuts.

It has to be done. And the sooner we do it, the sooner we can recover and return to our profligate American way of life.

[pubsrtoast]

Jobs, jobs, jobs! Forbes cheered as the means for people to support themselves and to drive the economy were shipped to China and India. Now, that these people can no longer find decent paying jobs, with any sort of stability, Forbes and his ilk are wishing that they just disappear. It isn't going to happen.

[sjc_1]

In Forbes' world we should all become stock brokers, sell real estate or insurance. The ethic is can we all do it all the time...no, we need value added and not just paper pushing.

[6591Hou]

It's not just jobs, it's also the type of jobs that matter. We need to wean ourselves off of service sector jobs and promote heavy manufacturing. Open Global Markets siphon off industry and labor from developed countries to less developed countries where the operating costs are substantially lower. Over time it raises the standard of living in the less developed country and lowers the standard of living in the developed country through the economic impact of lost jobs, wages, and benefits.
Calculate the lost revenue to the U.S. economy and tax base through off-shoring and raise import taxes and tariffs to recover that amount. If a company wants to make piece parts outside the U.S. every single part they bring back in should have an extra charge against it. Retailers who import shiploads of Chinese goods should be paying out the nose for the privilege.
Partner our high-tech centers with manufacturers in order to develop and implement a 21st century economic strategy of sustainable GNP growth.