White Plains, NY—“There’s no reason why, if we pursue the right policies, this economic expansion shouldn’t be as slow as it was in the 1980s and ’90s,” said former presidential candidate Steve Forbes, president/CEO of Forbes Inc. and editor-in-chief of Forbes magazine during a session at list firm Direct Media’s 30th Annual Mailers Conference & Co-op here on March 25. “This economy’s got some real legs. Expansion is for real. It’s just going to be awhile before you feel it.”
Corporations, Forbes continued, are beginning to invest again. “Even in manufacturing,” he said, “which has been hard hit, business capital spending is growing at a double-digit rate. Look at the aggregate numbers: Companies are having positive cash flows. Personal income is up, while inventories are still very low because people remain cautious. That means there’s pent-up demand.”
In what became more politically-charged as it progressed, Forbes’s speech championed the tax cut that was made last summer in making a case for the country’s economic turnaround-in-progress. “The tax cut is doing the economy an enormous amount of good,” he said. “The thing to look at is if the tax cut reduces the amount you pay on your income. Too many economists overlook that.”
He continued making his case for both the merits of the tax cut and the return of the economy by pointing to the price of gold. “The best barometer of monetary disturbances is the price of gold,” he said. “If it goes below $300/oz., it’s bad, just bad. If it’s at $360-$380, that’s good. If it’s over $400/oz., which it is now, you flood the engine.”
As for the lack of job growth in the U.S. to prove his point, Forbes said the numbers are being misinterpreted. The U.S., he reasoned, is measuring jobs by a payroll survey and calls to households asking who’s working. “The two usually go parallel to one another,” he said. “But with the economy the way it is today, they’re diverging. And people are starting their own businesses, which takes awhile to show up on the government’s radar screen.”