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Encourage shouldn't we be.
By the progress.
Over there let's go straight to Steve Forbes who's here in the -- -- -- net editor in chief of Forbes media joins us now.
-- from Forbes -- -- -- it's always great to see you should we be encouraged and all because whether we like it or not at least for our financial markets Europe's driving the bus right now.
-- driving the bus short term because it is Europe.
But I think got the markets were a little upset this morning when the European Central Bank started seemingly pull back.
On -- that signals of a big giving that it's gonna take big measures to prevent a banking collapse.
I think people know that the end of the day something will be done.
But I think the key thing is what will be done.
They -- going to be there's -- -- be austerity what -- they combine -- with measures to get those economies growing again that's the big question austerity alone won't work.
Ultimately it -- Steve is it may be helping over there and in the United States.
If the Central Bank doesn't -- -- and start buying bonds from these nations because again doesn't that send the message that.
Yet to write yourself you have to stop spending so much money and we are going to be be ready hand to bail you out -- your debt.
Well the markets feared a couple of weeks ago that for whatever reason the Germans are gonna drag their feet on that.
And not let the European Central Bank to make those big bond buys.
And debt that -- started -- spiral.
Because they are so over indebted you have to situations here -- One is short term they are near cardiac arrest there is of whiff of panic was a whiff of panic in the air.
Longer term they have to put in measures to get those economies growing again which means austerity on the government side.
And regulatory and tax reform on the growth side.
So short term that got to stop this whiff of panic.
Make it clear the banking systems not gonna collapse and then you make the lifestyle changes to make sure you don't have a situation for cardiac arrest again.
Let's talk a little bit about that short term outlook because -- taken brings up what is the bond buying program more it's the this fiscal union that they're talking about that might come up this Friday.
We could sit here and rail or other people -- about bailouts as many people did back in 2008 but.
Is it fair to say that a bailout is a needed the time we ended situation we've put ourself and we have to go through it again.
Just like we did -- the United States and the second part does the United States have a part in that for the Europeans.
Well in terms of the bailout and that what's caught because that's what it is.
We are near cardiac arrest the European central bank one way the other with the Germans.
Are gonna have to step up in the markets expect it the ten year Italian bond which was yielding 7% of weaker to a go as went under 6%.
The market so the markets feel that something will be done.
So short term they cannot let the banks collapsed.
Which means they're not gonna let Italy and Spain collapse the question is what are they gonna do -- short term to make sure that doesn't happen.
Whether it's putting capital in banks -- better of buying the bonds by the European Central Bank.
They got to stop the panic but the key thing men and the markets are going to be looking very closely are they gonna take measures to get these countries really back on their feet.
And ultimately the big question for 2012 in the US says are we gonna start taking real measures to get ourselves back on our financial feet.
All that that I said this yesterday -- we'd better be careful what we wish for.
Because consumer Europe gets its act together -- -- the attention of investors and lenders to the US will start looking at us.
-- saying wait a minute.
You're -- your ballot sheet looks lousy maybe we need to extract more interest reviewed a loan you money and on that note is.
Now really the time to -- it's I once again extend the tax cut.
A temporary tax cut and I'm talking about the payroll tax cut.
Well politically they're gonna do it because the Republicans are not gonna go -- -- the campaign season most of them.
Saying it took 15100000.
Dollars -- a working people's pockets.
Real reform unfortunately he's not gonna come to this country -- we get a mandate.
With the 2012 elections that is genuine tax simplification.
Stop the -- spending and real regulatory reform starting with Obama care.
In the meantime we just have to hope we can limp along.
Before the real reforms can be taken and at the European start to really get their act together.
Which is still questionable I think that'll be a spur for us to get our act together after next November.
What's your view -- on the payroll tax cuts on the merits even if politically did you Republicans have to go along because you're somebody knows the finger to and -- certainly spoken about taxes over the years.
Why take a tax cut from Washington anytime you can cat and but in terms of stimulating the economy it's very weak it does not change of the price -- burden of starting new businesses taking risks and making positive investments that -- the Social Security trust fund which is a disaster anyway.
So it's pure politics.
And they get its typical of this administration.
For everything they seem to do -- -- short term but does not do anything long term we get our economy -- -- the way it should.
Speaking of the economy and that the previous financial collapse -- one last thing I just wanted to get your reaction.
To Jon Corzine.
This spectacular collapse and bankruptcy of MF global and the fact that he's actually going to testify today.
On Capitol Hill which is -- very rare given the investigations going on.
Yes I'm sure his lawyers have had several strokes.
-- the idea that he's not gonna plead the fifth.
But he's determined not to do it.
But I think it underscores what's the matter with this whole thing of crony capitalism news -- -- -- part because of this it ties to the government.
And the idea that a former CEO can say for relatively small firm I don't know what happened to a billion dollars.
I mean that this is slender this is crony capitalism.
It's a part of a theme that's gonna be -- -- 2012.
Alright Steve thank you very much -- talk about this for good part of the rest of the -- great to see is always Steve Forbes and always a fascinating discussion thank you so much -- thank you David and up.
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