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Economy not 'new normal,' but 'new abnormal,' Steve Forbes tells TCA delegates

LAS VEGAS — The U.S. economy has grown some this year, but the truth is it should be growing at a much faster pace, Steve Forbes, chairman and editor-in-chief of Forbes Media said here Monday.

“And that begs the question why isn’t it?” Forbes rhetorically asked delegates to the 75th annual convention of the Truckload Carriers Association under way here. “Why is it that we are like the diesel going 30 miles an hour when we’re capable of going 70-75 miles an hour?”

Forbes noted that it is a fact that in the past whenever the United States has had a sharp downturn, the sharp downturn was followed by a sharp upturn and then the only question was “could we sustain it?”

That hasn’t happened following the recession of 2008-2009, Forbes said.

“Why do we have to be content with a 1.5 to 2 percent upturn?” Forbes asked. “They (the politicians) call it the new normal.”

He’d rather call it the new abnormal, Forbes said.

“The good news is this is all because of bad policy decisions, all made in Washington, which means it’s not that hard to turn around,” Forbes said. “A few changes and you’d see this economy take off again. This is not a natural state of affairs.”

Forbes, a former Republican presidential hopeful, cited several reasons that he believed were holding back the economy:

Bad monetary policy The complicated tax code Overly aggressive governmental regulation, and No control over spending.
“The most critical one is the most boring subject—monetary policy,” Forbes said.  “When you say monetary policy it’s the Federal Reserve, interest rates, foreign exchange rates.

“The Federal Reserve has less formal insight than Congress. When you see Ben Bernanke testifying on Capitol Hill it is quite a site. You see these Congressmen ask questions that are fed to them by their staff. They ask the question, get an answer, bob their head and go to the next question. They don’t have a clue what the guy said. These central bankers understand if you say words in English, the people can’t understand them. People figure they’re the dumb ones, not you.”

Forbes has long called for a flat tax rate, which he espoused here Monday to a loud round of applause.

“They need to throw the whole thing out and start over again,” he said.

He cited two examples of the complexity of the current code.

In one case, a group created a situation for a family of four and sent tax information to 46 different tax preparers to prepare a mock return.

Forty-six different answers came back.

Then there is document research that when a taxpayer calls the Internal Revenue Service hotline, 25 percent of the time they are given the incorrect answer.

The Bible, he noted, has just over 700,000 words.

The current tax code has 9 million and has been changed thousands of times, he noted.

Forbes cited healthcare as a good example of over-regulation.

He noted that while federal workers in Washington can choose from between 200-300 health insurance plans available anywhere in the U.S., as a resident of New Jersey, he can’t purchase a less expensive plan in Pennsylvania.

“I can find a good health insurance policy in Pennsylvania for half the price I can in New Jersey, almost a third of the price I could in Wisconsin,” he said. “But it’s illegal to do so. I can buy a house or a truck in Pennsylvania, but I can’t buy insurance. If it’s good enough for Washington, why isn’t it good enough for you and me?”

He called for a free market in healthcare, a market where entrepreneurs could come in and figure out how to do more with less and come up with greater advances more quickly.

So where does the U.S. economy currently stand?

“Right now, we have this turbulence,” he said. “We’re stuck in second gear in terms of the economy. Maybe even thrust back into first. Can’t seem to get above second. This is not natural. Again, history shows the way out of this. Sound dollar. Sensible tax code. A little bit of restraint in spending. Regulation with a little bit of common sense. Turning healthcare from a liability into an asset. Do that and by golly we will be a nation of true abundance.

“This is not going to last. We will get past it.”

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