Free Republic

crony capitalism is back with a vengeance

Even if the Federal Reserve gets around to strengthening the dollar--which would do wonders to get the economy really moving again--we still face a mammoth and growing problem: the government's increasing domination and distortion of the capital markets. It's not only the need to finance Uncle Sam's deficits that crowds out other credit seekers in the marketplace. It's also the proliferation of government entities (think Fannie Mae and Freddie Mac), government loan guarantees, tax credits and the government's growing sway over the banking sector. Even if Washington's red ink were back to the levels of a couple of years ago,...

We all know the Rap on capitalism: That it is fundamentally greedy and immoral. That it enables the rich to get richer at the expense of the poor. That open markets are Darwinian places where the most ruthless unfairly crush smaller competitors and where the cost of vital products and services like health care and energy are almost beyond the reach of those who need them. Capitalism has also been blamed for a range of social ills--from air pollution to obesity. Not only have educated, successful people bought into capitalism's bad Rap, but the Rap is taught in our schools....

Forbes axed at least 30 editorial people, yesterday -- but the bloodletting isn't over, according to insiders, NyPo is reporting. Today's layoffs mark the third round of editorial cuts in a year. In January, the dot-com and print were merged and 50 people were let go. In the latest round, the magazine's bureaus were particularly hard hit. Many of Forbes' offices will be closed around the country and overseas, and those who worked in bureaus and survived the cuts will become correspondents working out of their homes, sources said. "We -- and the entire media world -- have been hard...

Forbes magazine's ninth annual list of top-earning dead celebrities was unveiled Wednesday, and surprise, surprise: Neither Michael Jackson nor Elvis Presley held court at the top. Late French fashion designer Yves Saint Laurent debuted in the No. 1 spot with an estate that earned $350 million in the year after his death from brain cancer in June 2008. To place on this year's list, "delebs" -- industry speak for dead celebrities -- had to earn at least $6 million between October 1, 2008, and October 1, 2009. Saint Laurent earned well past that. A February Christie's auction sold most of...

How is wealth created? Seemingly a strange question for Forbes readers, but the question is hardly an academic one in the wake of the credit crisis and ensuing global recession. It has profound political implications that will affect our economic future. Clearly, a sizable portion of the assets created in recent years turned out to be "make believe," the result of an unsustainable, ephemeral bubble in housing and the churning out of increasingly exotic, ultimately toxic financial instruments. It's one thing for folks and institutions that hold suspect paper to lose out, but it's quite another when the process that...

It's tempting to consider gold overbought. It currently trades at $1,017 an ounce, near its all-time high. It's survived two asset bubbles with flying colors. It sells for three times its April 2001 decade low of $255 an ounce. Now you have all kinds of cheesy, late night TV pitch-men screaming that they will buy your gold while former Richard Nixon staffers hock gold coins--things seem a bit overheated. Two years ago it was time to quit your job and get a realtor's license. Now it's time to melt down your dental work? Well, gold has long been an emotional...

“The alarm bells on our nation’s fiscal condition have now become a siren” “If anyone had any doubts that this burden on future generations is unsustainable, they’re gone — spending, borrowing and debt are out of control.” Senate Minority Leader Mitch McConnell Today CBO issued its annual summer update of the budget and economic outlook. CBO estimates that the federal budget deficit for 2009 will total $1.6 trillion, which, at 11.2 percent of gross domestic product (GDP), will be the highest since World War II. That deficit figure results from a combination of weak revenues and elevated spending associated with...

First Lady Michelle Obama, about to round out the summer with a stay on Martha's Vineyard, perhaps packing those shorts for the trip, debuted on the Forbes list of 100 Most Powerful Women -- at No. 40. Given that the list is heavily tilted to CEOs and world leaders, it seems a reasonable slot. German Chancellor Angela Merkel was No. 1 and Sheila Bair,

One of the most damaging forces in the study of history in recent years has been revisionism. Revisionist historians have painted Thomas Jefferson as a slave owner who took liberties with his property. Revisionists have tried to make slavery the primary cause of the Civil War. Revisionists have done their damage to figures in the ancient world, as well, with none taking the brunt quite so squarely as Alexander. In his interview with Hannity on Wednesday, Forbes was discussing his most recent book and gave his take on the oft-misunderstood conqueror, calling Alexander one who was given to passions that...

A Chinese commentator says his country needs to stand up stronger to the West. This week we're turning the tables at Beijing Dispatch: Instead of offering the usual foreign-correspondent musings about China, Forbes invited an outspoken Chinese essayist to take a few shots at the U.S. and the rest of the West. Wang Xiaodong, 53, is one of the co-authors of Unhappy China, a controversial nationalist (Wang prefers "patriotic") tome that seeks to prod the nation into a much more aggressive posture in international relations. Unhappy China has received some harsh reviews from China's media and intellectual elite but has...

Congressman Randy Forbes of Virginia asks the questions "Did America ever consider itself a Judeo-Christian nation?" and "If America was once a Judeo-Christian nation, when did it cease to be?" on the floor of the US House. MUST SEE VIDEO!

FYI: Headline misleads ...On Monday, Newsweek unveils the most dramatic overhaul in its history -- one that parent Washington Post Co. hopes will take it from a money-losing position in the weekly-news category to a money-making one in the thought-leader category. ...

The global economy this year will contract for the first time since World War II, according to the World Bank. But economists expect a recovery in 2010, albeit at sharply different levels depending on where you live.

Not optimistic.

'Forbes on FOX' guests asked if Madoff's Ponzi scheme or Obama's spending plan will cause more economic damage. According to some “Forbes on Fox” guests, the Obama Administration is more harmful to the economy than Bernie Madoff’s infamous Ponzi scheme. On March 12, Madoff pled guilty to 11 felony counts including money laundering, perjury, and mail, wire, and securities fraud. On Mar. 14, David Asman asked guests of the show “Who’s worse for the market – Madoff or the folks in D.C.?” Steve Forbes, Forbes magazine’s editor-in-chief, blamed the folks in D.C. as the worse culprit. Forbes explained that “in...

MEXICO CITY – Mexico is decrying Forbes Magazine's decision to include the reputed leader of one of the country's most violent drug cartels on its list of billionaires. Forbes ranks Joaquin "El Chapo" Guzman, with an estimated $1 billion fortune, at No. 701 — between a Swiss oil-trading tycoon and an American chemical heir. Guzman, Mexico's most-wanted fugitive, is believed to head the Sinaloa cartel. President Felipe Calderon said Thursday that "magazines are not only attacking and lying about the situation in Mexico but are also praising criminals." Mexico's Attorney General Eduardo Medina Mora said Forbes is defending crime by...

Warren Buffett. Bill Gates. Joaquin “El Chapo” Guzman? As if Mexico doesn’t have enough image problems, a reputed drug cartel boss landed on the Forbes magazine list of billionaires. Guzman, whose nickname means "shorty," just made the cut as he was tied for 701st on the list, with a fortune estimated to be worth $1 billion. Guzman, 54, is said to be head of the Mexico-based Sinaloa Cartel. He follows in the footsteps of Colombian Pablo Escobar, who also made the Forbes list back in his day, and was considered the ultimate godfather until he was killed in a shoot...

An accounting rule that requires banks and insurance companies to write down assets to reflect market values is worsening the financial crisis and should be suspended, said Steve Forbes, chief executive officer of Forbes Inc. "Market-to-market accounting is destroying capital of insurance companies and banks," Forbes said Monday in a Bloomberg Radio interview. "They have to suspend it completely and start over again. It is the equivalent of saying, 'Put your house on the market and sell it by 2 p.m.' You are not going to get a very good price for it."

Bad accounting rules are the cause of the banking crisis. What is most astounding about President Barack Obama's radical economic recovery program isn't its breadth, but its continuation of the most destructive policies of the Bush administration. These Bush policies were in themselves repudiations of Franklin Delano Roosevelt, Mr. Obama's hero. The most disastrous Bush policy that Mr. Obama is perpetuating is mark-to-market or "fair value" accounting for banks, insurance companies and other financial institutions. The idea seems harmless: Financial institutions should adjust their balance sheets and their capital accounts when the market value of the financial assets they hold...

The financial crisis is reaching a climax. Either Washington will let the banking system go into cardiac arrest, or it will take measures to bring it back to life so it can vigorously function again. The frightening severity of the crisis and the political imperative not to let banks collapse the way they almost did in 1933 will force the Obama Administration to take the necessary actions. --Get rid of mark-to-market accounting rules, which are unnecessarily destroying the balance sheets of banks and other financial institutions. For regulators and auditors to force banks to repeatedly write down the value of...

Here’s a quick and dirty guess: Upper-middle-class families in blue states–those President Obama calls “the rich”–will soon be paying 20% more a year in state and federal taxes. If you pay $100,000 off of a $300,000 income now, look for $120,000 in a couple of years. Federal income taxes are going up, and deductions are going down. That much we know. What we don’t know yet–but I would bet money on it–is if the 7.65% Social Security and Medicare tax ceiling will be lifted from $102,000 to $150,000 or so. Taxes are headed up at the state and local level...

<p>Resume Falsification of Radley Balko Exposed. Exaggerations A Common Tactic of the Left, Obama Acolytes.</p> <p>Liberal (and ersatz libertarian) blogger and wanna-be pundit Radley Balko claims on his bio on his blog that he is a bi-weekly columnist for Forbes.com. But an investigation by the RLCIL demonstrates that Mr. Balko has taken extreme liberties — perhaps even license — with the term “bi-weekly.”</p>

Several analysts on FNC's 'Cost of Freedom' shows condemn Obama's fear-mongering and go on the record against the stimulus bill. President Obama has resorted to draconian fear tactics in an attempt to shore up support for an enormous stimulus package, but many FOX commentators including Steve Forbes and Ben Stein criticized the bill and Obama’s scaremongering on Feb. 7. At the White House, Obama said on Feb. 4, “A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future.” Obama’s remarks grew harsher as...

President Obama’s pick for Treasury Secretary, Timothy Geithner, is being urged to lay the foundation for “global governance” by considering “international taxation” measures to loot more money from U.S. taxpayers. The recommendation is included in the report, “The Global Agenda 2009,” which is being considered by the World Economic Forum (WEF), meeting in Davos, Switzerland, January 28th - February 1st. The WEF is not an official government group but does include dozens of government, corporate and labor leaders at its annual meetings. Media companies such as News Corporation (parent of Fox News, the Fox Business Network, and the Wall Street...

While industry executives and shoppers will remember 2008 as the year the party ended, figure 2009 to be the year of the hangover. Already, Circuit City, Linens 'N Things and Mervyn's stores are going away. Sharper Image is too, though the company will continue to sell some of its high-end gadgets through license agreements with other retailers. More pain is on the way. One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. That means the market is still far too saturated with stores. Expect closings and bankruptcies to...

Amazingly, equities will end the year up. Most shareholders will experience something they've forgotten existed: capital gains. True, the economy is now in a bad slump, and the Obama initiatives (see below) will do little, if any, long-term good. But the forces of recovery will break through. As they always do, stocks will rise before the economy does. There will be volatility aplenty, but imperturbable bulls will be smiling a year from now. Big Bar to Robust Recovery: Bad Ideas The U.S. is enacting a "stimulus" program of gargantuan peacetime proportions to rejuvenate our recessed economy. We are not alone...

Click here.

Speaking to the Daily Telegraph, Mr Forbes, the owner of capitalist magazine Forbes, said that the Government's decision to increase the tax for those earning more than £150,000 was the "exact wrong thing to do to revive an economy and signalled the message: 'We don't like success.' " Mr Forbes said that the Government should have instead boosted the standard rate of tax for those earning up to £70,000. He added that the Government should have instead looked at reducing tax for the top tier of the population. "Why would you go back to old Labour ways?" he asked. "If...

WASHINGTON (CNN) — Forbes magazine President and CEO Steve Forbes called Treasury Secretary Henry Paulson “the worst treasury secretary we’ve had in modern times”, citing, among other things, the government’s handling of the housing crisis. In an interview with CNN’s Wolf Blitzer on Sunday, Forbes repeatedly called on the treasury secretary to be more straightforward about the money used to bail out mortgage giants Fannie Mae and Freddie Mac. “Have Henry Paulson do at least one thing right, and that is, have the government explicitly guarantee the debt of Fannie and Freddie,” the financial mogul and former Republican presidential candidate...

It is useful, at this juncture, to stand back and survey the economic landscape--both as it is now, and as it has been in recent months. So here is a summary of many of the points that I have made for the last few months on the outlook for the U.S. and global economy, as well as for financial markets: --The U.S. will experience its most severe recession since World War II, much worse and longer and deeper than even the 1974-1975 and 1980-1982 recessions. The recession will continue until at least the end of 2009 for a cumulative gross...

The Next President It's Time To Restore Liberty Claudia Rosett 11.06.08, 12:00 AM ET With more than 63 million votes, President-elect Barack Obama--eloquent, young and bankrolled to the gunwales--has won the White House. That still leaves more than 55 million Americans who voted for the aging, outspent warrior, John McCain.

Forbes: Obama Will Be Forced to the Center Thursday, November 6, 2008 2:52 PM By: Gene Koprowski Steve Forbes, editor-in-chief of Forbes magazine, says he expect President-elect Barack Obama to be forced by the economy to "govern from the center," not the far left, as some fear. "When Clinton came into office, the economy was growing at a 4 percent rate at the end of 1992. Now we have negative growth. Last quarter was 0.3 percent decline,” Forbes told Fox Business News. “So, short term, yes. Obama will move to the center. He is a calculating enough man to know...

November 4, 2008 Why did Forbes spike its story on Iran's support for Obama? Try this: search for "'Obama and Ahmadinejad' by Amir Taheri" at Google. The first link goes to Forbes magazine, which published Taheri's article on October 26. But if you click on that link, you get this: "Something's gone awry! The page you requested could not be found." (Thanks to Olivia for the heads-up.) You can still find the article in the Google Cache. But what I want to know is, Why has Forbes sent it down the memory hole? The Forbes editors should be decent enough...

ARTICLE EXCERPT: The world is flush with cash. It's frozen because of fear, but the cash is there. Productivity gains are burgeoning. So, will this global boom resume next year, slowly at first and then with increasing momentum? It should. Whether that happens, however, depends on the next, highly dangerous phase: the political aftermath. Will we and other countries pursue policies that hinder growth and retard or abort a full-blown recovery, e.g., regulations that stifle innovation and taxes that harm the creation and deployment of capital? Washington politicians are asking: If the federal government can bail out banks, why not...

Dear Forbes.com readers: This will turn out to be the worst financial crisis since the Great Depression and the worst U.S. recession in decades. I first said so in August and, since I wrote those words, financial and economic conditions have deteriorated further--and severely. Stock prices are sharply down and there is a risk of a market crack. Interbank and credit spreads are wider than ever since the beginning of this crisis, Lehman Brothers (nyse: LEH - news - people ) and Merrill Lynch (nyse: MER - news - people ) are gone, and soon enough Morgan Stanley (nyse: MS...

Former presidential candidate Steve Forbes declared Monday the U.S. economy is in “cardiac arrest” and will plunge into “something we haven’t seen since the early 1930s” if Congress doesn’t come to the urgent rescue of American financial institutions. “You have to have faith that at some point these people will come to their senses, and do things that have to be done to stabilize the patient, and then we can take positive measures, like a strong dollar, like tax cuts, to get our economy in shape so that it can start to recover next year,” Forbes told Newsmax in an...

Quote from article: "The Bush Administration should vigorously push to have Fannie Mae and Freddie Mac recapitalized and broken up into 10 to 12 new companies, with their ties to the government completely severed. Yes, this would mean Uncle Sam pumping in some $300 billion in equity capital, and perhaps taking on some $100 billion in those questionable mortgages. But such an investment would enable these companies to have a sound debt-to-equity ratio in the vicinity of 4-to-1."

Steve Forbes is on FOX, is being critical of Paulson and also of Ben Bernanke. Like Newt, he recommends getting rid of Mark-to-Market accounting procedures. Other good stuff . . . TUNE IN

The Treasury Department has told members of Congress that the U.S. faces an economic tsunami if a bill allowing the government to purchase up to $700 billion of toxic securities from financial firms is not passed this week. Unfortunately, this solution of giving the U.S. Treasury almost unlimited power to buy distressed securities could be avoided if the government made some simple (and temporary) changes to mark-to-market accounting rules. So far, and for many unknown reasons, these changes have been considered off limits. Why drawing such a hard line in the sand is so important is a real mystery. Certainly,...

Forbes Magazine recently released the top 50 states for business again.which ranks state economies especially with regards to small businesses which are the backbone of our economy. To no surprise, red right wing republican free states beat the Democrat liberal left wing socialist paradise states by an overwhelming number. 8 out of 10 states on the top ten were traditionally Republican with Nebraska beating Minnesota for number ten, while 7 out of 10 were traditionally Democratic. West Virginia was once again at rock bottom followed by Louisiana, Alaska and Maine. Mississippi, considered the worst state in the country was 42nd....

The Treasury/Fed/Congressional rescue of Fannie Mae and Freddie Mac is only a stopgap. Unless fundamentally restructured, these two debt-bloated giants will sooner or later blow up. The once implicit, now explicit, government guarantee for these two quasi-government entities was the reason that they could be leveraged to the hilt, with a debt-to-equity ratio of almost 25-to-1. Instead of just packaging mortgages and selling them off, the companies kept hundreds of billions in these instruments in their own portfolios to fatten profits--and enrich their politically connected managers and political allies. They also went into the junk-mortgage business, buying more than $170...

Hand it to John McCain for being the perpetual Lazarus, from his virtual political demise a year ago to what he wrought in Minneapolis/St. Paul with his pick of Governor Sarah Palin for Vice President. Although the GOP is in disrepute, the Arizona senator has a good shot at winning in November--and a good thing, too. Whatever Senator Barack Obama's dazzling abilities as an orator and campaigner are, he has demonstrated no understanding of the elemental importance of free enterprise or of the fundamental role of risk-taking in bringing about economic progress. To him businesses are necessary evils and must...

Ithaca, N.Y. — The Best Of Everything? By REBECCA JAMES   The Commons is a popular gathering place in downtown Ithaca, N.Y. (Photo by Gloria Wright)     ITHACA, N.Y. — When your town has made more than 25 lists that call it one of the best cities in America, you might be surprised that one magazine would call it one of the "Twelve Great Places You've Never Heard Of."But along with that 2006 designation from Mother Earth News, Ithaca seems to make the grade no matter what's being ranked. It's one of the "lesbian friendliest cities," has the "best...

Steve Forbes begins speaking on the economy around the 18 minute mark, and continues until just past the 43 minute mark. (He is done chatting with the audience around the 20 minute mark, if you want to skip those remarks.)

Political Players: Former GOP Presidential Candidate, McCain Economic Adviser On Taxes, Energy And The Budget, Steve Forbes. Steve Forbes: I think his (McCain's) plan is the most realistic plan to achieve a balance - or a far better balance - that is out there, by recognizing the importance of reducing the burden of taxation, among other things. That is the key to getting the economy back on track again. ... So the way you get a balanced budget is one, greater revenue growth. And he's got the best plan for it. And two, restraint of spending. ... Steve Forbes: The...

Ohio has two counties in the list: Delaware County #5; and Geauga County (the red county where I live) was #4. Forbes' rankings are skewed toward counties with good school districts. Using research provided by the Tax Foundation, a nonpartisan tax research group based in Washington, D.C., we started with a list of the nation's counties with populations over 65,000. To eliminate under-funded school districts, we isolated 97 counties where more than half of per-pupil spending comes from property taxes. They've also discovered something most Americans are still searching for: the ideal place to raise a family. Their sons, Pete...

Has the Federal Reserve run out of bullets? that implication could be drawn from the recently released minutes of the Fed's last Open Market Committee meeting, during which the federal funds rate was cut from 2.25% to 2%. The Fed hinted that no more rate cuts are in store and that the economic horizon is becoming cloudier. (The reason our central bank can't reduce interest rates further is that the inflation picture is getting uglier.) Stocks tanked on this news. However, the Fed has yet to use its most effective artillery: strengthening the value of the U.S. dollar.

Detroit has earned another dubious honor, the second place on Forbes magazine's list for the worst cities in the United States for jobs.

Jimmy Carter Bush Steve Forbes 03.24.08, 12:00 AM ET More From Steve Forbes Can it be true? A Republican president repudiating the anti-inflationary legacy of Ronald Reagan? That is precisely what George Bush is doing.