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Tags: forbes | obama | win | recession

Forbes to Newsmax: An Obama Win Will Lead to New Recession

By    |   Wednesday, 04 April 2012 01:19 PM EDT

Forbes magazine editor and former presidential candidate Steve Forbes tells Newsmax that Mitt Romney will win the GOP presidential nomination and defeat President Obama in the November election.

But he warns that an Obama victory — perhaps even the anticipation of an Obama win — will lead to a market selloff and another recession.

Forbes is president and CEO of Forbes Inc. He ran for the Republican presidential nomination in 1996 and 2000, urging the adoption of a flat income tax with a single tax rate. He makes frequent appearances on the Fox News Channel.

Forbes originally endorsed Rick Perry for the Republican presidential nomination. But with victories in three primaries on Tuesday, Mitt Romney appears to have the nomination sewn up.

In an exclusive interview with Newsmax.TV, Forbes was asked if he has any reservations about now supporting Romney.

“No, I’ll support whoever the nominee is and it looks like he is going to be the nominee,” he says.

“I thought his victory speech [Tuesday night] was very different from the ones he gave before. He didn’t use the pronoun ‘I’ as he tended to do. He was dressed with a necktie instead of the open shirt collar. That’s fine during the day but at night you should dress up for the occasion of addressing the nation. And he gave a speech where he went into much more substance than he has before.

“One of the things about the primary process is it does make you a better candidate, and I think he is light years ahead of where he was three or four months ago.”

Story continues below the video.

Forbes is active with the Club for Growth, a conservative political action committee. One of candidates the group is supporting is Indiana State Treasurer Richard Mourdock, who is running in the GOP primary against incumbent Sen. Richard Lugar.

Forbes explains why he is backing Mourdock: “I think that Richard Mourdock brings a kind of perspective you need today, a kind of dynamism. I think he earned the gratitude of the nation when he tried to uphold a thing called the rule of law when Obama put in his imposition of a bailout on Chrysler and General Motors. He tore up the rule of law. He tore up precedent in bankruptcy. That’s what you do in Argentina, not the United States of America. He resisted.

“Unfortunately the courts did not have the backbone to stop this usurpation of the rule of law. But since then, because of his efforts and the efforts of others, the atmosphere’s changed dramatically where the challenge to Obamacare is now treated with a seriousness that would have been inconceivable two years ago.

“He’s also against the blowout in government spending, wants to simplify the tax code and good things like that. So he brings that good conservative perspective and the energy to try to make positive things happen.”
Forbes cited other candidates the Club is backing.
“[Arizona Congressman] Jeff Flake is a very good candidate [for the Senate]. There’s no incumbent there — Senator John Kyl is retiring,” Forbes says.

“Ohio Treasurer Josh Mandel in Ohio [running against incumbent Democratic Sen. Sherrod Brown] is another good one.

“The key thing, whether they’re running against an incumbent or running for a seat where you don’t have an incumbent or challenging a Democratic incumbent, is if they get to Washington are they going to have that kind of dynamism and perspective and understanding why they’re there that so often gets lost when you go to Washington.

“And so if you get a good conservative core there in the Senate, people like Senator Mike Lee from Utah, get allies there, then that’s going to have a profound impact.

“I think Romney will win the election against Obama. But if you have a good conservative core in the Senate you’re going to get things on his desk, the president’s desk, that I think are going to be much stronger for the country, much better for the country, than if they weren’t there.

“So this isn’t just about winning a particular race, it’s also about having the cadres, so to speak, who can make positive things happen.”

Fed Chairman Ben Bernanke has warned of a pending fiscal cliff that the nation is approaching. The Bush tax cuts are set to expire on the first day of 2013, and deep spending cuts are also in the works.

Asked if lawmakers in Washington will be able to deal with this “cliff” without causing turmoil in the markets, Forbes responds: “After the November elections, if President-elect Romney makes it clear that he’ll sign temporary legislation on January 20 extending those tax rates for a few months so Congress can make deliberations on a whole new tax bill, I don’t think the markets are going to have much of a hiccup. I think they’ll make the Bush tax rates retroactive to January 1.

“So the key is who wins the election. If Obama happens to win, I think you’ll see a market selloff. I think we’ll be on the way to another recession. And I think the markets, if they anticipate Obama will win — markets don’t wait for a bad thing to happen, they sell off before it happens.”

Newt Gingrich has said he would support Rick Santorum in the Republican presidential race to ensure an open convention in Tampa in August. Forbes sees that scenario as unlikely.

“The voters have been speaking, and of the contests so far Romney’s won 20, Santorum 11, Gingrich two, Paul none,” he tells Newsmax.

“So no matter what Santorum or Gingrich does together or separately, Romney is going to end up probably picking up the delegates — unless he does something truly crazy. But he’s a disciplined enough man where I don’t think that’s going to happen.”

He was also asked if he believes a Republican White House and GOP Congress would implement a flatter tax code.

“I don’t think you’re going to get a proposal from Mister Romney on the flat tax,” he declares.

“As a matter of fact when I ran 15 years ago, he did ads against the flat tax. But the key thing is if you have the right people in the House and the Senate, the tax bill — and there will be a tax bill or tax bills plural — will be shaped in a way where I think we will get dramatic simplicity.

“We might not get a pure flat tax but we’ll get something pretty close to it, and maybe the flat tax itself. I don’t think Romney is going to resist if he sees there is strong support for genuine tax simplification. I don’t think he wants to meet the fate that the senior George Bush met when he went against the base of the party.

“So the key thing is to have a good base in the Senate, a good base in the House, and then I think we can positively shape the tax legislation.”

Commenting on the United States recently surpassing Japan as the nation with the highest corporate tax rate, Forbes says: “It’s part of the reason why the U.S. economy is not doing well, why this recovery is so punk — proportionately probably even worse than from the early ‘30s.

“Normally when you have a big downturn you have a sharp upturn, at least initially. This time we didn’t get a sharp upturn. This year we’re going about 40 miles an hour on a superhighway when we should be doing about 80, and one of the reasons is the uncertainty about taxes and the high tax burden.”

Editor's Note: Steve Forbes to Newsmax — A Romney Win Better for Markets

Editor's Note: Forbes to Newsmax — I Support Indiana's Mourdock

Editor's Note: Forbes to Newsmax — Arizona's Flake Would Boost Senate 'Conservative Core'

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Wednesday, 04 April 2012 01:19 PM
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