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BizRadio: Dr. Laffer Predicts the End of Prosperity if Obama Policies are Enacted
industrialinfo.com
SUGAR LAND--June 10, 2008--After Barack Obama's victory speech, BizRadio's conservative economic brain trust discussed what would happen to the U.S. economy and markets if Mr. Obama has his way. From a supply-sider's view, it's not a pretty picture.
Dan Frishberg: "Well, I tell you I don't like what I am seeing right now because, look, you and I probably both agree that there is, sooner or later, going to be a rally in the American stock market. And the more disturbed everybody gets when they run out of gas, the better it's going to be, but right in the middle it looks like it could get interrupted by bad policies."
Arthur Laffer: "Yeah, it sure could. Well you know if Obama puts his policy through, it is a very serious time the U.S. is going to have. I've got a book coming out between the November election and the inauguration, which is called "The End of Prosperity." It just outlines exactly what will happen to the economy, to assets, to all these things if the Obama agenda is taken, as it currently stands."
Mr. Frishberg: "Well, let's talk about what might happen, forgetting about if the GOP can rally the voters. Let's assume that they can't for the moment, and let's think about what would I invest in to make money on this mismanagement of the economy. We've got to figure out what to do from here."
Dr. Laffer: "No, that's right. What do you do from here? I think things like if you wait a little bit, land might be a good deal. Land has always performed relatively well in bad times. When you look at other things, maybe investing abroad would be a good idea.
"I think it's pretty serious, and I think the price of real estate and homes can go down, especially by region. I think California can have a large, large further downside. What has happened in California is because of all the regulations and requirements and how long it takes to get the permitting process through. All the houses that are being sold today were really begun eight years ago when things were booming. So they've got this pipeline filled with houses and now California has become so unattractive that everyone is leaving California. You've got this huge overhang of houses and lots more coming on stream and people leaving, so you know you've got a lot further to go down. Texas and Tennessee and several other states don't have those problems."
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