Sam Zell Speaking Hard Truths: "Falling off the edge of a fiscal cliff is what America needs."
My old boss Sam Zell was on one of the Squawk shows on CNBC this morning (the one that stars Rutgers' own Becky Quick). While Zell's tenure and mine at Tribune Company had all to short a date, the real estate mogul and dead ringer for R. Crumb's Mr. Natural had plenty of choice words about our endless economic stagnation:
On the fiscal cliff: "I'm not sure a fiscal cliff, falling off the edge, is not exactly what America needs."
On whether high unemployment and low growth is the "new normal" for America: "There are always 'structural issues.' The question is what are the solutions."
On education: "How do we keep the greatest number of failing teachers in place so we can be fair?…That's not fair…It's racist, it's unfair, it's everything you can imagine."
On whether we're back in a recession: "We have a company in the business of creating enterprise service. One of the signs is when we see all these projects get delayed. That's one of the signs that we're heading into a recession. Somebody says we'll put it off for six or nine months. And we're seeing that… We're seeing it everywhere, except maybe Texas."
On the overinflated stock market: "One thing: Sam has always been is an optimist… My problem is that my assessment of the reality of the stuff is that everything is too expensive… The stock market should be at 9,000… But the stock market is being buoyed by QE 7 or 8 or 9."
On Barack Obama: "I don't think Barack Obama has been the best president we've ever had. I frankly think he's been one of the poorer presidents we've had."
On housing: "You've got to clear the market. If the single family housing market had been allowed to fail, we would have a viable, terrific housing market today, because it would have cleared. By virtue of not allowing it to clear, you have 4 or 5 million houses in purgatory, foreclosure, all that stuff, because nobody was willing to say A is A, B is B, face up, next, let's suffer and go forward… A policy that doesn't acknowledge reality has never succeeded in the history of the world. That's been the policy of the last four years. It's been stick your finger in the dike, hope for something good to happen."
On Ben Bernanke: "The idea of all these massive amounts of liquidity: Each time he increases, the impact is less and less. You'd think that maybe it's time to think of another solution. Because it ain't working. You've had three or four QEs, we've bought cars at inflated prices, we encouraged people to buy houses. We did all these things and nothing worked. If it was your life, if it was my life, we would have changed things three years ago, right?"
