Sam Zell, CEO, of Equity Group Investments, a massive private equity firm, was on CNBC yesterday talking about several topics, including:
ways to find value in real estate and the financial crisis in Europe, and U.S. economic slowdown.
Discussing his difficult venture into natural gas.
Why he thinks Occupy Wall Street protesters shouldn’t take over private property. He adds that the real issue behind some of their concerns is not income disparity, it is an education issue.
Strategies for U.S. business innovation in order to compete with global economies and emerging markets AKA China. And opportunities for investing in the emerging markets.
Below are some quotes on regulation, where Zell took a swipe at Obama’s policies:
“When it’s all said and done, it’s very hard for me to see how raising taxes can change anything. Raising taxes may generate more revenue but every time you raise taxes, you create further disincentives. We’ve already got too many disincentives in our system.”
“If we want to generate growth, effectively President Obama should announce that all regulation is being postponed until we have 4.5 percent unemployment, at which point maybe we can afford the kind of gold-plated ideas that are coming out of the regulatory agencies. That’s the reality.”
“We did not need Sarbanes-Oxley if we had enforced the existing regulations. We did not need Dodd-Frank is we had enforced the existing regulations. Effectively, after we have all of those things, how does something like MF Global go broke? They go broke because we have regulators, but they are all sitting in Washington trying to devise how to destroy the economy rather than enforce the rules that have been written.”
“Basically the regulatory agencies to a large extent have scared the hell out of the business community.”
“I think that effectively they can raise taxes by ‘re-jiggering’ the IRS code. In other words, you clean up and simplify the code and effectively, you’ll raise revenue.”
Below are videos on all the above topics and their respective transcript (if available):
just people sense. some final thoughts from our guest hose sam zell. you go there, do you look around? yeah. you kick the tires? oh, yeah. i spend $1200 a year in my airplane. so i go everywhere. i spend a lot, just in the last five days i went around the world. $1200? hours. hours. 1200 hours — i think the emerging markets are doing well. i think that it’s as simple aswhere is the demand? and the emerging markets have pent-up demand that can be satisfied? and so i think they’ve sufferedless from all that’s gone on, and i think they’re going to be less impacted than the conventional wisdom. i think about all the stuff that sam has said today, and i was going to ask him now that the financial crisis just left us with a hangover, a demandhangover that’s going to be hard to get out of the way. it’s not necessarily current policies, and it’s the rogue idea of — but then i realized the way we handled it, in your view, that has added to — i don’t want to that was a there’s lots of things that could be done. obviously i think defusing the regulation time bomb, much more consistency. the president of the united states goes out on monday and says we want exports and on tuesday we sue boeing. it just doesn’t make sense. that’s the number one exporter in the country. doing anything on residential real estate? yeah, i mean, i would have liquidated — i would haveallowed the market to clear and we would have a healthyresidential market today. any worse than it did already?absolutely not. i think when you create all of these false hopes.telephone day there’s another politician that says we’re going to invent in next plan. that’s just another reason why somebody shouldn’t make a somebody shouldn’t make a decision. or the fact that we’re working in a single-family house arena. 10% of the people who haven’t paid are capable of paying.
here’s what i want to talk to you about. there was such a great discussion about — that we just had with all of us that want america to regain the stature that it deserves and that it had. there are moves that help us factor in. now way had become the envy of the world with the six killer apps like technology and property rights, health care advances. and china has downloaded five of them and taken them from us. and ready to pass within the next couple of decades. they stril nill have not downlo property rights. he said that’s the only chance we have to compete with china is they don’t ever get the property rights correct. which is sad. it doesn’t mean that we’re going to get back to doing the innovating and doing what we do great. that means they stumbled. i’m not — what do we need to do? i’m not nowhere near as pessimistic as he suggests. about the west? yeah. i think we have to focus on what is american exceptionalism? american exceptionalism is the fact that we are an immigrant nation. and by definition — risk takers. immigrants are self selecting. my family — my parents’ family was 14 people. the only people left were two. and the other 1 reje2 rejected idea of moving. those are the people that have made our country. and we succeeded when we fed their april tights, when we encouraged them to take risks. when we encouraged them to grow and expand and make this country what it is. you go from there to wealth redistribution, you’re literally creating the opposite environment.
On Occupy Wall Street
let’s get more thoughts from our guest host sam zell. so let’s go to it. occupy wall street. please, andrew, what doo you think of occupy wall street? not much. i think that it’s collected a whole bunch of people with very different views. i think that protest is both healthy and critical to the dynamics of our country. at the same time, i don’t see any justification for taking over private property. i don’t see any justification for creating health issues and attracting people would more than anything else want to get on television. if you were the property owner of the park, you would have done — i would sow– what do you make of the larger conversation of economic inee quality inequality of the country. it’s worth asking. and the answer, andrew, is that there has been a significant bifurcation and economic equality in our country. the rich have gotten richer and the poor got poorer. as david brooks said yesterday, the real issue is not income inequality. the real issue is education inequality. the fact that we have tier highly educated, highly mote valted and highly productive and highly reimbursed. then we have an uneducated scenario that’s getting helped. i mean we operate a company that is a $6 billion distributor. we decided to set up a plant in the united states to provide passengers — if we had a live disruption, we can’t fill the plant with workers because — make passengers? to make passengers. you have to be able to fill plan real plans. we have 10% unemployment. i mean we have an education cris crisis. and the fact that we’re not educating our people, the fact that we advocated our education to union rules, i mean, you know, i never figured out — someone said when the students start paying us, then