Forbes critical of U.S. economic policies

RENO -- Former presidential candidate and magazine editor-in-chief Steve Forbes didn't pull any punches as he spoke Wednesday about what he calls faulty "deflationary" U.S. economic policies.

Speaking to a packed crowd of approximately 1,000 suit-clad professionals at the Directions 2002 economic conference at the Lawlor Events Center in Reno, Forbes railed on the Federal Reserve -- and its popular chairman, Alan Greenspan -- for raising interest rates at a critical time, and said President Bush's tax cut is too small, likening it to "a weak cup of tea, posing as high-proof bourbon."

"The Fed has given us what we have not had in decades -- deflation," he said, citing rate-hike decisions designed to cool economic growth during the late 1990s. "When the theory's wrong, they blame you for not cooperating with the theory."

Forbes, who failed to excite voters with a proposed flat tax during the 2000 Republican primary election, did not have kind words for the current tax system.

"The Bible has 783,000 words," he said. "The tax code has 8 million words.

"I pity the poor archeologist that digs this thing up 1,000 years from now."

Forbes still believes in the flat tax, and said in an interview that he foresees the issue reappearing on the political radar. "I think that is something that will happen during Bush's second term," he said. "Even if the messenger doesn't make it, the message can."

Despite disagreements on economic issues, Forbes has found a ray of light in Bush's handling of foreign affairs in the wake of the Sept. 11 terrorist attacks. He praised his former adversary on a war executed with vigor "on par with Alexander the Great."

"Finally, the civilized world is taking terrorism seriously and is going to do something about it," he said. And on Iraq, which he believes is another haven for terrorism, "Any way we do it, as long as (Saddam Hussein) is around, the war on terror is unwon."

Forbes said the swift and decisive military campaign in Afghanistan sends a message to other world powers, such as China, that the United States is not soft when confronted with adversity.

Forbes, who headlined a group of four speakers at the conference, also said that after two failed attempts, he does not plan to pursue a presidential bid again in 2004. "I will endorse George Bush," he said. "Those days are over."

Speakers who preceded Forbes spoke specifically on economic efforts in Northern Nevada and Reno, looking back at a tempestuous year and forward into the long term.

Jim Rogers, CEO of Kampgrounds of America, said the environment of the Truckee Meadows is not being effectively utilized by marketers and development advocates.

"There's no place I see where Mother Nature and Lady Luck work together so effectively," he said. "It's time to pro-actively introduce Northern Nevada's outdoor recreation to the visitor that's already here."

He said in his business, Sept. 11 actually strengthened KOA's market position because family is becoming a renewed focus for vacationers. But Reno, with a sometimes dingy downtown, may be turning potential two-time visitors and future residents away.

"This is not about multi-million dollar investments," Rogers said. "It's about better using what we have right now."

Interspersed between big-screen commercials for local companies like SBC Communications and Sierra Pacific Resources, speakers John Lilley, UNR president, and Dr. Ioanna Morfessis, president of the Greater Baltimore Alliance, had a rosier outlook on the steps that have brought Reno praise -- including an article last week in the Wall Street Journal -- for its long-term planning.

Morfessis said Reno deserves recognition for moving away from a gaming-based economy, toward diversity, but said the real challenge will come in the future when a qualified young work force becomes a rare commodity.

"The real threat in the future will be not having enough talent in the pipeline to meet the needs of the next century," she said.

She also emphasized recruitment policies that diversify the workplace and broaden the market for newcomers.

Lilley, who started at UNR six months ago, said one emphasis of the university will be to gear up for a student population that could reach as high as 28,000 in 10 years, an eventuality that will necessitate major property acquisitions and philanthropy. He also said by pushing the idea of an "interactive university" working with Nevada's K-12 schools, the higher education system can help qualify students entering the work force.

Jeff Beckelman, CEO of the Reno Sparks Convention and Visitors Authority, also spoke at the event.


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