20 September 2001
Economist paints gloomy outlook at Forbes
SINGAPORE - Delegates at the Forbes CEO Global
Conference in Singapore heard today some harsh facts about
the US economy made worse by the September 11 attacks on
the World Trade Center and Pentagon.
Respected economist and regular Forbes columnist,
Professor Steve H Hanke, Professor of Applied Economics,
Johns Hopkins University, said that, before the attacks,
the US economy was already looking dire.
On September 9, he said he had already advised "everyone
to get out of the market."
The terrorist attacks only made things worse and he said
it would be a "long and difficult battle ahead".
Speaking through a video-conference, Hanke said the
terrorists' choice of destroying the twin towers of World
Trade Center was no accident. "They represent the rule of
law and capitalism."
And he put into perspective how important the US economy
was to the rest of the world. He said he had recently
calculated the total capitalisation of all shares in the
world and 78 percent of the amount was US$-denominated and
in New York.
"The rest are sideshows," he said. This was why, he
added, high-tech companies everywhere wanted to do their
IPOs in New York.
"That's why we have to realise the significance of the
twin towers thing. It is mind-boggling to think of the
capital concentrated in New York and the brain power that
Hanke said, "There will be no quick fix. We can't say
let's have a quick win, quick war and get it over
He also did not hold out any hope of an IMF-led recovery
and likened the IMF to a wrecking ball, destroying
everything around it, and he pointed to countries in Asia
where IMF policies had not worked.
IMF, he said, was "unreformable".
He also called the Japanese "hopeless", saying they had
been trying to fix their economy for 10 years but held hope
for the new Prime Minister's policies.
Beyond the prospect of a military war, Hanke said there
was also a "war of ideas with anti-capitalists". He cited
the 40,000 NGOs around the world, whom he called
"anti-capitalists" and "our biggest problem".
"Most companies are kowtowing to the NGOs and 50 percent
of their funds are derived from governments."