On Thursday, Forbes's Robert Lenzner claimed the U.S. needs a second stimulus, and CNN's financial gurus Richard Quest and Ali Velshi were content not to challenge his point. Velshi even acknowledged later that the country needs to "stimulate employment" through tax benefits to small businesses.
"What we really need, but unfortunately we're politically behind the eight-ball is, we need an enormous stimulus program of say, $200 billion to put to work all these people from the construction trades and building and real estate that are out of work," Lenzner insisted.
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However, both Lenzner and co-host Richard Quest admitted that the stimulus would not pass Congress. Quest even told him that "your stimulus package probably has as much chance as daylight at night in London."
Neither co-host then questioned or contended with Lenzner's bold claim. Later on, the Forbes columnist argued that Obama should grant small businesses a tax benefit so they could hire one person for the next three-to-five years. Velshi expressed enthusiasm for the idea.
"And even conservatives agree on this point, that if we all want to see some measure of growth in the economy, the most effective way – even more than tax cuts, is to somehow stimulate employment," CNN's American Morning co-host remarked.
Lenzner also predicted that the American economy will take years to recover from the shocks of 2008, even though measures have been put in place to revive it. He said that "what we went through in 2008 and 2009 was such a serious operation on the American economy that you cannot recover fast. And what happened to housing – it's going to take years for it to recover."
A transcript of the segment, which aired on August 18 at 3:48 p.m. EDT, is as follows:
ROBERT LENZNER, columnist, Forbes magazine: What we really need, but unfortunately we're politically behind the eight-ball is, we need an enormous stimulus program of say, $200 billion to put to work all these people from the construction trades and building and real estate that are out of work. That's what we really need, and I don't think Republicans will ever go for it. I have one other idea, I just want to – go ahead.
RICHARD QUEST: Well – but before we got to your idea, your stimulus package probably has as much chance as daylight at night in London. However, that means it's the Fed and the ECB that's going to have to come in with QE3. And there is a valid point, that it hasn't been as effective as it might have been.
(...)
QUEST: Where does the ultimate responsibility – who's going to have to get us out of this mess?
LENZNER: I don't think we're going to get out of the mess. I think we're going to have to muddle through, because as Professor Rogath at Harbard has pointed out – and this is something that nobody wants to accept, they want to deny the reality of this – but what we went through in 2008 and 2009 was such a serious operation on the American economy that you cannot recover fast. And what happened to housing – it's going to take years for it to recover. Nobody wants to accept this reality, which is the result of him studying 800 years of history. So no matter what the Fed does –
ALI VELSHI: So let's push on this a little, Robert. This is an interesting concept, and a number of people are saying it, that what if we had to get used to a new reality that doesn't involve much growth whatsoever. Tell me for – and I know you write for regular folks. Tell me for regular folks who are watching this, what does that new reality mean, a world where it's not about growth in the value of your house, your salary, in the value of your stocks. What does that mean?
(...)
LENZNER: I wonder what do you think of this, Ali. Because I heard you on Jon Stewart, I thought you were terrific. What if Obama can come up with some tax benefit for small business, where most of the jobs have been created, so that each small business over a certain size would hire one person.
VELSHI: Yep.
LENZNER: One person for at least, let's say, the next three to five years. That would be millions of people. If they would get some benefit that would not cost them a lot of money, in the search of improving their business and increasing their revenues –
(Crosstalk)
VELSHI: And even conservatives agree on this point, that if we all want to see some measure of growth in the economy, the most effective way – even more than tax cuts, is to somehow stimulate employment. So I'd love it if we had an idea like that.
