The U.S. economy is starting to pull out of recession, but deflation will stall a full recovery for several months, according to Steve Forbes, president and CEO of Forbes.
Speaking at the Securities Industry Association (SIA) Internet Trends & Strategies conference in New York on February 28, Forbes said that while the current war on terror is in a lull, the U.S. should brace for further attacks in the next several months and perhaps even expect a war between India and Pakistan.
Forbes also fears Congress will “overreact” to the Enron fallout. He says lawmakers may exaggerate any suspicious activity by a company, sparking mayhem in the markets. “Congress may do something foolish,” he said. Luckily, the Enron crumble has had a minimal effect on the markets. “The capital markets have absorbed [the Enron bankruptcy], but the danger is in what Congress might do to stop more Enrons.”
Post Enron, Forbes said, new regulation will be adopted placing audit committees in charge of auditing a company’s books. And auditors will be prohibited from acting as both auditor and consultant to a company. And the somewhat controversial retirement bill, H.R. 2269, the Retirement Security Advice Act of 2001, which allows all types of advisors to give advice to consumers on their 401(k)s, will pass.
Forbes also said there are more corporate bankruptcies on the horizon.