Carl Icahn Speaks

We have already assessed the views of Nouriel Roubini, Jeremy Grantham and Leon Cooperman, extremely wealthy market players. And we have discovered that they are all very pessimistic.

Today, we take a look at another billionaire, Carl Icahn, on the grounds that cranky old rich people are often the best guides through market turmoil. They are often the best guides through market advances, too.

As it happens, Icahn is seriously pessimistic, not just about the markets, but about the American economy. He remarks that corporate and political leadership is “worse than mediocre.” We would have great difficulty disputing the point. I mentioned the point yesterday, so I find it congenial.

This report, from the Epoch Times:

Billionaire investor Carl Icahn said that the U.S. economy is at a breaking point, blaming “worse than mediocre” leadership and warning that soaring inflation threatens to topple America’s position on the world stage.

“Inflation is the worst thing an economy can have, and I think people underrate that,” he said, adding that, historically, “every hegemony has been destroyed by inflation.”

Now, one remarks that the Federal Reserve bank has made something of a hash of its inflating fighting policies. More than a few serious thinkers, people like Lawrence Summers, have declared that the Fed was late to the party. Since Summers also remarked that the Biden administration, what with its out-of-control spending, provoked the current inflation, we are inclined to take him seriously.

Anyway, Icahn suggests that we are lacking good leadership. But, we have more diverse leaders-- apparently, diversity and incompetence go hand-in-hand:

Besides inflation, Icahn said he sees other “major problems in this economy right now,” including leadership at corporations and on Capitol Hill.

“I’m not going to get into politics, but you do feel that in Washington nobody knows what’s really going on,” he said, before turning to the issue of boardroom weakness.

“Leadership is worse than mediocre” in many U.S. corporations, he said, acknowledging that there are exceptions.

“You go into a company today … it’s really horrible what you find,” Icahn added.

Most sensible observers believe that the current corporate and government mania about diversity and inclusivity led to the hiring of more than a few people who were not up to their jobs. Evidently, it is difficult to identify the connection between certain executives and corporate performance, though we have tried to do so in recent days in relation to the Silicon Valley Bank and the Signature Bank.

Again, Icahn fears inflation and he understands that administration money printing has caused it:

“I think the banking crisis is something that you might expect in Silicon Valley Bank. There’s so much money floating around in the system,” he said.

“There’s just too much cash. By definition, if you keep printing out money … If we have too much money floating around in the system, you’re going to have inflation by definition,” he said, adding that he believes the Federal Reserve is right to hike rates to cool price pressures.

Of course, given the meltdown in Silicon Valley, among others, the chances are growing that the Fed will not be continuing its attack on inflation. One dares mention that Jerome Powell, whatever his virtues, is, by training, a lawyer. Would we all feel better if a banker was running the Fed?