Michael Milken spoke to CNBC’s Maria Bartiromo this afternoon about the state of global markets and the U.S. economy.
- 0:25 We’ve recapitalized the United States for the most part. Corporate bond issuance is up, public/private markets are financing the world. We should expect inflation and growth. EM is still strong.
- 1:10 The underlying fact is that China has built their education for their citizens. You can’t grow the U.S. economy if you don’t strengthen the education system. Markets are recognising the strength of the education of Chinese citizens.
- 2:00 We have the accept the fact that China will have a larger economy than the U.S. eventually. That doesn’t mean the U.S. economy is not the largest economy on a per capita basis.
- 2:20 “We have got to stop this non-recourse loaning to housing. We have distorted the utility curve of middle class America.” We have misled people on what size house they need. Middle class America is allocating too much of its resources to housing and transportation.
- 3:10 In Asia, they allocate as many resources to housing and transportation and supplemental education. How can we expect to compete long-term?
Milken then goes on to discuss the priorities of governments in Japan, the U.S., and Europe suggesting the priority is no longer inflation, but employment. He doesn’t think we’ll see defaults on the state level, and foresees a compromise on state’s rights with the federal government.
On education, he said, “We cannot expect job creation until the country decides that the education of their children and the responsibility of a parent to the supplemental education of their [children] is more important than the size of their house or the horsepower of their car.”
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