Joseph Grano: Nation Looking for Leadership and Can't Find It

Friday, 03 Feb 2012 07:26 AM

By Forrest Jones and Kathleen Walter

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President Barack Obama has failed when it comes to leading the country to better days by resorting to divisive politics, while Republicans also haven't provided the leadership the country needs now more than ever, says Joseph Grano, author and chairman of Centurion Holdings.

"Our current president, in terms of Obama, has not been that successful, and the second point of a president is you are looking for somebody that can coalesce our nation and bring it together and provide the confidence, the framework and the aspirations that we are so used to," Grano tells Newsmax.TV in an exclusive interview.

"That has not happened, and again I think the basis of it is ideology rather than solutions and rather than acting like an American rather than a partisan zealot. And I blame the Republicans just as much as I blame the Democrats in that regard. The nation is looking for leadership."

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Blaming the wealthy for the nation's woes via tax hikes and other proposals won't help those who are out of work and are otherwise harder off financially than they were before the downturn.

"This division of rich and poor makes no sense and the only way you get employment back to the nation is through wealth creation and not wealth redistribution," says Grano, author of "You Can't Predict a Hero: From War to Wall Street, Leading in Times of Crisis."
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Finding common ground on the deficit will involve compromise from both parties.

Democrats are going to have to agree to spending cuts while Republicans are going to have to accept to raising revenue, often a euphemism for tax hikes or closing loopholes.

"In 2008, our debt was $9 trillion and now it's going onto $16 trillion, and I think it can be solved with a combination of reduced spending and increased revenue," Grano says.

"We'll probably have two years of very slow GDP growth, and if we start focusing on these solutions then yes we can get back to the good old days."

The government probably won't extend the Bush tax cuts, which are set to expire at the end of this year, and if that happens, policymakers must resist the temptation to spend the increased revenue that would arise with the end of the cuts, Grano says.

"I do think there will be a slight rise in income taxes across the board. It should really be focused on those of us earning over $250,000, and I'd be an advocate of raising my taxes, let's say 5 percent, but match it with a 10 percent reduction in spending," Grano says.

"The last thing we should be doing is bringing in revenue and spending them on additional entitlements. That makes no sense."

Amid such uncertainty, made worse by an oncoming recession in Europe and the fallout from the Arab Spring in the Middle East, where leadership remains fluid, investors should look to cash and cash equivalents right now.

"I would rather people take a very cautious approach to the markets until we see a discernable trend on the upside," Grano says.

"I advocate a barbell strategy of 70 percent very safe, and 30 percent very aggressive and nothing in the middle. Preservation of capital is probably the most important issue right now and if things were to get worse, cash would be king."

Editor’s note: To order ‘You Can’t Predict a Hero' at a great price — Click Here Now.

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