oligarchs can wend their way through the morass of government-protected bureaucracies by greasing palms and offering sinecures , the dreams of progress are crushed .
EB5 : A recent letter to Congress from the U . S . Chamber of Commerce and other organizations estimated the EB-5 program generated over $ 15 billion from 2005-2015 and created more than 100,000 jobs in America – becoming “ an essential economic development financing tool in post- Great Recession capital markets .” What is your reaction ?
Dr . ABL : EB-5 ’ s greatest attribute is as an example of what can be done , what should be done and how to do it . I have no idea whether the numbers are correct . The effects could be much greater . What I do know is that the success of the program seems to be ever-increasing .
“ In response to the financial crisis , the world ’ s major central banks essentially all reacted in the same way : loosen monetary policy as much as possible by buying as many bonds as possible .”
EB5 : You ’ re known as “ The Father of Supply-Side Economics ” for the role you played in the global taxcutting movement of the 1980s . You ’ ve served as a professor of economics at Pepperdine University , the University of Southern California and the University of Chicago over the decades . What do you foresee in terms of the future economic and job creation impact of the EB-5 program ?
Dr . ABL : Today , EB-5 ’ s effects are small , but they are growing because of the continuous success of the program . EB-5 and its descendants are the wave of the future . I think the program should be massively expanded .
EB-5 will likely be seen many years from now as the catalyst for a great deal of economic growth and prosperity . The reason I ’ m so confident in EB-5 ’ s success is that all of the program ’ s incentives are correctly aligned . There ’ s nothing better for America than people wanting to come here to work , invest and produce . And there are many foreigners who want resident status in the U . S . The beautiful thing about EB-5 is that is marries both foreigners ’ desires to live in the U . S . and our desire to bring some of the world ’ s most productive people to our country . EB-5 is a win-win .
EB5 : Let ’ s switch to some big picture economic issues . Where do you think interest rates are going and what do you foresee in terms of the overall economy going forward ?
Dr . ABL : Since the onset of the Great Recession , central banks have been intervening heavily in bond markets to set interest rates at different levels than they would be in a free market . The point here is simply that the bond market no longer reflects an equal market supply and market demand . Now total bond demand , including the artificial demand by government , greatly exceeds the private demand for bonds , leaving interest rates far below their appropriate market levels . Bond market yields , as a result , have lost much of their information content . Central bankers have , through the use of unconventional monetary tools such as quantitative easing ( QE ), Operation Twist and negative interest rates , forced interest rates lower than they otherwise would be in a free market . For years , bond yields have not reflected the prices market buyers and sellers would be willing to pay for bonds when supply has to equal demand . Instead , bond yields reflect the size of the monetary tools employed by the world ’ s central bankers to force rates lower .
In response to the financial crisis , the world ’ s major central banks essentially all reacted in the same way : loosen monetary policy as much as possible by buying as many bonds as possible . The U . S . Federal Reserve ( Fed ), European Central Bank ( ECB ), Bank of England ( BoE ) and Bank of Japan ( BoJ ) all pushed interest rates down and engaged in quantitative easing .
The irony in today ’ s world is that U . S . Fed policy is now relatively tight — the idea that one drunk is soberer than the other lushes — when compared
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