Senate candidate Eric Hovde makes his Milwaukee introduction

 

Eric Hovde was an unknown political commodity until recently, but like Sen. Ron Johnson in 2010, Hovde is using his Washington outsider status and personal fortune in his campaign for the U.S. Senate seat of retiring senator Herb Kohl.

Hovde appeared before the Milwaukee Press Club Tuesday afternoon to answer questions about his campaign, and his career as a community banker, hedge fund manager and real estate developer. He is running for the Republican nomination against former Gov. Tommy Thompson, State Rep. Jeff Fitzgerald and former Congressman Mark Neumann. Congresswoman Tammy Baldwin is the lone Democratic candidate running for the seat.

Hovde opened by saying economic history is foretelling the nation is on the road to economic ruin. Hovde sees two prospects for the United States unless drastic fiscal changes are made. One: defaulting on our debt, which will lead to a global recession that will eclipse the Great Depression, and two: the Federal Reserve will continue with quantitative easing which will devalue the dollar and leading to ever-increasing inflation.

His reasoning comes from a book titled This Time is Different: Eight Centuries of Financial Folly, which traces the economic missteps of the world’s economies and the current economic collapse of Greece, Spain and Portugal.

However, Hovde provided his plan to avoid what he calls the inevitable economic collapse of the United States.

“First, we need to stop spending and second, we need to look at the 1,300 different Federal agencies and determine their relevance, duplication of services and if they are fulfilling their mission cost efficiently,” he said.

He added that there must be tax reform to encourage growth, the deregulation of Federal agencies, stop quantitative easing, end crony capitalism and enforce the rules of banking equally.

“The Democrats attacked Bush on Enron, Tyco and they all went to jail,” Hovde said. “But where is Lloyd Blankfein, the chairman of Goldman-Sachs? Probably sitting in his mansion. Do you all realize that Obama received more money from Wall Street than any Republican and his Treasury Secretary Timothy Geithner oversaw all the abuse?”

“If a something is too big to fail, then it is too big to exist,” Hovde said.

Hovde explained that the banks he controls are small and meet the capital to debt ratios required by law, but the large Wall Street financial houses don’t have to follow those rules. Hovde’s harsh words for Wall Street and big banks may seem odd, since he owns banks, managed hedge funds and is a real estate developer.

“There should be a mistrust of Wall Street. I’ve been a verocious critic of Wall Street,” he said, when asked why voters should trust him with his ties to the financial industry. “I was the first person to go on Squawk Box (CNBC) to criticize Goldman Sachs.”

As for banking regulations, Hovde doesn’t believe we need more but that we need regulators who will adhere to them and enforce them. He criticized the Dodd-Frank legislation (Dodd-Frank Wall Street Reform and Consumer Protection Act), saying that the 100 pages of obscure language is unnecessary. Instead, Hovde would have a clear rule to end the derivative and credit swaps by demanding the banks must either own the bond or have cash collateral to cover the value of the swap.

“The biggest problem we have in this country is politicians that don’t understand economics,” Hovde said. “Then they turn to Wall Street who ends up writing their own rules.”

Hovde opposes the “Buffett Rule.”

“We can’t even get close to taxing ourselves out of debt,” he said. “It would take a rate of 134 percent on income just to battle the current annual deficit.”

While Hovde has his own plan for ending the economic crisis, he also commented on Rep. Paul Ryan‘s Roadmap, saying the Congressman’s plan isn’t big enough to solve the problem, but he praised Ryan for having the guts to put forth a plan.

“Even under Paul Ryan’s plan, we would still be adding to the deficit and adding $8 trillion to the debt,” he said.

Hovde is not a fan of the Patient Protection and Affordable Health Care Act (Obamacare), taking the party-line stand that health care should be left to the private market. He agreed with Rep. Ryan’s idea to provide vouchers for those who could not afford to purchase their own insurance coverage.

“I don’t understand why we would let the Feds do (health care) when history shows government programs haven’t worked,” he said.

On international relations, Hovde said he would pull American troops out of Afghanistan immediately.

“This is a nation that has been occupied and nobody have been able to sustain there,” he said. “It is not worth the lives of our young men and women and the cost of keeping troops there.”

Instead, Hovde would develop a strike force base either in Afghanistan or in a nearby country that could be used to respond to any terrorist uprising. But he would give up on the idea of the U.S. trying to remake the Afghan society into a copy of ours.

As for Syria and the Assad regime’s violent response to protestors, Hovde would encourage the revolutionaries but not send American troops into harms way.

“All nations have to go through their own revolutions and don’t need the involvement of other countries,” he said.

In his final comments, Hovde said he would serve as a “citizen legislator” who would return to Wisconsin to listen to the people and know the communities he is representing. He shared a conversation he had with Casper Weinberger as a young man visiting his father Don Hovde, in the Reagan White House. Weinberger told him the creation of full-time career legislators is due to central air conditioning.

“Back before air conditioning, legislators would be in Washington during the spring and fall to do their work, but return home in the summer and holidays to practice their trade and to connect with their constituents,” he said.

But with the invention of air conditioning, politicians could stay in Washington over the hot, humid summers and not return to their home districts and interact with the citizens.

“We need more citizen legislators back in D.C.,” he said. “I will be that kind of legislator.”

Hovde and his three opponents will continue to campaign throughout the spring and summer until the primary on August 14.