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Tom James, an iconic figure in banking and personal finance, says the inability of American politicians to get out of their own way could be the biggest threat to full economic recovery.
James, executive chairman of St. Petersburg-based Raymond James Financial and a prominent Gulf Coast philanthropist, spoke publicly about his beliefs during a recent Raymond James mid-year economic update conference. “Our two political parties don't talk to each other very well to forge compromises,” says James, according to a transcript of the event.
What makes that widely lamented fact even more frustrating is James says overall, the country's financial system is in better shape than before 2007, when the downturn began. Raymond James' CEO for 40 years, from 1970 to 2010, James says many of the large national financial institutions under pressure have corrected lingering capital issues.
That means while James says growth rates will be “barely perceptible” on average for the rest of the year, at least the economy is headed upward.
The big problem, though, says James, is “the United States political system has still not addressed our major problems of deficit spending, large outstanding debt balances and very costly entitlement programs.”
“Consequently,” adds James, “unless we take major spending cuts...we will have a problem that we do not want to essentially face. That means compromise on all behalves.”
James, in his presentation, says the first step in a comprise would be for Republicans to back off their no new taxes position. He adds that many tax credits given to “certain corporate industry sectors that no longer deserve them,” like depletion allowance and agricultural subsidies, should be eliminated.
James' father, Robert James, co-founded what's now the largest Gulf Coast-based bank in 1962 with business partner Edward Raymond. Tom James continues to oversee the firm from his chairman post, and he also spends time with charitable and economic development projects. That list includes the Salvador Dali Museum, the United Way and the Florida Council of 100.
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