In an interview last month, Whole Foods Market (NAS: WFM) founder and co-CEO John Mackey shared his concerns over the state of America's fiscal and political situation. Watch the video below to see why Mackey is a long-term optimist, despite his worries that, if our leaders don't make the necessary changes, "Greece is just a few years away for our country." (A transcript is provided below; running time: 3:54.)
Tom Gardner: Do you think that there's a fundamental risk to the solvency of America?
John Mackey: Oh, absolutely. I'm very concerned about America's future at this point. Unless something changes, we are going to go bankrupt. I mean the writing's on the wall, and we are in sort of a political paralysis. The government is spending money and I guess there'll be a strong movement to try to put in like a value-added tax so the government will have more money to spend, but you can see how that's working out for Europe. It's not working out that well for Europe, but I'm very concerned about our; the deficits are clearly not sustainable and the debts that we're piling up. Greece is just a few years away for our country at this point, and it's amazing that more people don't see it. I'm very concerned about that.
Gardner: If that happens, what happens to a company like Whole Foods? Have you studied what happens when countries go, financially fall apart?
Mackey: They do different things. I think probably what our country would do would be they would choose rather than deflation and depression, which is the thing they're most scared about; they'll end up with a lot of inflation, to inflate away the debts. The United States can do what Europe can't do.
Mackey: We can print, and we are doing that. I would argue possibly that as our stock, it's an all-time new high today, that there's a bit of a bubble in the stock market. You can't earn any interest. They've been putting liquidity, and liquidity and liquidity in for the last few years. Where's it going? It's not showing up yet and consumer prices haven't gone up that much, so you don't have the inflation working its way through the real economy yet, except for oil perhaps, or gold, and those types of commodities have gone way up. It's not going back into real estate. I'd say a lot of it's right now going into the stock market. It may not look like a runaway bubble. Bubbles never appear to be bubbles really until afterwards, when they pop. Then it's like, what was I thinking? What would Whole Foods do?
Gardner: That would impact, yeah, what would Whole Foods do in that scenario, maybe something short of hyperinflation?
Mackey: Well again, we're piling up a lot of cash, so we want to make sure that we have plenty of reserves to weather whatever whitewater comes our way in the future. We want to be as prepared as we can be, and I mean unless you're just a total doom-and-gloom survivalist, and you're going to stock food at home, which we would be happy to sell to you, by the way, and guns in your basement or whatnot, we think we'll probably try to muddle through.
What else can you do? I'm not getting citizenship in another country preparing to move away. This is my home and my country. I have in some sense; I'm an entrepreneur, so I'm ultimately an optimist. Entrepreneurs tend to be optimistic. I'm still hopeful we'll get the right type of political leadership. I mean, you have a civil war and you get an Abraham Lincoln. Oftentimes America's had the right leaders when we've needed them, political leaders. I don't think we have that right now, but we could. And when things get really bad, maybe we will.
Gardner: You maintain your stance as a long-term optimist?
Mackey: I'm a long-term optimist; yes, because I fundamentally believe in capitalism, and I believe in science, and I believe in progress, and we're just making some economic and political mistakes that are still correctable, and I'm hopeful we will correct them.
For more from Tom's interview with John Mackey:
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