Dr. Alexander Mirtchev Discusses the U.S.

Government's
Measures to Deal With the Global Economic Crisis and
Stresses the Imperative for Viable Exit Strategy on the Riz
Khan Show

Dr. Alexander Mirtchev Discusses the U.S. Government's Measures to Deal With the Global
Economic Crisis and Stresses the Imperative for
Viable Exit Strategy on the Riz Khan Show

WASHINGTON, DC -- (MARKETWIRE) -- 05/14/09 --

Dr. Alexander Mirtchev, founder and president of Krull Corporation, discussed the U.S. government's
actions in response to the crisis in the economy on Al-Jazeera's Riz Khan Show. The complexities
created by the precarious economic and financial situation are exacerbated by what is perceived as a
"failure of the reigning 'social contract'" between Main Street, Wall Street and the U.S. government.
"To put it simply, Main Street was relying on Wall Street to go about its business, with the government
perceived as the arbiter and even guarantor of sure returns. Presently, the collapse of this 'contract' is
giving rise to calls from different quarters for overhauling the whole system," according to Dr.
Mirtchev.

"The public wants to see the government being pro-active, but 'there is no silver bullet, indeed,' that
would eliminate the current crisis with all its complexities, and particularly the presence of the
'elephant in the room' -- the specter of economic depression, looming debt and incipient inflation," he
pointed out. The U.S. government has only a limited set of tools at its disposal to address a plethora
of frequently divergent and contradictory problems. While the mammoth government intervention is
already an unavoidable fact of life and would hopefully contribute to a shorter and shallower slump, it
does not yet constitute economic policy.

"On one hand, the criteria of success are that government intervention should alleviate the fear and
uncertainty about the future, boost market confidence, and ultimately bring a new level of productivity,
competitiveness and entrepreneurship, utilizing rather than rejecting the 'strong hand of the market'
and gradually weaning the market from government 'fixes.'"
Mirtchev considers that "much more important at this stage is the imperative for the formulation and
articulation of a clear exit strategy that would comprehensively address the duration, prospects and
targets of the government intervention, as governments are not always the best stewards of the
markets nor are government officials the best executives to run industries."

"The bailouts, for example, appear to be utilized as a form of 'cure-all' and substituting as quasi-
bankruptcy proceedings for failed companies and sectors. Such unprecedented measures, however,
could impede normal market operations that ensure that failed companies do not 'malinger,'" he
warned. The bailouts are inevitably perceived by a number of constituencies to be rewarding failure,
often without clear public benefit.

"Attention has also been focused on the effectiveness of the massive government intervention, which
is often forced to rely on mechanisms not geared to deal with, or efficiently channel programs and
resources of such proportions. Given the sheer size of government funding, the potential for waste
and graft is substantial," according to Mirtchev. "An important issue is the accountability of the
recipients of government funding, in particular in the wake of the anger against bonus payments to
AIG executives," he added. "If laws have been broken, then obviously the guilty will be punished. But
this is more of a systemic failure, and attempts to place individual blame sometimes result in
complications and even cause the introduction of even more controversial measures and legislation."

Commenting on the claims that bailouts represent a form of "state capitalism" and sometimes even a
slide towards "socialism," Mirtchev reiterated that "historically, the role of the state expands during
times of crisis." Government plans and outcomes are "akin to a Rorschach test, in the sense that
different constituencies see what they are inclined to see." Paradoxically, at present the flow of funds
is from the public to the private sector, rather than the other way around, making it more complicated
than it looks at first glance to ascribe unambiguous ideology or philosophy to such intrusion in the
markets. "It remains to be seen what shape government intervention would evolve into, what and how
efficient the exit strategy will be, and what will be the long-term consequences," he commented.