Ian Schrager on the Economy and Obama's Prospects

Hotelier and real estate developer Ian Schrager. Robert Wright / Redux

Four years ago, well before the financial meltdown, you said your gut instinct told you we were headed for an economic correction.

I didn't realize it would be a paradigm shift.

What does your gut tell you now?

Usually these cycles last two to three years. This time it's going to be five, six, or seven years. I hope it's not going to be like what happened in Japan, when they had a lost decade.

You recently opened a new hotel in Chicago, President Obama's hometown. Has he been good or bad for business?

I don't really know. I think his health-insurance plan was a worthy thing to do. I'm not sure it's good to do at a time when the economy is so weak.

Some are predicting that there will be record foreclosures on hotels next year. Will you be acquiring them at bargain-basement prices?

I'm waiting for that, but so far this avalanche of opportunities hasn't happened. Interest rates are so low, and prices haven't even dropped yet, so that could be one explanation.

Money from rich Europeans was stoking the New York real-estate market. What about now that the euro zone seems on the cusp of collapse?

Family apartments in New York are selling for astronomical prices—$4,000, $5,000, $6,000 per square foot. The dollar is still cheap, and there's a lot of South American and Chinese money. There also seems to be a bigger breach between very wealthy people and people who are not so fortunate.

What tax and spending policies should we be pursuing?

Keep the capital-gains tax low. It would be a good idea not to raise the withholding tax. I think what the president is trying to do is noble, but when we're trying to jump-start the economy, I'm not sure that it wouldn't be better to let private industry do it rather than the government.

You've been a nominal Democrat. Who do you like this time around?

I haven't made up my mind yet. I like Mitt Romney, because he's a very smart guy. I met him through the Marriotts. The question is whether anybody is going to be able to unseat Obama.