One CEO With A Brain

Kevin Drum asks:

Why don’t more CEOs talk like this? Schmidt is right : American companies need more demand. That’s the uncertainty that’s dominating their lives right now: economic uncertainty, not the ludicrous specter of regulatory uncertainty that Republican politicians and Fox News keep pretending is our big problem right now.

This was in response to an interview by Christiane Amanpour to the former Google CEO and current Executive Chairman Eric Schmidt.

Amanpour: But you say significant stimulus. Obviously this is a political environment where the only real conversation is about cutting. Do you see any expectation or possibility of a climate for more stimulus?

blog_eric_schmidtSchmidt: Well that’s a political question. But the current strategy is ludicrous. You have a situtation where the private sector sees essentially no growth in demand. The classic solution is to have the government step in, and with short-term initiatives help stimulate that demand. If they do it right, they’ll invest in income and growth producing things, like highways and bridges and schools.

….So this is a pretty dark picture that you’re painting. Add to that no confidence from consumers, and businesses sitting on something like 2 trillion worth of profits, which they’re not going to spend apparently. Does the president have a material problem with the business community?

The real problem is not the business community. The real problem is: the Democrats and the Republicans fight for one point or another in a political sphere, while the rest of us are waiting for the government to do something concrete and predictable. What business needs is predictable, long-term plans. We need to know: Where is government spending going to be, what are the government programs going to be? And off we go.

Business can create enormous numbers of new jobs in America. All we need to see is more demand. What’s happening right now is: Businesses are very well-run, they have a lot of cash. They’re waiting for more demand. At the moment, business efficiency allows them to grow at 1 or 2 percent, which is what we’re seeing today. They don’t have to hire more people. And until we solve the problem, people are going to sit idle. And it’s a real tragedy.

It’s pretty obvious why other CEOs don’t talk like this. It doesn’t cost them too much to sit tight for a few years while profits are maintained and the party which gets them the most (Republicans) gets deeper into power. Right now the United States is in economic decline and it’s going to stay in economic decline for a long time because of globalization. Technology will improve and consumer goods will continue getting better and cheaper, people will be placated, but poverty will grow. The wealthy are trying to keep their wealth as long as possible regardless of the consequences.

There’s also a deeper issue, and it has to do with the idolatry of property, which I posted about here: “How Conservatives and Libertarians Have Been Corrupted.”

Of course, Eric Schmidt does deserve a lot of crap for his anti-pseudonym/anonymity problems and his agenda concerning that with Google+, but I’ll give him some slack here.


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