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tv   Wall Street Journal CEO Council Business Relations Panel  CSPAN  December 28, 2016 9:25am-9:56am EST

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website. you could say i want to see a particular person's name or a senate committee or a tag for a policy. to the left side is very valuable for narrowing down. >> search, click, and pli ay on the c-span video library at the head of honeywell and blackstone took part in "the wall street journal" ceo council annual meeting in washington, d.c. they talked about the division between wall street and main street and what the new administration will mean for business. this is about a half hour. we wanted to take a look at what the political campaign and public opinion in general did to the reputation of big business, your companies. so we've asked dave cote from honeywell and steve schwartzman
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from blackstone group, both ceos to come in and talk about the relationship between big business and government. it took a beating from both the left and the right this campaign season. please join me in welcoming dave cote, steve schwarzman and david is going to interview. thank you. great to have you guys with us. so what went wrong p? y you guys are like politicians yourself? what went wrong? why is the representation of business so poor as it relates to politics and the voting public? >> dave. >> in terms of what went wrong, if the question is geared
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towards the view of business in general, i remember complaining about this long before the financial crisis or this election. i can remember having a discussion in new york with a couple of people, les moonbez was there, i said, how come you guys can't make a movie where the ceo is the hero and rescues somebody from a burning building. >> this group likes that movie. >> something where we are portrayed positively, because we are actually a force for good. the reason the country lives as well as it does and has the standard of living it does is because of business. i'm not a complete anti-regulation guy. i think you need certain regulations to maintain a certain common denominator. at the end of the day, we are the reason the country is so productive and the standard of living is so good.
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that message started getting lost long ago. i wouldn't be surprised you could track it back to my generation in the '60s if you look at when did people start to look at business differently. >> steve, baby boomers to blame? >> i don't know if it is baby boomers. it is sort of like an evolution where it shows it started in the early 2000 period with enron and wor worldcom and it got quiet and you had the financial crisis. there were a lot of causes for the financial crisis. six or seven major factors. the way the legend got told, it was only the banks. no one else contributed to anything. that kind of focus carried on. it became really good politics.
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it helped elect people. it has continued actually to this day. i think it was inculcated into popular culture. it was repeated. it is a tough thing to run from. >> if we view the results of last tuesday's election, somewhat clearly a referendum on politics in washington, perhaps a referendum on business as well, the mood of people voting the way they did, anti-establishment, the mood appears not to have changed from the populous' voice. would you agree with that? >> i don't know that i would look at it as an anti-business vote. most of the people i talked to who did vote for donald trump would say that they just feel
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like things aren't working. things need to change. it doesn't get a lot more specific than that other than things need to change. we don't know what but we need to take a chance that things are going to change. i don't know that it was a lot more complicated than that. >> if there is one concrete thing that you guys can do. you have been involved in washington. to your credit, you have served a lot and been involved here. steve, you have been in business a long time. if there is one concrete thing you would recommend to the people here about what they might do to change perceptions both in washington and beyond, it is what. >> i think things are going to change. i think they are going to change a lot. if you're a new president and you promise to create jobs, the mechanism you are going to use to change those jobs is the business community. so the business community now becomes front and center. it has got to work.
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it has to create jobs. the new administration is going to do it with a lot of different policies. you are going to see very substantial changes in regulation. the financial community has been really constrained to extend credit. that was part of regulatory changes. it has gone so far everywhere in the developed world that growth has been reduced way below potential. europe, u.s., other democracies. as a result, you have all these unhappy people. there are other factors as well. without extending credit, shrinking financial institutions, economic growth tends to correlate almost 1 to 1 with credit extension. we have shrunk credit ruthlessly. that's going to be reversed. you are going to have a different tax regime with lower
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corporate taxes, lower individual taxes. you are going to have moneys brought back in the trillions from abroad. you are going to have different tax regime abroad. there are going to be so many of these changes that i think what's going to happen, it is going to really force growth. >> you are excited? >> i am. >> does it create real substantive growth, steve or just appearance of growth that unless business leaders truly invest may not sustain itself? >> i think you need the preconditions to grow. you've had almost no productivity in the united states over the last "x" years. part of the reason, i think, is so much money has been diverted into regulatory uses. without any result from it, from a productivity point of view. i think produck fifty tivity iso
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go up, overall economic activity is going to go up. i think the business community is going to look infinitely better at the end of two to four-year run than they have for quite a long time. >> clearly, i would wager that the sum spent on regulation, however big they may be, are still far lesson the sum spent on buybacks and dividends. it seems there has to be a change in mind-set from ceos who are willing to say i'm going to build a factory or invest in other capital spending. they haven't been doing it. >> if i could support steve's point, i think as we start to grow more, that perception of business is a lot less concerning if you growing 3% than if you are growing 1.7%. i think that happens. one of the interesting things
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that has surprised me with this election, it feels like there is a real change in the animal spirits, if you will, of business people. there is just a different feeling amongst business people when you talk to them. this whole change aspect, which i have to admit i did not forecast. i have been quite encouraged to see it, though, in this past week. th that, along with some of the changes that steve was talking about that could create a very different dynamic. if we end up growing more, people are going to feel better about it. >> whether or not people believe it, it becomes so. >> it does happen. >> i think we have a poll question for people here. i think we asked this very question. can we call that question up. if we can't, maybe we can do a show of hands. do we have the question, guys? how about a raise of hand, how many people here feel animal spirits? i do too.
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that's about a third, 40%. how many of you are really willing to spend money in a way you were not before because of the way you feel? >> you have to see change. my point is that they are the change, are they not? >> it has been a week. >> the stock market is up 6%. the stock market is up a lot. i don't disagree with what you are saying. they have to be willing to spend. >> two weeks ago, if you had done the same poll and seen how many hands raised, i think it would have been zero. >> does anyone here want to say what would be the thing that would actually make them spend. does anyone want to speak up here. hold that thought. maybe we will get to you. do you feel that there is a renewed, almost moral obligation for u.s. companies to think about americans and american jobs and american success and productivity perhaps in ways that they were not previously? >> i've always thought that was a slippery slope for any large
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company to start thinking that way. i pride myself on being an american. i'm very clear when i go around the world that i'm american and think that way. as business people, you should always be thinking about productivity, how can you have the best products, how are you going to participate in every single market, how you are going to obey the law everywhere. i don't think it is a good dynamic for the country or for share owners if you are always thinking in terms of, well, this is what has to happen in the u.s. first. i don't know that that's always the best way to run a company. >> steve? >> i think dave sketched it out right. our objective with companies is to make them grow at least 50% faster than the s&p. there are a lot of different ways when you are doing that to create jobs. some of them are here. some of them are abroad. you try and find the optimal
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mix. nothing stays the same in business. so where there was very substantial offshoring, some of that works and then people find out, geez, that's a little clutchy. maybe we ought to domicile more of our people back here. there is an evolution that's going on now. i think there may be some tax regimes to encourage people to have more jobs here. that's part of the change that's going to occur. >> it seems a lot of politicians believe that business people's job is to create jobs, which it actually is not. a business person's job is to create profits of which jobs are a part of that. >> fundamentally. if you are a business person and you think your job is to grow quickly -- you grow your companies really fast. what happens is you hire more people. >> correct. >> we have 700,000 people who
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work at our companies. we are the fourth largest employer in the united states. people think black stone is just a financial company or something. we're quite substantial. if we're driving all the time to grow fast, because that's when you sell an asset, you get more money for the faster growing the company is, we keep hiring more and more people, that's good for america. >> do you think people can understand that distinction, the byproduct and not the primary goal? >> hell, no. you get the same thing when you hear a politician say they are going to go to washington and create jobs. they are not going to create jobs. they can create an environment where jobs can be created. the only way they create jobs is if they hire more government folks. that is not a good use of taxpayer money. >> so what's your perspective then about the way that business
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can improve its image and reputation right now? going through all the things we just discussed, it seems like you are in a way saying it is washington's fault. clearly, business has a renewed responsibility to advocate for itself in ways that it was not before. >> that gets a little difficult, because what are you going to do? start taking out full page ads? >> we would love that actually. we can get you a good deal. >> the unfortunate part is that we are the only one that is read it. >> that's not true. approaching 3 million, i might say. seriously, is there anything you can do to improve your reputation. >> i would say to the extent ha we can be helping the country grow and advocating policies that help the country grow, that's probably the biggest ting single thing we can do. p.r. is really just not worth your time? >> i don't think it falls on ready ears. >> we have a slightly different
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approach. we are huge members of many, many communities as honeywell is. our people volunteer a lot of the time. we do all kinds of things for our communities. we have a very active foundation. we do a lot of stuff in sustainability, because it is profitable to do green projects with our companies. if you fight this, fight one good person or one good act at a time. if everyone did that, did what preet was talking about, run a completely ethical environment and let everybody know about it, i think if you took the number of companies in america and everyone behaved like that, you would change the attitudes towards business.
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>> what would you say to americans who -- >> i have to disagree a bit. i think all the sfuf ytuff you talked about, if we asked everybody here, they do all of the same things. still, this attitude is there. >> what would you say to americans who believed that the system is rigged and business is a part of that rigged system? >> it is not. >> i wish it was. my job would be a hell of a lot easier. >> steve, china, you have spent a lot of time there and made a large investment in the schwarzman scholars program. given your experience over there, what have you learned about business and government from your experience in china? >> china is a completely different system. they don't he can actually have rule of law. it is a little bit of an
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adventure when you are there. one thing you learn, it is good to have an american type framework legally, ethically and so forth. however, chinese workers work really hard. sometimes they are difficult to get to do exactly what you want the first time or two but these are very entrepreneurial people. they work harder than people almost everywhere in the world. >> than americans? >> leave americans aside. they have a real will to win. it is almost the whole country with a will to win. that's how you get these extremely high growth rates. you do it through debt policies and other things where one can argue that they have sort of pushed the limits of some of the
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things that they can do. they are clever. they don't mind setbacks. it is not a problem. they set extremely ambitious goals and they don't mind if they don't get there the way they originally tried. so that's in a way admirable. it is what has made almost every analyst wrong about what would happen in china. >> is there any one aspect of the chinese way of doing business that you wish would be more integrated into the u.s.? >> yes. >> go on. >> well, partly, it is this endless will to win and not stopping and continual innovation. it is almost like everybody is an entrepreneur.
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>> has america gone soft? >> as compared to when? 1880s, yes. so we've had a great run in america and the number of people who really sort of approach things with the zellous perspective of some of the chinese is not as high as it might be. >> the run isn't over here, right? there are so many things to be hopeful for about america. >> i didn't say the run was over. >> you were asking me to compare where we are like a balance sheet with where china is now. >> you had some reaction to china. >> yeah. i've always thought they did a great job of having a long-term strategy for the country, having some sense of how things were going to evolve and what they had to get done. then they really get on with it. there is a lot of arguing that goes on behind closed doors.
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we tend to think of it as a totalitarian system, which it is not exactly. it is something we are not quite familiar with. they have their own elections. different than ours. theirs are a hell of a lot more vicious as dirt as we think ours was. theirs are a lot more vicious in the end result. they really have a big argument but then they develop a strategy they stick with. they have a focus on what we want to get done. we kind of argue from election to election. i would like to see more focus on some of those longer term trends. the three i always talk about that i wish our government would talk more about is one, the economic rise of china. this century, they are likely to become the number one economy in the world. the changes in technology. you look at what is going to happen on the dinl tagital side the digital revolution and the biological changes that are coming when you start thinking about crisper technology and
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what it happen with dna. the third one is the population is going to go from 7 billion to 10 billion people in the next 35 years. how do you feel them? how do you handle the pollution? i would sure like to know that somebody within government is thinking about it, our government is think being it. in china, i do get a sense that people think about it and they start talking about energy efficiency in a way that says, how do we make sure our people can breath the air we have? how can they actually use all the water that we have, the limited amount that we have. i don't feel like we think that way. i think we benefit from it. >> steve, thoughts on that? >> i think davis right. they have long-term goals, for example, in education, when we announced the schwarzman scholar program. the president of china wrote a note as part of the announcement at the great hall of the people and said he wanted two of their universities to be in the top
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ten in the world in 20 years. part of the reason that he liked the schwarzman scholar program is that it fit in with chinese universities learning from some of the western approaches that we just take for granted. now, that's the kind of planning that we basically don't have for the most part. >> somebody does something. >> can business fill that void? if so, how? >> i'm not sure how business fills that void. i have always felt like between government and business, people tend to want to look at them as the same. they are really not. i've always looked at business, you don't mind churn. you don't mind companies going bankrupt someday. it happens all the time over the course of 100 years. most temperatures are going to end up being not viable any longer. from that, you get a significant amount of productivity.
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you get people really thinking. you worry a lot less about sustainability. with government, you need just opposite. thank god we don't count on them for productivity. there wouldn't be a lot coming. you need sustainability. the fact that the system has existed for 200 years and probably will for another 200 years, great. there is this symbiotic relationship where government needs to not just regulate business, which they like to do but they also enable business. they need to focus on that enabling side, whether it is the infrastructure we talk about, the education system that steve was talking about, what do we do with trade that is important, a patent system that understands the digital age and how things could be different. there is a lot of stuff that government needs to be doing to enable business to be successful. >> you saw this firsthand on the simpson bowles commission. where do we stand on the debt? i don't think that came up once. where do we stand on the debt? is everything cool?
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>> actually, it came up several times in the election. both candidates did a great job of swats it away. nobody really wanted to hear about it. no, the problem is not gone away. my generation is still retiring even if you have 4% gdp growth for ten years. the problem is still there. a lot is going to come back to health care costs, medicare, medicaid. it is as simple as that. that was the issue seven, eight years ago when we were doing simpson bowles. it is still the issue. as my generation retires, we are going to swamp the system. >> let's get a couple of questions now. let me start. business reputation, doesn't some of this have to do with the 1% income inequality, the ever-growing gap between the "c" suite and the average worker's pay, the decline of unions and collective bargaining and the ability of average workers to negotiate. isn't that also kind of contributing to disaffection
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among the public with big business. >> i think that's a convenient explanation. i think that what really middle class, lower income people have not had a good environment to increase their income at least since 2000. there was a statistic yesterday, where it said since 2000 60% of americans have less real income in the last 16 years. this is appalling, not just some people because the federal reserve lowered interest rates and popped up asset values. it is a more serious problem and
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you have to address this with a positive approach in policies to create economic expansion, not at the rate we are doing, and you have to dramatically increase economic growth to help the people in the country. >> but c.e.o.s say they are not willing to spend. some of them feel a little animated but not enough to grab their checkbook. >> these things have to start some place. you start with changes of policy. you start with a much more neutral to positive approach towards innovation, growth, you set up the policies, create a different environment and things start happening and that is the way you make change. i think part of
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the election, or the old election, is those issues are going to be addressed. >> frankly with steve's point, i think it is less about somebody is doing well than it is somebody is doing well and i'm not doing as well as i did before. if everybody is doing well on a different basis, i don't think that is so bad. i thought bono had a great line when asked to compare and contrast the u.s. and ireland. he said in the u.s. if you don't have any money and you walk by a big house you look up and say some day i'm going to be that guy. in ireland, you say some day i'm going to get that guy. we still have that attitude in the country, that i want to be that guy. we can't lose that about us.
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>> questions? >> thank you so much. [ applause ] while congress is on great this week during prime time we're showing american history tv programs normally seen only on the weekend s. to want a look at world war ii. it starts at 8:00 eastern and followed by the fbi investigation into a natzi spy ring and then the start of what is now the cia. american history tv prime time tonight here on c-span3. this week on c-span the crisises of p flint, michigan water crisis. >> seriously, you found out that one of your divisions created two million fake accounts.
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had fired thousands of employees for improper behavior and had cheated thousands of your own customers, and you did not even once consider firing her ahead of the retirement. >> thursday at 8:00 p.m. eastern we remember the figures that passed away including former first lady nancy reagan and friday night at 8:00 the program continues with paris, muhammad ali and former astronaut john glenn this week on prime time on c-span. >> sunday indent is going to see about barack obama and the only is april ryan and white house correspondent and author of the presidency in black and white. up close view of presidents and
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race in america. prince university eddie glaude and how race influences the american soul and journalists and editor of washington post david maranais. watch live sunday noon-3:00 p.m. eastern on c-span two. democratic pollster stoke about polling data during the 2016 election cycle at an event hosted by new york city law school. his remarks were p part of a long day long congress foe cushion on components of a system. this portion is about 45


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