The Secret to More Job Creation
On a recent trip to China, I was astonished when senior officials of Beijing and Tianjin proudly showed me plans for a financial and commercial city center already under construction. In Tianjin, two hours' drive from the capital, a new skyline—including 18 Chrysler Building-sized structures—is rising. The 102 million-square-foot project is scheduled for completion within 24 months. Add this massive undertaking to multibillion-dollar investments in high-speed rail, smart grids, and green tech, among others, and you have government stimulus that can't help but bolster China's future.
I left China with a sense of urgency over the pace of the U.S. economic recovery. A return to growth is not only a necessary condition for job creation and full economic recovery, it's also the one sure way to sustain America's standard of living and strengthen its competitiveness. But an indebted U.S. can't play the stimulus game Beijing's way.
When I rejoined Cerberus last year and took over the operating responsibility for the roughly 50 companies in our portfolio, I began seeing the economy through the lenses of all these enterprises. From banking to defense to biotech, they generate about $50 billion in annual revenues. Here's another significant number: They support about 100,000 jobs and provide employment security for a vast number of Americans whose incomes were in jeopardy when we acquired their distressed employers.
Over my nearly 40 years in business I've learned many lessons about making investments that create both returns and jobs. The best decisions rest on a foundation of facts, data, and objective analysis of alternatives. Politics, special interests, and ego—in the boardroom or on Capitol Hill—are the enemies of wise choices. And while the Beltway boasts its share of economists, real experience in making business investments has historically been limited in federal government.
The increased friction in today's Washington makes matters even more complicated. The war between our political parties—partisanship simply for partisan ends—is grinding governance to a halt. Moreover, bureaucracy can stifle action once Congress makes a decision. Although the Administration did well to develop a stimulus package and shepherd it quickly through Congress, many feel that money from the American Recovery & Reinvestment Act of February 2009 flowed too slowly. More than 55,000 projects have been initiated, but the ranks of the unemployed grew by more than 2 million from February 2009 to January 2010.
America, however, is rich in one resource that can help: business leaders who excel at making decisions that, despite budgetary constraints, drive growth and job creation. And tapping this resource may not be so difficult.
The government could establish a stimulus strategy team comprised of very high-level former CEOs who are patriots first and have no political agenda. I'm thinking of such top executives as Jack Welch, Lou Gerstner, Andy Grove, Anne Mulcahy, A.G. Lafley, and Larry Bossidy, who created millions of jobs during their careers. I know from interacting with men and women of this caliber that they would be willing to take on the mission of optimizing government stimulus efforts. Working with the Commerce Dept. and other key agencies, they would set guidelines for government programs with budgets, deadlines, and funding recommendations. They would conduct hearings to determine viable goals, while supporting industries with the highest potential yield in job creation, economic gains, and American competitiveness. The emphasis would be on speed, accountability, and results.
This body should have the authority to select, fund, and monitor projects, along with the power to revoke grants to projects that falter and redirect funds to more productive ends. As a check on the commission, the White House and Congress would periodically measure its progress and keep it going or scrap it based on—what else?—its performance.