Executive Summary
Total Page:16
File Type:pdf, Size:1020Kb
EXECUTIVE S UMMARY CAUCUS in association with FICCI Washington, D.C. Putting America Back to Work November 15, 2011 Presenting Spons o r s Burson-Marsteller NYSE Euronext CNBC Patriarch Partners Korn/Ferry UPS Leslie and Steven Saiontz The Yale CEO Caucus November 15, 2011 Putting America Back to Work Washington, DC Table of Contents Key Themes from Yale CEO Leadership Caucus Jeffrey A. Sonnenfeld, Yale CELI/Yale School of Management Discussion 1: How CEOs Add Value in Job Creation Efforts at Home and DC: Correcting Public Impressions Introductory Comments: The Honorable Mitch McConnell, Senate Republican Leader Andrew N. Liveris, Chairman & CEO, The Dow Chemical Company Respondents: Joshua Bekenstein, Managing Director, Bain Capital The Honorable Michael F. Bennet, U.S. Senate (CO) The Honorable Christopher Coons, U.S. Senate (DE) Governor John M. Engler, President, The Business Roundtable Alan B. Miller, Chairman, President & CEO, Universal Health Services Nell Minow, Board Member, GovernanceMetrics Nels B. Olson, Vice Chairman, Korn/Ferry International Mark J. Penn, Worldwide CEO, Burson-Marsteller Robert M. Tomasko, Director, Social Enterprise Program, American University Discussion 2: Fixing Problems without Washington: Jobs & Healthcare Panelists: Adam Aron, CEO, Philadelphia 76ers Trevor Fetter, President & CEO, Tenet Healthcare Corporation Tig Gilliam, CEO, Adecco North America Seth Goldman, TeaEO, Honest Tea James Hagedorn, Chairman, President and CEO, The Scotts Miracle-Gro Company Gerardo Lopez, President & CEO, AMC Entertainment John F. Lundgren, President & CEO, Stanley Black & Decker Thomas J. Quinlan III, President & CEO, R.R. Donnelley & Sons Company David B. Snow Jr., Chairman & CEO, Medco Health Solutions Lynn Tilton, CEO, Patriarch Partners Myron W. Ullman III, Chairman & CEO, JCPenney Company Discussion 3: Fair Fights: Domestic Employment & New Global Markets Panelists: Steve Case, Chairman & CEO, Revolution LLC The Honorable Elaine Chao, U.S. Secretary of Labor (2001–2009) Lisa Kahn, Professor, Yale School of Management; Senior Labor Economist, Council of Economic Advisers Lt. General David Melcher (Ret.), President & CEO, ITT Exelis D. Quinn Mills, Professor, Harvard Business School Peter Navarro, Professor, UC-Irvine; Author, The Coming New China War Robert A. Pastor, Professor, American University; Author, The North American Idea Jose Maria Sanz-Magallon, CEO, Telefonica Internacional USA The Honorable Christopher Shays, Former U.S. House of Representatives THESE SUMMARIES REFLECT BULLSEYE RESOURCES, INC.’S SUBJECTIVE CONDENSED SUMMARIZATION OF THE 2011 YALE CEO CAUCUS, AND THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE SESSIONS. IN NO WAY DOES THE CHIEF EXECUTIVE LEADERSHIP INSTITUTE OR BULLSEYE RESOURCES ASSUME ANY RESPONSIBILITY FOR THE INFORMATION CONTAINED HEREIN, OR ANY DECISIONS MADE BASED UPON THE INFORMATION PROVIDED IN THIS DOCUMENT. © 2011 Chief Executive Leadership Institute Created for Yale CELI by BullsEye Resources All rights reserved. Page 1 www.bullseyeresources.com The Yale CEO Caucus November 15, 2011 Putting America Back to Work Washington, DC Putting America Back to Work – Key Themes nationalizing the student loan business. The country has spent Overview more than $1 trillion on stimulus and has increased the national debt by 35%. Healthcare has been taken over by the There is no greater issue than the country’s high unemployment government, the FCC is trying to take over the Internet, and the rate. Lack of economic growth, lack of demand, structural changes NLRB is trying to shorten union elections. While unemployment in the economy, harmful government policies, and unfair trade across the country is high, the government continues to grow. practices are among the key factors inhibiting job growth. In the 2010 election, the American people “issued a restraining Business leaders and policymakers must come together to find order,” resulting in divided government. People wonder if any- solutions to put America back to work. This requires changing the thing is possible with divided government, but history has shown conversation in Washington, putting the country’s fiscal house in that big things are possible. Four examples: order (through entitlement reform), and creating an economic vision for the future. This vision must be complemented with specific In 1983 President Reagan and Tip policies and frameworks that create more certainty so businesses O’Neill agreed to raise the retirement can invest. Trade policies must be reassessed, a new commitment age for Social Security. to manufacturing is required, and policy changes are needed to In 1986 Reagan and O’Neill agreed on unleash entrepreneurship. Further changes in healthcare are comprehensive tax reform. needed to decrease costs, and the country’s educational system must be improved to address America’s skill gap. In 1996 President Clinton and the Republicans agreed on welfare reform. At multiple times in the late 1990s, Context Clinton and the Republicans agreed on After 67 CEO Summits over more than 20 years, the first-ever Yale balanced budgets. Senator Mitch McConnell CEO Caucus was held in Washington, DC on November 15, 2011. This caucus brought together business leaders, policymakers, and “Divided government is the perfect time to do big, academics to focus on putting America back to work. tough stuff.” Mitch McConnell The country faces huge challenges and needs the government to find solutions. These challenges include high unemployment, the deficit, and the debt. Entitlements have to be addressed. It is the view of the Republicans that government spending, regulation, and taxes are not the way to stimulate the economy. While thus far this divided government has not made progress on the big issues, Senator McConnell remains optimistic that it can. A few key numbers tell the story. Senator Michael Bennet laid out four curves that show where America is: Productivity curve. Productivity in the U.S. continues to rise as companies After Senate Republican Leader Mitch McConnell provided his take figure out how to do more with fewer on where the country is, other participants described the situation people. they see today, discussed why the U.S. is not creating jobs, and GDP curve. Economic growth has offered suggestions to increase job growth. Some of the key cratered and the country continues to themes from the caucus are summarized below. Senator Michael Bennet struggle to restore growth. Key Themes Household income curve. Median family income in the United States continues to stagnate; the middle class is hurting. Where the Country Is Today Unemployment curve. The focus of this caucus is the country’s high unemployment rate and how to create jobs. Historically, big things have been achieved during times of divided government, but that hasn’t yet happened this time. In addition, a telling statistic is that for every 100 children, only nine will graduate from college. If this doesn’t change, the Senator McConnell acknowledged that the winning party sets country will be constrained and will have a huge problem policy. After winning elections in 2006 and 2008, the Democrats competing. were able to make policy with little interference. The result has been an explosion of government. The government has taken over banks, insurance companies, and car companies, along with © 2011 Chief Executive Leadership Institute Created for Yale CELI by BullsEye Resources All rights reserved. Page 2 www.bullseyeresources.com The Yale CEO Caucus November 15, 2011 Putting America Back to Work Washington, DC . Public dissatisfaction is at record levels. Lack of economic growth. Recent data shared by Mark Penn, Worldwide CEO of Burson- After experiencing real, inflation-adjusted GDP growth averaging Marsteller, shows that 74% of Americans are dissatisfied with the 3.5% from 1947 to 2000, over the past 10 years, U.S. economic direction of the country. They are dissatisfied with the President, growth has averaged with Congress, and with business leaders. The population has just 1.6% per year. Had now been dissatisfied for almost eight years, the longest period the country grown at of sustained public dissatisfaction in recorded American history. historic rates over the past decade, an additional 20 million jobs would have been created. Professor Peter Navarro said the leading factor inhibiting GDP growth is the country’s massive trade deficit, particularly with China. Adam Mark Alan John Peter Navarro Aron Penn Miller Engler . Lack of short-term demand. In the aftermath of the mortgage crisis, the financial crisis, and Bain Capital’s Joshua Bekenstein and Tig Gilliam, CEO of various corporate crises (e.g. BP and Toyota), people are angry Adecco, both argued that companies only hire when staffing has at business. Politicians have fanned the flame with rhetoric and to be increased to satisfy demand. In the absence of increased regulation. Activist Nell Minow finds this anger understandable, demand, firms have no reason to add employees. Mr. Gilliam is as many of the CEOs and directors involved in these crises are seeing companies hire contract workers because they can get still serving, got huge payoffs, and faced no consequences. the precise skills they need for a limited time period. “The brand of U.S. capitalism has been severely “Companies hire when staffing has to increase to diminished.” satisfy demand. There will be no change in jobs Nell Minow until demand changes.” Tig Gilliam While DC is pointing fingers at Wall Street, business leaders are extremely frustrated with policymakers. Executives feel that they . Structural changes in the economy. are running their businesses well, while politicians are not keeping their house in order and are creating conditions that In a poll of attendees, permanent structural change in the U.S. make it difficult for business. economy was voted the leading reason why the United States is not creating more jobs (although several participants noted that The public is fed up. Ms. Minow said 53% of Americans support “lack of demand” was not an option in the poll). the views of Occupy Wall Street and Mr. Penn said two-thirds of Americans think the U.S.