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Very interesting insights from a Fortune 100 CEO on how part of this is the fault of business

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Thoughtful, deliberate, and—dare I say?—pragmatic. Quite an interesting read and how everyone is trying in his/her own way. Lydia DePillis writes in Wonkblog:

On Friday, we noted that CEOs of major American companies are not a little exasperated at what’s going on in Washington. Some of them, though, recognize that they were part of the problem to begin with. World Fuel Services chairman Paul Stebbins — a Georgetown government major who now runs a company ranked 74 on the Fortune 100 — didn’t need much prompting to describe how things went wrong, how corporate guys are withholding money from PACs that aren’t part of the solution, and why they’d rather pay more taxes to make the uncertainty go away.

Lydia DePillis: So you were involved with Fix the Debt from the very early stages. Did anything come out of the first round of alarm-raising?Paul Stebbins: Let’s start with the basic fact that business was part of the problem. In August of 2011, I was meeting with the Business Roundtable in D.C., and most business guys were running around the world being busy running their corporations and not paying a lot of attention in a general way. The idea was, much as you may not like Washington, eventually they’ll get in a room and make a decision, and you may or may not like it, but things will function. That was the case up until the August of 2011. And when 2011 hit and the President and the Speaker of the House were not able to come to an agreement, and we basically threatened the full faith and credit of the United States, the business community freaked out. Because the enormity of that crisis was so profound, we just could not believe that things could possibly be that bad.

I’ll tell you, I just showed up to a dinner in Washington and I was sitting next to Saxby Chambliss, Mark Warner, Mark Udall, Alice Rivlin, Lindsey Graham, Bob Corker, Kay Hagan, Jeanne Shaheen, Olympia Snowe, Susan Collins, and they’re all saying, ‘we’re in real trouble. This thing is really, really bad and we don’t have a way out of the box.’ So we engage, we raise a lot of money, and the most interesting thing that came out of it — the business world, it’s not unlike Congress, getting 150 senior business people to coalesce around anything is quite extraordinary in its own right. So it elevated out of the realm of the provincial business interests into a larger sense of citizenship.

We have a higher duty of care to engage this issue. It is grossly reckless to watch the long term business trajectory of the U.S. to be at such risk. And we are part of the pathology that got us here. We’ve all had our K Street lobbyists who are part of the problem. You’ve got the classic narrative: Progressives say, ‘fat cat CEOs want to throw grandma into the snow, and all their special tax interests.’ And then you’ve got the Club for Growth that thinks we sold them out.

The business community is fundamentally pragmatic. There’s a sense of, ‘can’t we get in a room and just fix this thing.’ Now, the problem with that is that CEOs are kind of naive. You come to Washington, you think you’ve got all this great data — debt to GDP ratio, and what the interests rates will be, $12 trillion in net debt, Medicare’s bankrupt in 13 years, Social Security’s gone in 20, okay, we get all that, so why can’t we fix it?

The reality is, you go over to Capitol Hill and you say to some guy, ‘why can’t you guys get in a rom and fix this thing?’ And they nod at you very politely and say ‘that was very nice of you to come, thank you for your input, you can go home now.’ Because their reality is, the Club for Growth is telling every single Republican member of Congress ‘we’re going to raise $5 million to beat you in a primary if you even mention the word revenue.’ And AARP is telling every Democratic member of Congress, ‘if you even mention the word entitlement reforms, which is all that throw grandma into the snow stuff, we’re going to raise $5 million and beat you in a primary.’ And what makes a politician’s life worth living? Reelection. So the CEOs had a bit of naiveté about the political realities of what makes it so hard for a lot of well-intentioned people to actually get to yes.

The thing that got the business community catalyzed is you cannot have this reckless, nihilistic, fundamentalist, ideologically driven governance. That ultimately, advocacy can’t trump governance.

So we did a lot of work to bring to bear pressure, and to also provide political cover for those who were really trying to do the right thing. And I could name a lot of people on the Hill who are trying to do the right thing. But then you get into a political cycle which was very difficult during the presidential campaign, because it’s all about what side you’re on, and don’t you dare mention this, don’t you dare mention that.

And by the way, immigration, education, energy, infrastructure, frozen. Nothing’s happening. So when the US has the opportunity to be growing at 3 percent-plus GDP, we’re dithering around at 1.8 percent, an I’ll tell you what, at 2 percent GDP, large corporations aren’t going to hire, because you’re just treading water. And what a shame, because you’ve got Europe is a basket case, they’ve got 10 years of disaster ahead of them. China’s a mess, financially. And and the US could be blowing the doors off it, but the worst enemy is us. This is self-imposed. So shame on us.

I’m an entrepreneur, I started my company in my 20s, and it’s now a Fortune 74 company with $40 billion in sales. I’m not just a Harvard MBA guy. I’m the American dream, and it never occurred to me that my board of directors would be talking about risk analysis, and the U.S. government would be one of those risks.

LD: But wait, was there ever really a happy time when everything worked smoothly in Washington? 

PS: When I worked in Congress, for a guy named Tim Wirth, back then, if you were a young freshman Congressman, and you picked up the sword and argued with the Speaker of the House, your parking space would be in Anacostia, you’ll be on the dog catcher committee, you’d you would get no money from the party, so you better sit down, shut up, and listen, because you don’t know anything, you’re low on the totem pole. Now today, John Boehner, if he tries to punish one of these firebrands coming out of the conservative wing of his caucus, they wear it as a badge of honor. Look, I had the chairman of the Energy and Commerce committee, Fred Upton, tell me that he got into an argument with one of these young guys on his committee about the defunding of Affordable Care Act. Well the argument was ‘look, Energy and Commerce had 50 hearings on that bill. Like it or not, it passed. The president signed it. The Supreme Court upheld it. So you don’t get to pick a bill you don’t like and link it to the entire financial well being of the United States.; Well the response is, ‘I didn’t come here to govern.’ Well what did you come here for? What did you come here for? To burn it to the ground?

So when you talk about getting back to the fife and drum and getting back to American roots, are you kidding me? This is so antithetical to everything that America has been about.

So there’s a sense in the business community that this is just appalling. You don’t get to default on the United States. I’ve got 70 offices in 26 countries. I’ve got CEOs and government leaders around the world who take me aside privately and say ‘what on earth are you doing over there? If you can’t get this right, how the hell are we going to get this right?’

And all this stuff about China and India and Brazil? Baloney. We are still 24 percent of the world’s GDP and we are the flywheel that drives all those other economies. And we are out to lunch.D: So now having realized your naivete, are you going to play the same game as the Club for Growth and AARP and fund candidates who agree with you?. . .

Continue reading.

Written by Leisureguy

29 September 2013 at 1:40 pm

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