Restoring Trust: How To Fix America's Economy
"Squawk on the Street" Co-Anchor
How in the world do Wall Street and Washington restore trust with the American public?
It's a question both sides have wrestled with for months.
But we're tackling it tonight on our CNBC Special, "Restoring Trust: How to Fix America's Economy."
We've tried to keep the griping, the blame game, the finger-pointing to a minimum.
We're now interested only in solutions: what should the President be doing more of? What should he be doing differently? Can Congress become anything more than a forum in which to humiliate executives and bankers? How can those same bankers convince Americans the reckless practices of the past are now in the past?
To answer those questions, we assembled some of the brightest minds in American business: John Gutfreund, the former head of Salomon Brothers; Gordon Bethune, who made Continental Airlines the top-rated airline as its former CEO; Bill George, the Harvard Business School professor who sits on the boards of Goldman Sachsand Exxon Mobil— and others.
We talk to former New York mayor Rudy Giuliani, who managed his own crisis after 9/11 —and even earlier when he cleaned up a crime-ridden New York City and convinced residents it was still a safe place to live. What's one way he remembers restoring confidence? "I never liked using the word 'crisis'," he says. "I remember when I first took over, people wanted to use the word that were in a 'crisis.' They said we would get more time to solve the problem if we called it a 'crisis.' I banned the use of the word, 'crisis.' I said we're not going to call it a crisis because if we do, it becomes a self-fulfilling prophecy."
Our panel tonight hardly agrees on everything: some, like former Vermont Governor Howard Dean, say the president needs to use this opportunity to convince Americans he's addressing long-term concerns: health care, education, energy policy. Deans argues: after decades of income inequality, where upper-income Americans got richer while real wages for most Americans stayed stagnant, trust with the general public comes from assurances the government will hold out a support "net."
But others say that by taking on too much, the President risks losing focus; they say his number-one and only goal should be to rescue the financial system. Tune out the media and Congress, says John Gutfreund. Others say: appear less on television, and let surrogates do some of the work for you. As Warren Buffett, chairman of Berkshire Hathaway, said on "Squawk Box" just days ago: "The American public partly is scared because they see all these different actions going on and they .. confuse the players, and people are criticizing every activity that comes along. I don't think that's useful in a time of war."
One big issue involves Wall Street, and how it restores confidence with Americans. They've already pared back on the use of private jets and fancy corporate retreats, but how much of that is because banks have received TARP money? And if they pay that money back, as Goldman Sachs reportedly plans to do, does that mean they'll revert to the old ways of doing business? We talk to David Faber about what he's hearing from financial executives — on a week where CEO's of the nation's largest banks will meet with the President. Bill George, who sits on Goldman's board, says paying the TARP money back will be a "boost to confidence.
If there was a simple way to solve this crisis, it would have been done already. Some on our panel tonight advise naming a "bank czar" that would oversee the billions in capital being injected into American banks. Others say we should suspend mark-to-market accounting, adding that some troubled assets and securities are just too difficult to value in such an illiquid market.
But whether the answers are simple or complex, what's important is: the blame game that's resulted from the biggest financial crisis in 70 years is finally fading, and the search for solutions is underway.
Programming Note: The CNBC Special, "Restoring Trust: How to Fix America's Economy" airs tonight, 9 pm/ET.