Google CEO Eric Schmidt Discusses President Obama's Business Sit Down
Wednesday, January 28, 2009SUSIE GHARIB: Late today President Obama's economic recovery package cleared the House of Representatives. Now, the hope is that it will be signed into law before Presidents' Day holiday. To build support for that plan, President Obama summoned business leaders to the White House where he told them the nation demands swift and bold action to create jobs. Google's Eric Schmidt was one of the CEO's meeting with Obama today. Darren Gersh spoke with Schmidt shortly after that session and began by asking him for his take on the Obama meeting.
ERIC SCHMIDT, CHAIRMAN & CEO, GOOGLE: This is a president in a hurry. This is a president who wants to make things happen very, very quickly. He's been around for a week. He's calling people saying what do you think? What do you want to get done? In this particular group, he was interested in what the actual business situation and it's not good and that was the report that we gave to the president.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: It's interesting because he used the word sober to talk about the tone in the meeting. My take away from that was that the message you guys gave him was that this recession is gathering momentum, that the downturn is accelerating. Is that correct? Is that what you were telling him?
SCHMIDT: There's a whole bunch of people who see their businesses getting worse or worried about it getting worse and they're getting ready to deal with that. There's a feeling that the government needs to act quickly. And if it doesn't act quickly, it will get worse. We don't really know. It's certainly not getting better.
GERSH: In terms of the government acting quickly though, there is a big stimulus plan going. Some people say it's too small. It looks like a lot of that money won't get spent until towards the fall and maybe a little lop-over into the next fiscal year which starts in October for the Federal government. Is that too slow? Were people concerned about that?
SCHMIDT: From the CEO perspective, anything that slows things down is a problem. The stimulus package is a two-year cycle. Everything is supposed to get done within two years. Obviously within that two-year period the earlier the better. A lot of the money though goes, remember, the state and local governments which can spend it very quickly and also for unemployment and so forth which is stimulative.
GERSH: Now, we're expecting that pretty soon the president is going to announce a plan to deal with all these toxic assets that the banks have. Did that come up in the meeting?
SCHMIDT: Not really. We talked mostly about the stimulus.
GERSH: Not really?
SCHMIDT: There's obviously some references to something else but he did not describe it. There were no bankers in the meeting so it's not really our area of expertise.
GERSH: But let me ask you this though. If the president comes out as expected with a very large financial rescue plan to clear out these toxic assets and shore up banks in some form, what would it mean for your company and how important would it be for your company?
SCHMIDT: In Google's case we actually don't need any debt right now. So we're fine regardless. The reason you need to fix the toxic assets is that it's causing a lack of credit. So we need a redesign of the financial system that fixes some of the regulatory issues which got us into this in the first place and gets credit flowing again. I'm not an expert in this area but I will tell you that whatever was done in the past did not work. It is time for a new approach. My sense is that they're readying a new approach but they're not ready to talk about it yet.
GERSH: Let me just ask you, the stimulus plan, what does it mean for your company? It's got broadband in there. It's got some high-tech stuff in there. What does it mean to you?
SCHMIDT: The specifics of the stimulus package that help Google a lot have to do with broadband. Broadband adoption is key to us because it creates more customers, creates new businesses and so forth and also a lot of investment in renewable energy which is an area that Google cares a lot about.
GERSH: Did the president ask the CEOs in the room to do anything? Did you say you guys need to help carry the message?
SCHMIDT: Yes. In particular the president wants all of us in the business community to understand the importance of the stimulus package and to make sure that people understand that it needs to get passed by the Congress.
GERSH: Eric Schmidt, Google CEO, thank you for your time, appreciate it.
