• With: Bob McDonnell

    This is a rush transcript from "Your World," May 3, 2011. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST OF “YOUR WORLD”: Usama bin Laden is gone. Is the biggest task now for America to get jobs back? More than seven million jobs lost since the recession first hit, and we are still struggling. Should the White House be taking a cue from Virginia? It’s got one of the lowest unemployment rates in the country.

    Republican Governor Bob McDonnell credits low taxes and a lot less regulation. He joins me now from the Nasdaq market site, where he just rang the closing bell.

    Well, la, da, dee, da.

    Congratulations, Governor. Good to have you.

    GOV. BOB MCDONNELL, R-VA.: Well, thanks, Neil. Great to be back on.

    And the Nasdaq Virginia companies are up today. I’m -- I’m excited.

    CAVUTO: That’s good to hear.

    You know what is weird? I mean, you could have the Nasdaq trying to bid for the New York Stock Exchange...

    MCDONNELL: Yes.

    CAVUTO: ... or enter into a partnership that could include the German financial company Deutsche Bank. That would be bizarre.

    MCDONNELL: Well, there’s been so many mergers and acquisitions over the last couple of years -- in fact, Nasdaq-listed companies are almost cut in half, primarily because of M&A.

    CAVUTO: Sure.

    MCDONNELL: And so that’s just the nature of business. And it’s an exciting, but volatile time to be in business.

    CAVUTO: Yes. You’re talking about mergers and acquisitions and all of that, the rule of the law in this global economy, in this global financial world, where so many of those companies at this fine site you’re located at do their hiring abroad. 

    MCDONNELL: Yes.

    CAVUTO: How do you entice them to do their hiring here in Virginia?

    MCDONNELL: Well, we say, first of all, Virginia’s open for business.  And we appreciate entrepreneurship and wealth formation and people that create opportunities for the American dream.

    That means lower taxes, regulation, litigation, strong right-to-work laws, great universities, and saying we want you to come and create business. We don’t do what you see sometimes in -- in the White House and in Washington, and that is to find ways to punish business, to tax them more, to over-regulate them.

    We’ve got to realize it is the free enterprise system and the private sector that create wealth and opportunity, not government. And that’s a fundamental difference.

    And I’ll tell you what. We cut spending to 2006 levels, so that we have more access to capital in the private sector. And now we’re down to 6.3 percent unemployment rate and things are coming back in Virginia.

    I think it’s -- consumer confidence oftentimes can be bolstered by people in government to say we want you to come and start jobs in our state. And that’s what we are doing, Neil.

    CAVUTO: Don’t you benefit as well from your proximity to Washington, obviously, where you benefit from a lot of government jobs?

    MCDONNELL: Well, there’s some of that, but over almost 90 percent of the jobs that we’ve created over the last 15 months since I have been governor of Virginia have been private sector jobs.

    Yes, the public sector, federal jobs, create some stability in the Northern Virginia area, but overwhelmingly its private sector.

    CAVUTO: You know what is interesting, as we look at a map of the states in this country with some of the lowest unemployment rates, your own among them, sir? A common theme tends -- not across the board, but tends to be very low taxes, low regulations, but -- but a push to seek out business, in other words, to actually aggressively recruit them.

    Now, Chris Christie in my state of New Jersey is trying that, but it’s still a tough sell, because, by comparison, taxes in New Jersey and in much of the Northeast are prohibitively higher than states like yours.

    (CROSSTALK)

    MCDONNELL: Yes.

    CAVUTO: So what do they do?

    MCDONNELL: Well, they’ve got to follow the formulas that work, and that is removing the impediments to free enterprise, taxes, regulation, litigation, unionization, those kind of things.

    But your point before is right: You have got to run a state like a CEO of a business, that is cutting spending and making things work better, and then go ask for business. I’m going to China, Japan and Korea this Friday. I’ve been to Europe already. We are going to India and Israel later on this year. And I’m going to sell Virginia and tell people why they need to invest in our state.

    CAVUTO: You know, I know you always eschew political conversations, to your credit, but a lot of folks are already saying maybe this post-bin Laden killing, that the president looks like granite, that no one can even hammer at him now.

    And I think it was Barbara Walters who said something to the fact I feel sorry for the Republican who has to take him on in 2012.

    What do you make of that?

    MCDONNELL: Well, first of all, this was a completely apolitical act.  I give the president high marks for his leadership, his determination in making the tough call to send those great men of SEAL Team 6 from Virginia Beach, Virginia, into Pakistan to do that mission.

    But, ultimately, this has been 10 years of Presidents Clinton, Bush, and Obama together gathering intelligence and doing the right thing and fighting the war on terror to get this result. You know, next year, Neil, what it’s going to be in November 2012, it’s going to be back to the basic issues of the economy. It’s going to be jobs, spending, and energy.

    And on all of those things, the president doesn’t have a good, well- thought-out plan of how to promote entrepreneurship, how to promote small business development, continue to foster American exceptionalism, have us - - an energy plan that promotes American energy independence...

    (CROSSTALK)