CEO Panel on 'FNS'

" Positive news on the economy coming from Washington and Wall Street with all the time was right to convene a group of top business leaders to find out where they think we Stan. We're joined now by Fred Smith chairman of federal express. John Chambers at Cisco comes to us from California. And from Florida Steve -- chairman of Office Depot well Federal Reserve Chairman Ben Bernanke said this week they. Recession is very likely over we now hear the President Obama says. That he believes the economy is beginning to grow again but that it's gonna be next year before we see jobs picking up. Threats that FedEx stock is up 18% this year but to announce this week quarterly earnings are down."

" 53%. Where do you see things right now. Well I think the recession has bottomed out. We have a very unique view of the economy Chris we have our. Express company that operates all around the world are ground company that's tied in with retail our freight company that's tied him. With the industrial sector in the economy. And we're really beginning to see some pick up and all three of those areas. Asia's very strongly at the moment led by China. So there's no question in our mind that. Economy at least stabilized. Albeit at a lower base John Chambers Cisco's stock is up 43%. This year. But earnings are down 21%. Where do you think we are in this recession."

" Well I think Fred is probably the best indicator. That's basically small business in the consumer type activity. We get to see what's going on it in medium sized business and larger companies. We saw the market for us level out in the first calendar quarter of this year. The second calendar quarter we began to see pretty good upturn in terms of sequential growth. Good balance in the US Asia very sought as Fred said Latin America. Europe will probably lied about couple quarters back to -- take away this. Isn't about the economy recovering because security is. It's do we put Americans back to work and have we made the changes during this downturn to position our country on a global basis but competitors point of view without it what companies try to do during the down all right."

" We're we're gonna we're gonna get to that in just a second about let me bring in Steve -- land Office Depot. Shares are a 111%. This year but second quarter earnings were down 22%. Are you seeing a turnaround mr. Odland."

" Well office people's customers are small businesses and so we've been a barometer. Of the health of the of the small business sector. What we've seen is that this sector of the small business customers have been hurt disproportionately. In this downturn. Because housing is a traditional source of liquidity for these people. They start their businesses with a second mortgage that fund them with home equity lines of credit and as that credit has dried up these businesses and not been able to recover so. We went off the shelf last year not feel like we're. Rocking around down here the bottom but we're not seeing a meaningful recovery at this point and I'm worried that we're not going to until the liquidity returns from the small businesses all right we're we're we're gonna dead end of that and I accidentally pick up would you -- drop land on that because. You know there was this credit crunch. Have you seen the Obama policies I -- turn to what does that the president is doing now about. What he's done and what the Fed has done about the stimulus also the financial rescue. Has that ease the credit crunch. Well the other stimulus money has not gone to small businesses this is an unusual. Recession in that it spent banking that. And housing -- and so as these sources. Of cash and dried up for small businesses they haven't been replaced by stimulus money or any other money. The issue here is that every modern recession. Is led out by the small businesses as they create jobs all net job creation happens in small business. In this case and it we're not going to see. Job. Rebound until we see these small businesses get more access to liquidity. Mr. chambers when you look at at what the White House is doing because the president in his administration while being cautious. Has said that they believe their policies are responsible at least for the end of the economic free fall. Do you think they're making the kinds of changes that you talked about your first answer did too. Build a solid. And then during recovery and do you worry about government intrusion in the private sector."

" We'll Christian you call me John that appreciated that whale -- too old. In terms of the policies I think you have to give the central banks in the Fed reserve. A very positive marks and a global basis. And I do you think you're seeing the tree and go on the right way that both Steve and had talked about. In terms of the programs that they're spending money on such as the smart grid capability we make in our country -- committed ethical point of view and calls the consumer. In terms of broad band in terms of electronic medical records. There's steps in the right direction but much like investments business makes. You won't know for twelve to eighteen months where they the right steps and a lot of them still have formed to take in terms about the position as we're really sustainable job growth that. It is in areas that they're starting to spin that I am."

" I'm cautiously optimistic. Fred Smith of the Obama economic policies helping her her well I don't think they're hurting Chris I'm not sure they get to the heart of the fundamental problem. The economy got way too invested. In finance and housing. And it did so because the tax policies of the United States. Favor -- speculation in the financial services sector as opposed to the industrial sector. So if you want to improve. Earnings power of blue collar folks you've got to stimulate the industrial sector. And our tax policies just don't. Just don't do that -- present time so give me one magic -- well I think feared their two things that -- that need to happen one the the tax rate in the United States at the corporate level is 38%. Other than Japan it's the highest in the industrialized world. Secondarily interest is completely deductible. So if you borrow money to speculate on Wall Street. The government is basically helping you with that speculation where -- an industrial companies like FedEx about a -- seven that -- people. Building the plane in Washington engines in Ohio. We get that airplane and put an in service and we have to appreciate that airplane in other words of the capital investment and that equipment. Is taxed much greater than speculation in the financial sector so expensing that capital would be huge stimulus to the industrial sectors."

" You can't not let me bring you all into what it is the big subject here in Washington and that of course is health care reform. Since you insist on that John -- they get when you know. Atwood went with the president's health care reform plan and I'm not talking the specifics but the general outline I'll let that be good or bad fur and for the economy."

" Well I think Chris you've got to find a way to get every American covered by health care capabilities. I pressed to be richest nation in the world and not deal with that I think would be. A problem -- I do think technology has to play a much more aggressive role which I've not seen as much. For me the proposed those that are in front of us in terms of reducing costs of health care at the same time you deliver this service so I think you can do and hand I think you can provide the service but we've got to do -- much smarter and much more. Technology base than before. And that current plan on proposals I think we have always ago Steve not land what do you think of where the president and Democrats are added. On healthcare reform what -- mean to your business and the economy."

" Well I think we've got to go back on health care and -- and asked the question what are we trying to solve what probably trying to solve. We seem to have about 45 million. Americans who are not covered half of them have access and choose not to buy -- which is I think in American choice. Half of the rest are are illegal aliens we have to debate that. I think what we're trying to solve is access for about five to seven million Americans out of 310 million Americans. She got eighty to 85% of the population which is fine. With the coverage we have to be careful not to mess up the greatest system in the world in order to solve. The problem for if you -- I'm a little worried about. Big government interaction here and the effect on small business and enlarged business as well."

" Fred Smith there's been a lot of complaints from big corporations and small businesses that this is gonna have to their cost. Well it certainly has to be reform as. John -- ad in and Steve mentioned there about 46 I think it's 47 million people that are. Not covered today 860 million people get insurance from their employers. About eighty million covered in Medicaid primarily for the young. And and Medicare forum for the aged. The problem is that the people that do provide insurance like FedEx for our employees there. Office Depot or Cisco. Are actually paying for the medical care for the uninsured because we don't deny people medical care. So -- of the czar I would basically say what we need to do is to have a mandated coverage. Of catastrophic care when I was young there was no such thing -- first dollar. Medical care or medical insurance it was major medical. And if we got to the point where our major role major or catastrophic medical expenses. Were covered in the market work in between Medicaid and Medicare. You'd have the beginnings of a reasonable solution what we're beginning to run out of time it's a bit -- who mrs. Smith were quick answer on this. President announced. A -- tariffs on Chinese tire imports sensible response to predatory trade practices pretty worried that were headed for protectionism and -- Well I we got to be very careful about this 25% of the world the United States economy is related international trade about 13% and imports which give us a much higher. Standard of living about 12% of our economy. Our exports. And we have to be very careful -- five point seven billion consumers outside the United States. In excess of our 300 some odd consumers trade as bill. Our standard of living we have to be extremely careful not to bring in protectionism because it will be a very catastrophic result if we do."

" We got about thirty seconds left for each of -- So let me start with you John and we'll go around. Your thoughts about what look at your route in the -- in Thursday's second fortieth -- economy where do you see unemployment."

" I think the economy a year out will be growing between two to 4% I think you'll start to see the unemployment -- back out. -- Chris the real sustainability -- this is based upon have we got three to five years out about how competitive our business as. And how competitive our education health care system is that we do it right I think we'll build a base for the future and I'm optimistic on America's future Steve off line."

" The economy started to go off two years ago and has come down dramatically I think. We need to get. The liquidity to the small businesses to start to create jobs if we do that we will have a slow steady recovery in 2000 intend but I think it's gonna take two to three years to get back to where we were two years ago so this is going to be a long haul and finally Frenchman. Well I think in the fourth quarter this year the economy's gonna grow over 4% sequentially. Next year are forecast this where between two and have to 3%. But remember that's awful lower base. That's come down because of the tremendous economic contraction -- we're gonna have to leave it there gentlemen I want to thank you all it's good get some analysis from three people who have to. Meet a payroll every way thank you you."