W2: Economic Forecast

This is a partial transcript from "Your World with Neil Cavuto," November 3, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Well, forget the war. My next guest says this president has an opportunity to seize the moment, and face our economic issues (search) dead-on.

Here to tell us what needs to be done is Don Marron. Don is the chairman and CEO of Lightyear Capital (search).

Good to have you.

DON MARRON, CEO, LIGHT YEAR CAPITAL: It's nice to see you.

CAVUTO: What's the biggest economic issue he faces?

MARRON: I think the biggest economic issue he faces is people feeling that the economy is not doing well. Jobs are not growing, but in fact the economy is doing OK. It's very selective, though. States like Ohio, to name some, have been hit particularly hard.

But in general the economy is growing, jobs are coming back slowly, business is becoming more productive. But it doesn't feel that way.

CAVUTO: We also had reminders that factory orders dropped for the second month in a low. We've had some slowness on the labor front, like you say. Are you worried that we sink back into something?

MARRON: I think there's a risk. What's happened is American business has learned how to run itself with fewer people. So the companies themselves are more efficient, but the markets haven't grown the way they should. And that's really the issue. The highest priority of this president is to figure out how to stimulate the growth in the economy.

CAVUTO: Is his focus going to be on that or on Iraq?

MARRON: Well, he's got to focus on Iraq. There's no question about it. But as he's an astute politician as well as a good leader and he must be listening to the people.

And his own speech Wednesday, emphasized mainly domestic issues. We have the war in Iraq. We have to figure out how to get some allies, but we have to get the domestic issues going, or we're going to have a very different kind of war, a war with China, a war with other parts of the world, who are competing very heavily with us.

CAVUTO: What do you make of the fact that in the middle of this, you have interest rates that are moving up, the dollar moving down, and concerns about whether foreigners want to continue investing in this country?

MARRON: Well, that's always a big issue. We have a big deficit and a growing percentage is financed by foreigners.

My view on all of this is first of all, basically, the foreigners are investing in the United States. So in a way, it's constructive that they have a stake in our health and how we're doing.

Secondly, the dollar is the world's currency.

And third, where else is the money going to go? It's such huge amounts of money.

CAVUTO: The euro.

MARRON: Well, they could possibly go into Europe, and you can't be frivolous about it. But the reality is the money that is coming into this country is owned by people who have a long-term interest in making sure that this country does well.

CAVUTO: All right. Now you're a powerful Republican. Right? You're well known in the circles.

MARRON: Well, at least one of those words is correct.

CAVUTO: OK. But here's the rap against this president and this Congress: They can dole out the tax cuts, nothing wrong with that. But when it comes time to cut spending, they've been the biggest abusers, and this president is guilty by default because he hasn't vetoed any of it.

What do you make of it?

MARRON: I think it's a fair comment. I think cutting taxes has worked out to be a pretty good thing, and certainly cannot be reversed. He is committed not to change the tax policy at all.

Americans have two things that they feel that are entitlements that are coming: Medicare and retirement. And each of those things represent enormous increases in costs right now and going into the future.

He has to show and lead the Congress to how to control both of these big items. Because without the control of those items, you're not going to be able to control anything else.

CAVUTO: All right. You're going to club me on my head while I ask you this question, but I mentioned your influence within the party. We're told that there could be a clean sweep or a significant sweep of president's cabinet. Any economic position that you would be interested in?

MARRON: I'm very happy in the private sector, and there are lots of qualified people. Why don't you think about going into government?

CAVUTO: We don't want to go there, Don.

All right. Don Marron, thank you very much. Good having you on again. We'll see what happens.

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