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Special Report

Head of Google Talks Economy

This is a rush transcript from "Special Report," September 22, 2011. This copy may not be in its final form and may be updated.

BRET BAIER: Two hours and 40 minutes from now, we'll be on that stage. A lot will be happening. We're here in Orl ando tonight where Republican candidates will debate each other of course and answer your questions, 9:00 p.m. eastern time.

Fox News is sponsoring the debate along with Republican Party of Florida and Google. The executive chairman of that company, Eric Schmidt, joins me here tonight. It has been an interesting week for you.

ERIC SCHMIDT, GOOGLE EXECUTIVE CHAIRMAN: Yes, thanks for having us on. It's so great to do this. Anything we can do to get citizens to participate more in the debates, it's always the right thing.

BAIER: What about the debate, and by the way, it's been fantastic working with your people. It's been very smooth. We hope it goes smooth tonight, but you say that this is a crowning moment for you for the interaction part of it.

SCHMIDT: Well yeah, we always wanted to have more interactive democracy. And now, with the internet, you can really hear from people. So, today, and over the last few weeks, we've been accumulating questions from viewers and people who just care. And now, you can vote on them as well. We've had more than 100,000 votes so far, and during the debate, we're actually going to be seeing people vote on questions, and after the debate, we're going to vote on some of the answers.

BAIER: Yeah. It's fantastic. Let me talk to you about the economy. Today was a big day on Wall Street and bad day on Wall Street. The Dow was down more than 500 points at one point, finished down almost 400. When you look at the economy and all the different factors, what do you see?

SCHMIDT: Well, first place, we're in a tough spot. And it's obvious. And everyone is now figuring it out. What's happening is companies are doing well, but they're not hiring. And if they're not hiring, they're not creating consumers. We have a jobs problem. We have a growth problem.

Now, we certainly have a long-term entitlements problem. I mean we've got to get that fixed. And that's a ten-year, five-year kind of a problem. All the issue with medical care and so forth. But right now, we need some kind of federal stimulus, something that gets the economy moving.

BAIER: Well there's a lot of people on the stage tonight who will disagree about the federal stimulus part of it. They'll say, give companies the environment to make this economy flourish without the federal government, do you disagree with that?

SCHMIDT: Right. I certainly agree with -- that the companies can help, because remember, companies create all the jobs. So, lowering and broadening the corporate tax base, for example, something that all of us have championed for a long time is a great idea. But right now, for a short period of time, the best thing that we can do is try to increase demand, and the government can help there.

It can help increase employment by changes in the payroll tax. It can do things like loosen union regulations. There's all sorts of steps that the government could take in the short-term to turn this from a very long-term unemployment and slow growth to something much shorter.

BAIER: You were up on Capitol Hill yesterday testifying. Your perception of that and the questions you got about Google and the dominance that Google has in this country.

SCHMIDT: Well, we were actually pretty happy to be there. It was the first opportunity we had to actually talk about Google's role. We answered those questions by saying that Google is 100 percent focused on what consumers need. And my personal view is as long as we're making choices for consumers, we're making the site better. We're solving problems better. We're on the right side of that debate.

BAIER: Well, who is your competition?

SCHMIDT: Well, it's of course, Microsoft, and who knows a lot about this given they went through this more than ten years ago. But the questions I thought largely reflected the competition question. And they did not focus on the consumer question. And ultimately, businesses succeed because they delight their consumers.

BAIER: Do you see Facebook taking a bigger role?

SCHMIDT: Well, Facebook is clearly winning in the internet in a number of areas and have done a particularly good job. There are sites, for example, where a majority of their traffic now comes from Facebook. So, Facebook is, clearly, a new player. And we compete with these guys every day, and I think that's very healthy for the economy.

BAIER: Where do you see the sector that is going to boom the most -- quickest? You know, where do you think the turnaround will happen first? Will it be in your sector?

SCHMIDT: Well, of course, information technology is very strong right now. We're classic examples of global multinationals which are U.S.-driven, U.S. jobs primarily we're hiring. We, Google, are hiring more than 5,000 employees this year, I think. We're, in fact, ahead of our targets in many cases. So, we're investing in America and also outside of America.

From my perspective, the other sectors are going to be the ones which involve the knowledge economy of one kind or another. Even financial services, which we always argue about, are very big -- export oriented. We also have advanced manufacturing technology. Did you know that there are advanced manufacturing jobs shortages in America for these very sophisticated things that only Americans can build.

BAIER: So, when you hear somebody saying, Google is going to take over the world, I'm worried about it. Or Google is, you know, seems like they're expanding all over the place. Is that -- how do you respond to that?

SCHMIDT: Well, information is very important. We have an important role there. But Google is one of many of the sort of new category of companies that provide information globally. I would argue that Google is America's best export, that what we do is getting information to all these people around the world, stuck in these repressive regimes like the ones you've been covering. You know, it's a good service, and we're happy to do it.

BAIER: Last thing quickly. What are you thinking about tonight and any thoughts about who needs to break out or have a big night?

SCHMIDT: I'm looking forward to the debate. What I'm particularly looking forward to is the fact that we've got you running the questions and you've got a whole 'nother set of people, your viewers, helping you ask the very best questions in the world.

BAIER: Yeah it's been a great partnership. Thank you very much.

SCHMIDT: Thank you so much, Bret.

BAIER: I appreciate it.

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