This is a partial transcript from "Your World with Neil Cavuto," March 1, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: Well, the good news is slightly more than one out of three companies is looking to hire people in this country. Now, the bad news, of course, that means two out of three are not. And the number who are continues to shrink.

What's going on here? Let us ask Hank McKinnell (search). Dr. McKinnell is the chairman of the Business Roundtable. He's also chairman and CEO of Pfizer (search). This guy has the same 24 hours in the day as I do.

All right. Thank you, sir. Good to have you.

HANK MCKINNELL, CEO, PFIZER (PFE): Neil, good to be here.

CAVUTO: There's so much in the survey that I want to get to. I also want to get to your business. So just pardon me.

The headline number in this that I think people fail to see is that the overall economic outlook index from CEOs like yourself is that it's pretty high, 4.4, the highest number it's been in quite a number of years. What does that number tell us? We're also looking at other numbers here, but first that headline number?

MCKINNELL: Well, it's the highest we've ever seen. The Business Roundtable is an association of the CEOs of the 160 largest companies in America. We account for over 10 million jobs. So this is a pretty good leading indicator.

And the CEO's of these large companies are saying we expect strong revenue growth, some 89 percent of all of the CEOs.

The big surprise in the survey is the capital spending numbers, where 60 percent are expecting capital spending to increase, and 37 percent expecting capital increase to be about the same. That's the strongest capital spending numbers we've ever seen.

It is true that job creation numbers are about the same as they've been in the last couple of quarters, but the economy is adding over a million jobs a year, and what this survey says is we can expect that to continue into 2005.

CAVUTO: Yes, but I noticed those who do plan on hiring more have dipped a little bit, so am I to assume from that, Hank, that the bosses are telling their workers, you know, work harder?

MCKINNELL: It's dipped a little bit, but that difference, 40 percent to 36 percent, I think it is, is probably within the standard error of this survey. So, it's probably the same number.

What we are seeing in this survey and other surveys is very strong labor productivity numbers. And this says to me that we have the opportunity for even higher growth without tertiary inflation, which is the best way to create more jobs for more Americans.

CAVUTO: A lot of your CEO brethren have always complained about the constant threat of litigation. A lot of people looking at their boats, looking at how they do business, looking at Eliot Spitzer (search), the New York attorney general.

Tom Donohue, your counterpart at the U.S. Chamber of Commerce, had said that Mr. Spitzer was acting as the investigator, the prosecutor, the judge, the jury, and the executioner. How do you feel about Mr. Spitzer?

MCKINNELL: Well, I have a couple of views here. One is I think the scrutiny we're under is a penalty we're all paying for the bad behavior of some very obvious ethical meltdowns in the last two or three years. Fortunately, those are now being brought to justice. And I think that's certainly appropriate, if not a little slow.

We do need a strong regulatory framework, but we need fairness in this, as well. And if we turn all of our entrepreneurs and visionaries into corporate compliance officers, we will have made a big mistake for the American economy.

CAVUTO: Do you think we're doing that now?

MCKINNELL: We're at risk of it. The best example is the Sarbanes-Oxley requirements, where companies are working very diligently to meet the requirements of the section 404 requirements. Most but not all companies will do that, so I think that's been a worthwhile exercise. But we should be very careful about over regulating what should be the free market part of the economy.

CAVUTO: I think you could say this about any profession, can you not? I think most priests aren't pedophiles. I think that most company CEOs are pretty decent. I think that most TV news anchors are wonderful chaps.

But the fact of the matter is it's the bad ones who we have to police to make sure that the good ones don't become bad. So is there anything wrong with Mr. Spitzer's approach, or enforcement regulators at the SEC to even taint more so we don't have more bad guys?

MCKINNELL: Well, I made exactly that point in introducing Mr. Spitzer to a large meeting. I, in fact, said 99 percent of CEO's are honest and hard working, and Mr. Spitzer said, "Show me the one percent." I think he's probably right.

CAVUTO: Did you bring up TV anchors that night or not?

MCKINNELL: No, I didn't. I'm trying to agree with you, Neil. Most are good people.

CAVUTO: Most are fine. Let me step back and take a look at what's happening in your industry. We've known drugs that are come back and recalled, and then put back on the market. The FDA had Celebrex and a host of others.

And now these latest problems popping up at Biogen and Idec with Tysabri, their M.S. drug. Do you understand why people who take these drugs, and are very informed, are now just scared stiff to?

MCKINNELL: Well, there's two risks we need to keep in mind here. One is the risk of either occurrence of rare side effects, or a small increase in more common side effects that we're not aware of. That can happen shortly after the introduction of a new drug, because many more people take the drug post-approval than take it in controlled clinical studies. That's why we do need better post-marketing surveillance.

CAVUTO: But you did something distinctly different than your counterpart at Merck did. You did not pull your drug. And now, after the fact, when essentially the FDA had said, "Look, let's put these back out there," they are in a bit more of a pickle than you are, right?

MCKINNELL: Well, the FDA panel actually voted 31 to one that Celebrex was an important option that should continue to be available to those suffering from arthritis and rheumatism. But our data showed very convincingly that there was no greater risk with Celebrex than there was with traditional non-steroidals. On the other hand, we had data over the past two or three years that showed Vioxx did increase blood pressure. Celebrex and Bextra have never, never shown that.

CAVUTO: OK. Hank McKinnell, thank you very much. Always good seeing you.

MCKINNELL: Neil, thank you.

CAVUTO: All right. Dr. Hank McKinnell. He's the chairman and the president of Pfizer and also runs the Business Roundtable. And a busy guy.

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