08
Apr
09

Dick Gephardt on the Economy

I had the opportunity to hear Dick Gephardt talk about the economy and his perspective on the key issues facing the country right now. He made his comments as part of the Kellogg Turnaround Conference on April 3, 2009 in Evanston.

Mr. Gephardt outlined three major issues facing the country: Addressing environmental issues; aligning unions and companies to create economic success; and difficulties facing the auto industry. Here’s a brief summary of each of those points.

Environmental Issues

Mr. Gephardt thinks that the environmental issues facing our country are the hardest problems in the history of man. He believes that we could effectively address every environmental issue effectively and still not succeed because of the economic growth of developing nations. New power plants and the growth of individual auto ownership can have tremendous impact on the world’s environmental condition. Gephardt quoted a fact that 25% of California’s air pollution problem comes directly from China.

The good news in the situation is that addressing these issues will create tremendous economic activity. The bad news is that the solutions will cost money. The bill coming through Congress will be a relatively moderate course of action to address these issues.

Labor Realignment

Gephardt has been a union supporter his entire life. His Dad was a Teamster truck driver and continuously reinforced the union message. Historically, unions played a major role in creating the middle class. They played a key role in building the economy and great companies; but times have changed.

Companies have improved and become more responsive to their work forces. In addition, the global economy now puts us in direct competition with economies around the world. Our standard of living is bound to come down because of the high level it was at and the new competition we face. Our economy needs collaboration between companies and labor in order to make the most of the situation. Gephardt believes in a system of open information and pay for performance in order to drive the system productively forward.

The Auto Industry

Gephardt feels we are in danger of losing the entire auto industry. He said that everybody is to blame for the present situation and that it’s a complicated dilemma. He offered no solutions, but cited statistics about the impact any collapse would have. Over 700,000 employees work for suppliers and another 1 million people work in the dealer network. Any collapse would cause a tremendous disruption until the needed adjustments take place.

Gephardt’s speech concluded with optimistic words. He remains an unabashed cheerleader for our government and how it works. There are 535 people in Congress with varying opinions and experiences who all have a say in what happens. Compromise is the only way that things can get done andĀ the system is set up in a way that keeps the losers engaged in the game.

The question and answer session gave Gephardt the opportunity to comment on the present budget mess. He talked about one of the biggest structural issues facing all of us: entitlements. Social Security and Medicare are two of the largest line items in the budget. Addressing Medicare will require us to address death and dying. Over 40% of Medicare expenses are incurred in the last month of life. Changing that will force us all to take a different look at the way we face the last days of the ones we love.

It was a terrific, candid talk. I think that we forget in the heat of all the issues just how smart some of the people who represent us truly are. The issues we face are difficult and we need people who are up to the challenge. It’s time for all of us to play a role.

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