The Obama administration should model itself after the Roosevelt administration during the Great Depression and World War Two, Goldman Sachs Chief Executive Officer Lloyd Blankfein said in an opinion piece published Tuesday evening on the Wall Street Journal website.
In the 1930s there was "extreme bitterness between the business community and the Roosevelt administration," Blankfein wrote. Corporate executives deplored President Franklin Roosevelt's policies. Roosevelt, in turn, said he welcomed their hatred.
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Yet, the two sides eventually worked together, spurring a colossal increase in industrial production that lifted the U.S. out of the Great Depression and crushed its enemies.
Blankfein sees a similar opportunity now, and wants the Obama administration and the corporate community to compromise and reconcile so as not to derail the fragile recovery.
"There is more than a trillion dollars of cash that is sitting on the balance sheets of U.S. nonfinancial companies," Blankfein wrote. "With certainty about tax rates, companies will increase their capital expenditures (currently at anemic levels), contributing to a virtuous cycle of jobs and growth."
"Broadening the personal income-tax base by closing loopholes will generate substantial additional revenue while minimizing increases in marginal rates that could stifle risk-taking and robust growth."
Blankfein also stressed the importance of restoring confidence in public finance by implementing spending cuts, entitlement reform and revenue increases. He also wrote that tax increases, especially for the wealthiest, are appropriate so long as they are accompanied by serious cuts in government spending and entitlements.
He also pointed out that developing domestic energy resources enables the country's businesses to take advantage of lower energy costs, making them more competitive in the global economy. Effective trade and immigration policies are also a high priority, Blankfein said.
"We are all ready to roll up our sleeves and work with the Obama administration and Congress to help fulfill America's enduring promise," he said.
(Reporting by Michelle Conlin; Editing by Phil Berlowitz)