WASHINGTON – Time Warner Chairman Richard “Dick” Parsons, a member of President-elect Barack Obama’s Transition Economic Advisory Board, says Black and other minority-owned businesses, which dominate the rock bottom of the economic crisi
WASHINGTON – Time Warner Chairman Richard “Dick” Parsons, a member of President-elect Barack Obama’s Transition Economic Advisory Board, says Black and other minority-owned businesses, which dominate the rock bottom of the economic crisis, will be swept upward as the bailouts and stimulus strategies begin to work.
“We all know it’s the people on the bottom who suffer most. But you’ve got to fix it on a holistic basis. You’ve got to get credit going,” Parsons told a standing room only audience at the Howard University School of Business recently. “No one is unaware of on whom the burden falls the heaviest. That’s just a reality. But how do you make things better for the people at the bottom? How do you make things tolerable? How do you make things bearable? You’ve got to fix the whole system so that it works top to bottom.”
Parsons was responding to a student’s question about how the Obama administration would specifically attend to the woes of “minority businesses” as much of the focus appears to be on bailouts of banks, lenders, major corporations and even the automotive industry.
Parsons says the excitement of an incoming new president will give people the hope and confidence to help jumpstart spending and keep the economy flowing. But the reality is that America’s economic condition at the moment is very bad.
“How bad is it? Actually, it’s pretty bad,” he told the audience of Howard business students, professors and economists.
Parsons says the high hopes for the new and historic administration of President Barack Obama after the Jan. 20 inauguration are fearful because people tend to overestimate what he can do single-handedly.
“One of my big concerns and fears for our incoming president is that the expectations for this guy are so off the charts. People think that he can walk on water,” he said to chuckles in the audience. “You know, he may be able to walk on water, but he’s not going to get this economy turned around in a nanosecond. There’s no silver bullet. I just hope somehow that we can really get people really grounded in what’s going to have to happen to get us out of this so that their expectations for a President-elect Obama can become somewhat more realistic.”
A member of Howard’s board of trustees and former Time Warner chief executive officer who recently led the entertainment corporation out of its own financial woes, Parsons gave the first hints of the strategy that Obama may use to strengthen the failed economy.
“The real problem is that virtually most of the growth around the world over the last half a dozen years has been funded through credit,” he said. “Banks jumped off the rail and started lending money to people who didn’t have the jobs or financial strength to otherwise pay the loans back, and the housing crisis started with this spiral downward.”
He said the economic rescue must start at the top of the economic chain because without credit, businesses will fail, jobs will be lost and people will not have money to spend. “First, businesses can’t get access to credit. That means they can’t build new plants, can’t replace obsolete or worn out equipment, they can’t innovate as progressively as they were before. That means jobs begin to go away,” he explained. "They begin to cut costs–human capital–and begin to ask, ‘How do we get people off the payroll?’"
Then, he said, people “stop spending, don’t have jobs, can’t pay credit cards.”
Then the economy must start going again, he said, pointing to the need for “some kind of stimulus package that has some kind of tax relief for the middle and lower class.
“I think that frankly, the fact that we have a new president is going to give people a sense of courage and optimism that will help materially, he said. NNPA
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