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Economic Optimism at Last -- Jack Welch Sees 'First Signs of Light'

In 1981, Ronald Reagan announced in his first inaugural address “In this present crisis, government is not the solution to our problem; government is the problem.”


President-elect Barack Obama announced just the opposite on Jan. 8. Obama said, “It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe.” (emphasis added)


It was the second portion of Obama’s statement that concerned some guests on “Cavuto on Business” Jan. 10.


Host Neil Cavuto welcomed economist Ben Stein, Stock Market analyst Charles Payne, Fortune senior writer Adam Lashinsky and former General Electric CEO Jack Welch to debate whether Obama was right or wrong about “only government” being able to fix the economy.


Welch responded “I wouldn’t go so far as to say ‘only,’ but it’s sure gonna be an important part of us getting out of the trouble we’re in.” Welch said he’s “all for” a plan that would involve both tax cuts and stimulus. Later in the segment, Welch mentioned his own opposition to public works projects.


“I’m not in any way enthusiastic about the public works projects,” Welch said. “But Neil, we need to get government involvement in spending.”


According to Stein, “big government is back with a vengeance.” He blamed recent “careless measures” for causing “a kind of socialized United States of America.”


Despite concerns about government intervention, Stein, Welch and Cavuto expressed optimism about the economy.


Welch noted some progress with liquidity injections, commercial paper guarantees, and mortgages. “We are seeing the first signs of light,” Welch concluded, but he said he still expects a “brutal first half and we can’t keep losing confidence.”


Ben Stein, author of “How to Ruin the United States of America,” spoke of “encouraging signs about the spread between junk and treasuries … a recovery may be in the offing.” Ultimately, according to Stein “There is light at the end of the tunnel if it is not snuffed out.”


Cavuto agreed with Stein’s encouraging words and shared his reluctance to spend even more money “when we – the money we’ve already spent and the actions we’ve already taken might already be bearing fruit.”


Eager to hear good news, Payne of WStreet.com described one way to improve consumer confidence. “Stop giving speeches that scare the pants off of everybody,” he recommended, and later added “paint a more positive picture. We know how bad it is – we don’t need to be reminded.”