Return to Transcripts main page


CNN Presents, Restoring the American Dream: Getting Back to Work Immelt; Roundtable Discusses New Developments in Middle East

Aired September 18, 2011 - 20:00   ET


FAREED ZAKARIA, CNN HOST: Welcome to a GPS special, "Restoring the American Dream: Getting Back to Work." I'm Fareed Zakaria.

If there's an idea of the heart of the American dream, it's surely a job. A family, a house, two cars to be sure. But at the center, a good job and rising wages.

Today that dream is at risk. We are in the midst of America's worst jobs crisis since the Great Depression. The official unemployment rate is 9.1 percent. But if you add the people who can only find part-time work or who've stopped looking for a job altogether, the rate is over 16 percent. Roughly 1 in 6 people in the labor force.

President Obama has put forward some proposals to tackle the problem.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The American Jobs Act will repair and modernize at least 35,000 schools. It will put people to work right now.


ZAKARIA: Many of them will ease the pain of the unemployed temporarily. Some will put people back to work. But they do not make for a complete solution. Yet it's a start. As long as Congress passes the bill.

While the politicians bicker, many Americans have no place to live. As many as one million people may have become homeless during the recent recession. With some living in tent cities like this one near St. Petersburg, Florida. These are people who used to have solid, middle-class jobs.

What's more, almost half of America's unemployed have been out of work for six months or longer. They are in danger of becoming a lost generation. Losing the skills and motivation to ever reach their potential.

But we need more than temporary tax cuts and extensions of unemployment. We need a plan to grow industries and with them, jobs.

In this hour, we'll shine a light on solutions. Immediate and long- term. But our focus is on stuff that can actually happen. Plans, not dreams. We'll look at promising industries and ideas. And we'll consider the role that the private sector and government should play in job creation.

We'll get our advice from those who are now called job creators. The CEO of General Motors, Dan Akerson. The CEO of Dow Chemical, Andrew Liveris. The CEO of Starwood Hotels and Resorts, Frits Van Paasschen.

From the state of Texas, Senator Kay Bailey Hutchison. And we'll talk to the head of President Obama's Jobs Council, the CEO of General Electric, Jeffrey Immelt.


JEFFREY IMMELT, CHAIRMAN, THE PRESIDENT'S COUNCIL ON JOBS AND COMPETITIVENESS: We don't want to see the country the way it is right now. You know we want to be part of the solution. We want to hire people where it makes sense. We want to hire them in the U.S. where it makes sense.


ZAKARIA: First, let's understand the nature of this jobs crisis. It's not just the result of the 2008 financial meltdown. We're suffering from long-term economic forces that have been in the making for two decades. You'll be stunned to see a chart that makes this clear. Let's get started.

So what is the nature of this jobs crisis we're experiencing? Helping to explain it for us is a top expert on jobs. Byron Auguste of McKinsey & Company, the global consulting firm. Recently he wrote a revealing analysis of the country's employment predicament, looking at the past, present and future. He's not only going to tell us what's going on, he's going to show us. Byron?

Thanks, Fareed.

BYRON AUGUSTE, MCKINSEY & COMPANY: Let's go all the way back to the recession of 1948. The U.S. lost jobs in that recession. People were laid off. But within six months of GDP recovering, those jobs were back. And the same pattern held for the next 40 years of recessions and recovery. People were laid off. The economy recovered and they were hired back. And it took about six months for jobs to return to their pre-recession levels after GDP did.

But something changed in the early '90s. And after the recession of 1990 it took 15 months from the time GDP recovered until the time that jobs recovered. More than twice as long.

And we saw that doubling again in the 2001 recession. And in that recovery, it took 39 months for jobs to recover after GDP had already recovered to prerecession levels.

And how are we doing now? Not well at all. In December of 2010, the U.S. economy returned to roughly its prerecession levels of GDP, but current rates of job creation, it will take 60 months -- that's five years -- to return to our prerecession level of jobs.

So what is the cause of these jobless recoveries in the U.S.? McKinsey's research shows three reasons. Changing employer behavior, mismatches in the labor market and declining entrepreneurship. These are the reasons for our jobless recoveries.

ZAKARIA: The jobless recovery that you describe, Byron, is fascinating because it does seem that this all begins, this trend of jobless recoveries, about 20 years ago as you say. And it's about the time that people talk about the rise of the information revolution and the ability of companies to do all kinds of things with technology throughout their supply chain that they were never able to do and the rise of globalization, the ability of companies to hire and source from everywhere in the world.

So it seems like these new forces -- technology and globalization -- are the kind of underlying shadow that is moving these numbers.

AUGUSTE: Fareed, it's absolutely true that technology and globalization play a major role here. In technology, for example, it's those he workforce management information systems companies have that allow them to reduce their workforce so quickly.

On the other hand, it depends on how you use technology. And when you use technology for innovation that creates jobs. So McKinsey's research suggests that the Internet created 2.6 new jobs for every one job that it destroyed. And in a decade like the 1990s where so much of our productivity growth came from innovation we saw both terrific productivity growth and great job growth.

The problem is in the last decade, it was more efficiency driven and not so much innovation.

ZAKARIA: Byron, that's a fascinating introduction.

Coming right up, we're going to dissect the jobs crisis with some of the most influential leaders in the business world. We'll ask CEOs how they plan to create jobs. Some of their solutions will surprise you. Stay with us.


ZAKARIA: Today's jobs crisis is decades in the making. But in an election year, voters won't be swayed by a history lesson. They want jobs, and they want them now. Nothing less than the fate of Barack Obama's presidency will depend on his ability to create those jobs. And he's counting on one man in particular to help him.


IMMELT: We don't want to see the country the way it is right now. You know, we want to be part of the solution. We want to hire people where it makes sense. We want to hire them in the U.S. where it makes sense.

ZAKARIA (voice-over): Jeff Immelt is the president's job czar. The chairman of his Council on Jobs and Competiveness, a group of fortune 500 executives and other private sector advisers. Immelt's day job, of course, is chairman and CEO of General Electric. Since he was chosen to lead the jobs council earlier this year, Immelt has presented a host of ideas to the president.

(On camera): What is it like working with President Obama?

IMMELT: He's a good listener. He's tough minded. You know I tell my colleagues in the business community, it's not like your first shot on goal is going to get through his pads, right?

ZAKARIA: You know a lot of people in the business community think he's anti-capitalist or he's too left wing to be president. You see him. You talk to him about capitalism, jobs, the economy all the time.

IMMELT: Look, I know he cares deeply about job creation. I know he cares deeply about the United States. Do I agree with everything that the president says or everything he stands for? Probably not. In fact, definitely no. But at the same time, you know, he's my president. And I believe when the president asks you to do something, you say yes.

ZAKARIA (voice-over): Immelt and his colleagues are looking for solutions to the jobs crisis, both from government and the private sector. First they're rolling out short-term measures like cutting red tape for infrastructure projects to get construction workers back to work.

IMMELT: We're just trying to build a very specific, very tangible, very action-oriented jobs plan. Like you would any other business plan that business would put together.

ZAKARIA (on camera): Have you learned something about the difficulties, the opportunities of job creation that's different from what -- from just running GE?

IMMELT: You know, one of the things that this made me do is reach out more and try to see it through the eyes of small business. And when you really try to put yourself in their perspective, they have all the problems GE has, only on steroids. So in many ways, you know, one of the roads out of this is there's got to be some simplification of regulations in the United States.

ZAKARIA (voice-over): The council convinced the Obama administration to get every federal agency to review its regulations. It also has a team that's working with the White House to brainstorm on ideas.

(On camera): When you look at these departments, Jeff, as somebody who's spent your life in private business, Department of Transportation, how do they strike you? Are you -- are you impressed or do you tear your hair out at the bureaucracy?

IMMELT: Look, I think there's way too much bureaucracy. But I see an awareness of the problem and a desire to try new things. And so in some ways, in some cases, we're starting to see some real entrepreneurial activity going on inside these big agencies.

ZAKARIA (voice-over): Next month, the council will reveal their plan for long-term job growth to include measures like boosting the tech sector and reforming the tax code. Immelt also wants to improve retraining for unemployed workers so they can get jobs in growing sectors like health care.

IMMELT: As we sit here today, there's probably 400,000 unfilled health care jobs around the United States. Four hundred thousand. These are radiology technicians. These are -- these are various support people.

And we need to have a way to get construction workers who have the highest level of unemployment to go from being a construction worker to a radiology tech in a year.

ZAKARIA: Believe it or not, there are over three million job openings in America today. Many workers simply lack the skills to qualify. Our system of retraining is clearly not working. A recent study found that the benefits of the largest federal job training program were, quote, "small or nonexistent," unquote.

IMMELT: Community colleges can be leveraged or other, you know, educational institutions not just for teaching young people how to do trades and skills, but another way is to retrain people in terms of what kind of skills are needed for the future.

ZAKARIA: Immelt is a registered Republican. But his views on government's role in spurring job growth are not in lock step with the party's prevailing ideology.

IMMELT: I believe in balance. Does the debt deficit need to be reduced? Absolutely. Right. Is government too big in many ways? Absolutely. But does the country still need to invest in education? Does the country still need to invest in the types of innovation and R&D that are going to make this country competitive in the 21st century? Yes, we do.

I live my life in Beijing, in Rio, in Paris, in Moscow, and I see the rest of the world investing in competiveness. And so I think a balanced approach, ultimately, is what most business people, most CEOs, would like to see.

ZAKARIA: But some think that a CEO like Jeff Immelt is not a good fit for the jobs council. Given the hiring practices of his own company. Under Immelt's leadership, General Electric cut thousands of American jobs in the last decade while expanding its workforce overseas.

(On camera): People say you're opening businesses in China. You're hiring people in China. But you're not hiring people --

IMMELT: Look, we're hiring 15,000 people in the United States this year. You know, we are -- we are investing in the U.S. but we're also investing in China. We're also investing in India.

I wish all my customers were in Chicago. Really. I do. It's an easier way to run the business. But that's not where my customers are. My customers are in Brazil. My customers are in Canada. My customers are in Japan and China.

We're one of the country's biggest exporters. I think the country should applaud that. You know, that's nothing to be criticized.

ZAKARIA: What do you think it would take for American companies to be able to -- to gain productivity by increasing employment rather than decreasing it? Because the last few years, what you've seen in an increase in productivity by shedding jobs rather than adding jobs.

IMMELT: And you know, again, I -- in the end you need demand. You know, in other words, none of our names are above the door. Right? We all work for investors. And investors want to see us invest in growth, but they don't want us to run operations that are less competitive or that are inefficient.

Our plants are full. We're adding people in every factory. We're adding people in the supply chain. Now 80 percent of those products go outside the United States. They go to the Middle East. They go to China. They go to India. The airlines that are growing are going there. So if you can see growth, the tendency is to want to hire people.

ZAKARIA: Looking forward, do you think that 2012 you're going to see a pickup in the economy more than -- because we're growing at about 2 percent now. We were projected to grow at 4 percent. Do you think we'll get back to those kind of levels?

IMMELT: You know, the Fed who I tend to listen to the most is -- you know, has talked out loud about growth being slower. More like the 2 percent. So it's going to be a grind it out economy. I think that's what everybody has to plan for. If it's better, fine. But that's -- you know, it is what it is. And that's what we al have to be prepared for.


ZAKARIA: Coming up, we'll consider an unlikely savior for the American workforce. China.


FRITS VAN PAASSCHEN, PRESIDENT AND CEO, STARWOOD HOTELS AND RESORTS: Chinese travelers or people coming from other countries are walking stimulus packages. They spend an average of $4,000 per visit in the U.S.


ZAKARIA: When we think of creating jobs, we tend to think of new factories or software start-ups or solar energy spin-offs. But there's one industry that's big, growing and could be made much bigger. And it doesn't get a lot of attention. Tourism. There is a gold mine of new customers and new jobs for the taking.


VAN PAASSCHEN: Chinese travelers or people coming from other countries are walking stimulus packages. They spend an average of $4,000 per visit in the U.S.

ZAKARIA (voice-over): Frits Van Paasschen is the CEO of Starwood Hotels and Resorts which owns the Sheraton, Western and W Hotel brands. Travel companies like his are anticipating a boom in global tourism.

You see, millions of people from emerging economies like China are entering the middle class and becoming tourists. Already 50 million Chinese are traveling outside their home country. In just four years, that number should double to 100 million.

And America is one of their top destinations.

VAN PAASSCHEN: People want to come to America. And when they come, they create jobs.

ZAKARIA: Tourism is already one of America's biggest industries, supporting over eight million U.S. jobs. Plus, jobs in this industry often don't require an advanced education. Making them attainable for Americans without a high school degree. And they're suffering from 14 percent unemployment.

VAN PAASSCHEN: And the good news is, you can't download a hotel. You can't outsource a hotel and you can't put a hotel in a low wage factory somewhere else. So these are jobs that will stay in America.

ZAKARIA: Van Paasschen says that with hard work anyone in the industry has a legitimate shot at achieving the American dream.

VAN PAASSCHEN: The hotel industry is famous for taking people in and promoting from within. So we've had so many people that have come in as housekeepers, behind a desk somewhere, who've moved up into more and more senior executive positions.

ZAKARIA: But there is a big problem. Foreign tourists who want to visit America face a barrier that makes it difficult. The hassle of getting a visa. After 9/11 America tightened its visa policies to address security reasons. Partly as a result, our share of the international travel market plummeted by over one-third over the last 10 years. According to the industry, that's an estimated 78 million visitors lost to other countries.

VAN PAASSCHEN: Today, five times as many people go to Europe from China as come to the U.S.

ZAKARIA: If America had maintained its share of the market, the industry estimates that almost half a million more jobs would have been supported annually. That squandered opportunity is referred to as the lost decade.

But Frits Van Paasschen said that if the industry can get back on track the rewards will be huge. VAN PAASSCHEN: If we can get that share back, that would mean 1.3 million jobs. And just to give a sense of how important that is, that would be 20 percent of the jobs that have been lost through the crisis.


ZAKARIA: But if we're going to get those jobs back, America will need to reform its visa process. Because trying to get one is like entering an obstacle course.

Take Brazil, for example. You can only pay your visa fees through a certain bank. The online visa applications are only in English. Scheduling an interview at a U.S. consulate can take months. The lines at those consulates can go on for hours, even days.

The State Department says they're increasing consulate staff and working longer hours, but Van Paasschen says there's a lot more work to be done.


ZAKARIA (on camera): When you tell people in Washington that what you're presenting them is a walking stimulus program, if they would just let more tourists in, what do they say?

VAN PAASSCHEN: You know the logic of this story is so compelling it's hard to argue against it and nobody does. The challenge we see in Washington is getting coordination across departments, getting budget money available which, by the way, could be repaid by the program itself, and actually making something happen.

From a businessperson's perspective, it's clear that the wheels of government turn at a different rate than the wheels of business. And that's a simple fact.


ZAKARIA: Another problem? America hardly promotes itself as a tourist destination. Other countries have ministries of tourism that work to make it easy to enter their countries. Welcome foreigners warmly. And spend millions on advertising. But the U.S. makes almost no such efforts. Our government attention is focused on keeping people out of the country.


ZAKARIA (voice-over): To help fill this void, President Obama and Congress created the Corporation for Travel Promotion. It's a public/private partnership that will launch a marketing campaign to attract foreign visitors in the coming months. Many agree that a tourism boom could have a big impact on the job market. That is if companies are willing to hire.

(On camera): We look at corporations these days and we see they have a lot of cash on their balance sheets, but they still aren't investing it in the United States. Do you think that if there were an increase in tourism you would start hiring new and more people?

VAN PAASSCHEN: There's no question about that. Today, right now, we have 80 hotel projects in the United States that are on hold. These are zoned, they're designed, they're approved, they're ready to go.

ZAKARIA (voice-over): But banks have been reluctant to provide financing in a shaky economy, Van Paasschen says. He thinks the government should persuade those banks to lend. But if we don't hustle to attract people here, we will not get the new tourists who are traveling around the world. And that will mean we will not create more jobs in the tourism industry.

(On camera): Does it frustrate you?

VAN PAASSCHEN: It does frustrate me. And the visa situation today is a classic roadblock to growth. There's really no reason not to do this. And yet it's taking time. And that's not just frustrating for us as a company, I think it should be frustrating to the American people and to people who are unemployed today that could have jobs if we could open our market up to do that.


ZAKARIA: When we come back, we'll look at another sector of the economy that could yield big jobs. Manufacturing. If you thought it was dead, a surprising number of CEOs say, think again.


DON LEMON, CNN ANCHOR: I'm Don Lemon. Here are your headline this hour.

New developments tonight in the investigation into that deadly plane crash Friday at the Reno, Nevada, air race. It turns out the plane contained equipment that may help determine what caused the disaster including a camera and a data recorder.

Nine people died including the pilot when the World War II airplane plunged right into the grandstand. Almost 70 others were injured.

In his first interview since charges of sexual assault were dropped, the former head of the International Monetary Fund says the only thing he's guilty of is moral weakness. Dominique Strauss-Kahn told a French television station today his relationship with a New York hotel made was, quote, "an error, a mistake." But he denies any sexual assault took place.

Two American hikers will have to remain in prison in Iran until Tuesday at least. An attorney for Josh Fattal and Shane Bauer says the judge who must sign the paperwork to free the two is on vacation until then.

The two Americans have been held for more than two years on spying charges after being arrested while hiking along the Iran/Iraq border.

NFL fans had to endure a little more on the way into stadiums across the country this weekend. Security guards are now doing full body pat-downs instead of the old way from the waist up.

The NFL says the upgrades were planned before an incident last week when a fan allegedly used an illegal taser during a fight inside the stadium at the Jets/Cowboys game.

Those are your headlines. Now back to the Fareed Zakaria special, "RESTORING THE AMERICAN DREAM."

ZAKARIA: When confronting America's jobs crisis, the lament one often hears is that we don't make stuff anymore. The decline of American manufacturing has been one of those forces that is pressing down on the average American worker. The person without the fancy college degree who simply cannot command the kind of wages he or she once did.

So could we start making stuff again?


ZAKARIA (voice-over): To some, it's a lost cause. One-third of all the sector's jobs vanished in the last decade. But there are those who say that American manufacturing is poised to make a comeback if we help.

ANDREW LIVERIS, PRESIDENT, CEO AND CHAIRMAN, DOW CHEMICAL: We have a manufacturing crisis. So let's get to work. Let's roll up our sleeves, collaborate with government to develop the policies to encourage manufacturing to stay in this country.

ZAKARIA: Andrew Liveris is the CEO of Dow Chemical, one of the world's leading manufacturers, that makes everything from plastics to car batteries. In his recent book "Make It in America," Liveris calls out the nation's leaders for giving up on manufacturing, banking on the service industries to pick up the slack.

LIVERIS: We can't have an unemployed America. We can't have an America that is just sectorial based or services with some agriculture.

ZAKARIA: Manufacturing jobs carry a special significance in our economy because a new factory sets off a chain reaction of job creation from the companies that make factory parts to the diner that sells lunch to the factory workers.

The number of peripheral jobs that the manufacturing industry creates is much higher than other industries. But despite all that, American manufacturing is just not chic anymore.

LIVERIS: It evokes an imagery of a century ago. Smokestack and heavy industries and basic industries. And I think we fell out of love with the word "manufacturing" because we imagined it to be of that kind.

ZAKARIA: The manufacturing jobs of the future are high-tech and high- paying. But isn't it impossible to lure those jobs to America since our labor is more expensive than other countries? Absolutely not, says Liveris. Labor accounts for only 8 percent of his total costs. LIVERIS: I do not make a decision on where to site my factories based on labor cost. I make it based on totally around the policies to encouragement to invest there and the human capital to support it. And that's why at the end of the day, we still have a chance in this country.

ZAKARIA: In fact, American companies are reconsidering the controversial business practice of outsourcing in favor of a new trend. Onshoring. Sometimes it makes more sense for an American to do the job rather than a cheaper foreign worker, says GE's Jeff Immelt.

IMMELT: Making things in the U.S., we've closed the gap versus Mexico and China dramatically.

ZAKARIA (on camera): Explain how. How does it make sense for you to hire an American worker when you can hire a Mexican at --

IMMELT: Let's pick a wage. Let's pick a wage of -- let's say, $15 to $20 an hour. The productivity of the U.S. worker, pure productivity, is three times higher.

ZAKARIA (voice-over): Plus, wages are going up in places like China and India. So the cost of doing business there are creeping up as well.

IMMELT: I think there's classic outsourcing, classic outsourcing, which happened in the '80s and '90s that every American CEO should review in the context of current competitiveness.

ZAKARIA: General Motors' CEO Dan Akerson is trying to do just that. Since the government's bailout of the auto industry, his company has created and retained 13,000 American jobs because, to him, it makes good business sense.

DAN AKERSON, CHAIRMAN AND CEO, GENERAL MOTORS: We like to build where we sell. And we hire where we build. Because although we have tremendous revenues, our margins are reasonably thin for a capital intensive, cyclical industry, and the slightest variation sometimes in foreign currency can take that margin away from us.

ZAKARIA: So GM has recently undertaken a high stakes experiment with its American workers. Converting a factory in Lake Orion, Michigan, to build the Chevy Sonic. It's a new sub compact car that would normally be built in a poorer country.

GM is making the assembly line more efficient with automation and it got the union to agree to wage concessions in exchange for keeping the Sonic jobs at home.

AKERSON: We're willing to experiment and try to establish or bring back new jobs into the American economy.

ZAKARIA: But the price of the experiment is steep for GM's workers. Almost half of the workers at the plant will make only $16 an hour. Below the median wage. (On camera): This is a job at General Motors which, you know, people would have thought of as a ticket to the American dream. And here it is paying less than the median wage.

AKERSON: We have progression within the union to afford for a higher standard of living, middle-class type wages. And at the same time, I have to be competitive.


ZAKARIA: I think it's worth taking wage cuts to keep manufacturing jobs in America. You see, if those jobs keep going overseas, we could lose our most important job creator of all. Innovation.


ZAKARIA (voice-over): Take Amazon's trendy reading device, the Kindle. America invented it, but Taiwan makes it. Liveris says foreign manufacturers learn from the process of making stuff. Which helps them invent new products themselves. Innovation happens on the factory floor, not just in research labs.

LIVERIS: When you make stuff, you don't realize that when you move the making somewhere else, then the people who know how to make it have the intellectual know-how to make the next one.

ZAKARIA (on camera): But now they're in China.

LIVERIS: They're in China. And so you've lost the supply chain as well. And your creativity has created huge jobs elsewhere of the continuous kind. It's not just the job of the first Kindle. It's the job of the second, third and fourth.

ZAKARIA (voice-over): If America is going to keep its manufacturing jobs and continue to lead in innovations, says Liveris, we need a national manufacturing strategy that lures high-tech industries to our shore.

LIVERIS: I do think your notion of a modern day industrial policy, national advanced manufacturing policy, to spur investments, not subsidies, not incentives, just to make it easier and more understandable, would be a great start.

ZAKARIA: Liveris says other countries already get that concept and are reaping the benefits.

LIVERIS: Singapore is a classic example of that. Lee Kuan Yew Singapore, they already are working on the next industries. In their case, biotech. Germany gets it. Germany, high wage cost country, understands that I've got to figure out what's going to follow when the Chinese finally copy my advanced engineering equipment which they will do.

All these things are national strategies. I don't see them in the United States. Now, is that a business risk? Of course it is.

OBAMA: Hello, Pittsburgh.

ZAKARIA: This past June, President Obama took a step towards creating a strategy. Announcing the Advanced Manufacturing Partnership. A collaboration between government, industry and universities to target new technologies.

OBAMA: This partnership is about new, cutting-edge ideas to create new jobs, spark new breakthroughs, reinvigorate American manufacturing today. Right now.

ZAKARIA: Liveris co-chairs the initiative which pledges more than $500 million from existing government programs.

LIVERIS: I'm not afraid of a conversation that says working with government. It's not big government or small government. It's smart collaborative government, which is, I think, the model that has made the United States great. It's the model that has created innovation of the great kind in the United States around crisis, World War I, World War II, NASA, and man on the moon.

Do we have a crisis today? Well, I'd like to think the answer to that is yes.


ZAKARIA: Whatever you may think of a government role in job creation for manufacturing, there's one part of our economy where Washington has always paved the way. Building our nation's infrastructure.

When we come back, we'll talk to a Republican senator who says she has a job creation program that won't break the bank.


ZAKARIA: Here's a trivia question for you. Name an idea for creating jobs that has the support of politicians on both sides of the aisle, America's unions and the U.S. Chamber of Commerce. The answer? Spending money on rebuilding America's infrastructure.


ZAKARIA (voice-over): The idea is to get Americans back to work building the roads, bridges and transit lines of tomorrow. Those projects would give a boost to the construction industry which is suffering from over 13 percent unemployment.

OBAMA: There are private construction companies all across America just waiting to get to work.

ZAKARIA: President Obama has stumped for infrastructure projects at every turn, proposing to fund construction in his jobs plan. The president's job czar, Jeff Immelt, thinks that cutting red tape for projects that are already in the works could provide a quick fix for the job market.

IMMELT: What are the 10 biggest projects, infrastructure projects, under way in the U.S. today, what's their permitting cycle time, how do we cut it in off?

Look, if you're out of work, right, things like a building initiative that will -- you know, creates ways to put construction workers back to work seems like a good idea.

ZAKARIA: Construction workers wouldn't be the only Americans who could benefit. Let's say a light rail line is expanded in a city. There would be jobs for the workers building the line and there would also be work for the manufacturers that make the track and build the train cars.

And according to Immelt and his private sector colleagues, a rebuilt infrastructure would pay big dividends for America's future.

(On camera): Do you think if we had better infrastructure it would be a driver of growth?

IMMELT: Totally. This has been studied by both conservative and liberal groups. Infrastructure is a facilitator of competitiveness and productivity. And whether it's broadband or highway system or ports or electricity grid.

ZAKARIA: Rebuilding infrastructure is not just about filling potholes. It's about revitalizing the life blood of our economy. Businesses consider an area's transportation system when they're deciding where to set up shop, whether it's a high-tech manufacturing plant or a corporate headquarters. If they don't like what they say, there's a simple solution.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: You're going to look elsewhere. And that's why we see many of our American companies building overseas and creating jobs overseas.

ZAKARIA: Texas Senator Kay Bailey Hutchison, a Republican, is co- sponsoring a bill with Democratic Senator John Kerry to create an infrastructure bank, a public/private enterprise that would fund transportation projects as well as energy related projects like upgrading power grids.

HUTCHISON: We have to have the basis for growth. Well, the basis for growth is infrastructure. It's having good transportation. It's having water supply. And it's having energy supply.

ZAKARIA: So how does our infrastructure measure up? Not well. The U.S. ranks 24th in the world according to the World Economic Forum, down from ninth place only a decade ago. The American Society of Civil Engineers gave our infrastructure a grade of D, saying it would take over $2 trillion to repair it.

Meanwhile, other countries are racing ahead. China has a new high speed rail system that's connecting once remote cities to the entrepreneurial east coast. Those trains run at speeds approaching 200 miles per hour. The line from Beijing to Shanghai will create a vibrant new business corridor.

Brazil is building a state of the art super port that's bigger than the island of Manhattan. It will feature a two-mile long pier that's been nicknamed the "Highway to China" because it will connect the two countries' overseas trade like never before.

HUTCHISON: Many other countries are doing the innovative infrastructure improvements, and America is not.

ZAKARIA: And if the implications for global competiveness aren't enough reason for concern, there's a more basic issue to consider. Safety. Let's not forget the horrifying collapse of the I-35 bridge in Minneapolis four years ago which killed 13 people.

Senator Hutchison says her infrastructure bank could help America change course. And she says her plan will avoid bridges to nowhere.

HUTCHISON: There are a number of conservatives and people in business who have looked at our structure and think that this is the right way to go.


ZAKARIA: Hutchison's I-Bank would only give loans for projects, not grants. So any project receiving funds would have to make money through tolls or electric bills. The loans would be capped at 50 percent for any project and an independent board would decide what's built, not political horse trading.


ZAKARIA (voice-over): The government's initial investment in the bank would be just $10 billion. But matching funds from private investors could yield much higher returns.

HUTCHISON: You take a $10 billion fund. You leverage it to $50 billion or $100 billion. And you have added capacity where you can't get it now.

ZAKARIA: In fact, the European Union has been using this market-based model for building stuff for years. Leveraging billions in private capital for infrastructure projects.

HUTCHISON: And they have done a much better job of increasing their infrastructure in Europe, and we modeled our bill a lot on the European plan.

ZAKARIA: The I-Bank has brought together some unlikely allies like Tom Donahue of the U.S. Chamber of Commerce and Richard Trumka of the AFL-CIO.

But congressional Republicans have opposed new fronts for projects, saying that it would be a new round of wasteful stimulus spending. Recently leading House Republicans proposed that money could be drawn from existing transportation funds, but so far nothing has passed.

Senator Hutchison doesn't want her proposal to break the bank. But if America is going to see job growth now and in the future she says we need to act. HUTCHISON: We are absolutely in need of cutting back spending. But as we cut back spending we need to make sure that we are investing in the areas that will produce long-term gains, long-term job opportunities, long-term economic benefits.


ZAKARIA: When we come back, I'll let you know what I think about the jobs crisis. Stay with us.


ZAKARIA: We've outlined on this show the best, smartest ideas to help boost employment in America. Growing the tourism industry. Reviving manufacturing. Setting up an infrastructure bank. But let's remember our talk with Byron Auguste from McKinsey at the beginning of the show.

This jobs crisis is a complex problem rooted in the last two decades of economic upheaval. Thanks to technology and globalization, the America worker faces greater pressures and competition than ever before.

Many of the proposals that you hear in Washington -- more unemployment benefits, tax cuts and credits -- would simply try to get us all to spend more money and thus create economic activity. But that's the wrong model.

For the last two decades, we took out loans, maxed out on credit cards, spent money we didn't have and goosed the economy. We need real growth which will mean a more attractive tax and regulatory environment for small businesses which create most of the new jobs. It'll mean better investments, better infrastructure and a better educated workforce.

Can we do it?


ZAKARIA (on camera): These are big changes, the long-term challenge. An educational system, a whole system of reforming the bureaucracy, getting much more deeply invested in infrastructure. We're not doing most of these things right now.

Are you confident we're going to be able to do them?

IMMELT: Look, I -- I'm optimistic and confident because I believe in the end our system works. Ultimately what we have to get to is we have to have a logical discussion about infrastructure, about education, about solving some of the problems. Because they're not going to be solved on their own.

You know, education in this country is not going to be magically solved by cutting the budget deficit. In fact, it gets tougher.

(END VIDEOTAPE) ZAKARIA: Immelt raises a crucial point. We need to get beyond this debate about deficits to understand that we also need the government to make investments for the future.

We need to cut back government spending in many areas, to be sure. Those related to consumption like entitlement programs. But we need to expand government spending in areas that are investments in the future, like infrastructure, power grids, research, development, new technologies.

But instead of a serious plan to create jobs and industries for the future, we have a sterile ideological debate about government itself. It doesn't have to be this way. In the 1980s and '90s, Republicans and Democrats compromised to save Social Security, reform the tax code, rationalize immigration policy.

Even recently the president and the speaker of the House came close to cutting a deal that would have reduced the budget deficit by almost $4 trillion over 10 years. That would have at least provided nervous would-be employers with some certainty.

But coupled with long-term deficit reduction, we need a long-term plan for growth and jobs. America's jobs. We need some ideas from the right, creating smarter and simpler regulations, a more straight- forward tax code. And some from the left, investment, education, infrastructure.

Everyone from Congress to the administration should have one focus. Job creation.


IMMELT: I just think we're in a particularly, you know, tough time right now because we're coming out of the crisis where people are still angry. And that's understandable. I kind of get that. But ultimately there's a sense of teamwork that's very much a part of the American culture. There's a sense of partnership that I think is -- will ultimately play out.


ZAKARIA: Let's hope Jeff Immelt is right. The future of the country depends on it.

You can catch us next Sunday in our normal time slot, 10:00 a.m. Eastern and Pacific. Thank you for tuning in.