WASHINGTON WATCH: Businessman Dick Parsons Discusses The State Of the Economy; Banks Being Too Big To Fail (VIDEO)

Roland Martin talked with Dick Parsons former chairman of Citigroup and the former Chairman and CEO of Time Warner about the state of the economy, are things getting better and the rate of economic growth. Parsons also discusses the notion of banks being too big to fail.

MR. MARTIN:  Welcome to “Washington Watch.”  We’re coming to you this week from Columbus Circle in New York City.  In our show this week, we have an impressive lineup of New Yorkers from the world of religion, academia, civil rights and also business.

We begin “Washington Watch” with a conversation with Dick Parsons, a man well known in the banking area, but also he is the man who was CEO of Time Warner and chairman of the board, who also built this impressive building here, One Time Warner Place.


MR. MARTIN:  Dick Parsons, first of all, welcome to TV One’s “Washington Watch.”

MR. RICHARD PARSONS:  Nice to be with you, Roland.

MR. MARTIN:  From your perspective, how have you judged where we are as a nation in terms of our economy?  Are we actually growing?  Are we actually getting better?

MR. PARSONS:  Yeah.  Well, at least you didn’t say I was one of the folks that caused it.  I thought that –

MR. MARTIN:  [Laughs.]

MR. PARSONS:  — was where you were going.  I was like, “Whoo.”

You know, it’s interesting.  Things are getting better.  The problem is that it’s just getting better slowly.  But you can feel it if you move around the country.

The restaurants – I was – you know, it’s funny.  When I was a banker, I had the Restaurant Index.  I was walking around town to see if the restaurants were full or not, because that was an indication of whether people –

MR. MARTIN:  Gotcha.

MR. PARSONS:  — thought they had disposable income.

The restaurants are filling back up.  The stores are showing modest improvements year over year – [unintelligible] – sales.  Cars are moving again.  Things are beginning to click over; but the rate of growth isn’t what, you know, we, a nation of impatient people –

MR. MARTIN:  Right.

MR. PARSONS:  — would like to see.

MR. MARTIN:  You talk about when you were a banker.  I mean you’ve had a long, distinguished career in banking.  When you hear folks say banks are “too big to fail,” that there’s no way we can repeat that course again, do you agree with that sentiment?  And if yes – or, even now, what is the recipe to deal with this whole debate?  Because you go out there, and people, when you say “banks,” they tighten up and –

MR. PARSONS:  Trust me.

MR. MARTIN:  — [crosstalk].

MR. PARSONS:  Trust me.  If I had one public servant or public policymaker tell me back when I was chairman of Citi, “Dick, you don’t understand that people are angry with the banks” – if I had one of them tell me that, I had a thousand tell me that.  People are angry with the banks, because they believe that the banks caused the collapse, and they were resentful of the need to sort of step in with taxpayer dollars and bail the banks out.  So, it’s understandable.

The question of “too big to fail” is a very complicated one.  These banks, the global banks – you know, the so-called “systemically significant” financial institutions – they didn’t get to the size they are simply because somebody back at headquarters sort of sat back and said, “I think bigger is better.”  They got to the size and complexity they are because that’s what the marketplace was calling for.  The banks are basically responsive to what their customers need.

And so as business globalizes, and as companies are doing business now in 110, 115, 120 different countries around the world, they need banks that can follow them and bank them and help them in local markets.  So, the banks just became global as well, which has made them much larger and much more complicated entities.

So, simply to say that, “Well, you know, ‘too big to fail’ – we[’ve] got to break these banks up” – that’s running in the wrong direction as far as what the marketplace wants needs and will ultimately get.

MR. MARTIN:  But should there, though, be some constraints?

MR. PARSONS:  There should be probably – we can’t go back to – my opinion – Glass-Steagall days, where you sort of simply say, you know, “The banks are simply sort of deposit takers and lenders to businesses and consumers, and everything else is outside the banking system.”  But there needs to be both an increase, probably – and this has been the trend in the capitalization of banks, so that the banks are sitting on more of their own money at risk than heretofore.  There needs to be a rethink about the regulatory structure that looks at banks.  It really needs to be global – because the banks are global.

And then there need to be clearer methods – the real problem was, with all the banks that were threatened with going down, we had no formula, no program, no pilots, no knowledge about how to disassemble them piece by piece and move the risk out of the system.  This is something the government’s been working on now.  What do you do with a big bank that gets in trouble, other than come in and pump money in to keep it alive?  How do you take it down piece by piece?

So, it’s a complicated problem.  People are working on it.

MR. MARTIN:  You’ve had to deal with multiple presidents.  You are reading information.  Republican.  You work with the President.  You work with Democrats.  Your assessment of President Barack Obama – [the] job he has done and, if you’re sitting before him in the Oval Office and saying, “Mr. President, you have four years.  This is what I think you should really be focusing on.”

MR. PARSONS:  Well, I’ll start with the easier part of the question, my assessment of President Obama.  I know him.  I think of him not – we’re not really friends, but sort of as a pal.  I’ve done some work with him in various of the Council’s advisory things he’s set up.  He’s enormously bright – enormously bright – and he’s a gifted communicator.  And he has a vision, I think, of the future that I can associate with.

I think his challenge has come with, you know … in a highly partisan time like we have, how do you get things done in Washington?  You know, I can imagine sometimes when I go to sleep at night what the combination of Barack Obama and Lyndon Baines Johnson would look like –

MR. MARTIN:  [Laughs.]

MR. PARSONS:  — because while President Johnson wasn’t necessarily, as they used to say in Texas, the “sharpest tool in the shed,” and I don’t know that he had a vision that is comparable to the vision that Barack Obama came into office with, he was a master at getting things done –

MR. MARTIN:  Period.

MR. PARSONS:  — in Washington – right?

MR. MARTIN:  Period.

MR. PARSONS:  Kickin’ ass and takin’ names.

MR. MARTIN:  [Chuckles.]

MR. PARSONS:  And that’s, I think, where this president has struggled a bit in terms of how do you make it work when things are even more polarized than they were in Johnson’s time.

MR. MARTIN:  Should African-Americans be making demands of the President and of Congress?

MR. PARSONS:  All citizens should be.  African-Americans are citizens, and they have not only have not only an[?] agenda.  I mean it’s – it’s easy to think of it – [clears his throat ] – excuse me – as kind of an African-American agenda.  I think of it as an American agenda.

Bob Johnson, formerly of BET, just did Ransom polls about, you know, the state of Black America – how do black people feel about their situation – and he was telling me he was surprised because 50 percent said, “Well,” you know, “things aren’t much better, but they’re not much worse.”  And about 20 to 30 percent said things are better for them than they were in the past.  But the 20 to 30 percent for whom things are worse, they’re much, much worse.

MR. MARTIN:  Right.

MR. PARSONS:  And, you know, there is some cohesion to this notion of a middle class of people finding common ground and a common sense of their own destiny with each other.  If you get to a place where you have way rich people over here and way poor people over there –

MR. MARTIN:  Right.

MR. PARSONS:  — the system will break.  And the challenge – and it’s particularly a challenge in the black community – is how do we reach out to and bring particularly the urban disadvantaged –

MR. MARTIN:  Right.

MR. PARSONS:  — along so they feel like they’re part of the system?  They feel like they’re part of society.  They don’t feel like, you know, a land apart – because if that doesn’t happen, ultimately this thing’s going to break.