The Barack Obama administration should model itself on the Roosevelt administration of the Great Depression and World War 2, Goldman Sachs CEO Lloyd Blankfein said in an opinion piece published on the Wall Street Journal's website on Tuesday.
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.
Yet, the two sides eventually worked together, spurring a colossal increase in industrial production that lifted the US 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 cash sitting on the balance sheets of US non-financial companies," Blankfein wrote.
"With certainty about tax rates, companies will increase their capital expenditure (currently at anaemic levels), contributing to a cycle of jobs and growth.
"Broadening the personal income tax base by closing loopholes will generate substantial additional revenue and minimise 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, were appropriate so long as they were accompanied by serious cuts in government spending and entitlements.
Blankfein pointed out that developing domestic energy resources enabled the country's businesses to take advantage of lower energy costs, making them more competitive in the global economy.
Effective trade and immigration policies were also a high priority.
"We are all ready to roll up our sleeves and work with the Obama administration and Congress to help fulfil America's enduring promise," he said.
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