Dialogues from the 2009 Aspen Ideas Festival - In Good Company
"Marketplace" host Kai Ryssdal talks to Google CEO Eric Schmidt about the financial crisis, the economics of ubiquity, and why it’s a great time to be in business.
Kai Ryssdal: This morning, I of course went to Google and I googled “the economic recovery.” And I got 47 million answers in 48 one-hundredths of a second. … How are you feeling about where we are in terms of fixing [the economy]?
Eric Schmidt: Well, with the caveat that I don’t understand how the learned and smart people who are running all of this could have gotten us into this situation in the first place … That’s like a serious error. It’s not a small error. With that as a caveat, we’re roughly on schedule.
If you look at the sequence of events, once the crisis occurred, everyone realized that asset values were too high. You had first a real estate crisis, and then you had a credit and finance bubble. The credit and finance bubble was largely because of unregulated credit instruments, which were shut down. With the bankruptcy of Lehman everything collapsed. … Then we had the stimulus package, which was designed as a short-term [fix], which I’m strongly in favor of, and then you have the time that it takes for the system to work. And we’re in that period now. Market low, roughly in the spring; business cycle low, roughly now; jobless high, roughly early 2010. We’re on schedule. How do I know this? Because the people who got us into this have told us that. …
Ryssdal: Let me ask you specifically about Google. I mean you guys are everywhere. It is, I think, in your phrase the “economics of ubiquity.” How does that help this country get going again?
Schmidt: We believe that information is power. I learned a while ago that the right way to run human systems is transparency. And almost all of these structural mistakes that we’re seeing have been caused by information-hiding or by poorly integrated systems. And it’s true at every level of politics and government.
So, from our perspective, more information is power, and the Internet is this enormously powerful platform for very, very rapid information flow. And you see this in the political dynamic with what’s going on in Iran. … It’s also true in business. It means that businesses can be more efficient. It means that start-ups can be formed more quickly. One way to say it is that the barrier to entry for a new company has never been as low, because of the ability to get mass distribution, quick access to new information, get your product out, get it distributed, and so forth.