Confidence will be key to sparking higher growth in the U.S. economy and easing tensions about the financial system that have sparked a global wave of protest, said General Electric Co Chief Executive Jeff Immelt.
Until you can restore confidence you can't move forward, Immelt, the head of the largest U.S. conglomerate, said at a Thomson Reuters Newsmaker event in New York on Monday.
Immelt, who has run the world's largest maker of jet engines and electric turbines for a decade, is a top adviser to U.S. President Barack Obama on jobs and the economy.
Immelt feels empathy for the crowds of anti-Wall Street protesters who have cropped up across the United States.
Unemployment is 9.1 percent. Underemployment is much higher than that, particularly among young people that don't have a college degree, Immelt said. It is natural to assume that people are angry and I think we have to be empathetic and understand that people are not feeling great.
A large and diverse group of protesters, who complain that the U.S. economic system is no longer working to the benefit of a large slice of the nation's population, have been a visible presence on Wall Street for a month now. The movement, known as Occupy Wall Street has spread around the country.
The protesters complain that the billions of dollars the U.S. government spent during the recession to prop up financial companies, including GE, have allowed banks to earn large profits without benefiting average Americans.
The only way to solve this specific problem is growth, Immelt said. If unemployment comes down people will feel better. If unemployment goes up people will feel worse, no matter what goes on Wall Street, no matter what happens with financial reform.
Immelt said that the gap between the pay of CEOs and average Americans is adding to tensions.
The discrepancy is certainly one of the problems today, in terms of why people feel the system is unfair, Immelt said. It is part of the problem that is creating this mood in the country and we need to address it ... If CEO pay goes way down and unemployment is 12 percent, people are still going to feel bad.
SEES SLOW EUROPEAN GROWTH
Concerns that Greece could default on its debt and threaten European and U.S. financial systems have rattled the world economy in recent weeks, pushing down stocks and prompting big banks including Bank of America Corp and JPMorgan Chase & Co to begin laying off staffers.
The most likely case is that Europe has slow growth for a long period of time, Immelt said. The process is going to have to be solved inside of Europe ... We see a slower Europe but we don't see a bad Europe right now, in terms of our underlying business and things like that.
Last week, the White House advisory panel Immelt heads submitted a report to the Obama administration saying that attracting more foreign capital, being more aggressive in energy policy and investing in infrastructure could help create jobs in an economy struggling with high unemployment.
Immelt, a lifelong Republican, has drawn fire from some shareholders for his work with the Democratic Obama administration. The Cincinnati-born CEO defended his role, saying GE executives have long had a voice in Washington.
It's an important time, he said. People need to try. I'd rather be in the arena trying that not doing what I can to help.
Immelt has repeatedly said that GE, which employs some 287,000 people worldwide, expects to hire about 15,000 people this year. Less that half GE's employees work in the United States, a fact that Immelt is unapologetic about, saying that it reflects that the company expects to generate 60 percent of its forecast $148.13 billion in 2012 revenue outside its home country.
The company views Russia as a major focus for growth over the next decade, and is also investing in resource-rich African countries including Mozambique, Angola, Nigeria and South Africa, Immelt said
(Reporting by Scott Malone and Nick Zieminski; Editing by Derek Caney)