Government as Business Partner

"Both men believed that the federal government could—and should!—play a key role in helping businesses and municipalities move beyond their troubles."

"Similarly, I came to believe that an institution like the RFC could still be used to promote the economic revitalization of such crucial national assets as Lockheed. A government agency should be formed, I felt, that would work with business and labor to supervise a national recovery program. In exchange for new capital, this agency could demand the management changes, the increased labor productivity, and the price disciplines that would be necessary to bolster American businesses and even its cities during the economic and social crisis caused by the current recession and oil embargo. I had found a disciplined and yet effective plan, I was certain, for the United States to make its way successfully through a time of financial uncertainty and emerge with confidence into a new, prosperous era."

"Ultimately, I helped to save Lockheed the old-fashioned banker’s way—by cobbling together a group of reputable investors and creating a sensible business model for the company. The company would be forced to endure some painful restructuring, it would need to abandon its dream of the Tri-Star, the banks would need to agree to be more indulgent, and the Pentagon and the government would have to provide strong financial support and guarantees. When this was all worked out, Lockheed was saved. A national resource, I felt with pride, could continue its necessary work in protecting the country."

"a three-year moratorium would be declared on the repayment of $1.6 billion of maturing publicly held city notes. This moratorium turned out to be the most controversial action we took during the entire crisis. That reaction, of course, did not take us entirely by surprise. Before we decided to take such a step, we had struggled with the decision. After all, a moratorium is, in many ways, a default by another name. It would be a serious blot on the state’s credit. But we had no choice. We simply were not able to raise the funds to pay off these notes. Our only alternative, we reluctantly decided, was to ask the legislature to declare a moratorium for three years, during which we would pay interest but not principal. At the end of the third year, we felt confident we would have the funds to pay the notes back. But until then, repayment was an impossibility."

"have achieved his success in shipbuilding, steel, dam building, or aluminum without a healthy relationship with the executive branch. The Kaiser story is just one example of how government entrepreneurship relies on both an activist government and venturesome entrepreneurs."

"."28 Kaiser demonstrated the dramatic success government entrepreneurs could achieve by being nimble enough to seize the opportunities presented by an activist government. His enterprises represented a confluence of administration policy and entrepreneurial zeal."

"Even Henry J. Kaiser, the most powerful businessman in the West, could not Page 3 have achieved his success in shipbuilding, steel, dam building, or aluminum without a healthy relationship with the executive branch."