NAPLES — Dow Chemical Co.'s chief executive served a healthy dose of optimism about the nation's economic future during the Forum Club of Southwest Florida luncheon Friday.
Weeks after meeting with President Obama and corporate executives, CEO Andrew Liveris, who is chairman and president of the Midland, Mich.-based company, explained why he believes the U.S. has a better than 50 percent chance of not falling off the "fiscal cliff."
The fiscal cliff is the conundrum faced by the U.S. government when the terms of the Budget Control Act of 2011 go into effect Dec. 31. The laws set to change include ending some tax breaks for businesses and the beginning of taxes related to Obama's health-care law, among other key changes. At the same time, spending cuts are to take effect as part of managing the nation's debt.
Economists and business leaders have warned that without a compromise in the plan, the combination of spending cuts and higher taxes likely would cause a dramatic recession felt later in 2013.
"It was not an unqualified optimism," Liveris said of his economic outlook while signing his book "Make it in America," after the forum at the Naples Beach Hotel and Golf Club.
The qualification, he said, is whether Democrats and Republicans can reach a compromise by year's end.
"There is better than a 50 percent chance, because in the past few days there is beginning to be more dialogue between both sides," he said. "They both know they have to get it done. But it ain't 90 percent. They could defer it until January or February and that could make it worse. It would make 2013 a very tough year."
The optimism stemmed in part from Obama listening to business leaders and more recently, Obama communicating more with House Speaker John Boehner, Liveris said.
The approximate "decade of dysfunctionality" in Washington has caused self-inflicted uncertainty due to partisan gridlock, Liveris said.
Liveris said he is getting clues that a compromise could be reached.
"There will be tax rate increases for the wealthy. The Republicans will give that up. There is no way out of that," he said.
Beyond the fiscal cliff, Liveris said the country needs to get back to thinking long-term.
After years of outsourcing, it's time to reinvent the economy by manufacturing in the U.S. again, Liveris said.
The U.S. is falling behind other nations such as China, Japan and Korea because those nations' governments roll out the red carpet for companies like Dow instead of rolling out the red tape, Liveris said.
Another key to U.S. economic longevity is energy, including natural gas from shale. This resource could spur an American renaissance if the policy is to neither burn all the fuel nor export too much of it, he said.
Instead of thinking of manufacturing as an economic sector in need of rescuing, it should be considered the sector that can do the rescuing, Liveris said.
The U.S. has been favoring services over goods, yet manufactured goods would have a higher value when exported, he said.
Liveris received loud applause after sharing his advice for Washington.
Forum attendees said they were impressed with Liveris' take on the issues.
"He told you things you really didn't want to hear, but made you feel good about it," said Jo Frazer of Naples.