Larry Fink: If government defaults, effect probably "much larger than Lehman Brothers"

(CBS News) Many corporate leaders say the government standoff is bad for business, prompting more than a dozen chief executive officers to lobby President Obama and congressional leaders during the past three months.

Larry Fink, chairman and chief executive officer of BlackRock, Inc., is among those who have been in Washington. BlackRock, Inc. is the world's largest asset manager representing individuals, 401(k)s, and pension funds. It manages about $4 trillion.

Fink, who appeared on "CBS This Morning," said he's been lobbying hard in Washington, and points to what this shutdown represents for the U.S. on the global scale.

"The narrative is all wrong," he said. "We are a principled nation. We built this country on principals of standing by your word. We're a model of democracy. We're trying to help other countries begin their journey toward democracy, and we're showing that democracy is not working as well as it should be."

Fink said even talking about the potential for a default is "bad enough."

"It's like somebody going to the bank after having a car loan or mortgage loan and going to the bank and saying, 'I'm not going to pay you,'" Fink said. "Now do you think the next time you're going to need a loan, that bank is going to give you that money? And so we're a country that's very dependent. About 25 percent of our debt is dependent on foreign sales, and so China and Japan are principally large owners. What I worry about is that narrative is going to harm us long-term."

Trying to put a default in an historical context, Fink said if the government defaults, "this probably will be much larger than Lehman Brothers (bankruptcy)."

Fink called a short-term solution on the nation's debt "just unacceptable" because he doubts a resolution can be made and because people will begin to defer decisions on purchases and other planning.

"We know that individuals defer their decisions," he said. "The bigger issue is CEOs. CEOs are not going to invest in those jobs. They're not going to invest in plants and equipment. They're going to hold back. And so here we are. We have a very, you know, unquestionably poor job economy, and we're only going to make it worse."

"CBS This Morning" co-host Norah O'Donnell noted that people are worried about 401(k) plans and their pensions, and Fink said "they should," and added, "Washington forgets the notion of confidence and they're not exhibiting confidence."

For more with Fink, watch his full interview above.