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Rick Wade: Remarks at U.S. Regional Business Tour, Battle Creek, Michigan

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AS PREPARED FOR DELIVERY

Tuesday, April 6, 2010

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Senior Adviser and Deputy Chief of Staff Rick Wade
Remarks at U.S. Regional Business Tour
Battle Creek, Michigan

Thank you, Professor Rienzo, for that nice introduction and for opening your class to me today.

It's been a real honor for me to serve President Obama and the Commerce Department over the last year, and an important part of that job, especially during a time of great uncertainty, is getting out of Washington to talk to groups like this one.

The future of this country is right here in this room, and I know we can always do a better job of listening.

Because you are the business leaders we’re counting on to keep our economy growing and creating jobs. We depend on you to make sure that in this next century—as in the last—parents can expect their children to have better lives, with more opportunities, than they had.

I know that here in Michigan, as in many other parts of the country, that future may seem distant.

We are emerging from the worst economic crisis many of us have ever seen, and even though we’re starting to see real signs of hope: The economy is growing, and in last Friday’s employment report, we saw the largest monthly jobs increase in three years.

Still, despite the signs that we’re finally starting to turn the corner, too many people who want work can’t find it, and too many people who are working can’t find enough of it.

That is what keeps people in this administration up at night. Because behind those unemployment numbers, there are families in distress.

The real measure of economic success is whether folks can find a job that provides security, dignity and some hope for the future.

We're simply not there yet, but we will not rest until we are.

People are justifiably frustrated that the economy is not turning around quicker.

But as we continue to work through these difficulties, it is important to be mindful of how far we’ve come.

Even before the recession hit, America had experienced nearly a decade of anemic job growth. Wages for middle class families flatlined, while the cost of health care, tuition and housing skyrocketed.

The reality is that if you worked on Wall Street or daytraded technology stocks or flipped houses, the last 10 years may have looked pretty good to you. But if you got up every day trying to carve out a living in a factory or a retail store or a restaurant, your life probably wasn’t materially better than it was at the turn of the century.

We should have known, even before the recession hit, that something was wrong.

But we ignored the warning signals, and by the time President Obama took office, the economy was in free fall. We lost 700,000 jobs his first month in office, and banks were failing left and right.

Everyone knows what followed. This administration took some difficult and sometimes unpopular steps. We shored up the financial system to keep credit flowing and with the Recovery Act, pumped life into the economy in the form of tax cuts, aid to states and infrastructure investments.

In the midst of economic calamity, history has not been kind to those who failed to act decisively. Just ask Herbert Hoover. Or you can look to Japan’s Finance Ministry in the Nineties. Both tried to muddle through a crisis with half measures. They were prudent. They were cautious.

And … they were wrong. They failed to lead. They failed to make tough choices, and their people suffered because of it.

This administration understood the lessons of history, and today, there is wide agreement among economists that the steps we took helped transform an economy that was shrinking by six percent a year ago, into one that grew by six percent in the last quarter of 2009.

We are turning this thing around, but it won’t happen overnight, because America’s economic problems didn’t happen overnight.

After years of illusory growth driven by speculation and debt-fueled consumption, we need to find a different path.

As President Obama recently said: “We need to build an economy where we borrow less and produce more. We need an economy where we generate more jobs here at home and send more products overseas. We need to invest and nurture the industries of the future, and we need to train our workers to compete for those jobs.”

Today, I want to talk to you about how exactly we plan to empower American businesses to build this type of an economy.

And since I'm speaking to an audience of current and future business leaders, we might as well start by addressing the proverbial 800-pound gorilla in the room.

There is profound skepticism in the business community about some of the policies this administration is pursuing.

You all know it. I know it.

And I understand where that concern comes from.

Say you're running a business making brake pads here in Southwest Michigan. You’ve got a lot on your plate. Meeting payroll, trying to find credit to buy some new equipment, and all while having to compete every day against companies abroad, many of whom pay their workers one-tenth of what you pay yours.

You’d like to think Washington is tuned in, that they “get it,” but all you hear is the usual noise—who’s up, who’s down, who’s in, who’s out. That’s what gets covered. That’s what makes headlines.

I cannot say it emphatically enough: That is not what this administration cares about.

America has always looked to entrepreneurs and private sector innovators to generate the continuous flow of new technologies and new ideas we need to keep our economy going forward.

This is who we’re trying to help.

We know very well that lawmakers don’t invent.

But the government does create the conditions—the framework—in which businesses operate. And that matters.

Because just as it is foolish to look to government for all of our answers, it is equally foolish to imagine that government has no productive role to play.

Think for a moment about the federal government building the interstate highway system, which for over half a century has sped the movement of goods across this country and delivered us immeasurable economic benefits. You’d be hard-pressed to find anyone today who didn’t think that was a good investment.

But back in the 1930s, when Franklin Roosevelt first proposed building it, one of his prominent critics said, “it would be the first major step toward state socialism under which the federal government would take over private industry and the United States would become a totalitarian nation.”

For those of you who’ve been watching cable news recently, those words might have a familiar ring. I mention this not to score political points, but to illustrate that to deny government’s important, complementary role in growing our economy is to deny history.

Take basic research, for example.

We may have seen the Internet come of age in Silicon Valley, but it first came to life in the labs of the Defense Advanced Research Projects Agency. The folks at Tempur-Pedic have given us mattresses that make us feel like we're sleeping on a cloud, but they are using technology that was first developed by NASA.

President Obama understands that funding this type of basic government and university research, which might be too risky or expensive for the private sector, is vital to our economic future.

That is why he has called for doubling the budgets of research agencies such as the National Science Foundation. And it’s why his 2011 budget—while freezing domestic discretionary spending overall—increases funding for civilian R&D by $3.7 billion, or nearly six percent.

I think the president’s commitment to research and development illustrates his broader approach to setting this country on a path for long-term economic growth.

This administration is trying to rebuild the physical and the regulatory infrastructure that private sector businesses need to thrive.

You can see that thread running through virtually every single one of the president’s domestic priorities.

The just-passed health care law; along with extending access to health insurance to the millions who don't have it and providing more security to those who do; will help reduce the backbreaking health care costs that have been forcing businesses large and small to drop coverage, reduce wages or sacrifice profitability.

The cost savings in this law are real. They will grow over time. And they will make U.S. businesses more competitive.

Don't just take my word for it.

The Congressional Budget Office, which is the nonpartisan, neutral accountant for the federal government has estimated that the various reforms in this law:

  • from moving to a system where we pay doctors for the value, not the volume of their care,
  • to tough new performance measures for hospitals…

are going to reduce health-care premiums by over $200 billion in the next three decades.

Add these system-wide reforms with measures like the $40 billion in tax credits that will be available to about four million small businesses over the next decade to help cover the cost of employee health coverage, and what you have is a law that is unquestionably pro-business and pro-jobs.

The same goes for our efforts to reform the financial sector.

If we can pass a solid financial reform bill, like the one that passed the House of Representatives last year, or like Senator Dodd just passed out of his Senate committee, we can finally close the book on “too big to fail”—where massive financial firms take irresponsible bets, and count on taxpayers to bail them out if they ever get in trouble.

We need to end that once and for all so small- and medium-sized business owners across this country won’t have to worry that their access to credit will be jeopardized by gambling on Wall Street.

And then there's energy. As the president recently said, “For decades we've talked about how our dependence on foreign oil threatens our economy—yet our will to act rises and falls with the price of a barrel of oil.”

And so, we are getting serious about energy security.

For the first time in three decades, we’ve greenlighted the construction of new nuclear power plants. A few weeks ago, the president announced eight billion dollars in loan guarantees for nuclear reactors in Georgia. There will be more to come.

We have opened up areas off the Atlantic seaboard and in the Gulf of Mexico for responsible exploration for oil and gas.

And we continue to push for comprehensive energy legislation that will put a price on carbon and send a signal to every entrepreneur in this country that clean energy can be the profitable kind of energy over the long-term. Today, we have too many clean energy investors sitting on the sidelines because there’s no certainty in the marketplace.

Because on the one hand everyone is talking up the potential of clean energy, but all the incentives—from our tax code to our regulations—favor the status quo: the exploration and production of fossil fuels that harm our environment, our economy and our security.

Healthcare, energy, financial reform; the progress we make on these issues is going to have a huge impact on the ability of American businesses to grow, compete and innovate.

And being from the Commerce Department, that is my number one concern.

The Commerce Department works on issues as diverse as patents and trademarks, international trade, the Census and the protection of our oceans and atmosphere.

It can be pretty difficult to put all of those things into one neat box.

But for all our different duties, the primary purpose of the Department of Commerce can accurately be described very simply.

We exist to make American businesses more innovative at home and more competitive abroad, so they can create jobs.

We are the one federal agency singularly equipped to help businesses at every point in their life cycle—from the birth of an idea, to starting a business with that idea, to finding markets once that idea has been transformed into a product or service.

We are helping to build the critical infrastructure companies need to compete in the global economy.

For example, Commerce is leading the administration's $7.2 billion effort to expand high-speed Internet access throughout the country. Thirty-six percent of Americans do not have high-speed Internet access at home—which, in effect, means 36 percent of our citizens are prevented from fully participating in the 21st century global economy. We are aiming to fix that.

Commerce’s statistical agencies and research labs provide the basic data and technical standards that enable companies to develop new products and identify new markets.

One of our research agencies is creating the standards that private companies will need to develop a national smart electric grid and health IT software that will enable us to share medical records

And Commerce provides direct services to businesses to protect their intellectual property, make their production and manufacturing processes more efficient and help them export around the world.

And the export part of our portfolio has become even more important of late with the announcement of President Obama’s National Export Initiative (NEI), which aims to double American exports over the next five years and support two million jobs here at home.

The NEI represents the first time the United States will have a government-wide export-promotion strategy with focused attention from the president and his Cabinet.

The NEI will be primarily focused on

  • improving government trade promotion in all its forms;
  • expanding export credit to businesses – especially small and medium-sized ones; and
  • Increasing the government's focus on knocking down barriers that prevent U.S. companies from getting free and open access to foreign markets.

Key to this effort is the Commerce Department's International Trade Administration (ITA), which has a global network of trade specialists posted in 109 U.S. cities and at 128 U.S. embassies and consulates in 77 countries.

Commerce’s trade experts serve as indispensable on-the-ground advocates for U.S .companies; helping connect them with new customers and vendors and navigate local rules and regulations.

And this help can be found right in your backyard. We have Regional Export Assistance Centers in Grand Rapids, Pontiac and Detroit that you can go to tomorrow to start discovering new export opportunities.

And I hope some of the business owners here with us today to take advantage of that, and the whole array of services the Commerce Department has to offer.

In this unbelievably competitive global economy, businesses need every bit of help they can get. And I know from having worked at the Commerce Department over the last year, we can be a real value add.

Getting our economy back on track is a great challenge, one made more difficult by the fact that other countries are racing for the lead in the same types of high growth industries, like clean energy, and biotechnology, that we are.

It’s a race in which we cannot afford to finish second.

The bottom line is that over the last decade, America has allowed its once unassailable position as the most competitive economy in the world to be threatened.

We may still be a world leader in key metrics of economic success like levels of entrepreneurship, R&D investment and IT infrastructure—but a widely-cited report last year concluded that no advanced industrial economy has done less than the United States to improve its competitive position over the last decade.

That’s a failure, and it’s a failure we cannot accept if we want our children to have the same shot at success as we had.

It’s time for us to reinvest and refocus on the fundamentals that have always made this country great: Research, innovation and a culture of entrepreneurship that values risk-taking and discovery.

That's where this administration has been focused since the day we took office. That’s where we’ll stay focused till we leave.

Thank you.

Now that I’ve talked a little bit about what we’re trying to do in Washington, I’d like to hear from you about what we can do to help Michigan.