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Remarks at Greater Seattle Chamber of Commerce, Seattle, Washington

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Friday, September 17, 2010

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Commerce Secretary Gary Locke
Remarks at Greater Seattle Chamber of Commerce, Seattle, Washington

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Good afternoon. 

It’s terrific to be back in Seattle.  And I’d like to thank the Greater Seattle Chamber of Commerce for inviting me here today. 

Having been away for almost a year-and-a-half, it’s always good to come back home to the “real Washington.” 

I see that some things haven’t changed. 

Leave it to the women to bring us another championship!  Congratulations to the Seattle Storm!! 

And Ichiro is on pace to set the record for consecutive 200 hit seasons.  11 more hits to go!!  It’s hard following the Mariners on my blackberry at 1 a.m.!!

I’m incredibly proud of how during my years as Governor, my administration worked with business, labor and community leaders to lay the foundation for a thriving, innovative private sector. 

Together, we helped businesses that were here for generations thrive and relatively newer companies grow to become world giants. 

During our eight years, Microsoft employment in Washington more than doubled and has grown since, creating an additional 11,000 jobs, to become Washington’s 2nd largest employer behind Boeing.

And together, we created an economic climate that attracted new businesses and capital from across the country and around the world. 

During my eight years as governor, we grew our international trade by 25 percent and doubled our exports to China.

And despite the dot-com bust and the recession in the aftermath of 9/11, total employment in Washington State grew by 280,000 jobs. 

And we were consistently ranked as one of the best managed states in America and the one of the top states to do business in.

And remains so under the leadership of Governor Gregoire.

Today, in fact she is in China leading a trade mission made up of Washington State businesses.

Seattle and Washington continue to be an epicenter of innovation. 

Southlake Union is home to some of the world’s most cutting edge research and biomedical facilities…

Vaccines to cure some of the most intractable diseases like HIV and malaria are being developed right here.

And clean technology companies are thriving alongside start-up software companies.

The moral of this story, one that I’ve taken with me to Washington, DC, is that a pro-trade and a pro-innovation economy is a job-creating economy.  

When President Obama asked me to be the Secretary of Commerce, I knew it wasn’t going to be an easy job.  I knew our economy faced serious challenges.

But I also knew that what we accomplished together while I was governor:

  • investing in our transportation infrastructure and our education system, even in tough economic times
  • growing our international trade
  • and making our state’s businesses more competitive
  • and government more efficient

… couldn’t have been better preparation for me to help the president accomplish his goals.

From day one, the president has been focused on putting people back to work and growing our economy.

 As we enter the political silly season, it’s important to remember that on the first day of his administration, the president was welcomed with: 

  • A $1.3 trillion deficit that year -- projected to balloon to $8 trillion over the next 10 years.
  • An economy that had been shedding 750,000 jobs a month.

For the first time in most of our lifetimes, we were hearing commentators from across the political spectrum warning that we were on the cusp of a second Great Depression. In fact, the job losses from this recession were worse than those experienced during the recessions of the 80s, 90s and early 2000’s combined. 

But the worst-case scenario never came to pass in large part because President Obama and the Congress took aggressive action:

  • to stabilize the financial system and
  • pass a Recovery Act that created demand in our economy when local governments, consumers and businesses couldn’t or wouldn’t spend.

As many of you may have heard, these steps haven’t been great for poll numbers

But here’s the stubborn thing about the story the statistics tell: The steps worked. 

The Recovery Act had three main components:

  • Tax cuts for working families
  • Emergency aid to cash-strapped states and the most vulnerable Americans; and
  • Important investments to spur immediate job creation and long-term economic growth.

By nearly any measure, it is working. Some three million Americans are in jobs today as a direct result of this law. That’s the verdict of leading independent economists including those who advised presidential candidate, John McCain.

And they are making a difference in the lives of Washingtonians.

  • Some 2.5 million families took advantage of the Making Work Pay tax credit, and nearly 300 transportation projects from the “Mercer Mess” to the projects in Ferndale were funded.
  • 36,000 used the First-Time Homebuyers Tax Credit, and thousands of people hit hardest by the recession were helped with the expanded unemployment insurance.

After shedding jobs for 22 consecutive months, the private sector has now added jobs for eight months in a row.

And our GDP is up for four straight quarters.

Despite these and other positive indicators, too many people are out of work and too many others are worried about making it to the next paycheck.

Too many Americans are still waking up every day having to make impossible choices no one in this country should have to make.

Do I buy food or my heart medication? Do I pay the utility bill to keep the lights on or my mortgage to keep the creditors from calling?

As long as the American people are struggling, this administration will not let up for a minute trying to get out economy back on track.

As we emerge from this recession, we need to chart a new path. 

That’s why we are building a new, stronger foundation for long-term growth and prosperity with:

  • Investments in the skills and education we need to compete in this global high-tech world;
  • Investments in a 21st century infrastructure; and   
  • Funding for research and technology, like clean energy, emerging technologies and biotech that will strengthen our global leadership and lead to new industries, new exports and new jobs.

This dministration wants to harness the skills and creativity of the American businesses and workers, for a brighter and more secure future for our country.

I recognized some of you may be skeptical.

Many of you are running businesses in an absolutely unforgiving environment, and just like the rest of the American public, you’ve grown impatient with the pace of the recovery. I can assure you: so has the president.

I want to give you a little insight into the discussions we’re having back in the other Washington. The economic conversation in the White House always revolves around a few simple questions:

What will accelerate job growth in the short term?

What will strengthen the economy in the long-term and create sustainable job growth?

President Obama’s recent proposals for new business tax cuts are a good example:

  • He’s called for simplifying, increasing and making permanent the R&D tax credit and allowing companies to deduct 100 percent of investments in plants and equipment through the end of 2011. That alone would represent the largest temporary investment incentive in American history. 
  • And to ease lending to small businesses at a time when credit is too often hard to come by, the President proposed – and the Senate just passed -- legislation that will provide community banks 30 billion in incentives to extend credit to small businesses, as well as other tax breaks for small businesses.
  • All this is on top of the eight different tax cuts we’ve already passed for small firms.

These pro-business measures will give a boost to our economic expansion, encourage innovation and put people back to work in the private sector.

As we chart a way out of the recession, we must avoid the mistakes of the past.

The recoveries from the recessions from the early 1990s and 2000s relied on spending in excess of income and real estate investment…much of it speculative.  As we are painfully aware, we cannot go down that road again.

While the Recovery Act helped provide critical short-term relief, it had a longer-term objective:  re-orienting our economy so it can thrive in the 21st century.

This bill included:

  • The largest clean energy investments in U.S. history – over $90 billion for things like scaling up the manufacturing of advanced car batteries, solar cells, and developing a national smart electric grid;
  • $20 billion dollars to digitize medical records to cut costs and improve patient care;
  • $8 billion for a high-speed passenger rail network; and
  • $7 billion to expand high-speed Internet to underserved communities across America

These are precisely the type of investments we need to spawn the new industries and businesses we’ll need to compete with countries like India and China.  And it’s why the president’s budget, while freezing domestic discretionary spending overall, actually increases funding for civilian R&D by nearly 6 percent.

One final point about what the philosophy behind the economic steps we’ve taken: The Obama administration understands that the private sector is going to lead the way out of this recession.

That’s why so many of the Recovery Act grants are in the form of seed money that will either encourage or even require matching private-sector investments.

In practice, the Recovery Act has converted the Department of Energy into one of the world’s largest clean energy venture capital funds.

Before we leave this topic, I want to address a big complaint about the Recovery Act: It may have worked, some people say, but the cost was too high. It added too much debt.

The numbers don’t bear that out.

The Recovery Act added a modest amount to our deficit – about 7 percent of the current projection.

The price America would have paid for not acting would have been much higher – more jobs lost, more businesses shuttered, more people out of their homes, less government revenues, more safety-net costs and thus increased deficit.

There’s no question that deficits matter. And the president is serious about addressing long-term debt, but the single best way to deal with it is sustained job creation and economic growth – precisely what the president’s policies are designed to foster.

To strengthen America’s economy at home, we’re making unprecedented efforts to help American companies sell their goods and services to the 95 percent of the world’s consumers who live outside our borders.  

You know the benefits of trade. More than most, we in Seattle and Washington State have seen how trade can:

  • create jobs and growth 
  • speed the delivery of transformative ideas and technology  to developing nations and lift their standard of living
  • and hasten democracy and the spread of freedom around the world

President Obama, and we at the Commerce Department, see real opportunities to grow U.S. exports, across our entire economy – from large corporations to small and medium-sized businesses.

Today, exports make up just 11 percent of U.S. GDP. Compare that to countries such as Germany where exports account for nearly half of the economy.

We can do better than 11 percent – because American goods and services are highly valued and in great demand around the world.

But right now only one percent of U.S. companies export – and of those, 58 percent export to only one country.

That’s why earlier this year the President announced his National Export Initiative, which seeks to double U.S. exports in five years while supporting millions of new U.S. jobs. 

It’s an unprecedented effort, and it was designed with two overriding goals in mind:

To put Americans back to work and ensure long-term economic growth.

Consider that today more than one in three manufacturing jobs and almost one in five agricultural jobs are tied directly to exports.  These are good jobs that provide good wages…

…The type of jobs we need a lot more of in Washington State.

The more American companies export, the more they produce. The more they produce, the more people they hire. And that means more jobs.

Let me just briefly explain how the NEI is going to help grow exports and create jobs.

Number one is expanding the U.S. government's export promotion efforts in all its forms.

This can mean a lot of different things.

It can be:

  • Commerce Department officials doing the tough shoe-leather work to help a company in Odessa, Washington sell millions of dollars of cardiac defibrillator equipment to Romania.
  • Agriculture Department experts helping an Eastern Washington farmer navigate local rules and regulations as he tries to export timothy hay to Japan; or
  • State Department specialists making sure a U.S. company gets a fair shake for a government procurement contract in China.

The National Export Initiative is also going to help improve access to credit, especially for small- and medium-sized businesses that want to export.

Finally, under the NEI, we’re going to increase the government's focus on knocking down barriers that prevent U.S. companies from getting free and fair access to foreign markets.

America will remain the most open major economy in the world. That’s been good for our nation’s quality of life, and it’s been good for our economy. But we will continue to insist that that if we give foreign countries the privilege of access to our market, our companies must be treated the same over there.

The Initiative is already paying dividends. 

Yesterday, at the President’s newly constituted Export Council – chaired by Jim McNerny, CEO of Boeing – we announced that our renewed focus on trade promotion has contributed to an 18 percent increase in U.S. exports so far in 2010 over the same period last year.

  • U.S. exports of manufactured goods so far in 2010 have risen by 22 percent.
  • U.S. agricultural exports this year are projected to be the second highest amount ever, with a trade surplus of $30 billion.

These increases are having an impact on the economy:

Exports contributed to GDP growth for just as much as domestic consumption in each of the four quarters of recovery.

Exports growth is also impacting employment.

Since January, Commerce’s Advocacy Center, in close coordination with the State Department and other agencies, has helped U.S. companies successfully compete for contracts with foreign governments supporting an estimated $11.8 billion in U.S. content. These deals alone support an estimated 70,000 jobs.

And among them, I am proud to say, are contracts for Boeing commercial airplanes built in the Puget Sound region and even an installation by Dale Chillily and dozens of his artists.

For our economy to return to full health, we need to ensure global trade remains robust, everywhere.

During previous economic crises, many governments, including that of the United States, have succumbed to the false comfort of protectionism.

In 2010, it still remains an open question whether countries around the world will do it once again.

History has already rendered its verdict on the utility of turning inward, closing off markets and seeking parochial over national and international interests.

It doesn't work. 

Protectionism leads to trade wars. And in trade wars, everyone loses.

I want to make clear that America’s trade policy has been and will be characterized by openness and engagement with the global marketplace. 

There are so many signs that slowly but surely, America is on its way back.

But we’re not there yet.  And to get there, I think we’ve all got to work together, in business, and government and elsewhere to solve the common challenges we are facing.

Just last week, I was reading about the 787 Dreamliner test flight that took off and flew over Washington State. All this was made possible because of steps so many of us took seven years ago.

It was the business and labor leaders and state and local elected officials who formed “Action Washington” to convince Boeing to produce the 787 right here in Washington instead of Texas, Alabama or South Carolina.

It was all of us working in common cause that helped keep well-paying, innovative jobs here in Washington State. 

It was that spirit of collaboration and of cooperation that is among my proudest accomplishments as governor.

And yet today we have arrived at this point in our political discourse where government action of any kind – even if it is to address real and pressing problems – is derided as imminent socialism or worse.

That might be a convenient line of attack for political campaigns, but listening to it would have prevented this nation from addressing deep structural issues that make our businesses and our economy less competitive.

If a few years ago, we could all work together to bring good jobs and opportunity to Washington state, I don’t see why we can’t repeat that type of cooperation all across America in the months and years ahead.

 These times demand nothing less.

 Thank you.