AS PREPARED FOR DELIVERY
Thursday, August 25, 2011
CONTACT OFFICE OF PUBLIC AFFAIRS
Acting Secretary of Commerce Rebecca Blank
Remarks at SelectUSA Event, Warren, Ohio
Good afternoon. I want to thank Thomas Steel Strip and the Tata Steel Europe Group for having us here today.
I also want to recognize Tata Steel President William Boyd and Plant Manager Lou Capuano and his team for taking time to talk with me about the work done here.
As a few of you may know, I’m the acting secretary of Commerce and have only been on this job two weeks, as we wait for the Senate to confirm our new nominee.
In my day job, when I’m not being an Acting Secretary, I’m the Under Secretary for Economic Affairs. . . an economist who manages the Commerce Department’s two statistical agencies.
So. . . let me say at the outset. . . I know you’re overjoyed to get to listen to an economist.
But if you’ll indulge me for a moment, I want to talk to you about our economy–how we got to where we are today and what we need to be doing about it.
It’s a story worth listening to; a story that needs more characters like Tata Steel.
For many Americans, I imagine it seemed like we were doing OK in this century’s first decade. In some respects we were. There were folks making a lot of money.
The problem was how few shared in the prosperity and where that prosperity was coming from–a bubble in the financial markets and a bubble in the housing markets.
Job growth in the 2000s, in fact, was the lowest of any decade stretching back to the 1940s. That's true even if you stopped measuring at the end of 2007, before the recession started. Meanwhile, wages for middle class Americans stalled, while health care and tuition costs just kept going up.
In short, the seeds of today’s economic problems were there. We just didn’t see them very clearly.
You can point to a lot of reasons why this happened, but fundamentally, the problem is that America lost sight of its true economic strengths.
In fact, one recent study found that no advanced industrialized economy did less over the last decade to improve its economic competitiveness than the United States.
So, in 2007, when those bubbles started to burst, creating a financial crisis that spread around world, we weren’t in a position to recover quickly.
Americans, confronted with falling home prices and mountains of debt, did exactly what you’d expect. They stopped spending. They started saving and worked to rebalance their household finances.
Common sense might seem to dictate that the government immediately do the same.
Time to go on a diet, right?
Not really. In an economic recession, when consumers and businesses stop buying, that’s when government has to intervene. In essence, we bet on the resiliency of the American people and our economy and helped create demand to give the economy a little breathing room while it recovered.
Failure to do that can turn a terrible recession into a Great Depression. That’s a fact.
So in the first days of this Administration, we took steps – some of them unpopular – to stabilize the financial system, to keep the American automobile industry from going bankrupt, to pass along a tax cut to middle class families, and to shore up the bottom line of America’s cities and states so that teachers and policemen could keep their jobs. We did precisely what we knew would stop the free fall. We did what worked in the past.
Ultimately, that included passing 17 different tax cuts for small businesses, the largest temporary investment incentive for manufacturers in the history of the United States and a payroll tax cut that put more money in the pockets of millions of Ohio workers.
There were a few, of course, who said we should just let the market sort it all out. And their numbers have grown with the talk of our long-term budget debt.
I understand that temptation. But I would encourage everyone here to think about someone they know who has lost a job or a home. Think about the devastation that unemployment and foreclosure has caused, not just for individual families, but to whole communities.
Now, consider the pain of unemployment, bankruptcy and foreclosure that we did experience and what would happen if it had been magnified. What if millions more had been tossed out of work, millions more unable to pay the mortgage, millions more found the American dream out of reach? That’s what would have happened had this Administration let the market sort it out without any intervention.
Instead, today, we are recovering. The good news is that we’ve had two years of positive economic growth. The bad news is that that growth hasn’t been as fast as any of us would have liked, and as a result unemployment hasn’t fallen as fast as we’d hoped and the housing market hasn’t recovered as quickly.
And as our economy has recovered, we’ve been hit by some headwinds that have slowed things down, such as rising oil prices and financial troubles in Europe. We’ve also created some of those headwinds ourselves in D.C., with the extended and acrimonious debate over raising the debt ceiling.
But even if the recovery hasn’t been as fast as all of us would have liked, it is happening. There is good news. The economy has created more than 2.4 million jobs in the last year and a half. We’re seeing a comeback in manufacturing and new strength in the clean energy sector. Household debt is back to where it was before the bubble of the 2000s, consumer spending is starting to rise, and corporations are making record profits.
The question now is how we keep moving forward, not just in the short-term but also in the long-term. We want America to be the most competitive and productive country in the world.
I'd like to talk just a little bit about how we make that happen and how companies like Tata can help get us there.
We have to focus on the parts of our economic foundation that helped make America’s market economy the envy of the world.
That starts with education. We need to ensure that employers have the highly educated, highly skilled workers who will power the jobs of the 21st century.
But it also includes repairing and upgrading our infrastructure, including roads, ports, as well as the electricity grid, and increasing the availability of high-speed Internet to all Americans.
And it includes fostering innovation so that American companies are on the cutting edge of a global economy and sell more of what American workers make around the world.
The good news is we’ve made progress on all of those fronts: Education, infrastructure and innovation. Consider that from the start of this Administration, we’ve:
- Doubled Pell Grants, helping more people afford college;
- Invested billions in community colleges;
- Funded 492 different transportation projects in Ohio alone, improving 977 miles of roads and bridges;
- Awarded grants that will enable local organizations to build more than 3,700 miles of new high-speed Internet infrastructure in the state and improve 4,700 miles more;
- Launched the President’s National Export Initiative, which helped increase exports by 17 percent last year, supporting thousands of jobs; and
- Announced aggressive reforms to reach the goal set by the innovation community to approve new patents faster than ever before, so that new ideas can be quickly commercialized, starting new businesses and creating new jobs.
These are all steps that will help more businesses grow and create long-lasting economic value.
But if we’re going to create all the jobs we need, we have to attract more businesses like Tata to our shores and do more to keep great U.S. firms here.
At Commerce, that starts with SelectUSA–the first government-wide initiative to attract and retain new business investment–and the jobs that come with it–in the United States. Whether you are an American-owned firm or not, if you are considering investing in new facilities in the U.S.–and particularly if you are weighing a U.S. investment against an investment in another country – SelectUSA will help states and local communities make sure that facility is built here in the U.S.
Today, we have $2.3 trillion of foreign direct investment in America. And foreign firms that locate in the U.S. are more likely to export and typically pay their workers higher wages on average.
This foreign investment is supporting more than 5 million jobs throughout the 50 United States, including those right here at Thomas Steel Strip. That’s why we want to attract more firms, such as Tata, to America.
It’s easy to see why they would want to be here. The American workforce is one of the best educated, most productive and most innovative in the world.
And the American economy is the largest on the planet.
In recent years, however, the global race to attract and retain new business investment has gotten tighter.
In 2009, the United States attracted 12 percent of total global investment, down from 25 percent just over a decade ago.
At the Department of Commerce, we heard over and over again from businesses that there were steps we could take to fix that; that we needed a national program to help attract foreign companies to the U.S. and to retain investment in the U.S. by American-owned companies.
SelectUSA was our answer.
Here’s how it works: Often there can be a federal-level barrier–a stalled grant or a permitting issue, for example–that makes it difficult to complete a deal that would encourage a foreign or U.S. business to locate their operations in the United States.
SelectUSA will allow state and local leaders, folks like your mayor or your governor, to call someone when trouble like that arises–someone such as SelectUSA Deputy Executive Director Aaron Brickman, who’s here with us today. Please stand up, Aaron.
SelectUSA’s job is to solve problems when a state or local leader calls. Aaron and his team have a point of contact at every relevant federal agency. And that contact’s job is to get to the bottom of hold ups and do everything possible to fix them.
SelectUSA also brings together information on federal programs and services available to companies looking to invest in the United States in one, easy-to-access location, supported by a comprehensive website at www.SelectUSA.gov.
Still, even if this new initiative exceeds our wildest dreams, it’s only one small piece of the answer.
Economists will tell you that it typically takes years to recover from the economic problems that follow a major financial crisis.
But that doesn’t mean we should sit idly by, crossing our fingers that American private sector competitiveness will turn out to be OK.
In the long run, we have to get our debt under control. That’s an important policy objective. But our federal spending problems will be best solved by strong economic growth, which means that debt reductions cannot crowd out important public investments. We must ensure that Americans receive a quality education, that businesses have the infrastructure they need to operate and that entrepreneurs can take new ideas and turn them into new businesses and new jobs in a timely way.
In the short run, the Federal government has to help spur faster economic growth and job creation. Select USA is one piece of that agenda.
But Congress can also pass the trade deals before it and extend the payroll tax holiday. And Congress could tomorrow give patent reform the green light and set up an infrastructure bank to put more people to work in the near term.
The mom scraping to make a mortgage payment and the dad beating the streets for work have the right to expect this type of help from the government they support with their tax dollars. They ought to be able to count on someone betting on them.
And that’s ultimately what everything I’ve described is–a bet on the drive and innovation of the American people.
We know government can’t solve all the problems facing our country. What we can do is help lay a foundation for growth and create smart incentives for businesses in Ohio and around America to build something special on top of that foundation.
That's how we put more people to work.
That’s how we help business grow.
That’s how we ensure that American workers and American communities compete and win in the global economy.
Good luck and keep up the great work here at Thomas Steel.