“Preserving Economic Freedom … and America’s Future” Remarks by Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce
THOMAS J. DONOHUE
President and CEO, U.S. Chamber of Commerce
United States Military Academy
West Point, New York
April 13, 2011
Thank you very much, and good afternoon everyone. It’s an honor and a pleasure to be here.
You know, I’ve made thousands of speeches in my life. I tell people that there are two kinds of speeches that are the toughest of them all: The ones after dinner when everyone’s been drinking. And the ones after lunch when everyone’s sleeping!
If I see a few nodding heads and drooping eyelids, don’t worry—I’ll understand. But I’ll try my best to keep that from happening. And I’ll reserve a good share of our time today for questions and discussion.
At the outset, I’d like to introduce a very special friend and colleague who plays a major role at the U.S. Chamber of Commerce and who is largely responsible for my visit here today. He’s Lieutenant General Dan Christman, USMA, class of ’65. Actually, first in his class.
Dan was senior vice president of International Affairs at the U.S. Chamber from 2003 to 2009. He remains an indispensable advisor on national security and international trade issues. And as you may know, he served as superintendant of this institution from 1996 to 2001.
Dan is the kind of person that West Point produces with incredible consistency—exceptional warrior, superior statesman, deep intellect, and a true leader. You’ll be pleased to know that although he’s been out of the service for a decade, Dan still ends every email, memo, or phone call with “Go Army!” And “hoo-ah” remains a vital part of his vocabulary.
We’ve had a great visit today. This morning we toured the Combating Terrorism Center. We had a meeting with Superintendent Huntoon and then joined him in the mess hall for lunch. What a study in logistics that was! After this class, we’re going to meet with the Social Sciences faculty and then get a briefing at the Thayer Leader Development Group.
The U.S. Chamber and Economic Freedom
So we’re getting to know more about West Point. In return, let me share a little about the U.S. Chamber.
The Chamber has been around for almost 100 years. Our headquarters is right across the street from the White House. Directly or indirectly, we represent 3 million companies—from the largest corporations in the world to the smallest mom-and-pop businesses. We represent them before Congress, the White House, the regulatory agencies, the courts, the court of public opinion, and before governments around the world.
For the last two years, we have had a big banner hanging across the front of our building that spells out our highest priority: J-O-B-S. Jobs. It’s the first thing we see when coming to work each day. And it’s probably the first thing that President Obama sees when he wakes up in the morning and looks out his window!
We’re also deeply involved in hundreds of issues—such as health care, taxes, trade, regulations, capital markets, and energy.
We have an outstanding staff of about 450 lobbyists, communicators, lawyers, and specialists in international affairs and domestic policy. We have an extensive network of American chambers around the globe operating in more than 100 foreign countries. And we have an active grassroots lobbying and political program, with thousands of state and local chambers and other grassroots activists who help our lawmakers either see the light—or feel the heat!
We’re very involved in House and Senate elections as well as races for state attorneys general and state Supreme Court judges—but we don’t get involved in presidential politics. We only have one president at a time, and the Chamber will have to work with him or her … and he or she will have to work with us.
If I had to sum up what we’re all about in two words, it’s this: free enterprise. It’s at the heart of our entire system and way of life. Free enterprise gives life and reality to the American Dream. It’s the reason why the United States of America has the strongest, most productive economy in the world.
Don’t forget that it’s a strong private sector economy that pays all the bills in our society—pays for a strong national defense, a compassionate social safety net, a clean environment, and educational opportunities for every American.
I like to say if you don’t have the cash, you can’t make the dash. And that’s true whether you’re running a family, a business, or a nation. The private sector is where we get the growth, the jobs, and the cash to run this country.
Now, you are on a path to be leaders in the preservation of our freedom here in the United States—and around the world. In a similar way, the U.S. Chamber is committed to preserving and advancing economic freedom—as embodied in our free enterprise system.
Our efforts will never entail the level of sacrifice that our men and women in uniform make every day, but it does unite our two worlds.
Of all the freedoms we treasure as Americans—our economic freedom is the most often taken for granted. Throughout our history, foreign adversaries have threatened our other freedoms and tried to take them away. Economic freedom is something we often try to take away from ourselves—not by evil design but through bad policy decisions and a fundamental lack of understanding about what makes free enterprise work.
The Chamber’s mission is to stop that from happening—and to preserve, protect, defend, advance, and explain the American free enterprise system to our fellow citizens and our leaders.
Issues That Will Define Our Economic Future
Now, I’ve looked at your course syllabus. Let’s face it. Economics isn’t necessarily the most exciting subject in the world. Even Major Caine might admit that!
But it is certainly one of the most important. Believe me, we would be a lot better off today if we could somehow make this course mandatory for every member of Congress and the White House staff, every member of the news media, and even some in the business community.
It’s no secret that the American economy has been through a very rough period. We’re now pulling out of a severe financial crisis and one of the deepest recessions since the Great Depression. But it’s going to take time—and decisive action. Seven million people lost their jobs. Hundreds of thousands lost their homes, their health benefits, and a good portion of their retirement savings and pensions.
Just as troubling, many are now questioning our nation’s ability to compete economically across the globe. With new economic powers emerging, where do we stand? Where will we stand in the future? Will we lead the 21st century global economy the way we led it in the 20th century?
To begin answering those questions, I’d like to raise five key issues—although there are many others—that I believe will fundamentally shape our economic future and define our level of success.
Size, Scope, and Role of Government
The first issue is how are we going to keep the unbridled growth of government spending, taxes, deficits, and regulations from completely smothering risktaking, the entrepreneurial spirit, free enterprise, and growth and jobs? This is a real challenge for the future of our economy and our nation.
The immensity of our fiscal crisis is daunting. We are already $14 trillion in debt. On our current trajectory, we’ll add another $7.2 trillion in the next 10 years. By that time, we could be paying nearly $1 trillion per year just to pay the interest on the debt.
Much of this debt is being driven by unbridled growth in entitlement programs like Medicare and Medicaid. We need to reform these programs not only to save them but to save us from financial ruin.
The president’s deficit commission—and House Budget Committee Chairman Paul Ryan—have offered serious deficit reduction proposals. President Obama is putting some of his chips on the table today. Unless we want to go the way of Portugal and Greece, this is a debate we must have and a challenge we must meet.
We also need a nationwide debate about the relentless activity of what I call the fourth branch of government—the regulatory agencies. American businesses and citizens already pay over $1.7 trillion to comply with hundreds of thousands of pages of fine-print rules.
Many are necessary; many are not. Their combined cost is simply overwhelming, and there are hundreds of complicated new rules in the pipeline covering health care, financial services, labor, and the environment.
Let me be clear: Government has a legitimate role to play. We need smart government regulations that protect public health and safety, consumers, and investors. We need adequate government revenue to invest in things like education and infrastructure.
The point is this: The more the government spends, taxes, incurs debt, and regulates, the less capital, flexibility, and freedom the private sector has to create jobs and growth. We need to find the proper balance.
Second issue: Will America have the human talent it needs to compete and win in the global economy?
The race to win in the 21st century is all about the race for human talent. You can obtain that talent in two ways—you can provide your own citizens with an outstanding education and the skills they need to succeed in a 21st century economy, and you can attract the best talent from around the world. America must do both.
On this topic we have a mixed record. We have the world’s greatest institutions of higher learning—and West Point is one of them. But our K-12 system is deeply flawed. One out of every three high school students fail to graduate in four years. For minorities, it’s one-half. That’s a moral outrage—and over time, it’s economic suicide. Four out of 10 students entering college must take at least one remedial course.
At the same time, the Department of Labor estimates that 90% of the jobs in the fastest-growing sectors of our economy will require some postsecondary education. Who will fill those jobs?
Our immigration policies are broken too. We are unnecessarily restricting the immigration of highly skilled foreign workers that we desperately need. It’s unrealistic to think that we can deport the 12 million undocumented workers in our country. Even with 8.8% unemployment, our economy would collapse overnight! And don’t forget—77 million baby boomers are now starting to retire. We will soon have a shortage of workers at all skill levels.
If we are to maintain our economic freedoms and our economic greatness, we must stop talking about fundamental school reform and start doing it. We have to remember who we are as Americans and how we built this great nation—and reaffirm our support for a smart, rational immigration system. Because the last time I checked, except for those who are Native American, we are all immigrants.
The bottom line is: Whether we’re talking about the Army, the Chamber, our top companies, or the nation, those who have the best people win. Those who don’t, lose. It’s that simple.
Energy and Infrastructure
The third issue: Will America summon the will and commit the resources to secure its energy future and maintain a world-class infrastructure?
We need a superior physical platform on which to run our economy and the energy to keep it going and growing.
Few institutions understand the importance of infrastructure better than West Point. For the first half of the 19th century, Academy graduates were largely responsible for the construction of the nation’s vital railway lines, bridges, harbors, and roads. President Eisenhower’s national highway system not only enhanced our defense capabilities, it helped propel the most productive and prosperous period in our nation’s history.
Infrastructure is an area crying out for action. It takes too damn long to build anything in this country, and everyone knows it. Our highways are reaching the end of their designed life span. A quarter of our bridges are functionally obsolete. Much of our water infrastructure dates to the turn of the last century. I’m talking about the year 1900!
On energy, we are shooting ourselves in the foot. We have locked away vast reserves of oil, oil shale, and natural gas on federal lands and off both coasts. Meanwhile, we are sending hundreds of billions of dollars per year overseas to buy other people’s energy—and a lot of it from dangerous, unstable places. Does that make any sense to you?
Federal lands alone are estimated to contain 231 trillion cubic feet of natural gas and 31 billion barrels of oil. Producing at least some of that energy could reduce our imports, create American jobs, and generate tax revenues to reduce the deficit.
In addition, we are failing to maximize our energy relationships with stable friends and allies like Canada. Congress should repeal a provision that could prohibit oil from the Alberta oil sands from being used by our government. And the administration should move quickly to approve a new pipeline that would supply us with more than 1 million barrels of oil per day.
It’s time to increase domestic energy production across the board—traditional and alternative. Our national and economic security depends on it.
Fourth issue: Will America vigorously compete on the global playing field, or will we turn inward and slide backward to protectionism?
As we face this question, we can’t overlook one inescapable truth—95% of the people we want to sell something to live somewhere other than the United States of America. In fact, a majority of the 500 largest companies derive more than half of their revenues from foreign sales.
We see evidence of this everywhere—last year GM sold more cars and trucks in China than they did here. More KFC fast food restaurants are opening in Asia now than in the United States.
We live in a globally interdependent economy. That’s not going to change. If we want a strong and growing economy, we have to trade with the world—double our exports in next five years and then double them again. We can do it!
Passing free trade agreements can help. U.S. markets are among the most open in the world. What do free trade agreements do for the United States? They lower barriers of entry into foreign markets, leveling the playing field for us.
At the same time, we must insist that these agreements are fair, that both sides benefit, that all parties are held accountable, and that assistance is provided to those who are adversely impacted by them.
And we need to get busy. Of 283 free trade agreements in force worldwide, the United States is party to just 11 of them, covering 17 countries. We are party to only one of more than 100 bilateral and regional trade pacts currently under active negotiation.
So to win on trade, we need to compete. To retreat on trade is to surrender.
Freedom and Security
The final issue I’d like to raise deals with enhancing our security by advancing economic freedom around the world. Specifically, how do we create entrepreneurial economies in post-conflict and disaster-relief countries?
The idea of “expeditionary economics” involves training officers to apply economic principles with a smart and entrepreneurial spirit while also taking account of local circumstances. It recognizes that it takes more than troops and weapons to establish peaceful, stable, democratic societies. It takes hope and opportunity that only free enterprise and a strong private sector can provide.
Colonel Peterson is a leader in this field. As he notes, when officers have local citizens in front of them asking when the lights will be back on, they need to act with urgency. They need to give local citizens a reason to support us, instead of an insurgency. Expeditionary economics offers Army officers a framework to help them achieve that security and stability.
Once that is accomplished, the business community has an important role to play—and a responsibility to meet—because free enterprise, jobs, and economic growth is what we do and know.
In fact, we’ve been involved in expeditionary economics long before the term was coined. The Chamber has an affiliate called the Center for International Private Enterprise, also known as CIPE. Through CIPE, we are working to build the capacity of local business organizations and promote the kind of reforms needed for entrepreneurs to thrive.
One of our key tools is a program that the U.S. Chamber has used for many years. It’s called the national business agenda—a set of legal and regulatory reforms needed to strengthen the business environment.
Over the last several years, CIPE has led the way with local groups in Iraq, Afghanistan, Pakistan, and other countries to help them push for reform and build their economies.
Ultimately, it’s essential for both the military and the private sector to work in partnership with the people of these countries to create stability and prosperity. The Chamber and the American business community are strong supporters of expeditionary economics. We pledge to work with the military to advance this important concept.
We know that in the 21st century economic development will be critical to building a more peaceful, stable world and a more secure America. And it’s why courses like this one on economics can be as important to success in your first assignments in the Army as tactics, engineering, or physical development.
I hope I’ve raised some thought-provoking issues and set the stage for discussion.
Let me conclude with a little story. While in China recently, I heard a senior Chinese leader proudly recount all of the things the Chinese were going to do to invest in their society and build up their economic machine as part of their latest five-year plan. He concluded that everyone understood where China was going in the future, but were unclear about the course for the United States.
The implication was obvious. He was suggesting, perhaps, that among nations, China would continue to move up while the United States would move down.
My response? No one has ever gotten rich betting against the United States of America! It’s just like Winston Churchill famously said—to paraphrase, you can always count on the Americans to do the right thing, after they have tried everything else!
Despite all of our challenges, we still have the largest economy in the world. We are still the world’s largest exporter when you include goods and services, although China is nipping at our heels. And while many Americans believe that our country doesn’t make anything anymore, guess what? We’re still the world’s largest manufacturer, producing 21% of global manufacturing output.
I could go on and on about all the benchmarks where we still lead the world. But the more important questions are what accounts for this leadership? How do we preserve it? It’s not automatic. It’s not a divine right. America’s leadership is something we have earned, worked for, fought for, and died for. And that will continue to be the case.
America is great not because we have the most powerful government, but because we have the most powerful idea. And that idea is freedom—personal and economic freedom.
That’s why my final message to you is captured in two words: Thank you.
A grateful nation can never adequately repay the debt it owes to the men and women in uniform—and their families—who shoulder so many burdens and make so many sacrifices for our freedom.
Today, I’ve laid out some difficult challenges facing our nation, but I hope I haven’t left you with the impression that I fear for America’s future. Quite the contrary. I think our best days are yet to come.
Witnessing the commitment, hard work, camaraderie, and leadership of West Point cadets instills in me great confidence in our future.
I represent the American business community, and its members don’t always agree on every issue. But we are united in our support of the military. Over the years, we have applied our lobbying muscle to ensure strong defense budgets and a better quality of life for military families and our nation’s veterans.
We’ve recently launched a major program to hire veterans called “Hiring Our Heroes.” This will involve 100 hiring fairs across the country this year to match veterans with employers looking to hire. And we have hired some great veterans at the Chamber—and we’re proud to have them.
So thank you. Thank you for your service. Thank you for your commitment to duty, honor, and country. And most of all, thank you for staying awake right after lunch!
# # #