contest. they seem to be saying, we will let the voters decide. let us go let us be seeing romney. it is not a strong force. at the end of the day, we need to coalesce around mitt romney? >> one of the funniest things was amy's question on electability. that might be the inevitable direction where the party is headed. we want to have this social conservative show down at some point. maybe we will head to romney. >> why does this meeting matter? >> there is a sense that mitt romney is this close to capturing the nomination. we are very far away from the

rest of the primaries. with two wins in his pocket, south carolina will be very important. we could write a story that says mitt romney's run ends in south carolina and here is a real mano a mano race in florida and beyond. we have seen the consternation and hand-wringing from social conservatives throughout this process that one candidate on his or her own could not coalesce support, money, organization to beat that bold color against the pastel of mitt romney. that is why you see these folks getting together to say to we wanted to end this soon? do we think he has been vetted

properly? do we want to say social conservatism, that we have put him through his paces? if so, then we have to be ok with the fact that we're going to nominate somebody very early and this process and i think that as a lot of what this meeting is about the. >> when the south carolina primary is over, as it is unfolding, what should the viewers be watching for? >> we have many evangelical voters and you get a handle on how they are voting, i think that would be a big thing i would look for. >> i would look at where john mccain did particularly well. it is the coast of through the columbia area. that is where mitt romney meets to do well. he does not win to -- he does not need to win a majority.

i will watch for those areas and those counties around columbia and up and down the coast to see where mitt romney sets compared with his opponents. >> amy walters and seth thank you both. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> you can see "newsmakers" again at 6:00 p.m. eastern. the c-span live road to the white house coverage in south carolina continues with a rick santorum town hall meeting in florence live today at 3:00 p.m. eastern on c-span the. >> in this episode, we will take a look at the record very surprising comments on climate change and the science behind

the research. >> i think there are a substantial number of scientists who have manipulated data. >> i rate different comments by politicians on a 1-4 scale. if you say something outrageous that is completely inaccurate, you'll get four pinocchio's. if you say something that is slightly misleading or out of context, you might get as little as one pinocchio. >> glen kessler evaluates the truthfulness of political figures and others. >> whether or not they are deliberately lying -- i think of a politician says the same day over and over again even when it has been pointed out it is untrue, they know they are saying something untrue, and they will just say it any way. >> that is tonight at 8:00 on c- span "q &a." >> now the annual state of american business address by the u.s. chamber of commerce

president thomas donahue where he talks about the economic challenges facing america and he predicts the economy will slow down in the early part of 2012. he also outlined the chambers plan for job growth. this is 35 minutes.

>> good morning. welcome to the u.s. chamber ofi am margaret spellings. this is an exciting time for us. 2012 marks the chamber's 100th anniversary. in a few minutes the chamber's president tom donahue will deliver his annual address. before he does, i will say a few words about tom. 2011 was a challenging year for america. through it all, tom did what he does best. he turned challenges and opportunities and led the chamber through a string of victories. tom has the energy and vision to act. that is what makes him fun to

work for. he does not keep the business community in the national debate. he helped frame it. he helped position the chamber to be an advocate for business in the most critical issues confronting america. that is why so many of us look forward to his address. i think we are going to get a glimpse of what this year will bring politically and economically and what it means for the american business community. most importantly, we will hear from tom on how the chamber is going to continue to advance free enterprise and defend and protect business over the coming year. as we face new challenges in 2012, i am confident he will lead the chamber to even greater success. please join me in welcoming u.s. chamber president and ceo tom donahue. [applause] >> thank you very much, margaret, and good morning, ladies and gentlemen. i would say parenthetically, if half of what margaret said was true, it would be true of because of the extraordinary people that we have working at the chamber and the people that we have been able to attract to come here at this very challenging time for our country. let me begin by saying good

morning and by expressing my appreciation to margaret and the national chamber foundation for organizing this event and each of you for being here today. it is something of a tradition that the chamber gathers in the new year and assesses the state of american business, size up our economy, and lay out our priorities for things that we believe are really important for our country. this year is particularly special for us. we are observing the chamber's 100th anniversary, 100 years of representing the business community and standing up for american free enterprise. as we begin 2012, we can say that the state of american business is improving, but it is doing so weakly, slowly, and insufficiently to put our nation back to work.

we were all pleased to see the positive jobs report last week. let's not forget unemployment was 5% in december of 2007 as the recession began, and we are still down 6 million jobs since the recession ended. there are more than 23 million americans who are either unemployed, working part-time, or who have given up looking for a job. priorityn's highest then must be to put these americans back to work. to achieve this goal, our economy has to grow much faster than it is today. unfortunately, we think the economy will actually slow down

in the early months of 2012. we expect growth to average 2.5% or lower in the first half, and then hopefully, depending on the actions of government, to work its way up to about 3% at the end of this year. there are long lists of what the economists like to call downside and upside risks. these factors could cause the economy to perform either more poorly, or much better than any of us might forecast. our goal is to see the nation take advantage of our many opportunities on the upside, while doing everything possible to address the risks on the downside. we are deeply concerned that our largest export market and a

commercial partner that we most value, the european union, faces an unresolved financial crisis and a looming recession. there will be leadership transitions and elections in taiwan, china, north korea, and in case you have not noticed, there is an election here in united states. we are seeing continued turmoil and violence in the middle east and saber-rattling from iran. what happens to our economy if we have to pay $100 or more over the long term for crude oil? here at home, government

policies and conflicts among our political leaders have added to these uncertainties, undermining business and consumer confidence and slowing the economy down. the federal government is expanding its powers, its costs, and its debt at a record pace. we have made virtually no progress in reforming entitlement programs which could eat the federal budget and our economy alive. and in a new survey of small businesses, more than 80% of them are very concerned about the prospect of new regulations, new mandates and higher taxes, and these concerns could put the brakes on their investment and their hiring. for all of these reasons, the chamber is putting forward an

american jobs and growth agenda, with specific ideas to put people back to work -- without raising taxes or adding to the deficit. we are calling on leaders in washington to work with businesses and with each other to build a stronger american economy. 2012 must not be wasted simply because it is an election year. there is no justifiable reason that it should be. the house of representatives, for example, have already passed 30 bills that its leaders say could accelerate growth and create jobs. so far, these bills have gone nowhere in the senate. surely, some of these must have good ideas that will attract the attention of the majority in the senate.

meanwhile, an administration spokesman said recently there is just one item on the president's must-pass legislation program for this year -- one item for the whole year -- a further extension of the social security payroll tax holiday. with all the challenges facing our economy and our country, it is inconceivable to me that the president would agree with that, and i trust that he does not. today i would like to briefly outline a few of the highlights of the chamber's jobs and growth agenda. let's start with a big one -- energy. our nation is on the cusp of an energy boom that is already creating hundreds of thousands of jobs, revitalizing entire communities, and reintegrating american manufacturing.

and conventional oil and natural gas development is on the pace to create more than 300,000 jobs in the next few years in ohio, new york, pennsylvania, and west virginia alone, and there are a lot of other states involved in this business. take a look at what is happening in north dakota. the state is booming. unemployment is 3.4%. oil production has just surpassed that of ecuador, one of the members of the ocd. energy is a game changer. it is the next big thing. with the right policies, the oil and natural gas industry could create more than 1 million jobs in the next few years. not only can we create jobs, but we can cut our dependence

on overseas imports while adding hundreds of billions of dollars to the government coffers at a time when they needed to. recent discoveries have confirmed that this nation is truly blessed with energy resources. numbers can be boring, but be patient with me for a minute. we have $1.40 trillion barrels of oil, enough to last for the next 200 years. that is what we know we have. we have 2.7 quadrillion feet of natural gas, enough to last 120 years. we have 486 billion tons of coal, enough to last over the next 450 years, and we need to use more of this strategic resource cleanly and wisely here at home while also selling at around the world.

to tap our energy resources, we have got to speed up permitting and eliminate many of the restrictions that have been put on key areas and put these resources off-limits, some for environmental reserves, and others for purely political expediency. instead of hand-picking a few technologies, we must harness all our resources -- traditional and alternative -- while also expanding nuclear power and driving greater efficiencies. this is the most important environmental advantage we have. our biggest most reliable energy supplier is canada. the proposed keystone pipeline would bring canadian oil sands down to our refineries and many destinations along the way. the project has passed every environmental test. there is no legitimate reason

to subject it to further delay. labor unions and the business community alike are urging president obama to act in the best interests of our national security and our workers and to approve the pipeline now. we can put 20,000 people to work the day it is approved and 250,000 over the course of the years that it will be built. expanding our energy infrastructure is just one part of a broader effort to modernize this nation's entire physical platform. congress -- this is very complicated -- has until january 31 to do the faa reauthorization. this will ease delays, create jobs, and save lives.

lawmakers need to make investments to improve our transit system. the safety law that covers that expires on march 31. if congress does not act then, the highway trust fund would cut a minimum of 35% out of what we now spend -- if we have the absence of a reauthorization -- and put people out of work. every piece of legislation should include reforms -- but infrastructure legislation should include public-private partnerships, and the use of

private capital. by knocking down the barriers, we can on lock up to $250 billion in private capital to infrastructure alone. leverage this with investments, and you can create 1.9 million jobs over the next 10 years. add up all these jobs and you begin to put a lot of people back to work. let me go to our next subject, trade and global commerce. 95% of the people we want to sell something to live outside the united states of america. let's get out there and convince more of these customers and consumers to buy american. the president and congress acted not a moment too soon when they finally passed the trade agreements with south korea, colombia, and panama. americans who were already

starting to lose jobs -- that is what drove us to conclude those agreements. we could lose sales and jobs in other markets as well unless we act quickly to advance a bold trade agenda. a great way to start is by completing a trans-pacific partnership agreement in the booming pacific basin. let's get a high-quality agreement done this year. the chamber has also proposed a new trans-atlantic economic and trade pact with the european union. this would eliminate tariffs on goods that we trade with one another. we're gaining a lot of support for it. we applaud also the membership of russia in the wto. congress should grant permanent

normal trade relations status to this agreement so that the u.s. business community can participate in these benefits, because without it, we cannot, and we want to put russia in a rules-based system. it is time to get moving on additional trade agreements. there is interest in egypt, brazil, and indonesia, just a few of the countries that should be on our list for consideration. to do this, the tpp that congress must renew its trade promotion. any president of any party should have it. the executive branch must negotiate agreements that will not be picked apart by the congress, but subject to an up or down vote.

we also need to complete the task of modernizing the nation's export control rules. there are still rules from 30 years ago, and we need to move it because it is costing us billions and billions of dollars of sales abroad, and we must continue to support the import bank and the overseas private investment corporations. these organizations, which some people criticize, have helped support our export of goods all over the country, and the government makes money on the deal. our country should make a major effort while we are doing this to attract more global investors. foreign investment supports millions of jobs in the united states, but indirect and direct. we need to negotiate more bilateral investment treaties to ensure that american

investors are treated fairly overseas, and india and china should be on the list for the dish eating those trees. we ranked 44th in the world in the number of such treaties, and that is a fundamental competitive disadvantage of the united states and our workers. we must not overlook the extraordinary benefits of expanding tourism and business travel to the united states. we need to broaden the visa waiver programs to limit wait times at customs to reduce the hassle without jeopardize the security. by simply restoring our share of the troubled market to the 2001 levels, we could realize a $860 billion in new economic stimulus and create 1.3 million new jobs at no cost to the

american taxpayers. let me move to a very sensitive subject. to grow our economy and create jobs, we need to have significant regulatory and legal reform. there are more regulations in pipeline to date than currently exist. the regulatory avalanche confronting our job creators is unprecedented. the labor department has 100 rule-makings in the pipeline. dodd-frank requires 437 rules and 59 studies. the health care law establishes 159 new bureaucratic agencies, panels, commissions, and regulatory bodies.

the epa has some 200 regulations in the works, and the business community must contend with the national labor relations board that is clearly tilted towards unions. this adds up to a big drag on our economy, and i did not mention many of the other regulatory agencies. when the need is there and the regulatory remedy makes sense, the chamber will support it. but when we see regulatory activism that is based on bad data, we will oppose it. we will go to congress, we will go to the courts, we will go to the court of public opinion to explain how a regulatory system run amok is needlessly driving american jobs out of the country or out of existence.

let me be clear, the chamber support necessary, sensible, and forward-looking regulations. for example, our capital markets advance positive ideas to reform the sec and is working closely to close the regulatory gaps and minimize systematic risk in our financial markets. dozens of the most critical dodd-frank rules are likely to be finalized this year. on derivatives regulation, the bulk of the rules, the potential money market reforms, and other important matters, we will help ensure that the regulators that the rules were right. we will continue to push for accountability and transparency at the consumer financial protection bureau. we were deeply disappointed to see the president installed the

director without the advice and consent of the senate and without the oversight of the conference. we're not opposed to the director. we wanted to change the process so that one person did not control this whole system. the chamber is also working to modernize and overhaul the regulatory system, including legislation to reform the permitting process and to update the administration procedure act for the first time since the truman administration. our institute for legal reform will continue to fight the expansion of excessive litigation that is sucking the vitality out of american companies and with it tens and tens of thousands of jobs. we are going to build on our successful work in the states and seek passage of additional state legal reforms.

we will be be engaged in a major effort point to engage voters as they vote for governors and state attorneys and we're ending to stop the alarming rise of third party litigation financing. this one gets me. that's where the outside investor funds a lawsuit in exchange for a share of what the lawsuit will bring in from the court. this encourages the filing of frivolous claims and invites testing questionable claims in court. disincentive to prolonged cases to get a settlement and it rise -- and it raises seriously at the questions in my opinion. who does lawyer really represent? his client or investor? in our business, we hear dumb ideas every day of the week but this one takes the cake.

my next topic is a critical one -- how to maintain an advance american leadership as the most innovative economy and the world? we're still number 1 but we are in danger of losing our edge. we can maintain our leadership by better protecting our intellectual property, everybody is committed to that. congress took an important step last year by passing long overdue patent reform legislation. this year, we are asking lawmakers to pass balanced legislation to crack down on foreign websites whose only purpose is to trick consumers, steal american jobs and pollute the internet system in this country.

leadership also requires that we reform our visa policies to allow the world's best minds and most creative entrepreneurs to stay in our country after we ede them. where? in our top universities. they will go and contribute a succeed elsewhere. so let's keep them here. it has to be in the united states. these are reforms that are just a small step toward the long- overdue priority of immigration reform. america's prosperity has always depended on hard work, sacrifice, drive, and the dreams of immigrants. our future will depend on them even more. leadership and innovation also demand substantial improvements

to our k-12 school system. a major overhaul of job training programs and close cooperation with our universities to make sure that our work force is competitive and ready for the jobs of the future. finally, innovation demands and depends on a rational, efficient, and globally competitive tax system. if we want to keep industries here and attract new investors to our shores, we cannot continue to maintain one of the highest corporate tax rates in the world. we need to lower the rate as a part of a comprehensive overhaul and reform that broadens the tax base, reduces the cost of burdens of compliance and makes us globally competitive. we must also, ladies and

gentlemen, recognize that the current individual tax rates, as well as taxes on dividends, capital gains, and the states are all scheduled to go up in smoke by the end of the year. if this happens, the idea of getting economic growth up where we would hope it gets by the end of the year is just not going to happen. and it will have a devastating effect on businesses and on consumers and on our economic growth. we have to take this issue to the congress this year. there is one more priority that i would like to raise. the urgent need and the -- and that urgently needs our attention. we must rein in government spending and bring deficits and debt under control in an orderly process. we cannot do that without serious entitlement reform. our states are doing it.

country has to do it. despite some progress in control of spending, we will still racked up an annual deficit in excess of $1 trillion. our total national debt has just surpassed 100% of the nation's gdp. that equates to $47,000 for every man, woman and child in this country. medicare, medicaid, social security are the principal drivers of this runaway spending. it is not malicious. it just happens. they already consume over 55% of all federal outlay. without reform, they will soon consume the total budget of the united states of america. all of us need to face the fundamental reality that the

only way to continue these programs and provide them for the people that expect them and need them is to make constructive changes and to do it now. ladies and gentlemen, let me conclude by underscoring that america's most pressing economic challenge is the lack of sufficient growth to create jobs, to expand income, to reduce government deficits, and to fund the essential programs. the good news is that our country is superbly positioned for a new era of growth. we still have a lot of strengths, you know. and there is no reason to wring our hands or cry in your soup. we're the most innovative, productive and open economy in the world. even with millions of baby boomers set to retire, our country has positive, useful

demographics and this will be a critical competitive advantage in the years ahead. we are home to the most sophisticated global companies. and two over 25 million small businesses and entrepreneurs. america leads the world in manufacturing and services, in high technology and in higher education. we have unbelievable reserves of energy and other natural resources. and one of the world's greatest breadbaskets. the business community is excited about building on the strengths and growing our economy and growing our companies. we are ready to invest, eager to compete, and we want to hire. we really want to put people back to work. in many instances, despite all of the uncertainty, and the impediments and risk our companies and entrepreneurs are

already forging ahead. this is leading the way in creating jobs. so the compelling question for all of us to think about for a minute is what is blocking our path to a stronger economic growth? to more jobs? and to better opportunities for all americans? there are some obstacles that will always be with us. there will always be uncertainties and risks that we cannot foresee. but what we can plainly see is an urgent need for leaders in every sector and at every level who are dedicated to meeting the needs of the country -- to meeting the country's challenges, solving problems, and helping america achieve her full potential. we all know the real leaders do not and cannot ignore reality. they do not sweep problems under the rug. they do not point fingers.

they do not divide us. they seek to unite us. real leaders understand that americans can have big differences in philosophy but still find common ground for our common good. this nation has always succeeded when we have worked together. real leaders would not wait another day without trying to solve the serious, economic and financial challenges facing our country. they would not tell us that the solutions will just have to wait until after the elections. leadership is also required of we the people. we cannot simply point our fingers at washington and blame them. we have a responsibility to be honest with ourselves and consistent with those who represent us. as much as we might want our

government to balance the budget, reduce the debt, and cut our taxes, all while providing each of us with an unlimited array of benefits, we know that that just cannot work. it just will not work. the business community also has a responsibility to lead. we must not lose the spirit of enterprise and of risk-taking that have served this country and our economy so well. and government starts removing the impediments that we have long identified as stifling growth in jobs, then we will be in a position in the business community to start taking far more risks and making more significant investments. the business community also has a fundamental duty to stand up for the one economic system that

can restore our nation to growth and prosperity and opportunity. and that is the american free enterprise system. if we the business community do not do it, who else will? now i am the first to say and regularly comment that this is not a perfect system. but no one has ever found a better one. for lifting people at a party, for inspiring hard work and creativity, and personal responsibility, for generating dynamic growth that it is broadly shared across this society, and for keeping the american dream for generation after generation, there is no better system. so as the chamber turns 100 years of age in this pivotal year, we are reaffirming our commitment to free enterprise, the greatest economic system

ever devised and the driver of america's greatness. we all know that this is no time to sit and wait and see what happens. it is time to live up to our legacy and make the right things happen. and you will see us striving to do so throughout the year -- on the hill, before the administration, in the courts, in the court of public opinion and, ladies and gentlemen, with the most aggressive grass-roots mobilization and voter-education program in our history. we passionately believe that it is time to stop apologizing for the one system in our society that really works, the american free enterprise system. and it is time for government and our fellow citizens to understand that the only way out of the problems we face is to drive economic growth from one

end of this country to the other. so let's go do it. thank you very much. >> on friday, president obama elevated -- he spoke for 50 minutes in the east room with the white house -- he spoke for 15 minutes in the east room of the white house. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> ladies and gentlemen, the president of the united states. >> good morning everybody. please have a seat. welcome to the white house. i see all kinds of small business people here, and i am thrilled to have you here. as a small-business owners, you know as well as anybody if we are going to rebuild an economy that lasts, an economy that creates good middle-class jobs,

we are all going to have to up our game. the other day i met with business leaders who are doing their part by in sourcing and by bringing jobs back to the united states. i told them that if you are willing to keep asking yourself what you can do to bring jobs back, i will make sure you have a government that helps to succeed. that is why we are here today. i ran for office pledging to make our government leaner, smarter, and more consumer friendly. from the moment i got here i saw up close what many of you believe to be untrue. the government we have is not the government we need it. we live in a 21st century economy but we still have a government organized for the 20th century.

our economy has fundamentally changed. our government agencies have not. the needs of our citizens have fundamentally changed, but their government has not. instead it has often grown more complicated and sometimes more confusing. i will give you a few examples. there are five different entities dealing with houses. there are more than one dozen agencies dealing with food safety. my sixth -- my favorite example that i mentioned in last year's state of the union address, the interior department is in charge of salmon and fresh water but the commerce department handles them in saltwater. if you are wondering what the genesis of this was, it had something to do with president nixon being unhappy with his interior secretary for criticizing him about the vietnam war.

he decided not to put noah in what would have been a more sensible place. no business or nonprofit leader would allow this kind of duplication or unnecessary complexity in their operations. you would not do it when you are thinking about your business. why is it ok for our government? it is not. it has to change. what we have had -- what we have tried to do over the first three years of my administration is do a whole lot of steps administratively to try to make processes and agencies more consumer friendly. we need to do more. we need authority to do more. today i am calling on congress to reinstate the authority that past presidents have had to streamline and reform the executive branch. this is the same authority that

every business owner has to make sure that his or her company keeps pace with the times. let me be clear, i will only use this authority for reforms that result in more efficiency, better service, and a leaner government. now, a little bit of history here. congress first granted this authority to presidents and the best of the great depression so they could swiftly reorganize the consent of branch to respond to the immediate challenges of the depression. for the next 52 years, presidents were able to streamline or consolidate the executive branch by submitting a proposal to congress that was able to have a simple up or down a boat. -- vote. in 1984, congress stopped granting that authority.

when the process was lost in the congressional procedures, it to bog it down. congressional committees fought to protect their turf and the lobbyists fought to keep things the way they were because they were the only ones that could navigate the confusion. it is always easier to add and subtract in washington. inertia prevented any real reform from happening. the department of homeland security was created to consolidate security agencies but congress did not consolidate on its side. the department of homeland security reports to over 100 different congressional panels. that is a lot of paper work and a lot of reports to prepare. that is not adding value or making us safer to file a bunch of reports all of the time.

it has been a generation since a president had the authority to propose a streamlining the government that allowed for real change to take place. imagine all of the things that have happened since 1984. 1984, we did not have the internet to take one example. a generation of americans have come of age. the cold war has given way to globalization. so much has happened and yet the government we have today is largely the government we had back then. we deserve better. don't talk to the skilled professionals in the government who are serving their country. you will not meet harder working folks and some of the folks in these federal agencies.

they devote countless hours to try to make sure they are serving the american people. they will tell you their efforts are constantly undermined by an outdated bureaucratic mess. if you go talk to ordinary americans including some of the small business leaders here today, they will tell you that to deal with government on a regular basis is not always the highlight of their day. over a past three years, we have tried to take some steps to fix the problem. to bring our government into this century and in doing so to read out waste. we made sure the government sends checks to the right people in the right about. -- right amount. it should be obvious. we have been able to prevent it 20 -- billion dollars in waste to make sure checks are spent properly and we reduce our

errors. we cut a whole range of overlapping programs. we have tried to yank the federal government in the 21st century when it comes to technology and making sure everything we do a little more web a friendly. -- more web-friendly. that helps in terms of accountability and transparency because the government can -- the public can get on whitehouse.gov and see what is happening at the track where money goes. we have done a lot but we need to do more. today i am outlining changes we could make if congress gives the green light to allow us to modernize and streamline. these changes would help small business owners like you. it would also help medium and large businesses. as a consequence, it would create more jobs, sell more products overseas, grow our economy faster and improve our quality of life.

right now there are six departments and agencies focus primarily on business and trade and the federal government. the commerce department, small business administration. the u.s. trade representative's office. in this case, six is not better than one. it produces redundancy and inefficiency. with the authority i am requesting today, we could consolidate them all into one compartment with one website and 1 and one mission -- helping american businesses succeed. that is the big idea. [applause] we have put a lot of thought into this.

over the past year we spoke with folks across the government and across the country. most importantly we spoke with businesses including hundreds of small businesses to hear what works and what does not when you deal with the government. what is frustrating and what is a value added. frankly in those conversations we found some unsatisfied customers. we heard that the individual who i am working with is really helpful to me but the process itself is too confusing. most of the complaints were not about an unresponsive federal worker, they were about a system that was too much of a maze. take a look at this slide. i do not easily use props in my speeches. -- i do not usually used props in my speeches.

i thought this was useful. this is the system that small- business owners face. this is what they have to deal with if they want even the most basic answers to the most basic questions like how to export to a new country or whether they qualify for a long period by the -- qualify for a loan. by the way, this is simplified because there are some color codes. the business owners do not get the blue and the purple. there is a whole host of web sites, all kinds of toll free numbers and service centers. each are offering different assistance. it is a mess. this should be easy for small business owners. they want to concentrate on creating products and services and selling it to customers. we are supposed to make it easy on them. and we can. there are some tools we can put

in place that every day would help small business owners across the country. we waste too much time getting that help out. if congress would reinstate the authority that previous presidents have had, we would be able to fix this. we would have one department or -- one department where entrepreneur is could go on the day they come up with an idea and need a patent to the day the start building a product and it need financing to the day they want to export and break into new markets overseas. one website, easy-to-use, clear -- one department where all of our trade agencies will work together to make sure businesses could better export. one department dedicated to helping businesses sell their products that the 95% of global customers who live beyond our shores. with this authority, we could help businesses grow, save businesses time, save taxpayer

dollars. this is just one example of what we could do. the contrast between this and this. it sums up what we could do on the business side. these kind of inefficiencies' exist across government. there is a real opportunity for us to rethink reform and remake our government so it can meet the demands of our time. it is worthy of the american people and so it works. this should not be a partisan congress to reinstate the -- congress needs to reinstate this authority authority in the past it has given to democratic and republican presidents for decades. in the meantime as long as the folks are looking for work and

small businesses are looking for everything i can with my current authority to help. to take one example, as of today i am elevate -- elevating the small business administration to a cabinet level agency. [applause] karen mills who is here today and who has been doing an outstanding job leading the agency will make sure small- business owners have their own seat at the table at our cabinet meetings. we will also unveil the new website, business usa. it will consolidate information that right now is spread apart all of these various sites. this way it is all in one place and easy to search. with or without congress, i will keep at it. it would be a lot easier if congress helped. this is an area that should receive bipartisan support. making our government stronger

and leaner -- should not be a partisan issue. we can do this better. we can provide taxpayers better value. so much of the argument out there all the time is up and 40,000 feet. these abstract arguments about who is conservative or who is liberal. most americans and most small- business owners, you guys are trying to figure out how do we make things work. how do we apply common sense? that is what this is about to. i will keep fighting every day to rebuild this economy so hard work pays off, responsibilities are awarded, and we have a government that is helping create a foundation for a credible energy entrepreneur ship that all of you represent. i will keep fighting to make sure middle-class families regain security they have lost

over the last decade. i believe this is a bank or break moment for families who -- i believe this is a make or break moment for families who are trying to get into the middle class, folks who are trying to start businesses. there is enormous potential out there. the trend lines and our global -- the trend lines in our global economy is moving in our direction toward innovation, openness, and it transparency. we have to take advantage of it. you need a strong ally in an effective, lean government. [applause] that is what this authority can do. thank you very much everybody. thank you. [applause]

>> live on the campaign trail today at a town hall meeting with rick santorum today at 3:00 p.m. eastern time. he has been getting support from evangelical leaders in texas, which could help him in primary races throughout the south. the next primary is in south carolina next saturday. we will hear more about political support from religious groups and what social conservatives are looking for in the republican candidates with richard land and his the president of the southern baptist convention ethics and religious liberty convention. you can watch that today on " newsmakers." >> i believe it is important to

emphasize that, while it is great to have this memorial to his mayor mary -- to his memory and it is great to have a national holiday and it is great to have streets and schools and hospitals named in his honor all over this nation and the world, it is also important to not place too much emphasis on martin luther king, the idol, and not enough in emphasis on the ideals of martin luther king, jr. >> take a look at the life and legacy of dr. martin luther king, jr. online at the c-span video library. search, watch, click, and share. it is what you want when you want. >> over the next three hours, we will take a look at the economy with a focus on jobs and global competition. this is with alice rivlin. she moderated this first panel at the brookings institution. it is about an hour.

>> and good morning. we will hear a lot today about ideas for strategies for making the u.s. economy more competitive and creating more jobs. but we have to start from where we are. and where we are is a difficult spot, as all of you know. we have to start from a realistic look at why the economy is struggling, why do we have 8.5% unemployment, and a lot higher number if you include all the people who are either looking for work and have gotten discouraged or who have a job but would like a better job and work more hours.

and why has an unemployment stayed so high for so long? what is standing in the way of a more rapid recovery? the job of this panel is to focus on why we are where we are and where we might be going. one thing that you may be very glad of is that you will not hear any political blame game today. you will hear no references to "it is all the fault of the democrats'"/"id is all the fault of the republicans." you will hear none of that. you'll hear analysis and what can be done. that is not to say that it will not be controversial. we are in a very uncertain situation and you will hear very different views of what is

happening and what might happen. to start us off, we have my colleague gary burke letless. you can find from home about unemployment, unemployment compensation, what is really happening in the distribution of income, what is happening now that we have had welfare reform for 10 years. gary applies is very considerable skills to those kinds of topics. and he will summarize for you the main points of the background paper which he and his colleague at a mooney have

written -- and his colleague alan loony have written. year a, you and and and did what i thought was an excellent job of laying out the current dismal state of the labor market and how we got here. the high unemployment and the slow growth since the recession ended, that the recession this attended by the crisis of 2008. you have a lot of good news in your paper. we have had inadequate consumer demand and all of this has been especially influenced by the plunge in household net worth as a result of the catastrophe in

the housing market. and you, adam, have also explored hypotheses about why the economy has not come roaring back. so i hope you will tell us about what you found in a few minutes for those who have not read the paper. summarize what you think the situation is and why this is better. >> this is the first session of the day, so i think it would be worthwhile to talk about what got us into the current fixed and what are the explanations for why unemployment has remained so persistently high over the last 24 months. most everybody in the room recognizes that the great recession was connected to a big run-up in house prices and then a collapse in those house

prices with fallout with the financial institutions that held all kind of financial instruments that are backed by home loans. the spectacular decline in the value of houses, which directly hurt consumers' buying power, translated into an equally spectacular fall in the value of a lot of the financial products that are backed by home loans. that collapse and those critical values rocked the financial system of the country very near collapse. fed action, treasury action, the tarp legislation played critical roles in keeping that financial catastrophe from occurring. so the financial system of the united states continued functioning, but there was a huge falloff in the valley,

first of all, of the financial institutions -- in the value, first of all, of the financial institutions and in selling goods and services to the american public. between 2007 and the beginning of 2009, the net worth of u.s. households fell by more than a quarter. that erased $19 trillion worth of wealth in the united states, measured in today's prices. the stock and bond markets partly recovered. so there has been a rebound in some of the asset prices. but we have still seen about a $15 trillion disappearance in the wells that households had before the recession began. there has been especially no rebound whatsoever in home prices. they fell sharply and they are still very low.

if households spend about 3% of the value of the assets that they own, the drop in that household net worth would translate into consumption falling by about $400 billion a year. that means, without the crash in asset prices, the household consumption would be 4% higher than it was in the last quarter. a lot of the lost wealth was in housing, which is a very widely owned asset in the united states. there is a lot of evidence from the last 20 years that, in fact, households spend more than 3% of the improvements in wealth that they have in their homes. they may spend as much as 5% of it. and the suggestion is that household consumption may be $750 billion higher without the erasure of such household wealth. but whatever estimate you

prefer, the house price collapsed and the ensuing as it -- ensuing assets decline affected the spending power in the economy. consumer spending could be expected to reduce business spending for workers, which has another impact on consumer buying power. when people lose their jobs, they lose their wages that those jobs did to them. in short, the direct and indirect effects of this financial crisis, the big spectacular decline in home values has created a huge shortfall and added to the demand in the united states. the fed action, the tarp legislation, a variety stimulus programs have all offset part of this loss, but not all of it. interest rates have fallen in the short run for safe assets to 0%. there's not much more the federal can do through

traditional monetary policy tools. the drop in the economy directly reduced the market income of american households. those fell 10% compared with the peak levels before the recession began. all of the federal countercyclical measures tended to reduce that decline. that 10% decline of what the household income is just down to 3%. we received more direct averment benefits, mostly in unemployment benefits. but still there has been a decline in disposable income in the unit states, which also reduces consumption. there has been a huge loss of household wealth, which still depresses consumer demand for a wide range of goods and services produced here in united states. we are emerging from the slump slowly, but way too slowly, some

people would say. the gap in what the economy does produce and what it could produce is about $1 chilling, roughly 6% of what the potential of the united states is -- is about $1 trillion, roughly six% of what the potential of the united states is. we have a 6% gap between the potential gdp and the explanation that fits the facts. there is too little aggregate demand in the united states. there is little more that the fed can do. it has reduced interest rates in the short run to as low as they can go. it cut short-term interest-rate says 0% early in the slump and that is where they have remained. the usual policy remedy when you have exhausted on a fair policy tools is to rely on fiscal

policy. some of you say that we tried that ended did not work. there is no evidence that the fiscal policy failed. none. six months after the onset, the biggest stimulus package that we have in the slump, the economy stopped falling like a rock and started growing again. within a few months, the private sector, when it began to grow, it was slowly, but it has continued to do so ever since. state and local governments face harsh fiscal realities and they are reducing their payrolls, offsetting some of the gains in the private sector. i estimate we would need about 10 million, possibly 11 million, more jobs today in order to reach full employment.

last year, we added 1.6 million jobs. at last year's pace, we would need about 6.5 years to generate 10 million more jobs. during that 6.5 years, the population of working age will grow, so we will need more jobs besides that. much of the excess unemployment is unnecessary. there are a lot of useful things that two million or 3 million more employed citizens could do if they were put on public or private payrolls to improve the country that we live in. there are many savers eager to offer united states government. they're saving to lend funds to the government at historically low interest rates so that figure may can put those funds to use. if households and businesses are unwilling to spend their cash reserves on consumption or

investment, the government can identify and aryanize and complete useful products -- useful projects with the money that households and businesses are willing to offer to the federal government for that purpose. the first thing we can do to boost aggregate demand is to improve the nation's public infrastructure. we can also offer direct incentives to businesses to add to the payrolls this year or next year. for example, we can exempt businesses that expand the number of people on their payroll from making payroll tax payments on those additional workers. this makes it cheaper for companies to expand their businesses this year and next coming comparison to expanding the three years or four years down the road. what are some of the other explanations for why we are in such a persistently terrible state, as far as the labor market is concerned. one is that there is a skills mismatch.

today's unemployed simply lack the skills that expanding businesses and occupations need and consequently this mismatch means that there is unnecessary unemployment. it could be fixed if we retool the skills of unemployed workers, which could be fixed if we paid businesses that are willing to train workers in those skills. the social protections in the united states have become much more generous in this slump compared to all of the previous slumps since world war ii. it is certainly true that the united states has been more generous with the unemployed this time than earlier recessions. that may have added three tenths of a point to the current unemployment rate. some economists said that it added eight tenths of a point to the current unemployment rate. but even if we subtract that, it would be very high by first or standards.

personally, i am not sure that they upper level is a very good one. but all of the improvements in our social protections since the slump began have been temporary. i am pretty certain that the extensions in unemployment benefits up to 99 weeks will be scaled back over the next year or two and they're likely to go back to where we were before the recession began within two years to three years. my reading is that the unemployment rate is high and it has remained stubbornly high because the unwinding of the house price boom had direct and indirect consequences that have removed a lot of buying power from the nation's households. that in turn has made businesses unwilling to expand or to make investments that will increase the scope of what they produce here in the united states.

the remedy, it seems to me, is to take direct action to boost aggregate demand to the most reliable tool available to us right now, namely direct government purchases of investment goods and indirect subsidies to employers to expand their payrolls and businesses in the near term rather than four years or five years from today. >> thank you very much, gary, for a very lucid position of your paper and its findings. let me turn next to klaus client kleinfeld. he employs about 60,000 workers. you have been dealing with this very difficult situation around

the world and rapid change in lots of dimensions. you have done a lot of that throughout your career. you went from being able german- based company, namely siemens. tell us how you see the current situation, mostly the economic situation, but especially the nature of the labor markets in the united states. and comment on the skills mismatch hypophysis. has it affected alcoa and how do you see it generally? >> why do i not go directly into the aspects to describe the environment and let me throughout a few thoughts on what opportunities we have to create jobs. i am with you. there are a lot of opportunities. and some of those can be put off

in a short-term basis. i see what i basically call lovers -- what i basically called leaders. -- what i call levers. the first thing is immigration. the second thing is innovation. we have had a lot of good ideas around that. we should not forget about it. that has two big sub-aspects. one is entrepreneurship. america is the country for all entrepreneurs. the american dream, i believe, is still alive and will be kept alive, i believe. and the second thing is large- scale renovation where you need government. for the first one, i think we just need to set the conditions right. countries are competing around

the world for a share in the globalization market, so to speak. there are a lot of things going on. you saw at the detroit auto show this week that more partitions are going there. foreign automotive companies see the u.s. growing. and they want a share. so what do they do? they invest here. bringing some of the things that have been outsourced and last year, bringing those things back, there are opportunities. working burmans have changed in many cases, not for the better. -- work environments have changed in many cases, not for the better.

it is dealing with the same issue of immigration, who do we let in? the middle class is growing all around the world. was to have their refrigerator and their car, they want to travel. they want to see the world. otherwise, they can only sit on tv. tourism is booming. france saw more chinese visitors than the u.s. did. i think that is not a question of the preference of the chinese, but more of a question of how we deal with it. estimates from experts say that, through tourism alone, we could create short-term millions of jobs. when you talk to people around the world, they want to come visit the u.s.. all the rescaling front, are we affected by it? absolutely. we talk about the k-12 education, we know that that is a issue.

the stock about the occupational skills. the wit occupational skills are changing, drastically, the workplace to requires that people are knowledgeable about handling security equipment. we see a shortage of that in the u.s.. we have started a lot of our programs to either with community colleges to do evening hours and weekends for rescaling training. we offer industrial machinist's job training. we offer maintenance training. we offer welding. .e need wilder's s. we need wilder'welder >> even girls can do it. [laughter] >> absolutely.

and i would encourage girls to do it. 900 people have enrolled in a program and we will continue to do that. it has been very successful. but, again, i do not want to leave the immigration side out. i believe that, when you look at the statistics, 25% of all startup firms in the high-tech space and engineering space have been founded by immigrants. i recently mentioned that statistic to vladimir putin and got a very interesting response. we do know what the president of russia basically acknowledging it and us forgetting about it. i think we have to come back to the roots here. those are my thoughts on these subjects pierre >> let me pick up on one thing you said about entrepreneurship. i think a lot of the

entrepreneurship is something that starts in somebody's grosz and is inherently a small business thing. -- in somebody's garage and is inherently a small business thing. do you want to talk about large companies? >> sure. there is a mind-set of entrepreneurship, truly a unique feature here in the u.s. is one of the things that gets ignored by the rest of the world and there are structural aspects also. almost 40% of the venture capital money worldwide is available here in the u.s. you talk to kids at other places around the world who want to start a firm, they have a much more difficult time to find people to invest in them. so the ecosystem, the fabric that you have been able to build here is generally fair ball, the mindset, the cultural ethic --

generally favorable, the mindset, the cultural ethnic unique. we have partial silicon valley's that exist in boston. just this morning, i saw a statistic that new york received more venture capital funding for the first time this year. this is great. this is not a competition. i think this is something where things come together, right? and build unequaled system that feeds into itself. the last thing is large-scale innovation. when you see some of the large- scale changes -- and i see the energy sector as the biggest one -- there is so much going on in the energy sector. it is almost too big for big companies. because it deals with so many fragments, if you want to put this together, you need kind of of an intelligent coordinating

hand in that. a good friend of mine just recently told me that he had been invited by the chinese -- he is in one of those advisory in the spare time, they drove him out to a test field. it was a two-hour drive from beijing. i only describe it second hand. he said that basically every when the bill in china -- ndmill isin the bilwi available in china. so this is a wind farm. and you have different types of solar. the cool thing with that is the combination mimics a base load. during the day, many areas where

you have the wind died down during the daytime and when the sun comes out. so you get rid of the problems the you have with renewable energy. you only have the peak time. a combine these things and if you put in the middle age have a storage device, you can literally minute large-scale " we otherwise only get through a nuclear -- what we've otherwise only get through a nuclear power plant. to do this right, you need a lot of companies, including the grid to handle this. those of the types of things that we need all large-scale innovation where companies can be brought in. but you need some intelligent hand around this to take a look at it. i am with the let's go to the moon project. it is worthwhile to do. if we do not want to lose the

vote. more investment has been going -- if we do not want to lose the boat. more investment has been going into this. if you look at what has happened in this industry, it has been highly subsidized in the past. it is hard to get started like that. armsthe solar and wind for around the world are having trouble because their governments tell them but they have to stand on their own. but they cannot stand on their own. >> thank you very much. one thing that is working for us is distinguishing between labor statistics and real statistics. [laughter] -- between lame statistics and

real statistics. let's get glenn into this conversation. this is a cyclical business and intertwined with consumer products at every level. andrew, can you tell us a little bit about how you see the current jobs picture and how you react to some of those things that jerry and klaus have said? >> everything is being said, but not everyone has said it appeared i do want to make sure that i highlight some of the key points that i agree with that have already been said by clubs and gary. we are global in 160 countries. it is not as cyclical as going into the signs days.

-- the science base. the united states and the forces of globalization on capitol labor and consumption, i think we are not having the right debate. i think this form, this forum ad panel, and what brookings is doing all day today, is the beginning of a very large debate that the united states needs to have. at the widest and of the funnel, it is short-term political cycles that are vastly inadequate for was going on in this globalized world of ours. it is not business or government as usual. how do we integrate think tanks like this one with what global enterprises are seeing and hearing?

the myth is that we're going overseas because of cheap labor with projections elsewhere. what is fair trade against free trade? how does that factor into decision making? it is no longer putting a mill in the market just for the sake of that market. not to state the obvious, we have 2 million consumers here. 2008, there were 6.7 billion consumers outside. we need to have the united states integrated. not as the center of gravity alone anymore. putting a pressure point on the world -- on the word consumption. i want to get down to that one,

because that is where the panel was honing in on. we are following skills. other countries, and klaus alluded to it, putting in place five years -- five-year and tenure strategies. i'm not talking about china, who clearly already has a plan, but companies -- countries like germany and others, who are more directed and thoughtful about where we are going in this globalized world, where markets are fairly open in terms of labor and skilled positions. i would tell you that the short- term fixes, whether they be exports, a phenomenal story in the united states over the last year or so, which has been much needed, clearly it has been short term. what is really required are the

leaders coming together to figure out how to do this in a thoughtful way and create new demand. gary referred to it. where is this new demand? i would clearly hone in on the three i have already talked about. the country is in a huge need of directed demand around infrastructure and energy policy, as well as a focus on renewables, the its solar or wind. this is a holistic approach, not a piecemeal approach. natural gas playing into the revitalization and an answer to our fossil fuel burning issues. of course, this entire discussion around exports and what a disgrace the few free trade agreements have been over the last several years. at the end of the day, how do we put energy, infrastructure, and

exports central to the agenda? i would tell you that there are policy impediments a route there. whether they are the fact that we are uneducated on trade, with 10 million jobs in the united states. for meat, the big structural fixes are in front of us. the debates of the day are going to help us. a big one for the united states that needs to stay in place on how to keep bringing in people from all over the world to help this country become the next century of entrepreneurship. people come here because of a freedom model. you have a german accent and a vaguely australian one. we are here because of your freedom model. [laughter]

bring in the best skills from around the world, or ever the come from. education is a big structural fix that i will not dwell on. skills for retraining and skills that are mismatched, i want to segue from that point into the advancing manufacturing partnership that i chair with mit. and we are, for the false -- first time in the many trips to washington, finally bringing together universities, small corporations, and companies to take taxpayer dollars that are already being spent and focused it with the impact of the private sector and research institutions, honing in on the pillars that matter. vmi -- already identified the technology area.

advanced sensing and materials design, information technology. we have addressed shared infrastructure and how to get the synergy of a whole against the synergy of the part. manufacturing innovation hubs come up as a proposal. here is where community colleges, in. taken from the german model, taking the high school diploma and retooling the high school diploma for mop -- modern age manufacturing and policy issues i have already touched on. this is a more direct to market economy than many in the free- market economy are ready to accept. i want to close with that state -- statement that i opened with. and this country has to realize the countries are competing like companies. they are bringing in manufacturers of the advanced kind, bringing them into their economies because they recognize

the two major drivers. one, a new job creation. not just inside of the plant fence, but around the plant fence. innovation follows. this is not low-tech manufacturing. the research universities attached to it grow around it and have a proliferation of the entrepreneurial action. that is directed. we have to realize if we do not bring the debate to that level, we will not only have a jobless for that amount of time, but we will lose out. >> terrific. it is interesting that these immigrants have brought our attention to the contributions

that immigration can and have made. i wonder if either of you think by the business community to educate the public about the benefit of education with a backlash largely projected towards people receiving that they are losing their jobs to immigrants. could the business community be doing more to turn the tables, here? >> should i start? it is in all of the above. ceo's are becoming much more active in public policy than ever before. hiding and honing in on one aspect of running a global business is over.

we have touched so many areas. not the least of which how to get the work force of the future design. we have to educate our workers. >> we are almost beyond the information because darrell wrote a book about it. what was it, last year? i thought this was one of the best books i have read on it because it provided a solution to the stalemate we're seeing. i have come to a point where i think the business leaders should be crystal clear to both sides that we are not willing to accept or discuss with anyone here who is supposed to be an elected official who represents the good of this country who is not willing to have an open mind on the immigration issue. basically, you see a stalemate.

on the one side, people say that you only except the hivisa thing if you except the solution for illegal immigrants and the other side says the we never talk about that. it cannot be decoupled and i think that there are solutions to salt it in the right way. how can you really work in an environment like that? it is ludicrous to believe that. there are good answers and we have to take it on. the business has to be much clearer that we are not willing to except bringing competitiveness in the u.s. down. >> let me raise a question before we bring it to the audience. gary touched on infrastructure.

this was a way of creating additional demand as opposed to increasing productivity. how do business leaders look at the u.s. infrastructure at the moment, which many of us see as crumpling, and how it affects you? >> we have all have these stories where you land at airports in the u.s. and you feel you are in the third world compared to beijing. roads, rails, ports, pipelines, we have gridlock to the approval process as. we have 60 agencies involved. only a couple states are easier than that. the ability to get anything done in this country is beyond belief.

when i go overseas, in a red carpet. inside the u.s., it feels like red tape. [laughter] really, it is just gridlock in terms of getting solutions for our enterprise. if you explode that to the national level, the answer is very evident. it is a determined from investment issue. obviously, time is money. rollo which states they are. >> it is a bigger issue than i ever thought it would be. it has increased over the last several years, unfortunately. on the local level, people are understanding because they understand what they need to do.

what people do not see is how heavy the competition is for investment. what andrew says is literally true. some places, you really have a welcoming bus their with people wanting to invest. they are competing for investments. if you compare that, people saying they need this thing, that permit, and how do i get that resolved but that gets pushed out -- pushed out for another four weeks? ok. another three months? i was willing to present it to my board in three months and i do not get an answer, so i will not presented to my board.

i could give you a whole list of things in the u.s. that are very unfortunate. a better dialogue and understanding would be important in unleashing those investments on the side. >> we have a lot to digest. i would like to invite the audience to raise questions. identifier self. someone will bring my microphone, i believe. since we are on c-span, please wait until you get a microphone before you start speaking. yes, back here?

>> my name is jack leibowitz. i am still a special volunteer. would it be possible through fiscal policy to lower the dollar? it is a high dollar now. it would increase exports enormously. >> gary? >> that would not be the main objective of running more stimulative fiscal policy, i do not think. it is true that a lower value of the dollar would help the united states find more customers in other countries for the things it produces. at the moment we have to face up to the fact that the united states is still regarded as a place where money is reasonably

safe and our currency is an excellent store of value against risks in a dangerous world. we have derive benefits from that fact. it is cheaper for us to visit overseas. but there is a price for the people who produce goods and services in this country that either compete with things that are imported or produce things that could be exported. i do think that in the long run, part of our long term solution is having a weaker u.s. dollar. >> yes? >> i had a question for both of you, actually. i am [unintelligible] also an immigrant. you mentioned the fact that regulation and the lakers are essentially strangling

improvement, both of you mentioned this, improvement in the structure. but at the local level, you also found a welcome. can you go into a little bit bored that to make us understand where this strangling effect comes from and if you have ideas on how to change that? >> i have an old saying that folks know that when intelligent people look at the same facts, they come to the same conclusion. the only answer is that they have very different information and do not talk about it enough. the people on the ground usually understand the situation and how it will hurt or help much better. very often they do not take the time to invest this type of

information and also do not get the strong enough sense of urgency about how important it is to get this matter resolved. they follow their usual procedure, it will take half of a year to a year. on the local level, people understand that it will have damaged us and a window of opportunity will have gone by. that is what i would have seen in different facets. >> regulatory environments having been addressed, i would tell you that coming forward with the processes, whenever the mib, are fairly well understood at the local level.

the paperwork required is horrendous. there are over 287 new epa regulations where they said they did not even know what the regulations would be. the ones that are coming stifle them completely. they say -- just a second, i do not want to take a risk. when you get down to the local level, the mid management level, there is no power. government is incredibly inefficient in this country. that is what i alluded to with 60 state agencies. with local officials in the private sector, that is one way to beat that. >> it is a lot, but not just environmental. >> in our industry, especially.

>> we have time for just one more question. >> in a member of the hospitality workers union. i was heartened to hear what both of you said on immigration. i was happy to hear you say that we should not artificially divided up. having said that, i will admit some considerable frustration that the business community says the right things about it, from my point of view, but with no political muscle behind it. kennedy mccain would have gone a long way, in my view, towards addressing these issues. those of us the work hard on that bill with those two bipartisan senators discovered

that there was zero muscle from this community around that issue. i am curious as to whether you believe that we can do better in that regard over the next few years, considering that -- and this is just a factual statement of a presidential candidate who i would suspect is likely to get the most substantial support, having jumped over the right wall on this particular issue. for me, we will not solve it unless we put muscle behind what you said here today. i am curious as to whether that is realistic. >> i sent one i sent because i have seen the same picture and you described. moderating my public statement to a more not-mop -- non- moderate statement. change has never come from washington. change usually gets brought to washington. that is one of the things we

have to be mindful of. we have to make it clear to our representatives how important it is for the competitiveness of this country. we have to make the case for your current environment and the candidate you're talking about. my friends tell me that i should not mistake a situation where you want to become a candidate for the situation if you get elected. that is the thing that gives me hope on that, but i could not agree more. with that approach of saying that this is what we want and we have a solution. on the immigration side, for me that was something from your study, which ended up in the book. you do not ask -- offer the aspect for free.

you have to have some type of test on how our constitutional system works. if i recall that correctly, if you have not paid taxes here and have lived here for awhile, you build a financial model by which you have to compensate for it. and i think these three things make a lot of sense and i have not met people that, at least privately, have not said to me that this is a very good approach. >> just want to mention that i would add, the business community is going through a severe wake-up call with the skills mismatch. there were 30 research institutions that had foreign owners in china. why are we going to china? because we can get the skills?

equally, we cannot get the skills here anymore. it is so difficult to get people into this country. i have three children and none of them have done science. i can say that our children are not studying science and engineering anymore. it might be a generalization, but our immigrants love going into these professions because of the big skills mismatch that we have in this country. >> well, thank you very much. i think that this has been a good start. [applause] thank you all. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> ok. we are very grateful to secretary bryson for finding time to be with us this morning. obviously, he is the cabinet officer that is most focused on the issues that are before us today. we have already had some very good discussion of them. there are two reasons why he is the ideal person for us to hear from and interact with a the bit. one, his current job. it goes almost without saying. also, the experience that it brings to that job. i think that he will say a word or two about a report called america competes that was published just last week by the commerce department. as you all know, he comes with a very rich and relevant set of

experiences from the private sector. here we have someone who embodies what the u.s. government can do and what the private sector can do and what can happen in partnership between the two. he has been here for 18 years as a member of edison international. he was the director of some startup companies, including the code automotive. if i am not mistaken, the cbo was with us one year ago for the forum. very much into innovation and the use of new technologies, particularly electric vehicles and battery systems that were just one indication of the extent to which the secretary has been a part of the solution to one of the base problems of our time. the one that andrew lewis

referred to in his comments earlier, which was the need to transfer to a low carbon and no carbon economy. he has been active in not just a for-profit area, but in the ngo world as well. his time with us is very limited. we are going to have a little bit of a chance to hear him make some opening remarks. then he has agreed to stick around for some questions. the way the we are one to handle the questions is very simple. at least, i hope it will work simply. we have cards distributed iran work -- around the room. write your question down and passed it to whoever is in the aisle. we will then take from those the most trenchant and work them

into a conversation with the secretary. on a personal note, i have to say that i reminded you a few moments ago that when i last saw you looking even more relaxed than you do now, on a flight from sun valley back to los angeles, that must seem like a galaxy far, far away and a time long, long ago. welcome to the brookings institution. [applause] >> well, many thanks. thank you to all of you who have invited me here. i look around the room and see so many friends that make me feel right back at home. i could be back in sun valley. i usually see kathleen up there. this winter our paths crossed. it was a wild and wonderful time. we do our family gatherings there.

we try to pretend like we're going skiing and all of those things. i will try to go through all of my remarks and cover the responsibility that the commerce department took on one year ago, doing something that was striking. an important. that was the reauthorization of the so-called repeat legislation. -- compete legislation. the commerce department had the responsibility to assess the competitiveness of the u.s. economy. i am told that when the legislation was passed through that modest request, there was a kind of sense on the part of the economists and statisticians and various people in the respective roles of the commerce department -- how could we do

that? i think that they did a spectacular job. i will go through and try to summarize that for you. doing it in something like 15 minutes. then i would be pleased to have questions. so, the central question, how competitive are we? what are we doing that makes us competitive around the world? we have been leaders in the world for a very long time. it is a relatively conventional observation to say the we are losing that position. and we need to address that now. the report says that we have had the great benefit of

spectacularly strong businesses and business leaders. we have had that for a long time. the key thing is that it was not alone, this responsibility. it was not a loan consequence of having these strong businesses, that we have done as well as we have done all of these years. the reality further is that the federal government has made a decisive difference. as all of you would recognize, there are tendencies across businesses, across the private sector, to under-invest in some areas. those have traditionally been substantially invested through the federal government and state governments. there were three areas in particular that i will touch on in the field of education and

infrastructure, and in basic research. so, i am going to talk about those. i know the intercom most say they have for the manufacturing perspective. i agree. but i will say more about that in particular. i want to start on a fundamental point, which is what is happening and what has happened in federal policy- making that means we're doing less in support of those key areas. education, infrastructure, research, then was the case. 10, 15, 20 years ago.

the focus can be simply put. will we have seen over the years increasingly is the damage done by very short-term thinking on the part of policymakers in washington. one way to get this is if you write a business, you make a distinction between what economists call investment and, on the other hand, consumption. there are three long-term investments that have to be made to ensure the long-term health of the company in the future and the immediate expenditures to kick it -- keep a business functioning day by day. and then there are the long-term the investments that need to be made to ensure the health of the company.

too often in washington we have decision makers who simply have lumped those two columns on the spreadsheet together. in that model, every expenditure, whether it is a short-term line item or a short- term investment, it is treated almost the same as if they were the same. and they are not. the balance in your federal it -- the balance the your federal policy makers made more consistently were decisions that took those things into account. the simple fact is that they do under-invest in those areas, but one federal and state governments step in to fill that gap, there is a significant benefit to businesses and a big return on investment for taxpayers in the form of new jobs and higher living

standards, as well as life change in advances. unfortunately, the federal commitment to longer term investment has pretty steadily declined over a number of years. u.s. policymakers have too often rested on the laurels of our 20th-century. at the same time, as you all know, over the past decade and more, many developed what were formerly thought of as developing countries and have grown way more sophisticated. and they have become, at the same time, very disjointed in their eggs accused of carefully developed plans for optimizing economic development in their respective countries, where they have advantages that they

carefully searched out and follow through on. so, the results, even as american businesses become more efficient and productive in their global reach, the underlying economic building blocks have eroded. with them, so have our questions of global economic leadership. so, today, and you know these things, the u.s. ranks 14th in the world in terms of percentage of college graduates it produces. we used to be number one. the world economic forum ranks our infrastructure 24th best. we used to be at or near the top. in the current federal share of research spending, there is now only one half of what it was in the eisenhower administration.

50% then, only 25% now. each of those declines is impacting our ability to attract and create the jobs of tomorrow. encouraging news in the report shows that this administration over the past three years has been working to reverse the trend lines on each of the front's i have mentioned. so, let me get to that first basic research. businesses and entrepreneurs are generally the most innovative source of new ideas, the federal government is supportive in developing those innovations. there has been a proud tradition of supporting the work of federal and university

laboratories that have helped to change our world. internet and satellite communication semiconductors, amongst other job-creating advances, they would not have been possible without the use of wisely spent u.s. tax dollars. that commitment has dropped off. but by 1980 the federal government funded 70% of basic research. since then, their share has fallen to 57%. so, then, education. all of us are very focused on education and what we are not doing. that is the second pillar of the report. we now know that highly skilled workers boost innovation and economic competitiveness. assuring that our children have

the skills that employers need for the jobs of tomorrow requires dedicated attention and resources at the state, local, and federal government levels. the critical importance of the science, technology, and mathematical fields, as they are called, this audience knows full well that the numbers are there. i think they're worth mentioning. in 2009, 12.8% of u.s. college graduates went into stem fields. significant economic competitors, such as korea, with 23.6%, and germany with 24.5%, are on the long list of countries producing a much higher percentage of graduates who are stem graduates. that simply has to change.

quickly, the third area of investment is infrastructure. the infrastructure needed to support a modern economy relies on publicly provided resources. we must do more to grow up the truly modern electrical grid with broadband internet access in both urban and rural areas. and here in america, 68% of households adopted broadband. that is an almost eightfold increase since 2001. and yet, when you think about it, 68% adoption rate means about one-third of american homes are simply now cut off from the digital economy. so, education, innovation, infrastructure, these are the areas where we cannot afford to cut the role of the federal

government. investments in these areas will lead to a more competitive economy and higher growth. so, what can be done? the administration is committed to restoring the consensus that once existed for democratic and republican administrations. that there are long-term priorities in which the public sector must invest in which the businesses have, in turn, a better chance of success. and what are we doing? increasing and sustaining the levels for basic funding research by the federal government. the recovery act of course included a one time infusion of federal r&d. federal funding increased from $56 billion in 2008 to $60

billion this past year. the president's budget for the past year called for more and congress did not concur. still, the enhancements we have seen have made a real difference. we are seeing that at the commerce department and elsewhere across the federal government. the commerce department, for example, the national institute of standards and technology, the administration has expanded the core research mission by about $50 million. the president and his administration will also continue to push to make permanent the tax credit to give companies the appropriate incentive to innovate and improve the way that basic research is transferred from the lab promptly and quickly into commercial products.

and we simply must intensify, substantially, our investment in the skills necessary to compete effectively in a worldwide economy where, as i have indicated, many other countries are simply surpassing us. new administration initiatives are making cholent -- college more affordable, spurring innovation at all levels, expanding the size and quality of teacher ranks. one such initiative is the aspen institute's skills for america's future effort, which the administration helped to launch. that program, maybe you know about it, it works with businesses, community colleges, labor unions, and other groups, to encourage the growth of job training programs that it work. and then -- that really work.

and then infrastructure. this of ministration is committed to investing in 21st century networks, including fostering access for citizens, no matter where they're located. the federal government must continue its drive toward a smart grid with a robust access for a commerce department is deeply involved in those issues. and then let me bring this to manufacturing. so, this really deserves very careful attention. a flowering and flourishing u.s. manufacturing sector is simply crucial to our competitive strength. it will continue to be a key source, both of economic growth

and of jobs. manufacturing pays higher than average wages and provides the bulk of u.s. exports, protecting national security. the manufacturing sector is almost the biggest -- also the biggest source of innovation in our business economy. 67% of the business research and development in america is done by manufacturing companies. that is why i have adopted more as commerce secretary. build it here, sell it everywhere.

if we do that, we can retain and enhance our u.s. economic pre- eminence. selling it everywhere means helping u.s. companies sell more of what they make to 95% of the world's consumers that live outside our borders. through this national export initiative, we are on track. after two years we are on track to meet the president's goal of doubling exports by the end of 2014. i will _ with you, this is a nonstop challenge. we have to continue to intensify. we have three more years. we have increased 16% in exports, then 17%. this morning the results were

not good for the month of november. there will be ups and downs. this is an undertaking where we have to constantly focus and find new means of taking this further. i will of course say that the free-trade agreement is very important in our ability to take up further. so, building it here means attracting and maintaining your investment so that companies are building their factories here in america. it means doing everything that we can to strengthen u.s. manufacturing. particularly advanced manufacturing. if american businesses stop building things here, it broke up the long before the actual innovating happens somewhere else. so, the president and i are

determined to reverse the tide, to revive manufacturing in america. in the president announced the advanced manufacturing partnership and we recently created a national program office for that initiative. it brought together industry, university, and all the federal government. i left that to drive investments in emerging industries, like i.t., biotech, and nanotechnology. in december, the president named gene sperling and myself as the cochairs of his white house office of manufacturing policy. strengthening american manufacturing where we should enjoy a comparative advantage, i will say, is an issue that is

close to my heart. with more than 25 years in the business community, including 16 serving on the board at boeing, i watched a broad decline in u.s. manufacturing and the erosion of the u.s. middle class jobs that came with that. i am committed to working to stop the decline based on past successes, like the ones happening right now, and our economic development administration, which i am the last two years alone has invested in 68 competitive, job- creating projects nationwide to support of advanced manufacturing. and the promising uses the we are starting to see manufacturing advance by

225,000, the fastest year-over- year growth since 1997. so, i will conclude with this, the administration does not believe all that the government has the answers, all the answers, but they do believe that their role to play in creating the conditions that make invention more likely to happen. ultimately, job growth is the metric that is most important. long-term job growth will occur most powerfully in a world where entrepreneurs and resources are supported in pursuing new ideas and taking, at an accelerated pace, the essential step of turning them into new products and

businesses. the priorities set out in the report are building blocks for fulfilling our country's tourist potential. it is critical of the transfer of these ideas and strategies into action. wherever possible, this administration, i personally want to be a partner researchers and entrepreneurs in any and all of your businesses in that effort. so, thank you very much. [applause] >> mr. secretary? you said i would have to give you a wire? first of all, i want to again thank you for being here and for

that discussion of why manufacturing matters. it has been out of our dialogue for quite some time. we get people from metropolitan areas built here and sold anywhere. fundamentally we have the manufacturing moment and an export moment. advanced manufacturing, you are a rock star right now. they are hearing the message about the changes that need to be made. and then there were cultural issues yesterday. i wanted to raise this and see your response. we have cultural barriers to achieving our manufacturing and

export moments. manufacturing, it is a cultural sense that we diminish manufacturing as a dignified work. we talked about the consumption and the amenities. we talked about everyone getting a four year degree. conflict the second piece that they mentioned was that we are the most of first country in the world and the most insular country in the world. we do not get out much. i am wondering, as you think about unleashing the dynamism of manufacturing and exports in the united states, have you thought about moving beyond a policy conversation, given where we

have been >> i think you are -- seen. >> i think you're right. in some ways, it is more pervasive and the federal government. there has been a sense for a long time that manufacturing is about highly untrained jobs. in a world where we put such an emphasis on getting traditional college degrees, we put little weight of any kind of working with your hands, bringing things together, making a difference that way. and i think we have lost a lot. as a consequence, very little has been invested in and very

little public support or public recognition has been brought to what brings 67% of the innovation in the american business sector. you see this in the automobile sector and what is being done is extraordinary. it is not just those companies, it is the overseas and automobile companies. manufacturing in key products. cars, trucks and the old ways that we think about manufacturing almost very outmoded. the skills required, if you are

the ford motor co. and you have 30% and knowledge needed in advance is electronics in southern california, i am going home for the first time since becoming secretary of commerce tonight. we will be going around to schools. he is a labor union guy that was the labour representative, fighting a lot of what was being done in the feld -- field of education. he has totally changed his views and taken the position,

for example, that the uaw in detroit has taken, which is to work together. the way to have jobs in this country is to bring business and labor companies, places where labor unions are part of the business sector, and doing it together. >> we are going to follow this panel with the representatives from dupont. 40% of their work force is going to potentially retire in five years. in some respects we have almost an urgent moment as we sort of begin to change the image of manufacturing, really begin to

train and upgrade the skills for good jobs, as you said. >> germany has done that spectacularly. i was a student in germany a long, long time ago. getting a good job between sessions, you could get one of these jobs, because we know the german tradition was universities or for academic elites. the parents had tremendous pride and continue to have tremendous pride and on the training skills that lead into manufacturing. and they do a great. >> so, i have a whole bunch of questions. we will be here until 2:00 in the morning. [laughter]

i thought i would unable you to give more details about what you just described. please, more details about the goals of the white house mfg. policy. for agency consolidation and restructuring. will that be and the remit of this office of manufacturing policy? what you described cuts across the federal government clearly. what are you thinking about timelines, both legislative proposals or administrative actions that you might see occur over the course of the next three, six, nine months? >> the white house office that gene sperling and i a chair is focused on bringing together,

effectively, all the elements of the federal government. so the defense department -- i mean, it is hard to identify any one part of the federal government that does not have a manufacturing arm. some of these are extensive. but they have been brought together in the past. even, say, the commerce department. there is a manufacturing arm of one sort or another. but they have tended to be silos. corps policy point here is let's work effectively to make this more productive, more efficient, where skills exist in one place. they do not have to be duplicated necessarily in another. let's make them really productive, and let's take the dollars that are available and can be enhanced in the manufacturing sector and not spend those dollars fruitlessly

on it duplicative of things from one department to the next. that would be a big focus. then we have at the commerce department national programs set up. it will be as spectacular program. from the outset, under the leadership of pat gallagher, a ph.d. physicist, a career person, who is absolutely the right person to head this up. this is the case of a career person who is our undersecretary of a brilliant guy, and he is reaching -- a team with him and i are reaching out to other departments working on this. this has to go way beyond policy. at some level, it becomes a waste of time, unless you're putting it into the reality of production, and that is the key thing. >> another question, same line,

office of manufacturing policy. your own thinking coming out of the energy sector. how much do you think this is about the large local companies, their challenges, their supply chains, many with small or medium-sized enterprises, or other small manufacturing firms, some which may be exporting, some which may not be -- how do think about size and scale? because that does have an enormous effect on a range of policies, both delivery as well as design. >> it is a very good question. the reality is the largest part of manufacturing in the country actually is in this supply chains. so andrew would have, here in the u.s., a very substantial supply chain. the automobile companies -- ford did not go to bankruptcy, but ford cannot have gone forward without general motors finding a

path out of its bankruptcy, because they had to have the support of a common supply chain that ford cannot afford to do if they did it independently. this is happening everywhere. andrew and i probably have gone over this grant four times. i have done it widely with others. what they value so much is the supply chains, and the supply chains are often invariably not more than called medium-sized. a lot of them are quite small but growing businesses. there is a span here, and the people that want to work, willing to have the education and develop the education, are really competitive. to be in your supply chain, you have to be awful good, right? these small businesses, they're competing like crazy.

it is the instant business people have come getting out there and winning. >> going back to your prior like, if you remember your prior life, the question deals with the potential of the clean economy and clean tech to be a driver of manufacturing. we did a report at brookings going back about six months where we said that the clean economy is disproportionately manufacturing-oriented, disproportionately innovation- oriented, and disproportionately export- oriented. it is all the right buttons, but it requires a stable and predictable and certain level of national policy, and obviously an alliance with state and local. do you agree with the assessment of the potential of the clean economy to be part of the manufacturing moment, and are there some short-term actions that the national government can do, either to do no harm or to potentially provide more pro- active support? >> i have been of the view that

we would be better across the country in dealing with clean energy steps, were there at some level a common set of requirements and supports across the entire federal government. this is an area in which the states have really let, and the states, i think, have done it with innovation, would have repeat -- having the advantage of our federal for. with different approaches, often very creative approaches, you know, in california, it has been end extraordinarily special leader. everybody is facing the reality of a tough economy right now. we have had a great advantage in the ability in the world, for example, a utilities, to have the natural gas prices come down so strikingly that allowed some room.

in many states, the state regulators and the utilities to continue to have something like current pricing in the market with some of their fuel costs down leaving some additional room for clean energy technology development and application, but that is fragile. i mean, the reality is we're all dealing with both the advantages and disadvantages of a very tough economy. the advantages, in my judgment, make us think more fundamentally, fresher ways, about how you get more out of every dollar that you have, for example, the federal government, every dollar you have in the business. it is a disadvantage, clearly, that some of the innovation and a lot of the financial support that was there to turn ideas into practical programs is diminishing. >> well, i know you have to go. but we would obviously like you

to stay. listening to your talk and these responses, your view of competitiveness really is co- produced across the sector and across all levels of government. it strikes me that a lot of what the advanced manufacturing partnership is putting forward in what you have described here today to play out in the states and the cities and the metro's come in respect of of what happens at the national level. your manufacturing moment and export moment begins to bubble up as we sort through our political difficulties that the national scale. we really thank you for coming to brookings. >> thank you very much. it has been a pleasure. [applause] >> we would the secretary back to the white has for a meeting with the president. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> this panel has the focus on advanced manufacturing and exports. and both to understand why we need to make a case for that. we have already begun that conversation in the first two panels. but also to understand what the national government can do, suspend disbelief, to set a platform for productive, innovative growth. and then in the absence of national action, what states, localities in partnership with universities, firms, business associations, community colleges, and others can do to pick up the slack. we have two wonderful panelists here. dominic barton is the major

adamo of mckinsey, the global management director, obviously based in london, but also on the board of the brookings institution. and thomas connelly is senior executive with dupont, and your boss was supposed to be here, but she was involved in a skiing accident. this is the problem with the winter holidays. but we really appreciate your taking the time. frankly, i think secretary bryson set this up very well. i think he marched us through why manufacturing matters, white it is such an innovative sector, wide it is such a dramatic impact on wages and incomes, critical to growing the middle- class, white it is important to the trade deficit, broader fiscal balance of the united states, why it into place with

environmental sustainability, the potential for clean tech. i think he really set this up well, and the report out of the department of commerce does that in the same vein. what i would like to do is sort of, really from your particular areas of expertise, is focus, sort of drill down further. dominic barton, i thought i would start with you. one of the most interesting pieces of work coming out of mckinsey, daniel and michael are here, other of your colleagues, is this focus on advanced industry. and the need for the united states to, as glen said, with a clear, a laser-like focus, to understand that there's certain sectors of the american economy, aerospace, automotive, defense, medical devices -- i mean, we

could run through the list. i think we probably would have the same kind of conclusions. they are absolutely fundamental for us to stay at the cutting edge of innovation in the vanguard of global competition. but that requires us to rethink what we do and these sort of co- production between business university and the public sector. at the get might help, as sort of a platform, for you to describe why mckinsey is interested in advanced industry, and why we need perhaps even to refrain the conversation about manufacturing in this way -- to refrain the conversation in this way. >> thank you. it is in honor to be here and also work with brookings. we're working in close collaboration on this topic, because we also think it is vital. as a bit of background, you mentioned the factor and the various companies or businesses

in it. a couple more facts, maybe on why we think it is important, and maybe some of the things we have done and what we see as some of the imperatives. it is roughly those industries that you talked about, the automotive assembly, a defense, medical devices, and so forth, it is about 10% of the u.s. gdp. that is the size of it, but it is about 45% of our exports. and it accounts for 4 million very high skilled jobs. we talked about knowledge workers, and you think about the whole chain, this is at the far end. we think, well, 10%, it punches way above its weight. the secretary talked about the amount of research and development being done by it these players. most of that 67% is actually done by the advanced industries players in manufacturing. this is where the engine is. actually, while we would argue

that all of the trends are heading south -- we heard about education, we heard about the lack of long-term thinking, the trends are heading south and quite quickly, we think. we actually do have quite a strong base. we should not forget that. in fact, more than the next four countries' combined abbottabad is changing. we heard what china is doing and so forth. we believe we are in the case now, they use it or lose the kind of thing, where we have got to make some big shifts. it was about 18 months ago, we decided to set up a sector called advanced industries to get the research and development to be able to get the capabilities to serve these types of institutions. if you look at the big forces at work in the world moving ahead, we all heard about the rebalancing of the world towards asia, brazil, and africa, and so forth. we're talking about the technology group, speed of information, the amount of

information moving, the repricing of the planet that is going on. the debate -- the democratic challenges, the aging population. we're going to move from having basically three retirees for every worker. we're going to end up moving to a situation which doubles that by 2050. there's all sorts of productivity issues, major ships going on. if you look at food, for example, which we think will be one of the major industries, ag food. the way to move it is there a lot of advanced technologies. it will be vital. if you look at what israel is doing in advanced industries in food, it is phenomenal. helping it cows produce from 5,000 liters of milk to 11,000 liters of milk per year. this is a big deal for china. they're looking at this and say, how can we buy these professors and get them over here? i can go through countless

examples of what has happened just in food, which you think is low tech, but it is high tech. the u.s. is in a wonderful position to drive that all across the value chain. i think dupont is doing a lot of it. you look at energy, much will be a big sector. the secretary talked about clean debt and so forth a that is a massive shift. health care -- i mean, healthcare, fortunately or unfortunately, it's going to be one of the biggest businesses of tomorrow given the demographics. a lot of the advanced industries is what will be there to make it productive, and we see a lot happening on that side. then, logistics and transportation. this is a country that invented airline travel, this sort of thing. that whole sector itself is moving forward. with these forces at work that we see there, the amount of business opportunity, which is going to be created and driven through this factor, in particular, is mammoth.

from the moon mission tabitha king, but we will see multiples of that. we cannot predict what they are. but we think it will be big. we think is a very important that we own that. that is why we're very passionate about this area, and we think there are a lot of things that can actually be done. well we have the sort of scale to be able to do it, all the forces are going in the wrong direction. so we think a pretty massive jolt is needed to shift this forward. >> just one follow-up question. this is a conceptual narrative really about what drives one, what is absolutely critical importance. obviously, when mckinsey quarterly comes out, the germans read it, the french, the japanese, the british, the

chinese greeted. do you get a sense that our competitors that are mature in developing economies have this clear sense about advancing industries, and therefore, moving to a policy, the platform they need to set -- are we alone in the world by basically not understanding that sort of core in sight? >> i think we're quite far behind in the understanding and actually the drive for doing it. i look at recent troubles -- andrew talked a little bit about this with in germany. we always talk about china. i actually was asked to go on talk -- they have a special initiative in their five-year plan with seven strategic industries. they are all advanced industries. and the amount of money that they're going to put into that, and they are on to immigration. one of the big discussion points

was, how come all of the -- we do not have any nobel prize winners, 0, except for those the go to the u.s. and what is going on? how do we ship to that, how do we moved it? in china, there's a massive focus on that side with the resources and planning. the germans, the french, the amount of effort the french are putting into foreign direct efforts in advanced industries is a credible. there is a lot of push to english with what is going on with cambridge. i would say that the focus on it and at the time frame and the resources and the desire to kind of cut through the blockage to move it i think is that a faster pace, and i think we're slow. again, we have an advantage, but over time, that will disappear. >> that is a great context for

the conversation with tom. for everyone watching it on the web and twitter and the rest of it, something about dupont, i mean, sixth largest exporter in the u.s. over two-thirds of your manufacturing base is in this country. over half of your work forces in the united states. 50% of them are in traditional manufacturing jobs. it is a large company in an advanced sector that has an enormous impact on people's lives, and obviously on some of the broader economic indicators that we care about. what is your perspective and the company's perspective about the dialogue you have heard so far about, do we have a manufacturing moment, is there potential for industrial revival, can we, not just double exports with a certain time span, but really have that this focus on global engagement,

become more part of our dna in the u.s.? what is the perspective from a large company? >> that is a lot of questions. yes, we're the sixth largest exporter. we run a balanced trade surplus from a u.s. perspective. we like the u.s. and our manufacturing base here, and we feel we're able to compete with people anywhere in the world from a u.s. base. i kind of push back on the notion of traditional manufacturing jobs. traditional manufacturing jobs are changing so quickly. there are no low tech manufacturing industries left. there may be some low tech producers, but they are not going to be around for long. if you are in the manufacturing business, either the product you produce has a distinct advantage or the process by which you produce it, or your logistics, have an advantage. but if you do not have a high tech advantage to your operation, you're not going to be in the manufacturing business

for very long. i think we can do that from a u.s. base, but we need to change some things. we talked about many of them already this morning. we see more and more consumers around the world -- the u.s. builds the largest and most attractive consumer market in the world, but over the last few years we have seen the emergence of china, not just as a producing nation, but as a significant consuming nation. we are seeing the same thing in india. these are vast markets for u.s. products that really did not exist a decade ago. what do we need to do to be ready for that? certainly, the new world, the next economy, if you will, trade and -- open trade and fair trade agreements are critically important. if we are going to have an innovation-based economy, ip protection is enormous. we innovate. we need to protect it, whether it is a product or process, whether it is a u.s. patent, and

the u.s. patent office is the gold standard for intellectual property and around the world. we need to protect and enhance that. it is about dependency. it is about the quality. we're the gold standard. we have got to maintain it. i think it is also about removing some areas. we heard that earlier from andrew about that. there are some things about the relic -- regulatory approvals and how long it takes. i know dominic and i were both in asia. things move faster there. we will be at a disadvantage if we allow our processes to take so long. a few things need to change, we definitely have a strong future. and there is a bit of a moment right now, given exchange rates, and more. >> let me stay with you about the issue of workers at various levels. because what you described to me the other day was a very large portion of your workforce eligible for retirement in a

very short time span. my sense is that you need workers with certain skills much more substantial than "traditional manufacturing." and do you have at the sense that our high schools, community colleges, intermediaries, labor or others, are able to produce these workers? secondly, at the management scale, someone came up to me during the break and said a critical question, and there were about three or four of them. it is for top-notch management talent coming out of the best business schools here and around the world, is still an attraction to the financial sector. manufacturing sector, not as attractive because the compensation issues and other issues. how do you think about the work force challenged with these multiple skills? >> lizette stock at the production level.

clearly, and again, we heard a bit about this this morning. there is the need for skilled craftworkers. people who are really good at being able to build and maintain plans. they are in short supply. we have been able to meet our needs, but as you say, our needs will be increasing over the next several years. they need to be met globally, because most of our production workers are recruited in the area. at the plant operator level, and it used to be that the plants, 20 years ago, manually controlled this, now there is a computer based distributed control system. the quantitative skills and computer skills required of a plant operator and chemical operations far exceed where we were a while back. at this level, the community college sort of can play a very significant role. it is not about a general curriculum at the community college level. it is really about a curriculum designed for the local industry to provide skilled workers that

we will need. we will say we have had great partnerships in areas where we manufacture, the committees of the countess, the states. they really do want to work with us in terms of developing those skilled work forces. at the professional level, i would say we recruit mostly scientists and engineers come over 70% of our professional staff have engineering degrees. we are concerned about the numbers of u.s.-born students who are interested in careers in science and technology. at the research level, we hire the sort of scientists that are trained by u.s. research universities, a leading research universities. you look at their chemistry department or there is victor biology departments, you find about half of their graduate students were born, again, outside the u.s.. immigration policy to allow us to attract and retain talent from around the world is important. at the management level, i am

and engineer by training and i am in a management role now. i am concerned that management talent may find the financial sector more attractive, perhaps. but at this point, we're able to pull in the talent that we need. >> dominant -- dominic, what you think about the work force challenge at all levels and whether we are able to do essentially deal with it, not just institutionally, the cultural norms in many respects? >> i think that is a broad area, and this may be a couple of angles on it. we have talked about the immigration issue before, and i would complete echo what klaus and andrew said, too. i think, if you look at the statistics and you look at were the source of the talent is coming from, a big chunk of that is foreign talent. if you see what is happening right now at mit and so forth,

and for example, we hire them, and it probably should be going elsewhere. but we bring them in, and they cannot get a job with us. they cannot work in the u.s., so we send them to canada. we send them to germany. guess where we start putting some of our centers of competence for advanced -- you know, it is ridiculous, this thing. i think we have to blow the cap. i do not know how much screaming -- i do not know whether we should camp out in tents. maybe that is the business. [laughter] we should camp out. it is seriously a big issue, just on that dimension. then i look around the polytechnic speed of there is kind of a cultural image that you go to a polytechnic, you have not really quite made it, or why do people go -- i think that is just a very wrong-headed view of how things are. and we have is some very good polytechnics in the u.s., and i

think we need to put more resources behind them in the community colleges. doing some work on the unemployment gap, there are several million jobs that are not filled because there are not the skills, it is the welders and so forth that are there. i think we have to be able to change the image. this is a very good thing to do, and it creates a terrific jobs and opportunities for people if they move forward and so forth. i'd think there is a cultural image of a very different from germany, very different from other parts of korea and so forth. interestingly enough, china has not figured this part out. the effort is on high in universities. they are creating not only hundreds of thousands of engineers, hundreds of thousands of people but also cannot get jobs. i think they are going to finally get it, too, that it is polytechnics that matter. on the cultural side, we'd been

-- we need to move that. and then we found in working with the brookings and talking with some clients in this area, one other thing we worry about, i will give an example, is risk culture. if you look at some of the defense companies, we have looked at, with the way media works today, it is kind of like you're getting an x-ray exam through every stage of the development of your product. that is not a very helpful thing to have happen, because you are going to have mistakes made when you're doing product development. i go to the, you know, the f-35. these are very complex devices that are being built, and there is a sense out there now, i think, from young high-powered talent, if you want to make a career in move ahead, you probably do not want to do that risky projects. chances are, there will be a screw up, and you'll know about it. we all know about -- you mentioned boeing.

it is kind of like we have a youtube version of what happened. i am not saying we should not have transparency. but how could we make that exciting again, because we have made many mistakes in the past of being able to build the things? it is risk culture. management, top talent, deferring to the big established business units, as opposed to doing new things. that is more of a very microthin, but that is certainly on the culture site. we have to look at it. i think this relates to something that was mentioned in the previous panel, we're way to short term in our thinking. i think we are driven by quarterly reports that the quarterly report focus has seeped into our r&d and so forth in companies. that is another cultural point of view that we have to shift. >> it sounds like both of what you're saying, particularly in regard to international

comparisons. because i think the cartoon version of international appearances is they get stuff done. you know, regulatory approvals expedited, public sector does what it needs to do, or infrastructure, and more. i think what you're describing with regard to the german model, there is a kind of. system were large firms and supply chains -- there is a kind of echo system were large firms and supply chains interrupt with the research institutions and the skills institutions in almost a seamless way. am i right? are we reading too much into what other countries are doing or are they really perfecting this and we tend to be more compartmentalized or segmented, business separate? you described some helpful alliances with the community colleges. is that the norm or is it the exception? >> from my standpoint, it is something that is developing

here. it is becoming more acute because of hiring needs. also because of the increased skills associated with those new manufacturing jobs, if you will. looking at models around the world, we mentioned germany. i have had experience in switzerland. you look at japan. all these countries have vibrant manufacturing sectors, and they all have very good skilling. the skiiling piece of it, it is hard to argue with the research part of it, but the craft, the community college, the polytechnics, that piece of the puzzle is done better in certain manufacturing-oriented countries like germany, so it's chilling, career, and japan. >> the thing i would say is, on execution, i would say many of the country to beat us. i was mentioning in the break an example from beijing.

this is not to do it advanced industries. this was about start-ups of new businesses. meeting the mayor of beijing, he wanted benchmarks. we would say would take six days in singapore, if you have an idea for a business, to get approval. obviously, it can vary if you're doing complex medical products versus setting up a kentucky fried chicken. but basically, six days was the measure. for beijing, the measure was 36 days. shanghai was 35 days. three months later, gone to visit the mayor of want the wall, there were chinese letters i cannot understand a but there were five numbers. 36, 35, 14, and i cannot remember the other one. i asked of that was some new slogan. and he said, no, that is how long it takes to start up a new business. someone had told -- i wish to remember it was made, but he said, someone told me about it. and it was there. you go into his office this way and you turn that way, that is what you sell.

i am sure it is different there. to me, that is kind of this execution. what is not there, and i agree, is the cultural dimension. the number of countries that have tried to develop a silicon valley, i mean, there is a long list. malaysia, the super corridor. russia is doing this right now, trying to build this. i think that is very difficult to try and replicate. that is the magic, if you will, that we have. that is why i go, why are we not doing more of that? we had the institute in medical that is wonderful. even there, we tell stories about the complexities of getting mit and harvard took elaborate, which they did, apparently. if you're at the mit campus of mit-harvard-brode. the point is, they're working together with businesses. you have researchers and business. it is a very vibrant place. i think we have offered many

opportunities like that here. we have talked about cybersecurity. cybersecurity is a very important and, fortunately or unfortunately, a huge growth business or area. and i think that is something where we could -- how do we put that together? we have talked about fracking when you think about shale gas. there are ways to build those centers. by the way, we can get other people's money. not only can we get talent -- this may seem strange. china, for example, has a lot of money, obviously. they need to develop this for their own development. it is not just a private or control thing. the have to do energy efficient investment to be able to grow without melting the place. it is and appeared at. we have suggested to them, why don't you spend some of that money in the u.s., spend that money in the u.s. to get the

technology. i think if we could build those sorts of areas, we cannot only attract the talent but also the money. but we need to get moving on it. >> i want to switch to a policy, because i think between the two panels that we have already had and in looking at what the advanced manufacturing partnership has put out, there really is sort of a common sweep of policy reforms that we need to undertake here. we have already mentioned on this panel, you know, a trade, ip, immigration, skilling. we could easily add infrastructure, tax, industry. there seems to be the common 7 to 10 areas of policy. in the last year, what have we gotten done in this town? we finally got the free-trade deals done. and some advances on patenting

monitors. relatively speaking, not the kind of sea change that we seem to need, you know, to really set a platform for retaining what we have in building on it. the question, i guess, is if you had to prioritize -- this presumes this is even a semi- rational system, but if there was a prioritization of we have got to get these two or three things done because of how you see the competitive threats, what would those be the national scale? the second issue is sort of building on the last conversation with the secretary. if the national government goes on a detour for a certain amount of time, can we imagine the states, the cities, , metros, the advanced research institutions, the corporations, doing what they can do to set the platform for advanced

industry and manufacturing, and how would you prioritize that? that may be the world we're in politically. first question, national scale, because we need national solutions. how do you prioritize in the near term? and then, assuming we still are in this time of partisan gridlock and polarization, can we push this out in some structured way to our laboratories of democracy? anyone who wants to start. >> ok, i will have a crack at that. first of all, at the national level, and again, most of the key issues have come up to date, i think the education, whether it is k-12 or university, community colleges, that is one where the international comparisons are unfavorable and becoming worse. when i talk to my, at some of the plans to the questions i ask

is, which forced the bed on in the race, the one that is out in front 31 running the fastest? the answer depends on how long the race is. but if we are in this for the long run, we cannot afford to have other people out there running faster than the u.s. economy. one of the things that is holding us back is education. let's get after the education part. the next thing, i put together a number of things that create uncertainty. nothing is worse for business or investment in manufacturing than uncertainty. we have elements of uncertainty that can be addressed. hiring is a long-term commitment. you do not want to take that on if you do not know what your future is going to be like. manufacturing requires fixed assets. you want a return on your investment over perhaps a 10- year time span. if you do not know what the future is going to look like, you keep your money in your pocket or invested in another jurisdiction were you understand or use cents less uncertainty.

uncertainty around tax rates, uncertainty around r&d policies, uncertain era of energy or climate policies. all of these uncertainties resulting in a reluctance to invest. what this town can do is really been drained the uncertainty for the manufacturing investment. >> that is correct. >> i think it is similar. i would probably have three i would do. one is around the immigration issue. i feel we need to jolt the system. i think it would give business a lot of confidence. if they move was made that way, they would say we're serious now about trying to build this. so i would get that to happen. the second one is actually a round the r&d -- getting a tax credit on r&d. there is an uncertainty issue. is it landed without people think about r&d? you do r&d for not a year, you

do it for longer. we have $1 trillion in manufacturing companies outside the country, you know, that is, by the way, earning zero. we heard about that before. we needed for r&d, and we need for the velocity of getting things moving. i would try to do something on the r&d front. the tax holiday on r&d. it is not just the white lab coats. i want the actual manufacturing to go with it. because you get all sorts of tax loopholes. i think something on it that. i would do the immigration, the and withe, uncertainties, would think about setting up some bodies as a fast-track mechanism. people can go somewhere to deal with all the convoluted process is. we have seen this with some of our clients that want to invest. there's one chinese clan that basically said we would like to invest in a particular area, in

the semiconductor area, actually. they said it it is like chicken stopping to ducks. must be some kind of chinese phrase. [laughter] they say, we do not even know where to go or what to do. larry summers was there. he was being very kind. he said, we actually do not know. >> you are a draft. >> probably. [laughter] >> some sort of fast-track mechanism to be able to work or the issues can pop up and people, we can hear what dupont is dealing with or what dupont -- what toyota is dealing with, and we can see how to move it. >> in some ways, you are arguing for a level of transparency about these regulatory barriers that obviously just did not make any sense whatsoever. i am going to open it up in a second. i already have a question here. just one last question about the

states and localities and universities and the rest of this. jim robinson is sitting here, and he was on president reagan's advisory council on federalism. i mean, we are a federal republic. washington does not really acting like it is responsible for galvanizing the talents and energies of the whole nation. sounds like it is in revote is on the national government. should we be thinking about a race to the top on advanced industry? should we be thinking about saying to the states, a cross advanced r&d, across skills, across infrastructure, across the export policy, and the states must do the foreign direct investment, not the national government, we want to challenge you to base of the come forward to us. more likely the states will have a strategy, frankly, with their cities and metros.

is that what we should be thinking about, given this moment, political, economic, fiscal, and otherwise? any initial response to that? >> i am not just saying this because you are up here, but i actually think that is of vital, and that is where we should be heading, to the state and, actually coming to the city level. you would have a better perspective on who is more open- minded. we have seen three or four places where there is a huge appetite to actually do this. it comes back to the world in many ways, a conglomeration of many cities. 600 cities can account for 60% of the world's growth. if i look at singapore, they're too small to be drawing an analogy, but they do this integration phenomenally well. they think about the forces at work. they think about the jobs of the future. they have a regular, every six

months, they have the minister of finance, the minister of education, the polytechnic heads, three of them, and business leaders, and they literally map out, you know, water is going to be a big opportunity. we're talking about skilled manufacturing related research and water. how many jobs will that create? how many, therefore, educational spots will we have? that is how the deal with it. they teach history in singapore, and they teach philosophy, which is important. but the number of spaces are limited. there are more spaces to learn about water technology. i am not saying we should go to the singapore model, but i am saying that there are a lot of examples like that. i think we have a lot of places like that in the u.s. where we can actually get a lot of things going. i think when you mention this to external players, investors or organizations, if they could actually see and meet people like that, these states and

cities are like countries in and of themselves. i think it is a very big push. if we could provide some more transparency domestically and globally to -- where are the people that actually really want to make something happen? who can we communicate with? i think we could get something moving. you're kind of race to the top idea, i think, is a good one. if we can get other states and cities seeing that other people can do it, i think people will start to push. you look at itasca, minneapolis, and you look at how business and government of the social sector have come together to deal with big issues, there are places like that that actually really want to move. and i think we should really push on it that. >> questions, right over here. and identify yourself. >> my name is hot keith rogers. my question is for thomas

connelly. if i understand it correctly, part of dupont's business relates to the advanced industry, part of it relates to lower tech, grass-roots industry, in terms of customers. my question is, are those types of local grassroots industries actually having a tough time these days? because banks have gotten bigger and internationalized, investment firms are big and internationalized, and at the local level to get financing for their particular local enterprises -- well, the home builder, the bank needs aren't standardized underwriting criteria, however, some are not. that can be sold on the secondary market. but if you have a local enterprise that is localized in

has specific characteristics, they might not inside a big international firms or big international bank. i mean your perception, are some of those types of enterprises being squeezed? >> i would certainly say that the lower tech industries, in the manufacturing situation, where they face competition from other parts of the world, yes, there will be squeezed. dupont itself and our portfolio does not have many of those types of product lines, but recently celtic customer bases, for example, in the construction industry, to use your example, where there are lower -- local operators with the lure technology makes. i would suggest that, for the future, even in industries such as construction, there are opportunities to bring much more technology to the building industry in terms of energy efficiency, to name one dimension. for the producer who is feeling

the pressure and is being squeezed, i think it is time to innovate. i was asked recently whether innovations cost us jobs, and i say failure to innovate costs us jobs. i would say that to the lower tech producer who is filling the pressure. >> question back here. >> my name is marilyn, and my questions are, first of all, as we talk about these advanced industries and the need to put as much as we can behind it, both the political will and the necessary resources to my four, -- my first question is a run quality control. i think we have seen lately in this rushed to roll out products and services, is we have seen an increase in recalls in a lot of products and services. how do we married quality control with making sure that we can get the best products out there utilizing technology.

the second question i have relates to a survey i saw recently about china's wealthiest class wanted to integrate to countries like the u.s., canada, in india, and the raise the issue of health and education. apart from the one child policy, what are we missing that we're not seeing in terms of the opportunities they have at home and the desire to leave their country? thanks. >> let me start with the first part of the question, which was around a rush to get new products to the marketplace and are we missing something? first of all, business is always in a hurry. that is part of being business. it is about being faster and being more efficient. but there are certain ground rules and around product stewardship, and i think that is they part river there have been

failures, there in the area of product stewardship. in the manufacturing operation, product stewardship is about how we make the product, first and foremost. how do we make the product? how do our plants perform? what do we have in connection with producing those products? california energy-efficient is our operation? it is also about how the products perform. have they performed in the intended use? how it performs when misused, how it performs at the end of the lifecycle. and those dimensions. i think what you're seeing is a lack of focus on that product stewardship process. leading manufacturing companies are becoming more and more rigorous around that. within dupont, we have achieved sustainability officer, and that role is really all about understanding, how the product performs in the intended use and in its misuse and at the end of

the lives of all -- and the lifecycle. we have checks and balances in place to address that. >> your question was, what are we missing? why is it that people want to move here when maybe we're complaining it is not so good here? i think that is a long talk in itself, but i think you have to segment id. in china, i think a lot of people are moving into the middle class and the rural areas of the city. they're very happy with where they are. it is interesting. trust in business in china, a survey is just coming out, and it is one of the highest in the world, believe it or not. there are actually a lot of people that do not want to leave, they're happy with where things are moving and feel very good about the future and were their children are in the focus.

they put a lot of focus on education. i think it is more in the very high wealthy group that actually wants to have places in different parts of the world and move it. i think there's an interesting question for the u.s. i literally think there are millions of people who would like to buy houses in the u.s. it might deal with the housing issue. i do not know whether we want to do that or not. but there's a big demand for that, because there's a large number of wealthy people. that is kind of how i will look at it. on that comment about education, and that was one of the points you're making, i think that is an asian advantage. if you look at the amount of emphasis and focus on how important that is compared to how, i think, we see it, and i am generalizing -- i am amazed, for example, in the korea, at

the size of the private tutorial market in children between the ages of four to eight. $1 billion companies serving that market. it is australia's third largest export, education, primarily to asia. >> interesting. questions, right over here. >> yes, i am jeff alexander, with sri. we work in regional and economic workforce development. there is a contradictory message. a lot of people have said the technical institutes and community colleges are an important part of work force and job growth. but we have a strong message in this nation about everybody needs to have a four-year college degree and we need more kids going to university. local governments use that population of the four-year degree has something with the

measure's success with. what do think about that? >> i agree, we need to put much more emphasis on higher education. it does not mean it has to be a university degree. a means we need to broaden the aperture of where that is. i'd think maybe we're simplifying too much when we say we want more education. i actually think we have to be -- again, i would be emphasizing much more on at the polytechnic side. also, there's the sense that you go there if you have not made it. i think that is really a bad image to have. by the way, there are a lot of cases of people going to polytechnics. they do the work for a while. a number of ceo's have come through that group. there are all sorts of reasons, skilling reasons and so forth. we need to get the stock -- the

story out about that and broaden it. also, the aging population. why is it that we think when someone is over the age of 55, they cannot be productive anymore? we might need to think about education institutes of focusing on 55 year olds as another wave. i think our kind of mind-set on education needs a reset fundamentally. >> listen to this question and the back and forth, how many folks in the room either have read the book "moneyball" or seen the movie? brad pitt, right? for those who have not read the book were seen the movie, the premise is you have got to measure right, is essentially. it is about baseball and the oakland athletics in the general manager who had been sent from a

young statistician, and basically decided that there was a better way to measure a baseball performance than just rbi's and the traditional sort of batting average on base performance. it is almost like we have a "moneyball" for manufacturing or for metros. we're measuring the right thing. it is a little more comprehensive. we do these cartoon measures. everybody has a four-year degree. we go off on it that. it is not dispose secondary education. about six months ago, i went out to see the austin college academy on the west side of chicago. it used to be the big manufacturing base in chicago. they set up a publ h