The New Economy

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President Clinton Discusses the New Economy

THE WHITE HOUSE
Office of the Press Secretary
(Palo Alto, California)
For Immediate Release May 1, 1998
REMARKS BY THE PRESIDENT
AT DISCUSSION WITH WORKERS

Warehouse Floor
Therma Inc.
Facility

San Jose, California
12:35 P.M. PDT
THE PRESIDENT: Thank you very much. I want to thinkJoe and Nicki for welcoming me here. I want to thank Dan Kirby forthe tour through the operations. He did a great job. (Applause.)Thanks to Congresswoman Zoe Lofgren and Mayor Susan Hammer, my goodfriends, for joining me here today. I thank the labor leaders thatare here -- Amy Dean, Ray Lancaster, Mark VanDouheuvel, StevePreminger. But most of all, I thank all of you for giving me achance to leave Washington and come out and visit the real world.It's great. Thank you very much. (Applause.)
Before I say a little more about why I came here today,I'd like to meet a brief comment on something very important to yourfuture that did happen in Washington, D.C. late last night. Lastnight, an overwhelming bipartisan majority of 80 members of theUnited States Senate voted for a treaty that will permit us to bringPoland, Hungary, and the Czech Republic into the NATO militaryalliance.
Now, why does this matter to you out here on thisfactory floor? I think it's very important to you and to everyAmerican. We fought two world wars and lost a lot of Americans andwaged a long Cold War in a deeply divided Europe. The Berlin Wallfell, communism dissipated, giving us the chance for the first timein history, ever, to deal with a Europe that is free, democratic, andundivided. And that's important. If we can do that, that meansyou will know that you'll have stable partners for trading purposes.You can sell them things, you can buy things from them, you can be apart of growing.
Even more important, it means you know that yourchildren will likely never have to go there to fight and die in awar. And furthermore, you know that we'll be able to work togetheron the problems that do exist in the world to contain them.
Now, just in the last few years since I've beenPresident, we have used NATO for those purposes. We've brought intwo dozen other countries in a Partnership for Peace, and they workwith us all over the world training and working with our militariestogether. We made a special agreement with Russia and with Ukraine.And together, we went into Bosnia and stopped the bloodiest war inEurope since the end of World War II, with no conflicts, no shooting,no deaths. (Applause.)
So that's why this is important. Poland, Hungary, andthe Czech Republic -- three more partners that will make our alliancestronger. If we have to do something in the future, that's threemore countries that will be contributing people, sharing our burden,and building a future of strong partnership based on trade andcommerce and travel and visitation, not on conflict. It's a bigdeal.
And I would like to thank the Senate Majority Leader,Trent Lott; the Senate Minority Leader, Tom Daschle; Senator JesseHelms; Senator Joe Biden -- all of them. This was an unusualcoalition of people -- (laughter) -- who worked together to dosomething that a lot of people didn't think we could do. And it'sgoing to make a better world for our children. Ten years from now itwill look like an even bigger vote than it does this morning. So Ithank them.
I'd also like, before I begin, to offer my condolencesto the family of the police officer, David Chetcuti, who was killedin the line of duty last Saturday, and express my gratitude for thebravery he showed when he lost his life. And in that connection, I'dlike to thank the police officers from the motorcycle crew from SantaClara County, because they had to accompany me on this visit andthey're missing his memorial service that is going on this morning.So I thank them for doing that.
Now, let me tell you why I came here. Because, to me,you guys represent the future. You're good at what you do, you'rechanging all the time, you're committed to getting better, you'reoperating in a global economy, you have a good management-laborpartnership, you have apprenticeships for new workers, you havetraining for veteran workers to make sure they learn new skills andmaster new technologies. You're proving that Silicon Valley'seconomic revolution does not just include computer programmers, itcan include all the workers of America if we're all well-trained,highly competitive, and the best in the world at what we do.
You're evidence of that. I thank you for it. I wantedAmerica to see it. And mostly, I wanted to talk to you and yourrepresentatives behind me about how we can do this all over America,in every part of America, and set the processes in motion that willkeep it going year in and year out.
You are a very important part of this wonderful economicrenaissance going on in America now. Yesterday we saw that theeconomic strategy that we put in place over five years ago inWashington did, in fact, work to unleash the competitive capacitiesof America. We said we were going to reduce the deficit and balancethe budget. We were going to invest in our people, in education, intechnology, in scientific research, in environmental investment. Andwe were going to trade more with the rest of the world. We weregoing to open more avenues to trade our goods and services.
Yesterday we saw more evidence that it's working. Theeconomy grew in the last quarter at over 4 percent. Unemployment wasthe lowest in 28 years; inflation the lowest in 30 years; consumerconfidence the highest in a generation. For five years in a row now,our country has been rated the most competitive economy in the world.You did that -- you and people like you all over America, and youshould be very, very proud of yourselves. (Applause.)
Another reason I wanted to come here was because thiscompany proves that even in Silicon Valley opportunity to participatein that new economy embraces more than those who work directly withcomputers or in laboratories or in offices; and also shows, as thisgentleman demonstrated, that computer technology has revolutionizedevery aspect of American labor, and therefore, that we all mustbecome more familiar with it.
I couldn't believe it -- I told the folks that weregoing around with me that at one point during my long service asgovernor of my state, I would go out about once a month and spend ashift working in different kinds of factories. And I was around alot of sheet metal workers. I've seen a lot of welding in my lifeand it was a long time ago now, a few years -- that's light years asfast as things are changing. But the machines I saw today and thelevel of the work I saw, it's just so breathtakingly different thanjust 10 years ago, it's almost unimaginable. You, of course,understand that better than I do. But for somebody like me whohasn't seen this work in a few years -- I don't have as much time asI used to do these sort of things -- (laughter) -- it was quiteshocking in a very positive way.
And again, I say I think it's important that all ofAmerica see that these kinds of things are going on, and that allAmerican workers in all forms of endeavor have an important role toplay in building our future.
The other point I wanted to try to explore today is howwe can really make sure that everybody has a chance to participate inthis. Because, you know as well as I do that even though theunemployment rate is the lowest its been in 28 years, there's stillplaces in America where it's fairly high. And there's still workersin America who work at tasks where they're not improving theirproductivity, they're not learning these skills, they're not matchingnew technologies, and they're not getting raises.
And what we have to do now at this moment when theeconomy is working so well is to try to devise systems that will workfor everybody who is willing to work for himself or herself. We haveto try to make sure that the lessons that you live every day in thisplace are somehow learned where they don't exist.
We're doing what we can in our administration to createthe special economic incentives to go into inner-city areas andisolated rural areas where there hasn't been a lot of new investment.We're doing what we can to give people the ability to start their ownbusinesses more easily in those places. But I think you know thatunless we can guarantee a world-class education to all of our kids,and a system of lifetime learning for all workers in America so thatthey can always continue to learn new skills, we will not be able toreach the people that presently have not yet fully participated inthis recovery.
You've done a great job on that, and I just wanted to behere. I've done my best to do two things that I think are important.One is to open the doors of college to all Americans of any age.With our HOPE Scholarships now, we give virtually all Americans a$1,500 tax credit for the first two years of college and then creditsfor the second and third year, and for people who, like many of you,might want to go back and get further training. We've increasedscholarships and made the loan program better. And there's also nowan education IRA so that you save -- for example, for your children'seducation, you can put the money into an IRA and that money is notsubject to tax when you put it in. And then the gain is not subjectto tax when you take it out, if you use it for your children'seducation, to try to help make it easier for people to save foreducation.
The other thing we're trying to do is to create atraining opportunity for people who work in companies that are not assophisticated or advanced as yours, by passing what I've called --and I've been trying for five years to pass this -- the G.I. Bill forAmericas Workers. We have literally dozens of federal trainingprograms. And if I gave you a sheet of paper and a pencil and Iasked you write down five of them, I bet you there's not a person inthe room who could do it -- probably including me. (Laughter.) Butthere are dozens of them. And they were all created for someparticular good purpose when the economy was more static then it is,before it started changing like it is now.
What I've been trying to do for five years is tocollapse all the programs, put it in a fund and just give everybody acertificate who's eligible for the training and let them take it tothe local community college or wherever else, to let the people whoneed the training have the money and then choose the place where theywant to get the training. I think most of you have enough sense toplot your own future, and most other adults do in this country, too.And it would be a lot better than having all these separatebureaucracies and programs there.
So we're working on that. The House has passed a goodbill; the Senate has got a bill up -- I think they're going to takeit up today. And I hope that this vote last night on NATO is a goodindicator of what might happen on the G.I. Bill for America'sWorkers. Because think what it would mean if every person in everyworkplace in America -- every person in every workplace in America --if they lost a job or if they were grossly underemployed, could get acertificate which would basically empower them to get furthereducation and training at any point during their life. It couldrevolutionize the lives of a lot of those folks we're talking aboutthat have not yet fully participated in the recovery. And I hope wecan get the support for it.
The last thing I'd like to say is that if you all aregoing to keep producing more things in less time at higher quality,you've got to sell them someplace. And you have to sell them tocompanies that in turn sell their products. Everybody you sellsomething to has got to sell what they sell -- produce to somebodyelse. Otherwise they can't buy your product. So it's very, veryimportant that we have a growing American economy and a growing worldeconomy.
If we don't have a growing world economy, we're going tobe in deep trouble. Why? Because we have four percent of theworld's population, but we have 22 percent of the world's wealth.Now, you don't have to be a mathematical genius to know that ifyou've got 4 percent of the population and 22 percent of the wealthand 96 percent of the people are living someplace else, and for thenext 20 years in the developing countries, they're projected to growat three times the rate of the rich countries, somebody has got tosell something somewhere else than America in order to maintain our22 percent share -- in order to maintain the opportunities that weall want for our children.
And that means that we have to help other people getwealthier, too. And you may have noticed, in Washington we're havinga big argument now about whether we should pay our fair share tosomething called the International Monetary Fund, the IMF. What thatfund does is to help countries who get in trouble stabilize theireconomies so they can start growing again -- from our point of view,so they can start buying our products again.
Now, we're out here in California -- 30 percent of oureconomic growth in the last five years has come from selling to othercountries. Over 30 percent of our exports go to Asia. You have beenreading in the papers, I'm sure, that a lot of those Asian countriesare in trouble. The IMF does not just go in and give people money;it says, if you've got a problem, you've got to clean up your act,organize your business properly, start running your economyefficiently, and if you'll do these things, then we'll help you getstabilized and start growing again.
Those Asian countries are our trading partners. They'rean important part of our future. And I think we ought to pay ourfair share to the IMF. I don't care what other political business isgoing on in Washington, and there is a lot of other things that aregoing on here -- we should do whatever is necessary to keep thisexpansion going. And I hope that you will send that signal. And Iwant to thank your representative, Zoe Lofgren, for being strongly infavor of this position. But we've got to convince the Congress thatAmerica, if we want to lead the world economically, has at least gotto pay our dues and put in our part of an institution that is goingto help Asia come back so we can keep selling.
I guess that's a long-winded way of saying the best wayfor us to succeed is for me to do my part and you to do yours. AndI'm going to try to do that. But one of the things that we have todo is get the focus in Washington on basic things: how do we build aworld-class education system; how do we support companies that arecommitted to changing technologies; how can we make sure workers cancontinue to get the education and training they need. That's what Ihope to learn from you here today, and what I hope through yourvoices all America will here on the news tonight and tomorrowmorning.
Thank you for the example you set for our country.Thank you very much. (Applause.)
(Discussion begins in progress.)
MR. PARISI: Most of it boils back down to theemployees. I think the one thing we've been fortunate enough to haveis a lot of latitude for our employees to improve themselves. Andthe other thing that's been really good is that between us and ourunions we've established some really fabulous training schools, andwe've taken advantage of those. And then, Therma's kind of been on away out there as far as trying things out that are kind of new andhoping to be ahead of the curve always with anything that's new.
THE PRESIDENT: How do you determine -- first of all,who pays for the training?
MR. PARISI: The employers donate so many cents per hourtoward a training fund.
THE PRESIDENT: And are the training programs just forthe employees of your company, or do they include people from othercompanies?
MR. PARISI: All of the people in the constructiontrades go to the training schools.
THE PRESIDENT: And is there a regular schedule fordoing it, or does it depend on what new things you're doing at anygiven time.
MR. PARISI: No, they -- well, first of all, most all ofthe employees come up through an apprenticeship program. I'm surethat all these people can talk about that better than I -- in normaltime like five years, and they have to go two nights a week for fiveyears in order to become a journeyman. And then, further than that,they have wonderful journeyman training long after they've graduatedand have become journeymen.
We find that about, for us, 60 percent of our employersthat are already journeymen go and take evening classes to betterthemselves. So it's really helped us in the long run.
THE PRESIDENT: And you started the company 31 yearsago?
MR. PARISI: Yes.
THE PRESIDENT: When Nicki was under age. (Laughter andapplause). Now, I didn't want to put this out on the record -- howmany employees did you have when you started?
MR. PARISI: Well, one or two. (Laughter.)
THE PRESIDENT: And how many do you have hear today?
MR. PARISI: You're looking at them -- 1,600, I think,give or take. (Applause.)
THE PRESIDENT: That's pretty good growth. That'simpressive.
LeRoy, do you want to talk about --
MR. GINN: Well, just about Therma, really. And youasked how did Joe get to this position -- I think it's giving theemployees the opportunity. One thing that Therma doesn't do -- wenever say no or it can't be done. So if you want to do it from anywalk of life, Joe and Nicki give you the opportunity to go and grow.And there is never -- there's no roadblocks, no barriers. Do whatyou want to do, grow to where you want to grow. If you need tolearn, if you need a tool, like Joe said, he -- Joe is probably morefar out than any of us on thinking where it can be and what'shappening and what's coming up, and he pushes us there. And it's awild ride, but it's great. (Laughter and applause.)
THE PRESIDENT: Give us an idea of the different kindsof customers you have. You serve people in the computer business,people in the biotech business.
Q We serve basically every major computermanufacturer. We serve the tool manufacturers for the computer chipsthemselves, which is big. In this valley there are a lot ofmanufacturers of the tools that the computer companies buy the tools,and so if you have a fab of some name-brand computer, they'll have 10or 20 different types of tools that that chip goes through to get tothe process of becoming the computer chip.
And those tool manufacturers are very big in this area,and the tools themselves have a lot of process gasses, a lot ofspecialty exhaust, a lot of waste products. And so we do a lot ofdesign with those tool manufacturers so that they can get thespecialty gasses and take care of the product and everything thatgoes with those tools so that it can work in the fabs.
Q I have to say that the training here, there is nota lot of formal training for a lot of the new technology coming outbecause product life is so short that we have to respond very rapidlyfor the manufacturer or our customer so they can get their product onthe market. And many times these are very new products. And sowe're inventing and learning along the way, at the job sites, andcoming up with ideas on how they can produce their products in atimely manner so they can get out on the market and stay competitive.
So there is not a lot of schooling for a lot of that.You've got to have employees that are very creative and are willingto take the challenge to do that. And if you look at some of thethings we've done here in the last year, we had five patents come outof this company. We see a need and we go and figure out how to doit. Then maybe in a few years we might have a school for it, butwe're, I think, probably the front runners in a lot of the stuff thatis happening in this valley as far as keeping main computer industrycompanies competitive.
Q Joe and Nicki's philosophy has worked so well --one of the reasons I enjoy working for them is they put a lot oftrust in the field personnel to make decisions on the job sites. Ifyou have a large project going, a delay is very costly, the man-hourout there is very costly when you have 50 to 100 people. If youcould make a field decision without having to come back to the officeand consult 10 people and make that decision on the field, that jobgoes much faster. And they have entrusted all of us to makedecisions like that. And that speaks a lot. They depend on us.They hold us to a high level. And we all hold ourselves to -- at theend of each day, of accomplishing something. And it's a greatfeeling at the end of each day. And it's a great feeling that theyappreciate that. (Applause.)
THE PRESIDENT: Good for you.
Q I can also add that we also have a safety net. Ifyou have any questions, you can call up to this front office. Wehave the best engineers in the valley; we have planners; we havethings at our fingertips because of this fast turnover. This bayarea -- I've been in this trade for 25 years now and the turnover hasbeen immense -- fast-track jobs. You go out to these places whereI'm familiar with them meet -- you start off your project at twoweeks. All of a sudden it's condensed. What do they want? Theywant it in four days. What do you do? First you pull your hair out,then you say, hey -- (laughter) -- then you start on your resources.It's a magnificent buddy system.
And even with our suppliers, a heavy burden falls uponthem. Where are you going to get that unit that takes six weeks?You have to rely on, well, like Pat -- she can attest to that.
MS. GLENN: With Therma, you've got a partner andsomeone you can trust. When they say that this is a panic situation,you must respond to that in this valley, because people don't crywolf. They come out and say, I need it, I need it now, and this isthe reason. And you must then go out to the rest of the country inmost cases, to get other people and other places in the country torespond to your needs so that you can respond to theirs and get thecustomer on-line.
Q One thing that is so unique about our area is thatthings have to happen so fast for a reason. As you know, by the timethey get a product out the door, it's already been copied, usually,somewhere else, and they're on to their next product. And we do nothave the time to wait around. When they say, we need to get thisnow, we understand why they need to get it now, and that helps us outin the field and in the office staff, getting these things done rightaway. And we all work together in accomplishing this and it's agreat system.
Q I think as a group we're very willing to adapt andreact quickly. And that goes with -- because they do trust us a lot.We're respected for having minds and our voice will be heard and ouropinions are wanted. And that means so much to everybody here thatit makes you try so much harder and want to give more of yourself.(Applause.)
THE PRESIDENT: That may be the single most significantrevolution, even more important than all the technology that'soccurred in manufacturing in America over the last two decades or so.The companies that are doing really well are the companies thatempower their workers and that learn from them as well as teach them,and where people are working together.
I can go to any part of America and spend half an hourin a plant and immediately know, without anybody having to sayanything, how people feel about that, because that's the mostimportant thing that you see -- anyplace you go, whether the answeris a good one or not a good one, it's down deep inside the mostimportant thing to the people that work there.
Q I think at Therma you're a name, not a number. Youfit into a team. And the team is -- there is no real hierarchy hereat Therma. We all work for Joe and Nicki, and if I need to talk toanybody in the company or anybody in the company needs to talk toanyone, we pick up the phone, pick up the page, or pick up the --whatever, it's right there. And like John says, you have the depth.Joe has gone out and got the right people for the depth for thiscutting-edge stuff we're doing. And if you have a question, there isan answer right inside Therma and it only takes picking up a phone.There is no special thing you have to do. You call that person andsay, hey, I need this answer, and you get it.
And that's -- because of like Mark was saying how fasteverything is happening here, we have to have those answers in orderto keep our customers satisfied. And it works out well here.
Q It is a true team effort. It's a one mind kind ofthought that we're all advancing together.
Q And we could work anywhere, too, but we choose towork here. There are a lot of companies that are signatory, and wecould go anywhere, but Therma takes care of us and they're on thefront lines and this is where we want to work. (Applause.)
Q That's a really good point. Joe and Nicki havebeen in business 30 years. They have customers, long-termrelationship customers that they've been doing work for on acontinual basis for those 30 years -- many of them -- not just afluke deal, one or two. They have many long-term people who callthem and they do the work.
They also have many long-term employees who have beenhere for 30 -- some of them 30 -- there's an original crew 30, andthem some of them 20, some of them 10. When people get here, theytend to say because it is, it's a very nice place to work. You feelpart of a team.
THE PRESIDENT: That's what you said, right?
Q It's true. That's right. (Laughter.)
THE PRESIDENT: You could go somewhere else.
Q I started off as an apprentice here and then Iturned out, and then they taught me now how to run work, and nowthey're teaching me how to do the computer. I'm not just stuck inone little spot. They keep training me and keep giving me theopportunities.
Q If you see something there that you want to goafter, you can go right after it. And there's not a restriction onit. And what a neat thing to wake up every morning and say, gee, youknow, I want to get more involved in learning this type -- and theyprovide the support, the training is there, everything is in place.And it's like almost going to work somewhere different every day.And that's a great job.
THE PRESIDENT: You know, it's interesting, I haveworked hard -- with limited success, I might add -- but more than Iwould like -- more than I thought in the beginning we'd have, withthe Vice President, to try to organize this kind of workplace in asmany government agencies as possible. And it's harder in some waysbecause you're organized to make good things happen and to make goodthings happen in a hurry. A lot of people who go to work for thegovernment are terrified that something bad will happen and it willbe on them. And they'll read about it in the newspaper and thenthey'll have to be a scapegoat for it.
So what that tends to do is to create a kind of a -- toreinforce the sort of bureaucratic mentality, don't venture out,don't try, because if you make a mistake, it will be in the papers,all the taxpayers will be mad, you'll be the goat, you'll be out thedoor sort of thing. As a consequence, more mistakes are made.
If you think about it, we've still got -- we are reallytrying to create an environment in which we can respond more quicklyto people's needs. We have -- just a little example -- we're havingmillions of people this year filing their income taxes by e-mail ortelephone, in just a few minutes. And most people have a fairlysimple form. There may be, I don't know, some percentage that willbe harder to check, or whatever, but the point it, it's really worthdoing because it's a hassle on the best of terms and to make iteasier for people is a good thing to do.
And the Social Security Administration, believe it ornot, won an award, over L.L. Bean and a lot of other places, for thebest telephone service of any major, big organization in America.(Laughter.) But we really worked at it.
But it requires getting people to not be afraid to trysomething new, and to let them know that, assuming they're notabusing the citizens or something, that if you're actually out theretrying to something new and you're taking a chance, if it doesn'twork out, you're not going to be punished because you want people tofeel that way.
It is really -- it's an enormous challenge to try tocreate the flexibility and productivity you have in an organizationlike this, where you have clear common goals. I mean, it's not likethere's no uniformity of objective, or uniformity of standards. Butyou still have some creativity in carrying it out. And you've kindof got my juices flowing to keep trying today.
But every effort we've made in government has been worthit. But I just -- I want to urge all of you to support us in doingthat, too, because it's like everything else, if you give people alot of freedom and you ask them to try, once in a while you make amistake, because nobody is perfect. And you have to create anenvironment in which your people are trying to the right thing forthe right reason and not being reckless in doing it, you supportthat.
Q I think you want people to try to do things andstep out -- and we're all bound to make some mistakes, and it's muchbetter to have accomplished something and made a mistake, at leastrecognize your mistake and then you can fix it. But if you haven'tdone anything, nothing happens. And we all stand around looking ateach other.
MS. PARISI: I think if you don't make a mistake, youaren't working. When anybody makes a mistake, and they come and say,"I'm sorry", I say, "if you didn't make a mistake I would worry."And the other thing I think you can see here, because we are aprivate company, Joe and I can make a lot of mistakes and everybodyout here covers us up. (Laughter and applause.)
THE PRESIDENT: I could say something hilarious aboutthat but I won't. (Laughter and applause.)
Let me say again, though, I think -- one of the places,interestingly enough, where we've had quite a bit of success is aplace that you might not expect, is in the military, because we havevery rigorous, uniform training characteristics. I was out here acouple of years ago, actually in the harbor at Oakland, having lunchon an aircraft carrier with some career Navy people. And I talked toan enlisted man who had done 19 years in the Navy and he'd quit andgone to work in the private sector for two and half years, and hecame back to the Navy because he said that as compared to the privatesector job he had, he had much more responsibility and they trainedhim -- they gave him at least one new skill every year. It wasfascinating. And he said, eventually I'll have to quit this and I'llstill be a young person, but he couldn't find another job in theprivate sector where someone was always teaching him something newand where he was being given more and more responsibility. Andthat's basically what I'm hearing from all of you.
Q Hopefully.
Q Joe has devoted so much to organizing therelationship for the schooling. I mean, we can't stress that enough,because without the schooling, the special orbital welding skillsthat are needed to put together these -- every phase of our industryhas a very specialized, very highly skilled labor force. And withoutthe schooling -- we can't stress that enough -- Joe has worked sohard at putting together and making sure that that is accomplishingthe end result -- we could not do what we're doing.
And we have probably one of the top apprenticeshiptraining centers in the country. Many of them have looked at it andemulated it, and we're proud to have it here. And it fits well,being the high-growth silicon industry we are that we should have avery high-tech training program. And that's one of the keys the restof the country has to realize, I think, is provide that high-skilledtraining and let these people go out and learn new skills.
THE PRESIDENT: You'd be amazed how little of this isdone in some other parts of the country and in some other sectors ofthe economy. And yet I'm convinced you would have pretty much thesame pay-off everywhere, because as you go around here, you see that-- I mean, sure, you're serving all these high-tech industries, butif this country were located out in the middle of the countrysomewhere where you had a totally different customer base, you wouldstill be making more money if you were doing the same things you'redoing here. Isn't that right? And you would still have thatgentleman over there running your computer program for you and you'dstill have all this -- in other words, you'd be doing all this stuffthat you're doing here, even if you had a different customer base.
That's what we've got to get people to understand, thatwe need -- that you can't -- education and technology dominate everform of production. And just the fact that your end users happen tobe in Silicon Valley predominantly, or be in this kind of business,is almost incidental to what we should be doing in every workplace inAmerica, I think.
Q And this skilled labor force that's out here,people that we're asked to represent -- us and them -- most of ushave finished high school, some have college, some have full college,but for the most part we've finished high school and we've taken andlearned a skill level that we can take anywhere in the world asjourneymen right now and apply it . We want to stay here.But it's a great thing to have in your hands, that skill level, theability to take it somewhere.
Q I think the skills are -- I think a lot of us findout that those skills are best used here. We have the opportunity togo full bore. Like you say, nobody holds you back. If anything,they encourage you and help you along. And as far as makingmistakes, if you do feel like you're making a mistake or you'restarting to fall down, there is a lot of people here to help pick youup and help you along the way and give you that support and say, it'sall right, we're all in this together, we're going to make it, we'regoing to do it. It's immense support. You can turn in any directionand it's there to help you.
Q Well, the nice part is you do a lot of things youweren't trained to do. (Laughter.)
Q A lot of things. So many times you get out thereand there are so many special requests and so many things that havenever been done before. And it's up to you to deal with theseengineers, to deal with these researchers, and deal with just regularpeople and listen to what this request is, what their idea is, andtry and put that down on paper -- is this really what you want?Yeah, it is, that's what we're going for. And it's initiated andit's done and it helps them improve themselves.
You get with these little companies that may be just sixpeople in a company, in a space, in a building. And then next thingyou know, you're helping them build a facility that's maybe 80,000square feet. And before you're even done building this facility,you're already working on a complex for them. They're just advancingthat quickly and that fast, and you're there to help them out. Andthen next thing you know, you're seeing this product or this deviceor whatever it is on the news or being utilized somewhere. And thereis a lot of pride that goes into it, to say, hey, you know, Iremember these guys when it was just four guys, six guys.
Q And that's what the one -- we haven't really talkedabout the biotech industry -- the pharmaceutical-biotech industry inthe San Jose, Northern California, has been a very big help tostabilize the economy. The semiconductor industry, as we all know,goes up and down at different times. In the last 10 years, thebiotech-pharmaceutical has come in and really -- again, somethingthat Joe saw and jumped at it. He said, let's go try this out. Thisis new, let's go get in there and get our feet wet. And we did. Hemade a commitment to do it, and we all cut our teeth on it.
And like Ben says, there is -- we all hear the storiesof the garage where two people started huge computer companies in the'50s or '60s. That's happening on a daily basis in thepharmaceutical-biotech. You have two or three people that have anidea that can take that idea and, like Ben says, in the process ofthree or four years, turn it into a huge company that you should havebought stock at when it was real small. (Laughter.)
THE PRESIDENT: For whatever it's worth, our peoplebelieve that that will continue for another 20 years because of theHuman Genome Project and all the mysteries we're unlocking. Just twoyears ago -- year before last, we found these two genes that arepredominate in causing breast cancer. We've seen splicing of nervesin laboratory animals that actually repair the spines of laboratoryanimals that have been broken so that they can actually have lowerbody movement again, which offers the possibility, if we can work outthe genetic sequencing in people, that people who are in wheelchairsbecause of spinal cord injuries may be able to walk again.
All these things are happening, and the pace at whichthese genetic discoveries are being made is accelerating ratherdramatically. So I think there will be more of it.
Q We've had an interesting time of it. We've had astart-up biotech company that, even though they had gone out andraised the money for their product, didn't know the process that theyneeded. And our process engineers were able to design the processfor them so they could function and make their product.
Q It was a good team effort.
THE PRESIDENT: That's an amazing story. (Laughter.)
Q No, it happens all the time.
THE PRESIDENT: Just your typical sheet metal workerstory. (Laughter and applause.)
But again, it shows the power of ideas. And if youthink about it, work can be a lot more interesting now than it evencould have been 50 years ago, when it wasn't being powered by ideas,and repetition was important in building the kind of traditionalindustrial society. Now work can be fun and good because the wholeeconomy is being powered by ideas. And that means also that there isan unlimited, inexhaustible supply of future human endeavor, which iswhy I believe, for example, that the environmental movement, themovement to deal with the problems of climate change and globalwarming, which we've seen a little bit -- a taste of with El Ninothis year -- that that will not cost jobs, that will generate jobs,because we'll have to figure out how to do it and ideas will bebrought to bear on it. All these little people that come up with allthis stuff and then become fabulously wealthy are just idea machines.
Q You're absolutely right, Mr. President. It appliesto what we work on, with the CFC ban and certain refrigerants. Weall looked at that as being a real headache, but there have beencottage industries that have built the machines to reclaim these, therecycling plants that now take care of this refrigerant. And you'reright. It absolutely makes more growth, and we saw it herefirsthand.
THE PRESIDENT: The CFC thing is a great example. Whenwe took chlorofluorocarbons out of the atmosphere, it not only -- itwas projected to have a modest negative impact on our economy, andinstead it had a noticeable positive impact. And I think that theimportant thing for the government, for us, to do is to is when wemake these rules is to make them in such a way that allows thesekinds of processes to develop.
Q Phase them in?
THE PRESIDENT: Yes. And to give a market solution atime to work. That's a big concern I had when we went to Japan lastDecember to try to come up with some rules about how to deal withclimate change. I am positive that -- if you look at what putscarbon dioxide into the atmosphere today, about a third of it comesfrom vehicles, about a third of it comes from buildings, bothresidential and commercial, and about a third of it comes from powerplants and factories. And we now know there is available technology-- just for example -- you can buy windows now that let in six timesas much light and let out only one tenth as much heat. They costabout three or four times as much, but if they have a two-yearpayout, then after that, you're making money. And once you get thetechnology, once it all works out, then we will be doing these thingsthat we ought to do for the environment because they also are goodfor the economy. Because you have to turn the problem into an ideamachine.
Q Another department we have is energy retrofit. Wecan go into buildings and save an incredible amount of kilowatt usageused. And that all means less generation at power plants, andactually give them better process control and more comfort byupgrading their equipment and putting better controls in to operatemore efficiently. And often here they tend not to look at the nextquarter profit as the cost of the money, but we get projects who canpay off in a year and half, two years, and save --
THE PRESIDENT: Yes, what do you require? If you startsomething new like that, how quick does it have to pay out for you tothink it's worth doing?
Q Well, for us, of course, we're a little differentthan most of our customer are. Our customers generally would like tosee the payback in one year. I think we're more realistic about it.But even when you can show them payback in less than a year, veryoften they won't take advantage of it. And that's the sadder part.You know, we find that a lot, especially on brand new buildings. Thebudget is everything and they don't -- they go for low cost no matterwhat it is.
THE PRESIDENT: Well, we're trying to see if we can makea few changes in the tax code that will change that behavior, becausein manufacturing processes there are like -- there's not one bigthing, as you know, there's dozens of little things that can be done,all of which, at least the ones that I've studied, have a two-year orless payout, which dramatically cuts your energy bill. And thenafter that, you're making money eternally.
And so we're trying -- I have asked the Congress toadopt some minor changes in the tax code which won't cost a lot ofmoney, but which would give significant incentives is you're right upagainst that decision -- you say, well, can I wait a year, year andhalf to get this money back.
Q That will be a big stimulus to our industry and therest of the country to have an incentive like that.
Q It could make the difference in a decision, likeJoe says, because bottom dollar is everything, but if there was somekind of advantage, I think the companies would go -- it makes sense,but it's the bottom dollar. So if they can have some payback in itsooner, I think it would make the decision a lot of times. And thenit's a long-term payoff for everybody.
Q I think there's just a mental adjustment that weall have to go through eventually, I think. Companies have atendency to get too bottom line driven, unfortunately. And part ofthat comes from our own stock market, I assume. They're foreverpunching for that profit for this quarter so they can look good.
THE PRESIDENT: They would have been better off waitingin the last five years. Wait and wait and wait. (Laughter.)
Q It's a tough call.
THE PRESIDENT: You've got the biggest stake in this.(Laughter.) I asked him if it was true he had nine children. Mynotes said he had nine children. He said it was true, and I said,congratulations. (Laughter and applause.) Well, I mean, it's true,you have a stake in this meeting. You have nine kids that will beable to do hundreds of different things that haven't even beeninvented yet by the time they're old enough to go into the workplace.
MR. GOOCH: That's true.
Q What's the age span of them, Johnny?
MR. GOOCH: Oh, God. (Laughter.)
THE PRESIDENT: He's going to start bragging now.(Laughter.)
MR. GOOCH: From 23 to 17 months. (Applause.)
THE PRESIDENT: Do you have twins?
MR. GOOCH: Yes. Most of you know who know me, I havetwo sets of twins, eight years old and 17 months. Big span.(Laughter.)
THE PRESIDENT: That's great.
Q -- extended production. (Laughter.)
THE PRESIDENT: Here's a man who wants to be taken careof in his old age. (Laughter and applause.)
Q There won't be enough Social Security. (Laughter.)
THE PRESIDENT: Oh, yes, there will. (Applause.)
I will say, though, one of the things we're doing now iswe're undertaking a process across the country to determine what wehave to do to change and modernize both Social Security and Medicareto make sure it's there when the baby boomers retire.
The generation of people who will turn -- the oldestbaby boomers -- I'm one of them -- the people that were born between'46 and '64, that group of people, are the largest group of Americansin a given generation in history, until last year when we got -- lastyear there was finally a group of school children that were morenumerous than the baby boomers. But that skips a whole generationand then some. So that when we're all in the retirement system,which is roughly 2029 -- that is when we're all 65 or over, which isabout 2029, we'll all be -- all the baby boomers will be 65 or over-- if we continue the projected work force participation rates andthe projected retirement rates, there will be only two people workingfor every person that going on Social Security. And, so, we're goingto have to make some fairly substantial adjustments to make sure thatthe benefits are there to provide at least the minimal support thatSocial Security provides today.
About half of the seniors in America would be livingbelow the poverty line if it weren't for Social Security, althoughalmost all seniors have income over and above Social Security.Social Security itself is not enough for hardly anybody to maintainthe standard of living they had before they retired, but if theydidn't have it, they'd be in trouble -- most people. So what ourtrick has got to be is to figure out how to keep what is good aboutit, but to make the adjustments necessary so that it's financiallystable and so we can -- and maybe have a little bit higher growthrate from our investments -- so that we can deal with the comingpopulation changes.
Q The one thing nice about the unions is that theyhave a fabulous pension program. They retire real well.
THE PRESIDENT: Pension plan.
Q -- with the advancement of all of the medicaladvancements and lifestyle changes, that the retirement age of 65 isa little bit shy now, that we can extend that out.
THE PRESIDENT: Yes. We're raising it to 67.
Q I think it should be even higher than that. Ithink people are productive way after that.
THE PRESIDENT: Well, one of the things that we'retrying to do to deal with that -- we've raised it to 67, and then wehave made it possible -- we've put incentives in the system forpeople who want to work to work longer.
If you raised it to 70, for example, the real problemwith that is that the -- and, of course, you have early retirement at62 and you take a discount. You'd change the discounted value. Sothe more you raise the retirement age, the less you get if you retireearlier. But the real problem with going -- and we're looking atthis, and as I said, we've tried to raise the incentives, forexample, now, for people to keep working. Because if they keepworking, they keep paying taxes and they're paying into the systemeven if they're also drawing some Social Security. And that reallymakes a huge difference in leveling up the system.
But if you go to 70, you could probably work herecomfortably at 70 -- here -- but there's still a lot of people whowork in jobs where it would be quite difficult for them to work thatlong. And so, if -- you say, well, but you still have the earlyretirement option -- that's true, but the early retirement is worthconsiderably less, because you take the present value of the wholedeal because you move the full retirement out later than if youretired at 62, you get a little less.
I agree that it has to be raised and we are raising itto 67. We've tried to -- and one of the things that -- one of thevariables that's being looked at is whether it should be raised more.Other people have suggested that we have, for younger workers, someportion of the payroll tax available for their own investmentdecisions on the theory that -- now, that looks like a wonderful ideanow because the stock market has gone from 3200 to 9000 since I'vebeen President and there's no precedent for that in history.
It's also true that over a 30-year period -- any give30-year period in the 20th century, stocks have always outperformedguaranteed government investments. The problem is, if you had anindividual account, it's not true in every month of every year. Sowhat happens if you have to retire in a year when the thing is downfor several hundred points and you don't get it out. If there's someway to sort of share the gains, if you will, across the years--that's one of the things we're looking. Because, obviously, if wecould generate a higher rate of return for the investment that youmake in your payroll tax, it would make Social Security moreattractive to younger workers.
The other thing, don't forget, that Social Security doesthat other retirement systems don't, is it's also -- it's adisability plan and it's a survivor's insurance policy. So if youpay into Social Security here and something happens to you, then yoursurviving family at least get something to help them survive, andthat can be quite important.
But let me just say this -- there is a huge amount ofdiscussion about this out there now, and I think most Americans knowwe've got to make some changes. And I think most Americans willsupport us making some substantial changes because there is no pointin being dishonest about it, we can't sustain the present system asthe baby boomers retire at the present rates of return.
But there is also -- it's important not to overlook howmuch good this program has done to stabilize -- the poverty rateamong seniors in America is now under 11 percent, and it is lowerthan that of the population as a whole. It has been for over 10years now, for the first time in the whole history of America. Andthat's something that our country should be proud of. So we have tofigure out how to save the best parts of it.
But you ought to tell -- if you have any ideas, specificideas, or you want to even organize the folks in the company to puttheir ideas up, if you give them to Congresswoman Lofgren, I promiseyou they will be carefully reviewed by our group, because we'reactually trying to go out in the country, tell people what the factsare, and figure out what the best resolution is.
Q Mr. President, I think I see a signal here that wehave to quit. (Laughter.)
THE PRESIDENT: This is Clinton's Second Law ofPolitics. When you start to have a good time, you're supposed to besomewhere else. (Laughter.)
I've enjoyed this immensely. Thank you all very much.Thank you. I appreciate it. (Applause.)