Remarks at the U.S. Export-Import Bank Annual Conference
Thank you very, very much. Thank you. (Applause.) Thanks a lot. Thank you very much. Thank you, Fred. Thank you all very much. Thank you very, very much. Thank you. Thank you for a standing ovation. Winston Churchill said the only reason that people stand and give a standing ovation is they desperately need an excuse to shift their underwear. (Laughter.) So I know you all had a much more noble thought in mind. (Laughter.)
Anyway, I’m happy to be here. I’m very happy I didn’t nose out Susan Axelrod at any point in time, because if I had, I never would have become Secretary of State. (Laughter.) So congratulations to her for winning the small business entrepreneur.
I’m a little embarrassed, Fred. Thank you very much for a generous introduction. I appreciate it very much. I more appreciate our friendship, and I thank you for your support through my political life and now through my non-political life as Secretary. I’m greatly appreciative and I’m delighted to have an opportunity to share some thoughts with all of you here today.
Fred’s ability to find out about my foray into the cookie business gives you some sense of Ex-Im’s deep expertise in matters of business and personal affairs. (Laughter.) I’ll have to make sure that’s as far as it goes. (Laughter.) Fred was actually very diplomatic in not telling you more about that escapade because he didn’t really mention that it was a triumph of hope and late-night wine that gave me this notion that I was going to open this business in Faneuil Hall Marketplace.
I actually was having a wonderful dinner at one of the establishments in Faneuil Hall. I hope many of you have been there. And the friends I were with, and we did enjoy one bottle too many and we came out, and don’t know if you’ve ever had that late-night chocolate chip cookie craving – (laughter) – for the right reasons – (laughter) – but at any rate, I came out of there and I was somewhat bored as a private sector attorney for a few years, and I really did have this notion I wanted to do something in retail business. And there was this vacant space in Faneuil Hall, and I looked at it and I said, "God, it’d be really interesting to open this gourmet food store there."
So literally, the next morning as a young lawyer, I found myself in Jim Rouse’s Baltimore’s office, the Rouse Company, who were the developers. And I negotiated this lease, and I wanted to have this sort of really great emporium of cookies that was then going to become a national effort and a flag store or whatever. And I was roundly brought to ground by the Rouse Company, who said, "Well, we don’t want any more fast food things here. We really just want a real gourmet food place." And I said, "Well, that’s exactly what I want to do." (Laughter.) And I gave him this explanation of what I was going to do, and then lo and behold, we have the lease and we started laying it out, and had these wonderful ovens that you can see the cookies progressing through them and dropping out on the other side.
And everything was moving swimmingly – I had my Hobart mixer and my things. I’d never done anything like this before, and as you will all know in a moment when I tell you that we were one week from opening and I suddenly realized, "God, I need a cookie recipe." (Laughter.) So I went home and I took my – I had been a Toll House cookie baker since I was a kid. I love-love them; anybody who’s traveled with me will tell you. And so I started baking and baking and baking, and I learned the chemistry of food is the hardest thing in the world because as you get bigger, of course, it changes; it’s not an automatic progression. I learned that the hard way – many batches and hours later, days later.
But we did it. We put together these incredible cookies with pure Lindt chocolate and honey and amazing, all natural ingredients. Everything was all natural. And within one year, I am proud to tell you, we won the Best of Boston for our cookies, for our macaroons, for our brownies, for our everything. And I only sold it when I had the idiotic notion of going into public life and running for lieutenant governor, and I didn’t want anybody accusing me of having sweetheart relationships, which I didn’t, or anything – but that doesn’t stop anybody in American politics from telling you you do. And so I sold it to my manager and I am proud to tell you that 20-whatever number of years later, it is still there and thriving in Faneuil Hall.
And my dream had been to take it – I actually visited Harrods in London, and I had a place picked out, and I was going to put it there, and I was going to take it. And you know the old notion, you get 40 stores, 50 stores, and sell it for 10 times earnings, and that was the story. And of course, I didn’t, and here I am now a public servant and I’m not making anything, so – (laughter) – what can I tell you?
But it’s a long way of telling you all – and this really helped me, I have to tell you – it really helped me in the United States Senate, where I did become chairman of the Small Business Committee. And I was on the Small Business Committee for 20-plus years. It taught me an enormous amount about the difficulties of being a small business, about having 35 or 40 part-time employees, getting your tax forms filled out, working on your withholding, dealing with the health department, getting your license, dealing with inspectors, getting – I mean it’s – you know it better than I do, but it really taught me about entrepreneurship and risk-taking. And if any of us need a reminder of how critical leadership and vision are to the success of any leadership effort, you can ask anybody at any one of these tables here.
Every single one of you are living examples of that and you know how to do it, as does Fred Hochberg. And I’m delighted that Fred is leading the Ex-Im effort. He himself is a very skilled, capable businessperson. Not so long ago, Fred’s father gave him a tie bar – not a tie bar here, but a tie bar that – in your – where you hang all your ties. And he listed on it the following letters: Y-C-D-B-S-O-Y-A. And it was supposed to be an acronym. I don’t know how you say that – Ycdbsoya or something like that? But he lives by it, and here’s what it means: You can’t do business sitting on your ass. (Laughter.) It is a maxim that has driven him to take his family catalogue company global. It’s what made him an exceptional leader of the Small Business Administration, where I knew him and we were friendly, and at his own company. And today it is driving him to work to try to tie the world together with American exports.
Now, I think every single one of you here would agree that this man has been anything but an idle executive. In five years on the job, he has helped to finance over $188 billion in U.S. exports and supported 1.2 million American jobs in the process. The Ex-Im Bank has been a driver of economic growth for much of the past century, especially during difficult times. And that’s been true, frankly, since Ex-Im’s beginning, when it was founded during the height of the Great Depression. It’s been true again in our recovery recently from our own great recession. The Ex-Im Bank has played an absolutely vital role in driving President Obama’s National Export Initiative forward.
And I want you just to think about it: Only a few years ago, a few years removed from the greatest financial crisis in our lifetime – and believe me, I will never forget the Treasury Secretary, Hank Paulson, coming up and literally quaking in front of us in a Senate room, in the LBJ Room in the Capitol, pale and clearly vexed as he explained to us what was going to happen to Lehman Brothers and what was going to happen to the financial world if the United States Congress didn’t pass what was then called a bailout – not a bailout in the end, but a bailout – paid – paid the American taxpayer, I might add. And there was an irony in a member of one party coming to the members of another party to ask them to save them from themselves, and it happened.
The reality is that since then, since that great recession which really put the financial system of this country and the world on the precipice, since then we have come back. People have forgotten what President Obama had to begin to do even before he was sworn in as we tried to navigate through that late fall of 2008. Since then, U.S. exports have hit an all-time high, a record $2.2 trillion. Today those exports support 11.3 million jobs and they account for 14 percent of the entire economy of the United States of America. Now, I’m happy to tell you that America is selling more goods and services abroad than at any time in our history. That’s a remarkable accomplishment. (Applause.)
But let me make clear, that kind of recovery was by no means inevitable. It was the result of specific economic choices that we made at the federal level of our government. It was the result of strong partnerships between everyone at Ex-Im and with so many of you out there and others who aren’t here today. I want to thank the many business leaders in this room who have done so much to gain a bigger foothold for American companies overseas and to create opportunities for our workers here at home.
And every American needs to understand none of this money is a giveaway. It’s not a gift program. It’s not a charity. It’s in our interest. We are not just promoting American businesses here at home; we’re promoting American values where they reach abroad. And we’re helping to strengthen countries that are on the brink, in some cases, of maybe being a failed or failing state.
Now, I didn’t come here to talk about the road that we have traveled. It’s important, because you’ve got to know where you’ve been to know where you’re going. But I want to talk to you about something that’s more powerful than the past five years or even the past 80 years of Ex-Im’s existence. Everywhere I travel, everywhere I am privileged to travel as the Secretary of State of this great nation of ours, everywhere that I travel I see how the aspirations that make America great are moving global. I see how people around the world want the same kind of opportunities that have defined our country’s success, and the success, I might add, of many of our partners.
When I was in Kyiv, walking the street down towards the Maidan recently, where the snipers had killed all of those protestors, I was struck by one man who came up to me, a Ukrainian, who said to me in pretty good English, said, "I just came back from Australia, and I was motivated by what I saw there. I want people here in Ukraine to be able to live the way they’re living in Australia." It was a personal witness to the possibilities of how life can be because of jobs and business and the ability to create a larger and larger middle class.
Wherever I go, whether it’s the Middle East or Asia or Africa, where I will be next week, I am engaged in efforts to ensure that the rise of the global middle class helps advance opportunity here at home. That’s what it’s about.
As I said at my confirmation hearing last year and as I tell our team at the State Department every single day: Economic policy is foreign policy, and foreign policy is economic policy. What we do to invest abroad, to build businesses, to help people be able to export and import – all of that is the way that you tap into the potential of people in the world. And that has never mattered more to our strength than it does right now.
When more than half of the world’s population is under the age of 30, when hundreds of millions of young people all over the world will enter the job market in the next decade, we honestly don’t have a moment to waste.
From Sao Paolo to Sana’a, all across the world young people are more connected than ever before. All they need to do is flip on their mobile device and they’re in touch instantaneously with everybody everywhere all the time. They can see the kind of opportunities that are emerging across the world. They know the challenge of one country, and they share those challenges in another country. They understand, particularly, the disparities in wealth and the disparities in opportunity. And they see that they’re just as real, and they experience them, believe me, every single day. What’s worse, they fear that it’s those disparities and not the opportunities that are going to define their future.
Remember, folks, Tunisia’s revolution was not born out of religious extremism or ideology. It was a fruit vendor who was frustrated with corruption and the inability to be able to sell his wares and being slapped around by a policeman, out of total frustration, out of not being able to touch that sense of independence and possibility, went and self-immolated in front of a police station. And that is what ignited a revolution that saw a 30-year dictator disappear and the country begin to kick off what we came to know as the Arab Awakening.
In Tahrir Square in Egypt, it was not the Muslim Brotherhood. It was no religion. It wasn’t Salifis, it wasn’t Sunni or Shia. It was young people in touch with each other, texting each other, googling, working their phones, that brought millions of people out there to throw off the yoke of corruption and open up a sense of possibility for the future. And then it happened again. It took another one because the government wasn’t responsive to their aspirations and their needs. (Applause.)
In Syria, where people are so upset and desperate about what is happening, that didn’t begin – that wasn’t, again, not a revolution in terms of religious backing or sectarianism. It was young people. The same thing that happened elsewhere, they went out in the street and said, "We want jobs. We want an education. We want a future." And when their parents went out with them after they were arrested the first time around, they were met with bullets and explosions, and the rest is history.
I’m telling you, as sure as I’m standing here, that this connectedness is not capable of being put back in the bottle by any politician anywhere. And in the end, everybody is going to be affected by these hopes and aspirations. It’s both a challenge, but it’s a huge, huge opportunity for business.
When you look at the different markets that are out there, half of the world’s population living on $2 a day or less, almost – a huge proportion living on $1 a day or less, these are people who need schools, they need jobs, they need opportunity. We want these people to be able to reach for the brass ring and to be able to have their opportunity to be able to tap into that possibility.
Just consider the opportunities on one continent, just look at Africa – home to eight of the ten fastest growing economies in the world and home to 1.1 billion people. I think they have to educate something like 150 million kids in the next ten years just to keep up – unbelievable challenge. But think about the size of the opportunity. It’s more than twice as large as the European market, and that’s the largest market in the world. And you look at what Ex-Im and your companies have helped to do for Europe and in other developed places, but we now see these possibilities exponentially in various parts of the world. And whether it’s in agriculture or infrastructure or energy – particularly, I might say, in energy.
The marketplace that created the great wealth of the United States of America in the 1990s when – which, incidentally, was the greatest wealth creating period of American history. A lot of people aren’t aware of that. We created more wealth in America in the 1990s, and every single quintile of American income earner saw their income go up. Why? Because it was a period of extraordinary growth as a result of the technology boom.
The technology boom represented a marketplace of $1 trillion, and there were one billion users. The energy market that I just mentioned is a $6 trillion market with four to five billion users today, and it will reach perhaps nine billion users within the next few years. Just think about that. That’s the mother of all markets. And the opportunity to be able to move on alternative, renewable, and different kinds of transportation, energy-saving, efficiency, building materials – run the list. It’s gigantic. And I want to see American businesses being the leading innovators and the leading providers in order to be able to be able to capture that market.
So I’ll tell you something. Whether it is in Africa or the Americas or in Asia, I see this enormous hunger out there not just for American products but for ideas and ideals that are uniquely American. Young people I met – I was in Kuala Lumpur last year in Malaysia at this incredible Global Entrepreneurship Summit – 15,000 young people, and I heard them screaming and yelling and chanting, and I said, "What is it? I’m at a rock concert or something." Not a rock concert; this was their energy and enthusiasm for entrepreneurism. They were excited, and every single one of them – they weren’t interested in becoming pop stars; they were interested in becoming the next Bill Gates or the next Steve Jobs. Believe me, they were thirsty for opportunity. And they’re all – they know what everybody else is doing everywhere else in the world. They’re talking to them.
So we could help create the climate for these young people to take an idea and make it into a business by harnessing their energy and ingenuity, and this, frankly, matters to us deeply. Because I firmly believe that the places where citizens have the freedom to be able to develop an idea and take it out there and even to try and make it reality and perhaps even fail – but to be their own boss and have that option, these are the societies that are most successful, they are the most cohesive, the least conflicted, the most peaceful.
That’s why not one of the political problems that we are working so hard to resolve today is – and not one of the solutions that we’re working hard to achieve is going to endure without greater economic exchange and development. I think it’s something we’ve seen over and over again, world over. Prosperity is a vital foundation for any kind of lasting, durable peace to take root. That happens to be one of the principal lessons that we have learned from Asia’s incredible rise. It’s a story that America proudly helped to write with our enduring commitment to security and economic exchange across the Pacific.
Even as I speak right now, it’s a story that we’re building on. The President of the United States, President Obama, is hard at work in Asia right now – leaving Japan, heading to the next stop, strengthening these ties for the future. And he’s driving forward negotiations on a high-standard trade agreement that can be the foundation for greater economic opportunity for decades to come. The Trans-Pacific Partnership, TPP – it’s a trade pact between the United States and 12 of our Pacific partners, and it would be the largest free trade agreement of its kind in the world. And what would it do? It would set high standards for trade and competition for 40 percent of the global economy. That matters to us, my friends. It matters to us that there are rules of the road and that everybody is playing by them, particularly for a nation that lives by and is proud of something like the Foreign Corrupt Practices Act.
We’re competing in a voracious world marketwise, competitive, and you know that. So the chance for an agreement like this, where we raise the standards for everybody, where we create transparency and accountability and rules by which everybody lives, evens out the competitive marketplace and provides opportunity, because I don’t need to remind you this kind of opportunity doesn’t come often.
And I’ve been part of these debates, and it doesn’t come easily. Remember the battle for free trade in the Senate? I fought that for 29 years. I’m proud to say that almost every single trade agreement I voted for, and it’s clear that these voices are going to be determining where we go as we go forward. The voices of opposition are going to grow louder, obviously, but the clamor for those rules of the road is precisely what President Obama is determined to try to achieve. He wants to break down the barriers to trade, open up the possibilities of opportunity, and that’s what he has been setting out to do since the day he came into office.
From the free trade agreements that the President sealed with the Republic of Korea, Colombia, and Panama during the first term, the President, I think, has been very clear about the need to tame the worst forces of globalization and harness the best possibilities of globalization. He is continuing to lead the charge on the Trans-Pacific Partnership as well as our negotiations with Europeans, where we are negotiating the Transatlantic Trade and Investment Partnership, a free trade agreement that would comprise another 40 percent of the global economy.
So as you gather here to think about Ex-Im and its future and the global marketplace, you don’t have to be a big company to do any of this. There are huge opportunities staring all of us in the face. And there is a lot at stake for us, both in these negotiations and in this moment of history.
It really boils down to this: Will the global economy be defined by a race to the bottom – by the search for cheaper and cheaper labor, the lowest quality products, and the most lax, if any, regulations? Or will globalization be defined by a race to the top? Will the high standards that we set become the standard of the world? Today, as the largest market on earth, we have the power to determine what course the global economy is going to take.
Because these agreements are so important for our economic future, I have made certain that we elevate the capacity of our economic team within the State Department. That’s why I have brought leaders with a proven track record of private sector experience, private sector accomplishment to the table. Leaders like Ambassador David Thorne, who’s here; like Ambassador Charlie Rivkin, who was our ambassador in France until a few months ago; our new Under Secretary for Economic Affairs, Cathy Novelli, who I stole from Apple; former fund manager Scott Nathan from Boston – they’ve all come to the table because they believe in helping to tame the worst forces in the marketplace and try to open up the best opportunities. It’s why I’ve challenged every Foreign Service officer – every one – to be an economic officer and make our prosperity agenda what I call an all-hands-on-deck job at the State Department.
That’s why we’ve partnered now with the Department of Commerce to bring foreign investment and private sector experience to our shores through SelectUSA, to encourage people to come and invest in the United States. And that’s why we are using the Direct Line program to connect American companies with opportunities to expand overseas by connecting them to economic insights of more than 15,000 ambassadors and diplomats around the world. That’s what we’re doing. We need you to tap into that.
That’s why, together, we’re not only committed to leveling the playing field through the TTIP and the TPP; we’re fighting corruption by advancing the Anti-Bribery Convention.
That’s why we’re working with the Ex-Im Bank to expand the President’s NEI agenda into the NEI-NEXT phase, promoting American exports based on their quality and potential for innovation rather than basing it on just how much they cost.
That’s why we we’re using public-private partnerships like the Palestinian Economic Initiative and the Partnership for New Beginnings to try to open up new possibilities for changing life on the ground for people who have seen little improvement in those lives over decades.
And that’s why the President started the Presidential Ambassadors for Global Entrepreneurship program, to bring the most – the insights of our most successful businesspeople to entrepreneurs across the world.
We’re doing all of this because in the world we live in today, there are far fewer borders to trade and talent and that means – and you know this better than anybody – our companies have much more competition.
In the Cold War, when I grew up, the United States could actually make a bad business decision or a bad policy decision. We were the sole economic power after World War II; everybody else was just crushed or undeveloped. And now today, it’s totally different. We’re not alone. There are other powerful economic entities on the planet, many of whom we helped make powerful through the Marshall Plan and other efforts of our values and ideals.
But the result is there’s more competition. We welcome that. I know you welcome that, because American companies are the most innovative in the world, our workers are the most productive, and we can compete against anyone. We understand that. And particularly if we have a fair playing field, where there’s an absence of corruption and a plethora of opportunity. When American companies are the most innovative in the world and when our workers are the most productive, we can welcome competition.
But when other governments are out there aggressively backing their own business – aggressively under the table in some cases and above the table in others – we need to be out there too, pushing back. And we need to be partners with you and your businesses every step of the way in order to make sure that we are able to win in a battle that is fair and square. We need to be fighting for a rules-based system that levels the playing field. And when 95 percent of the world’s consumers – 95 percent of the world’s consumers – live outside of our market, that’s exactly what our companies and our people need us to do.
I have directed all ambassadors to promote American values but also be powerful advocates for our economic interests. We are going to make certain that each of our posts and missions around the world have both a political and an economic mission and they are joined at the hip. We need all the gears that drive economic growth driving in the same direction.
The first part of that effort is going to be to tell our economic story, our incredible economic story. And that’s a story that every one of you ought to be proud to go out and tell wherever we go. I know that wherever I touch down, whether it’s in Tunis or Tokyo or anywhere in the world, the words "Made in America" still mean something. They mean a lot. And that’s because our economy is envied as the most innovative economy in the world. It is also the most resilient economy in the world, as we have seen in the aftermath of the Great Recession. And that is because it continues to adapt and change to meet new challenges and because we have a greater free allocation of capital and movement of capital to ideas and more people willing to take a risk and possibly fail in order to find an idea that works.
So let’s make certain that we, going forward, improve on that formula. Let’s make certain that we build the partnerships that we need to create a shared prosperity in our country and around the world. The world, as you all know, keeps on turning, but if we refuse to stand still, which is in the American DNA, I am confident together with Ex-Im, with USAID, with World Bank, with IMF, with U.S. State Department, with all of the tools at our disposal, we are going to have an extraordinary impact and have extraordinary results here at home as a consequence of our economic engagement in this world, and most importantly as a consequence of American leadership with respect to the rules of the road.
Thank you, and keep on working. Thank you. (Applause.)