Former President Bill Clinton believes in high-end manufacturing, patronizing the small independent shopkeeper, and that retailers, regardless of size, should be hopeful despite the sick economy.
“I wouldn’t be pessimistic. After all, you just had a good year,” Clinton told a crowd of about 5,000 retailers, suppliers and consultants of all types, at the National Retail Federation’s annual convention Monday at the Jacob K. Javits Convention Center.
Regarding the recession, Clinton was more positive than negative. “We are slowly emerging from it — some sectors faster than others. Retail last year grew 5 percent compared to the general economy at 2 percent.”
However, the 42nd president of the U.S. and founder of the William J. Clinton Foundation, cited the deep financial and psychological impact of the current economic crisis including how people feel about themselves and their prospects which are changing, noting that many men are taking retail jobs that traditionally went to women. “All during my childhood and young adulthood, I never doubted not for one minute I could make a living.” But the recent economic crisis has “shattered” that line of thought for people. “This is more than just an economic crisis. It’s gone to the core of people’s sense of who they are and what they are worth.”
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He did open up on a light note, saying, “This is a bigger crowd that I usually draw. It makes me feel like I’m president again.” But the overriding message of his wide-ranging speech, themed “Embracing Our Common Humanity,” was dead serious, covering the world’s instability and unsustainable way of life; his global humanitarian efforts including a joint effort with Macy’s to support artisans in earthquake-ravaged Haiti, and fighting childhood obesity which he said could “bankrupt the health care system if we don’t do something about it.”
Globally, he characterized Brazil as “one of the most interesting places on earth, one of the most hopeful and one of the most environmentally responsible big countries in the world,” yet confronting complex issues revolving around generating more power supply.
On Japan, which was also overrun by an earthquake and tsunami last year, Clinton said, “It’s easy to overlook Japan, though they are capable of remarkable turnaround but still have to fix their financial institutions.
“The bottom line is we can’t get away from the rest of the world so we have to share the future,” Clinton said. “We will either share misery or share the prosperity, but the only way to do that is to create more shared opportunities and shared responsibilities.”
After the speech, he engaged in a Q&A with Macy’s Inc. chairman and chief executive officer Terry J. Lundgren, who asked him about the possibility of breaking government gridlock, ways to accelerate job growth and how to strengthen the economy. Clinton was far from shy with his responses. “What we need to have is a different manufacturing strategy,” he said. “We actually gained manufacturing jobs in the eight years I was president. They will never be as numerous as the service sector because it ought to be focused on high-end manufacturing. Otherwise, we will lose a lot of our research labs here.” He said his favorite example of a high-end manufacturing success story is Corning Glass, based in upstate New York. “Corning manufactures all over the world but they also manufacture here because their labs are here,” Clinton said. “They want manufacturing and research together so they can check [new products] right away.…The manufacturing structure ought to give people incentives to do this.”
Another potential path to job growth, Clinton said, is by repatriating corporate money sheltered overseas at the long-term capital gains rate and using the revenues to create an “infrastructure bank.” Funds in that bank could generate another million jobs, Clinton said. Or in a similar scenario, Clinton said let corporations repatriate at minimal cost if they can prove the money coming back into the U.S. is creating jobs.
Clinton said the tax code was “a real problem.…Exxon paid an effective tax rate of 17 percent and the average American worker paid 20 percent last year. Clearly, the rate should be lowered and the structure should be flattened. There should be three, no more than four rates. The international average among rich countries is about 24 to 26 percent. We should eliminate a lot of the deductions and credits and lower the rate, broaden the base and get the same amount of revenue or might get more. We should get it as close to the international average as possible.”
Asked how to break the government gridlock, Clinton replied that in a presidential election year, “Both Democrats and Republicans in Congress have a vested interest in producing.…They should keep looking for things that they could work together on. What I always did was draw up a list of things I could do, so you can get some things done and show you’ve gone to work.” The gridlock may be easing, he suggested. “The fever broke up a little [during] this dilemma of the payroll tax.”
He also said that when he was president, he had the benefit of some “genius negotiators” including his chief of staff Leon Panetta, now the Secretary of Defense. “You need to get people in there who can make complex deals. Compromise is far better than shooting each other. That’s what democracy is.”