Compilation of Weekly Presidential Documents - February 14, 2000 - Interview with the Chicago Tribune, the Los Angeles Times, and USA Today

� February 10, 2000



� National Economy



� Q. I guess I wanted to ask you, given the way that the economy is.

going--given that there's been so much growth, and it's been so

successful-how much credit do you think that you and your

administration can realistically take, compared to the other factors

that people talk about? There's been some discussion, I'm sure you

know, recently, with people crediting everything, going back to

President Reagan. And I'm just curious on that topic, what your

views are?



� The President. Well, I think, first of all, if you look at the

difference in the expansions of the eighties and the nineties, we

had athe one in the eighties was funded by an oldfashioned explosion

of deficit spending. But it built in a structural deficit, which

guaranteed profound long-term problems for the economy, very high

interest rates, and very slow job growth.



� There was a lot of commentary in '91 and '92 about how, even though

nominally a recovery had begun, I think some of the writers called

it a "triple dip" phenomenon, that we kept sliding back and sliding




� So I think the main thing we did was to cut interest rates by

getting rid of the deficit. And I think that if you go back and read

allI remember what a boost in the bond market there was when we

just-when Lloyd Bentsen announced our economic program in December

of '92. So I think our main contribution in the short run was to

make it absolutely clear that we would have a consistent,

disciplined fiscal approach that would cut and then eventually

eliminate the deficit. And I think that played a major role in the

investment boom. And it cut interest rates, which also put more

money in consumers' pockets, which helped fuel the consumer side of

this recovery.



� But I think that -the consistent policies of the Government that go

back to the previous administrations, that reflected the second leg

of our ap roach, which also deserves credit, which is keeping the

markets open. You've had three administrations here in a row

committed-in the eighties and the ninetiescommitted to open trade.

And I think that that's been very good, because that's kept

inflation down and spurred continuing competitiveness. And I do

believe the previous administrations deserve credit for that.



� Then I don't-you know, the lion's share of the credit belongs to

the people in the private economy: the people who restructured in

the eighties; the workers who got better training and understood the

global economy and didn't press for what would have been

inflationary increases in pay and benefits, that aligned them more

with the real profitability of their firms; and then finally what, I

think, only in the last couple of years has come to be fully

appreciated is the enormous contribution of the technology

revolutions, which are centered, still, in the high-tech

sector-they're 8 percent of our employment, but they've been 30

percent of our growth-but also are rifling through every other

sector of the economy in a way that has added to productivity that

is only now being measured. If you noticed, the last couple days we

had a new estimate of productivity growth. My sense is that all

along, the economists underestimated-understandably, based on past

experience-the productivity contribution of technology and the

ability of a combination of fiscal discipline, open markets, and

productivity increases, to prolong the growth in a way that would

generate large numbers of jobs and begin to broaden the benefits of

the recovery. That was another real problem for-we had 20 years

where income inequality continued to increase, because of the way

the recovery was structured. So I think you have to look at the

whole piece.



� And then I think now, we're beginning to get the benefits of the

third part of our economic strategy, which was to continue to make

the requisite public investments, which have, I think, made a

significant contribution in education, in training, and we've got

college going up by 10 percent now, over when I took office. We've

made real, contin



� I took office. We/ve made real, continuing investments in science

and technology, which I think are pivotal to the long-term health of

the economy and the continuation of this productivity increase.



� So I think that we've made a contribution, but the lion's share of

the credit-as always, since it's a private economy; we had the

highest percentage of private-sector jobs in this economic boom, I

think, of any one since we've been keeping such statistics.



� Q. To follow up on this, Mr. President, I notice that in your last

interview with a group here about the economy a week ago or so, you

were very generous with credit. There are some people, in fact, who

are saying, this is one long boom. We're in the 17th year of an

expansion. What do you think of that account of what's going on with

the economy?



� The President. Well, we could say that, basically, we've been in a

30-year boom and gone back to '61, or a 40-year boom, but for the

oil price problems, which led to all the inflation. I mean, you can

argue this flat or round. There is a fundamental health in the

American free enterprise system, which has prospered in the global

economy. And in that sense, the people who set up the system at the

end of World War 11 deserve a lot of this credit. I don't think you

can disaggregate all this.



� I think the fundamental mistake that was made in the eighties was

basically abandoning arithmetic. I think that we got out of that

recession, and we had-you remember-we had impossible conditions in

the seventies, with recession and high inflation at the same time,

caused by a set of economic circumstances that were not of our own

making, at least certainly mostly not of our own making.



� So the idea of stimulating the economy in the early years-of the

Reagan years was, even though it was masked in anti-Government

rhetoric, was basically traditional Keynesian economics. But the

problem is, when we had a recovery, because it was sold as a, you

know, "tax cuts are good; Government's bad" package, we wound up

with a structural deficit that couldn't be overcome without a series

of highly difficult and controversial decisions that were embodied

in the Budget Act of '93, which required both tax increases and

spending restraint. And the people who shouldered the burden of that

paid a considerable political price in the elections of '94, but I

think there's no question that it enabled us to have a balanced,

longterm, stable, not only statistical recovery but finally

job-growth recovery that was more broadly shared. It seems to me

that was the problem with the eighties philosophy, that we wound up

with a structural deficit that was totally unsustainable. And I

think it basically grew out of the ideological wrapping of what was

done in 1981.



� Q. just one last question along those lines. Sometimes when I

listen to you recently, in the talks that you give, I get the sense

that you're trying to assure or encourage that your administration

get sufficient credit for the boom that's going on now, whether for

historians, whether in the next election. And I'm wondering if you

have any sense of that.



� The President. No, I don't have any sense of that. What I say is

what I believe to be true, and I've tried to-with you, I've tried

to, as I said in the State of the Union, as always the major credit

for anything good that happens in this country belongs to the

American people and the people and what they do in their private




� I think Government plays a pivotal role, and I do not-let me flip

it around. If you go-forget about what I might say. Look at what

Alan Greenspan has said; look at what all the commentators have

said, going back to the '92, '93, '94 period. I do not believe that

we would have had a recovery this robust, with this many jobs-I

don't think we'd be anywhere close to that-if we hadn't taken

serious, aggressive, and immediate action to get rid of the deficit

and to bring interest rates down and to free up investment and at

the same time, by getting interest rates down, to put more money

into the pockets of people. They had lower home mortgage, car

payments, college loan payments, credit card interest payments,

which enabled the consumer side of this boom to continue.



� I also don't believe that there would have been anything like the

amount of business investment borrowing or consumer borrowing, if-I

don't think that would have been sustainable, in this environment,

unless the Government had not only eliminated the deficit but gone

into surplus and begun to offset private debt with public savings.



� So I simply think that's a fact. But I don't-but my view of this is

different. I don't think anybody can claim sole credit. And I'm not

so interested in that. I think what's happened is, America is

following a balanced policy now. And if America stays on that course

when I'm not President anymore, I think we'll meet with success. And

then we'll have to be flexible, you know, if intervening events

cause a recession, well, there will be cause for adjustment in




� But if we had adjustment in policy, it might work.



� I mean, if we had continued with these deficits, then the next time

we had a recession, deficit spending wouldn't have been an option to

help get the country out of a recession. So to me, the American

people should look at this in terms of-I think I did my job. But I

think the rest of the-I think Alan Greenspan did his job. I think

the people in the high-tech sector were terrific. I think the people

who restructured all of American industry and business to increase

their efficiency and productivity were great. And I think the

working people of this country deserve a lot of credit for

understanding that they can only get wage and benefit increases that

were rear and-if they got out of line with economic growth, then

that could contribute to inflation as well.



� So I think we've had a remarkable balance here, where the American

people, all of us in our own way, essentially have done what we were

supposed to do. And there's more than enough credit to go around.



� Technology Revolution



� Q. Mr. President, can you talk just a little bit-you talked about

the high-tech sector and how important that is to the economy. Can

you talk about the Internet for a second and how important it is to

the ongoing boom? And also, can you tell us how worried you are

about what's happened over the last 3 days with these attacks on

websites? If this is a growing part of the economy, should we be

concerned that it's so vulnerable to attack? And is there anything

the Government ought to be doing about it, beyond what the FBI is

already doing?



� The President. Well, let me give you a brief answer to the first

question you asked, because I think we could talk for hours about

that. Quite apart from the technology revolution, I don't think we

have any way of measuring the contributions that the Internet is

making and will continue to make, not only to the overall growth of

the American economy but to the range of individual opportunities

open to people.



� You may have heard me say this in some of my talks, but I was

amazed-I was out in northern California a few weeks ago with a bunch

of people who work with eBay. And they were telling me, now, that

there are over 20,000 Americans who actually make a living on eBay,

not working for eBay but on eBay buying and selling, trading-and

that they have enough information on their user base to know that a

significant number of these people were once on welfare. And they

figure out a way to stay home, take care of their kids, and

literally make a living buying and selling on eBay.



� Now, that's all I know about that. I don't have any more facts.

It's an interesting story you might want to follow up on, but the

point is that this is just one example of, I think, a virtually

unlimited number of new economic opportunities which will be open. I

also think-it will shrink distance in a way that will make it

possible for more profitable investments to be made in areas that

are now still kind of left behind in this economy.



� And I-you know, we've tried to do an analysis of all the areas in

America which have had slow job growth or which still have higher

unemployment. And we developed this new markets initiative and

proposed more empowerment zones and things of that kind. But the-if

we can bridge the digital divide and literally make the Internet

accessible to lower income people and to places that are not fully

participating in this economy, I think the potential is staggering.



� Now, to the second question, yes, I'm concerned about the latest

hacking incidents. But I think that, you know, we've gotten all this

incredible benefit out of a system that is fundamentally open. And

as you know, I've worked hard to keep it unencumbered, to try to

make sure that Internet commerce is not unduly burdened by

regulation or taxation. And if you have an open system likethis,

you're going to have to have continuous guarding against intrusion.

And people go where the money is. It's like Willie Sutton, you know?

I mean, the money's in information and in knowledge about

transactions and opportunities.



� And so my view of this is that this-our renewed vigilance to try to

deal with cyberhacking, or even cyberterrorism, is part of the cost

of doing business in the modem world. We've been working hard on

this for 2 years. We've proposed, I think, $2 billion in this budget

to deal with it. We've got this, you know, this proposal for a

cyber-academy to train young people to try to work to help us

prevent illegal intrusions into the Internet and into important




� And we have this FBI center, as you know, and-I think it's in

Pennsylvania, near Pittsburgh-that's looking into these latest

incidents. But I'm going to bring in some people next week from the

private sector and from our Government team, to talk about what if

anything else we can do about this.



� Q. Because of the incidents that just happened?



� The President. What?



� Q. You're going to bring them in because of these events that just




� The President. Yes, Yes. As a result-you know, we have a continuing

ongoing consultation with them. We've had extensive conversations

leading up to the proposals that we've already made and the work

we've done for the last 2 years.



� But I don't-I wouldn't-I think it's important that we not overreact

to this. I mean, we don't want to shut off this incredible resource,

which I think will be a source of great wealth and, I think, will

have all kinds of social benefits, not only in the United States but

around the world. And we just have to recognize that it's like any

other new institution that's a source of ideas, information, and




� I mean, people used to-it's harder to rob a bank than it used to

be, and we figured out how to make it harder. And we'll figure

out-we'll continue to figure out to secure the Internet without

shutting it down or closing off options. But the American people, in

my view, should look at this as an inevitable negative development

in what is an overall very positive trend. And there's probably no

silver bullet to deal with it, but we'll keep working at it until we

can prove our capacity to protect the people who are participating

in it.



� Q. But doesn't this set some limits on the growth of the new

economy, the Internet economy? I mean, there was this poor soul who

was described in the Post today--he sat there on E-TRADE and watched

his stock drop 6 percent while he couldn't get online. I mean, if

some 14-year-old kid-and we don't know who has done this, but if

some 14-year-old kid with a PC can screw up the system that badly,

doesn't that effectively limit how much people are going to trust it

and how much people are going to use it?



� The Presidnet.. Unless we can solve it. But unless we can figure

out how to solve the problem-but my instinct is that there are

people just as clever or more clever who will be interested in

making the thing work for society as a whole as there are those that

want to gum UP the works.



� The fact that a 14-year-old did it, I don't think, should be

surprising to anyone. I mean, all the rest of us-you know, you get

to thinking by the time you're 35, you're too old to break new

ground in this area. But it's troubling, but I don't-again, I would

say that if you look throughout history, every new positive

development contains within it the seeds of its own vulnerability,

and then people, either for pure mischievousness or because they're

trying to do something really wrong and reach some illicit benefit

try to interfere with it.



� So I don't think what you're seeing today is sort of anything new

in terms of human nature or people trying to put their ingenuity to

work for destructive purposes. And we just have to keep working

until we find ways to thwart it. Because I think fundamentally, this

has been an extraordinarily positive development for our country and

for the world.



� Biotechnology and the Human Genome Project



� Q. Mr. President, can I take you from the new economy to what you

may call the new-- new- economy, biotech and the human genome. As

you know and as you've said in the State of the Union, we're within

months of having a first draft of the entire human genetic code. As

I'm sure you also know, there is some argument about how we can best

put it to use: Whether we should have very broad access to it by

scientists and so on, or whether we get products, new treatments,

and so on, faster, if it's more narrowly constrained, or access to

parts of it, substantial parts of it, are more narrowly constrained;

should the public, and especially the research community have ready

access to the underlying human code, the genome itself?



� The President. Yes.



� Q. You know that there are people who say that we should allow

extensive, broad patenting of it, not just to use, but have a

compositional matter portion where people actually---Companies,

biotech companiesbiotech companies, the drug companies actually

control the underlying sequence, and that's the best route to get

products out fast, get new treatments. What do you think of that




� The President. I basically agree with the guidance that the Patent

Office has now announced, that they believe that the broad

information, the basic sequencing of the genome should be made

public and should be made publicly available to scientists and

researchers, to all people in private sector businesses and



� Q. Why do you think the Patent Office is-do you think the Patent

Office is saying that, and why do you think the Patent Office is

saying that? Because there are many people, Dr. Collins, for

example, who you were with 2 days ago who say that's not what the

Patent Office is doing?



� The President. Let me anwser your question first of all, and then-I

think the patenting should be for specific discoveries and

developments that have a clear and definable benfit, because you

don't want to take those things, you don't want to-I think we would

be making an error not to give people who develop such things the

benefits of them, and you would, then, discourage private investment

and research in that area.



� Now, I think some-I believe-and I think that's the position that

Dr. Collins believes that we should have. Now, the Patent Office has

been criticized for not following that, for having a policy that was

too broad if you will, but they have-my understanding is that

they've announced new guidance and that this is the policy they're

going to try to follow prospectively into the future, and it's the

one I think they should follow. And I understand there is a debate

about this.



� But I think most scientists and researchers believe the basic

information ought to be as broadly shared as possible. And then when

people develop something that has specific use and commercial

benefit and the kind of thing that has to be done and should

properly be done in the private sector, then that ought to be




� Q. Because, for example, Dr. Collins, who you were with a couple of

days ago, and Dr. Lander talked with you and to you about this at

the millennial evening last fall, have concern about this, I wonder,

would you sketch what you think-in a little more detail-what you

think ought to be publicly available and how you can assure that

that is publicly available even when we have a very aggressive, very

innovative private sector that is filing patents like mad?



� The President. The thing that I'm concerned about, obviously, the

thing that I'm concerned about is the capacity of the Patent Office

to make the judgments and to make them at a timely fashion and to

draw the lines in the right way. And you know, I certainly don't

feel, for example, that I have the level of knowledge to know how to

split the hairs there. And I think what we've got to do is to make

absolutely sure if we've got the right policy. Then we have to make

sure that the Patent Office has the capacity to implement the

policy, not only in the right way but in a timely way.



� The worst thing would be to have these things all bogged down for

years and years and years. And I think that's one of the things

we're going to have to assess this year to really try to make sure

that we have the capacity to make the right judgments and to make

them in a timely fashion.



� National Economy



� Q. If I could take the discussion back to a little bit of a more

broad approach, things are going so well now economically speaking,

and you regularly recite figures that are very impressive, I'm

wondering if there is any particular thing or set of things that you

regard as possible threat on the horizon that we need to look out

for, that we need to be paying attention to. There's been some

discussion of high oil prices, for example, and they've talked about

the trade deficit.



� What would you see as the things we need to be watching?



� The President. The thing that bothers me about the high oil prices,

primarily, is the disproportionate effect it has on people who are

excessively relying on oil. We still have, mostly in the

mid-Atlantic and New England-we still have too many people who still

rely on home heating oil. They're the ones that have really been




� The country's overall reliance on oil is much less than it was 25

years ago when we had the big oil price problem. And we're on the

verge of real, new breakthroughs in fuel efficiency. Our ability to

build our buildings with far less energy use per square foot is

dramatically increasing, both residences and office buildings. There

are all kinds of advances in factory efficiency now.



� So the real problem I have with the oil prices is the very

old-fashioned problem of re people that are just too dependent on

home heating oil, and it's a real, serious problem.



� But I don't think that will sink the overall economy or threaten

it. I think it's far more likely that we have to be vigilant about

the size of our trade deficit and the amount of American obligations

held by people in other countries, combined with a very high level

of debt in this country.



� One of the reasons-right now, we're in good shape on that, because

the debt-to-- wealth ratio of Americans looks very, very good

indeed, even though the per capita debt is high. I also think the

individual savings rate is somewhat understated because I don't

think we calculate the impact of homeownership as well as we should,

and we have the highest homeownership in history.



� But for me, that's another argument for our economic strategy.

That's why we ought to be trying to-not trying to, we ought to be

actually paying down the debt and be very disciplined about it and

say that we're on a track to eliminate the publicly held debt over

the next 13 years. I understand there's a lot of problems with

people who think that would be bad for the bond market and interest

rate settings and all that. That's an arcane decision we could have

on another day.



� But I think basically, one of the reasons that I have been so

adamant about paying this debt down is that it tends to stabilize a

system that requires if you're having a lot of business expansion,

requires a lot of business borrowing for new investment, and where

you have a lot of personal borrowing from people who feel the

security to do it, because they have more assets, but the value of

the assets is dependent in part on the overall stability of the

economy, the confidence of the American people, and the confidence

of investors around the world.



� I don't think we made a mistake to leave our markets open, for

example, during the Asian financial crisis, even though it exploded

our trade deficit, because I think it helped the Asians to recover

more quickly, and it helped to stabilize the global economy. But if

you ask me the only things that I'm concerned about, I'm concerned

about those things. And I think the way to deal with them is to do

what we're doing, which is to keep paying the debt down, so that the

overall fiscal health of the American economy, when you look at

public and private debt, against assets and wealth and growth

potential, continues to be robust and strong and the confidence

remains high.



� Japan's Economic Situation



� Q. Speaking of the trade deficit, Japan looks like it's sliding

back into recession. I know that this Government has been jawboning

the Japanese for years now to try to get them to change policies.

How worrisome is it that after all their effort, they're going

backwards at this point in terms of our trade deficit?



� The President. I think that-let's just talk about Japan a minute.

First of all, it's a very difficult case, because you've got this

country of people who work very hard, who are very well educated,

and who have an enormous technological base. My heart goes out to

them, because they have tried to takethey've taken interest rates

down virtually to zero and are virtually paying people to borrow

money. And then the savings habits of the Japanese are so great-and

for that and other reasons they've had difficulty making that

strategy work.



� Then they've got a Government deficit now-they've tried deficit

spending, and the deficit is a higher percentage of GDP than ours

was when I became President. So I think that somehow what they have

to do is to unlock the creative potential and the confidence of

their people at the same time, which will be politically difficult

because it will require them, I think, to keep going to, in effect,

deregulate, open up, and make more competitive their economy. I

think that somehow they've got to tap the energies of all these

young people, like all these young people in America are creating

all these Internet companies and doing all the things they're doing




� They're an immensely gifted people, and they work like crazy, and

they have everything they need I think to succeed. And they're

highly efficient in their energy use. They've got a lot of things

going for them. I just think that it must be so difficult for them

because the traditional stimulus hasn't worked, traditional bringing

interest rates down hasn't worked, because of the nature of the

present economy. So I think they're just going to have to keep

pushing to unlock the sort of spirit of entrepreneurialism and

creativity and confidence in their economy. And meanwhile, we'll

just keep working with them and do the best we can,



� Yes, I'm concerned about it, but I just have to believe that sooner

or later-and hopefully, it will be sooner rather than later--

they'll come back, because they just have so many assets, they have

so much talent.



� Q. Does it frustrate you at all that they refuse to change some of

the structural pohcies that we have tried to get them to change over

the years?



� The President. Yes, but it just takes time. I mean, look at how

long the rest of the world beat up on us before we finally had thein

the eighties-look how long the rest of the world hit on us before we

finally did something about our deficit. For all of the talk about

the globalization of the world's economies, nations are still

governed by their people, their own institutions; they deal with

their own impediments as well as their own promise. And I think

they'll get there.



� I think the Prime Minister of Japan is an able man and a man who

has shown some political courage already in making some changes, and

I think what we have to do is keep pulling for them and do our best

to share what we believe will work. And we all need a little

humility because they-you know what works in one decade is not

always great in the next decade. And all these countries had to-they

worked on us for a long time before-you know, telling us we had to

so something about the deficit.



� But I just hope that they will-I wish that they had the confidence

in themselves right now that I have in them. I wish that they

believed that they could make this sort of leap into the 21st

century economy and still be able to maintain their social fabric.

And I think eventually they'll do it because I don't think they want

to fail. I think they want to succeed. And you can't blame them for

playing out these two tried and true strains of economic recovery,

on the deficit spending and on the low interest rates, before

getting to-because that was easier to do than to deal with the

underlying structural issues. And I think eventually they'll do




� I mean, look at the pain that was caused in America in the 1980's

when all the industries had to be restructured and all the the whole

economy was topsy-turvy, and there was a lot of difficulty there for

people. And countries don't willingly absorb that kind of short-term

pain, even though they know the long-term gain is out there.



� So I just think that-but I think they'll get to it. They'll have

to. And I think they will, and I think we just need to stick with

them, keep encouraging them, keep supporting the right kind of




� Q. Thank you very much.



� The President. It's an interesting time to be alive, gentlemen.

Don't you think?




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