Davos Annual Meeting 2011 – William J. Clinton
…for this evening discussion: William
Jefferson Clinton, the 42nd President of the United States, but also of course
UN Special Envoy to Haiti. I mention it because we will discuss Haiti certainly
during this discussion now. Thank you, Bill, for being able to join us
again here in Davos; it has become a kind of tradition.
You came first 1999 as President of the United States, and I would say we cannot
believe that it’s just around ten years ago that you left office and I would say
you have given a new significance to the word retirement if I look at what
you have done in between. Of course you have created the Clinton Foundation
and we all are very familiar with the Clinton Global Initiative which
you set up in 2005 and we are very pleased to share in some ways the same objective
and to cooperate the mission always being ‘what can we do together in order to
improve the state of the world?’ I just would like to mention the four areas
you are particularly involved in in the Clinton Global Initiative at this
moment because you changed the focus. That is, empowering women and
girls; strengthening market-based solutions; enhancing access to modern technology
and harnessing human potential. One area where the Clinton Global Initiative
and the World Economic Forum have been able to work together is
the situation in Haiti and I would draw your attention to a publication which we
just published this week with your help, with your support.
It’s called ‘Private Sector Development in Haiti: Opportunities for Investment,
Job Creation and Growth’. So we took the little, albeit very positive approach to
Haiti and we will hear afterwards how you feel about it.
And I would like to thank here, on behalf of both of us, to all those members
and partners who have been involved in this project: companies like Coca-Cola, McKinsey,
TNT, Accenture, Microsoft, KPMG, Digicel and of course the
international organizations such as the World Bank, the IFC and the International Development Bank
(IDB). I’m asking you, sir, for the first question. When you look at Haiti, where we
stand today, are you satisfied with what has been achieved, and particularly, do
you believe that what has been achieved is sustainable for the future? Well,
first of all, thank you for having me again and thank you for continuing to
modify and grow the World Economic Forum and for making all of our facilities
more comfortable this year. And thank you for the support you have given to the efforts in Haiti. So we will
begin with Haiti. Am I satisfied with the progress that has been made?
No. Is it sustainable? Yes, if we emerge from the current
political situation and let me explain what I mean by that. In April of last year, about three months
after the earthquake – after a lot of the emergency work had been done to try to
save lives and put people in temporary shelter and make sure they had food and
water and the basic things were taken care of – the government of Haiti, with its supporters, decided that we ought to have
a mechanism that would enable the reconstruction to begin.
To rebuild the economy; to deal with the housing and the
other challenges on a longer-term basis while the government itself built an agency that
could supervise this for several years. So a very unique mechanism was set up called
the Interim Haiti Reconstruction Commission which is half international
donors and participants – the Inter-American Development Bank whose leader
Luis Moreno has been just wonderful on Haiti this year; the World Bank; the United Nations; all
the countries that had pledged 100 million or more – Canada, France, United States; Venezuela is there; Cuba has observer
status because they have given a lot of things there.
All of the people who fight with each other in our hemisphere are united in
trying to help Haiti; the Caribbean community; and then every sector of
Haitian society is represented. And what we are attempting to do is what
we did in Indonesia after the tsunami – to run all the public donations through there
and also to get all the non-governmental organizations to get their projects
approved because this Commission basically has a mandate to do the rebuilding in a
way consistent with the economic plan and the social development plan adopted
by the government of Haiti. Then we had to staff it up.
Keep in mind 70% of the government workforce was killed on earthquake day.
And we had to create a whole new agency so it took us until about August
to really get going. We had a lot of help from Pricewaterhouse,
McKinsey & Company and from others and we’re moving now.
Many countries and the UN have given us staff, people, the Haitian diaspora –
many people have been willing to go home and work and since then an enormous
amount of work has been done. And I think we’ve got a better strategy
for how to get rid of all the earthquake rubble – we’re going to have a housing expo
and I think this year you will see a lot of movement out of those camps and
the housing and so yes, it is sustainable. Now, in the midst of all this there has
been an election for a new President and a Parliament and a dispute about the results
of the presidential election, which the governor of Haiti has tried to resolve
with the help of the OES and other interested parties.
If we can have an election that is completed on time for both a new Parliament
and a new President, that is perceived by the people of Haiti to be
an honest, transparent process, that is empowering to them, and if this can all go
forward between now and the time the new government is to start meeting in May,
then I think it is sustainable. I have a very, very high regard for the
man who is my co-chair there in this Commission – Jean-Max Bellerive who was
here I think last year – he is Prime Minister of Haiti. They have emergency
authority to act without legislative approval and I hope that if we can get
an understanding that we can make some changes in the laws and procedures of
the country to make it more competitive. I just left an annual conference in Saudi
Arabia and I stopped off in Bahrain – both those countries have done an astonishing
job in the last few years of improving their competitiveness by measuring their
progress against the World Bank’s ranking and the World Economic Forum’s rankings
of competitive economies. That’s what I have urged the Haitians to
do; to just keep pushing themselves up; that’s a transparent process and it’s one
you can keep score on but yes, I think it is sustainable and no I am not satisfied,
but a lot of good things have been done. Even in the aftermath of the cholera
epidemic, Doctors without Borders and others have helped us to establish clinics,
set up to deal with cholera but they leave us the skeleton of
now a national health system. The private sector has committed well over
US$ 100 million, in a country where 75% of the nine million people live on less than
US$ 2 a day, to development projects. We just cut the ribbon on the restoration
of Haiti’s old iron-market and I urge you to go online and find it.
You can find it on our Haiti website, the IHRC website; you can also
probably find it on Digicel’s website, the cell phone company because it
was financed by Denis O’Brien, a leader of Digicel. But they rebuilt an 1891 market
that was really built in the turn of the century style, beautiful old bows-arch buildings
and it stands out like a breath of fresh air against the destruction
of Haiti. It’s one of the most beautiful buildings in the Caribbean and now it’s up
and going again, so we’re going to be fine if our supporters will stay with us and
we can manage the politics during the rebuilding. We need your help. So it was a good demonstration
of public-private partnership. If I would extend the area, Bill:
the Millennium Development Goals, and the deadline is 2015. You have been very much involved; you
are involved with your practical work, you have been involved in the conceptual
work. My question here would be similar: are you satisfied? And are you
particularly satisfied with the engagement of business in
making those goals reality? I would say that the answer to the
second question is, I am very satisfied that there are more businesses more involved
in trying to figure out practical, affordable and sustainable ways to not
only meet but to maintain the Millennium Development Goals than we could have
predicted ten years ago. That’s the good news. I’m concerned about something else.
I’m concerned that both businesses in this difficult environment, and governments,
in this difficult environment, will see the necessary investments in meeting these goals
as somehow optional or one of those things that unfortunately need to be cut.
And you and I were talking backstage about whether this will happen or not, and
I think it depends upon how central businesses and political leaders throughout
the world see the meeting of the Millennium Development Goals. If you
are a global corporation and you believe in markets and you believe that they
promote democratic freedoms as well as economic prosperity, you have to be concerned
about the continuing inequality in the world, not only because it makes
you feel bad but because it imposes very severe constraints on future growth. You should be concerned about the pace
of climate change because if you look at Australia alone, it imposes very severe
constraints on future growth, so what we have to do I think is to integrate creating
these kinds of measures – like the Millennium Development Goals – of
shared progress into the basic business plan. These things are no longer what
you might call economic externalities. They have to be part of the core vision of
what it is to run a business in a global society and what it is to run
a responsible government. I am very worried, for example in the
United States now, in the aftermath of these congressional elections, the majority party in the House seems
to believe that the most important public policy you can possibly have is to give me
another tax cut and that the best thing we can do is to pay for it by getting rid of
foreign assistance, as if that were not part not only of our moral responsibility
but our own economic and social well-being over the next unforeseeable
period of time. So this is something we need to talk about.
In the Forum here I hope there will be thousands of conversations about this.
Everybody understands if you can’t afford to keep doing this for a year or two but
to abandon this as a core part of making the global economy work in the 21st century
would be a terrible mistake. I would formulate in the following way,
as we did outside, integrating external costs into the business model is not just
a question of being socially oriented. It’s a question long term of competitivity and of survival.
But let me shift to a more political issue. Bill, you were so close to reaching
an agreement between Israel and Palestine and now we see the events in Tunis,
and probably matters will become much more complicated, much more dangerous. Would you like to share your ideas
in this respect with us? Well, first, I think we don’t really know how the Tunisian process will play itself
out but it is a manifestation of the yearning for a change and accountability
and shared progress moving throughout the world, particularly throughout the Middle
East and North Africa. The street demonstrations in Cairo. I feel differently
about what happened in Lebanon. So far – I hope I will be proved
wrong – but it looks to me like a crass reaction, pre-emptive reaction to
an international body doing an objective effort to determine who murdered Prime
Minister Hariri. And so I feel differently about that, and I just want to make sure
the Lebanese have some real domino rolling in controlling their own destiny
over the long run. I see what happened in Tunisia and – relatively speaking – the smaller protests
that you see in the streets in Cairo as a yearning in the Middle East and North
Africa to be part of a modern world that works. And in that sense, to me, it is
part and parcel of the modernization movement manifested in Saudi Arabia
by building four new communities, the first co-educational university which also
does amazing surgeries and research there; Bahrain adopting an economic development
mechanism that is half private sector, half public sector with women fully represented;
the UAE having NYU building a university there and winning the
competition with Germany for the International Clean Energy Headquarters on
the promise of building – in the Middle East – a city that is completely carbon
neutral. The university in Qatar, the weapon that they put on us in the World
Cup thing and the promise to build ten or twelve air-conditioned soccer stadiums
so you can play football in 110 degree temperature. Dubai recently hosted a conference; I
flew all the way to Dubai to speak to the 22 countries in the Middle East and
North Africa about the alarming rise in diabetes, attendant to childhood obesity and what could be done about it because of
the project we have in the United States. This is a huge deal, all of these countries
coming together and wanting to adopt common policies to restore health in
the longer future to their countries so all of this is really exciting to me.
What we have to do is to try to give the Tunisians a positive way forward.
What we have to do is to try to give the Egyptians a way forward that connects the
Egypt that I know with the Egypt that the left-out and left-behind live in.
I recently spoke to the Cairo US-Egyptian Chamber of Commerce and they had
more than 1,500 people there; it was exhilarating.
But the people you see in the street on the television don’t feel like
they are a part of that. So there will be a lot of fits and starts but on balance, if I were in Israel and I
had any influence, I would want to make that deal now, because all these countries
have offered Israel a political, economic and security partnership – not
just peace; not just the normalization of relationships, but a genuine partnership.
And they realize Israel will become the first country in the world to put
100,000 all-electric cars on the road; not the US, not China, not countries much
bigger: Israel. Can you imagine what the synergies of economic and social development
that could be claimed if the Palestinians were given their state and
they got the best partner in the West Bank they’ve ever had? So I think,
for me, all these things that are going on should make a peace more likely.
I realize there are all kinds of arguments against that but just look at
where we are going to be in five years, ten years, 15 years, 20 years. Can anyone imagine that either the Middle
East – or in particular the Israelis and Palestinians – will be better
off if we do not do this now? It has to be worse, not better.
So I hope, Klaus, as your question intimated, that what you see on television
and the disruptions will animate the parties to make a peace agreement.
But it ought to be done because of the positive future they can build together,
not just out of fear. I would like to have a dialogue with you
and I see someone sitting over there, who has served – David Gergen
– how many Presidents – 5? 6? Since Grover Cleveland actually. Now, I thought that David Gergen was
always going to be known as my token Republican in the White House, but he was
so promiscuous, it turned out that he would work for any President. He just
wants to prove he can outlast us all. Mr President, it’s good to see you again,
sir, and thank you for coming back to Davos. And I know I speak for a lot of
folks here – it’s really good to see you looking so fit;
it’s really, really good. Two questions: one about leadership.
We have many young global leaders here in Davos coming from business, the civic sector,
the public sector, what advice would you give them – what counsel – about
how they might be effective leaders in the 21st century? First
question. And second question as you well know,
a debate has broken out again about whether America is in decline, and we have
public intellectuals like Niall Ferguson, Gideon Rachman who are issuing dark
threats about America’s decline. We have others like Joe Nye who are much
more reassuring, and I am curious where you are in that debate; what you think the implications are for America and the world, especially
in relationship to China. And finally, how’s America going to get itself back
on track especially in the creation of jobs. I’m sorry; that’s very broad
but if Klaus also has some thoughts, I know people
would welcome them too. Thank you again. Well, first, to the young leaders I would
say, the challenges you face depend on where you live and how global
your activities are. But, I think you should – whatever you do
– you should focus on the interconnection of your activities to everything else that
is going on in your country and your region and the world. And I believe that there are two things
that I would like to see you focus on, one of which I talk about all the time like
a broken record, and that is, don’t just talk about the challenges we face,
do something about them. Don’t just say you wish the people in
your government would do this, that or the other thing, or you wish the people running
the biggest companies in the world would do this, that or the other thing.
Figure out something that you can do to change things in the direction you think
they ought to go, because the world is so hungry today for examples of things that
work. Lots of people talk about what doesn’t work.
It’s quite another thing to be able to do something – no matter how small it may seem
– that actually changes lives in the direction you think. Second thing I haven’t talked much about,
but I have been giving a lot of thought to this. Most of us believe that personal
freedom, market economics and political democracy are a pretty good thing. But we need a little more sophisticated
analysis of how you manifest that. As I always tell people in areas where there
is an election for the first time in a long time after a bloodshed, that true
democracy is more than a majority rule; it’s also minority rights and the rule of
law. But beyond that, I am struck by how the peculiarities of political systems
continually produce governments that will not make decisions that all public opinion
polls show are supported in the country. I will give you a couple of ideas.
If you took a poll in Israel and in the Palestinian territories today, you could
get big majorities in both places for a peace agreement that nearly everybody
would consider honourable and that would be close enough to the one that the King
of Saudi Arabia, King Abdullah got all the Arab, Muslim countries in the Middle East
and then eventually I think – and Prince Turki’s here, he could tell me – more than
22 countries to sign off on, offering a partnership with Israel if they take it. But if you look at how people actually get
elected to the Knesset and why and if you look at the political pressures which you
see playing out in Lebanon, you see that sometimes what is maybe a perfectly honest
election is put through a democratic form that will not produce a government ever
that reflects the majority rule and that’s very frustrating.
Now, that brings me to your other question about America. Do I think America
is in decline? I don’t; but its relative position is changing. Now, you and I used to talk about this when
I was in the White House. I used to tell everybody that at the end of the Cold
War we had a brief moment where America was the world’s only military, economic
and political superpower. I would remind them that China was bigger
than we were, that India was bigger than we were and that if Europe continued to
unite politically and economically, they would bigger than we were and you can
never begrudge someone else the fruits of their labours or the benefits of
their imagination. Therefore it would not be long before others had aggregate wealths
at least as great as we did, and then whether our military superpower remained
unique, depended on how they decided to spend their money. And whether our political influence remained
unique depended on two things: how they decided to exercise their influence,
and whether we could remain true to our own values that had made us
attractive to people throughout the world. So what I think, David, is that relatively
speaking, the 21st century will belong to a lot of countries, but the world would
be much better off if America was still a very important, positive force, and we
cannot be an important, positive force in politics or security affairs unless
we have a strong economy. So I don’t like the people who have given
up on us because people have been betting against our country for more than 200
years and so far everybody that’s bet against us has lost money because we had
a remarkable ability to keep coming back. On the other hand, I don’t like what I see
as being set up as one of the main themes that the new Republicans are trying to set
up in the 2012 elections which is they know America is a truly exceptional country
and all these ‘wussy’ Democrats don’t. Because, like Michelle Bachmann,
in her Tea Party response to President Obama, ‘everybody knows we have the greatest
healthcare system in the world’. That is factually untrue. That is not true. You can get the best healthcare in the world
in America if you’re Bill Clinton or David Gergen or Turki Faisal, but that’s
not the same thing as having the best system that works for everybody.
So what I think America needs as much as anything else, is to stop conducting its
politics in a parallel universe divorced from reality, with no facts. And I say that, look, I would make
every American here mad, whether you’re a Republican or a Democrat, if we talk
about what I think ought to be done. I think it’s a good thing that a lot of
these states with excessive pension burdens are going to be forced
to re-examine them. I think it’s a terrible thing that state
and local governments went around pretending that they were running on
balanced budgets when they were doing no such thing.
I think that there’s a lot of things the Conservatives are saying that need to
be heard here in the budgeting mechanism. On the other hand I think the idea
of addressing America’s deficit problems at a period of no-growth, by saying we’re
not going to deal with the defence budget, we are not going to deal with Medicare,
we’re not going to deal with Medicaid, we have to pay interests on the debt and therefore
we will focus all our cuts on the 15% of the budget that is, our pathway
to the future is nuts. We need to put our country back
in the future business. So my answer to you about America’s future
is this: you go all the way back to the Samarian civilization and you will see
that every successful civilization builds institutions that work, that lift it to
greatness, and lift its talented people up and reward people for their productive
efforts. That’s what we’ve got to do in Haiti because they don’t have
those institutions. Then, if you look at every one of those countries, or the Roman Empire,
you will see that at some point all of those institutions that benefitted
people get long in the tooth. They get creaky. The people running them become more interested
in holding onto their relative power than advancing the purpose for
which the institute was established. The people who are the constituents become
more interested in holding on to present benefits than putting a little of it at
risk to build a better future for our children and our grandchildren. That’s where we are now, in the
public and the private sector. That’s why there’s an opportunity here for
a genuine by partisan cooperation in America. We need to modernize America’s
systems so they fulfil the purpose for which they were established whether
it’s government budgeting, the retirement system, the healthcare system, the education
system, the way we produce and consume energy, the way we regulate
finance and provide credit and investment and there’s more than enough work to go
around and more than enough real debates to be had about a slightly right-of-centre
or a slightly left-of-centre job. But I think where we are in 50 years
depends on what we do now. So I think the inevitability of those
who say we are down and out and the inevitability of those who say we are
always going to be on top are both wrong. But I’m still with where Winston Churchill
was when the British press baited him about America and his buddy Roosevelt
not coming into World War II and he said ‘America always does the right thing –
after exhausting every other alternative’. And what I believe is we need to be finished
with this alternative exhaustion phase and get the show on the road.
And if we do, don’t bet against us, we’ll come back again. Bill, I would like to take this
point a little bit further. You just mentioned the deficiencies
in the democratic election process. Now, the feeling many foreigners have of
the United States at this moment is that the society is extremely polarized. My question to you – and of course
it reflects in politics – is what could be done to overcome this polarization? Is
it something which is of a momentaneous nature, or is it something which, driven
by the system, will remain a factor? What is your recipe? Let’s just look at the political season
through which we had just come. My party was bound to lose quite a number
of seats in the Congress because we picked up some very marginal seats in 2006 and
2008 because of the weakness of the economy and the unpopularity of America’s
military involvement principally in Iraq. And because the economy was still bad.
On the other hand, we took the whipping we did because there was a well-organized,
well-financed, two-year effort to drive every alienated person nuts by comparing
the President and the leaders of Congress to crypto-socialists who were driving
the country flat off the brink. And what I mean by a parallel universe is,
one more time the American people rewarded the policies that they say are against.
Since 1981 when the Republican Party parted from traditional conservatism
into demonizing the government as an institution in saying the most important
thing you can do is to cut taxes and attack government, America
has been dominated by them. We had eight years and they had 20. 12 on one side of me, and eight on the
other until President Obama was elected. Now, during that time the Conservatives
produced 20 deficits, quadrupled the debt before I took office and doubled it again
when I left, and I produced – four of budgets were surpluses and I paid
down US$ 600 billion on the debt. In other words, it’s not what it seems.
But they had a heck of a campaign. Now in 1994 I lost at Congress because I
took on all this and the National Rifle Association besides on guns, and our party
raised a lot of money but we gave it out to our individual members of Congress because
we did not know you could have a national campaign in a non-presidential
year. We have known that since 1994. In 1998 we ran a national campaign and we
won first time since 1822 in a six-year presidency. And in 2002 we lost but President
Bush was at 80% after 9/11; we didn’t lose much.
2006 we won the Congress back. In 2010, for reasons I will never understand,
the Democrats reverted to the strategy of 1994, raised US$ 1.6 billion
and didn’t spend even 10% of it to tell the American people what they had done,
what they intended to do and what the differences were. So basically we had no national
message and they did. It was amplified by Rush Limbaugh; it
was amplified by Fox; it was amplified by their paid ads and I don’t blame them.
I am not criticising the Republicans; they’re in business to beat us.
I’m criticising my party. We had no national message so our losses
were roughly twice as great as they needed to be and it’s gotten everybody discouraged
thinking of the polarization. Here’s what I think is going to happen:
they’ll be skirmishing and the conservatives in the Tea Party movement
will probably try to force the President and the Democrats to accept basically the
obliteration of the future budget of the federal government and our obligations
to the world through the aid programme and other things. Or they’ll say we won’t vote
to raise the debt limit. And then one side or the other will blink. Or they both will and we’ll get through
that and then we’ll fight some more and then if we’re lucky it’ll be like it
was with Newt Gingrich and me and Bob Dole and we will start working together and do good
things for America. But we are going to have to put up with a little blood on
the floor and a little uncertainty and a little both sides playing chicken for
a while. I don’t really know how it’s going to come out, but since I believe that most
of these people genuinely love their country, even the ones that totally disagree
with me, I have to believe that in the end we will find a way to work together
and to move the country forward. Therefore I think the President did the
right thing in the State of the Union address not just saying some of the things
that I’ve just said to you and instead just to be positive and try to
keep pushing the ball forward. That’s not his job.
He did the right thing. I don’t know how it’s going to come out
but my gut is that a lot of these people who got elected – these new members – they
may not have a lot of experience; they may actually believe a lot of what
they said, that I believe was factually untrue. But they are smart;
they are vigorous; they are convicted and they are energetic
and I think they love their country so I believe in the end we will find a way
through this, but we have got to stop having these – I mean, I listen to
a zillion debates about healthcare and nobody in the press ever said ‘well,
what about the cost of continuing the status quo? We’re spending 17.2% of our income
on healthcare and none of our nearest competitors are closer than 10.5%.’ The
next most expensive system in the world is right here, in Switzerland at 11.5%
because your population is older and as you see, the reason we are loving Davos
is there are certain distributional challenges to bringing healthcare
to remote Alpine villages. But if you look at the big countries, you’ve
got Canada at 10.5%, Germany at 10%, France at 10%, the UK
at 9.5%, Japan at 9%. We are spotting our competitors a trillion
dollars a year and nobody even talked about in the last elections.
What I want to do is be a nag on both sides and just get people to get back into
the fact-based world and then work through their challenges.
We’ll be fine if we do. Bill, we are living in an age of, let’s
say austerity, or we have to live in an age of austerity, of deleveraging.
On the other hand if everything is included, I think the real rate of jobless
people or job-seeking people is 16/17% in the United States.
That’s correct. And if you add the parents of unemployed
people, the relatives, you come to a figure which is probably closer to 40% of
people directly or indirectly affected by unemployment. So the next election will
probably very much be determined by this issue. Now what would be your advice
– to become more protectionist? What would you do in order to address
this issue of unemployment? Let me make a couple of observations.
Number one, one of the tragedies of the last election from my point of view is
that the Democrats and President Obama were blamed for the size of the debt because
of the stimulus programme which was a one-off deal brought in because the
economy was contracting and there was no private investment.
That is, they did what is traditional economic theory. We never had permanent deficits
in America before 1981. Just go back and look. We institutionalized deficit spending and
it worked for about eight years and then it didn’t work very well for President
Bush which is why I won. Because there is only so long that you
can just keep borrowing money when the economic circumstances don’t warrant it.
On the other hand, the American people voted against borrowing money when
the economic circumstances did warrant it. Now, it doesn’t have to be all bad because
– unlike the depression when we stopped stimulative government spending too soon
in 1937 – we financed our own deficit then. People like my grandfather who was
a poor working guy, kept a little money in a coffee can, when Franklin Roosevelt would
come on the radio he’d get in the tin and go buy a bond and try to help finance
that way. Now we borrow the money from our trading partners and we are aggravating
the global imbalances and capital flows when we do that. So, on the other hand, look at the
challenges Europe is facing. Iceland – not part of the Eurozone – was
in worse shape, arguably, than Ireland and Greece but it seems to be coming back
quicker because they weren’t subject to a level of contraction that, in conventional
economic times, you would not have. So the Europeans are going to have
to figure out how to get money in. The United States has an interesting
dilemma because the American people have voted now and they say ‘we
want you to cut back now. We want you to start showing restraint
now.’ The deficit commission, the bipartisan commission that President Obama
appointed, when they issued his report, they recommended we not do this until
next year when growth was underway. So, what’s the way out of this and Klaus,
you just asked the question, ‘should we become more protectionist?’ No. I was glad
to see the President say we should adopt the Korean and Colombian and
Panamanian trade agreements. On the other hand, what are the reasons
that the Germans maintain an unemployment rate two points below the United States,
even when we had recovered a higher percentage of our lost GDP than Germany
had? Why did they do that? I think they did it for three or four reasons.
One is Germany did a better job of penetrating the Chinese and other
growing markets than we did. Two is, the Germans – partly because of
the partnership between management and labour and partly because of the laws
– have a much better way of dealing with underemployment than we do.
In other words, before you pay somebody the full unemployment, in Germany they have
a system where you can get some money from a trust fund you pay into to keep
people employed at your firm when activity drops, so you don’t have to go to the
trouble to hire again and train again and do all that.
The third reason is that Germany was one of the four countries in the world, of the
44 wealthy ones, who promised to make specific targets under the Kyoto Climate
Change Treaty; the other three being the UK, Sweden and Denmark and all four of
them, before the financial collapse, were outperforming the American economy.
They had lower unemployment rates, higher job growth rates, higher business rates,
less inequality because they changed the way they produce and consume energy
turned out to be good economics. So I think that that is an indication
and as Klaus said, for the rich, developed economies, if you want your economy
to grow, you don’t want to shut it down and become protectionist but you do have to
have a source of new jobs every five to eight years.
The other thing I would say is: China joined the World Trade Organisation.
We want them to be able to help the poor people living in China who aren’t
part of their prosperity yet. India, we don’t want to see a major political
crisis where the country has world’s biggest middle class and record
numbers of millionaires and billionaires and still has 650 million people
living on less the US$ 2 a day. So we want them to do that.
On the other hand, the relative position of the United States and the other
wealthy countries is different now and we have suffered now and we have 9.5% unemployment
and if you count the discouraged workers as Klaus has said, about 16.7%
of the working age population. And I do believe that our trade
policy has got to reflect that. People can’t say, well, you have to be open
no matter whether you have any sense of parity in the rules and the access
to the markets and the currency value and whatever. We have got to recover our own
economic strength or we will not be able to do any good for anybody else.
We won’t be able to fund the Global Fund on AIDS, TB and malaria; we won’t
be able to implement the Millennium Development Goals; so I think
you will see I’d be adamantly opposed to some sort of wholesale protectionism.
I don’t agree with the immigration position of the new majority in Congress;
I think America – including the unemployed and the underemployed – would be more
likely to get jobs and more likely to raise their incomes if we passed immigration
reform and bought in more skilled immigrants and we would generate
more economic activity. That’s what I believe.
But, I do believe that we have no choice now but to try to focus on
the American economy. Bill, we are having a session during this
meeting with the Prime Ministers of the Scandinavian countries, the Nordic countries
and if you look at our own Competitiveness Report, the most socially
inclusive countries and also in terms of gender equity, are the
most competitive ones. Absolutely.
And I think this is a lesson which every country should learn; it’s inclusive
growth as we say. It goes back to the point you said that
there are no externalities in economics anymore. The most effective political
philosophy when it comes to economics is communitarianism. Not necessarily right or
left. Not necessarily ‘the government has to do this; the private sector
has to do that’ but a sense that we are all in this together
and that we have to create an environment of shared benefits, shared opportunities,
shared responsibilities and common progress. If you have too much inequality it’s going to limit your growth potential. I think you’re absolutely right. I don’t mind us having an argument in America
and throughout the world about what the best way to do that is, but to
pretend that the only thing that matters is to keep taxes as low as possible on
the private sector and individuals and strangle the government and that will give
you a good result, defies all evidence. There is not a single example in the world
today of a truly successful economy that does not have number one, a
vigorous private sector; number two an effective government and
number three, a strategy to widen the circle of opportunity. There just isn’t; you
can’t find one. America now, we permitted – and again I
blame us, my party more than anyone – we had an election conducted on a totally
false premise and you’re right, the interesting thing on this energy
deal is they all did it differently. Germany leapfrogged Japan and the United
States to become the number one country in the world in solar power, although
China is now going to pass it. But in Germany the sun shines on average
as much as it does in London. So they had to really have big subsidies.
Yet Deutsche Bank, not Greenpeace, Deutsche Bank says that the Germans
netted 300,000 jobs out of this solar policy. The Swedes adopted a really sensible,
unique carbon tax in 1991 under a conservative government.
David, you were talking about this on your television appearances, the Swedes adopted
a carbon tax and said ‘we’re going to tax you so you will know the real cost of
carbon, so it won’t be an externality anymore. And then we’re going
to give you the money back. 100% of the money.
And if you want to spend it just the way you did and maintain just the system we
have, you have the freedom to do it. How about it?’ And they gave all the money
back and guess what, people wanted to spend the money on something else.
So Sweden is the only country to meet its Kyoto targets 100%, virtually 100%, through
no alternative energy and all through efficiency.
Then Denmark and the UK, they are slightly different stories.
My point is that you can argue this right or left, but you can’t defy the evidence
and so I appreciate what you said. We need the conservative and progressive
debate to be over what kind of communitarianism we’re going to have.
How do we have shared benefits, how do we have shared responsibilities? That’s
the debate the world needs. I think that’s a good way and a good
message to end this session, but nevertheless I have one last question.
You have achieved such a lot during your Presidency; you have achieved in a different
way a lot over the last ten years. I think a remarkable example
of engagement – global engagement, social engagement. Now what do you want
to achieve in the next ten years? I’d like to live.
I’d like to be a grandfather – I have nothing to do with that achievement
but I would like it. I would like to have a happy wife and
she won’t be unless she’s a grandmother – something she wants more than she wanted
to be President. Seriously, I tell you what I would like. I consider every day a gift.
So I would like to maintain enough health and enough mental capacity to keep learning
about the world as it is and keep changing it for the better.
And before I die, whenever that is, I would like to believe that my own country
and the world had at least embraced the right paradigm.
We’re never going to have all the answers and we’re always going to fight
like crazy over the details. The best is to be thinking about
these things in the right way. That’s why I love the World Economic
Forum because the primary benefit may be 50 years now of all these Davos meetings
may have been by then the millions of conversations that have occurred as people
just keep reaching out for each other. Just consider this: the Hubble telescope
went up in the air, I don’t know, a dozen years or so but at least they may have found
the world’s first galaxy, 13 billion years old.
Last year we found a planet in another galaxy in the Milky Way that seems to have
the same conditions that exist on Planet Earth; close enough that there
might be life out there. Last year we discovered that unless you
are 100% sub-Saharan African, between 1 and 4% of your genome comes from our
pre-human ancestors, the Neanderthals. My wife was not surprised to find out I was
part Neanderthal but she was stunned to learn that she was.
That’s the way we all are, that’s the thing. Most important of all, Switzerland
is now the home of the largest superconductor and supercollider on earth.
It was moved from Texas to Switzerland after the 94 budget, but we still have
smaller ones in the United States. The first significant discovery came out
of the superconductor last year that may offer a key to how life began after the
big bang and how we can finally do what Einstein thought might be done and have
a unified theory that encompasses biology, chemistry and physics.
Because we were all taught – all of us who studied elemental physics – that at
the sub-atomic level, the positive and negative elements of every atom have to be
in equal balance otherwise matter would not cohere and we would all fly apart.
And the superconductor discovered that the smallest sub-atomic particle, the muon,
it turns out that based on their findings – which will be confirmed or contradicted
when the Swiss machine is up and going – turns out that there’s slightly more positive
than negative muons in all of our atoms, which would justify the fate of all
of the believers of the world, make you more optimistic and give us an explanation
for how we might have all come to this moment from the primordial slime.
This is an exciting time to be alive. There is no reason to go around hang-dog.
It’s just that we don’t have a level of consciousness and understanding broadly
enough embedded in these societies to make consistently good decisions. And you asked me what I want in the next
ten years: before I die, I want to believe that is the case, so that I can feel that
100 or 1,000 years from now, people on this planet will wake up to the same
sense of wonder I feel every day. That’s really what I want.
Thank you so much, Mr President.