[Congressional Record Volume 141, Number 58 (Wednesday, March 29, 1995)]
[Senate]
[Pages S4833-S4836]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         ADDITIONAL STATEMENTS

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     DR. JOHN BRADEMAS ON THE FUTURE OF THE NEW YORK STATE ECONOMY

 Mr. MOYNIHAN. Mr. President, during the past year, NYNEX, a 
major telecommunications company headquartered in New York 
State, has sponsored a series of ``Agenda For Growth'' conferences on 
the future of the economy of the State.
  Keynoting the last of this series was Dr. John Brademas, president 
emeritus of New York University, who before joining the university in 
1981, served for 22 years in the U.S. House of Representatives.
  Cosponsors with NYNEX of the February 15, 1995, meeting were the 
Business Council of New York State, Inc., 
[[Page S4834]] and the New York City Partnership/New York Chamber of 
Commerce and Industry, Inc.
  I believe many of my colleagues in both Houses of Congress will find 
Dr. Brademas' analysis of interest, and I ask that the text of his 
remarks be printed in the Record.
  The remarks follow:

Agenda for Growth: NYNEX Conference on the Future of the New York State 
                                Economy

       I am honored to have been asked to open this conference on 
     ``The Future of the New York Economy,'' and I congratulate 
     Dick Jalkut, President and Group Executive of NYNEX 
     Telecommunications, on the contribution the ``Agenda for 
     Growth'' series represents to understanding important issues 
     facing our city and region.
       At the outset, let me note that I have served on the Board 
     of Directors of NYNEX since 1991 and have greatly enjoyed the 
     opportunity to work with Dick and the other outstanding 
     leaders of NYNEX.
       Today, I'll speak to you from the perspective of someone 
     who served twenty-two years as a Member of Congress, from 
     Indiana; for eleven years, as President of the nation's 
     largest private university, New York University; and as a 
     former chairman of the Board of the Federal Reserve Bank of 
     New York. Among other current responsibilities, I'm serving 
     as chairman, by appointment of President Clinton, of the 
     President's Committee on the Arts and the Humanities and also 
     chair the National Endowment for Democracy.
       So from this general background, I want to join you in 
     considering prospects for the future of New York City and the 
     surrounding area and ways of strengthening our economy in the 
     years ahead.
       As we all know, the economic recovery of the metropolitan 
     region has lagged that of the entire nation. We know, too, 
     that recent changes in political leadership at the city, 
     state, and national levels have added a new dimension of 
     uncertainty to the economic outlook for New York.
       How, in this context, do we nurture the unique strengths of 
     the metropolitan region and nourish its preeminent role in 
     the international marketplace?
       How, as it were, do we develop an agenda for prosperity?
       To respond to these questions, we must first understand the 
     dynamic that drives the New York economy and then consider 
     the challenges that require our efforts. The participants in 
     this
      conference will offer many insights. Let me offer some 
     initial observations.
       Point number one. New York's economic future lies in 
     fundamental changes in the international economy. 
     Technological advances propelling us into the 21st century 
     are redefining the competitive landscape of the entire world. 
     National borders and political ideologies no longer determine 
     patterns of global trade and the movement of capital. We have 
     entered an era characterized by a combination of intense 
     competition and interdependence.
       Two of President Clinton's actions this month dramatically 
     underscore what Secretary of the Treasury Robert Rubin has 
     described as the ``interconnectedness'' of the world economy: 
     the Mexican rescue package and sanctions on China.
       This changing structure of the international economy 
     profoundly affects the life of major cities like New York. 
     Why? The dispersal of economic activity around the globe has 
     created a corresponding need for organizational coordination 
     in a few key sites. So cities are increasingly taking on a 
     strategic role as highly concentrated command centers for 
     operations that are worldwide. Not surprisingly, cities have 
     concomitantly become critical locations for finance and 
     specialized services.
       All these functions have influenced immeasurably both 
     international economic activity and urban development. One 
     result is the emergence of ``the global city,'' with New York 
     a primary example. The scope and character of the New York 
     area economy are more and more defined by its role in the 
     world marketplace.
       Beyond understanding New York's place on the international 
     stage, we must appreciate a second fundamental factor. The 
     principal reason for the strength of the New York region in 
     the world economy is that it is the center for the creation 
     and sophisticated application of intellectual capital.
       For during the past century, the New York economy has 
     evolved from one dependent on manufacturing to one based on a 
     concentration of Fortune 500 headquarters, corporate R&D 
     facilities, advanced business services in finance, law, 
     advertising and management and the world's leading cultural 
     institutions and media firms.
       Indispensable to all these activities is what I'm calling 
     ``intellectual capital''--the individuals and industries that 
     develop new products and services, apply technology in 
     innovative ways, generate new marketing concepts and 
     techniques, design new fashions, create new forms of music 
     and art and produce the information and entertainment that 
     are distributed across the nation and the world.
       Indeed, as several recent news accounts have noted, the
        richness of its intellectual capital sector makes New York 
     an incubator for a host of new multimedia start-ups which 
     thrive on the vibrance of the arts--painters, musicians, 
     writers, filmmakers--and provides innovative content for 
     communications, advertising and publishing conglomerates 
     headquartered in the region--Time Warner, Sony, Hearst, 
     Viacom, Bertelsman, ABC, CBS and NBC. As the New York area 
     also offers comprehensive venture capital and financial 
     services, the remaining resources essential to creative 
     development are right here.
       And New York's intellectual capital sector is more and more 
     the primary pulse of the region's strength. The performance 
     of individual facets of the sector may fluctuate over time 
     but taken as a whole, the intellectual capital sector will be 
     the lead generator of income and employment for the future of 
     this region. We must, therefore, nurture this unique resource 
     so that the New York metropolitan area can respond to change 
     with state-of-the-art capabilities. We cannot afford to cede 
     fields of specialization over time to our national and 
     international rival cities.
       As we meet today in a hotel close to Times Square, I 
     observe that tourism--New York style--also depends on 
     intellectual capital. Business travelers come to New York in 
     search of the ideas and specializes information most easily 
     obtained through face-to-face contact. Other visitors come 
     for the city's cultural life, its restaurants and retail 
     stores.
       Walk just a few blocks from here and you can see how New 
     York City blends culture, entertainment and tourism in new 
     and creative ways. Leading entertainment companies, like 
     Disney, Viacom and Virgin Records, are revitalizing historic 
     theaters on 42nd Street. This development has been made 
     possible, in part, through the impressive work of the Times 
     Square Business Improvement District which has made the 
     entire theater district attractive to visitors from around 
     the world.
       As a former university president, I cannot fail to add that 
     New York City's intellectual capital is in large measure the 
     product of the presence of a rich mixture of colleges, 
     universities and research institutes. More than 100 
     institutions of higher education are located here, situated 
     in all parts of the city. Unlike so many cities where one or 
     two colleges and universities dominate, New York is home to 
     nearly every type of educational institution: theological 
     seminaries, two- and four-year colleges and health care 
     centers and research universities of international 
     distinction.
       Indeed, what helps make New York so special is that the 
     students who attend college and professional schools in New 
     York City often settle here and replenish our intellectual 
     capital. Our colleges and universities are magnets that draw 
     people to New York
      who then launch their careers here, providing a new stream 
     of talent for both the private and non-profit sectors.
       I must make another point. The intellectual capital sector 
     encompasses not only the world's largest corporations and 
     financial institutions but also the small companies and 
     manufacturing firms that pioneer customized products and 
     services. Recent studies have underscored the importance of 
     nimble, skilled small businesses as a significant part of the 
     job creation process in the New York area.
       How then can we strengthen our base for the years ahead, to 
     assure that we retain both our role as a global city and our 
     investment in intellectual capital?
       Here are a few suggestions.
       First, we must recognize that we're fashioning an agenda 
     for growth at a time of major political change, and as you 
     and I know, decisions at every level of government have an 
     impact on the economy.
       New leadership in both the United States Senate and House 
     of Representatives, a substantial number of members wholly 
     new to the legislative process, shifting committee 
     jurisdictions and, above all, a President and Congress 
     sharply divided by party mean a set of forces that may take 
     Federal policy in directions that depart radically from the 
     past. Similarly, this year, we have had a change of party in 
     the Governor's office in New York State, and last year, in 
     the Mayor's office in City Hall.
       The Congressional Budget Office estimates that reductions 
     in Federal grants to New York State in the Republican 
     ``Contract With America'' would total $26.4 billion a year. 
     Such cuts would affect every aspect of life in the city, from 
     transportation to education, and particularly health care, 
     which accounts for over 12% of employment and wages in the 
     metropolitan region.
       From Albany, Governor Pataki wants to reduce state aid to 
     the city by $158 million for the City University of New York, 
     $128 million for the MTA and nearly $2 billion from Medicaid 
     and welfare.
       From City Hall, Mayor Giuliani announced yesterday $600 
     million in cuts in city agencies.
       Clearly a concern that underlies all discussion of spending 
     cuts--Federal, state or local--is the impact on the poor in 
     the city. Although the widening gap between rich and poor in 
     New York City is not the subject of this conference, I 
     believe that effectively addressing this complex issue is 
     essential to the long-term social stability and economic 
     health of our city and region.
       A second item on our agenda for growth: We must not only 
     sustain but substantially improve the infrastructure that 
     supports New York's economy and its reservoir of intellectual 
     capital. By infrastructure, I mean 
     [[Page S4835]] the capacity to move goods, people and 
     information.
       The Port Authority of New York and New Jersey, under the 
     sagacious leadership of Stanley Brezenoff, undertook major 
     improvements in the region's airports. We must continue these 
     efforts while dramatically enhancing ground access to our 
     airports. Indeed the regional public authorities should start 
     planning the transportation systems necessary for the next 
     century. While making better use of the existing 
     transportation infrastructure, we must also link inner-city 
     residents to jobs in outlying areas and find ways of 
     connecting suburban communities directly to downtown 
     Manhattan.
       The other element of infrastructure indispensable to 
     intellectual capital is telecommunications. Put simply, the 
     metropolitan area can function as a global city only with a 
     telecommunications capability second to none. For there is a 
     synergistic relationship between unending demands for ever 
     more sophisticated services and the push for breakthrough 
     technology and systems to meet those demands.
       Driven by data and communication requirements for managing 
     international operations from corporate headquarters and 
     conducting complex financial transactions around the world, 
     New York has emerged as the central nervous system for the 
     global network of the most advanced information technology 
     anywhere.
       New York City resembles a giant switchboard: Electronic 
     messages are constantly flowing in, through and out of the 
     city's office towers and stock exchanges. Modern 
     telecommunications systems have enhanced the city's capacity 
     to put information to work, converting ideas and data into 
     new products and services that are distributed electronically 
     around the world.
       Indeed, New York is the leading source of content for 
     books, magazines, newspapers, radio, television and 
     eventually for the Internet. Within just one mile of this 
     motel are the headquarters of the nation's largest television 
     and radio networks, leading publishing companies and major 
     sources of cable television programs.
       As the global market for information and entertainment 
     expands, New York's communications industry will become even 
     more important. Only last week, MTV, a division of Viacom, 
     headquartered just four blocks from here, announced the 
     launch of a music television channel in South Africa, the 
     first American broadcaster to establish a network in South 
     Africa since the new,
      post-apartheid government opened the state-controlled 
     airwaves to private enterprise.
       New York is--literally--spanning the world!
       Let me turn from physical infrastructure to the foundation 
     of New York's intellectual capital sector--people. New York 
     City has a larger number and wider diversity of brilliant, 
     talented, motivated men and women than any other urban area 
     in the world. It is this intellectual firepower that in large 
     part makes New York New York and is so attractive to 
     international business.
       Two forces are critical to invigorating the environment 
     necessary for constant renewal of our creativity and 
     expertise: education and the arts. Let me elaborate.
       The employment requirements of the New York metropolitan 
     region are increasingly characterized by the sophisticated, 
     cosmopolitan nature of the intellectual capital sector.
       I have earlier spoken of the crucial role our post-
     secondary educational institutions play in luring people here 
     for their studies and careers. Yet no challenge is greater 
     for New York City than to reaffirm the priority of good 
     elementary and secondary schools. The public school system is 
     nevertheless being asked to do much more with substantially 
     less. As Robert Berne, Dean of NYU's Robert F. Wagner 
     Graduate School of Public Service, has warned, the proposed 
     freeze in state aid to New York City schools represents a 
     substantial cut in funding because our school population is 
     increasing by approximately 20,000 students every year. And 
     Mayor Giuliani's announcement yesterday that the deepest 
     reductions in his budget will fall on the City's public 
     schools only intensifies the problem.
       Without a strong school system, we will not be able to 
     produce a skilled workforce, one able to compete in today's 
     job market. As entry-level jobs demand higher technical 
     skills, we must design our high school programs to meet the 
     requirements for employment in the 21st century.
       In addition to education, other components crucial to the 
     creative milieu that defines New York are arts and other 
     cultural institutions. The arts are a $9 billion industry in 
     this region, an essential asset to tourism which in turns 
     generates $20 billion of regional economic activity. The 
     Metropolitan Museum of Art, for example, is the city's single 
     largest tourist attraction, with 4.6 million visitors 
     annually, nearly one million of whom are from outside the 
     country.
       As a recent report, The Arts As An Industry, issued by the 
     Port Authority of New York and New Jersey, stated:
       ``The arts and the people who create, present, and market 
     them are a critical competitive advantage that New York and 
     its suburbs have over our national and international 
     competitors for survival in the next century . . . But . . . 
     the most important role the arts play in the life of the 
     region is not related to its economy but to its very sense of 
     itself.''
       I speak to this matter with particular interest as Chairman 
     of the President's Committee on the Arts and the Humanities, 
     and I express serious concern about the uncertain future of 
     Federal support for the arts, the humanities and museums. 
     Proposed budget cuts would have a deeply damaging impact 
     nationwide, for the arts, humanities and museums are vital to 
     the economy of every state and every local community. Non-
     profit arts institutions alone generate $36 billion in 
     economic activity annually. They support 1.3 million jobs and 
     generate $3.4 billion in Federal tax revenues. Investment in 
     the arts and the humanities is good business.
       Support for the National Endowments for the Arts and the 
     Humanities is so small--only $.64 per person a year for each 
     Endowment--yet it is indispensable seed money. Every Federal 
     dollar leverages an average of $11 more from private, state 
     and local sources, and without Federal support, there is no 
     serious prospect that private funds will fill the resulting 
     gap or that state and local governments will be able to do 
     so.
       And what would be the impact of threatened cuts on New York 
     City where culture is an integral part of our tourist 
     industry?
       Now in defining the context for ``an agenda of growth'' for 
     the New York Area, I have made two assertions:
       (1) New York's future is linked to the international 
     economy; and
       (2) Our unique source of strength is intellectual capital.
       I must add a third factor: (3) We must more aggressively 
     encourage communication and cooperation between and among the 
     business sector; our educational institutions, especially 
     higher education; and government at every level.
       The prevailing political winds can set a new course for the 
     relationship between government and business. The profit-
     making sector and our colleges and universities can find new 
     ways of working with one another.
       Indeed, it is awareness of the importance of such cross-
     cutting relationships that caused the Carnegie Corporation of 
     New York to make a grant to New York University to organize 
     this year a series of three colloquia on science, technology 
     and government. Scientists and engineers, business executives 
     and government
      leaders will join scholars from New York University, other 
     area universities and the New York Academy of Sciences to 
     take part in sessions on three major topics--
     biotechnology, telecommunications and science and 
     environmental journalism. Experts from New York, New 
     Jersey and Connecticut as well as city, state and Federal 
     officials will discuss the implications for the tri-state 
     economy of advances in science and technology and of 
     decisions by public policy-makers.
       Let me conclude this analysis by suggesting some questions 
     for this distinguished panel to consider. It is, in my view, 
     imperative that the business community, along with civic and 
     community groups, be involved in shaping the agenda for the 
     economic growth of the city. In doing so, there will be 
     difficult choices among competing priorities. Let me 
     illustrate.
       First, sustaining the infrastructure of the New York City 
     region will require large-scale public investments. Which 
     ones? Here's an example: Should we renovate Yankee Stadium, 
     improve access to the airports or expand the Jacob Javits 
     Convention Center?
       A still broader question here: How to link our economic 
     development strategy for job creation to our investments in 
     infrastructure?
       Second, we must support the institutions that nourish our 
     base of intellectual capital. How?
       To meet the demands of a changing economy, we must 
     modernize our public schools. What is the role of the 
     business sector here? Of our colleges and universities?
       Again, can our institutions of higher education forge 
     connections with business and industry to the advantage of 
     both? Can, for example, the city's medical schools 
     collaborate more closely with the region's pharmaceutical 
     firms to build a stronger biotech industry?
       I have spoken of the arts, one of New York's greatest 
     assets. How can we assure financial support, both public and 
     private, of our cultural institutions in ways that reflect 
     their importance to our economic future?
       What initiatives, public and private, are necessary to 
     attract and retain artists, writers and the entrepreneurs of 
     New York's emerging multimedia industry?
       Third, can we explore opportunities for more public-private 
     partnerships? Their success in renewing Union Square, Bryant 
     Park and downtown Brooklyn demonstrates that the quality of 
     life in New York can be enhanced if business and government 
     work together.
       How can we stimulate jobs and economic development in low 
     income communities and invent more effective approaches to 
     the delivery of public services?
       We all know that privatization is now in fashion but we 
     must ask exactly what government functions should be 
     privatized and the effect of privatization on the delivery of 
     services.
       We know, too, that government tax, spending and regulatory 
     policies will continue to influence the agenda for the 
     economic growth of New York. The entire range of issues that 
     affect the economy--and society generally--is, of course, in 
     a democracy, the stuff of politics.
       Now I have not today attempted to be exhaustive in my 
     comments, but instructive. I 
     [[Page S4836]] would, however, insist that in a modern, 
     complex society like ours, there are roles for both private 
     and public sectors. And if I have said anything useful, it is 
     to stimulate more communication and cooperation between the 
     two.
       The rapidity of scientific and technological change imposes 
     new burdens on leaders of business to remain competitive and 
     on government policy-makers to serve the pubic interest.
       For all these reasons, I applaud NYNEX for bringing 
     together these distinguished leaders from various fields to 
     discuss the future of our region.
       I conclude with the words of that great conservative, 
     Edmund Burke:
       ``The public interest requires doing today those things 
     that men [today, he would add, ``and women''!] of 
     intelligence and goodwill would wish, five or ten years 
     hence, had been done.''
     

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