    [Public Papers of the Presidents of the United States: William J. Clinton (1993, Book II)]
    [December 4, 1993]
    [Pages 2117-2119]
    [From the U.S. Government Publishing Office www.gpo.gov]

    [[Page 2117]]

    Remarks in a Roundtable Discussion on the California Economy in Canoga
    Park, California
    December 4, 1993

        Thank you very much, Mayor, and thank you, Secretary Brown. I want
    to say a few words and then introduce your State's two Senators, after
    which we will begin the program. First, let me thank all of you who are
    here today, those of you around the table and those of you who are out
    in the audience.
        I wanted to do this in California, this meeting, as a necessary
    followup to what many of us have been doing here in the last year and
    also because I thought it would be useful to do this in light of the
    economic conference we had in Little Rock one year ago this month, that
    some of you here in this room attended. I held that conference in an
    attempt to get the best ideas I could from all kinds of people all over
    the country about how to implement the economic strategy that I had run
    for President to put into effect. I wanted to get our country moving
    again. I wanted to try to restore jobs and incomes, to make us more
    competitive as we move toward the 21st century, and to give people who
    were outside the mainstream of economic life a chance to get in it.
        As Secretary Brown has said, we have been convinced all along, just
    looking at the numbers, that we couldn't restore the American economy
    without restoring the California economy. Most of this year, the
    unemployment rate here has been roughly 3 percent above the national
    average and has been aggravated into two areas which are causing us the
    most trouble nationwide, that is, the huge numbers of poor people in
    inner cities who can't get jobs at all and the very large number of
    middle class workers who have lost jobs who can't get new jobs or can't
    get jobs as good as the ones that they lost. Those two problems together
    are bearing down on the Nation and are certainly a big problem here.
        We've learned some things in the last year. We've learned that there
    is no silver bullet, that the problems are complex and require a broad-
    base approach. We've learned that you can make real progress, especially
    if you're willing to be disciplined and pay the price of time. We've
    learned that national action is not sufficient, that there has to be a
    partnership that is public and private and that is State and local and
    sometimes community based as well as a national effort. And we've
    learned that you can't really leave any stone unturned. I want to refer
    in a minute to a point the mayor made.
        I'd like to briefly summarize what's happened in the last year
    that's affected California in terms of our national policies and some
    California-specific efforts. First of all, the deficit reduction part of
    our economic plan that went into effect on October 1st actually has real
    reductions in spending in 356 separate accounts in the Federal budget.
    That's not lesser increases, that's actual reductions this year over
    what we spent last year.
        We did raise income taxes on something less than 2 percent of the
    American people, but we also lowered taxes for 90 percent of the small
    businesses in the country, passed the venture capital gains tax that the
    venture capitalists heavily concentrated in California have been asking
    for for years, passed some passive-loss rules that the real estate folks
    in California have been pleading for for years, expanded the research
    and development tax credit which is very important to this State.
        Over the last 10\1/2\ months, you see a remarkable thing in a world
    economy that's in recession. In America, interest rates have stayed down
    at historic levels; inflation has been at historically low levels;
    investment is up; personal income is up; more private sector jobs,
    almost 50 percent more private sector jobs now in the first 10\1/2\
    months of this year than in the previous 4 years; over 5 million
    Americans have refinanced their homes. And we see the beginning of a
    national economic recovery that is quite impressive. So that part of the
    economic strategy--keep inflation down, keep interest rates down, get
    investment up--is working.
        The second part of our strategy was to have more sales, more
    markets, and more products. We sought more sales through removing
    controls on exports that had previously been controlled during the cold
    war, $37 billion in computers and telecommunications equipment alone.
    About one-third of that market comes out of the State of California. So
    in the years

    [[Page 2118]]

    ahead that will create tens of thousands of new jobs in this State, just
    by a national economic policy that was clearly in the interests of our
    country. Now, the Secretary has already mentioned the national export
    strategy.
        With regard to markets, we pursued NAFTA; we pursued a new
    relationship with Japan; we have reached out to the other countries in
    Asia. We are doing our best in the remaining 11 days to reach a world
    trade agreement with GATT. I don't know if we're going to get there, but
    it won't be for lack of effort.
        I want to say since we are in southern California, I want to say
    that I think that Mickey Kantor has done an absolutely brilliant job as
    our Trade Ambassador, fighting for the economic interests of this
    country and still trying to promote an expanded system of global trade.
    If we get a good agreement, the manufacturing opportunities there and
    the opportunities for the audiovisual folks that are heavily
    concentrated in both California and New York, our first and second
    largest States with the second and third highest unemployment rates in
    the country, are absolutely astounding. So we're working very, very hard
    on that.
        With regard to more products, we've got an unprecedented partnership
    with the Big Three auto makers to produce a clean car, a whole strategy
    with environmental products in general, and the technology reinvestment
    project, which all of you know about and which California has done very
    well in, indeed, getting about 15 percent of the grants but 30 percent
    of the money that's come out of our effort to work in partnership with
    the private sector to take defense technologies to create jobs for the
    commercial economy at home and abroad.
        The next part of our strategy has been to invest more in people and
    communities. The Mayor mentioned our family preservation strategy. There
    have been many other things. We changed the education formulas in ways
    that have benefited California. We have provided hundreds of millions of
    dollars of more money to help deal with the burden of immigration here
    in health care and in education. We have supported the Community
    Development Bank, the empowerment zones, and increasing infrastructure
    in the Red Line extension here. These things are all very necessary. And
    I want to come back to that in a minute as I sort of leave you with the
    questions that I have.
        The last point I want to make in terms of looking toward the future
    is that we've got to do something about crime and violence if we want
    the whole California economy to recover. Look at the cover of Business
    Week here: ``Rampant crime is costing America $425 billion a year. What
    can be done?'' Plenty. Now, if you assume this number is right, let me
    just give you some feel for what $425 billion a year is. Our annual
    deficit is $255 billion this year. It was about $50 billion less than it
    was supposed to be when we took office; $425 billion is considerably
    more than that. If we had $425 billion to invest in this country, we
    could lower the unemployment rate by 3 percent in California within a
    year, just if we had it to invest in the whole country. This is a very
    serious thing. It says, ``What can be done?'' Plenty. And Business Week
    sort of advocated the administration's and the mayor's crime prevention,
    crime reduction strategy. More police reduces crime; it doesn't just
    help you catch criminals. If you deploy police in community settings, it
    reduces crime. It reduces the incidence of crime.
        Focus on punishment. Do the right things by the juveniles, have boot
    camps, have alternative systems that give people hope that haven't done
    things so serious that you have to lock them up for long periods of
    time. Do more on drug treatment and drug rehabilitation and drug
    testing. Do more on job training and reinvestment and neighborhood
    safety. And do more to get the huge volume of guns out of the hands of
    teenagers and others who should not have them. That's what this says.
    And it's a money issue that is directly affecting the capacity of
    southern California to recover economically--don't ever think it's not
    for a minute--and every other urban area in this country.
        So, having said that, we will have more investments as we can. Let
    me just leave you with the problems from my perspective at the national
    level, if I might. Number one, we've got to be willing to pay the price
    of time. Middle class wages have been stagnant or declining for 20 years
    under the pressure of the global economy. We have huge increases in
    productivity now in the manufacturing and in the service sector. That's
    the good news. But what that means is fewer people can produce more
    things. So we've got to have a lot more customers. We've got to have a
    lot more customers around the world. That's why trade's so important.
        We've had social decline in this country for 30 years. A lot of the
    problems that we're deal-

    [[Page 2119]]

    ing with now are the tail end of a 30-year downward spiral that all of
    us bear some responsibility for not addressing earlier and more
    vigorously. We can turn it around. We absolutely can, but it's going to
    take some time.
        Number two is the changing nature of jobless people. It used to be
    people would lose their jobs; they'd be called back to their old jobs
    after a certain period of unemployment. Now it's much more structural,
    and people are not likely to get their same old job back. We have to
    revolutionize our approach to unemployed people. We need to scrap the
    present unemployment system and convert it into a reemployment system to
    move people through this economy more quickly. It's very, very
    important, especially when you go through the same kind of restructuring
    you're going through here.
        Number three is, we're still not making, in my judgment, enough
    investment in the areas--and this is not just California--but enough
    investment in the areas that have been disproportionately hurt by either
    defense cuts or by disinvestment in our urban areas.
        And finally, our problem is, at the national level, we have a real
    conflict that the American people have imposed on the Congress and on me
    that can't--we don't need to glaze it over. We know we need to invest
    more money all across the country, pure investments, things that create
    jobs. At the same time, the American people are telling the Congress to
    adopt a balanced budget amendment. And we have already adopted a 5-year
    budget which cuts defense, holds domestic spending flat, and is
    increasing only in retirement and health care costs. So every time I
    spend more money as the President or the Congress appropriates more
    money to invest in defense conversion, we have to cut something else out
    of the domestic budget right now. And all those people who said we
    haven't made any cuts, you just wait until we show up in January and I
    put that new budget on.
        So all I'm saying is we have to keep bringing this deficit down. But
    we need the support of thoughtful people in the business community, in
    the labor community, and community leaders to work through these things
    with us. We also have to keep investing. This mayor and this city need
    the police officers on the street. We need investment, and we need
    partnerships in areas hit by defense conversion and in areas of the
    inner cities where there's been total disinvestment.
        So we can do these things together but not if the political
    pressures force us to overlook the economic realities. And we're going
    to have to have really thoughtful support from the private sector if
    we're going to make the right kind of decisions, and it needs to be as
    nonpartisan or bipartisan as possible. We need to try to make our
    economic policies a matter of our national security. Those are the
    problems from my perspective. I'd like to now call on Senator Feinstein
    and Senator Boxer to talk.
        Thank you.

    Note: The President spoke at 10:20 a.m. at the space shuttle main engine
    final assembly area, Rockwell International/Rocketdyne Division. In his
    remarks, he referred to Mayor Dick Riordan of Los Angeles.