    [Public Papers of the Presidents of the United States: WILLIAM J. CLINTON (1999, Book II)]
    [July 7, 1999]
    [Pages 1154-1159]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks in a Roundtable Discussion on Small Business Development in
    Phoenix, Arizona
    July 7, 1999

        The President. Thank you very much. First, I want to thank Ed
    Pastor for making me feel so welcome and for being
    my friend and doing a wonderful job for you back in Washington, DC. He
    has the respect of every Member of Congress, and when he talks, we all
    listen.
        I want to say to all of you that I am honored to be back in Phoenix.
    Arizona has been very good to Hillary and to me and to the Vice
    President and Mrs. Gore, not only in voting for us in the last election
    but in proving that the philosophy of government and the policies we've
    followed can bring us together and make us a stronger country. So I want
    to begin by saying a simple ``thank you.''
        I'd like to thank the people who have come here with me today.
    Congressman Pastor mentioned Congressman Kanjorski from Pennsylvania, Congressman Clyburn from South Carolina, our Small Business Administrator,
    Aida Alvarez, and my Deputy Chief of Staff,
    Maria Echaveste; they are all here and
    others. I thank them.
        I'd like to thank the Reverend Jesse Jackson for coming on this tour with me, along with the
    business leaders; thank you. I know there are some public officials
    here. I think Janet Napolitano, your
    attorney general, is here; she met me at the airport. Jim Hill, the State treasurer of Oregon, is here. Thank you both.
        I'd like to thank the business leaders here with me: Leo
    Guzman, Marianne Spraggins, Gene Humphrey of Enron,
    Steven Burd of Safeway, John Corella of Corella Electric, Myrna Sonora of KTVW 33--some of you probably watch that--
    [laughter]--Mike Welborn of Bank

    [[Page 1155]]

    One, Andy Gordon of Arizona Multibank, Frank
    Ballasteros of MICRO, Leonard
    Moreno of Moreno Welding, Yolanda
    Kaizer of Builder's Book Depot; and
    obviously, I'd like to thank our host, Josie Ippolito, and all the other wonderful women in this remarkable
    family that own this group.
        Ed already said why we're here, and I'm here mostly to listen to the
    people here. But I want to make a very important point. I want you to
    know why we are here. We are here because we have the longest peacetime
    expansion in history, almost 18 million new jobs since I took office,
    the lowest unemployment rates among Hispanic-Americans and African-
    Americans ever recorded. Our country has been really blessed by these
    good economic times. It has contributed to giving us the lowest crime
    rate in 25 years, the lowest welfare rolls in 30 years, declining rates
    of teen pregnancy and drug abuse. We have 90 percent of our little
    children immunized against serious childhood diseases for the first time
    in the history of our country.
        But we know, as blessed as America has been, not every American has
    been blessed by this recovery. All you've got to do is drive down the
    streets here in south Phoenix to see that. So what we are doing is going
    around the country to say we can do better, that morally, now that we're
    doing so well, we have an obligation to give every American who is
    willing to work for it a chance to walk across that bridge into the 21st
    century with us so we go forward together, leaving no one behind. And
    not only that. It's good economics.
        A long way from south Phoenix, I have to worry every day about how I
    can keep creating jobs so you have more people to buy these wonderful
    products you are producing. I mean 840,000 a day. That's a lot of
    people, you know. Of course, not everybody eats as many at one sitting
    as I do. [Laughter] So, I mean, it's a lot of people. So I think about
    that.
        How can I do that? Well, we can sell more of our products overseas,
    which we're trying to do. We can take more people off welfare or
    disabled people and help them get in the work force, which we're trying
    to do. But the easiest way to keep America's economy going strong is to
    get more investment, create more jobs, and create more consumers in the
    neighborhoods, in the cities, and in the rural areas, and on the Indian
    reservations which have not yet felt this recovery. That's what this
    whole thing is about. How we can do this together?
        And I'm here to make three points: Number one--and I want to give
    some specifics in a minute--we've been working at this for 6\1/2\ years
    with our empowerment zones and our enterprise communities and our
    community development banks--you have one here--with the vigorous
    support of the Community Reinvestment Act.
        Number two, therefore, American business needs to know that there
    are good opportunities right now in inner cities and in rural America.
    This is not about charity; this is about how to make money by helping
    people who are willing to work for themselves get the chance to do it,
    to start those businesses or become good employees. That's what this is
    about.
        Finally, it's about supporting our new markets initiative, which
    seeks to make it easier for people to get equity capital to start or
    expand their businesses in any poor neighborhood or underdeveloped area
    anywhere in the United States of America. So that's why we're here. And
    that's the message you're sending out here in south Phoenix to every
    community in America where there are good people who need investment and
    jobs.
        Now, let me say that there are a lot of good things that are
    happening, and I want to thank some of the people who are here. I want
    to thank Safeway for the new store at 16th Street and Southern Avenue,
    and the new shopping center that it will anchor. That will create a lot
    of jobs, and interestingly enough, we're trying to highlight this
    everywhere. Because in almost every city in America, even with high
    unemployment, there are obviously a lot more people working than not
    working, and there is more purchasing power in our cities than there are
    stores to take it up. So we thank Safeway.
        I also want to thank Univision, because they are about to build a
    new multimillion-dollar broadcast facility for its local station, KTVW
    33, and they're going to build it right here in south Phoenix, and that
    will help your economy to grow. Thank you. Thank you, Myrna
    Sonora.
        I want to thank the community development institutions like Arizona
    Multibank, the microenterprise organizations like MICRO. That's a fancy
    way to saying they loan small amounts of money to people to start small
    businesses who couldn't get the money anywhere else, and guess what?
    They usually make good loans, and

    [[Page 1156]]

    they make money doing it, by giving people a chance who couldn't get a
    chance anywhere else.
        I want to thank Arizona Multibank for launching Magnet Capital,
    which is a new venture capital fund, backed by the Small Business
    Administration, that will give lower income entrepreneurs the equity
    they need to grow and expand. So thank you very much, Mr.
    Gordon.
        Now, there's lots of other things that all you have to say. Just
    remember, we came here for three reasons. One is to show the business
    community of this country that we have the kind of partnership between
    government and the private sector that makes it more attractive to
    invest in places with higher unemployment and with too few businesses.
    Two, to make the point that there is a huge amount of opportunity out
    here right now, and the more American business knows about it, and the
    more they invest in it, the better they'll do. And three, we have a
    proposal before the Congress to go nationwide to give big tax breaks to
    people to help provide equity capital.
        And I want you to know what I'm doing. I'm basically asking the
    Congress to give investors like those on this stage with me today the
    same incentives to invest in south Phoenix that we give them right now
    to invest in the developing countries of Latin America and Africa and
    the Caribbean. I want to do that, but you should have the same
    incentives here.
        So thank you all for coming, and Congressman, the floor is yours.
    You want to introduce the folks who are going to talk? I think maybe
    you're going next, our hostess.

    [At this point, the discussion began.]

        The President. Thank you very much. Let's give him a hand. [Applause] I thought that was good.
        If I could just make one point. One of the things that I learned
    traveling around the country in 1990 and 1991, before I decided to run
    for President, was that the crime rate was going down in areas where
    more police were on the street and in the communities and working with
    their neighbors, not just because they were catching people quicker, but
    because it was actually preventing crime from occurring in the first
    place.
        In the last 6\1/2\ years, we have funded 100,000 more police
    officers for our streets in small towns and rural areas as well as big
    cities, and in the budget I now have before the Congress, we're trying
    to get another 50,000 targeted at the highest crime areas in the
    country.
        So that will help. That's something that we didn't come here to talk
    about today, but if I can persuade the Congress to do that, that will
    obviously help you and others like you to locate more stores and to have
    more substations, and it will also bring the police in closer contact
    with the community and increase confidence and good feeling. So I thank
    you very much for that.

    [The discussion continued.]

        The President. I want to thank you for the work that you have done.
    You know we were just together over at Chicanos Por La Causa and the
    work you did to help them set up their micro lending program. The Vice
    President, who has supervised all of our
    community economic development efforts for the last 6 years, announced
    this new SBA initiative with Aida not very long
    ago.
        But I just want to emphasize to you, we were in the Mississippi
    Delta yesterday--it was also 100 degrees there--and we were in a little
    factory that makes picture frames, that had been going into bankruptcy.
    And we met a young man that thought he could turn it around, and he had
    opened the place back up in a place with terribly high unemployment.
        But one of the people I met there was a woman who had worked for a
    small business that was doing okay, but the person running it in this
    little town, for family reasons, couldn't go on, and she was the only
    person qualified to take over this business. Otherwise it was just going
    to disappear. But she made very low wages for a person who owns a
    business, and she had no money in the bank, and because she was able to
    get some equity capital from someone as farsighted as you, her little
    business, in a year, went from 5 employees to 11 employees--instead of 5
    people losing their jobs--and a woman that never made more than a few
    dollars an hour in her life is now a successful small business owner.
    That is that sort of thing we ought to be doing more of in America. And
    if we did more of it in places like south Phoenix, the unemployment here
    would not be higher than the national average, and the incomes would not
    be lower. So I thank you very much for what you're doing.

    [[Page 1157]]

    [The discussion continued.]

        The President. I'd just like to make two points if I might, by way
    of completely agreeing with what you just said. First of all, for people
    who think we don't need these SBA programs anymore because the economy's
    doing so well, I would remind you that the SBA is a permanent example of
    the kind of approach that I believe we should be taking in the
    Government. The SBA basically gives people the tools to make the most of
    their own lives. They make the market more likely to work in places
    where it otherwise wouldn't work. And for people who don't think it
    matters--you know how much all these telecommunications companies are
    worth now and what's happened to the stock market in the last 6 years.
    It's more than tripled, 30 percent of our growth coming out of high
    tech. Intel and America Online--huge companies worth billions upon
    billions of dollars--started with SBA loans. And so I think, you know,
    that's enough to rest our case.
        The second thing I would tell you is, there are--not all the
    business people that have been on this trip are right here in Phoenix,
    and not all the business people who wanted to go on this trip can go.
    But there is a phenomenal amount of interest in this, and I must--I want
    to give credit to Reverend Jesse Jackson. His
    Wall Street Project has been working on this for years.
        I mean, there is a much higher level of awareness among American
    business leaders that there is money to be made and a better society to
    be made at the same time in these neighborhoods. So I don't think you
    have to worry. I think when we can finish this tomorrow afternoon in
    East L.A., you will see a much higher level of commitment and interest
    in corporate America than we had before. Thank you, Mr.
    Corella. You're great.

    [The discussion continued.]

        The President. First of all, I want to thank Gene, because really, Texas is a classic example; it's almost
    exactly like Arizona and Phoenix. The unemployment rate in Phoenix as a
    whole is less than 3 percent. The unemployment rate in this section of
    Phoenix is twice the national average, maybe a little more. You have the
    same thing in Houston.
        I just want to illustrate--use Enron, which is a fabulous and very
    large energy company, to illustrate a point that he made, that I think we should emphasize because it goes
    back to something John made. One of the
    reasons we're taking this trip here is that one of the--is that even in
    business, even with a market economy, where people are always supposed
    to act in their own self-interest, people cannot do what they don't
    know, and people cannot have a relationship with people with whom they
    are not acquainted.
        And one of the things that Enron did, saying that he worked through a local community investment group, is to
    have--to literally build networks of relationships between big
    businesses and people that they would otherwise never, ever, ever come
    in contact with.
        And so, I say again, I think--you heard what Steve said about
    Safeway figuring out there was a market here. Once you begin to
    establish these networks of relationships, and once they become a part
    of the fabric of American life, then we can build an economic, a normal
    economic infrastructure in these distressed areas so that the next time
    a recession comes along, we won't be hurt so badly here. And then when
    the pickup comes, everybody will benefit instead of just a few.
        So I can't thank you enough. But I do want to emphasize what--Gene
    Humphrey was a little too modest here. We do
    have a substantial number of business leaders heading companies more or
    less in the size range of Enron, who are helping. But we are nowhere
    near where we need to be. We need hundreds, we need thousands of people
    with the kind of commitment that he's manifested, because without these
    relationships, the decisions cannot be made to put the money there.

    [The discussion continued.]

        The President. I'd like to ask a question. I'd like to ask
    Frank or Andrew
    a question. What is the average size of a microenterprise loan that you
    give?
        Andrew Gordon. For the last 10 years, Mr.
    President, it has been under $2,500. And those $2,500 make a difference.
    Our default rate, after lending over $7 million in Arizona, sir, the
    default rate is less than 4 percent.
        The President. Let me say that this is--give him a hand--[applause]--this is a fairly typical
    experience worldwide.
        I got interested in this 15 years ago, when I met a man who was trained in the United

    [[Page 1158]]

    States and went home to Bangladesh and founded--one of the poorest
    countries in the world--founded a community bank making microenterprise
    loans to poor village women, average about--then--probably $20. Today,
    they average about $50. But that's a lot of money, in American terms,
    given the size of their economy, and they had a 96 percent repayment
    rate. Now he's made millions of these loans,
    in a country with 100 million people. So I'm--one of the things I'm
    quite proud of is that now, under our administration, we now fund 2
    million microenterprise loans every year in poor, poor villages in
    Africa, in Asia, in Latin America.
        But again I say, if it's good enough for us to do for them--which we
    need to do, so those countries can keep their democracies alive and be
    good citizens and not cause wars and have a decent life--it's certainly
    good for America. And my only regret is that we don't give ten times as
    many of them every year. And if we have institutions like Arizona
    Multibank and MICRO everywhere--we have the networks out there, again,
    to make the contacts--I think there's really very little limit to what
    we can do in getting more money for microloans, because they plainly
    work.
        Is the average person, the average size of the business a single
    employee, self-employed? Or is it two?
        Mr. Gordon. It's a sole proprietor, sir.
        The President. Sole proprietor?
        Mr. Gordon. Sole proprietor. Although they
    do get help from their family. It's just--it's a family business. It's
    not only that self-employed--but that's what makes it, it guarantees its
    success, because of the support.
        The President. That's why they repay the money back, isn't it?
        Mr. Gordon. Yes.
        The President. Thank you.

    [The discussion continued.]

        The President. I'd like to say something about both these
    presentations. First of all, the way the new markets initiative works in
    terms of who gets the tax credits and who qualifies, the way this works
    is, people that invest in a business enterprise can get up to a 25
    percent tax credit for the money they put up, then they qualify, for
    every dollar they put up, for $2 in bank loans that are government-
    guaranteed, and the government guarantee dramatically lowers the
    interest rates on the bank loan, so that between the tax credit and the
    lower interest rates, you reduce the relative risk of investing in these
    areas to make it more attractive.
        And existing businesses qualify every bit as much as new businesses
    do. It is the area, where do the people live? What is their per capita
    income? What is the unemployment rate? How much do we need the new
    investment here? So we could never get into--it would be a bureaucratic
    nightmare to try to make distinctions between existing and new
    businesses. Everybody's eligible. It's people we're trying to help and
    places we're trying to reach.
        The only other thing I would like to say is to thank you for what Univision is doing here and for what Univision
    doubtless will do to publicize this meeting to the Hispanic world in
    America. As you know, I'm very close to Henry Cisneros, and I think that the American people should know that,
    next to the Vice President, the two people
    most responsible for everything we've done in this community development
    area over the last 6 years are the present HUD Secretary, Andrew
    Cuomo, and his predecessor, Henry Cisneros.
    So this is, indeed, something to celebrate.
        So the only thing I want to say is when you start building that
    building down here, hire some of these folks and make sure it's a good
    deal. Thank you very much. Thank you all.

    Note: The President spoke at 5:55 p.m. in the La Canasta Mexican Food
    Products factory. In his remarks, he referred to civil rights leader
    Jesse Jackson; Arizona State Attorney General Janet Napolitano; Oregon
    State Treasurer Jim Hill, president, National Association of State
    Treasurers; Leo Guzman, president, Guzman & Co.; Marianne Spraggins,
    senior managing director, Smith Whiley & Co.; Gene Humphrey, president
    and chief executive officer, Enron Economic Development Corp.; Steven
    Burd, chairman, president, and chief executive officer, Safeway Inc.;
    John C. Corella, president, Corella Companies; Myrna Sonora, vice
    president and general manager, Univision 33/KTVW; Michael Welborn,
    chairman and chief executive officer, Bank One Arizona; Andrew Gordon,
    president, Arizona Multibank Community Development Corp.; Frank
    Ballasteros, chief administrative officer, MICRO; Leonard Moreno,
    president, Moreno Welding, Inc.; Yolanda Kaizer, president, Builder's
    Book Depot; Josie Ippolito, president, La Canasta Mexican Food Products,
    Inc.; Muhammad

    [[Page 1159]]

    Yunus, founder and chief executive officer, Grameen Bank, Bangladesh;
    and former Secretary of Housing and Urban Development Henry G. Cisneros,
    president and chief operating officer, Univision Communications, Inc.