[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
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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
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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.
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[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
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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
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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.