[Weekly Compilation of Presidential Documents Volume 29, Number 8 (Monday, March 1, 1993)]
[Pages 319-328]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on the Global Economy at American University

 February 26, 1993

    Thank you very much, President Duffey, distinguished members of the 
board of trustees, and faculty and patrons of American University, and 
Members of Congress, members of the diplomatic corps, and my fellow 
citizens, and especially to the students here today. I am very honored 
to be here today at this wonderful school on the occasion of your 
centennial, at the dawn of a new era for our Nation and for our world, 
and deeply honored to receive this honorary degree, al- 

[[Page 320]]

though I almost choked on it here. [Laughter]
    My mind is full of many memories today, looking at all of you in 
your youthful enthusiasm and your hope for the future. I'd like to say a 
special word of thanks to all of you for the warm reception you gave to 
the person to whom I owe more than anybody else in this audience, 
Senator Fulbright.
    When I was barely 20 years old, Senator Fulbright's administrative 
assistant called me one morning in Arkansas and asked me if I wanted a 
job working for the Senate Foreign Relations Committee as an assistant 
clerk. Since I couldn't really afford the cost of my education to 
Georgetown, I told him I was interested. And he said, ``Well, you can 
have a part-time job at $3,500 a year or a full-time job at $5,000 a 
year.'' I said, ``How about two part-time jobs.'' [Laughter] He replied 
that I was just the sort of mathematician they were looking for and 
would I please come. [Laughter] The next week, literally a day and a 
half later, I was there working for a person I had admired all my life, 
and the rest of it is history. But Senator Fulbright, now 88 years 
young, taught me a lot about the importance of our connections to the 
rest of the world, and that even in our small landlocked State of 
Arkansas, we were bound up inextricably with the future, with the 
passions and the promise of people all across this globe. And it is 
about that which I come to speak today.
    I also want to say a special word of thanks to your president, Joe 
Duffey, and to his wonderful wife, Anne Wexler, who have been my friends 
for many years. When I was a young man at Yale Law School, I went to 
work for Joe Duffey in his campaign for the Senate. His wife was then 
his campaign manager. I enjoyed working for a woman. I learned a lot 
about equal opportunity, which I have tried to live out in my own life. 
Well, Joe Duffey didn't win that race for the Senate. And 4 years later 
I went home to Arkansas, and I ran for Congress, and I lost my race, 
too. And I thought how ironic it is that our failed efforts to get to 
Congress made us both President. [Laughter]
    Finally, let me say that in my senior year at Georgetown, in the 
winter, on a day very much like today, I had a date with a girl from 
American University. I didn't think about this until I got in the car to 
come up here today, but it was snowing like crazy that night, just like 
it was today. And I creeped along in my car from Georgetown to American 
with this fellow who was in my class. And we picked up these two fine 
women from American University. And we went to the movie, and then we 
went to dinner. We went to a movie, we took them home, and then we were 
driving home. As we were driving home it was very slick, just like it is 
today. And I put my brakes on when I was almost home, and my car went 
into a huge spin. And it missed this massive pole on which the stoplight 
was by about 2 inches. And I couldn't help thinking after my speech last 
week how many more people would have been happy in America if I'd been a 
little bit closer to that pole 25 years ago. [Laughter]
    Thirty years ago in the last year of his short but brilliant life, 
John Kennedy came to this university to address the paramount challenge 
of that time: the imperative of pursuing peace in the face of nuclear 
confrontation. Many Americans still believe it was the finest speech he 
ever delivered. Today I come to this same place to deliver an address 
about what I consider to be the great challenge of this day: the 
imperative of American leadership in the face of global change.
    Over the past year I have tried to speak at some length about what 
we must do to update our definition of national security and to promote 
it and to protect it and to foster democracy and human rights around the 
world. Today, I want to allude to those matters, but to focus on the 
economic leadership we must exert at home and abroad as a new global 
economy unfolds before our eyes.
    Twice before in this century, history has asked the United States 
and other great powers to provide leadership for a world ravaged by war. 
After World War I, that call went unheeded. Britain was too weakened to 
lead the world to reconstruction. The United States was too unwilling. 
The great powers together turned inward as violent, totalitarian power 
emerged. We raised trade barriers. We sought to humiliate rather than 
rehabilitate the vanquished. And the result was instability, inflation, 
then depression and ultimately a Second World War.

[[Page 321]]

    After the Second War, we refused to let history repeat itself. Led 
by a great American President, Harry Truman, a man of very common roots 
but uncommon vision, we drew together with other Western powers to 
reshape a new era. We established NATO to oppose the aggression of 
communism. We rebuilt the American economy with investments like the GI 
bill and a national highway system. We carried out the Marshall plan to 
rebuild war-ravaged nations abroad. General MacArthur's vision prevailed 
in Japan, which built a massive economy and a remarkable democracy. We 
built new institutions to foster peace and prosperity: the United 
Nations, the International Monetary Fund, the World Bank, the General 
Agreement on Tariffs and Trade, and more.
    These actions helped to usher in four decades of robust economic 
growth and collective security. Yet the cold war was a draining time. We 
devoted trillions of dollars to it, much more than many of our more 
visionary leaders thought we should have. We posted our sons and 
daughters around the world. We lost tens of thousands of them in the 
defense of freedom and in the pursuit of a containment of communism.
    We, my generation, grew up going to school assemblies learning about 
what we would do in the event a nuclear war broke out. We were taught to 
practice ducking under our desks and praying that somehow they might 
shield us from nuclear radiation. We all learned about whether we needed 
a bomb shelter in our neighborhood to which we could run in the event 
that two great superpowers rained nuclear weapons on one another. And 
that fate, frankly, seemed still frighteningly possible just months 
before President Kennedy came here to speak in 1963. Now, thanks to his 
leadership and that of every American President since the Second World 
War from Harry Truman to George Bush, the cold war is over.
    The Soviet Union itself has disintegrated. The nuclear shadow is 
receding in the face of the START I and START II agreements and others 
that we have made and others yet to come. Democracy is on the march 
everywhere in the world. It is a new day and a great moment for America.
    Yet, across America I hear people raising central questions about 
our place and our prospects in this new world we have done so much to 
make. They ask: Will we and our children really have good jobs, first-
class opportunities, world-class education, quality affordable health 
care, safe streets? After having fully defended freedom's ramparts, they 
want to know if we will share in freedom's bounty.
    One of the young public school students President Duffey just 
introduced was part of the children's program that I did last Saturday 
with children from around America. If you saw their stories, so many of 
them raised troubling questions about our capacity to guarantee the 
fruits of the American dream to all of our own people.
    I believe we can do that, and I believe we must. For in a new global 
economy, still recovering from the after-effects of the cold war, a 
prosperous America is not only good for Americans, as the Prime Minister 
of Great Britain reminded me just a couple of days ago, it is absolutely 
essential for the prosperity of the rest of the world.
    Washington can no longer remain caught in the death grip of 
gridlock, governed by an outmoded ideology that says change is to be 
resisted, the status quo is to be preserved like King Canute ordering 
the tide to recede. We cannot do that. And so, my fellow Americans, I 
submit to you that we stand at the third great moment of decision in the 
20th century. Will we repeat the mistakes of the 1920's or the 1930's by 
turning inward, or will we repeat the successes of the 1940's and the 
1950's by reaching outward and improving ourselves as well? I say that 
if we set a new direction at home, we can set a new direction for the 
world as well.
    The change confronting us in the 1990's is in some ways more 
difficult than previous times because it is less distinct. It is more 
complex and in some ways the path is less clear to most of our people 
still today, even after 20 years of declining relative productivity and 
a decade or more of stagnant wages and greater effort.
    The world clearly remains a dangerous place. Ethnic hatreds, 
religious strife, the proliferation of weapons of mass destruction, the 
violation of human rights flagrantly in al- 

[[Page 322]]

together too many places around the world still call on us to have a 
sense of national security in which our national defense is an integral 
part. And the world still calls on us to promote democracy, for even 
though democracy is on the march in many places in the world, you and I 
know that it has been thwarted in many places, too. And yet we still 
face, overarching everything else, this amorphous but profound challenge 
in the way humankind conducts its commerce.
    We cannot let these changes in the global economy carry us passively 
toward a future of insecurity and instability. For change is the law of 
life. Whether you like it or not, the world will change much more 
rapidly in your lifetime than it has in mine. It is absolutely 
astonishing the speed with which the sheer volume of knowledge in the 
world is doubling every few years. And a critical issue before us and 
especially before the young people here in this audience is whether you 
will grow up in a world where change is your friend or your enemy.
    We must challenge the changes now engulfing our world toward 
America's enduring objectives of peace and prosperity, of democracy and 
human dignity. And we must work to do it at home and abroad.
    It is important to understand the monumental scope of these changes. 
When I was growing up, business was mostly a local affair. Most farms 
and firms were owned locally; they borrowed locally; they hired locally; 
they shipped most of their products to neighboring communities or States 
within the United States. It was the same for the country as a whole. By 
and large, we had a domestic economy.
    But now we are woven inextricably into the fabric of a global 
economy. Imports and exports, which accounted for about $1 in $10 when I 
was growing up, now represent $1 in every $5. Nearly three-quarters of 
the things that we make in America are subject to competition at home or 
abroad from foreign producers and foreign providers of services. Whether 
we see it or not, our daily lives are touched everywhere by the flows of 
commerce that cross national borders as inexorably as the weather.
    Capital clearly has become global. Some $3 trillion of capital race 
around the world every day. And when a firm wants to build a new 
factory, it can turn to financial markets now open 24 hours a day, from 
London to Tokyo, from New York to Singapore. Products have clearly 
become more global. Now if you buy an American car, it may be an 
American car built with some parts from Taiwan, designed by Germans, 
sold with British-made advertisements, or a combination of others in a 
different mix.
    Services have become global. The accounting firm that keeps the 
books for a small business in Wichita may also be helping new 
entrepreneurs in Warsaw. And the same fast food restaurant that your 
family goes to or at least that I go to--[laughter]--also may well be 
serving families from Manila to Moscow and managing its business 
globally with information technologies, and satellites.
    Most important of all, information has become global and has become 
king of the global economy. In earlier history, wealth was measured in 
land, in gold, in oil, in machines. Today, the principal measure of our 
wealth is information: its quality, its quantity, and the speed with 
which we acquire it and adapt to it. We need more than anything else to 
measure our wealth and our potential by what we know and by what we can 
learn and what we can do with it. The value and volume of information 
has soared; the half-life of new ideas has trumped.
    Just a few days ago, I was out in Silicon Valley at a remarkable 
company called Silicon Graphics that has expanded exponentially, partly 
by developing computer software with a life of 12 months to 18 months, 
knowing that it will be obsolete after that and always being ready with 
a new product to replace it.
    We are in a constant race toward innovation that will not end in the 
lifetime of anyone in this room. What all this means is that the best 
investment we can make today is in the one resource firmly rooted in our 
own borders. That is, in the education, the skills, the reasoning 
capacity, and the creativity of our own people.
    For all the adventure and opportunity in this global economy, an 
American cannot approach it without mixed feelings. We still sometimes 
wish wistfully that everything we really want, particularly those things 
that

[[Page 323]]

produce good wages, could be made in America. We recall simpler times 
when one product line would be made to endure and last for years. We're 
angry when we see jobs and factories moving overseas or across the 
borders or depressing wages here at home when we think there is nothing 
we can do about it. We worry about our own prosperity being so dependent 
on events and forces beyond our shores. Could it be that the world's 
most powerful nation has also given up a significant measure of its 
sovereignty in the quest to lift the fortunes of people throughout the 
world?
    It is ironic and even painful that the global village we have worked 
so hard to create has done so much to be the source of higher 
unemployment and lower wages for some of our people. But that is no 
wonder. For years our leaders have failed to take the steps that would 
harness the global economy to the benefit of all of our people, steps 
such as investing in our people and their skills, enforcing our trade 
laws, helping communities hurt by change; in short, putting the American 
people first without withdrawing from the world and people beyond our 
borders.
    The truth of our age is this and must be this: Open and competitive 
commerce will enrich us as a nation. It spurs us to innovate. It forces 
us to compete. It connects us with new customers. It promotes global 
growth without which no rich country can hope to grow wealthier. It 
enables our producers who are themselves consumers of services and raw 
materials to prosper. And so I say to you in the face of all the 
pressures to do the reverse, we must compete, not retreat.
    Our exports are especially important to us. As bad as the recent 
recession was, it would have gone on for twice as long had it not been 
for what we were able to sell to other nations. Every $1 billion of our 
exports creates nearly 20,000 jobs here, and we now have over 7 million 
export-related jobs in America. They tend to involve better work and 
better pay. Most are in manufacturing, and on average, they pay almost 
$3,500 more per year than the average American job. They are exactly the 
kind of jobs we need for a new generation of Americans.
    American jobs and prosperity are reason enough for us to be working 
at mastering the essentials of the global economy. But far more is at 
stake, for this new fabric of commerce will also shape global prosperity 
or the lack of it, and with it, the prospects of people around the world 
for democracy, freedom, and peace.
    We must remember that even with all our problems today, the United 
States is still the world's strongest engine of growth and progress. We 
remain the world's largest producer and its largest and most open 
market. Other nations, such as Germany and Japan, are moving rapidly. 
They have done better than we have in certain areas. We should respect 
them for it, and where appropriate, we should learn from that. But we 
must also say to them, ``You, too, must act as engines of global 
prosperity.'' Nonetheless, the fact is that for now and for the 
foreseeable future, the world looks to us to be the engine of global 
growth and to be the leaders.
    Our leadership is especially important for the world's new and 
emerging democracies. To grow and deepen their legitimacy, to foster a 
middle class and a civic culture, they need the ability to tap into a 
growing global economy. And our security and our prosperity will be 
greatly affected in the years ahead by how many of these nations can 
become and stay democracies.
    All you have to do to know that is to look at the problems in 
Somalia, to look at Bosnia, to look at the other trouble spots in the 
world. If we could make a garden of democracy and prosperity and free 
enterprise in every part of this globe, the world would be a safer and a 
better and a more prosperous place for the United States and for all of 
you to raise your children in.
    Let us not minimize the difficulty of this task. Democracy's 
prospects are dimmed, especially in the developing world, by trade 
barriers and slow global growth. Even though 60 developing nations have 
reduced their trade barriers in recent years, when you add up the sum of 
their collective actions, 20 of the 24 developed nations have actually 
increased their trade barriers in recent years. This is a powerful 
testament to the painful difficulty of trying to maintain a high-wage 
economy in a global economy where production is mobile and can quickly 
fly to a place with low wages.

[[Page 324]]

    We have got to focus on how to help our people adapt to these 
changes, how to maintain a high-wage economy in the United States 
without ourselves adding to the protectionist direction that so many of 
the developed nations have taken in the last few years. These barriers 
in the end will cost the developing world more in lost exports and 
incomes than all the foreign assistance that developed nations provide, 
but after that they will begin to undermine our economic prosperity as 
well.
    It's more than a matter of incomes. I remind you: It's a matter of 
culture and stability. Trade, of course, cannot ensure the survival of 
new democracies, and we have seen the enduring power of ethnic hatred, 
the incredible power of ethnic divisions, even among people literate and 
allegedly understanding, to splinter democracy and to savage the 
nation's state.
    But as philosophers from Thucydides to Adam Smith have noted, the 
habits of commerce run counter to the habits of war. Just as neighbors 
who raise each other's barns are less likely to become arsonists, people 
who raise each other's living standards through commerce are less likely 
to become combatants. So if we believe in the bonds of democracy, we 
must resolve to strengthen the bonds of commerce.
    Our own Nation has the greatest potential to benefit from the 
emerging economy, but to do so we have to confront the obstacles that 
stand in our way. Many of our trading partners cling to unfair 
practices. Protectionist voices here at home and abroad call for new 
barriers. And different policies have left too many of our workers in 
communities exposed to the harsh winds of trade without letting them 
share in the sheltering prosperity trade has also brought and without 
helping them in any way to build new ways to work so they can be 
rewarded for their efforts in global commerce.
    Cooperation among the major powers toward world growth is not 
working well at all today. And most of all, we simply haven't done 
enough to prepare our own people and to produce our own resources so 
that we can face with success the rigors of the new world. We can change 
all that if we have the will to do it. Leonardo da Vinci said that God 
sells all things at the price of labor. Our labor must be to make this 
change.
    I believe there are five steps we can and must take to set a new 
direction at home and to help create a new direction for the world. 
First, we simply have to get our own economic house in order. I have 
outlined a new national economic strategy that will give America the new 
direction we require to meet our challenges. It seeks to do what no 
generation of Americans has ever been called upon to do before: to 
increase investment in our productive future and to reduce our deficit 
at the same time.
    We must do both. A plan that only plays down the deficit without 
investing in those things that make us more productive will not make us 
stronger. A plan that only invests more money without bringing down the 
deficit will weaken the fabric of our overall economy such that even 
educated and productive people cannot succeed in it.
    It is more difficult to do both. The challengers are more abrasive. 
You have to cut more other spending and raise more other taxes. But it 
is essential that we do both: invest so that we can compete; bring down 
the debt so that we can compete. The future of the American dream and 
the fate of our economy and much of the world's economy hangs in the 
balance on what happens in this city in the next few months.
    Already the voices of inertia and self-interest have said, well, we 
shouldn't do this or this, or that detail is wrong with that plan. But 
almost no one has taken up my original challenge that anyone who has any 
specific ideas about how we can cut more should simply come forward with 
them. I am genuinely open to new ideas to cut inessential spending and 
to make the kinds of dramatic changes in the way Government works that 
all of us know we have to make. I don't care whether they come from 
Republicans or Democrats, or I don't even care whether they come from at 
home or abroad. I don't care who gets the credit, but I do care that we 
not vary from our determination to pass a plan that increases investment 
and reduces the deficit.
    I think every one of you who is a student at this university has a 
far bigger stake in the future than I do. I have lived in all 
probability more than half my life with benefits

[[Page 325]]

far beyond anything I ever dreamed or deserved because my country 
worked. And I want my country to work for you.
    The plan I have offered is assuredly not perfect, but it's an honest 
and bold attempt to honestly confront the challenges before us, to 
secure the foundations of our economic growth, to expand the resources, 
the confidence and the moral suasion we need to continue our global 
leadership into the next century. And I plead with all of you to do 
everything you can to replace the blame game that has dominated this 
city too long with the bigger game of competing and winning in the 
global economy.
    Second, it is time for us to make trade a priority element of 
American security. For too long, debates over trade have been dominated 
by voices from the extremes. One says governments should build walls to 
protect firms from competition. Another says government should do 
nothing in the face of foreign competition, no matter what the dimension 
and shape of that competition is, no matter what the consequences are in 
terms of job losses, trade dislocations, or crushed incomes. Neither 
view takes on the hard work of creating a more open trading system that 
enables us and our trading partners to prosper. Neither steps up to the 
task of empowering our workers to compete or of ensuring that there is 
some compact of shared responsibility regarding trade's impact on our 
people or of guaranteeing a continuous flow of investment into emerging 
areas of new technology which will create the high-wage jobs of the 21st 
century.
    Our administration is now developing a comprehensive trade policy 
that will step up to those challenges. And I want to describe the 
principles upon which it will rest. It will not be a policy of blame but 
one of responsibility. It will say to our trading partners that we value 
their business, but none of us should expect something for nothing.
    We will continue to welcome foreign products and services into our 
markets but insist that our products and services be able to enter 
theirs on equal terms. We will welcome foreign investment in our 
businesses knowing that with it come new ideas as well as capital, new 
technologies, new management techniques, and new opportunities for us to 
learn from one another and grow. But as we welcome that investment, we 
insist that our investors should be equally welcome in other countries.
    We welcome the subsidiaries of foreign companies on our soil. We 
appreciate the jobs they create and the products and services they 
bring. But we do insist simply that they pay the same taxes on the same 
income that our companies do for doing the same business.
    Our trade policy will be part of an integrated economic program, not 
just something we use to compensate for the lack of a domestic agenda. 
We must enforce our trade laws and our agreements with all the tools and 
energy at our disposal. But there is much about our competitive posture 
that simply cannot be straightened out by trade retaliation. Better 
educated and trained workers, a lower deficit, stable, low interest 
rates, a reformed health care system, world-class technologies, revived 
cities: These must be the steel of our competitive edge. And there must 
be a continuing quest by business and labor and, yes, by Government for 
higher and higher and higher levels of productivity.
    Too many of the chains that have hobbled us in world trade have been 
made in America. Our trade policy will also bypass the distracting 
debates over whether efforts should be multilateral, regional, 
bilateral, unilateral. The fact is that each of these efforts has its 
place. Certainly we need to seek to open other nations' markets and to 
establish clear and enforceable rules on which to expand trade.
    That is why I'm committed to a prompt and successful completion of 
the Uruguay round of the GATT talks. That round has dragged on entirely 
too long. But it still holds the potential, if other nations do their 
share and we do ours, to boost American wages and living standards 
significantly and to do the same for other nations around the world.
    We also know that regional and bilateral agreements provide 
opportunities to explore new kinds of trade concerns, such as how trade 
relates to policies affecting the environment and labor standards and 
the antitrust laws. And these agreements, once concluded, can act as a 
magnet including other countries

[[Page 326]]

to drop barriers and to open their trading systems.
    The North American Free Trade Agreement is a good example. It began 
as an agreement with Canada, which I strongly supported, which has now 
led to a pact with Mexico as well. That agreement holds the potential to 
create many, many jobs in America over the next decade if it is joined 
with others to ensure that the environment, that living standards, that 
working conditions, are honored, that we can literally know that we are 
going to raise the condition of people in America and in Mexico. We have 
a vested interest in a wealthier, stronger Mexico, but we need to do it 
on terms that are good for our people.
    We should work with organizations, such as the Asian-Pacific 
Economic Cooperation Forum, to liberalize our trade across the Pacific 
as well.
    And let me just say a moment about this: I am proud of the 
contribution America has made to prosperity in Asia and to the march of 
democracy. I have seen it in Japan after World War II. I have seen it, 
then, in Taiwan as the country became more progressive and less 
repressive at the same time. I have seen it in Korea as the country has 
become more progressive and more open. And we are now making a major 
contribution to the astonishing revitalization of the Chinese economy, 
now growing at 10 percent a year, with the United States buying a huge 
percentage of those imports. And I say, I want to continue that 
partnership, but I also think we have a right to expect progress in 
human rights and democracy and should support that progress.
    Third, it is time for us to do our best to exercise leadership among 
the major financial powers to improve our coordination on behalf of 
global economic growth. At a time when capital is mobile and highly 
fungible, we simply cannot afford to work at cross-purposes with the 
other major industrial democracies. Our major partners must work harder 
and more closely with us to reduce interest rates, stimulate investment, 
reduce structural barriers to trade, and to restore robust global 
growth. And we must look anew at institutions we use to chart our way in 
the global economy and ask whether they are serving our interest in this 
new world or whether we need to modify them or create others.
    Tomorrow, our Treasury Secretary, Secretary Bentsen, and the Federal 
Reserve Board Chairman, Alan Greenspan, will meet with their 
counterparts from these Group of Seven nations to begin that work. And I 
look forward to meeting with the G-7 heads of state and the 
representatives of the European Community at our Tokyo summit in July. I 
am especially hopeful that by then our economic package here at home 
will have been substantially enacted by the Congress. And if that is so, 
I will be able to say to my counterparts, you have been telling us for 
years that America must reduce its debt and put its own house in order. 
You have been saying to us for years we must increase investment in our 
own education and technology to improve productivity. We have done it. 
We have done it for ourselves. We have done it for you. Now you must 
work with us in Germany and Japan and other nations to promote global 
growth.
    We have to work with these nations. None of us are very good at it. 
America doesn't want to give up its prerogatives. The Japanese don't 
want to give up theirs. The Germans don't want to give up theirs. There 
are deep and ingrained traditions in all these nations. But the fact is 
that the world can't grow if America is in recession, but it will be 
difficult for us to grow coming out of this recovery unless we can spark 
a renewed round of growth in Europe and in Japan. We have got to try to 
work more closely together.
    Fourthly, we need to promote the steady expansion of growth in the 
developing world, not only because it's in our interest but because it 
will help them as well. These nations are a rapidly expanding market for 
our products. Some three million American jobs flow from exports to the 
developing world. Indeed, because of unilateral actions taken by Mexico 
over the last few years, the volume of our trade has increased 
dramatically, and our trade deficit has disappeared.
    Our ability to protect the global environment and our ability to 
combat the flow of illegal narcotics also rests in large measure on the 
relationships we develop commercially with the developing world.

[[Page 327]]

    There is a great deal we can do to open the flow of goods and 
services. Our aid policies must do more to address population pressures; 
to support environmentally responsible, sustainable development; to 
promote more accountable government; and to foster a fair distribution 
of the fruits of growth among an increasingly restive world population 
where over one billion people still exist on barely a dollar a day. 
These efforts will reap us dividends of trade, of friendship, and peace.

    The final step we must take, my fellow Americans, is toward the 
success of democracy in Russia and in the world's other new democracies. 
The perils facing Russia and other former Soviet republics are 
especially acute and especially important to our future. For the 
reductions in our defense spending that are an important part of our 
economic program over the long run here at home are only tenable as long 
as Russia and the other nuclear republics pose a diminishing threat to 
our security and to the security of our allies and the democracies 
throughout the world. Most worrisome is Russia's precarious economic 
condition. If the economic reforms begun by President Yeltsin are 
abandoned, if hyperinflation cannot be stemmed, the world will suffer.

    Consider the implications for Europe if millions of Russian citizens 
decide they have no alternative but to flee to the West where wages are 
50 times higher. Consider the implication for the global environment if 
all the Chernobyl-style nuclear plants are forced to start operating 
there without spare parts, when we should be in a phased stage of 
building them down, closing them up, cleaning them up. If we are willing 
to spend trillions of dollars to ensure communism's defeat in the cold 
war, surely we should be willing to invest a tiny fraction of that to 
support democracy's success where communism failed.

    To be sure, the former Soviet republics and especially Russia, must 
be willing to assume most of the hard work and high cost of the 
reconstruction process. But then again, remember that the Marshall plan 
itself financed only a small fraction of postwar investments in Europe. 
It was a magnet, a beginning, a confidence-building measure, a way of 
starting a process that turned out to produce an economic miracle.

    Like Europe then, these republics now have a wealth of resources and 
talent and potential. And with carefully targeted assistance, 
conditioned on progress toward reform and arms control and 
nonproliferation, we can improve our own security and our future 
prosperity at the same time we extend democracy's reach.

    These five steps constitute an agenda for American action in a 
global economy. As such, they constitute an agenda for our own 
prosperity as well. Some may wish we could pursue our own domestic 
effort strictly through domestic policies, as we have understood them in 
the past. But in this global economy, there is no such thing as a purely 
domestic policy. This thing we call the global economy is unruly. It's a 
bucking bronco that often lands with its feet on different sides of old 
lines and sometimes with its whole body on us. But if we are to ride the 
bronco into the next century, we must harness the whole horse, not just 
part of it.

    I know there are those in this country in both political parties and 
all across the land who say that we should not try to take this ride, 
that these goals are too ambitious, that we should withdraw and focus 
only on those things which we have to do at home. But I believe that 
would be a sad mistake and a great loss. For the new world toward which 
we are moving actually favors us. We are better equipped than any other 
people on Earth by reason of our history, our culture, and our 
disposition, to change, to lead, and to prosper. The experience of the 
last few years where we have stubbornly refused to make the adjustments 
we need to compete and win are actually atypical and unusual seen 
against the backdrop of our Nation's history.

    Look now at our immigrant Nation and think of the world toward which 
we are tending. Look at how diverse and multiethnic and multilingual we 
are, in a world in which the ability to communicate with all kinds of 
people from all over the world and to understand

[[Page 328]]

them will be critical. Look at our civic habits of tolerance and 
respect. They are not perfect in our own eyes. It grieved us all when 
there was so much trouble a year ago in Los Angeles. But Los Angeles is 
a county with 150 different ethnic groups of widely differing levels of 
education and access to capital and income. It is a miracle that we get 
along as well as we do. And all you have to do is to look at Bosnia, 
where the differences were not so great, to see how well we have done in 
spite of all of our difficulties.

    Look at the way our culture has merged technology and values. This 
is an expressive land that produced CNN and MTV. We were all born for 
the information age. This is a jazzy nation, thank goodness, for my 
sake. It created be-bop and hip-hop and all those other things. We are 
wired for real time. And we have always been a nation of pioneers. 
Consider the astonishing outpouring of support for the challenges I laid 
down last week in an economic program that violates every American's 
narrow special interest if you just take part of it out and look at it.

    And yet, here we are again, ready to accept a new challenge, ready 
to seek new change because we're curious and restless and bold. It flows 
out of our heritage. It's ingrained in the soul of Americans. It's no 
accident that our Nation has steadily expanded the frontiers of 
democracy, of religious tolerance, of racial justice, of equality for 
all people, of environmental protection and technology and, indeed, the 
cosmos itself. For it is our nature to reach out. And reaching out has 
served not only ourselves but the world as well.

    Now, together, it is time for us to reach out again: toward 
tomorrow's economy, toward a better future, toward a new direction, 
toward securing for you, students at American University, the American 
dream.

    Thank you very much.

Note: The President spoke at 10:44 a.m. at Bender Arena. In his remarks, 
he referred to Joseph Duffey, president of American University. A tape 
was not available for verification of the content of these remarks.