    [Weekly Compilation of Presidential Documents Volume 35, Number 17 (Monday, May 3, 1999)]
    [Pages 736-741]
    [Online from the Government Publishing Office, www.gpo.gov]

    <R04>
    Remarks in a Discussion Entitled ``The Third Way: Progressive Governance
    for the 21st Century''

    April 25, 1999

    [Moderator Al From, president of the Democratic Leadership Council,
    opened the discussion.]

        President Clinton. Thank you very much. I'd like to begin just by
    expressing my profound gratitude to Al From, and to all the people at
    the Democratic Leadership Council for having the passion and the
    patience to work at this for years and years and years.
        I, too, want to thank Hillary and the hearty band within the White
    House who keep us focused on the big ideas and values that got us here
    in the first place. And I'd like to say a special word of thanks to my
    friend and aide Sidney Blumenthal, for the work that he's done in trying
    to put this meeting together.
        I would also like to just very briefly say how very much I admire
    the people who are here with me at this table today, how much I have
    learned from them, how much I look forward to working with them at every
    opportunity.
        Wim Kok, from The Netherlands, actually was doing all this before we
    were. He just didn't know that--he didn't have anybody like Al From who
    could put a good label on it. [Laughter] But he was doing it, for years
    and years and years. Tony Blair has made me long for a parliamentary
    system. [Laughter] Gerhard Schroeder had to wait even longer than I
    did--[laughter]--and was also a distinguished Governor. And Massimo
    D'Alema has proved that you--I think--I'll make you a prediction here--I
    think he is already proving that even in Italy, where governments tend
    to be like the flavor of the month for ice cream, that the right sort of
    politics can have a sustained long-term impact on some of the most
    wonderful people in the world. So I'm honored to be here with all of
    them.
        I'd like to thank my friend and ally, Congressman Cal Dooley, who is
    out there; the

    [[Page 737]]

    Secretary of Transportation, Rodney Slater; the Secretary of the Army,
    Louis Caldera, who helped me in so many ways. And we're going to hear
    afterward from Lt. Gov. Kathleen Kennedy Townsend, former Governor and
    Democratic Party Chairman Roy Romer; Mayor Wellington Webb of Denver;
    and Commissioner Michael Thurmond. I thank them.
        All of you know we've just finished a 3-day NATO conference,
    celebrating the 50th anniversary of NATO, bringing in new members,
    celebrating an astonishing partnership with over 40 countries, including
    the countries of southeastern Europe, all except for Serbia, and the
    countries of central Asia in this amazing new group which, itself, is
    full of Third Way questions.
        At our last luncheon, one of the members made a crack that we had
    five members of the last Politburo of the Soviet Union sitting around
    our table today. And another one said, ``Yes, and a lot of the rest of
    us should have been on the Politburo, but we weren't.'' [Laughter] And
    it was a picture of how much the world has changed.
        What gives rise to this kind of politics, when the old order is
    destroyed or when the realities of daily life or popular dreams can no
    longer be accommodated by a given set of political arrangements through
    a political debate? We see that in southeastern Europe today, with the
    crisis in Kosovo, where the old choices between state stability and
    being consumed by ethnic hatreds, and what we're arguing for is a new
    integration based on the embrace of difference, not the oppression of
    it.
        I would like to just pose a couple of questions and then let our
    panelists take off. You heard Al From say that basically our lodestars
    have always been in the United States the concept of opportunity,
    responsibility, and community. We've worked on this for years. We tried
    to think of simpler and more complex ways to say what we stand for, but
    we've never done any better than that.
        So I think I will just leave it there. But let me say, what could
    that mean in the present time? What is giving rise to all these people's
    elections? Why is this happening everywhere? It's not some blind
    coincidence. I believe it is because the social arrangements, which were
    developed within countries, and the international arrangements among
    them, which grew up from the Great Depression through the Second World
    War and then the cold war, are no longer adequate to meet the challenges
    of the day.
        And most of the parties of the right made a living by beating us in
    elections by saying how bad we were. And whatever--we were always for
    more Government, and they were for less of it. And if you thought it
    was, by definition, bad, then less is always better than more.
        So they had quite a run in the 1980's. And then it became readily
    apparent that that didn't really solve any problems. And that there were
    serious questions that demanded serious answers. So I will just pose
    three, and then let our panelists go in whatever order they would like.
        I seems to me that the great question that any political party that
    purports to represent ordinary citizens must answer is: How do you make
    the most of the economic possibilities of the global information economy
    and still preserve the social contract? What can governments do to help
    make sure that every responsible citizen has a chance to succeed in the
    global economy? And how can we discharge our responsibilities, as the
    leaders of wealthy countries, to put a human face on the global economy
    so that in other countries, as well, no one who's willing to work is
    left behind?
        The second question I'd like to ask is, what is the nature of the
    social contract now, and how is it different from what it used to be?
    What does it mean? Are there entitlements that we should still have?
    Beyond entitlements, what are the empowerment issues of the social
    contract? What is the role of the private sector and the relationship of
    the government to it?
        And finally, what do we mean by the concept of community? Who's in,
    who's out? And how can we create a concept of both national and
    international community that is a more powerful magnet drawing people
    together than the awful magnets pulling them apart, rooted in racial and
    ethnic and religious difference throughout the world?
        And I will leave with that. It is a cruel irony that in this world
    we're entering, that

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    we have always celebrated in our dreams as a place of unbelievable
    technological explosion, unbelievable scientific advance, unbelievable
    advances in health care, and using computer technology to empower people
    in small African and Latin American villages, for example, to learn
    things--would be dominated by the most primitive hatreds in all of human
    history, those rooted in our basic fear of people who are different from
    us. How can we construct a community in which those forces pulling us
    together are more powerful than those tearing us apart?
        There are hundreds of questions we debate all the time, but just
    about every question we debate falls within one of those three
    categories. And so having set it up like that, we have no agenda, and
    I'll just turn it over to our friends.
        Mr. Blair, would you like to go first?

    [At this point, Prime Minister Tony Blair of the United Kingdom, Prime
    Minister Wim Kok of The Netherlands, Chancellor Gerhard Schroeder of
    Germany, and Prime Minister Massimo D'Alema of Italy presented their
    opening remarks.]

        President Clinton. I should say that the Prime Minister is a good
    friend of the man who is now the most famous Italian in America, Roberto
    Benigni. And after his performance at the Academy Awards, you have both
    affection and respect. [Laughter]
        I would just like to try to comment on a couple of things, to maybe
    make the conversation somewhat more specific and sort of segue into the
    participation of our other American leaders here.
        If you look at this whole Third Way challenge, in America, for the
    Democratic Party it meant we had to prove we could manage the economy in
    an intelligent way and then deal with the whole question of social
    justice. And in our country those questions basically meant three
    things. One is what to do about the poor and how to have a welfare
    system that empowered people who could take care of themselves but also
    took care of people who could not take care of themselves--first
    question.
        The second question, how to deal with the fact that we had
    phenomenal economic growth but increasing inequality. That inequality
    had been increasing for quite a long time, partly because of Government
    policies, partly because the new economy gives such a wage premium to
    education and skills.
        And the third question, to my mind, in many ways the most important,
    how can this country with all of its phenomenal success and low
    unemployment--the lowest unemployment in 30 years--and now, finally,
    rising wages again, how can we strike the right balance, a better
    balance between work and family--give families the support they need to
    raise their children, take care of their parents, have the time they
    need, have the child care, the health care they need, and still maintain
    the economic dynamism? What is the right balance?
        Now, for Europe, it goes the other way. I wish Prime Minister Jospin
    were here from France. Very interesting--France has had economic growth
    averaging over 3 percent for the last 3 or 4 years, but their
    unemployment rate hasn't gone below 11 percent, I think--something like
    that. Any way, still in double digits. And we know from our own
    experience that when unemployment--I mean, when growth can be sustained
    above 2\1/2\ percent in an industrial society, normally the unemployment
    will go down until it bottoms out at around, at least around 6 percent,
    even without going over 3 percent.
        So the European question is, how do you get growth manifested in
    jobs and not give up your social solidarity? In America the question is,
    how do we keep all this growth--we love it--and get a little more
    stability for families and make sure we have done what we should for the
    poorest of our communities and our people and try to make sure that
    Americans who do work and carry the load in this country have a chance
    to have more of the growth in terms of their personal wealth and well-
    being. So to some extent we are crossing.
        Now, I mention that to just give you a couple of specific examples.
    Gerhard Schroeder mentioned the German job training system. We sort of
    copied a lot of elements of that and tried to amend it for America in
    setting up our school-to-work program in 1993, because the Germans do
    the best job of moving people from--who do not go on to university for 4
    years--moving most people into the

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    workplace with modern skills so they can claim a higher wage.
        And in our country, we have--John Sweeney, the head of the American
    labor movement--the labor apprenticeship programs. A lot of the labor
    training programs do a good job of that, but as a society, we don't do
    as good a job of that. So we're trying to improve that.
        Another interesting example--how do you deal with the fact that more
    and more people are working at home, more and more people are working in
    flexible work environments? You're going to have more and more part-time
    jobs. How is that consistent with maintaining a kind of social safety
    net? I would argue that The Netherlands have done the best job of that.
    Wim Kok's country has the highest percentage of voluntary part-time
    workers in all of Europe; that is they choose to do so. And they've
    worked out an agreement, which maybe he would like to talk about, so
    that even the part-time workers earn, on a pro rata basis, their
    vacation--annual vacation rights, and have retirement and health care
    and other things. They have the social protections. And there it makes
    them more willing when necessary to take part-time work. This is a big
    deal.
        When I became President in America, there were 3 million people
    making a living primarily out of their own home, for example. When I was
    reelected, there were 12 million. Now there are 20 million, in only 2
    years. So this economy is going to, if you will, atomize a lot. It's
    going to get a lot more diverse, and kaleidoscopic. So we'll have a lot
    of challenges to face in having the proper sense of social safety net.
        And then, as I said, the most important thing is getting it right
    between work and family, since I think we would all admit that the most
    important job of any society is raising children as well as possible,
    something we are even more burdened with in the moment, that conviction.
        So I just throw those ideas out. These are things that are going on
    in other countries, something that we're battling with here constantly.
    And I wonder if any of you would like to comment on that.

    [Prime Minister Kok and Chancellor Schroeder offered comments.]

        President Clinton. Let me just say very briefly, I think when we
    meet in Germany in the next few weeks with the G-8, I hope we will
    ratify a number of changes to the global financial system that I believe
    will be adopted by the international financial institutions and other
    bodies that will avoid having another financial crisis like the one we
    saw in Asia that we have all worked so hard to keep from spreading to
    Latin America and elsewhere.
        And it really is a classic Third Way problem, because what happened
    was, in the last 50 years after World War II when the so-called Bretton
    Woods instruments were developed, the IMF, the World Bank, and others
    designed to promote global trade and global investment, with the
    explosion of technology and the explosion of trade, more and more money
    had to move around the world.
        And then as always happens, there came an independent market in
    money, unrelated to the trade and investment. So that now every year,
    every day, there will be about $1.5 trillion in trade per day in goods
    and services, and the amount of money that moves--excuse me, $1.5
    trillion a day in trade and money, which is roughly 15 times the daily
    volume of trade in goods and services. And that's the basic problem. So
    we don't have a framework that has the right incentives to keep that
    from getting out of hand and collapsing economies, protecting people
    from their own foolishness, as well as from the foolishness of
    investors.
        But I think we can make some changes and keep the growth going, and
    get rid of the problems, which is obviously the kind of balance we've
    been striving for.
        Anybody else?

    [Prime Minister D'Alema and Prime Minister Blair made remarks. Mr. From
    then introduced Lt. Gov. Kathleen Kennedy Townsend of Maryland; former
    Governor Roy Romer of Colorado; Mayor Wellington Webb of Denver, CO; and
    Labor Commissioner Michael L. Thurmond of Georgia, who each made brief
    remarks.]

        President Clinton. Well, let me say, first of all, I want to thank
    all four of them for speaking here today and for the work they do. And
    they're all friends of mine and I was

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    sitting here feeling like--sort of like a proud father or something. I'm
    so proud of my friendship of many years with Governor Romer; and Mayor
    Webb, who did so much to help me become President; Kathleen Kennedy
    Townsend. We're glad your mother is here. Ethel, welcome. There is no
    Lieutenant Governor in America who has had remotely the impact that she
    has had on the lives of her constituents. It's a stunning thing in many
    ways. And I think Mr. Thurmond can speak for himself. [Laughter] But I'm
    really proud of him, as well.
        You see--the reason--let me just say, one of the reasons that I so
    much love the DLC and I was so proud of hearing them talk is that for
    most of us, including those of us at this table, the stories you just
    heard--that's why we got in politics. And then when you become a leader
    of a country and you're arguing about what's in some bill or what is the
    debate before the Parliament or the Congress or--if you're not careful,
    the debate gets very abstract and very frozen and very wooden and very
    meaningless to the people that put you in this position in the first
    place.
        And the further you get away from your constituency--and I think
    sometimes our friends in the press almost contribute to this in a way,
    because they have difficulties, too. You know, they have to write a
    complicated subject, and they've got to get a headline out of it. Or
    they have to figure out how to take an issue that's going on, and how to
    put it into 15 seconds on the evening news.
        But what you just heard is the ultimate test of whether ideas and
    our values and our work amount to a hill of beans. It's whether it
    changes the lives of people in concrete, positive ways. And so, I just
    want to thank them and those whom they represent. And I'd like to give
    my fellow panelists here the chance to make any comments or ask
    questions they'd like of those who just spoke.
        Tony, do you want to start?

    [Prime Minister Blair and Prime Minister Kok made remarks.]

        President Clinton. I just want to comment on one thing, because a
    lot of you talked about at what level something should be done. We're
    having a huge Third Way debate here in this country that has many
    different manifestations related to how the Federal Government should
    give money to local governments in various areas. And it's very
    interesting. By and large, the Republicans will say--and they really
    believe this--that since we can't run law enforcement, for example, we
    should just set aside how much money we want to give and give it to
    local government and say, ``Go enforce the law. They'll lower crime.''
    And the old motto would have been we would have passed a law which would
    have had 15 different programs, each with a different subcommittee
    chairman's name on it and said, ``Go spend the money in this way.''
        Now, what I'm trying to do is to say, ``Okay, we shouldn't tell you
    how to do things, but you have told us what works.'' Therefore, we
    should stop giving money for things that don't work and start giving
    money for things that do. So we say, ``If community police works, that's
    what we should do.'' If Kathleen's program works on testing parolees,
    which by the way, I'm trying to get enough money out of Congress to do
    that nationwide, just what she said. She's proved it's worked, right? So
    we don't tell them whether they should contract with people to do the
    drug testing or what they should do or exactly how they should do it.
    But I think we should say, ``Look, in Maryland, this works. Therefore,
    we'll give you the money if you do this. But we're not going to just
    give you the money, and you decide whether you want to waste it or
    not.''
        And that's the debate we're having. You know, because we're not
    trying to micromanage local government, but we are trying to take things
    that work and say, ``Okay, if they work in Denver, or if they work in
    Georgia, if they work someplace else, we need to stop funding things
    that don't work, start funding things that do. But we're not going to
    tell you how to do it. You figure out how, but this is a thing that
    works, and so do it.''
        And it's a big debate. And I urge you all to watch it this year.
    It'll play itself out in three or four different areas. And we may not
    win them all. But I think it's a very important debate to have, because
    it will be about the nature of the Federal responsibility in a lot of
    areas in the years ahead.

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        Would anyone else like to talk before we adjourn? Gerhard, do you
    want to say anything else? Massimo?

    [Chancellor Schroeder and Prime Minister D'Alema made remarks.]

        President Clinton. Thank you. Yes, I'm not sure I would even have
    you here, Massimo, if I were running for reelection. [Laughter]
        No, no, I'll tell you a serious story. Hillary and I went to Italy
    over a decade ago, and we were in northern Italy, and I met these
    Italian Communists who were anti-Soviet Union, pro-NATO, and pro-free
    enterprise. And I thought to myself, I've got to be very careful about
    what words mean, anymore. It was amazing. [Laughter]
        Let me introduce three more people who came here and are just as
    tired as our panelists are, and they sat through this whole thing. I'd
    like to thank Cherie Blair, Rita Kok, and Doris Schroeder Koepf for
    being here. Thank you all for coming, and being a part of this.
        And let me say, I'm sure you all know that this was a very difficult
    but profoundly important 3-day meeting we had of NATO. And all these
    leaders, I think, must be quite exhausted. We have worked very hard and
    tried to do the right thing on every front. But they cared enough about
    these ideas and the worldwide movement to try to achieve what we have
    worked on and believe in, in common, that they came here to be with us.
    And I think we owe them all a very great debt of gratitude, and we thank
    them.

    [Mr. From thanked the participants and closed the discussion.]

    Note: The discussion entitled ``The Third Way: Progressive Governance
    for the 21st Century,'' began at 5:21 p.m. at the National Press Club
    Building. In his remarks, he referred to former Assistant to the
    President Sidney Blumenthal; Prime Minister Lionel Jospin of France;
    John J. Sweeney, president, AFL-CIO; Ethel Kennedy, mother of Lt. Gov.
    Kathleen Kennedy Townsend; Cherie Blair, wife of Prime Minister Blair;
    Rita Kok, wife of Prime Minister Kok; and Doris Schroeder, wife of
    Chancellor Schroeder. The transcript made available by the Office of the
    Press Secretary also included the remarks of the other participants.