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tv   Politics Public Policy Today  CSPAN  October 14, 2011 10:00pm-6:00am EDT

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the contenders. we also want to make sure to thank speaker sheldon silver and p the p people here at the new york state assembly for allowing us to broadcast live. we want to thank our studio audience and our cable partner up here in albany, time-warner. we're going to leave you with a few of al smith's own words on his career and life. >> i was elected to my first public office in 1903. i remained in the assembly for 12 years. then i was elected sheriff of new york county. then i was elected president of the board of aldermen. in fact, i ran for office 22 times. i was element -- elected 20 times and defeated twice. i've worked for the county, i've worked for the city. i have worked for the state. and you will probably remember that i tried to get a job down in washington but something happened to me at that time.
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[laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] .
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the series airs live every friday night at 8:00 p.m. eastern through december 9. you can see tonight's program again at 11:00 p.m. eastern. for more information, go to our website, c-span.org. you will find appraisals by historians and portions of their present -- and portions of the commentary. >> it has been almost 30 years since the proposal of a memorial to honor dr. king. sunday, what the official dedication of the memorial in washington, d.c. >> next, republican presidential
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candidate texas governor rick perry the outlines his energy policy. after that, house democrats discuss currency manipulation legislation. and the c-span series "the contenders" on key figures who have run for president entrenched political history. tonight, the life of al smith. now, republican presidential candidate and texas governor rick perry on his jobs plan and energy policy. this is his first major policy address since entering the race. from the u.s. steel plant in pennsylvania, this is about an hour. >> good morning, everybody. i am the general counsel and
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senior vice president of corporate affairs for united states steel corporation. welcome to this facility. it produces products for the appliance industry. also make sheet steel for processing into welded tubes down the river in our facility down the river. this morning, i have the pleasure to introduce a friend manufacturing, and a the united states steel corporation, governor rick perry of texas. still had a significant texas since 2007, when we acquired a lone star technologies. since that time, we have seen firsthand the governor perry's promote economic development, and to attack job- killing, unnecessary regulation
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on business. governor perry is here to make an important address on energy policy, an issue that is as important in western pennsylvania as in texas. ladies and gentlemen, please welcome governor rick perry of texas. [applause] >> thank you. i really appreciate you. yes, sir. thank you all for joining me today. i want to say a special thanks to jim and scott. thanks for the tour. it was awesome to be on the line with you. the men and women of u.s. steel -- i appreciate you for having me here today. it is great to be in the outskirts of pittsburgh, a city built on the work and hopes and dreams of a blue-collar american
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workers. the central issue facing americans is a lack of jobs. there are 14 million americans work today. there is one in six americans who are job ready, but cannot find a full-time job. for 45 million americans on food the where resident is receiving government benefits. our president has labeled americans and soft. i believe our people have toughed it out the best they can. but they are looking for leadership. they are looking for optimism, which is all too rare in what i am proposing is the first of an economic growth package that will rebuild the engine of american prosperity. the plan that i present this morning, energizing american
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jobs and security, he will kickstart the economic growth of this country and create 1.2 million jobs. and free of washington gridlock, because it does require constitutional or congressional action. we are doing it through a series of executive orders and other executive actions. it will begin the process of creating jobs soon after the inauguration of a new president. in a few days, i will offer to the american people a broader package of economic reforms the will require congressional action when i am elected president of the united states, but my complete economic growth package will tackle tax reform,
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entitlement reform, and real spending reductions in order to address our growing debt crisis. today, today i offer a plan that will create more than a million and good-paying american jobs across every sector of the economy, and enhance our national security. the best news is it to be set in motion in the first 100 days of my administration. my plan is based upon the simple premise. make what americans buy. by what americans make. sell it to the work. critics tell it to the world. we are standing on top of the next american boom. it is the energy underneath this country. to give our shot in the arm is to deploy the american ingenuity to
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tap american energy. that, f environmental bureaucrats are told to stand down. my plan will break the grip of the dependence that we have today on foreign oil from hostile countries like venezuela, those unstable middle eastern countries. it would allow us to grow jobs here at home. untapped supplies of natural gas, of oil, of coal. america is the saudi arabia of coal. we have 25% of the world's supply. to 134 billion barrels of oil, nearly 1.2 trillion cubic feet of gas.
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we have the resources we need to fuel our cars, our homes, our poll, -- power plants. found in pennsylvania, west virginia, ohio, texas, oklahoma, north dakota, new mexico, alabama, kentucky, throughout the american west, and up in alaska. overreaching environmental agency, his environmental protection agency, will not allow american business and american labor to draw on even a fraction of this domestic energy, from reserves on government-owned land. the obama administration opposes fossil fuel development at home. hand, they encourage countries like brazil
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to drill offshore and sell it to american consumers. we're creating foreign jobs. they are creating foreign profit. that is wrong, hypocritical, and unfair. america should not be -- and when i am the president of the states, will not be -- held hostage by foreign oil and federal bureaucrats. [applause] the american economy should not be beaten into the ground, when greater energy independence and energy costs lie under american soil. my plan will create jobs in every sector. it will revitalized manufacturing and contain the cost of electricity. concrete actions.
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the first is we will open several american oil and gas fields for exploration that are currently off limits because of political considerations. the current administration has restricted exploration in the gulf of mexico and alaska, in the atlantic/mid-atlantic area. the gulf of mexico, for instance, the median time for the review of permits for combined deepwater exploration and development -- it has increased by 400%. the deepwater development plan approvals have decreased by nearly 80%. interior has stopped offshore off the coast of virginia. i might add over the objections of the governor of that state, their congressional delegation. they passed a bill in the house
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of representatives to achieve the will of the people. it was supported by both of those democrats senators from warner. but with a series of executive orders and actions, i will authorize the following. i will work to open alaska's as resources to oil and gas exploration, including the and more coastal plain and the reserve of alaska. this is where you will need congressional authorization, he and bill understand the future of america. -- but they will understand the importance of the future of america. it is worth it to create 120,000 jobs, the opening of that area. we will initiate offshore investigation in the seas off the north and west coast of alaska.
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and that will create 55,000 . we will resume exploration of the gulf of mexico, creating another 230,000 jobs. i happen to support the keystone xl canadian crude pipeline. it will either go west to china or south to america. i know where i want it to go. it will create 20,000 direct . we will tap the energy potential of the american west, open federal land and private land in states like wyoming, montana, mexico, north dakota, colorado, and utah. collectively, our western states have the potential to produce
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1.3 million barrels of oil per day by the year 2020. trillion cubic feet of natural gas. those states can produce more energy than we can import from iraq, kuwait, venezuela, and russia combined. and right here in pennsylvania, right across the state line in ohio, we will tap the full potential of the marcellus shale and create another 250,000 jobs by getting the epa out of the way. is today's opportunity. deeper utica formation may offer even greater potential, with more jobs over the horizon for pennsylvania and its neighbors.
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in american oil and natural gas production is demonstrated in manufacturing and in production. plant that employs more than 3000 of your fellow citizens, whom makes steel products other companies used to develop in the marcellus shale today. that production in the marcellus shale is what you are building in some of your facilities. the face of manufacturing in the industrial states is changing rapidly. natural gas exploration is a game changer. it can bring new opportunities to replace the ones that have been lost. will
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create jobs in the supply chain. costs for manufacturers. when you think about western pennsylvania, you are known for producing some pretty great quarterbacks. i want western pennsylvania to quarterback a new energy revolution that creates jobs across america. by expanding energy exploration, he will also use the revenues that are generated to pay down debt. where america , everglades and the yellowstone -- will not explore in those pristine locations. as we roll back federal control, we will see greater cooperation
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with the states. if the states oppose energy exploration, we will respect their decision not to drill in certain areas in their state. but those instances are truly the exception, not the rule. it is equally important to take a second step to eliminate those activist regulations that are already on the books. the obama administration has put them in place. president obama has been very public about his newest jobs proposal. the behind-the-scenes, that working to drill the economy to regulations. there are a raft of new rules and foot-dragging from the epa the interior that are killing jobs in this
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country. examples of that are the utility available control technology rule, they cross state air pollution rule, the proposed coal combustion residuals regulation. alone, they could destroy 2.4 million american jobs by 2020, $127 in costs to electric providers and consumers. these are just new rules they put forward. under my plan, each of these rules would be subject to an immediate review, a cost-benefit analysis to determine the impact on american employers and our environment. if we face the fact we know that none of these rules were needed the emissions of the
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six principal solutions by 50% in this country since 1980. we know that. and they are not needed now. especially as our economy hangs in the balance between recovery and recession. there is another step i will take that is important to economic growth. that is i will stop the measures related to the regulation of greenhouse gases. when you consider that any carbon reduction will be offset by the increase of carbon emissions by developing countries like china and india, the epa would tie our hands. it would tie this economy in knots and give the advantage to our global competitors, while reason it -- while realizing no global environmental benefit in the process. a third part of my plan is to reform the bureaucracy, and in
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particular the epa. it needs to be allowed it -- this country needs to allow the epa to function on the regional state issues. they need to be providing scientific research as well as environmental analysis and cost comparison studies to support the state environmental organizations. we need to return greater regulatory authority to the states to manage our air and water quality. we cannot impose this one size fits all mentality that comes out of the federal rules. i reject the notion that committed to stewardship and state and local officials, who must live with the consequences of their own environmental policy. the fourth component of my plan
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is to level the competitive playing field among all the energy producers out there. as the governor of the nation's leading producer of wind energy, i clearly believe there is an important role for green sources of energy as part of our generation mix. the fact is every energy producer receives incentives and/or subsidies that cost taxpayers, and the distort the market place. my plan will stop the practice of washington writing subsidy checks to any and all sectors of the energy industry. it will also stop industry- specific tax credits, phasing them out over time and allowing the marketplace the time to adjust. , how -- i
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however, to have tax credits for research and development. the best approach is to allow the private industry the freedom to develop. the shocking reality concerning their energy policy, our current administration, is that energy prices that we find -- it is not an accident that they are up the level they are. it is intentional. an energy secretary who said he wanted european prices in america for our fuel, a president who said it was necessary to raise the price of electricity. this administration has intentionally sought to make conventional generation for coal and natural gas more costly, taking more money out of the
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pockets of you and your fellow citizens. is they want to drive consumers to green energy. but we do not produce enough green energy to fill that. the result is going to be greater reliance on foreign sources of energy, increasing the use of green energy is a laudable goal. we have done it successfully in my own state. but we have used renewable resources to expand our entire supply, not to replace the conventional generation. are responsible for roughly 2/3, of the electricity generated in this country. how can we have a stable and affordable electricity when the
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federal agencies target the top to fuel generation sources for electricity. you cannot. not confined to this administration. wrongly targeted by members of my own party. i happen to take a different view. i welcome the continued development of coal as an part of job creation in america. allowing that industry to invest research and development is the best way for us to pursue clean coal technology. i do not accept the premise. do not accept the choice that we must pick between energy and the environment. it is time for a balanced, pro- american, a pro-jobs energy policy. and
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can assure him cleaner development of traditional sources. the epa war on american fossil fuel production comes despite the fact that they cannot point to a single incident of unsafe hydraulic fracturing in the pursuit of natural gas. not one incident. the obama legacy will be 2.1 million american energy jobs lost in gas and coal. the choice of selection is between two very different visions in the country.
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it would kill jobs through these aggressive regulations, while i would create 1.2 million american jobs through safe and exploration home. president obama would keep us dependent on hostile sources of foreign energy, while my plan would make us more secure by tapping america's energy potential. these energy policies are driven by the concerns of activists in his party. my policies are driven by the workers without jobs. we must get america working again. the big part of the solution is right under our feet and write off our coast. it can be done without being mired in washington gridlock, because the president has the authority he needs to roll back
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regulations, create energy jobs, and make our nation more secure. is as simple as changing presidents. american needs jobs. america needs a made in america energy revolution. i have that long time track record and experience of success in this critical area for jobs and economic growth, to create a new wave of independence, energy independence. and the overregulation. and the texas litigation. and the bureaucratic intimidation. get america working again. make what americans buy. buy what americans make, and sell it to the world. god bless you, and thank you for being with me.
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[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
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>> watched more video of the candidates. see what political reporters are saying. track the latest campaign contributions. c-span.org helps you navigate the political landscape, with the latest polling data, plus links to media partners in the early primary and caucus states. >> tomorrow, on washington journal, a look at the role of young adults in the occupy wall street protest, with matthew
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siegel -- segal. after that, a talk with the republican party chairman in florida. and a look at u.s. efforts to encourage foreign businesses to open in the united states, with nancy mclernon. that is live at 7:00 a.m. eastern, here on c-span. house democratic whip steny hoyer told reporters currency manipulation costs the u.s. economy more than a million jobs. with other house democrats, he urged house republicans to take action on the currency manipulation bill. this is about 25 minutes. >> thank you very much for joining us.
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>> i'm joined by a ranking member of the ways and means committee. we're very pleased to have them here. we are here to talk about the chinese currency legislation which is pending -- pending and passed the house in the last congress overwhelmingly with the 99 republican votes and a very large bipartisan support on tuesday. the senate sent us a bill that would help american workers and businesses facing unfair competition as a result of other countries manipulating their currencies. it passed with strong bipartisan support in the senate. house republican leadership has refused to bring it up for a vote even though it passed the house last year by a wide bipartisan margin, as i said, with 99 of those votes being republican. right now, millions of americans are out of work. it is in no small part because other countries are artificially week against the dollar. the manipulation of currency seeks to make goods available
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broad sold cheap and goods trying to be sold into a country more expensive. this is a result of unfair tactics and it leads to the outsourcing of american jobs and more expense of american products in foreign markets. currency manipulation costs us more than 1 million jobs. i want to emphasize that. it is estimated currency manipulation costs our economy over 1 million jobs. taking steps to address that problem, which this legislation would do, is a key component of the make it in america agenda. it is about creating the right conditions for businesses to innovate here, make their products here, and create jobs here. that is why addressing currency
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manipulation as a critical part of our plan. american businesses can compete against anyone anywhere anytime if they are competing in a fair playing environment. that is what this bill aims to do and will do if we can pass it. as we said, the senate has passed this with a comfortable margin with 16 republican senators. next week we will be entering into a district work period. i expect they will hear a clamoring for action on jobs and to put business on a level playing field with global competitors. one of our concerns as democrats that we have articulated over and over again has been that we have not brought jobs legislation to the floor. again today, we are addressing on the floor of the house of
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representatives a bill to simply undermine the protection of clean air and clean water. mr. bruce bartlett indicated in a column just the other day. he is an economic advisor from the reagan administration and first the bush administration. he said it would have been minuscule effect on jobs. this legislation we believe would have an effect on over 1 million jobs. i urge republican leadership to put the currency. on the floor of when we return to session and to start working with democrats to create jobs and move our economy forward. i am very pleased to be joined off by one of the real leaders in this effort, the sponsor of the bill along with tim ryan and betty's son -- betty sutton. he has been leading the effort on a discharge petition so we
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can get this to the floor. i am pleased to yield to my friend and our leader on the ways and means committee, senator levin. >> this is all the more reason to screen the currency build from the curtain and sometimes iron curtain that has been put up by the house leadership. they do not want this bill on the corp. for one reason, because it would pass. the argument is that currency is not the only issue. the problem with this argument is that house republicans have not acted on any other issue relating to our trade imbalance with china. that should not be an excuse if
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it is the only issue. let's have a vote. the constitution says the house has primary jurisdiction over trade and currency is a major ingredient of our trade imbalance. if we should act. it should be freed by the house republican leadership. next, i think will be tim eliam from ohio. >> thank you. when we started this, i think seven or eight years ago, dealing with the chinese currency, it was duncan hunter and i. then the chairman, the negotiations, took this bill to the next level. this has always been a bipartisan bill. this was one issue we could all agree on. a level playing field around the
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world making sure that we were not losing manufacturing jobs in ohio, all throughout the industrial midwest, because china was manipulating currency. you cannot look at what has happened in ohio in the last 10 years since 2001 when we have lost jobs. the have directly been related to unfair trade with china. this is affecting our communities back, and we need to address it here in washington, d.c. having this signals to the world that not only do we enforce global rules that in the united states we want to reclaim manufacturing. let's make it jobs that pay more, have better benefits, jobs that spinoff intellectual property and patents that meant -- than many other industries. it is critical this bill comes to report front. i will say as i said, on these trade agreements and other
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things are a sideshow compared to what devastation has been brought upon the united states because of the chinese currency bill. go down to youngstown, akron, toledo, anywhere in the industrial midwest. go to detroit. go to indiana, wisconsin come at any of these states. you will see devastating effects because of the trade with china and guenther trade practices. this bill addresses it had gone and i want to encourage the speaker of the house from ohio to pass this bill. this will not be dead on arrival when it gets to the house. >> my partner in summit county, betty. >> thank you for your leadership. every week i go back home to
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ohio and then meet with countless men and women who just want to get back to work. they are ready to prove something that we already know, the american worker is the most productive and most innovative in the world. there is something that stands in their way. the good news is that it is something that we can fix. right now there are thousands of americans who could be put to work, and millions if the estimate is right, who would be put to work if we held china accountable for manipulating their currencies. by cheating the system and giving their manufacturers and unfair advantage, china has placed a road block in our economic recovery. thankfully, our friends in the senate have acted on this and passed a bill to hold china accountable to give us a level playing field on which to compete. if house republican leaders are serious about creating jobs, then they will bring the bill
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to the floor. a house republican leaders are serious about helping our economy recover, and they will bring this bill to the floor. this is not a difficult call. what will it take? how many people have to be out of work in this country until the republican majority will focus on jobs and getting people back to work? last congress, the democratic leadership put this measure on the floor and it passed on a very strong bipartisan vote of 348-79. 348-79. the question comes down to this. speaker john boehner, are you going to stand up for fairness and thousands of ohioan is to give them the opportunity to get back to work by letting us vote on this bill?
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or are you going to continue to stand idly by and allow china to continue to cheat and help add to the unemployment dirge that a high winds are facing? it is up to you, mr. speaker. and this point, i would like to introduce a wonderful leader on this bill. >> thank you, betty. i think most people have said everything that needs to be said. one thing that i can do as the last speaker is just to say that we will not rest. this bill, this issue is too important to the american people for us not to talk about this day in and day out. but my colleagues, i urge the speaker of the house to bring this to the floor. we will not let this die. we will continue to fight for
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the american people. i just want to read you a quick quote that came from the lips of speaker brainer. as the chamber closes to the people, the house works best when it is allowed to work. what that means is that the reason that this country is so strong is because we do not rule from the top down. we did not tell the americanwe allow them to tell us what is good and we follow their lead. i urge the speaker to let the house markets will. if this bill passes, as it did last year with 99 republicans, they have 62 republican co- sponsors. if this passes the house, so be it, because it is good for america, good for the american people. our manufacturers are hurting. let's step up to the plate and elected to do and help the
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american people by targeting a manipulator of currency that is harming this nation. since china has entered the world trade organization, manufacturing jobs. $29 billion trade deficit in one month against china. obviously, the playing field liens their way, but we are also talking about deficit reduction. passing this bill and allowing these issue to be brought to the forefront could lower our deficit by $70 billion per year and, just over a decade that is $1 trillion. this is something that is needed that we need to do. we need to lead for the american people which is why we are here. house work. >> i want to make two points and then i will yield for questions. we talked about the chinese currency because they are the largest trading partner with which we deal and our largest deficit.
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there is no doubt that they have manipulated their currency. i want to make it clear that this bill is not china-specific. it mentions any of our trading partners come if they manipulate currency to enhance an unfair trading advantage to be impacted by this piece of legislation. this is not solely directed at china although we think they are the biggest violator and therefore the greatest consequence to our american workers. secondly, we have made sure that this bill was compliance with our international trading goals. what it says is every trading partner ought to play by the rules. if you play by the rules, all
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workers will compete and we will make things in america and sell them to you. if you have goods and you are on a level playing field, the new cans sell here. we will play both sides by the rulings. surely the majority of republicans who voted on this bill to pass it through the house of representatives will pass it through congress. surely they still believe that every one of our partners ought to play by the rules. that is therefore our american workers, businesses, and for the american tax payers. let me yield to questions and i have some real experts here behind me. i will yield to them if i cannot answer or you want a specific answer from them. >> how will this create a large number of jobs in a short period
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of time when the statutory regime that is setup requires companies to go in and prove a specific product in a market have been manipulated and victimized by the chinese currency? these investigations can take up to six months and even up to one year. >> i will yield to sandy levin for that because he would be the expert on this issue. i will just say in the short term that if you are talking about passing anything tomorrow that will make a difference, perhaps that is not the case, although psychologically it will make a difference tomorrow in terms of people deciding that we should play by the rules are there will be adverse consequences. i will yield to sandy levin, the ranking member of the ways and means committee to try to specifically address your question.
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>> if you are right. this case is to take a while. but the reason that the chinese are attacking the senate and house bill is because they realize that if these bills are passed and they become law, it will immensely increased the pressure on china to act now. the history of this is that when there has been pressure, china has acted. that is the history. this will have an immediate effect because it will increase the pressure not only from the united states. we have been talking to other countries, and i just want to emphasize that the chinese officials just today said that china was worried about protectionism. when expert has labeled the chinese currency the most
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protectionist action in decades. the way to end that is for us in the house to send this through the congress and it will be noticed. it will have more impact than any particular case that is being brought forward because of the realization that it could be brought. >> i realize you probably do not watched the presidential debates. >> we do. when the ball game is not on. >> mr. romney said he would cite china for currency violations. do you think that statement may have an impact on the leadership or some of the republicans that would like to sign the discharge petition?
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>> i think should talk to mr. boehner and suggest a move that. >> hopefully they will. >> clinton told the economic club of new york that would be appropriate, fitting, and timely to challenge them on their foreign exchange policy. as the white house given an indication that this bill is the appropriate way to do that? >> i do not think we have discussed with the white house whether it is the appropriate way to do this or not. i would welcome the secretary of state on that. i think everybody here would agree. however, we believe this is the appropriate action for us to take. we took it in the last congress and passed it overwhelmingly. it has now passed the senate and we have more than a majority of sponsors in the house. tim ryan, betty, mark cook, sandy levin, they have all been working very hard on this and
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we clearly think it is the ability of the house to work its will favorably on this as mark has pointed out than they ought to do some, but we certainly agree with the secretary's statement. >> we had a case before the itc on oil country tubular goods and they stepped up with a tariff on those products coming in from china, anti-dumping, and since then we have had $2 billion in investments in the united states for those types of manufacturing facilities. that is due in large measure to the tariffs that were put on. the administration has acted in that regard also on tires so they're starting to recognize the benefits of job creation and benefits coming in, so i'm hopeful they will move on this as well.
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>> that is such a good question. the answer is that the house should do its work. the house should do its work on trade. we have the primary constitutional responsibility and it is a matter of pride that the speaker should let the house work as well. it is a matter of our function. why are people here? why block action by the house and what is our responsibility? the speaker's position in that sense, if he maintains it, is irresponsible. irresponsible. >> i just wanted to say that to put a face on the story tim just talked about in terms of oil country tubular goods come after the case was worked and it did take a long time to go
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through the itc did get this decision to put the counter- veiling duty on them, but the good news is the news that tim brought, that we are getting more work because of that decision. the bad news is that china turned around and then started dumping in subsidizing another hike they make at a plant in my district and we had to start the cycle over again. that is why the urgency is upon us and we cannot wait. the system is broken and this will help us in great measure to get us started in fixing it. >> last question. >> i just wanted to shift topics. today's the day committee recommendations are due. one of your colleagues introduced a bill to do away with the super-committees and the 12 members are meeting in secret. how much concern is there among democrats that this smaller group of members will be able to come up with something in
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just a few weeks on such a big issue? >> there is a concern about success of the super committee. the have been given a very large job to do. as you have heard our leaders say yesterday, we hope that they will produce a package that is big, bold, and balanced. i have shared that view. i do not know who introduced that bill. why would not support that bill. i think this committee's work is extraordinarily important and i wish them a great success. i share the leaders view and in view of many that they need to follow the example of time number of the commissions that have met and made reports. we have a fiscal problem in the consensus and we can solve the problem for have the courage and will to do so. we can do so in a way that
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protect the mothball marble in our country and demands that everyone pays their fair share towards bringing down our deficit and debt while continuing to invest in growing our economy so we can make it an american to out bill coming out to innovate, and out educate our competitors. i, for one, believe the work of this committee is very important and that they can accomplish their objectives within the timeframe and i hope that they will. thank you very much.
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>> congressional quarterly is covering the work of the joint deficit reduction committee. what can you tell us so far? >> the chairman and ranking members of both chambers have been submitting recommendations this week. you saw the house democrats introduced recommendations last week. right now, things are still quiet. members are not really talking. we are getting a sense of what they are talking about. congressional quarterly reported today some republicans are scaling back their ambitions on tax reform, looking more on the
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corporate side than the individual side. that is a topic of discussion. there are some small cuts that are likely. other than that, we are still waiting to see what the bigger picture is going to look like. >> you mentioned the democrats submitting their recommendations yesterday. what are some of the ideas? >> house democrats are holding firm to their insistence that the super committee include a tax increases as part of any deficit reduction package. the primary objective is protecting and lot of federal programs from major cuts, including specific job creation ideas in the eventual package, and paying for all of that not with mostly spending cuts, but a balance of tax increases and spending cuts, a message which is not likely to play well with
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republicans. >> have other lawmakers submitted recommendations? >> republicans have weighed in. on the senate side, you have seen the finance committee weighed in, as well as the armed services committee. folks in the armed services chambers have been particularly notl, asking that they're be too many cuts to the pentagon. they have been the most local faction as the super committee has been doing its work so far. >> tell us about some of the timetables ahead for the super committee as they continue their mission. >> they are trying to produce a package by november 23. whatever package, if they do produce it, would be guaranteed a vote on the house and senate floor by december 23. in that time friend, of course, if the committee produces something, the cbo will need a little bit of time to score it.
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the committees are putting their recommendations in today, but the clock is ticking. we have until the end of november before we see any real product. >> is the flexibility if they do not meet those timetables'? >> it is a law. you can always change the law eventually. right now, under the way the law is structured, there is not a lot of flexibility. they could retroactively change that. >> are we likely to see more public meetings of the super committee? >> after the first two public meetings, they went entirely behind closed doors, which has gotten some criticism. as folks say, the less they are saying, it may mean a more progress they are making. they are not talking a lot about what they are doing, which has fed the impression that they seem to be getting into serious
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negotiations now. >> congressional quarterly is covering the work of the super committee. you can read that out -- at vq. -- cq.com. >> next, "the contenders," one key figures who ran for president and lost but changed political history. tonight, the life of house met. then remarks by hillary clinton and an energy policy speech by texas governor rick perry. >> if has been almost 30 years since a small group from of five house but proposed a memorial to honor dr. king, and the senate, wash the official dedication of the martin luther king jr. national memorial in washington, d.c. live coverage and 9:00 a.m. eastern on c-span.
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>> and now from albany, new york, the life of al smith has profiled in the c-span series, "the contenders." >> i come here tonight knowing i am the underdog in these final weeks. if you know where to look, there are signs of hope. even in the most unexpected places. even in this room full of proud manhattan democrats. i can't shake that feeling that some people here are pulling for me. [applause] i am delighted to see you here tonight. hillary. [laughter] >> i was thrilled to get this invitation. i feel right at home here because it is often said i share the politics of alfred e. smith and the ears of alfred newman. [laughter] it is an honor to be here with al smith.
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i never knew your great- grandfather. everything senator mccain told me, the two of them had a great time before prohibition. [laughter] >> i am not surprised by the final repeal of the 18th amendment. i said all along that when this matter was submitted, they would readily see it had no place in our constitution. it would be very difficult if not impossible to explain to those who come to this country from the lesson taught to the coming generation, to make it their business to see that no such matter as this is ever again made the subject of federal constitutional laws. >> you have been listening to the 2008 presidential nominees talking at that year's al smith dinner followed by al smith himself talking about the
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lifting of prohibition. in 1933. welcome to "the contenders" series. we come to you from albany, new york where al smith served for 12 years before becoming the -- before being elected governor and becoming the democratic nominee for president. our guests for the next two hours and the life and career of al smith, john evers. is the former historian for the new york state assembly. he is a ph.d. candidate and is doing his dissertation on al smith. we are also joined by beverly gage. of yale university. she is the author of "the day wall street exploded." she is a history professor. if you could, set the scene for us to begin. 1928, the united states. what was going on in this country?
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what are some of the issues we will be discussing? >> the 1928 election is one of the most interesting and also what of the most vicious -- one of the most vicious elections in american history. we have two candidates who really embodied two different americas that are coming into conflict in the election. so we have al smith, the subject tonight. al smith is urban, he is from new york city. he is an irishman. he is catholic. he represents a kind of immigrant, urban america that has come of age in the last 30 years. on the other side, we have as a republican candidate herbert hoover who in many ways can hardly be more different than al smith. he is from the midwest. he is from iowa. he is very straitlaced. he is not urban. if he is pious. he wears colors.
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-- very starchy colors. these two mena really encapsule some of the most important political and cultural clashes of that moment. clashes over prohibition. to some degree, clashes over the economy. in many ways, this turns out to be a cultural selection that hinders on which of these two -- hinges on which of these two americas is the america that will be voted into office. >> it was said that the three p's influenced this election -- prohibition, prosperity, and prejudice. >> i think they really do captured. -- capture it. >> we have al smith who is one of the nation's biggest critics of prohibition. it has been in effect for almost a decade. it has been a real problem for most of that time and throughout al smith has said it is a bad idea not only because it infringes on freedom, but because it is causing a law-
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enforcement crisis. there are many people who are concerned about this. what is going to happen to prohibition is one of the big questions. we have herbert hoover on the other side. in terms of prosperity, both of them are running in favor of prosperity. the problem for al smith is you had eight years of republican rule. first warren harding, followed by calvin coolidge. the republicans have a leg up on the prosperity front. you had the 1920's. it has been a boom decade for wall street and for large segments of the economy. although less for farmers and agriculture at that point. i think the darkest part of this election and the reason i said it really is one of the most vicious elections in american history is our third "p," the question of prejudice. al smith -- i think most americans today are more familiar with john kennedy as a catholic candidate.
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that caused a real stir even in the 1960's. a real set of questions about the presidency. al smith raised all of those questions much earlier in 1928. it had already been a decade that had been seized with a lot of questions about immigration, immigration reform, the rise of the ku klux klan. those come into play. >> how did the role of catholicism play out? john evers. >> it was a vicious campaign. this was not new to him. when he ran in new york state, he faced at them. -- he faced it and then. in 1914, martin glenn faced anti-catholic prejudice. it showed up in the 1915 constitutional convention as a little bit of it was during -- of a whispering campaign. smith what into this for years in advance of the election knowing this would be an issue. he addressed this issue in 1927 and in his reply to the
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"atlantic monthly." discussing why catholic man could be a president. it was a very good statement but it was intellectual. it went over everybody's heads. it did not help his campaign. >> as mentioned earlier, we are in the new york state assembly chamber in albany, new york in the new york state capitol building, finished in 1894. we are also pleased to have join us a studio audience of albany area residents. some college students and historians, some people interested in al smith. they will also have a chance to ask some questions about al smith in the 18 -- 1928 election. has will you. we will put some phone calls on the screen so you can start to dial in now. this is the 6th in our 14 week series. "the contenders," the focus the
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1928 election and the house met. -- and al smith. john evers, what kind of a candidate was al smith in 1928? >> he was a fighter. if you look at him and you see the short stature, his gravelly -- the pugnacious mess of them, is grappling voice comes out all across america. this is one of the first campaigns where radio plays a role. he campaigns from the back of trains which is very common. he goes out there and he tries to engage in america on issues that are important to americans. they did not want to talk about those issues. prosperity was there so they could not say they were the issues -- he was not candid of prosperity. that was the republican party. he wanted to talk about water power. he wanted to talk about prohibition. one of the reasons why on paper he was a fantastic candidate.
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he came out as a fighter. his speeches were well reasoned. on paper he was a fantastic candidate. he was swimming uphill the whole time. >> beverly gage, electoral vote count at the end. 444 for hoover, and 87 for al smith. which states did he win and why? >> it was definitely a blowout election. i think the real -- in some ways we can almost say al smith should thank his lucky stars he did not win the 1928 election. we might remember al smith's name a little more, but what would we remember him for? it was really a blowout election. i think it was heartbreaking for smith supporters in part because it had been such a nasty campaign. a lot of the big questions of the election ultimately became -- was it simply the fact that republicans take credit for this boom decade and therefore, smith never really had a chance? was it a rejection of all the things smith felt deeply and stood for?
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i think smith really took that to heart. he was very concerned about that and the real nastiness of that campaign. he had some support but not a whole lot. >> there is a fourth "p" i want to talk about. that is progressivism. he was known as a progressive during his time in the legislature. as governor. did that play an issue at all? how are progressive politics identified back then? >> when you think about it, progressivism is a historical phenomenon. it is a turn-of-the-century phenomenon. it really begins at around 1900 with, say, teddy roosevelt. he is our pioneer progressive. what it means by the 1920's is very hard to define in many ways. there were people who call themselves progressives who supported prohibition and were very impassioned about it. there were people who call themselves progressives who opposed prohibition like al smith and two were also very impassioned about it.
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the basic idea of progressivism is a sense that had come about. al smith really did stand for that you could use government in new and proactive ways to deal with some of the really pressing social and industrial conditions that americans faced back in the early part of the 20th century. al smith as governor and running for president really tried to make that case. he changes his mind a little bit later when the new deal comes along. we will get to that. that was really the basic idea of progressivism with the idea that you could use federal power in some significant way to really change people's lives for the better. >> i think that is a key point. we talk about the new deal today. we talk about the programs and everything fdr brought in. when smith ran for president, he had experimented with these things in new york state. he was a champion of the labor issue. he was a champion of parks and
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recreation. he was a champion of hydroelectric power. he was wanting to spend money for the social programs of new york state. there were all forerunners to -- they world for runners to the new deal. in 1928, people did not want to hear that issue. it was overclouded by prosperity. there was a whispering campaign about his religion. he was an unknown candidate that had a thick new york accident -- accent coming out to the form territory. even smith when he campaigned, he had one funny story. he was driving on a train for wyoming. they were about one hour out. he sees a horse out in the field. he says, we must be getting close to civilization. somebody said, that is a wild horse and we have one hour to go. he showed how much smith was out of his element. he was used to new york. i think the country was used to somebody other than a new yorker. they were used to calvin coolidge and hoover. >> if you were elected governor of new york at that time, were
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you a shoe in or an automatic for consideration of the national stage? >> absolutely. al smith was nominated -- it was always the favorite son candidacies. when the first ballot thing happened in 1920, they nominated al smith for governor -- for president. it went one round and a dropped the votes. eventually, it was cox from ohio. in 1924, they really went out for smith. there were 123 ballots and he ultimately had to withdraw. in 1928, he was the nomination. all throughout history, the new york governor -- this is even in modern history, the new york governor is automatically considered a presidential material. if you look at the people that have run and won, and those that have run and loss, you'll see new york all throughout the history. >> i was just going to jump in there. i think new york was just an
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incredibly important -- new york was one, and ohio was the other. it kept producing president after president. i don't think we have anything like that anymore. maybe we could look at something like texas. but it is not just within the democratic party. when you look at the republican party, all of these figures, roosevelt, charles evans hughes, coming out of republican candidates. out of the democratic party, you see franklin roosevelt. new york as a state has two machines really going. it has a pretty significant effect. >> two machines? >> the same as a machinist at tammany machine. >> the republicans head and an incredibly powerful network as well. >> what is tammany hall? >> tammany hall is technically just the new york city's democratic party. the manhattan democratic party. tammany hall from the mid-19th century was best known as the machine of machines in urban
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america. it was identified as a primarily irish machine. a machine that will be depended -- that really depended on the neighborhood power, word power, and that was as much about taking care of your neighborhood and the coming up to the neighborhood as it was anything really about national politics. tammany hall is the most powerful force in new york city politics at that moment. but really in new york state, democratic politics. >> how did tammany hall fit into the 1928 election? >> that was the brush that painted smith into a corner. we talk about the religion issue. this started at the convention in 1928. tammany hall would go to the conventions and they would always have -- new york was a key state. it would nominate the democratic candidates. many candidates -- we had both a democrat and republican candidate from new york like teddy roosevelt ran against alton brooks parker.
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the chief judge of the court of appeals in new york state. one was a republican and one was a democrat. tammany hall was always seen outside of new york state and sometimes in new york state as a corrupt machine. it was seen as boss tweed. people like william jennings bryan would rant and rave about tammany hall. he wanted their votes, but he did not want a tammany man there. them pullingant the strings. eventually, smith is a tammany man and a candidate. it shocked many people within the democratic party. >> al smith lost new york in the 1928 election. >> he did. he had the sad fate of losing the race for president of the united states and seeing his hand-picked successor win. for governor. fdr wins. it slips the dynamic of their relationship forever and ultimately, roosevelt winds up where smith wanted to be. smith winds up in retirement. >> we will get into that.
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beverly gage, when we ask you prior to the show some issues you thought were important to the 1928 election, one you mentioned was the role of the media in 1928. >> i think particularly for al smith, he has come to age as a media battler. particularly, william randolph hearst, they were after him and after him, one of the most powerful newspaper tycoon's in the country. smith had a certain amount of confidence by 1928 that he knew how to fend off these kinds of press attacks. ultimately in the election, one of the interesting things about the catholic issue is that we now understand it to have been absolutely crucial to this election. smith openly acknowledged it. a lot of it was done and talked about through a window, john -- through innuendo -- john mentioned earlier about a whispering campaign. it was not something that would be said in the press, but the press would feed into these images. i think smith, from my reading
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of it, he was behind from the first with the press in part because there was so much coded language being used and in part because the press had this feisty, irascible personality that likes to write about it but were often quite contemptuous of it and really set a public narrative that did not afford him the respect he deserves. >> i think one of the things that is interesting about smith in the press is that he loved the press. he used to hold press conferences here in albany, the press corps got to be very close to him. he had a great relationship of what was on and off the record. except for the battles with hearst and his newspapers in new york state, he really enjoyed that. when he left the safe confines of new york state and the whispering campaign came out, there were papers that were not friendly to him. it would not cover the issues that were important, smith was greatly hurt by that. he was also not used to the media of the day.
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the pie plate, he used to call the microphone that you speak into -- he would speak to the microphone. he did not like to read prepared speeches. he would take out of this coat pocket an envelope. he wrote everything on the backs of envelopes. long after lincoln, he would have the custom, he would say, these are the points i will make. i will address the nation on these things. i will speak from the heart. when the campaign became more of a prepared speech, he was not used to that. he was used to the old tammany hall way. meeting people, greeting people, going out amongst them. >> just to jump in, you mentioned the rise of radio. i think that made a huge difference in how americans were able to perceive smith. he is this new york guy. i will not attempt -- will you attempt to do an al smith impersonation? >> i don't have a deep enough a voice.
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>> a deep new york accident. -- accent. but the fact that people could hear him, to many he sounded foreign. he did not sound like he came from a different country but he sounded different from them. that became and other big issue in the campaign. >> this was the first time ever people were able to hear their -- here in mass media, their candidates -- candidates, correct? >> yes. as radio started to get bigger and as the media started to circulate, tv came much later. people would hear the campaigns from their ward leader, from the political machines, they would read it in the paper. they did not see the candidates, let alone hear the candidates. we have a candidate that comes out and pronounces radio as "reh-dio," that added to the whisper campaign. people would say, is this guy an american? >> again, we are live from albany, new york. "the contenders" with al smith.
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this is our sixth week. he is the four time governor of new york. 1928, the presidential candidate for the democrats. now, the route this two hours we -- throughout the east two hours week will be talking about al smith, we will return to the 1928 election as often as our callers want to. but we want to learn a little bit about where al smith came from. here is a little bit of al smith talking about how he was raised. >> i was born in a little house under the brooklyn bridge. the bridge was erected when i was a small boy. my father was at the opening ceremony. what he came home, he said, i have just witnessed a great spectacle. at the same time, it was a very bitter disappointment.
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what did he mean? here is the story as he told it to me. he said, son, this bridge has kept thousands of men working for years. the steel cables, the concrete, the wiring, the machinery, it costs millions of dollars. today was the opening. bands were playing. flags were waving. they cut the tape, and finally had happened. what happened? they found all you had to do was -- all you could do was go to brooklyn. [laughter] >> this was the neighborhood where al smith grew up. he raised his children here. he went to school right around the block. st. james until a crane. -- until eighth grade. his father died, and he had to go off to work and support his mother and sister. this is where al smith's action -- accent came from.
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this is where it all began for him. it was all irish and italian. they came from over off of ellis island and settled in here. he got involved in tammany hall. it grew from there. >> the second speaker we heard was al smith iv, al smith's great-grandson. john evers, what is the lower east side and our important was it for -- and its importance for his career? >> i never knew vocal cords could be inherited. that sounded a little bit like his great-grandfather. the lower east side is the southern tip of manhattan. a little on the southeast side. that is where smith was from. it was a port. it was not like it is today. there were ships -- smith wrote that was his playground. he came from an irish family. it is interesting. it is not well-known, his father was actually from german
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and italian roots. but smith used to claim he did not know this. he probably did not. he grew up in this bustling area. the center of his neighborhood was the catholic church. st. james, he was an altar boy. he used to work and sell papers. the sad part about his early life was he lost his father very young. he was about 12. his father was a trucking van. -- a trucking man. a teamster. he would cart goods from the seaport up to the city. he died young. he never graduated, even for the eighth grade. if you trace his red book entries, which is the official biographies, he always said he graduated from eighth grade, which was not true. he said he inherited his father's truck business. that also was not true. that might have been self consciousness of sitting around lawyers and businessmen from upstate. the real struggling diehard and
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neighborhood shaped him forever. it made him tough. he enjoyed it. for the rest of his life, it was the catholic church, his family, and the democratic party. >> so he went through the seventh grade. >> he had to leave a month or two before graduating eighth grade. it was too tough. >> paint the larger picture. what was new york like and what was the country like in 1873? >> 1873 -- new york is growing increasingly different from the rest of the country in many ways. at that point we are eight years out from the end of the civil war. in new york, you are beginning to see the city change in all sorts of interesting ways. in the 1830's and 1840's and 1850's, you have the first massive wave of immigration. that was from places like ireland, germany, irish and
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german immigrants had settled the city. by the time you get into the 1890's, you are getting waves of immigration from new areas like italy, russia, eastern europe. new york is really becoming the way that we think about it. a kind of polyglot city. this is really the age at which that is beginning to congeal and become an important part of the city's politics. as part of this, all of the groups are beginning to organize. this is through the heyday of tammany hall, the irish machine getting its bearings in the middle of the 19th century. what were conditions like on the lower east side is famous during these years, particularly as to get it to the late 19th century as being the single most crowded place on planet earth. there are not much tenant --
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tenements regulations or sanitary regulations. it's kind of a free-for-all. you have enormously crowded conditions. often you have big problems with disease. sanitary conditions are poor. in many people's memories, you also have tight-knit ethnic neighborhoods which had some powerful institutions. he had it churches, synagogues, labor union starting to emerge during these years. the lower east side at the moment is a tightly packed, very intense place in new york. for a lot of the country, it is a symbol of the urban ills that are really beginning to press upon the country. industrial strife, overcrowding, poor working conditions, disease. for many people, this continues onto the through the 1920's. immigration is a symbol of the way the country is changing.
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>> i think in smith's day it was the same. he would talk about sailors from different countries. he would meet people from all over the world. there were sections of his area where he lived. there were russians, jews, people from italy, people from chinatown up the road. he lived in a little enclave that was surrounded by all of this. he would go over a few blocks and there would be areas of the vice. if you go a lot down the street and there would be ships from all over the world. this shaped his image. he thought he knew america by knowing all of these people. he knew what it meant to be tolerant and see different ethnicities. this was his world. later on when he went out in america, i think part of the shock was -- it is not all like this. he thought he knew -- new york state was -- when he first went to the assembly, he realized that he had seen a lot more in his neighborhood then what these people had seen. he could not bring everybody down to new york and manhattan.
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although he brought many members of the assembly to see, he said, this is how america really is. it is a melting pot. some of that came back to xenophobia, to anti-religion, his accent. it was almost a way of saying, you are foreign, you are not like us. >> he went to work in 1886 at 13 years old. where did he go to work? >> he had probably one of the toughest careers i have ever heard of. he starts by leaving early. he goes and sells newspapers. he starts after school, i will sell newspapers. he gets a few dollars that way. it is not enough. his mother had to go and get a job the day they burried his father. she comes back from the funeral, goes back to the forelady in the umbrella factory where she worked prior to marrying al smith, sr. she gets her job back.
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it is not enough. she takes peace work home. it is not enough. eventually, he goes through a rapid series of jobs working in a small candy store that his mother was the proprietor of. he goes and works in a company of -- truckspotting. he used to run along the south end and pick up different trucks for his company. it would report to them, don't come back, go to this area. eventually, he gets the most famous job he is known for. it is at the fish market. -- the fulton fish market. he got up at 4:00 in the morning, rolled barrels, shoveling crushed ice, coming home smelling like fish. he would go there at 4:00 in the morning and get back to 4:00 in the afternoon. this led to him getting a job at tammany hall. he was not getting up at 4:00, smelling like fish. the good thing about it, he wanted to -- he used to take all the fish he wanted. if you compile all the fish up that he and his family aid, it
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would let their rafters of the capital and slide down state street 50 feet deep. they will slide down the hill 50 feet deep. that was how poor he was. they gave him a lot of the free food. >> this is "the contenders" and we are talking about al smith. first off for our two guests, new york, wayne, you are on cspan. >> hello. the question is two-fold. i am interested in what al smith's role and commitment was to the new york state civil services and labor. how he championed that. when he campaigned on the federal level. what specific things did he do to help reform new york state politics, particularly the self-service and his commitment to labor. -- the civil service and his
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commitment to labor. >> thank you. >> that is a really good point that separated al smith when it came to labor issues. in 1911, there was the famous triangle factory fire down in manhattan. smith was on the commission to study labor law. he became good friends with francis perkins, all the reforming labor activists at this time. in this very chamber, the labor laws that would regulate fire escapes, hours of service, health codes, workers' compensation. hand in hand with that was probably the advent of civil service. being a tammany man, there were rumors he wanted to pack everything with democrats. but this became more prevalent as it got to the end of his gubernatorial career, the most qualified person should have the job. smith was well-known to having
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people in his cabinet that were republicans, that were not enrolled. people who had nothing to do with government at all. his highway commissioner was a military engineer who had republican affiliations. he wanted the most qualified people around. some of that lead into the civil service. he also wanted to have strong labor relations. he stood up for those that came to labor that were often shunted aside. the reactionary forces often embodied in the republican party fought him on this. he took that campaign, he had the support of afl cio. the afl championed him in the state but not nationally in the 1928 campaign. >> those issues that john evers was talking about, did it play out nationally? how strong were the forces behind the issues?
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>> i think al smith is a good example of somebody who was radicalized over the course of his time on a politician. he starts out as an unexceptional tammany guy who is not putting forth particularly creative ideas. no one knows much what he was doing as an early assemblyman. both through the social turmoil that he had during the progressive era and then through the triangle fire which does seem to have been this kind of eye opening moment for him, 146 people died in this fire. they are mostly teenage girls, mostly teenage immigrant girls who are locked in on the eighth and ninth floor. they are forced to jump to their deaths. he ends up on the commission. he becomes a true progressive in those -- what i would say the radical and not radical sense of that word.
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when he begins to work on the commission, they revamp fire codes, they pass legislation to protect women and children. he becomes an advocate of paternalistic labor laws. revamping some building codes. he is never a super strong supporter of grass-roots organizing. one of the things left out of the triangle story is that there have been strikes under way at the factory and throughout the industry. that does not become something that he champions in quite the same way. he does champion legislation. that will ameliorate industrial conditions. that is his stance by the time he is running for president in the 1920's. the 1920's are not a good decade for american labor. it is not one of the big issues of the campaign. nonetheless, he holds on to the progressive tradition.
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one other thing worth noting as well, i actually first encountered al smith when i was doing some research on a bombing that happened in the new york in 1920 which was an attack on wall street at the time. i encountered al smith because he had just become governor, and this was during the midst of the red scare after the first world war. five assemblymen who had been -- five socialist assemblymen who had been voted in from districts of new york were thrown out. al smith turned out to be a champion of their right to stay in the assembly. it was a lot of concern that the bolshevik resolution -- revolution over radicalism. al smith stood up and said they had every right to be here. he was a great champion and a new voice that was speaking out in favor of a broad vision of democracy at that point. >> knowing what you do about all smith, how do you think he would feel about the current occupy wall street movement?
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>> that would be interesting. he was an underdog. we talk about the socialists. smith would out there and took on popular stances. he got up there in 1920 and told the assembly next day, i will put out a press release championing the rights of these people to hold their seats. it was flabbergasted. nobody would do that. we are in the middle of the red scare. these people are anarchists. the same with labor. smith would go and settle labor strikes by sending state employees from the labor department, and one case, francis perkins. a woman who had to settle in upstate labor dispute. he is not only sending government people, he is sending women now. he was unconventional. he was a wedge for diversity. when it comes to something like
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that, i think he would look at it and say, what is it for the good of the people? he was not a big champion of big business. >> francis in cincinnati. thanks for holding. you are on "the contenders" on c-span. please go ahead. >> good evening. i have been privileged to have gone to school in albany. i would like to know if you could address the financial banking that elspeth had -- that al smith had and the contention -- by john j. araskog, and the contention that was because smith was catholic and trying to be president. >> francis, where did you go to school here in albany? we have several colleges in our audience. >> i went to the academy of the sacred heart on south pearl street. unfortunately, it has been closed and is now for sale.
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>> thank you very much. the financial question. >> he was a good friend of the dupont family. he was one of the key people in general motors. araskog, he was a multi millionaire. as i mentioned earlier, smith was not a huge champion of business. he voted as he was told to vote. later on, he drifted towards pro-business, that was after the roosevelt fallout. he wanted to be involved in politics. he became friends with al smith. smith makes him the head of his campaign in 1928. much to the consternation of many people, they said this guy is not a politician. he is not active in democratic politics. why are you doing this? a lot of people thought it was because of the money.
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he also became friends with many people, bill kenny was one, roared in -- rourden was another, these new york irishman who made a lot of money and became millionaires. they have smith jobs. at that time, smith wanted him as a friend. he brought a lot of money. >> i think it is true. the question that came up about what he would think about occupy wall street, it really depends what al smith we are talking about. as a young man, he is kind of a straightforward tammany politician. he voted as tammany told him to vote. he is coming up through the ranks. if there are no glimmers of greatness during those years. then he becomes a progressive politicians both as governor of new york and when he is running for president in 1928. but after that, he takes a turn in which he becomes deeply hostile but only to the new
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deal but takes up some of the kind of red baiting tactics that he had fought so hard against. in terms of trying to judge how he will respond to the social movements of his day, some of which were deeply anti wall street, it depends when you run into him. if you got him at the right moment, he would be exactly as john said. he would be a gesture in in support of not being deeply in support. later in his life, he would have been calling them communists. >> before we got started, you pointed out where he sat in this chamber. he started out somewhere in the back, you said. >> way in the back. seat 143 i think it was. he used to get confused with the bystanders and the visitors. that was before they got microphones. before -- for years, he never spoke.
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which is hard to believe. then he sat in two seats that are right here where we have two gentlemen. the man with the beard raising his hand when he served as majority leader. and this gentleman over here in the tie. that is what he was the minority leader. >> that was in 1911. smith became majority leader when the democrats took over. in 1912, they went into the minority. in 1913, he while it up -- he wound up being the speaker. >> right behind this is the speaker's chair. maybe 20 steps from where we are sitting is the speaker's office that al smith used. the current speaker -- i am so -- sidney sheldon -- sheldon silver, i am so sorry about that. and there is a a portrait of al smith. >> the came from the same
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district. they both are democrats. the bulk for speakers of the -- they both were speakers of the assembly. it is interesting when you talk about -- it is almost 100 years ago that smith was speaker. 100 years later we have a speaker from the same district and political party. the neighborhood is still a very diverse neighborhood. smith became speaker of a fleet. -- on a fluke. new york state reapportionment was so heavily weighted in favor of republicans, that his democrats rarely held in this chamber. he was here 12 years and was only in the majority twice. it only became democratic won in -- once in the 1930's. they had to go to these 1960's before smith -- for the democrats took over. i think smith would be proud that they finally got equal representation. they changed the system to make it one-man, one-vote. you could then allow new york city to send its proper amount of legislators to new york and has resulted in another
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manhattan speaker. >> we talk with speaker sheldon silver about al smith. here is what he had to say. >> i think he was a man ahead of his time. his reaction to that trying to shirtwaist fire, putting in legislation to deal with child labor, with labor generally. providing rights. we today commemorate that triangle factory fire. we come up -- commemorate the 100 anniversary of it. all of the legislation protecting workers are things that we in the assembly due -- do today. al smith when he was the governor of the state --al smith when he was governor of the state, he talked about having the wealthier pay a little bit more. he had some great hopes about it. i remember i wrote one down because it was as appropriate
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today as it was in 1913. -- 1930. he said, what do we say about our colleagues who reject an income tax amendment? what do they say? they reject it. why? they are unwilling to say that the fortunate ought to share its share of the burden of government. they are unwilling to subscribe to the indisputable principle that he who benefits the most should pay the most. that was al smith in 1930 and that debate is taking place again today. >> that portrait or that photograph of al smith that is in the office, when was that taken? >> that was probably taken when he was the speaker. he was a very young man. he was elected to the assembly when he was only about 30 years old. he would probably be in that picture, mid 30's or so.
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he might be close to 35 or 36. that might have been one of his official portraits as an assembly man. it might very well have been his portrait as the speaker. >> how powerful was the speaker of the new york assembly, and how does that compare with the power today? >> the speaker is always the most powerful person. i would say it is most comparable. back then when smith was just starting out. he did not even meet the speaker, fred nixon, until three days before the session adjourned. the speaker back that was almost regal. today, there are more chairman. the power is more diffuse. it is not as arbitrary as the used to be. the speaker has tremendous control over the bills that come to the floor, over the chairmen who are made chairman, what the program will be. it still is a key job. one of the three most powerful
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people in the state. the senate leader, the assembly leader, and the governor. >> beverly gage, state politics in the new york in the teens and today. >> as i said, new york is a key state nationally but it has its own political culture. i think it reflects the same things we see today. the difference between your urban core, your new york at that time largely dominated by a tammany machine. but not exclusively. upstate new york you have cultural differences, political differences there. because you had all of these differences, it was always a question of, what kind of issues you were actually going to deal with that the state level. one of the things that al smith ends up doing as governor, he tries to make it possible for the governor to do more than he has been able to do. it is not a particularly strong
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post at that point. for tammany hall, your power is concentrated in the york city. al smith is an ambassador for the city to the rest of the state in certain ways. he is trying to make it possible in this progress of the impulse to actually make more things possible. to consolidate a little executive power up. albany in ways he had not seen before. >> talk about his career as four term governor as we take this call. from fort lauderdale. hi, neil. you are on "the contenders." >> first of all, a commentary and then a question. your quorum is incredibly stimulating. i don't have the credentials you do. i fancy myself and armchair historic. as far as mr. smith is concerned, the catholicism should not enter into the picture.
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he was clearly a proponent of the middle-class and pro labor. generally, i think he was a well intended individual. i am wondering that if today, if we had a candidate running for the president of the united states, what candidate would mr. smith's mindset be able to pull off? despite that, thank you so much. i enjoy watching. >> beverly gage. >> i think that is an interesting question. smith goes through a very weird political transition in the 1930's. after he lost the election, he does look of a lot of what he -- does slip on a lot of what he stood for up to that point. i know we will get to talking about that a little later in the show. he was a populist of sorts. he is not an absolute populist. he was certainly not a william jennings bryan populace. -- populist.
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if anything, he really did not like bryan around cultural issues. he was an urban populist. i think it is true that he is and advocate of the middle class. he is a figure that embodies and advertises he embodies the kind of, working your way up to the american system from childhood of poverty ought to success. would a candidate today who had that kind of populist message, or least pseudo-populist, would it be successful? i think it is hard to say. smith was not particularly successful in his day on the national stage. i think populism has kind -- has had a kind of a mixed history in the united states. >> is there a politician today you would compare to al smith? mighton't know. today he be more of the technocrat.
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i will explain that. populism itself that smith embodied was almost like a compassion best, he wanted to do -- a compassionate technocrat, he wanted to do the need delaware prior to the -- the new deal prior to the new deal. roosevelt once said, i don't know why al smith is complaining. i am just doing in washington, d.c. what fdr did in new york. with the way the economy is today and the debates over government, smith would probably lead to his lips and say i would love to go to washington, d.c. and figure this out. that is what he did in albany. annie did it in a republican state with a republican legislature. even discussions now with the bipartisan gridlock, smith had done in new york. -- had that in new york. he would probably sell himself very well today by saying, i have done this in the york. -- in new york. i have battled the legislature that is hostile. i know how to get government under control.
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i know how to get the economy moving again. i think he would be seen as a technocrat. he was not flashy, but some of that would be ofbraintrust kind of guy. >> james in dayton, ohio. good evening. >> i was wondering if,in 1929 wall street collapsed. initiating the great depression. i was wondering if he had any party platform that might have contributed to anything -- any -- cloying -- all avoiding any of the abuses by the moneyed class is in on the wall street that led to the collapse and ultimately the depression. if he had been elected in 1928, would he have done anything that might have possibly avoided or diminished the effects of the depression that followed? thank you, james.
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beverly gage. >> what would like to be able to say, yes. if al smith had been elected, none of the depression would ever happen. i don't think that is true. i don't think of economic issues by 1928, the 1920's turned out to be a relatively conservative decade on things like labor policy. smith himself is not running in a shanty wall street campaign in -- an anti-wall street campaign in the 1928. the real progress of candidates have been four years earlier. that had a much more vocal, into wall street sentiment. it had a much more strict set of regulations and have more focus on economic issues. unfortunately, i don't think that smith would have done a whole lot significantly different. i am not sure that any president was really in a position to see what was coming
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or really have the tools at to that point to prevent it from happening. >> that is kind of what hoover at the end with his ideas of experimentation with government intervention, i heard somebody say once that if smith had it run and won in 1928, hoover would have been the obvious time -- kind attended in 1932. it would say, we need a is this man. which you will need a businessman. we need somebody who is a model of getting the economy going. no matter who won, they would have been unprepared to stop the avalanche of financial ruin pure >> let's take a back to 1918. al smith is elected governor of new york for the first time. how? >> the accidental governor. it took all smith until 1925 or 1926 to get into the minds of the republican party that he
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was not going to lose. so he ran against charles whitman. -- 1918. charles whitman, the d.a. of manhattan had come up becomes governor of new york state. he runs twice in gets elected. he starts i mean the white house in 1920. we like to look back and say what if. maybe it would not have been party. -- harding. maybe it would've been charles whitman. smith unseats this governor largely because there is a flu epidemic. he campaigns around upstate new york. he turns out the new york city vote. he wins by a very slight margin. he get in there. in 1920, the legislature crosses its arms and says we will not do any of these things. >> the republican legislature? >> the republican assembly and senate. smith starts the campaign by
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saying, and will have a reconstruction commission capitalizing on the transition from a wartime economy to the private sector economy. he starts saying he is going to strengthen -- we are going to bond so we can have capital improvement spread out for many years in just -- instead of the infrastructure starts to crumble. he has a lot of these great ideas. the legislature says this guy will never win in 1920. that will be the presidential year. back then, do your governor's -- ran at thevernor's same time the president ran. smith gets reelected in 1920. he has very little to show -- he loses in 1920. he has very little to show what he goes up in 1920. they run a very conservative, upstate republican who wins. sure enough, al smith goes away. people thought he would never come back. he did run again in 1922, 24, and 1926.
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he starts to avalanches success. >> at the same time, all of his elections are pretty close. >> they are close until the last two. they have a very close election which is 50,000 votes in the -- 15,000 votes in he loses a close election in 1920. the national democratic ticket goes down by over 1 million votes. smith only loses by 75,000. that is what they this person said, it is like swimming up niagara falls. you can the closest anybody did. he comes back in 1922 and was a squeaker. in 1924 he starts to add to his totals and he went against teddy roosevelt -- teddy roosevelt, jr.. it was only in the 1920's with his third start to come to fruition. before then, he has seen is the
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accidental governor. >> 1920, when did get to vote. -- women get to vote. does that make a difference in al smith's career? >> he is interesting because as john indicated before, he actually staffed a lot of his inner circle with women at a ball between not many speakers -- at the moment when not many speakers are doing that. francis perkins becomes the secretary of labor is a close ally of smith. pell moskowitz is his make it happen, and up in albany. he actually has a fairly progressive outlook of women in government. the advent of the women pose a vote does not have a huge impact on national politics. it ultimately begins to build. does not have the impact many people are predicting.
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in terms of new york politicians, job would know this better than i, i don't have perspective it really transforms -- >> not at first. at first, he was not in favor of forbids a suffrage. -- of women's suffrage. it his mother said, i would never vote. there is no need for me to vote. she does. she cast her first ballot for her son for governor. smith's hook is he gets a lot of these people involved. he starts to realize these are the voters. he says, how do i talk to these people? he says talk to the lucky would talk to a chamber of commerce or anyone else in the campaign. he starts to realize that would suffer to is a good idea. -- that women's suffrage is a good idea. i can enlighten these people. i can get them to vote democratic. that is where he gets the braintrust for many of these people who were -- who will work for him who becomes dirty -- sturdy supporters of the democratic party. smith capitalizes on that. >> a few blocks from here is
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the governor's mansion. what was life like for all smith at the governor's mansion? >> hectic. >> when he walked up here? >> he would walk up there. when i worked for an assemblyman in his 80s, he would tell me the stories and he remembers the governor walking over from the governor's mansion of the capital, and saying, did you go to school with my son, yes. the governor would joke with him. he was very much, i guess you could say, a neighborhood guy. he had a zoo. he brought them all with him. a lot of things were given to him. he had bear, deer, elk. at one point he had an alligator.
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smith always loved animals. when he was a kid he would collect dogs. sown on the south port, sailors would come in and have these exotic animals, monkeys, goats. he would take them home and put them in his attic. he never had less than two dogs, he used to say and when he came for his first term, he had his great dane and it jumped up on charles whitman and smith joked, "it's tammany tiger coming to take over." with all these children and animals, it was always a hectic place. it was a very friendly kind of atmosphere. >> i could add on the animal front we all owe smith a debt for his love of animals because one of his great allies first in city government and then state park was robert moses, the commissioner of parks of new york, who made new york in many ways.
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he and smith remained very, very affectionate well into the 1930's after smith was out of political life. and he insists that there be a zoo in central park so that al smith can come and visit the animals. he's living up town at that point. there are poignant stories about smith at the end of his life, he literally had a key to the zoo and he would sometimes go down there in the middle of the night and hang out at the central park zoo. in many ways it's a tribute to al smith and his love of animals. >> honorary night superintendent was al smith at the zoom. >> we've had a very, very patient audience here and in just a minute we're going to
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start taking questions from you as well. but we have a very patient tony from pleasantville, new york, who has been holding. you're on c-span and the contenders. >> thank you for this series and c-span. i've been watching for over 20 years and i think if more people would watch c-span we would have better presidential candidates. but you beat me to the punch. i wanted to ask you about belle moskowitz. i wonder if they could expand on belle moskowitz's role and the job she had for governor smith. and also earlier you mentioned al smith didn't speak for two years. eighth grade education. didn't speak in the assembly, intimidated by all the other lawyers there. can you tell us what al smith did at night while the others went down on state street to booze it up and carouse? how did he educate himself to become majority leader and
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speaker? >> we're going get john to answer those questions. but i know you are a new yorker. is that the reason for your interest in al smith and your knowledge something >> i read a great book called empire statesman. i worked in albany for a while and i knew the al smith building was there, the tallest building in the state before the empire state building, i believe. but i read the book called "empire statesman." >> all right. thanks for calling in tonight. what else about belle moskowitz and what he did to educate himself? >> belle was the unofficial gate keeper. she would serve as his advisor and it was probably the best way to describe it as she was the person who would pass
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through all of these labor programs, all these reconstruction commissions. in fact the reconstruction of new york state, which eventually led to the reforming of the state constitution and the establishment of a strong chief executive, was done with the reconstruction commission. that was belle moskowitz's brain child. she recruited bob moses into the commission. in fact, tammany hall became very jealous of moskowitz and moses and prochnauer. they joked that's the brains of tammany hall. wereweren't irish, they jewish.
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the interesting thing about him not speaking in the assembly, smith sat so far back and he was so intimidated and so lost that he went back to new york after his second term and told tom foley, the tammany boss of his district, "i think i might be in over my head." he told him, "i might be able to find you a job, maybe superintendent of buildings in new york city, if you really can't hack it." that appealed to smith's ability to fight. he said i'm not going to admit i can't handle something. so he went back with a mission. he took all the bills every night and read them, every bill introduced, so he could understand the legislature. he didn't have a high school or college degree. he wasn't a lawyer. the assembly at the time was
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prominently the legal field. smith made sure that he could do that. also since he didn't have any money, he lived on the $1,500 a year plus traveling expenses, he didn't have anything else to do. he didn't go out partying at night. he didn't do bad things. he missed his family. he would go back to his room at his hotel and read. and when he wasn't there he would be in the legislative library reading the bills and what they affected. >> about 300 pages long? >> yeah, they could save a lot of trees by having them done electronically. smith used to read the appropriations bill cover to cover and he said not more than 10 people could explain the appropriations bill. thick, massive, he read that line by line. and it helped him as governor because he had an understanding of the budget system. >> i have a question from our audience.
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this is dave petrusa. he is an author. did not know he was going to be here tonight. he was a new book coming out about the 1948 election. go ahead. >> thank you. and your guests are doing a great job tonight. there are is constance in al smith's career. there is tammany hall, frankly roosevelt. and another fellow, william randolph hearst. specifically what can you say about that relationship, specifically the gubernatorial races and the 1922 presidential nomination process? >> let's start with beverly gage. >> hearst is one of the towering figures of this moment and he turns into one of smith's great critics and he's sort of the man around which smith learns how to deal with the press in many ways. i know you, we were talking earlier and you said you had been writing about this in great detail, the milk issue and hearst's attacks on smith. >> oh, god. yeah. great question. glad dave brought this up because william randolph hearst was probably one of the most controversial government figures or quasi-government figures in new york history. he ways two-term congressman
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from new york. he basically bought the seat. he tried to get the nomination in 1904 for president of the united states. he lost that. he runs for governor in 1906 against charles evans hughes and loses. he runs for new york city mayor and loses. many by has control of the two newspapers, the evening journal and the new york american, and he churns out really the basest
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appeal to people and to try to tell them that i know better, i'm a reformer, i want municipal utilities that will lower your rates. i want transparent government, you can get that if you back me. in 1918 he wants the nomination for governor and they try to figure out who is going to get this. they settle on smith. smith goes and gets elected. in 1919, immediately william randolph hearst starts to poke at smith's programs. there's a milk strike in new york city. the upstate dairies can't get milk into new york city. they then have a milk strike upstate where the producers won't ship it to new york city. well, none of this is within the purview of the governor's powers. the governor tries to get his departments of farms and markets to act. they won't because many they don't report to the governor. hearst won't take this answer and he also says you are moving too slow on municipal ownership. we want the utilities in new york to be owned. you are the governor, you should make them do that. they won't. smith goes head-to-head with him. he takes the stage at carnegie hall to debate hearst. hearst won't show up for the debate. he goes to san simeon and starts buying more art work. smith loses control, screams and yells, red in the face, about this man and unmasks hearst. hearst then ironically comes out and backs smith for re- election. smith want nothing to do with
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him. 1922, hearst wants the nomination. smith says i won't run on the ticket if he's going to be on it. he said i'll be gore. he said i won't run on a ticket with hearst at all. smith was one of those guys that was just, well, he's honest. are he said i'm not going to change my mind left and right and be as despicable as hearst and deal in character assassination smith wins. and an ally, one of hearst's allies, he replaces him with jimmy walker and takes over the party. but smith gets the last laugh because in 1932 hearst uses his power to throw on the fifth ballot the nomination from the f.d.r. -smith battle.
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he takes his votes under california under mcadoo and give them to roosevelt, knocks smith out and he loses the nomination because of hearst's behind the scenes. >> well, there were three he was active in. 1920, 1924 and 1932. here is a newsreel about the elections. >> then the great political battle of 1924 where with alfred e. smith and john davis, he stood out as a leader. there never was a political convention to match the democratic national gathering of 1924 in new york for drama and color. mcadoo against al smith. day after day, terrific storms of passion shaking the delegates. the high note of all, franklin d. roosevelt's presentation of alfred e. smith with the deathless phrase, "the happy warrior." the democratic convention attendees from the lone star state and once more franklin roosevelt took the stage to praise as only he could do the man for whom he has always had such affection and respect, naming him again, his friend, al smith, the happy warrior, the governor of new york. al smith will always have his own place in the hearts of the
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american people, but events were moving fast. he wanted a good man to run for governor of new york. he persuaded franklin roosevelt to make the race. although smith lost by a narrow vote, roosevelt was elected to his first term as governor.
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already roosevelt was the leading favorite for the nomination. the leading opponent, none other than his old friend al smith. >> frankliin d. roosevelt, having received more than 2/3 of all the delegates, i proclaim him the nominee of this convention for president of the united states. >> you have nominated me and i know it and i am here to thank you for the honor. i pledge myself to a new deal for the american people. >> and back live in the new york constituent assembly chamber.
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beverly gage, how did we get from 1928 f.d.r. calling al smith the happy warrior and nominating him to the 1932 election? >> well, they had been allies before, both coming up through the same new york democratic party. a couple of things happened between 1928 and 1932, some of which are very personal and some of which are on a grand scale. the most important thing that happened is of course that we entered the depression so her better hoover begins in 1929 as president. he gets stock market crash that year and by 1932 you are really in the deepest, darkest moments of the depression. so that is bad news. but for the democratic nominee for president that's actually
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really good news. so in 1932 al smith wants to be the candidate again. in fact he's put forth as a possibility. but there's a lot of controversy about whether or not this is going to be a good idea. there are a lot of people who do not want to introduce into what looks like it's going to be a smashing democratic year all of the issues that you had seen in 1928, issues about catholicism, about prejudice, about prohibition. all these sorts of things. now franklin roosevelt has a little bit to say about these things, but when he's a candidate in 1932 he's kind of being as even keel about all this as you possibly can be. so smith is gunning for this and there is a lot of pushback about that and it's not clear either that smith is a huge fan of roosevelt's. they've had a very, very cooperative relationship, but
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it's always been smith through the elder statesman with roosevelt the supportive, younger man. and it seems at this moment and we should acknowledge like a lot of people in the united states in 1932 he views franklin roosevelt kind of as a dilettante, someone who is not willing to come out and take hard stands on things, he's come from a life of leisure. here's smith who worked his way up. so you have this personal drama playing out at the same time you have the political drama playing out and you know who wins that in 1932, and it doesn't take very long for smith to begin to attack roosevelt personally as well as politically. i think it's easier to understand his personal animosity toward roosevelt as it begins to develop. i've always found it a little bit more puzzling to understand how by 1936 he's actually endorsing the republican presidential candidate and is embracing a kind of politics he really hadn't embraced before. is it because he is heartbroken? because he doesn't like roosevelt? is it because he has actually changed his mind ease sees roosevelt enak the new deal? these are all sort of open
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questions about their relationship. >> now back to your calls on the contenders. sheridan, arkansas. yes, my grandfather albert godwin was a county democrat chairman, a state senator and supporter of al smith. compare al smith's campaign for president and dewey's campaigns for president. >> well, let's ask the former new york constituent assembly historian if he could -- state assembly historian if he could do that in just a few minutes. >> oh, sure! dewey will be the subject of a future contenders i think in two weeks. >> there really is no comparison with dewey, the personalities couldn't be more different. they really couldn't be. first of all if smith is a democrat, dewey is a republican. smith is a progressive, pre-new deal campaigner. dewey takes over the reins in
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new york state after he beats the hand-picked successor of f.d.r. and al smith and he runs new york state during the new deal, and he is by all accounts somebody that implements his programs. so he's not a rock-ribbed republican in the sense of a conservative. kind of like a nelson rockefeller republican. dewey wanted to be president. think there were rumors he was going to run for president when he was still i think new york district attorney. he had it in the cards that he wanted to do this for a long time. smith's campaign in 1928 had always been troubled from the start. he did get the nomination and did his whirlwind campaign from july onwards. dewey had more of the modern campaign. in fact f.d.r. did this in 1932. he knew he would run early on
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and traveled the country getting his delegates in order. i think the biggest difference is that dewey was out there with this campaign and preparation a lot more than al smith ever was. we have a question here in our audience. if you would, if you feel comfortable, tell us who you are and where you are from. >> thank you. amy standard from clifton park, new york the besides the zoo that al smith brought to the governor's mansion, what was his moat notable achievement for new york and the country? >> i think if i were to rattle them off it would be kind of impressive but we don't have, like, three hours. probably smith's biggest achievements were to bring progressivism into the modern age. smith was that pre-new deal type of person. smith had the modern labor code, he had parks and recreation, he had new york state vote on bonds, hundreds of millions of dollars in bonds to improve roads, bridges, railroad
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crossings, parks, hospitals, prisons. he was ahead of his time when it came to criminal justice. smith's whole movement of government was not to downsize government but to use government as a tool to provide people with services instead of it used to be more conservative where government was simply there. the federal government would deliver the mail. it had the military. in new york state it really wasn't that much different. it did certain functions, but it didn't go out there and regulate industry. didn't go out there and regulate utilities. it didn't provide parks and recreation. didn't have the interaction with people that really needed it. so i think smith's overall accomplishment in new york state was to launch us on a social welfare state in the best positive sense of the word. we're here in the beautiful old state capitol building. finished in 1894. surrounded by state office buildings, many built in the
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1960's, 1970's, etc. would al smith -- what would he think about the growth of state government in new york? >> i think he would be ok with state government as it is. when smith was governor, it was 10, 10.5 million people. he realized state government needed to be housed. he said you've got to get all these agencies not only coordinated but he used to joke that we spend hundreds of thousands of dollars every year renting little offices. can't we build state offices? can't we centralize the work force? smith really believed that using the government to organize the people and to deliver services, that's the proper role of government.
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he stood with that his whole life. he thought the new deal just went too far. >> beverly gage? >> i just wanted to add i think on the national stage he plays a very different but equally important role in the sense that smith's candidacy in 1928 comes after a decade when we sort of had already issues about immigration, about race. immigration reform paused in the early 1920's, in part targeting people from places like italy, russia. people considered ethnically different. the other great social phenomenon of that decade was the rise of the ku klux klan. the klan in the 1920's is a mass organization.
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it's not kind of the southern targeted klan we see in the 1950's and 1960's. it's a mass organization with millions of members. it's stronghold is really in indiana, a lot of mid western state. a lot of urban is centers even in the east have large klans too which are targeting catholics and jews. these are the main issues driving the klan. and smith as a candidate, though he loses, is a person who stands up on the national stage and says no to all of that. he says no, that's not what the united states is supposed to stand for. all those people you are talking about restricting, talking about pushing out, who you are describing as foreign, those are my people, we are all americans, and he stands for that very powerfully on the national stage, even though he's rejected as the president. >> in just a minute we're going to ask our guests what they think al smith's biggest failures were. but helen, in cape may, new jersey, you are on the contenders. >> i was so excited to hear that you are going have al smith on. my grandfather was part of the irish catholic republican bear
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machine. they did split ranks in 1920 and vote for al smith. my question is after the election al smith had really harsh words to say both about president roosevelt and the new deal and the democratic party doubt. think it's because he feared the democratic party was edging too close to socialism and away from true progressivism? >> john? >> i think that his initial responses in 1928 were more of a emotional response, basically saying, and he admitted it, saying i'm done, i'm not going to run again. ironically he comes back in 1932 and says i changed my mind.
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but he wanted to set the record straight and say i think i could do a good job on this. his split with roosevelt is hard to explain. a lot of historians have really struggled with this. he alternately says it's gone too far but in certain things he says that's ok. he supports preparation for the war in the 1930's but then won't support roosevelt on the war. kind of hard to pin him down at the end except that he thinks the federal government is growing too big the he blames alphabet agencies or how the government has gotten off track and he hides a little bit behind the states' rights issue. you can't through the constitution correct or control people's individual behavior, and often he said it's a state's issue when it comes to the democratic party but he stretched it with the new deal saying states' rights when he realized a lot of these things were things he implemented in new york state as well. >> we've heard from the former new york state historian and from a history professor at yale university about the f.d.r.-al smith relationship. alf landon he supported in 1936 and wendell wilkie in 1940 over f.d.r. in fact here is al smith on the radio talking about his support for wendell wilkie.
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>> i'd just like to make a little observation. i'd like to wonder what could be going through the mind of the 16 million men that are in the draft. i wonder if they're not saying to themselves, if this becomes serious, if it becomes necessary that we have to face an enemy, who, upon the record, would you sooner be behind? the third-time candidate or a wilkie? in my opinion the only hope for the people is the election of wendell wilkie, who believes --
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\[applause] -- who believes in the constitution of the united states and the principles upon which it was founded. when he is chosen to guide this nation, then and then only will the stars and stripes again wave over the land of the free and the home of the brave. \[applause] >> beverly gage, what's your reaction to hearing that? >> well, it's really remarkable how quickly and how viciously al smith ends up going after the people who had once been his greatest supporters.
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i was trying to think if there has ever been another major party presidential candidate who in less than a decade after he had run on his party's platform is actually endorsing actively the candidate of the other party -- >> joe lieberman? >> i guess so. joe lieberman is sort of hard to read. was he ever really a democrat? i don't know. but, so going around and actually doing these endorsements in 1936 and 1940 and i think in this way that is incredibly outspoken and vicious, i mean he makes this speech in 1936 where he's accusing the new deal and f.d.r. themselves, as i mentioned earlier, of being communists, socialists. he picks up the most vitriolic new deal language. he calls roosevelt a tyrant, says he's abusing the constitution and becomes one of the standard-bearers of the liberty league, basically a business funded -- really funded by the dupont family, a group founded in the 1930's to attempt to push back the new deal. it really is a puzzling, puzzling moment. career.
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people who have tried to trace, well, he always had these platforms, he believed in state power, not federal power, or he had a more limited view of government, but i just don't think that those are answers. i think he went through something personally at that point and his circle in new york as he becomes head of the empire state building and begins to solidify these relationships with businessmen, that really becomes his world in the 1930's. and we're going to talk about that part of his life in just a minute. but we have another questioner in the new york state assembly. tell us who you are and what you're doing. >> good evening. i'm a professor at schenectady community college and i teach administrative law. as my students are talking about government and how government is getting larger we discuss state agencies and we talk a lot about immigration reform as it relates to department of homeland security. so as we're talking about al smith and his background, having come from new york city, south street seaport, being
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raised amongst a lot of ethnically diverse groups, i wonder what an immigration policy would look like for today for a governor al smith? what would he think in terms of, one, the ethnicities of those coming in are vastly different than what he grew up with and also we're looking for policies in today's immigration platform that would deal with labor issues, you know, whether or not people that have been here illegally should have the trite work after having been in the country for a number of years. so i wonder where would al smith stand on that type of issue, immigration as it relates to labor and also racism as you talked about. seeknow, we don't really much in terms of the ku klux klan any more but we so -- do see a lot of internal racism in agencies as it relates to racism. -- relates to immigration?
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>> i think al smith would be very understanding of loose immigration, probably because of where he grew up. smith was exposed to all kinds of ethnicities, all kinds of immigrants. his mother was the daughter of immigrants. his father was a son of immigrants. he worked in an area with people from all over the world. he joked one time that even representatives from china town came up for one of the marriages of his daughters. so i would say he would be more understanding of open immigration or more widely construed immigration just because that's what he grew up with. >> beverly gage, you want to add significant one thing i remember as a student was compare and contrast, immigration then and immigration now. >> right, i think that's really
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at the core of who al smith presented himself to be to the world. this question of immigration and labor was one of the hot issues, so immigration law when wait was being, immigration restriction which is passed in the 1920's, you had decades of debate about the relationship between wages and labor and immigration and in fact during al smith's day immigration policy was actually under the department of labor. and so these things were really intimately tied then. as i said, when he ran in 1928 it was really in the wake of a wave of nativist sentiment. if he stood for anything it was a pushback against this reactive nativism. now, if he had actually been elected president, would he have been able in his day to push back immigration restriction? it seems unlikely.
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this period in the 1920's is really very intense around immigration. it lasts for 40 years. during al smith's childhood there had been almost no restrictions on immigration. that wasn't reopened until the 1960's when as you said you begin to get very different groups of immigrants coming in. >> about 25 minutes left in our program on al smith. howie, you're on the air. >> yes, good evening, i wanted to shed some light on prohibition and how president hardy did not force prohibition on states that did not do the job themselves. it was 1926, around may when al smith actually signed the repeal of the prohibition act. can you also shed some light on kansas politics leading to the 1936 election where 58 smith -- al smith blew the whistle on
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the new deal? >> i think prohibition is something heavily identified with al smith. he never favored prohibition. it was not an issue he championed. he didn't like how new york state ratified it anyway. they did it by simple resolution through the legislature. he thought it should be a referendum. i believe it was 1924 they had a referendum in new york state, what do you think about prohibition? should you change the percentage of alcohol? i think it was, they wanted beer and light wines to be allowed. it passed overwhelmingly but it didn't mean anything. smith himself was elected the president of the convention in new york state in 1933 to repeal the prohibition amendment officially in this chamber. the 150 delegates that gathered overwhelmingly voted, and they overwhelmingly voted for al smith to be president. so he got the last laugh on
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that. they brought out 88-year-old elihu root to come out and second the nomination and pat him on the back. but it shaped him in that it was almost ridiculous to say that you could use the constitution to control human behavior. it actually took a right away from people in the bill of rights giving rights to people. and he also thought it was hypocritical. he used to say he saw more people who would come out there who said they were dries and more wets trying to repeal the prohibition so he thought it was ridiculous. >> and it was very intimately tied to all these questions about immigration and rural versus urban america. a lot of the imagery to promote prohibition was about the german saloon and immigrants
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running wild in the city. they took issue with that and with the kind of institutions mobilized to get prohibition passed. >> beverly gage, was prohibition a christian right issue in the 1920's kind of like abortion or gay marriage today? >> i think it's certainly a cultural issue that mobilized certain sections of the population, but i wouldn't necessarily call it a right wing issue in its day. it got a lot of its base of support from protestant groups, certainly from protestant fundamentalists during that day, this again being of the great issues of the 1920's, with the scopes trial and questions about fundamentalism really also at the forefront of american political debate but you also
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had a lot of progressive reformers, particularly women who had been suffragettes, who had been progressive on any number of other issues who were also supporters of prohibition. partly the feminist issue, saving you from your drunken husband. it's a complicated issue and i think it doesn't line up very neat hi on this left-right -- neatly on this left-right spectrum. >> john evers, in between his presidential runs, 1922 and 1930, what happens to al smith in 1930? >> al smith after he retires from the governorship here in new york actually as a little bit of a side note he believes and a lot of people attribute this to him that he's going to help f.d.r. out, f.d.r. is going to need help. he's going to draft the budget for him, to hold his hand. that turns out not to be the case. f.d.r. wants to stand son his --
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stand on his own and doesn't want anything to do with smith the smith goes back to new york city and gets the job to run the empire state building. it's going to be built they were knocking down the waldorf astoria and were going to break ground for this right around the time the stock market crashes. but they continue through. the dupont family and all the moneyed interests that wanted this built, this huge building that goes up just as the depression happens, just as the rents are, everybody is leaving their leases and nobody wants to rent everything. -- anything. it's dubbed the empty state building and smith who is making $50,000 a year as the president of the corporation -- >> a large amount? >> large amount but he's running like $1 million deficit as a year because nobody is renting the he goes to f.d.r. and says could you put some people in there? he goes hat in hand, by the way, could you put someone in the empire state building?
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of course the economy changes and he does recover, but at first it was a very difficult job to have, trying to rent space in new york city. >> one of his failures is really bad timing. he ends up as democratic candidate in 1928. if it had been 1932 he would have been a shoe-in. he ends up taking over this building that breaks ground on this building in 1929. he had a timing problem in the early 1930's. >> we had another question from the audience. >> hi. i'm a junior political science major at suny-albany. i just have a question. when andrew cuomo first came to office as governor he said he wanted to emulate some of the qualities of alfred smith. and earlier in the program we
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talked about how at one point the governor's office was a very weak political office. can you just, if anything, go over what he did to make the office of governor stronger and what example did he leave behind for others to follow? >> thank you, sir. that is probably one of the lasting legacies of alfred e. smith, and when governor cuomo entered office he put smith's portrait behind the rostrum so that all the press conferences will see al smith and he replaced teddy roosevelt, who was there for the last three governors. governor cuomo also instituted a sage commission which would investigate government and try to make it more efficient, which is also like smith's reconstruction commission. the point that smith is probably being emulated most for efficiency in government. smith took 187 massive rolling bureaus, boards, commissions,
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departments, and rolled them into the 20 department of government and had the legislature pass the constitutional amendments, and then they were ratified by the people to make the governor a strong governor, and this is prior to f.d.r. reforming the executive office of the presidency in d.c. smith is wanted to make sure that if i appoint a commissioner i want him answerable to me. prior to smith's reforms, commissioners' terms overlapped. the health care commissioner had a six-year term. certainly commissioners could be appointed by the previous governor, like the insurance commissioner. so the governor can't remove him. certain departments like ag and others were appointed. smith reformed government.
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the point about smith is he right-sized it. he made it responsive to the executive, who in turn is responsive to the people. that's his most lasting legacy. and had a little bit of the template taken to d.c. when f.d.r. reformed the office of the presidency. >> albany, new york. mark, we're here in your home town. what's your question on al smith? >> well, my question is this. by the way i do work for state government. i'm an internal audit director for a public authority and i teach a two-day class to state employees about the state budget process. one of the things i teach them and as a understand it, al smith also reformed how budgeting is done in new york. prior to him, the budgeting wasn't done very well and the budget may have been put forth by the legislature and now we have a very strong executive
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being put forth by the governor and that's another legacy that exists to this day for al smith. in my opinion that's one of his real strong contributions to the whole structure of government in upstate new york. wonder if you would comment on that. >> yeah, prior to smith, budgeting was done by the legislature. they would get together you all the estimates of what it would take to run government. very inefficient. you had executive agencies reporting to the legislature to say this is what i need whereas they technically reported to the governor. smith used to joke about it and say when the initial been bill was presented it was then added to by the legislature so that the original budget bill could then be almost unrecognizable. they would laden it down with pork. in one constitutional convention they claimed that a clerk passing the bill from one house to the next actually added his own item in there.
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smith said let the governor submit the budget to the legislature based on estimates from his own executive departments that the legislature can then act on. that made budgeting much more responsive to one individual, the governor of new york, and that's how it is today. >> beverly, we began this program with a little video from the al smith dinner. what is the al smith dinner and how did it come about? >> it's most famous as a place the presidential candidates show up every four years. they show up, democrats and republicans. it's really a memorial dinner for smith, and at this -- i think it's smith -- think that if anyone's heard al smith's name at this point in time that that's where you probably heard about al smith unless you hang around these hallowed halls. in general it's probably his most lasting public legacy, the place where his name gets out.
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it's held every year, not just every four years. it's a memorial dinner. it's a catholic charity dinner and a place where people get together and try to assess the legacy be al smith and -- of al smith and presidential candidates always try to crack good jokes about each other. >> and they show up together most times. they show up, both the democrat and republican nominees show up together. we want to show you some of the past al smith dinners. >> might i ask if monsignor clark might come up here because either the president of the united states or i am without a seat and i have no intension of standing. >> i must say traveled the banquet circuit for many years and never quite understood the logistics of dinners like this and how the absence of one individual could cause three of us to not have seats. >> mr. vice president, i'm glad
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to see you here tonight. you said many, many times in this campaign that you want to give america back to the little guy. mr. vice president, i am that man. [laughter] >> as i looked out at all the white ties and tails this evening, i realized i haven't seen so many people so well dressed since i went to a come as you are party in kennebunkport. >> we just had really good news out of yugoslavia. especially pleased that mr. milosevic has stepped down. that's one less polysyllabic name for me to remember. [laughter] [applause] you know what this world really needs? it really needs more world leaders named al smith. [laughter] >> it is an honor to share the dais with the descendants of the great at -- al smith.
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al, your great, great grand father was my favorite kind of gore. -- governor. the kind who ran for president and lost. [laughter] >> about 15 minutes left will. . glen in freeland, michigan, you are on the contenders. please go ahead. >> thank you very much. the question i have is with all the anti-roman catholic racism and his being the first major american presidential party candidate that was roman catholic and everything, how much international attention did this get? specifically, did the pope at the time ever weigh in or
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comment on any of the campaign he ran or anything like that? thank you very much. >> thank you, glen. beverly gage, if you want to start? >> right, well, in terms of polls you didn't really have the same kind of polling mechanisms you have today so these things are a little bit harder to gauge in the 1920's. you know, which percentage cares about war and the electorate. it's tough for historians, actually not knowing that much about the electorate. on the international question it's really interesting because, yes, there was a lot of attention paid to this and it came in the wake of two trails -- trials as well that really raised these questions about america's national character. the first was the scopes trial in 1925, and the second, the trial had happened earlier but the second was the execution of sacco and venzetti, two italian immigrants, italian anarchists,
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that happened in 1927. so these questions of what the united states' presentation to the world in terms of race, in terms of immigration policy, in terms of its attitudes towards radicalism and political tolerance, all these were really out there already by the time smith became the candidate. so his candidacy then on the world stage becomes another moment to ask those questions and call the questions. >> well, after the election and he loses he does eventually go to europe at one time. he does meet the pope and he recounts on a few occasions that on many of his travels around italy they thought he was the president because they knew he had run. he goes to the house of commons. he had a very good relationship with winston churchill. it certainly did catapult him to the world stage. so in that sense he was a famous also-ran around the world as well.
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>> catholicism, 1928. 2008, serious woman contender, potential mormon in 2012. is it a fair comparison? >> i think it is a fair comparison in certain ways. in that sense al smith was absolutely, he was a trail blazer on this front and i think in many ways it's hard for people today to understand the depth of anti-catholicism in the united states at that moment. when al smith was on the campaign trail particularly in places like oklahoma, places he had never been before and he didn't know much about, his train would pull into town and there would be crosses burning. he faced physical danger around these sorts of questions and he also faced all sorts of conspiracy theories about what his role was going to be, if he was going to be taking orders from the pope or were they building secret tunnels from the vatican.
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all these kind of really intense conspiracy theories that are hard to remember although we've seen other conspiracy theories come up in recent years. but the intensity of the anti- catholic sentiment he faced is hard to remember. >> another member of our studio audience has a question. >> hello, i'm kathy and i'm a junior american studies major at lauderdale college in seneca, new york. how has al smith's legacy been reflected? >> i went to siena. so far so good. -- so very good. one of the things that's a great parallel between the two is working with a legislature that is seen as hostile, that is seen as the two-party, the partisanship. smith faced that every year that he was in office here in albany. he only had control of the
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senate for two years and that was by a single vote. the other eight years it was eight years of republican dominance here in this chamber and in the other house he only had the one term. so i would think that the problem of dealing with the other party is something that smith had to battle with and undertake. that's something that the current president has a problem with as well. the other thing that he has is his remarkable the sense of humor. president obama has a very good sense of humor and handled press conferences very well. al smith was the same way. he knew he could be funny on occasions but not all the time because then people wouldn't take you seriously so he could really play a very good statesman with a sense of humor, which is another good parallel. >> beverly? >> the only thing i might add is i'm not sure barack obama has quite learned how al smith learned how to make it all happen. not sure he's learned his
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lessons for dealing with a hostile legislature. >> next call from houston, texas. joe. good evening to you. please go ahead. >> oh, thanks for taking my call. my first question, i know smith lost new york in 1928 to hoover. how well did he do in the five boroughs? i also wanted to know, was anti-catholicism vote more prevalent in the southern states as compared to like the midwest, say kansas, nebraska, etc.? and i also wanted to know, he had a fallout with f.d.r., i was surprised to hear he endorsed wendell wilkie in 1940, but i'd like to know how did he feel about social security? >> all right. thank you. >> he did well in new york. he always did well in new york city. he did extraordinarily well in
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his own district. but he just couldn't make it up over the whole state. the other question, what was the other? >> well, did he win new york city? do you know off hand if he won in 1928? >> oh, i don't recall. i don't think he did. >> not even new york city? >> new york city also had outer boroughs that had republican dominance, which is stilt case in staten island. but in but in pockets of queens as well. >> social security? >> the issue on social security is something that smith had tried to implement in new york state when it came to widows and orphans' pensions. he tried to experiment with health insurance for industrial workers and also tried to do all kinds of social security issues when it came to trying to support those that were downtrodden, make-work projects were something that he had experimented with and it might have been one of those programs he would have carried into the new deal had he won.
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>> i just wanted to address one other aspect that came up, which is about the south. one of the strange things that emerges, so wasn't a catholicism -- was anti- catholicism more powerful in the south than in the midwest? that's a hard question to answer. but we've been talking about democrats versus republicans here. one of the things that were very difficult for smith were the divisions in the national party. the whole south at this point is still a democratic south with smith as their national candidate, so you had real tensions within the democratic party between this kind of urban core smith was coming to represent and the more southern wing as well as other wings of the democratic party as well so those inter partying tensions were as important as these tensions between republicans and democrats. >> hoover, 444 electoral votes. al smith 87. herbert hoover won 40 states. smith won eight.
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louisiana, alabama, mississippi, south carolina, massachusetts, and rhode island. another question? >> if you were to grade him as governor, what letter would you assign? and as the first clock president -- catholic president candidate, did he view religion as a factor there? >> i would give governor smith an a because he faced a tremendously uphill battle. new york was a republican state at the time and as i mentioned he had a very tough time dealing with the legislature which was overwhelmingly republican. in 1920 when they expelled the socialists i never understood why because they had 110 republicans out of 150 seats and it didn't really matter when if came to the votes. but i would give smith an a.
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he created so many -- so many things, the budget, the short ballot, to stop voting for six or seven statewide offices and have some appointed. are and the port authority in new york and new jersey was one of his authorities, bi-state authority. he had a lot of interesting things. >> john evers? biggest failure of smith? >> some of it might be that he overthought things. i think from a political science point of view public authorities were something he wanted to deal with. he created those and now there's debates over public authorities. and bonding. governor smith was a huge proponent of bonding. that has created a tendency -- tendency for dependence on bonding. >> what difference did he make
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in national politics? >> i think al smith called certain questions and faced them down. his candidacy raised questions that had been percolating in various ways throughout the 1920's. these questions that we've been talking about, immigration, nativism, all these sorts of issues and he really calls the question. he takes a powerful stand about who is american, who ought to be included, and becomes a great symbol for that. it within the democratic party, he is a powerful figure consolidating what we now talk about at the roosevelt coalition, but begins with smith bringing the urban core in. >> beverly age and john, thank you so much. thatant to make sure to the speaker here and the new york state assembly for allowing
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us to broadcast live. we think our studio audience and our cable partner, time warner. we leave you with a few of our smith's own words on his career and life. >> i was elected in 1903. i remained in the assembly 12 years, and i was elected sheriff of new york county. then i was elected president of the board of albany. i ran for office 22 times. i was elected 20 times and defeated twice. i have worked for the county, have worked for the city, i have worked for the state. you will probably remember that i try to get a job down in washington, but something happened to me. [laughter] ♪ [captions copyright national cable satellite corp. 2011]
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[captioning performed by national captioning institute] >> "the contenders" features key figures that ran for president and lost but changed political history nonetheless. our live look begins next friday. we will be in indiana talking with historians and taking your calls about the presidential campaign of wendell wilkie.
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the series runs through december 9. see tonight's program on al smith began sunday at about 12:40 p.m. eastern. for more information, go to c- span.org. you will find a schedule, biographies, historians appraisals, and portions of their speeches when available, all at c-span.org/the contenders. >> it has been almost 30 years since a small group from a fraternity proposed building a memorial to honor dr. king. this sunday, the official dedication of the martin luther king jr. national memorial in washington, d.c. live coverage begins at 9:00 a.m. eastern on c-span. >> now secretary of state hillary clinton on the role of the u.s. economy and foreign policy. after her remarks, she answers questions from current and former economic club trustees. this is a little over an hour.
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>> today, we welcome our secretary of state. hillary rodham clinton has demonstrated that in foreign policy and national security, what is it economic is strategic, and what is strategic is economic. she's been a great advocate for american leadership and investing in and promoting the sources of our strength. she knows what it takes to compete in the 21st century. she understands america's standing in the world, and that is what has acclimated her tireless daily work in the past three years that spans 600,000 miles and almost 90 countries. ladies and gentlemen, our secretary of state, hillary rodham clinton. [applause] >> thank you, and good morning.
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it is absolutely wonderful to be here in new york, at this distinguished and historic new york economic club. i want to thank andy tish for his introduction. i want to acknowledge the club's president. but it never gets old seeing a woman president of anything. [laughter] i am especially pleased to be here under your tenure. i appreciate andy setting the scene. i know some of you may have wondered, why is the secretary of state coming to the new york economic club? i could see the treasury secretary or the commerce secretary or the chair of a
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bank, but why is the secretary of state here? it is because, as he just said, the economic is strategic and the strategic is economic. i suppose that should go without saying, to some extent. it is true, it has been true, and it will always be true. but there is an urgency to that formulation in this early part of the 21st century that has everything to do with america's leadership, now and in the years to come. it was, after all, harry truman who said our relations, foreign and economic, are indivisible. because president truman understood that if america wanted to shape the post war world, america had to lead, not just diplomatically or militarily, but critically and,
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maybe most importantly, economically. so we marshaled our economic strength to rebuild friends and even former enemies. we led the charge to create a new international economic order, and we made the investment that we needed here at home to advance our ideals and promote shared prosperity. well, today, it is just as true, our foreign and economic relations remain in the visible. -- remain indivisible. our challenge is not deterring any single military foe but advancing our global leadership at a time when power is more often measured and exercised in economic terms. here at home, it is no secret to any of us that these are difficult times for americans. families across our country are struggling to get back on their
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feet after the worst economic downturn in my lifetime. the protests are a reminder that we have a great deal of work to do. the challenge is how do we get on the american team? how do we work together to help our country continue to advance and meet the expectations of the american people? this is not happening in a vacuum. we have seen revolutions that have swept across an entire region. europe faces arguably the most severe economic test since the second world war. i see countries gaining influence less because of the size of their armies then because of the growth of their
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economies. adon't think i need to tell room full of new yorkers that we still face serious threats. we always will. we must position ourselves to lead in a world where security is shaped in board rooms and on trading floors as well as on battlefields. simply put, america's economic strength and our global leadership are a package deal. a strong economy has been a pillar of american power in the world. this gives us the leverage we need to exert influence and exert our influence. this gives other countries the confidence in our leadership and a greater stake in
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partnering with us. it also underwrites all of the elements of smart power. robust diplomacy and development and the strongest military that the world has ever seen. rain now, the challenges of a changing world and the needs of the american people demand that our foreign policy community as the late steve jobs put it, think different. our problems have never respected dividing lines between global economics and international diplomacy and neither can our solutions. that is why i have put what i call economic statecraft at the heart of our foreign policy agenda. economic statecraft has two parts, first, how we harness the forces and use the tools of global economics to strengthen our diplomacy and presence
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abroad. second, how weak it that diplomacy and presence to work to strengthen our economy at home. following the speech tomorrow, i am issuing updated instructions on statecraft and every embassy are around the world. to we have made this a court diplomatic mission to enhance our leadership in the world and to drive economic renewal. under president obama's leadership, our national security leadership has been shoring up the sources of our strength. economic recovery is mostly a matter of domestic policy, political will, and the willingness of the american people to really keep focus on tomorrow. while our efforts must begin at
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home, they cannot and there. today, i want to talk about how we are monetizing our economic statecraft. we simply have to get this right. despite all of the problems, the world still looks to america for leadership. in nearly every country that i have been to, i see what is missed among all the noise in washington, i see the fact that we have a very strong presence, we have an amazing amounts of good will and admiration. we also have doubts, doubts about who we are, about our staying power, about our willingness to lead economically, politically, and every other way. when i think about the power of
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our examples and the work that we do in every country and on every continent, i am reminded that we still have the best economic model that remains the single greatest engine of growth and shared prosperity that the world has ever known. the events of the past week offer a powerful reminder of what is its stake at the intersection of economics and foreign policy. on tuesday, the senate passed a bill signaling their concern about misaligned exchange rates around the world including in china. the congress has passed three trade agreements with three critical partners. throughout the week, our european allies have been in
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urgent negotiations to stabilize the eurozone. this is having a major impact on some of our most important strategic relationships. this is the fourth in a series of speeches and i have been given on the economic statecraft. i explained how the policy and develop it contributes to our own economic policy. in hong kong, i laid out our expectations and that those that work with us must follow the rules of competition. i want to talk about how our foreign policy priorities and capabilities are evolving to meet challenges that are both strategic and economic. first, we're updating our foreign policy priorities to
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include economics every step of the way. march you powers put economics at the power -- center of their foreign policies. when their leaders approach an economic challenge, just as they do when they approach an economic challenge, how will this affect our economic growth? we need to be asking the same questions not because the answer will dictate every one of our choices, it will not, but this must be a significant part of the equation. there will be times when we put costs aside to keep americans safe or to honor our principles. for the last decade, our foreign policy has focused on the places where we have faced the greatest dangers. this week brought a fresh reminder that responding to threats will always be central to our national security. this cannot be our foreign
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policy. our foreign policy must focus on the places where we have the greatest original opportunities and often those will be economic in nature. as we end the war in iraq and the began bringing troops back from afghanistan, we are making an important pivot. this is shifting east could to we are focusing more on the asia-pacific region. one of the great successes of the past century was to build a strong network of relationships and institutions across the atlantic, an investment that continues to pay off today. one of our great project will be due to the same across the pacific. our commitment to the trans- pacific partnership, the demonstrations that we are not only a resident of military, and diplomatic power, we are a
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resident economic power and we're there to stay. of course, asia's tiger is not the only large cats out there. we are making it a priority to engage with the latin american jaguars, if you can call them that, which grew by more than 6% last year. our free trade agreements move us closer to our goal of a hemispheric partnership reaching from the arctic to the tip of argentina. we believe in the power of proximity to turn growth across the americas into recovery and jobs here in the united states. we are also committed to strengthening the economic dimensions of our closest relationships. together, america and europe
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account for half of the world's economic output but just 1/3 of global trade. we should be trading more. at the trans-atlantic economic council, too often week we litigate differences when we should be resolving them and avoiding new ones. this frustrates companies on both sides of the atlantic. the trans-atlantic economic council is the forum where we try to resolve these differences and i believe harmonizing regulatory schemes between the united states and the eu is one of the best ways that we can both enhance growth, at enhance exports, and avoid costs. if you spend weeks arguing about the price of a jar of baby food, there is not the potential for payout that comes from resolving these issues to forge an ambitious agenda that is every bit as compelling as our security corp. of brown the
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world. in every region, we are working to integrate the economics into our diplomacy. even in the relationship dominated by politics and security, we are now focused on helping russia joined the world trade organization and we are putting a special premium on protecting freedom of navigation and a rolls based approach to places like the south china sea and the arctic ocean. of course, you cannot talk about our economy without talking about energy. with a growing global population and a finite supply of fuel, the need to diversify our supply is urgent. we need to engage traditional exporters and emerging economies like to bolster
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security and insure the country's national wealth results in inclusive growth. we are establishing for the first time in the state department aide bureau of energy resources to make sure our relationships included dancing our vital relationships and a clear source of energy. i plan to address these issues also in a later upcoming speech but it is important to point out that when we decided after i commissioned the study about what we were doing well, what we needed to do better. what we can afford to drop, energy stood out as an area that we had not focused on in all of its complexity and importance. as we embraced economic statecraft, it is not just our party is changing. the way that we pursue them is
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evolving as well and this is my second point. we are honing our ability to develop and execute economic solutions to strategic challenges. a belief in the strategic power of economic forces is not new in american foreign policy. what is new is the reach and complexity of global markets, expertise, sophistication, and create a corporation needed across the hall of government for us to remain effective. consider the transitions under way in egypt, tenacious, and libya. we want to see democracy take root and we need to help them design economic systems. we know that aide alone is not enough. we need a sophisticated effort to promote investment and to assist in economic
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modernization. i have been urging congress to support the economic proposals that the president laid out. the arab political awakening must also be an economic awakening. we are supplying similar tools in afghanistan. we are looking to stabilize the country and give their neighbors a greater stake in their success through regional trade and immigration. and our development efforts in africa and elsewhere, we are insisting that they reinforce, not a substitute for what markets can achieve on their own.
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we are aiming for the same creativity and sophistication in addressing security challenges. we are responding with more targeted and hard-hitting tools not only sanctions against leaders and generals and more sophisticated measures to cut these regimes off. also the shell companies that they depend on. we're committed to raising the economic costs of unacceptable behavior and denying the resources that make it possible. if sanctions are among our more powerful sticks, our culture of entrepreneurship is one of our most effective carrots. this is an often overlooked element of our economic statecraft and a source of american power. add a time when there are compelling visions for the
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future of the global economy that are competing visions, this is a part of the american brand that speaks to people and winds them over to the values they promote around the world. the free markets, the rule of law, the free exchange of ideas. that is why we created a global entrepreneurship program that builds network and innovators and strategic locations around the world. we are aware of the fact that we are not only in a political and economic competition, we are in a competition for ideas. if people don't believe that democracy and free-market deliver, then they will be looking elsewhere for models that more readily respond to the daily needs. we happen to believe that our model is not only the best for us, we think that this embodies universal principles, human aspirations, and proven results that make it the best model for any country for people.
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there can be variations on how it is implemented that we are in this competition to win. we want to make clear that it is not only good for america but also for the rest of the world to pursue democratic and economic reform. we are modernizing our agenda on trade, investment, and commercial diplomacy to deliver jobs and growth for the american people. i can imagine that some of you know that we have our work cut out for us there because what is the connection but twain -- connection between what we do in the state department and what is happening in the york or anywhere else in the country? there are some who believe that america should turn inward. you cannot call timeout in the global economy.
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our competitors are not taking a timeout and neither can we. what we can do is fight to build and enforce a system of rules that apply equally to everyone. of course, no nation is perfect, including our own, but we don't fear a system that is open, free, transparent, and fair because we know american companies will thrive when the plane filled was leveled. a level playing field is not just a time warner rhetorical device. countries that benefit because we honor our commitments should know that we expect them to honor theirs. a cornerstone of our approach to economic statecraft. -- that principle must be a cornerstone of our economic approach to statecraft.
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all who benefit from the rules of the global economy have a responsibility to follow them. enough of the world's commerce now takes place with developing nations that exempting them would render the whole system not just unfair and unworkable. that would end up harming everyone. one example of just such an unsustainable approach is china's currency policy which does in fact cost american jobs but it also cost brazilian jobs and german jobs and other jobs. it denies the chinese people full fruit of their labor. china has been gaming the system to give their companies a leg up. their company has appreciated but not enough and this is just one unfair practice. president obama has made clear that whatever tools we put in place in response to must actually work and must be
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consistent with our own international treaties and obligations. at the same time, we need to be assertive in securing the wind when economic relationship we can and should have with china. -- win win economic relationship wakeham and should have with china. -- we can and should have with china. our ambassadors are leading whole of government efforts to drum up new business and fulfill a goal of doubling america's exports by 2015. under secretary -- is coordinating with the import export bank to support our investors and exporters in emerging economies. by passing the trade deal with panama, colombia, and south
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korea thanks to the leadership of ron kirk, we are proving that even in today's washington, leaders from both parties can come together to deliver results but also to send a message to the rest of the world. these agreements will allow us to compete in important emerging markets, creating tens of thousands of jobs for the american people. these victories also give us new momentum to take on a broader agenda of promoting fair competition are around the world and updating our economic tool kit. we are working for it in negotiating a cutting edge free trade agreement called the trans pacific partnership. our goal is not only to lower barriers but to raise the standard of economic competition from vietnam, new zealand, peru, and many places in between. we'll continue to use the economic form which president
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obama will host next month in hawaii to push the envelope on the open free transparent and fair trade across the pacific basin. we have to be nimble and created because we are confronting new barriers that are confronting behind the borders and the nine companies a chance to compete on their merits. this is a challenge for our diplomacy around the world. for example, when governments impose a so-called tollbooth that forces on fair terms on companies just to enter or expand in a new market, we pushed back. for me, it is clear that when countries turn a blind eye to piracy or other problems, we have to demand that they protect intellectual property and our embassies are there on
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the front line. we stepped in when we see corruption, red tape or bullying of these businesses. when companies want to compete, countries must open up their government contracts and not just expect us to open hours. we are pushing the procurement, the international procurement standard so that this is not just a again a one-way street. when american companies are not given a chance to compete fairly, that costs us jobs at home. just as the wto eliminated the
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most formal terrace of the 1990's, today we need institutions that can provide solutions to these new market distortions that go beyond tariffs. countries that share the same economic values need to create and force new agreements and mechanisms to guarantee fair competition. let me speak about one barrier that we need to address and that is the participation of women in the global economy. according to the "economist" women's increase in the global labor market in the developed world accounted for a greater share of global growth and china's. this is about all of us to keep tearing down these walls that prevent business and individuals from seeking their own full potential. this is not just enough for us to defend against bad behavior and barriers that block people and companies from global competition, we have to get better at playing offense. every year, the population of the world's cities grows by 65 million people. that is the equivalent of seven
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chicagos. the idea of a new world order with seven major rahm emanuel is should get enough to make us moving. there is opportunity to build new ports, stadiums, and highways, and to shape the sustainable cities of the future. i have asked the assistant secretary to help companies compete where growth is the fastest. it is not enough for us to promote the flow of goods and services, we also need to promote the free flow of capital as well. investment is vital to creating growth and jobs here at home. last year, a kentucky based company that owns kfc and pizza hut actually made more money selling money -- selling fried chicken and pizza in china than in the u.s.
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this creates jobs in louisville and in china. when tom friedman warned that the chinese will eat our lunch, i am not sure that is what he had in mind. we expect fair treatment for our investors overseas. we have to welcome foreign investment and america. we are focused on attracting billions of dollars of new investment to create american jobs. the state department and the u.s. trade representative's office will also lead to negotiations on a next- generation of bilateral investment treaty. this will protect and encourage investment. i am pleased to announce that we will soon resume technical elections of discussions tossed technical levels of discussions with india. -- technical levels of discussions with india.
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we have to make sure that everyone plays by the same rules. too often national favorites enjoy preferential access to government resources and special protections from competition in their markets. that gives these companies, whether they are wholly owned or partially owned by a government, and unfair it damage and harm for competitors and local entrepreneur is alike. we're working to include a chapter on state owned enterprises in the trans- pacific partnership and to finalize new guidelines. our premise is simple -- the rules must apply equally to all companies. we call this competitive neutrality and we promote it all over the world. these challenges to our economic interests are not the whole story.
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my fourth point is that we confront a special set of strategic challenges from the growing wealth in state hands today. governments are entering markets directly through their cash reserves, natural resources and businesses they own and control. they are shaping these markets not just for profit but to build and on behalf of the state. there is nothing new about forcing others to bend to their will. today, the resources at their disposal are unprecedented and interconnected global markets present new avenues to deploy them. a decade ago, the governments of emerging nations added a combined $100 billion a year to
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their reserves. in 2009, they took in 1.6 trillion dollars. sovereign wealth funds control 12% of investment worldwide. increasingly, state owned and state-supported enterprises operate not just in their home markets but around the globe. sometimes in secrecy, often lacking transparency and accountability that would come from shareholders and regulatory screams and boards. we also see hybrid companies masquerading as commercial actors that actually control by states and acting with strategic consequences. the dividing lines are not clear anymore. wednesday's participate in markets directly or through the companies they own and control, their behavior is often the ninth. they're doing what they say they're doing, making an investment. sometimes, it is even
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beneficial like when they work with energy suppliers to stabilize global markets. sometimes but not always. we also see them pulling their neighbors. the way states deploy cash is of critical concern to us and you. we need to develop international rules and norms that set the boundaries, police bad behavior, and require transparency so that state-owned entities are clear about their intentions and actions. as we respond to this challenge, we must not respond in kind.
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we need to agree on a code of conduct to ensure all stakeholders that these funds would act responsibly. today, we need to broaden that discussion, seek similar commitments, perhaps binding agreements of state owned companies. this is an ambitious agenda and we need to ensure the state department and the u.s. government are on the right footing to get it done. after 9/11, we realized we had to break down the silos that prevented our intelligence and law enforcement agencies from working together. today, many of the responsibilities of economic statecraft are similarly split among government agencies. we'll need to bring our unique strengths to the same table. under the leadership of the president and the white house,
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we're taking part in a government effort. the state department has talented tireless diplomats engaged in economic out reach around the world. at every level we are trying to raise our game, reorganizing to break down the old bureaucratic silos, creating a new undersecretary for economic growth, energy, and the informant and the first ever chief economist to the state department. we will do more to train diplomats to understand economics finance and markets and more to promote those who do. we should be aiming for universal economic literacy and widespread expertise. we need to be a department or more people can read both foreign affairs and a bloomberg terminal. finally, for all we can do beyond our borders, the choices that we make here at home will be the most crucial to shore up the source of our leadership. it is not only choices by our
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government and our political leaders, it is also choices by our businesses. we need to recognize that our dependence on imported oil and our national debt our foreign policy challenges, not just economic. in the short term, they create volatility and give others leverage against us. in the long term, they pose a generational challenge to our global leadership. we are working to respond with new thinking and a renewed sense of common purpose, to get our economy growing, modernize our infrastructure, bring down our debt. as we do, we must resist the temptation to cut our investments, not only investments in infrastructure, education, research and development, but also diplomacy. as i have said before, and i will pre pete again today. the 1% that we spend on policy and development is not driving
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our deficit or debt. either we invest now and what keeps us safe and secure, or we should expect to pay the cost of living in a more dangerous and economically more challenging world. i do not think that is a choice that we can afford. washington has to it and the culture of political brinksmanship, which raises questions around the world about our leadership. when i was in hong kong, i was brought about questions about the debt ceiling negotiations. having been around washington now longer than i care to admit, i was able to assure all of the business leaders and government leaders that we would get to a solution probably at the very end. and like winston churchill said, we had the best system, but we did not get to a solution until
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we had exhausted every other alternative and american democracy will always be messy. that goes with who we are. but that messiness cannot outweigh the imperative of delivering results. we have to recognize every decision that we make now in this totally 24/7 interconnected world is followed around the world. a lot of people do not understand our system well, but when they see that we cannot make decisions as fundamental as to whether the united states of america will default on our debt? you have to know that it raises questions in their mind about where we are headed as a nation. but as i say, it is not only our government. our businesses also need to leave. many companies today are sitting on large cash reserves in many countries that i visit, leaders ask me, where are the american
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businesses. how come they are not here competing? for this contract, this mining deal, for this business opportunity. it we are working to create an environment where american companies large and small, at home and abroad have the tools and the confidence to go full bore. but ultimately it is up to the businesses to hire, invest, take the form of risks that are essential to america's success. yesterday, the state launched for the korean president, asset with a group of american businesses who do business in korea and we started talking about this. one of the business leader said, you know, there is a lot of risks in the global economy today and we have to evaluate those because we owe our
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shareholders a very well thought through investment policy. he said there is also a new element. he said we feel like we are competing not only against other companies, we are competing against countries. it and it is obvious countries we all know, state owned enterprises or hybrids competing, but it is also other countries that are much more on the same team between business and government. we need to be back on the same american team. we have to work together to address these challenges. the 1990's, businesses took on child labor and it was american businesses that began to change the terrible picture of children in what amounted to forced labor. today, i am encouraged that a new coalition of major companies
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is coming together to keep global supply chains free of pirated software and cut to fit goods. that gives innovators their rightful reward but also creates american jobs. nobody out works us and nobody out innovates us. we just have to be competing to deliver what we do best. to be sure, the challenges facing our companies, government, and people are sizable, but this is not the first time that america has faced adversity, and we have to be just prepared to get out there and fight hard for what we know we can achieve. we have to overcome our adversity at home and around the world. i believe that confidence is a commodity. we need to remember at our very best, america remains at the opportunity society. a place of idealism, a
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possibility, and pragmatism, a country where an idea hatched in a college dorm can still grow and flourish into a multibillion-dollar business i also believe that our diversity is one of our greatest strengths. no place in the world shows that better than new york. america today is as well- positioned as any nation to adapt and thrive amidst all of this complex change. somewhere in new york or elsewhere in america today, somebody is creating a business with an idea that could be a billion dollar company in a bad idea can find its way into the marketplace. -- that idea can find its way into the marketplace. i know that in some of the places we are falling most carefully in the news -- the middle east and north africa --
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we have to help create that culture of entrepreneurship that will give people a belief in themselves and the possibility that they can have a better life. everywhere across this country, we have hard-working, talented people who are ready to be a part of this country's recovery. it is my commitment that our economic statecraft will help people live up to their potential and spread that opportunity broadly. america's believe that everyone should have the chance to succeed is what we have come closer to meeting that any country at par. we cannot afford to lose that. in the century ahead, we need to make it true that every american and hopefully, at the person around the globe, we are going to build a stronger economy that will provide more prosperity
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more broadly. we will rise to this challenge. we will answer the questions being asked around kitchen tables and cooking fires. we will ensure that american leadership will be there for decades and decades to come. not only will that be good for america, but it is my conviction that it is absolutely essential for the world we want to let in. thank you very much. [applause] >> thank you, madam secretary.
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as is our tradition, we in beit two of our members to pose a question to the east -- we invite two of our members to pose a question to the secretary of state. they will each ask a question of the secretary. >> andrew, thank you. good morning, madam secretary. thank you so much for joining us today and for providing what was an extremely forward- looking, thoughtful, and comprehensive review of these critical issues. it was so comprehensive that what i would like to do is drilled down on just one of the topics you raised. specifically, the expectancy -- effecacy of the -efficacy -- efficacy of the american model in enhancing democracy and
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freedom. one of the elements of the model has been a focus on three markets. what we see in the environment today is that many u.s. companies have already begun to respond to the global rebalancing with faster economic growth being seen in places like asia and latin america. or at the companies in the s&p 500, 40% -- for the companies in the s&p 500, 40% of their revenues are being derived outside the united states. can you give us some idea of how you would use this " restraint to benefit -- use this corporate strain to benefit the creation of jobs?
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>> i want to put it in a context and i will certainly be spot. -- i will certainly respond. there is no argument with american business is growing around the world. we are 100% behind that. we want to be out there to open doors and not down barriers. we do think there is an absolute connection. it is not as though american companies go invest in china, india, or brazil and there is no benefit back home. this is. the amount of the benefit and the durability of the benefit depend upon decisions we make here. as to how we think about our competitive stance in this new,
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challenging environments -- there is an important discussion that needs to take place. i wish it could take place now in our political system with the involvement and the support of american business leaders about what it is that we need to do to change the tax code, to provide incentives, to work toward the ability to capture some of those resources, reserves that are offshore. how do we bring small and medium-sized businesses to the table more effectively? most of our exports come from larger businesses. we have not crack the code about how we opened the door for smaller and medium-sized businesses. business is a political and economic discussion. i think we are in a standstill in that debate at home.
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i deeply regret that. i do not think we have the time to be quite as caught up in our own political arguments. there are certain economic realities. underlying goals are the rules of the arithmetic. there are certain decisions we could make that would benefit american businesses, didn't fit our long-term challenges on the debt and the deficit. it was not 100 years ago. it was the 1990's, after all, when we had a booming economy and ended up with that years up a surplus in our budget. i well remember being on the budget committee of the united states senate as your unit -- your new york senate where a debate was going on where how lowering the debt, even delaminating the debt, would not be a good idea.
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who could it have that conversation today? it is not a political statement. i truly am out of politics. i say that as a rueful admission that we are doing this to ourselves. it is so important that we rebuild that team america spirit. does the corporate tax code have to be revised for a more competitive 21st century global environment? yes. let's talk about what will work and what will not work. do we have to begin thinking more about how we try to enlist our businesses in an effort to change codes of conduct in international rules that will benefit them and the united states? i think so. this us versus them mentality
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that i see too much up in our country today had to give way to a much greater understanding of what we need to do to benefit all of us, particularly children and grandchildren to come. there are a lot of answers. i look out into this audience and there are a lot of answers about what we can do and should do. the thing we cannot afford to do is remain paralyzed by ideology and partisanship. we need to roll up our sleeves and sit around tables where people have sat around in the past in our country and make these tough decisions. it is an age old debate about how best we do it and how we will debate and incentivize the market. let's have that debate on the facts and what adds up and what does that add up and what we
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know from the past. i will end by saying i am bullish on america. i am convinced that our system will stand the test of time present it is in during -- is enduring. i do not want to have to hedge my bet. i want to make sure our political and economic interests are working in tandem, that they are continuing to generate more ideas that will been a bay -- that will benefit us here as well as abroad. there are thousands of jobs in america today, right here in new york today, that go on filled -- go unfilled because we do not have the work force with the skills to fill them. it is a common dilemma.
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maybe we see some of that coming-- we will see -- we will see some of that coming out of the super committee. other presidents balanced our economic interests. i hope that we can do the same. >> i know i can speak for this group in appreciation for you coming here. i know your schedule is so busy. thank you very much. i will join abby. it was an excellent speech. i am bullish on this country as well. i would like to have a question. i would like to have many questions, but i only have one. i would like to ask a question
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that goes down the road of unintended consequences. this group is fairly gloomy. your speech may have picked them up a bit. there is a lot of worried that we are like japan. there are some worries about the 1930's, unfortunately. in fact, there is worry about protectionism. in that light, i would guess that in the thirties, they did not realize that what they were doing might have a calamitous impact. i was wondering what the administration's view, the legislation on the chinese currency manipulation is and how we can limit it from leading to a trade war. >> i think people are anxious.
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that is understandable. we have gone through a rough couple of years. i like to remind myself that we are by far the largest economy in the world. we have the most productive workers in the world. we have the capacity to continually reinvent our economy because we have the youngest workforce in the world. that has been fueled by immigrants, which is why our immigration debate should not be carried on apart from our economic interests. they are closely linked. we have all these incredible assets going for us. we do seem to be more worried than i think is merited assuming we start to act like americans again, that we start
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actually solving our problems and working together and realizing the opportunities that lie ahead. that does not mean we cannot afford to look out at the global economy and not realize a lot of things have changed. other countries are major players on the global economic scene. we should welcome back. we welcomed the rise-- which -- w2e should -- we should welcome that. we should welcome the rise of the bric countries. we have a big investment in the growing these economies and seeing middleclass is developed and see consumers develop. -- does seeing -- we have a big investment in growing these economies and seeing the middle- class development and consumers develop. chuck schumer is a staunch
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defender of new york's economic and death. you have to ask yourself, why is senator chuck schumer leading the charge on this? in part, it is because it is not only distorting the market. it is not only making our exports more expensive. it is now beginning to impact on other countries as well. it is not the united states ilan saying china needs to rebalance. -- saying china needs to rebalance. there is nothing wrong with standing up and asserting ourselves. i do not see that leading into
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the kind of protectionism that you want about from the 1930's. the obama administration has said about the chuck schumer bill that anything we would do needs to be consistent with our international obligations, including dubie t l -- wto obligations. we also do not want to be taken advantage of. it is one thing to see a country rising to a certain level where they are highly competitive and they are sitting on more cash reserves that any entity has ever had in the history of the world by our best assessment -- that they continue to try to game the system to their advantage and our disadvantage. right now, they are dependent on us and our markets. we still have leverage and a
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certain ability to influence the future of it since -- of event. -- of events. it is appropriate and timely for us to be standing up and say, this is not acceptable. we need a rules based reciprocity system on border barriers, its tariff barriers, currency options and all the rest of it-- bor -- border barriers, tariff barriers, currency barriers and the rest of it. we cannot be protectionists in a 1930's since. we have to make sure everyone plays by the same rules. we have to put together an international coalition of
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countries that have the same economic stakes that we do in a wills based system that will protect economic growth and to make it possible for us to continue to compete in the ways we can wherever we can. i believe this is the beginning of a discussion, even a negotiation. as i said to you earlier when we were waiting to come in, if you are china, you are going to do what advantages china. look at the remarkable success they have had. but we are america. we need to take care of what is going to put us in the strongest position. that means taking care of our own business here at home. that is really where we are giving it away to everybody else who wishes to compete against us. it also means working for a new
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set of global rules that take into account the changes we have seen in the last several decades. thank you very much. [applause] >> thank you, madam secretary. thank you for everything you do every day for the united states. to my fellow members of the economic club, to paraphrase what the secretary said, go out and create a business. we are adjourned. >> tomorrow on "washington journal," a look at young adults
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in the wall street protests. after that, a discussion on the 2012 presidential race. later, a look at u.s. efforts to encourage foreign-based businesses to open in the united states. we talk to the president for the organization of international investment. that is live at 7:00 a.m. eastern. >> it has been almost 30 years since a small group from the alpha phi alpha fraternity proposed a memorial to honor dr. king. this sunday, watched the official dedication in washington d.c. live coverage begins at 9:00 a.m. eastern on c-span. >> now, republican presidential jobs and energy plan. this is his first major address since entering the race. from eight u.s. fuel plant outside of pittsburgh, this is about one hour.
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>> good morning, everybody. i am the general counsel and senior vice president of corporate affairs for united states steel corporation. welcome to this facility. automotive and appliance industry. we also make sheet steel for down the river in our facility down the river. this morning, i have the to american manufacturing, and a friend of the united states steel corporation, governor rick perry of texas. participation in texas since 2007, when we acquired a lone star technologies.
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ability to promote economic development, and to attack job- killing, unnecessary regulation on business. governor perry is here to make an important address on energy policy, an issue that is as important in western pennsylvania as in texas. ladies and gentlemen, please welcome governor rick perry of texas. [applause] >> thank you. i really appreciate you. yes, sir. thank you all for joining me today. i want to say a special thanks to jim and scott. thanks for the tour. it was awesome to be on the line with you.
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the men and women of u.s. steel -- i appreciate you for having me here today. it is great to be in the outskirts of pittsburgh, a city dreams of a blue-collar american workers. americans is a lack of jobs. there are 14 million americans that are without work today. americans who are job ready, but cannot find a full-time job. for 45 million americans on food stamps, and there is 48% of the households in this country where at least one resident is receiving government benefits. americans and soft. i believe our people have toughed it out the best they can. but they are looking for leadership. they are looking for optimism, which is all too rare in washington, d.c. today.
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what i am proposing is the first part of an economic package that will rebuild the engine of american prosperity. this morning, energizing american jobs and security, he will million jobs. it can be implemented quicker and free of washington gridlock, because it does require constitutional or congressional action. we are doing it through a series of executive orders and other executive actions. it will begin the process of creating jobs soon after the inauguration of a new president.
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the american people a broader congressional action when i am elected states, but my complete economic growth entitlement reform, and real spending reductions in order to address our growing debt crisis. but today, today i offer a plan a million and good-paying jobs across every sector of the economy, and enhance our national security. the best news is it to be set in motion in the first 100 days of my administration. my plan is based upon the simple premise. make what americans buy. by what americans make. sell it to the work.
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critics tell it to the world. we are standing on top of the next american boom. it is the energy underneath this country. the quickest way to give our economy a shot in the arm is to deploy the american ingenuity to tap american energy. environmental bureaucrats are told to stand down. my plan will break the grip of the dependence that we have from hostile countries like venezuela, those unstable middle eastern countries. it would allow us to grow jobs here at home. america has untapped supplies natural gas, of oil, of coal. america is the saudi arabia of coal.
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we have 25% of the world's supply. billion barrels of oil, nearly 1.2 trillion cubic feet of natural gas. to fuel our cars, our homes, our power plants. pennsylvania, west virginia, dakota, new mexico, alabama, kentucky, throughout the american west, and up in alaska. overreaching environmental agency, his environmental protection agency, will not and american labor to draw on even a fraction of this domestic
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energy, from reserves on government-owned land. the obama administration fossil fuel development at home. encourage countries like brazil to drill offshore and sell it to american consumers. we're creating foreign jobs. they are creating foreign profit. i happen to think that is wrong, hypocritical, and unfair. when i am the president of the united states, will not be -- held hostage by foreign oil and federal bureaucrats. [applause] the american economy should not be beaten into the ground, when greater energy independence and american soil.
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my plan will create jobs in every sector. it will revitalized the cost of electricity. there are four concrete actions. the first is we will open several american oil and gas fields for exploration that are of political considerations. the current administration has restricted exploration in the gulf of mexico and alaska, in the atlantic/mid-atlantic area. the gulf of mexico, for instance, the median time for combined deepwater exploration and development -- it has increased by 400%. the deepwater development plan approvals have decreased by nearly 80%. interior
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has stopped offshore exploration off the coast of virginia. i might add over the objections their congressional delegation. they passed a bill in the house of representatives to achieve the will of the people. it was supported by both of from virginia, webb and warner. but with a series of executive orders and actions, i will authorize the following. gas exploration, including the national reserve of alaska. need congressional authorization, they will understand the importance of the future of america. it is worth it to create jobs, the opening of
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that area. investigation in the seas off of alaska. jobs. the gulf of mexico, creating another 230,000 jobs. i happen to support the construction of that keystone xl canadian crude pipeline. it will either go west to china or south to america. i know where i want it to go. it will create 20,000 direct jobs for american workers. we will tap the energy potential of the american west, open federal land and private land for exploration in states
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like wyoming, montana, mexico, north dakota, colorado, and utah. states have the potential to produce 1.3 million barrels of oil per day by the year 2020. of natural gas. energy than we can import from saudi arabia, iraq, kuwait, venezuela, and russia combined. and right here in pennsylvania, right across the state line in tap the full potential of the getting the epa out of the way.
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the marcellus shale is today's opportunity. the deeper utica formation may offer even greater potential, horizon for pennsylvania and its neighbors. american oil and natural gas production is demonstrated in manufacturing and in production. we see that right here in the 3000 of your fellow citizens, many of whom makes steel products other companies used to develop in the marcellus shale today. that production in the marcellus shale is what you are building in some of your facilities. the face of manufacturing in the industrial states is changing rapidly.
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natural gas exploration is a game changer. to replace the ones that have been lost. create jobs in the supply chain. it will lead to lower energy costs for manufacturers. when you think about western pennsylvania, you are known for producing some pretty great quarterbacks. quarterback a new energy revolution that creates jobs across america. by expanding energy exploration, he will also use the revenues that are generated to pay down debt. at the same time, where america has our ecological treasures,
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the everglades and the not explore in those pristine locations. control, we will see greater cooperation with the states. exploration, we will respect in certain areas in their state. but those instances are truly the exception, not the rule. take a second step to eliminate those activist regulations that are already on the books. the obama administration has put them in place. president obama has been very public about his newest jobs proposal. behind-the-scenes, that permanent bureaucracy is to drill the economy to in pursuit of activist
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regulations. there are a raft of new rules and foot-dragging from the epa and department of the interior that are killing jobs in this country. examples of that are the utility maximum available technology rule, they cross state air pollution rule, the proposed coal combustion residuals regulation. they million american jobs by 2020, $127 billion in costs to electric providers and consumers. these are just new rules they put forward. under my plan, each of these rules would be subject to an immediate review, a cost- benefit analysis to determine
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the impact on american employers and our environment. if we face the fact we know that none of these rules were needed to reduce the emissions of the 50% in this country since 1980. we know that. and they are not needed now. especially as our economy hangs in the balance between recovery and recession. there is another step i will take that is important to economic growth. the draconian measures related to the regulation of greenhouse gases. by the increase of carbon emissions by developing countries like china and india, the epa would tie our hands. it would tie this economy in
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our global competitors, while realizing no global process. a third part of my plan is to reform the bureaucracy, and in particular the epa. this country needs to allow the epa to function on the regional and across-state issues. providing scientific research as well as environmental analysis and comparison studies to organizations. we need to return greater regulatory authority to the states to manage our air and water quality.
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we cannot impose this one size fits all mentality that comes out of the federal rules. i reject the notion that washington is more committed to environmental stewardship and who consequences policy. the fourth component of my plan is to level the competitive playing field among all the energy producers out there. as the governor of the nation's leading producer of wind energy, i clearly believe there is an important role for green sources of energy as part of our energy generation mix. the fact is every energy producer receives incentives and/or subsidies that cost taxpayers, and the distort the market place. my plan will stop the practice of washington writing subsidy checks to any and all sectors of the energy industry.
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specific tax credits, phasing them out over time and allowing the marketplace the time to adjust. i think it is wise, however, to and development. allow the private industry the freedom to develop. concerning their energy policy, our current administration, is that energy prices that we find today -- it is not an accident that they are up the level they are. it is intentional. who said he wanted european prices in america for our fuel, a president who said it was necessary to raise the price of
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electricity. this administration has intentionally sought to make conventional generation for coal and natural gas more costly, taking more money out of the pockets of you and your fellow citizens. the reason why is they want to drive consumers to green energy. enough green energy to fill that need. greater reliance on foreign sources of energy. green energy is a laudable goal. we have done it successfully in my own state. renewable the conventional generation.
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of the electricity generated in this country. how can we have a stable and federal agencies target the top to fuel generation sources for electricity. you cannot. it is not confined to this administration. it has been wrongly targeted by members of my own party. i happen to take a different view. i welcome the continued development of coal as an creation in america. allowing that industry to in research and development is the best way for us to pursue clean coal technology. i do not accept the premise.
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i do not accept the choice that we must pick between energy and the environment. pro- american, a pro-jobs energy policy. and under developed that can him cleaner development of traditional sources. the fact that they cannot point to a single incident of unsafe hydraulic fracturing in the pursuit of natural gas. not one incident. lost in gas and coal.
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the choice of selection is between two very different visions in the country. it would kill jobs through these aggressive regulations, would create 1.2 million american jobs through safe and aggressive energy exploration here at home. more dependent on hostile sources of foreign energy, while my plan would make us more secure by tapping america's energy potential. these energy policies are driven by the concerns of activists in his party. my policies are driven by the workers without jobs. working again.
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the big part of the solution is right under our feet and write off our coast. it can be done without being mired in washington gridlock, the regulations, create energy and make our nation more secure. changing presidents. american needs jobs. america needs a made in america energy revolution. i have that long time track record and experience of success in this critical area american jobs and economic growth, to create a new wave of independence. end the overregulation. end the excess litigation. end the bureaucratic intimidation. get america working again.
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make what americans buy. buy what americans make, and sell it to the world. god bless you, and thank you for being with me. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]
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>> watch more video of the candidates. see what political reporters are saying. track the latest campaign contributions. c-span.org helps you navigate the political landscape, with the latest polling data, plus links to media partners in the early primary and caucus states. >> tomorrow, on washington
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journal, a look at the role of young adults in the occupy wall street protest, with matthew siegel -- segal. after that, a talk with the republican party chairman in florida. and a look at u.s. efforts to encourage foreign businesses to open in the united states, with nancy mclernon. that is live at 7:00 a.m. eastern, here on c-span. >> it has been almost 30 years before a group from the alpha phi alpha of fraternity proposed to build a memorial to martin luther king jr.. watch the dedication. coverage begins at 9:00 eastern. house democratic whip steny hoyer told reporters currency manipulation costs the u.s.
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economy more than a million jobs. with other house democrats, he urged house republicans to take action on the currency manipulation bill. this is about 25 minutes. >> thank you very much for joining us. >> i'm joined by a ranking member of the ways and means committee. we're very pleased to have them here. we are here to talk about the chinese currency legislation which is pending -- pending and passed the house in the last congress overwhelmingly with the 99 republican votes and a very large bipartisan support on tuesday. the senate sent us a bill that would help american workers and businesses facing unfair competition as a result of other countries manipulating their currencies. it passed with strong bipartisan support in the senate. house republican leadership has
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refused to bring it up for a vote even though it passed the house last year by a wide bipartisan margin, as i said, with 99 of those votes being republican. right now, millions of americans are out of work. it is in no small part because other countries are artificially week against the dollar. the manipulation of currency seeks to make goods available broad sold cheap and goods trying to be sold into a country more expensive. this is a result of unfair tactics and it leads to the outsourcing of american jobs and more expense of american products in foreign markets. currency manipulation costs us more than 1 million jobs. i want to emphasize that. it is estimated currency manipulation costs our economy
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over 1 million jobs. taking steps to address that problem, which this legislation would do, is a key component of the make it in america agenda. it is about creating the right conditions for businesses to innovate here, make their products here, and create jobs here. that is why addressing currency manipulation as a critical part of our plan. american businesses can compete against anyone anywhere anytime if they are competing in a fair playing environment. that is what this bill aims to do and will do if we can pass it. as we said, the senate has passed this with a comfortable margin with 16 republican senators. next week we will be entering into a district work period.
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i expect they will hear a clamoring for action on jobs and to put business on a level playing field with global competitors. one of our concerns as democrats that we have articulated over and over again has been that we have not brought jobs legislation to the floor. again today, we are addressing on the floor of the house of representatives a bill to simply undermine the protection of clean air and clean water. mr. bruce bartlett indicated in a column just the other day. he is an economic advisor from the reagan administration and first the bush administration. he said it would have been minuscule effect on jobs. this legislation we believe would have an effect on over 1 million jobs.
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i urge republican leadership to put the currency. on the floor of when we return to session and to start working with democrats to create jobs and move our economy forward. i am very pleased to be joined off by one of the real leaders in this effort, the sponsor of the bill along with tim ryan and betty's son -- betty sutton. he has been leading the effort on a discharge petition so we can get this to the floor. i am pleased to yield to my friend and our leader on the ways and means committee, senator levin. >> this is all the more reason to screen the currency build from the curtain and sometimes iron curtain that has been put
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up by the house leadership. they do not want this bill on the corp. for one reason, because it would pass. the argument is that currency is not the only issue. the problem with this argument is that house republicans have not acted on any other issue relating to our trade imbalance with china. that should not be an excuse if it is the only issue. let's have a vote. the constitution says the house has primary jurisdiction over trade and currency is a major ingredient of our trade imbalance. if we should act. it should be freed by the house republican leadership. next, i think will be tim eliam from ohio. >> thank you. when we started this, i think seven or eight years ago,
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dealing with the chinese currency, it was duncan hunter and i. then the chairman, the negotiations, took this bill to the next level. this has always been a bipartisan bill. this was one issue we could all agree on. a level playing field around the world making sure that we were not losing manufacturing jobs in ohio, all throughout the industrial midwest, because china was manipulating currency. you cannot look at what has happened in ohio in the last 10 years since 2001 when we have lost jobs. the have directly been related to unfair trade with china. this is affecting our communities back, and we need to address it here in washington, d.c. having this signals to the
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world that not only do we enforce global rules that in the united states we want to reclaim manufacturing. let's make it jobs that pay more, have better benefits, jobs that spinoff intellectual property and patents that meant -- than many other industries. it is critical this bill comes to report front. i will say as i said, on these trade agreements and other things are a sideshow compared to what devastation has been brought upon the united states because of the chinese currency bill. go down to youngstown, akron, toledo, anywhere in the industrial midwest. go to detroit. go to indiana, wisconsin come at any of these states. you will see devastating effects because of the trade with china and guenther trade
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practices. this bill addresses it had gone and i want to encourage the speaker of the house from ohio to pass this bill. this will not be dead on arrival when it gets to the house. >> my partner in summit county, betty. >> thank you for your leadership. every week i go back home to ohio and then meet with countless men and women who just want to get back to work. they are ready to prove something that we already know, the american worker is the most productive and most innovative in the world. there is something that stands in their way. the good news is that it is something that we can fix. right now there are thousands of americans who could be put to work, and millions if the estimate is right, who would be put to work if we held china accountable for manipulating their currencies. by cheating the system and
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giving their manufacturers and unfair advantage, china has placed a road block in our economic recovery. thankfully, our friends in the senate have acted on this and passed a bill to hold china accountable to give us a level playing field on which to compete. if house republican leaders are serious about creating jobs, then they will bring the bill to the floor. a house republican leaders are serious about helping our economy recover, and they will bring this bill to the floor. this is not a difficult call. what will it take? how many people have to be out of work in this country until the republican majority will focus on jobs and getting people back to work? last congress, the democratic leadership put this measure on the floor and it passed on a very strong bipartisan vote of
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348-79. 348-79. the question comes down to this. speaker john boehner, are you going to stand up for fairness and thousands of ohioan is to give them the opportunity to get back to work by letting us vote on this bill? or are you going to continue to stand idly by and allow china to continue to cheat and help add to the unemployment dirge that a high winds are facing? it is up to you, mr. speaker. and this point, i would like to introduce a wonderful leader on this bill. >> thank you, betty. i think most people have said everything that needs to be said. one thing that i can do as the last speaker is just to say that we will not rest.
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this bill, this issue is too important to the american people for us not to talk about this day in and day out. but my colleagues, i urge the speaker of the house to bring this to the floor. we will not let this die. we will continue to fight for the american people. i just want to read you a quick quote that came from the lips of speaker brainer. as the chamber closes to the people, the house works best when it is allowed to work. what that means is that the reason that this country is so strong is because we do not rule from the top down. we did not tell the americanwe allow them to tell us what is good and we follow their lead. i urge the speaker to let the house markets will. if this bill passes, as it did last year with 99 republicans, they have 62 republican co- sponsors.
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if this passes the house, so be it, because it is good for america, good for the american people. our manufacturers are hurting. let's step up to the plate and elected to do and help the american people by targeting a manipulator of currency that is harming this nation. since china has entered the world trade organization, manufacturing jobs. $29 billion trade deficit in one month against china. obviously, the playing field liens their way, but we are also talking about deficit reduction. passing this bill and allowing these issue to be brought to the forefront could lower our deficit by $70 billion per year and, just over a decade that is $1 trillion.
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this is something that is needed that we need to do. we need to lead for the american people which is why we are here. house work. >> i want to make two points and then i will yield for questions. we talked about the chinese currency because they are the largest trading partner with which we deal and our largest deficit. there is no doubt that they have manipulated their currency. i want to make it clear that this bill is not china-specific. it mentions any of our trading partners come if they manipulate currency to enhance an unfair trading advantage to be impacted by this piece of legislation. this is not solely directed at china although we think they are the biggest violator and
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therefore the greatest consequence to our american workers. secondly, we have made sure that this bill was compliance with our international trading goals. what it says is every trading partner ought to play by the rules. if you play by the rules, all workers will compete and we will make things in america and sell them to you. if you have goods and you are on a level playing field, the new cans sell here. we will play both sides by the rulings. surely the majority of republicans who voted on this bill to pass it through the house of representatives will pass it through congress.
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surely they still believe that every one of our partners ought to play by the rules. that is therefore our american workers, businesses, and for the american tax payers. let me yield to questions and i have some real experts here behind me. i will yield to them if i cannot answer or you want a specific answer from them. >> how will this create a large number of jobs in a short period of time when the statutory regime that is setup requires companies to go in and prove a specific product in a market have been manipulated and victimized by the chinese currency? these investigations can take up to six months and even up to one year. >> i will yield to sandy levin for that because he would be the expert on this issue. i will just say in the short term that if you are talking
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about passing anything tomorrow that will make a difference, perhaps that is not the case, although psychologically it will make a difference tomorrow in terms of people deciding that we should play by the rules are there will be adverse consequences. i will yield to sandy levin, the ranking member of the ways and means committee to try to specifically address your question. >> if you are right. this case is to take a while. but the reason that the chinese are attacking the senate and house bill is because they realize that if these bills are passed and they become law, it will immensely increased the pressure on china to act now. the history of this is that when there has been pressure, china has acted.
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that is the history. this will have an immediate effect because it will increase the pressure not only from the united states. we have been talking to other countries, and i just want to emphasize that the chinese officials just today said that china was worried about protectionism. when expert has labeled the chinese currency the most protectionist action in decades. the way to end that is for us in the house to send this through the congress and it will be noticed. it will have more impact than any particular case that is being brought forward because of the realization that it could be brought. >> i realize you probably do not watched the presidential debates.
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>> we do. when the ball game is not on. >> mr. romney said he would cite china for currency violations. do you think that statement may have an impact on the leadership or some of the republicans that would like to sign the discharge petition? >> i think should talk to mr. boehner and suggest a move that. >> hopefully they will. >> clinton told the economic club of new york that would be appropriate, fitting, and timely to challenge them on their foreign exchange policy. as the white house given an indication that this bill is the appropriate way to do that? >> i do not think we have discussed with the white house whether it is the appropriate way to do this or not. i would welcome the secretary of
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state on that. i think everybody here would agree. however, we believe this is the appropriate action for us to take. we took it in the last congress and passed it overwhelmingly. it has now passed the senate and we have more than a majority of sponsors in the house. tim ryan, betty, mark cook, sandy levin, they have all been working very hard on this and we clearly think it is the ability of the house to work its will favorably on this as mark has pointed out than they ought to do some, but we certainly agree with the secretary's statement. >> we had a case before the itc on oil country tubular goods and they stepped up with a tariff on those products coming in from china, anti-dumping, and since then we have had $2 billion in investments in the
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united states for those types of manufacturing facilities. that is due in large measure to the tariffs that were put on. the administration has acted in that regard also on tires so they're starting to recognize the benefits of job creation and benefits coming in, so i'm hopeful they will move on this as well. >> that is such a good question. the answer is that the house should do its work. the house should do its work on trade. we have the primary constitutional responsibility and it is a matter of pride that the speaker should let the house work as well. it is a matter of our function. why are people here? why block action by the house and what is our responsibility? the speaker's position in that
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sense, if he maintains it, is irresponsible. irresponsible. >> i just wanted to say that to put a face on the story tim just talked about in terms of oil country tubular goods come after the case was worked and it did take a long time to go through the itc did get this decision to put the counter- veiling duty on them, but the good news is the news that tim brought, that we are getting more work because of that decision. the bad news is that china turned around and then started dumping in subsidizing another hike they make at a plant in my district and we had to start the cycle over again. that is why the urgency is upon us and we cannot wait. the system is broken and this will help us in great measure to get us started in fixing it.
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>> last question. >> i just wanted to shift topics. today's the day committee recommendations are due. one of your colleagues introduced a bill to do away with the super-committees and the 12 members are meeting in secret. how much concern is there among democrats that this smaller group of members will be able to come up with something in just a few weeks on such a big issue? >> there is a concern about success of the super committee. the have been given a very large job to do. as you have heard our leaders say yesterday, we hope that they will produce a package that is big, bold, and balanced. i have shared that view. i do not know who introduced that bill. why would not support that bill. i think this committee's work is
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extraordinarily important and i wish them a great success. i share the leaders view and in view of many that they need to follow the example of time number of the commissions that have met and made reports. we have a fiscal problem in the consensus and we can solve the problem for have the courage and will to do so. we can do so in a way that protect the mothball marble in our country and demands that everyone pays their fair share towards bringing down our deficit and debt while continuing to invest in growing our economy so we can make it an american to out bill coming out to innovate, and out educate our competitors. i, for one, believe the work of this committee is very important and that they can accomplish their objectives within the timeframe and i hope that they will. thank you very much.
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host: "washington journal" continues. elizabeth williamson with "the wall street journal" is here with us this morning to talk about a senate bill that was passed earlier this week regarding china and currency. what did the senate bill actually say about china's currency? guest: what is interesting about this bill, it does not name china in the legislation itself. it talks about any nation whose currency is misaligned.
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it is a lower bar than currently right now -- treasury has to prove that a nation like china -- obviously, we all know if is china. they have to conduct willful manipulation of their currency. it's a lower standard and a stricter punishment. host: in all fairness to china, are there any other countries that manipulate their currency in the way this bill wants to go after? guest: there are some other countries you could make a case. china is obviously, because of the size of the economy and because of the importance of the exports from china, how they compete with the united states, they are the obvious target. host: now the bill is on the other side of the capital. what are its prospects for passage in the house? guest: this is interesting. we were comparing it yesterday.
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once it reaches the floor, it will absolutely pass. the trick is getting it to the floor. the republicans have said they do not want to do this. boehner has said he does not want to. cantor says he fears a trade war. both of them are trying to call out the white house. host: why does he fear a trade war? guest: is this bill were to take affect, it would lead to levying tariffs on china.
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host: speaking of us in the long term, how would this affect people on main street? guest: a number of manufacturers are pushing for this because they feel their goods are unfairly valued. nobody is arguing -- it is accepted that they do. they do keep it artificially low. that makes their goods cheaper in the marketplace. the estimates range from 25% to 40%. that means our goods are much more expensive in the marketplace.
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host: we are talking with elizabeth williamson from "the wall street journal" about the senate bill that was passed. if you want to get involved in the conversation, give us a call. you can also reach us by e-mail and twitter. before we get to the phone calls, we want to take a listen to what speaker boehner had to say. this is what the speaker said to the folks there. >> there has been concern from my part and a lot of quarters in america about how the chinese manipulated their currency. there's been every effort that you can imagine out of our treasury department over the last seven or eight years
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addressing this with the chinese. there has been a significant improvement in the valuation of china's currency as a result of those conversations. for the congress of the united states to pass legislation to force the chinese to do what is arguably very difficult to do, i think is wrong, and dangerous. you could start a trade war. given the economic uncertainty here and all around the world -- it is very dangerous. we should not be engaged in this. host: elizabeth williamson of "the wall street journal" -- your thoughts? guest: he lays out the classic argument.
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the focus more on domestic consumption. the administration and the republicans are aligned in this in that they favored diplomacy and quiet persuasion. china themselves, they will say beijing says this is working, despite the fact that they have internal pressures not to let their currencies rise. a goes up about 0.5% every month. would beestion of what the inflation rate that people like and what is the way to achieve that? host: our first call for elizabeth williamson from "the wall street journal" comes from baltimore, maryland. go ahead. caller: i had more of a comment and a question. china -- a communist country --
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they do not really appreciate democracy. i do not understand how we have such friendly relations with china. look att's important to the broad picture. this is what the administration always points out. the chinese are an important ally in the region. we worked with him on things like north korea. we also try to cement relations cementkorea, obviously, this week. it is important to see the broader scheme of things and not
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just knew this in terms of exports and trade. host: next up is niagara falls. kevin on the line for independents. caller: good morning. my view of this is -- we have been losing. it has only gotten better for the last seven or eight years. what do we do in the future? i cannot see it getting any better. they have an advantage and they're going to keep it. host: the chinese have an advantage? caller: yes, the valuation of --ir dollar -- it's causing our goods are paid more for there.
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their goods are cheaper here. i wouldn't give it up if i had an advantage. host: we can go back and forth between the house, the senate, and the white house. what is truly the incentive for the chinese to raise the value of their currency? guest: it's important to remember that the chinese not only sell goods here, but they also buy from us. australia has a trade surplus with china because they are selling them so many raw materials. china has an enormous appetite for raw materials. again, it's a complicated relationship and it's not about the chief manufactured goods that most people think about when they think about china. host: we have this tweet.
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guest: they are doing is simply to sell more. our trade surplus with china 20 years ago was $10 billion. last year, it was $273 billion. we are a nation of consumers. we are one of the wealthiest consumer nations in the world. we consume a lot of these goods. they are cheap, yes. if they were not as cheap as they are, we still consume them? host: that to the phones. new york, new york. james, you are on the "washington journal." caller: good morning. a lot of people fail to realize that the nation of china, 1.4 billion people, you have to feed all these people. you have to educate all these people. everything from family planning to military intervention -- in
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other parts of theworld, which is good business, but there undervaluing the currency, i believe, is another effort to -- they realize they are on a road to emploimplode. i feel they have a disadvantage. they resort to other means. this trade war everybody talks about -- recently in the news, they were complaining.
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[inaudible] they cannot even feed themselves. host: elizabeth williamson. guest: the caller points out that this is a whole basket of issues the united states has with china. 1.4 ilion people. the state is under pressure to try to deliver its own ways to make its goods competitive. we have a lot of issues with china. intellectual property theft is another issue we are negotiating with china on. our government considers it progress that of the software used by the chinese government, 90% of it is pirated from u.s. companies. that's down from 100%. that's seen as progress. currency is the tip of the
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iceberg. host: we have another tweet. is that true? guest: china has many more means for doing this. they are able to pull all the levers in a way that a free market economy is not. host: back to the phones. texas on the line for democrats. you are on the "washington journal." go ahead. robert, are you there? you are talking with me now. do you have a question or a comment for elizabeth williamson of "the wall street journal"?
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caller: i don't think americans have to be afraid. host: we are going to move on. robert seems to be having some problems. next up, on the line for democratrepublicans. caller: hello and good morning. i just got back from china and what i saw what was absolutely mind-boggling. but construction that's going on in the country, all paid for by our deficit. the build up of their 3.5 million individuals under armed forces, compared to our 1.5. the development of their aircraft carriers, which is an absolute -- it is beautiful.
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anti-aircraft carrier submarines. it is absolutely scary. i am a retired marine pilot. i do not want to go over there and have to shoot down their aircrafts. host: were you over there on business? caller: no, i was over there as a tourist. it's mindboggling. everywhere you look, there's construction -- major construction. one person told me -- half the construction trains in the world are in shanghai. host: we are going to lead it there. your response? guest: the construction market is huge. this is what we talked about before when we talk about the need for raw material.
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we do send tremendous amounts of raw material to china. the fact that china is our banker, that touches on the sensitivity here. with the administration, they know, and the chinese government makes the point -- if we go over there and start preaching to them about their currency, this will not fly with their own public anymore that if they were to come to us and say, "we are your bankers. you need to fix this, this, and this. you can imagine the cry in the united states if they were to come here and do that. there is this quiet dance that goes on to try to get what the united states wants and needs from them. host: earlier this week, majority leader harry reid was talking about unfair currency manipulation by china and its impact on jobs in the united states. this is what he had to say.
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>> it's pretty clear by now china undervalues its currency. it has caused -- cost american jobs by unjustly tilting the playing field. america's trade deficit with china has ballooned from $10 billion in 1990 to $ 270 billion today. to many of those lost jobs came from the manufacturing sector. american businesses do not need special advantages to compete. they just need an even playing field. host: does this legislation even out the playing field? guest: it's hard to say. undoubtably, lots are -- lots of
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jobs are being lost. to put a number on that is really hard. there are so many factors that have contributed to the decline of the manufacturing sector. host: in an article in this morning's "the wall street journal" by your colleagues, they write -- breakdown those numbers for us.
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is the gap getting smaller or larger. guest: as consumer spending increases, you will see that gap widen. what the currency devaluation as americans start to spend more and feel more optimistic about the future, they will buy more from china, so consequently -- consequently the deficit will grow. host: it the chinese athletes or adjust the value of their currency and it starts to go up, it will benefit us here in the united states. what does it do for countries, the neighboring countries in the pacific rim? is there some think the president can say to the south korean president that may help the overall situation?
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guest: i think including the trade agreement with south korea was an important step. winners and losers here. host: our next call comes from walkie, wisconsin. david of the line for independents. -- from milwaukee, wisconsin. caller: could you tell was the top three segments of the economy are. she is that information not
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readily available. -- is that information not readily available? thank you. guest: i would say manufactured goods, steel, and electronics would be the industry's better vote hurthat are most hurt. china feels like it is really hurting by undervaluing the currency. in raw materials you do not have value added you see it in a stark way. some of the other industries have other fish to fry. the electronic industry is very concerned about currencies. they feel like if we engage in a trade war with china what you might ultimately get is nothing on yjr ogthe ifp front. our president and the south korean president are going
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an michigan today to twour automotive plant. the automotive industry benefit? guest: somewhat. korean cars a very popular in the united states. what they negotiated under the obama of fenestration were more careful provisions for u.s. auto makers over there. whether that will result in more sales or a surge in popularity remains to be seen, because caribbean consumers to prefer korean cars. -- korean consumers really do prefer korean cars. host: sue brokaw righwrites -- do you think the new trade agreements will help substantially lower the unemployment numbers? guest: the first question, no,
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because their goods are more expensive in the marketplace. they are up to 40% more expensive than other goods are here, and that is a direct result of the currency manipulation. on the other, trade agreements tend to move jobs around. again, it is really hard to quantify the impact of these moves in terms of raw numbers of jobs. host: back to the phones. dan of the line for democrats. you were of the washington journal. caller: what i was calling about is wages around the world. china and india your able to buy a car. how were they ever go to buy our product with the make that kind of muddy? they cannot afford it. the second thing is trade
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adjustment. they know you're for to lose your job. third thing is we just had a trade deal with colombia, panama, and south korea. columbia leads the world in the world's cocaine. marijuana, drugs, -- has been for years a terrorist organization. i want to say they are stupid and do not care, but it is all about money. how the world were those people buy our products with a do not make any money? guest: i think it is important to note that wages are also -- cheap labor in china is another reason their goods are cheaper here. tactfully currency issues, but that is not a panacea for cheaper goods coming in from china.
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host: this article under the headlines -- towards the bottom of the article is says the bill present a thorny problem for president obama. many in his political base for to take steps to turn -- punish china for its economic policies. what is in the bills right now that the white house will want to see changed in order for the presidency -- signed off on this. guest: the white house is not very specific on this. when they were considering this of the senate, republicans were saying let's have some amendments.
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what mcconnell was proposing, the republican leader in the senate, but he was saying let's just vote against it. nobody wants to vote against the legislation like this. host: elizabeth williamson. the next call comes from palestine, texas. caller: yes, i would like to have a few things to say. i would like to say a few things. first of all, the president is a great person, but do not get me
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wrong. there is so ready jobs that he is tried to create for people, if he is just forgetting about the small towns. we have places here that he could put factories in for the small towns. just think about the small towns. some of the people ready for president, one could not even run texas, what makes you think he could run the world? as far as the children are concerned, please think about them. they're trying to graduate, and they have dropped two years of spanish to graduate. why can't the spanish people -- why can't we have tended to years of english to have them graduate? host: we a talk a little bit about the effect of larger
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reading fracturing like automotives, but for the smaller people, what effect might this bill have it in the form? guest: it obviously would make goods more competitive. what is interesting among smaller vader factures is a lot of them are making component parts and business is booming for them, because the assembly is what is done in china. the component parts are still here. it is a bright spot. it is also a need. host: that romney talks but he would deal with china is cheating. -- mitt romney talks about how he would deal with china. is this strictly something being
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dealt with right now of washington? guest: if you look back at the 2010 election, bashing china was enormously popular thing to do. china, india, outsourcing, moving jobs overseas. the other thing you have all the jobs front is the fact that american companies to move operations to china. not only because they are closer to serve the market, but because they do have cheap labor. that is another part of the puzzle. bashing tied is very popular, which is one of the reasons for that of the folks that are running in 2012 went on record as voting against this measure. host: elizabeth williamson has covered several areas for the paper since 2008. back to the phones, jack on the line for independents. caller: how are you doing today?
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host: go ahead. caller: i have a business. the biggest problem we have with that is by the dead person's side of your lights are made overseas. the quality is not as great, and the lights that are made here, what happens is they jack up the price so high that people cannot afford to buy them. there is absolutely no reason to eject them up. i know this because i had people tell me this. they're doing this because of tax rebates and the credits they get.
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it makes business sense. i was the victim in the 1970's. host: elizabeth williams said. jack underscores the point that we made earlier that some assembly is what is done on the manufacturing's side. it does not necessarily the manufacturing of component parts. the labor cost increasing. there are many of the business community that would argue u.s. resolutions governing things like we had the most powerful
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weapon. we are such a huge market that people in the india i did states can force these companies to come back there was some type of private organizations that could come back and get the people behind them to say we're not going to buy until one is made
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in america. the commuter factures will say if i of the first one to get a factory opened in america, i will make the bank. this is just one example. as long as we sit at the trough and keep buying all of this china stuff, but this will continue. the businessmen make more money, and makes more money. the only people getting killed is us. host: he makes an important point. guest: many would argue the quality is not as good. i think that depends on the sector and type of item and the supplier over there, but there is some manufacturing moving back here.
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just the distribution, if you have an american product you are distributing in the united states to get it back from china obviously adds to your cost. there is a manufacturer moving back. many would argue here the key is innovation. we are caught -- not for to make textiles here and make stops here and have them be competitive with asia. -- make socks here and have the be competitive with asia. the answer here is to make a different mousetrap and a better one. host: we have a tweet that writes -- guest: well, the idea of this is to buy american products, and to make the cost differential lost so much. it is a balancing. host: back to the phones of the
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line for republicans. reed is of a washington journal. caller: i agree with most of the figure just as much of it, except for the last point about things are not coming back. i think there is propaganda. i think collectively would we hear phrases like jobs are not coming back or we do not want to start a trade war, i agree with many colors of this issue, we have it at a trade war for a long time. i really sick of our politicians, pundits, or anybody standing up at the microphone back and saying if we cut back of the ratio of stop the trade deficit, but that will cost american jobs. i think it is the upper echelons of wall street. cul-de-sacs is the serial job exporter. they have been for 25 years.
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i am saying this to give an idea of just how corrupt our government is. guest: our calller is really tapped into the bigger out there. the reason the measures come down the pipe and that the of of an election year is politicians are aware how angry people are. people are looking for a reason. so what are due for a scapegoat. host: where are we in the process of the house version of this bill? guest: it is crafted. there is support from half the members. if it were to come to the floor, it would pass. chances are the leadership is -- as we saw earlier, a producer of this will not come to the floor. host: back to the phones. butler, pennsylvania. steve of the line.
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caller: [inaudible] host: turn down your television. caller: president bush implemented plans to create a political entity to combine him and the united states and mexico. he called it the security of prosperity partnership act in 2005. it is claimed he did this because nafta was not taking off. the they realized with china was more feasible, the s.s. paep decided that we're gonna be
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turned into a borderless union, and there will be roads going through from -- host: do you have a question? caller: it has to do with china. china wants to go to mexico. instead of having us go through loss angeles -- host: with the current situation with the chinese currency value the way it is, it doesn't make it easier for them to do business with smaller countries like mexico? are they even concerned with that, or is it mostly manipulating things so they can get our money from the united states? host: i think because we are also globally connect it, there will be a knock off affect from anything they do with china or
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anything they do with us. we did not know about and had the consequences. there is love and i would like to point out. if this with a solution were to ever enter force, what would happen is tied with for stopwatch a complaint with the wto. -- what would happen is they would log a complaint with the wto. that would drag on for years. so the obama of the streets of is tied to tackle these issues and try to crack down on china, on trade issues in ways other than the currency. what they argue against this bill, they would point that out.
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we have made it a core diplomatic mission to enhance our economic leadership in the world and to drive domestic economic renewal. under president obama's leadership, our national security strategy is focused on shoring up the sources of our global strength. now, it is certainly the case that economic recovery is mostly a matter of domestic policy, political will, and the willingness of the american people to really keep focused on tomorrow. but while our efforts may begin at home, they cannot end there. and today, i want to talk about how we are modernizing our economic statecraft to rise to this challenge. we simply have to get this right. because, despite all the problems, the world still looks
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to america for leadership. in nearly every country i visit, i see what is sometimes missed amid all the noise in washington -- i see the fact that we have a very strong presence, we have still an amazing amount of goodwill and admiration, but we also have doubts -- doubts about who we are, about our staying power, about our willingness to lead economically, politically, and every other way. when i think about the power of our example and the work we do in every country on every continent, i am reminded that we still have the best economic model that remains the single
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greatest engine of growth and shared prosperity that the world has ever known. now, the events of the past week offer a powerful reminder of what's at stake at the intersection of economics and foreign policy. on tuesday, the senate passed a bill signaling its concern about misaligned exchange rates around the world, including in china. and on wednesday, the congress passed free trade agreements with three critical partners. and throughout the week, our european allies have been in urgent negotiations to stabilize the eurozone. these economic developments are having a major impact on some of our most important strategic relationships. this is the fourth in a series of speeches that i've been giving on economic statecraft. in mid-july in washington, i explained how diplomacy and development contribute to our own economic recovery.
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in hong kong, i laid out our economic values and our expectation that all who benefit from the global economy must respect the rules of fair competition. and in san francisco, i gave a speech on the role of women in the global economy. canand here in new york, i want to talk about how our foreign policy priorities and our capabilities are evolving to meet challenges that are both strategic and economic. first, we are updating our foreign policy priorities to include economics every step of the way. emerging powers like india and brazil put economics at the center of their foreign policies. when their leaders approach an international challenge, just as they do when they approach a domestic challenge, one of the first questions they ask is -- how will this affect our economic growth? we need to be asking the same question, not because the answer will dictate every one of
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our foreign policy choices, it will not, but it must be a significant part of that equation. now, there will always be times when we put cost aside to keep americans safe or to honor our principles. and for the last decade, our foreign policy has, by necessity, focused on the places where we faced the greatest dangers. this week brought a fresh reminder that responding to threats will always be central to our national security. but it cannot be our foreign policy. in the decades ahead, our foreign policy must focus just as intensely on the places where we have the greatest opportunities. and often, those will be economic in nature. as we end the war in iraq and begin bringing troops back from afghanistan, we are making an important pivot. the world's strategic and
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economic center of gravity is shifting east, and we are focusing more on the asia pacific region. one of america's great successes of the past century was to build a strong network of relationships and institutions across the atlantic -- an off today. one of our great projects in this century will be to do the same across the pacific. our free trade agreement with south korea, our commitment to the trans-pacific partnership, are clear demonstrations that we are not only a resident military and diplomatic power in asia, we are a resident economic power and we are there to stay. now, of course, asia's tigers aren't the only large economic cats out there. we are also making it a priority to engage with the latin american jaguars, if you can call them that, which grew by more than 6% last year. our free trade agreements with
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panama and colombia move us closer to our ultimate goal of a hemispheric trade partnership reaching from the arctic to the tip of argentina. we believe in the power of proximity to turn growth across the americas into recovery and jobs here in the united states. we are also committed to strengthening the economic dimensions of our closest relationships. together, america and europe account for half of the world's economic output, but just one- third of global trade. we can and we should be trading more. at the trans-atlantic economic council, too often we re- litigate regulatory differences when we ought to be resolving them and avoiding new ones. and this frustrates companies on both sides of the atlantic. the trans-atlantic economic council is the forum where we try to resolve these
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differences, and i believe harmonizing regulatory schemes between the united states and the eu is one of the best ways we can both enhance growth, enhance exports, and avoid duplicative costs. but if you spend weeks arguing about the size of a jar for baby food, that's not exactly facing up to the potential of the payoff that comes from resolving these issues. so we need to forge an ambitious agenda for joint economic leadership with europe that as every bit as compelling as our security cooperation around the world. in every region, we are working to integrate economics into our diplomacy. even in a u.s.-russia relationship dominated for decades by politics and security, we are now focused on helping russia join the world trade organization, and we are putting a special premium on
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protecting freedom of navigation and a rules-based approach to resource development in places like the south china sea and the arctic ocean. and of course, you can't talk about our economy or foreign policy without talking about energy. with a growing global population and a finite supply of fossil fuels, the need to diversify our supply is urgent. we need to engage traditional exporters and emerging economies alike, to bolster international energy security, and ensure that countries' natural wealth results in inclusive growth. so we are establishing for the first time in the state department a bureau of energy resources, to make sure all of our relationships include advancing our vital national interest in a secure, expanding, and ever cleaner source of energy.
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i plan to address these issues also in a later upcoming speech. but it's important to point out that when we decided, after i commissioned a study about what we were doing well, what we needed to do better, what we needed to add to the portfolio, what we could afford to drop, energy just stood out as an area that we had not focused on in all of its complexity and importance. as we embrace economic statecraft, it's not just our priorities that are changing. the way we pursue them is evolving as well. and this is my second point. we are honing our ability to develop and execute economic solutions to strategic challenges. a belief in the strategic power of economic forces is not new in american foreign policy. what is new is the reach and
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complexity of global markets -- the expertise, sophistication, and creative cooperation needed across the whole of government for us to remain effective. consider the transitions underway in egypt, tunisia, and libya. if we want to see democracy take root, which we do, we have to bring advanced tools to bear to help countries reform economic systems designed to keep autocrats and elites in power. and we know that aid alone, no matter how generous, is not enough. we need a sophisticated effort to integrate the region's economies, to promote investment, and to assist in economic modernization. this is the logic behind the middle east proposals that the president laid out in may, which i have been urging congress to support. to succeed, the arab political awakening must also be an economic awakening.
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we're supplying similar tools in afghanistan, where any successful endgame requires a viable economic vision that helps stabilize the country and gives its neighbors a greater stake in its success through greater regional trade and integration. and in our development efforts in africa and elsewhere, where we are insisting that our dollars reinforce, not substitute for, what markets can achieve on their own, we are pushing an investment agenda. we are aiming for that same market-minded creativity and sophistication in addressing security challenges. when iran threatens global security or syria threatens its own people, we are responding with ever more targeted and hard hitting tools, not only sanctions against leaders and generals but more sophisticated
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measures to cut these regimes off from insurance, banking, and shipping industries as well as the shell companies that they depend on. we are committed to raising the economic cost of unacceptable behavior and denying the resources that make it possible. if sanctions are among our more powerful sticks, our culture of entrepreneurship is one of our most effective carrots, an often overlooked element of our economic statecraft and a source of american power. at a time when there are compelling visions for the future of the global economy that are competing visions, this is a part of the american brand that speaks to people and wins them over to the values we promote around the world -- the
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free markets, the rule of law, the free exchange of ideas. that's one reason we created a global entrepreneurship program that builds networks of innovators in strategic locations around the world. we're very well aware of the fact that we're not only in a political and economic competition, we are in a competition for ideas. if people don't believe that democracy and free markets deliver, then they're going to be looking elsewhere for models
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that more readily respond to their daily needs. and we happen to believe that our model is not only the best for us, we think it embodies universal principles, human aspirations, and proven results that make it the best model for any country or people. now, there can be variations on how it's implemented, but we are in this competition to win it. we want to make clear that it's not only good for america but it's good for the rest of the world to pursue democratic and economic reform. third, we are modernizing our agenda on trade, investment, and commercial diplomacy to deliver jobs and growth for the american people. now, i can imagine that some of you know that we have our work cut out for us there, because what is the connection between what we do in the state department every day and what is happening here in new york or anywhere else in the country? and i know there are some who believe that america, after taking our lumps in recent years, should turn inward. but we can't call time out in the global economy. time out, and neither can we. what we can do is fight to build and enforce a system of rules that apply equally to everyone. now, of course, no nation is perfect, including our own. but we don't fear a system that
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is open, free, transparent, and fair, because we know american companies will thrive when the playing field is level. and a level playing field is not just a timeworn rhetorical device. countries that benefit because we honor our commitments should know we expect them to honor theirs. that principle must be a cornerstone of our approach to economic statecraft, not an ideal that we strive for case by case but a universal expectation everywhere and always. all who benefit from the rules of the global economy have a responsibility to follow them. enough of the world's commerce now takes place with developing nations that exempting them would render the whole system not just unfair but unworkable. and that would end up harming everyone.
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one example of just such an unsustainable approach is china's currency policy, which does, in fact, cost american jobs, but it also costs brazilian jobs and german jobs and other jobs, and it denies the chinese people the full fruits of their own labor. china has been gaming the trading system to hold down the value of its currency to give its companies a leg up. its currency has appreciated, but not enough. and currency is just one unfair practice. president obama has made clear that whatever tools we put in place in response must actually work, and must be consistent with our own international treaties and obligations. at the same time, we need to be assertive in securing the win-
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win economic relationship we can and should have with china. the state department is determined to help our companies seize opportunities around the world and bring down the barriers to trade, investment, and fair competition. our ambassadors are leading whole-of-government efforts to drum up new business and fulfill the goal of doubling america's exports by 2015. under secretary bob hormats, once very involved in this club, is coordinating with the export-import bank, opic, and others to support our investors and exporters in emerging economies. by passing the trade deals with panama, colombia, and south korea, thanks to the leadership of u.s. trade rep ron kirk, we are proving that even in today's washington, leaders from both parties can still come together to deliver results but also to send a message to the rest of the world.
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these agreements will allow us to compete in important emerging markets, creating tens of thousands of jobs for the american people. these victories also give us new momentum to take on a broader agenda of promoting fair competition around the world and updating our economic took kit. so we are moving forward in negotiating a cutting edge multilateral free trade agreement called the trans- pacific partnership. our goal is not only to lower barriers but to raise the standards of economic competition, from vietnam to new zealand to peru and many places in between. and we will continue to use the asia pacific economic cooperation forum, which president obama will host next month in hawaii, to push the envelope on open, free, transparent, and fair trade across the pacific basin. now, we have to be nimble and creative because we are
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confronting new barriers that are emerging not at borders but behind borders, denying our companies a chance to compete on their merits. and this is not just an issue for trade negotiations, it is a challenge for our diplomacy around the world. for example, when governments impose a so-called tollbooth that forces unfair terms on companies just to enter or expand a new market, we push
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back. and for me, it's clear that when countries turn a blind eye to piracy or other problems, we have to demand that they protect intellectual property. and our embassies are there on the front lines. we step in when we see corruption, red tape, or bullying of small or medium- sized businesses. and when companies want to compete, then countries have to open up their government contracts and not just expect us to open ours. we are pushing the procurement -- the international procurement standards so that it's not just, again, a one-way street.
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because when american companies are not given a chance to compete fairly, that costs us jobs at home. just as the wto eliminated the most harmful tariffs in the 1990's, today we need institutions that can provide solutions to these new market tariffs. countries that share the same economic values need to create and enforce new agreements and mechanisms to guarantee fair competition. and let me speak briefly about one barrier we urgently need to address, and that is the participation of women in the global economy. because when half of the world isn't invited, that makes a mockery of the ideal of free, open, and fair economic competition. according to the economists over the last decade, women's increased participation in the global labor market in the developed world accounted for a greater share of global growth than china's. so this is not just about somebody else -- it's about all of us, to keep tearing down these walls that prevent business and individuals from seeking their own full
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potential. but it's not just enough for us to defend against bad behavior and barriers that block people and companies from global competition. we have to get better at playing offense. every year, the population of the world's cities grows by 65 million people. that's the equivalent of seven chicagos. the idea of a new world order with seven mayor rahm emanuels should be enough to get all of us moving. [laughter] american businesses, though, have a major opportunity to help build new ports, stadiums, and highways, and to shape the sustainable cities of the future. i've asked assistant secretary jose fernandez to help american companies compete where growth is the fastest. it's also not enough for our commercial diplomacy to promote the flow of goods and services. we also need to promote the free flow of capital, too. investment in both directions, backed by well-enforced rules, is vital to creating growth and jobs here at home. for example, last year, the kentucky-based company that owns kfc and pizza hut, two iconic american brands, actually made more money selling pizza and fried chicken in china than in the united states. but this creates jobs at headquarters in louisville and it creates jobs as well in china. when tom friedman warns that the chinese will "eat our
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lunch," i'm not sure that's what he had in mind. [laughter] but it is true that we expect fair treatment for our investors overseas. and if we do that, we have to welcome foreign investment in america. through the president's job council, which i chaired a meeting of last week, and a whole of government paradigm called selectusa, we are focused on attracting billions of dollars of new investment to create american jobs. the state department and the u.s. trade representatives office will also lead negotiations on next-generation of bilateral investment treaties, the so-called bits that protect and encourage investment. and i am pleased to announce we will soon resume technical level discussions on a new bit with india. to make the most of open markets, however, we have to make sure that all companies
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play by the same rules, whether their owners sit in corporate boardrooms or government ministries. now, let's just be very clear here -- too often, national favorites enjoy preferential access to government resources and special protection from competition in their markets. that gives these companies, partially owned by a government, an unfair advantage and harms foreign competitors and local entrepreneurs alike. we are working to include a chapter on state-owned enterprises in the trans-pacific partnership and to finalize new oecd guidelines. our premise is simple -- the rules must apply equally to all companies. we call this commonsense principle competitive neutrality, and we promote it all over the world. fivebut these challenges to our economic interests are not the whole story. my fourth point is that we also confront a special set of strategic challenges from the growing wealth in state hands today. governments are entering markets directly through their cash reserves, natural resources, and businesses they own and control. and they are shaping these
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markets not just for profit, but to build and exercise power on behalf of the state. now, there is nothing new about countries using economic power to force others to bend to their will. feetbut today the resources at their disposal are unprecedented, and interconnected global markets high present new avenues to deploy them. a decade ago, the governments of emerging nations added a combined $100 billion a year to their reserves. in 2009, they took in $1.6 trillion. sovereign wealth funds now control 12% of investment worldwide. and increasingly, state-owned and state-supported enterprises
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operate not just in their home markets, but around the globe, sometimes in secrecy, often lacking transparency and accountability that would come from shareholders and regulatory schemes and boards. masquerading as commercial actors, but actually controlled by states and acting withthe dividing lines just aren't clear anymore. when states participate in markets directly or through the companies they own and control, their behavior is often benign. they are doing what they say they are doing, making an investment. sometimes it's even beneficial, as when energy suppliers work with consumers to stabilize global markets -- sometimes, but not always. we also see states bullying their neighbors. for example, national oil companies tightening gas
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supplies in the dead of winter. or they restrict access to critical minerals after a dispute. the way states deploy their cash, companies, and natural resources, especially in global markets, is of critical concern to us, and i hope it will be also to you. we need, therefore, to develop international rules and norms that set the boundaries, police bad behavior, and require transparency so that state-owned entities are clear about their intentions and their actions. as we respond to this challenge, however, we must not respond in kind. when the international community grew worried about sovereign wealth funds,
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countries, institutions, and the funds themselves came together to agree on the santiago principles, a code of conduct designed to reassure all stakeholders that these funds would act responsibly. today we need to broaden that discussion, to seek similar commitments, perhaps even binding agreements, about the behavior and intentions of state-owned companies. and this is an ambitious agenda, and we need to ensure that the state department and the u.s. government are on the right footing to get it done. after 9/11, we realized that we had to break down the silos that prevented our intelligence and law enforcement agencies from working together.
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today, many of the responsibilities of economic statecraft are similarly split among many government agencies. so we all need to bring our unique strengths to the same table. and under the leadership of the president and the white house, we are taking part in a genuine whole of government effort. for our part, the state department has talented, tireless diplomats engaged in economic outreach around the world. at every level, we are trying to up our game. we are reorganizing to break down old bureaucratic silos, creating a new under secretariat for economic growth, energy, and environment, and appointing the first-ever chief economist to the state department. we will also do more to train our diplomats to understand economics, finance, and markets, and more to promote those who do. we should be aiming for universal economic literacy and widespread expertise. we need to be a department where more people can read both
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foreign affairs and a bloomberg terminal. finally, let me underscore that for all that we can do beyond our borders, the choices that we make here at home will be most crucial to shoring up the source of our leadership. and it's not only choices by our government and our political leaders, it's also choices by our businesses. we need to recognize that our dependence on imported oil and our national debt are foreign policy challenges, not just economic ones. in the short term, they create volatility and give others
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leverage against us. in the long term, they pose a generational challenge to our global leadership. we are working to respond with new thinking and a renewed sense of common purpose to get our economy growing, modernize our infrastructure, bring down our debt. and as we do, we must resist the temptation to slash our investments -- not only our investments in infrastructure, education, r&d, but also in diplomacy and development. as i've said before and i'll repeat again today, the 1% of our budget that we spend on diplomacy and development is not driving our deficit or our
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debt. either we invest now in what keeps us safe and secure, or we should expect to pay the costs of living in a more dangerous and economically more challenging world. i don't think that is a choice we can afford. washington has to end the culture of political brinksmanship, which, i can tell you, raises questions around the world about our leadership. when i was in hong kong, i was just barraged by questions about what i thought would be the outcome of the debt ceiling negotiations. and having been around washington now for longer than i care to admit, i was able to
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assure all of the business leaders and government leaders that we would get to a solution probably at the very end. and like winston churchill said, we have the best system, but we didn't get to a solution until we exhausted every other alternative. and that american democracy will always be a little messy -- that goes with who we are. but that messiness cannot outweigh the imperative of delivering results. we have to recognize every decision we make now in this totally 24/7 interconnected world is followed around the world. a lot of people don't understand our system very well, but when they see that we can't make decisions on something as fundamental as to whether the united states of america will default on our debt, you've got to know it raises questions in their minds about where we're headed as a nation. but as i say, it's not only our government -- our businesses also need to lead. many companies today are sitting on large cash reserves. and in many countries i visit, leaders ask me, "where are the american businesses?
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how come they're not here competing for this contract, for this mining deal, for this business opportunity?" well, we are working to create an environment where american companies, large and small, at home and abroad, have the tools and the confidence to go full- bore. but ultimately, it's up to all of you, businesses yourselves, to hire, invest, take the kinds of informed risks that have always been essential to america's success. yesterday, at the state lunch for the korean president, i sat with a group of american businesses who do business in korea, and we started talking about this. and one of them said -- one of the business leaders there said, "there's a lot of risks in the global economy today, and we have to evaluate those risks because we owe our shareholders a very well-thought-through investment policy." he said, "but there's also a new element." he said, "we now feel like we're competing not only against other companies, we're competing against countries." and it's the obvious countries that we all know, where state- owned enterprises or hybrids are out there competing, but it's also other countries that are much more on the same team between business and government, and we need to be back on the same american team. we have to work together to address these challenges. in the 1990's, businesses used their supply chains to take on the problem of child labor in the developing world, and it was american businesses that began to change the terrible picture of five-, seven-, nine- year-old children in what amounted totoday, i am encouraged that a new coalition
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of major companies is coming together to keep global supply chains free of pirated software and counterfeit goods. that gives innovators their rightful reward, but it also creates american jobs. because nobody outworks us, and nobody out-innovates us. we just have to be out there competing to deliver what we do best. to be sure, the challenges facing our companies, our government, and our people are sizeable. but this is not the first time that america has faced adversity, and we have to be just prepared to get out there and fight hard for what we know we can achieve. we have to overcome our adversity at home and around the world. you see, i believe confidence is a commodity, and we need to remember that at our very best, america remains the opportunity society. a place of idealism, possibility, and pragmatism, a country where an idea hatched in a college dorm room or a garage can still grow and flourish into a multibillion- dollar business. and i also believe that our diversity is one of our
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greatest strengths. no place in the world shows that better than new york. america today is as well positioned as any nation to adapt and thrive amidst all of this complex change. and just as we always have, we will seek our success in a way that helps others succeed as well. because i know that somewhere in new york or elsewhere in america today, somebody is creating a business with an idea that could be a billion-dollar company if that idea can find its way into the marketplace. i know that somewhere in the developing world, there's an entrepreneur who could succeed if they're given a chance and then to keep trying even if they fail at first. and i know that in some of the places we're following most carefully in the news, middle east and north africa, we have to help create that culture of entrepreneurship that will give people a belief in themselves
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and the possibility that they, too, can have a better life. everywhere across this country, we have hardworking, talented people who are ready to be part of america's recovery. it is my commitment that our economic statecraft will help americans first and foremost live up to their own god-given potentials and then spread that opportunity society broadly. america's core belief that everyone should have the chance to succeed is one we've come closer to meeting than any country, ever, and we cannot afford to lose that. so in the century ahead, we need to make it true that for every american, and hopefully, eventually for every person around the globe, we're going to build a stronger economy that will provide more prosperity more broadly. we will rise to this challenge, we will answer the questions that are being asked around kitchen tables and cooking fires, and we will ensure that
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american leadership will be there for decades and decades to come. and not only will that be good for america, but it is my conviction it is absolutely essential for the world we want to live in. thank you very much. [applause] >> thank you, madam secretary. as is our tradition, we invite two of our members to pose questions to the secretary of state. abby joseph cohen is a trustee of the economic club and senior investment strategist at goldman sachs. ed hyman is founder and chairman of isi group and a former trustee of the club. they will each ask a question of the secretary. abby. >> andrew, thank you.
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