tv Key Capitol Hill Hearings CSPAN August 31, 2016 6:00pm-8:01pm EDT
work. we will continue to look for ways that the g20 can support the implementation of the paris agreement. finally, president obama would underscore the continued importance of the g20 going forward. at the pittsburgh summit in 2009 , we made the decision to elevate the detroit as the premier forum for international economic cooperation. since then the g20 may global , economic governance more effective and representative and provided an indefensible setting to facilitate cooperation among the world leading economies. the president believes the g20 will continue to play a central role in preventing a reemergence of the types of imbalances and regulatory gaps that contributed to the global financial crisis in 2008. i will close by noting that the g20 has proven to be a flexible forum for global cooperation. as we've seen over the last few years, moments of global crisis like 2008-2009 over one kind of
-- call for one kind of coordinated response, like we saw in pittsburgh. periods of less distress requires something different, a commitment to common principles and individual action that moves important issues towards better outcomes while allowing partners to maintain a dialogue to deal with potential or real crises. a one size fits all approach to coordination will never work, but the interdependence of the global economy demands the frequent communication and building consensus requires an investment of constant attention to detail and persistent efforts. thank you very much, and i look forward to the discussion with the david wessel, into taking -- and to taking your questions. [applause] and thank you very much mr. secretary for coming. , i was trying to think of some topic that you didn't cover in his speech, but other than not mentioning donald trump i think
you covered everything i could ask. but one point i want to start with is you said that g20 has been significant progress in addressing tax evasion and avoidance. ok, progress, but there is some tension as well. yesterday, the european union said apple owes ireland 13 billion euro. i have a couple of questions on that. one about the eu, and one about apple. first, the eu. do you think the european union is unfairly targeting us-based multinationals in this crusade? mr. lew: david, this is an issue that we've engaged on for some time now. we have a shared commitment with our colleagues in the eu to taxe down pathways to evasion and tax avoidance. we made real progress in the g20, more in the last 24 months than in 24 years in dealing with some of the issues like transfer pricing that are at the core of the problem. our concern with the european commission action is that it is
to makestate aid theory tax law. it is doing it in a way that is retroactive and overrides natural -- national tax law in our view. we think that it undermines the environment in europe for international business, because it creates uncertainty that will ultimately not be good for the european economy. as the head of the u.s. tax agency, i have been concerned that it reflects attempts to reach into the u.s. tax base to tax income that should be taxed in the united states. i understand the frustration that tax reform in the u.s. has been slow to accomplish. we have been working to press forward. i think we have made progress and that there is a growing bipartisan consensus on how to deal with tax reform in a way that will enable us to reach overseas income. what i do not think is right is
for issues to be addressed in a way that undermines the spirit of economic cooperation, and that is inconsistent with well-established principles of tax law. that wet a difference want to get income that has gone without taxation because of loopholes in the tax law. mr. wessel: do think they are targeting only u.s. companies? is there some other agenda? mr. lew: i've raise the issue that the pattern of the actions appears to be highly focused on u.s. firms. they point to some small actions against non-u.s. firms, but the largest actions do appear to be aimed squarely at our tax base. aboutssel: let's talk apple. sometimes what is legal is more outrageous than what is not legal. so from what the european commission has said, apple that what you basically pay almost no taxes, less than 1%, on this income it was setting to off set off in ireland that didn't have
an office or any people. you are correct if they ever brought that money will be would be taxed in the u.s. they show no interest in doing that. carl levin said yesterday sham -- shame on apple for dodging taxes and shame on the irs for , failing to crack down on the. is or something to that argument? mr. lew: you know, i share the view that tax law should make it impossible for income to go tax lists. -- tax-less. we have put forward a minimum tax rate that applies to all income that is taxable in the united states where ever it is earned. congress has not acted on that. we have made progress. there is an increasing bipartisan can sense is about and approach. i'm hopeful we will see action early in the next administration.
said to many ceos, and i specificcomment on any tax matter for a specific company, but i've talked to many ceos and said you need to be careful when you think about only maximizing tax advantage. there is a real impact on reputation and the environment for business when you have issues like companies that avoid taxation. need tothat there is a balance what decisions are made at a firm level. i have been very clear on issues like in version. it is legal, but wrong. a company does not to take action just because it is permitted. if it would hurt a company long-term in terms of reputation , market access, and attractiveness, that matters to shareholders as well. have a that we responsibility as policy makers
to take action in these areas. it is a reason i am so committed to working through the issues regarding inversion. the right way to do with this, income is taxless reform. we have tools to use administratively that we will use the best that we can. congress needs to act. i've been encouraged that in the last 24 hours i've heard members on both sides of the i'll talk about tax reform, more than i have recently. mr. wessel: maybe you can come back after the election and be the next president of tax reforms. service we have done a to congress and all state tax reforms. we have a blueprint on white paper that is the basis for bipartisan agreement. mr. wessel: the g20, you made the case that the g20 helped save us from the great depression 2.0. youlisted instances where basically said it would have ,een worse if not for the g20
protections, exchange rates, and such. outside of the official circles, people say, is it working? the global growth forecast continues to be revised down. there are signs of modest protectionism. global trade flows, the growth has plateaued. antipathy toward globalization, trade treaties. it leaves people to say, we will effort, buta for outcomes, growth of real people, you do not get a very good grade. mr. lew: i cannot disagree with the argument that we should be doing better and could be doing better. i think what is quite clear is that when you compare where the united states is eight years ago, it is night and day. the difference between an economy spiraling with no bottom
pillar oftrol to a strength in the global economy, notwithstanding the fact that we would like to see stronger growth. you look around the world, and we are not seeing a global recession like 2008, but i think the macroeconomic policies have failed to take advantage of the opportunity to have a more robust growth. -- the nine it states is united states is facing headwinds from a slower grilling global economy. we cannot make policies and other countries, but we can influence the way they think about their policies. if you look around the world, more countries are using macroeconomic goals, fiscal policy tools in particular, than one year ago or two years ago, in part because of sustained commitment. mr. wessel: what would you say to your german counterparts? you've had this argument with
them for as long as i can remember. you say do fiscal, they say we're worried about inflation. mr. lew: i've always said we need to keep our eye on long-term growth and short-term fiscal balance. fors the director of omb three surplus years. in good times, you need to orive towards balance surplus. what we have not seen in eight years is the kind of environment that is the right environment for those kinds of emphasis on surplus. it does not mean you can be out of control forever. if you compare where things are today versus four years ago in europe, the conversation on using fiscal policy is different . the united kingdom had a policy that was strict austerity. they are now talking about using the fiscal tools to navigate the space that will be bumpy after
the brexit referendum. unionve seen the european , which reflects germany's , soften some of the fiscal targets, particularly in countries dealing with the refugee crisis. you have seen germany deal with spending requirements to deal with refugees on top of, not within, prior targets. i am not saying that we will see every country jumped on the bandwagon and declare their using fiscal tools, but more fiscal tools are being used. that is not inconsistent with the basic premise of we need to be doing better. i agree we could and need to be doing better. i think the issue of inclusive growth has a salience around the world that is important not only for the moment, but will remain important. in the united states, there is a benefit to the international
trade, international economic cooperation, because we have the best workers and products in the world. we need access to global markets. it will not improve the quality in the united states and around the world of countries cut themselves off. mr. wessel: why do you think so many americans doubt that globalization has produced anything good for them or their families? mr. lew: on one level, those that believe these are good principles need to be more clear and how we communicate the policies, purposes of policies, and benefits. i believe that companies have to share the benefit of global trade in their policies, in terms of wages and other things that reach working people. , we need to focus on the tools that we need. the research and development, is strongerre, that
and not weaker. over the past 25 years, we tend to talk about these issues at moments when we want to pass trade agreements. people are skeptical. they say, what are you doing in between? there was not a lot of listening in between. i think that we need to make it clear not only on that you've of the vote in congress, but the months in between that these are shared bipartisan priorities. the reality is that we have a challenge to maintain the dialogue. something that we need to do better at as policymakers. you can say the obama administration is for the transpacific partnership, but your counterparts will say what are the odds of getting it through congress? donald trump and hillary clinton
have expressed opposition. what would you say? mr. lew: i would say the president remains committed to getting it done. and will use every ounce of energy he and those of us have to push it forward. we continue to have leaders in congress. this speaker of the house, the leader of the senate, committed to getting the agreement approved. i personally believe that for members of congress who voted for trade promotion authority, tpp isn't easy vote. -- is an easier vote. provisions that if improve labor standards and improving our mental status, sure it will become a level playing field. you can see actions being taken to improve labor standards. i think that the case on merits for tpp are very strong. the access to markets that will come to the united states is a
plus for american workers. clearly, the political environment is a complicated one. i don't need to say, to tell anyone that. they know that. they also know that it's always hard, and what it requires is a commitment of a of the president to push forward and the cooperation of leaders -- i will tell them that we will continue to press forward. that we think it will be done this year. that we will do whatever to make that happen. i cannot take away the concern that people have when they look at the difficult political environment. the effort totand get it done. mr. wessel: one more question, then questions from the audience. you mentioned from your speech specifically overcapacity in a big issue in china. what action do you get from the
chinese when you give them the advice that may be producing more steel that the world could use for 20 years is not a great strategy? mr. lew: i'll tell you, david, the chinese have acknowledged for themselves they have a problem with excess capacity. if you look at the measures they brought to the national people's congress a few months ago, it has been a language and policies to deal with excess capacity as part of their structural reforms. so i think we don't have to convince them in theory. what they need to do is tackle the very real challenge of pressing these changes down into the provinces, where steel capacity is owned by state-owned enterprises and other powerful interests, where they are employing a lot of people at this not just local economy but a very much a political and social system as well. so this is not easy, but i think they understand that if they don't address it, it's corrosive to china's economy and the long-term future for china's economy is much dimmer.
that doesn't mean that i have 100% confidence. we are pressing very hard on this. we are urging them to take clear measures both domestically and into indiana national arena to -- and in the international arena to make clear that this is something they are determined to follow through on. we will continue for the duration of our tenure to seek real tangible progress. i think we have seen important reflections in policy but the proof of the pudding is in the eating. they have to press the policy. mr. wessel: you have not seen anything tangible? mr. lew: we have not seen the full and more than tatian -- the full implementation of the policy. we went through a restructuring of our still industry. we have a more efficient and competitive steel industry because of it. it is not acceptable for the country that has gone through an industries tohave
be uncompetitive because of excess capacities that can be addressed through policy. as i mentioned, for china to meet its environmental objectives, closing down old and dirty steel plants is critical. they can replace it with an equal amount of capacity. mr. wessel: three questions, then we will take three in a row. you want to start? because we are pressed for time, tell us who you are and a short question, not a speech. you mentioned earlier china has made progress allowing market forces to determine the value of the currency. in the context of a slowing chinese economy, would you expect the devaluation of the currency, and the forces going forward? >> thank you. media groupporter
china. as far as i know, there is a u.s. delegation talking about negotiation about the b.i.t. talks in beijing. i would like to know if we can expect any announcement b.i.t and the ttp following the summit. mr. wessel: overhear? secretary, one area where we have seen change is climate change and u.s. leadership has been pivotal in that. the question that i have is on fossil fuels. the subsidies, the g7 has made a commitment. is it possible to have that commitment in the g20 and second, an aspect brookings highlighted very much is the importance of carbon pricing. now differences across , jurisdictions on carbon
pricing but what is the goal for , leadership on issue of carbon pricing? mr. wessel: three good questions. the first one, do you think the mb fall will let the r to get the market moving? mr. lew: if you look at the chinese economy, there has been downward pressure on the rmb. very different when market forces are driving exchange rate and not political decisions to drive exchange rate. i said on many occasions that real test for china is when market forces are pressing appreciation of the rnb and will . will they tolerate appreciation? if we want them to move in an orderly way toward the market determined exchange rate, we have to accept it will go up and down with market forces. i think that what we have heard
from them is unequivocal here they are prepared to do that. what we need to see is how they behave in the real world when market forces are driving the rmb up. bilateral: the investment treaty with china, will you get that done before you leave? progress.e have made it is a big piece of work. it took us years for the information technology agreement, which was more narrow in scope. i have had conversations with my counterparts in china, and i think we have a shared view which is important to make progress. our negotiators just spent one week meeting on this. it will be the competing focus on work. it will be because of the time remaining, picking up the pace to get through the amount of work. it is possible, and we have lurched the teams to continue to make as much progress as they can, and hopefully reach an
agreement. mr. wessel: the question about the campaign to reduce fossil fuel subsidies, that is now a g20 -- .r. lew: it is a g20 commitment the fact that the united states and china have gone through, two countries going through, that g20ects a commitment of the to do a fossil fuel subsidy reveal. subsidy reveal. the challenge after the review is enacting policies to take away the subsidies. we have seen around the world, particularly at a time of low oil prices, countries moving in a direction of trying to address structuraltant issues. it is hard. you have consumers, retail and industrial, who have built the subsidies into their expense models, into the family and business budget.
because of low energy prices, it is ideal for countries to make the adjustment at this time. what we know is fossil fuel subsidies lead to distorted use which is bad for the environment and bad business practice. i hope it is an area that we can continue to make progress in. mr. wessel: what do oil exporters say when you bring up this conversation? have beenhe saudis taking steps to review their own subsidies. everyone, at some level, understands that it is a bad thing. i've never heard anyone advocate for the fossil fuel subsidies in place. i was talking about policymakers. thewessel: finally, question about carbon pricing. whether the tax on carbon, is that part of the conversation or over the horizon? mr. lew: the imf has pointed to
the globalissue community should focus on p or have encouraged attention to it. it is a very challenging issue. us having lived through the 1990's, it and the attempt to place, in pricing in remember firsthand how difficult it was. it was small, and it became a metaphor for things that were difficult to do. it does not mean the conversation should end. it should be continually pursued. mr. wessel: do we have time for another question or two? the gentleman in the aisle. >> thank you. can you speak to issues at the g20 on cybercrime? mr. wessel: cybercrime. and this woman over here, please. thank you. is there some concern in quarters that are not happy about the tpp about the provisions for tribunals for
investors that feel their profits have then harmed by various legislation. i wonder if you could comment about that. that is a position folks in the union have been taking. cyber, the issue of cybercrime and cyber exposure is on the radart is of every leader, whether it is government or business around the world. i met yesterday with a group of senior financial industry executives and you could not have assembled a group like that to have ano intelligent discussion on the issue. we are seeing the risk and exposure, and the need to be more effective hear the president has taken action administratively. he has worked with congress to enact legislation. we are working aggressively to stay ahead of what is constantly
.volving and morphing risks i do not think it is a problem that will go away quickly. every time that we succeed in shutting down one avenue, there are other new attacks that require the kind of coordinated is what it takes to be effective. domestically, we need to have the kind of flow of information between government and industry that is seamless. you need to see the patterns of the attacks in order to get behind them and stop them. internationally, we increasingly need to be in a position to do that kind of sharing. it is hard to share information that you do not have fidelity or confidence in. it is evolving. we have conversations at the g7 at how to increase sharing of resources. i can say that it is not a day that goes by when we are not attempting to look at what can better, to be
effective at stopping attacks that we see, preventing attacks in the future. i think the stigma that comes with being attacked has to go away. one of the risks of having a stigma attached, that you did something wrong if you were attacked, is you makes -- is it makes you more reluctant to share. that means others will be more exposed to a similar attack. these attacks happen, we have to roll up our sleeves, go to work, get behind them, and remain vigilant. mr. wessel: the tribunals, how corporations settle disputes with the government. mr. lew: on the question of investors dispute resolution we have seen this as a way to make sure that other countries cannot do things that are unfair in the way that they
deal with trying to address competition. we have never lost a case. something that we have a very strong record in. our processes are very strong and can withstand scrutiny. we are sensitive to the concern that has been raised, and do not the it as a way for companies to go behind legitimate policies, and undermine legitimate governmental interests, whether it be about potential regulatory matters or health and safety. throughnue to work the process of negotiating to clarify that. frankly, it is an area that we need to remain attuned to, to where there are nuanced changes that can best protect against unfair practices, and not provide a means for doing what it was not intended to be. i think the debate over tpp,
there has been inaccuracies in terms of how the mechanism has been described in terms of both what it is and how it has been used, what the intentions are. i think that we will continue to work to try to create greater comfort with where we are and where we need to be. mr. wessel: thank you very much, mr. secretary. thank all of you. i ask you to stay in your seats so the secretary and get out. he has another appointment. is a coffee cup or a piece of paper at your feet, put it in the trashcan. please join me in thanking the secretary for his time. [applause]
[captions copyright national cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> here next year is a look at here is a look at our primetime schedule. at the clinton speaks american legion national convention in cincinnati. on c-span2, it is book tv with a look at some of our recent adventures on the road to oakland, hartford, and santa barbara with our local content vehicle. and on c-span3, american history tv with programs and events on native american history. also tonight, c-span's road to the white house coverage continues with donald trump outlining his immigration plans and agenda. he will speak to supporters in phoenix. that starts live at 9:00 p.m. eastern on c-span.
earlier today, the heritage foundation released its annual report looking at global economic policies. two of the co-authors spoke about some of their findings in areas such as trade and investments, corruption, and the future of the chinese economy. this is an hour. >> good morning. welcome to the heritage foundation and our auditorium. we welcome those who join us on our heritage.org website. and in-house, we ask that you make last courtesy check that our mobile devices have been silenced and as well for those watching online, you're welcome to send questions or comments at any time today or in the future presentations. firstname.lastname@example.org. hosting our discussion is ambassador miller. he serves as director in our center for analysis and trade and economics.
he also oversees the publication of index of economic freedom which we copublish with the wall street journal. copies are available if you have not seen one. prior to joining us here at heritage, he was a diplomat and public servant. he also served as the state department -- at the state department as well as in several postings around the world. please join me in welcoming ambassador miller. [applause] >> thank you, john. good morning and welcome to the roll-out of the 2017 global agenda for economic freedom. it looks like this, if you didn't manage to pick one up yet. the global agenda is a product inspired by the heritage foundation's index of economic freedom. it's a joint production of the
institute for economic freedom and opportunity and the davis institute for national security and foreign policy. it's basic premise is that the promotion of economic freedom at home and abroad is essential not only for the genuine and sustained revitalization of the u.s. economy, but also to strengthen u.s. national security. in 2010, the united states fell from the category of economically free countries in our index of economic freedom. it's been stuck in the ranks for the mostly free ever since. that's the second tier category of countries whose governments interfere in significant ways in their citizens' economic freedom. what's caused the u.s. decline? mainly the growth of government, which has become not only more expensive, but which is
-- has intrutded more significantly into energy -- which has intruded more , and suggests that washington knows best. for a country founded on the principal of limited government with a constitution that's filled with checks and balances on government power, the recent explosive growth of washington's influence on our daily lives is an irony with tragic consequences. other factors have derailed too,can economic freedom, and my expert colleagues at the heritage foundation delve into many of them in this collection of essays. the message for americans is to support policies that will avoid further decline. in this election year, that means supporting policymakers
conditionso creating for more economic freedom at home and abroad. this addition to heritage foundation for economic freedom layed out a broad series of actions for the u.s. to make in 2017, mostly at home but also overseas. it offers a blueprint for a practical and effective strategy to end stagnation and restart meaningful worldwide economic growth. for example, american leadership can be decisive in promoting property rights and anticorruption measures in other countries. we could start by taking high-profile steps at home to strengthen those rights here. while incorporating them as a key objective of foreign aid abroad. and the global agenda urges the
the u.s. government to reject cronyism and agreements that eliminate barriers to trade in -- pursue agreements that eliminate barriers to trade in investment in an even-handed way while efforts to create additional regulatory hurdles to doing business. but i'm getting ahead of the story here. to present highlights of the 2017 global agenda today i'm delighted to be joined by two of my heritage colleagues who co-editor this year's addition. james is the index editor for the rule of law and monetary freedom and analyzes economic issues in latin america and europe, as well as economic development issues worldwide. before joining heritage in 2007, jim was a career foreign officer at the u.s. state department and he completed tours of duty at u.s. embassies in mexico, portugal, france,
panama, and haiti. jim earned a master's degree in international developmental economics from yale and holds mba from the university of pittsburgh. william t. wilson is a senior research fellow in the asian study center. before joining heritage in 2014, dr. wilson headed economic and financial research for the ernst & young institute for emerging-market studies. in that capacity, he spent three years in beijing before starting an office at the -- for the institute in moscow where he lived for two years. prior to that, bill was executive vice president and head of economic research for the national bank of kuwait. he holds an ma and ph.d degree in economics from purdue university. after jim and bill present this year's global agenda, we will be honor today hear comments about it from steven moore, distinguished visiting fellow for the project for economic growth.
steve is very familiar to millions of americans for his long career writing about economics at "the wall street journal" and his frequent appearances on cnbc. earlier, steve founded the club for growth which helps select conservative members of congress including heritage foundation president jim demint when he first ran for congress. steve has a master's in economic -- economics from george mason university. after steve's comments, we should have plenty of time for questions. jim, take it away. >> thank you, terry. we have a lot of material to go through so i will have to try to be quick. starting off with trade. a senior trade policy analyst at heritage and my colleague in producing the index of economic freedom is here.
bryan has done a great job explaining the benefits to american workers and consumers from the efforts of really generations of u.s. presidents from both parties to improve the free flow of trade and investment around the world. and he notes that tariff rates have dropped, but he also notes the disquieting developments during the obama years of increases in nontariff barriers and nontransparent investment regimes. and that's something he is calling the next administration to fight against and reduce barriers and open new markets. next, our colleague brett shaffer has an interesting piece on foreign assistance, foreign aid of element assistance of u.s. government taxpayer money and calls for an update of the 1961 foreign assistance act, calls for an independent evaluation of all foreign assistance done by the u.s. government, calls for the -- under thee u.s.
direct supervision of the u.s. state department. he emphasizes making the rule of law center to policies and also reforming the food assistance program. one of those areas, of course, is corruption. our colleague writes a piece about the very deleterious effects of corruption in sub-saharan africa and how it damages the rule of law and is linked with all kinds of bad things, like increases in violence, even homicide. the next administration should xliiiwhat the bush administration did. we want to see a return to that promotion of civil society. other index of
economic freedom colleague anthony kim writes about another aspect of developed assistance policy with regard to the world bank and development banks, calling for an emphasis on economic freedom as core principles and to use private sector role modeling for programs that they do, especially for the 18th --lenishment of the idea a idea that will be finalized quickly after the next administration takes office. briefly about the three essays i wrote for this collection. the first of with international policy coordination. we have a g7 the dates from the cold war era that needs to be updated. , really, 2008 crisis calls for using the g20, because they had -- wanted to have a place where china could be included. we think it's a mistake, that
the g20 has been a time wasting, ineffective series of photo ops and it has allowed much more possibility for crony's interests and all the various subgroups. we are calling for the g20 to be downgraded to the finance minister level and for the g nine to be created and -- the g9 to be created, specifically excluding russia, with the behavior of russia under putin as not meriting inclusion in that group. 9 could be very formal. it could meet on the fringes of other meetings. you don't need the whole bureaucracy that's been in place. you could have a more productive exchange of views. we talked about the world bank. the other breton would institution we will talk about -- breton wood institution we will talk about is the imf. we want to see a return to the
basics from when the imf was set up. i was helped by the republican congress that insisted that the framework be reimposed at the world bank when they approved the reform package at the end of last year. we want to see that sort of approach of rules-based policymaking and advice followed through next year in the next administration. we don't want to have imf bureaucrats basically with a wink and a nod saying, if you break these rules, we will be there to bail you out. the imf should not be a first responder. finally, a lengthy set of reflections on really a hydra five did -- hydra-headed problem, cronyism in all of its forms, socialist, environmentalists, cultural cronyism. all those forms of cronyism expanded greatly during the obama years.
the next president should cut off the food supply to all these nefarious groupings. at the end of the day, what this always comes down to is rent seeking. powerful interests seeking special treatment and carveouts in exchange for doing the bidding of the government in power. what we say is cut the rent off, cut the -- cut off the partnerships, and the corporate welfare -- end the corporate welfare. this is another essay that my colleague will talk about. bill, i think it's time for you to take over, thank you. wilson: excellent. thanks. greetings, welcome. in terms of economics, we live in very interesting times, don't we? only a short time ago the
so-called "bric" countries, the four-largest emerging economies, were flying high and they were cocky. over the past six years, i lived in china and russia before i returned to washington, d.c. and they were gloating. high-level official were gloating over the state of the u.s. economy. how much has changed in four or five years. brazil is in its worst recession in at least half century. today brazil will impeach its president. in russia, the economy is contracted for two consecutive years, essentially nothing more than a failed petro state. and china, which i will talk about in a little more detail in
just a second, where i lived for 3 1/2 years, economic growth was approximately 10% as recently as four years ago. we suspect now it's running around 5%. i will give more detail on that. the only bright like would be india. 70%, -- 7%,wing at but it has a fertility rate of 7%. it's working age population is growing enormously, by 230 million people by the middle of the century, so it has to create an enormous number of jobs. i'm sorry, 7% won't do it. in his first two years in power, modi has not done enough. as my mentor when i was a very young man used to tell me when things were bad -- i worked in detroit as a young man, of all places. yeah, i can pick them. [laughter] he said, " cheer up, bill,
things are getting worse." it was our thesis that nation states don't make economic reforms until they hit rock bottom. we may be in the early or -- through immediate stages of a lot of large to emerging-market economies hitting rock bottom. this may be a good time to get into the stock market. on the first chapter, i want to talk about, on the global agenda for economic freedom -- years --ived for 3 1/2 is the chinese model past its expiration date? it's the second largest economy in the world, $11 trillion. it was the size of japan as recently as 2010. now it has more than doubled in size. more than doubled the size by 2016. the answer to the question i yes,up there is, in short,
it is. it's relied successfully on exports and fixed asset investment for 30 years. there's enormous excess capacity but moreustry, importantly i worked as a banker for 10 years. i understand the credit cycle. china was 150%in of gross domestic product in 2007. today it's, you know, we don't know the exact number, but it's roughly 300% gross domestic product. in other words, it's growing. by the way, they say they are 7%.ing at 6.5%, this is nonsense. they're not. they're not contracting but they are not growing at 6.5%, 7%. china has a population of almost 1.4 billion people.
they released their gdp figures 14 days after the end of the quarter, and there are no revisions. no revisions. they always fall within the target. exactly how fast are they growing, i don't know. but it is slower than 7%. probably in the neighbor of 4.5%, 5%. if they were still growing at 10%, the debt load would be a lot more manageable, but they are not. they are growing at 1/2 the rate they were four, five years ago. the u.s. response should be to prepare for a hard landing. faita theta complete -- that there will be a financial crisis in china. i'm not saying china is going away. the question is how they respond to this financial crisis, whether it occurs next year or two or three years from now. there's still room to expand credit so i don't see it , happening next year.
so, much slower growth would cause the ccp, the chinese communist party, to become more aggressive in foreign policy in order to retain authority at home. again, i can give much more details later in the question and answer period. one more thing in terms of u.s. policy, you know what, i think we should -- we've been talking about this for ten years. we just signed a bilateral investment agreement with the chinese. did you know this? chinese are the second largest net exporter of credit in the world, despite their debt? they export a lot of credit. let them invest in u.s. infrastructure. why not take their money? so we advocate here at heritage signing the bia. next slide. the importance of liberalizing global energy markets. i was living in the middle east in 2007 -- [laughter] it was crazy when oil reached
$150 a barrel. they were all high. i mean, this could never stop. and my reaction was that markets , three to five years from now, prices would come way down. these levels were not a sustainable equilibrium. let me give you two quick figures. u.s. energy production in 2007 -- what was it? 5 million barrels a day. last year, despite closing down a lot of the shell oil production -- shale oil production, it was 9.4 million barrels per day. that's a revolution. that's a revolution. shale revolution. and our -- unlike abroad, most -- where most of the oil companies are owned by the state. our oil companies are all privately owned, private shareholders. private money went in, went into
the pipeline, and we doubled production over a relatively short period of time. the good news is the congress removed the export ban on oil last year. that was a very good sign. we also advocate that the department of energy be removed from the decision-making process in improving liquid natural gas products. right now, we can't do projects -- lng products with countries we don't have an fta, free-trade agreement, with. this is stupid. i've got to move on. i'm running out of time. eliminating export financing subsidies. this was not offered by me, but by a subject matter expert. but i was shocked that the level of export subsidies globally --t year -- export subsidies
was $280 billion. now, i've worked in the private sector my entire life. i've worked in the private sector for 25 years. we have the best private in terms in the world of return on equity and efficiency. here at heritage we recommend bet the import-export bank eliminated. shut down. it subverts free-trade. it causes all sorts of distortions. it causes disadvantages to domestic nonexporters who don't receive the subsidies. small businesses don't receive subsidies. they don't have the power to lobby in washington. if they did have the power, they would lobby. they are too small. it's the big companies, like ge. it incurs undue risk.
the u.s. per capita gdp is $55,000. one of the richest companies in the world. you have other country saying, you know, you are subsidizing your blue chips. they are subsidizing their blue chips. we have a fraction of the per capita gdp. why shouldn't we subsidize our largest companies? so, i advocate -- only 2% of u.s. companies receive subsidies from the import-export bank. so we have -- it's one of the few areas where we disagree with the u.s. chamber of commerce. we usually agree on 90% of issues. this one we disagree. we should eliminate the import-export bank. last thing, eliminate state owned enterprises, which i hate. estate owned enterprise -- a
state owned enterprise is simple defined as when the state owns more than 50% of the outstanding shares. 10% of the world's largest firms are state owned enterprises. 96% of the shares of china's top 10 firms belong to the state. in russia it's 81%. putin has reclaimed that commanding heights over the past 10 years. russia was largely a private economy ten years ago. even in malaysia, in asia, malaysia, 70% of the top firms are state-owned enterprises. state owned enterprises undermine free trade and economic growth, and i know for corruption.invite corruption is the scourge of the emerging markets. so, what we advocate, illuminating this sort of -- eliminating this sort of
protectionism should be a top priority for international trade deals. with that, i will leave you to our star, steve moore, to make some comments. thanks.e: good morning, folks. it is a privilege to be asked to speak at this. james and bill, congratulations on a fantastic report. i read a lot of it last night and learned a lot from it, including things that i suspected were true, but you documented this so well, about the proliferation of corruption and cronyism around the globe and how that has incapacitated economies, the fact that we see protectionism on the rise, the fact that we see more and more government involvement in energy markets. and i would thad -- add to that another. i think you guys made a really strong point about how impotent foreign aid is and that we are
so misguided, often times, in foreign aid, rather than just allowing the free exchange of money and goods and services. i thought it was pessimistic, actually. i was a little bit discouraged about the directional effect. that's what i want to touch on for just a few minutes and then turn it over for some questions. want to give some kind of personal reflections on some of these ideas that are laid out in this excellent report. i travel around the country quite a bit and sometimes internationally, and i'm shocked by the fact that when you talk to real people out there, cab drivers, school teachers, veterans, construction workers, there's a real sense in the united states that things will going on. you see this reflected in the polls that two out of three americans think the country is on the wrong track. americans are angry and they are cranky right now. it's interesting because i've been reading a lot of articles
recently from people inside the washington beltway, why is everybody so angry, everything is so good in america, look, there's a divide that's going on. if you look at what is happening outside here, you know, in the neighborhood here in washington, d.c., i lookngton, out my window, cranes going up. the most prosperous place in america today is probably washington, d.c. and i think that mass that you get to political center that is like wild -- that is growing like wildfire's, but that isn't happening across america, except some other areas like san francisco, they're doing very well in silicon valley. this is obviously refracted in the economic growth numbers that have been in my opinion just dismal over the last several years. you all know this has been the slowest recovery from a recession since the great depression. we got the news last week that over the last six months the u.s. economy has grown 1%. that's pathetic. that's pathetic.
that's barely staying out of recession, and i would make the case that in the business sector, if you look at business spending, business confidence, what's happening with business process, in my opinion the business sector is what i call a soft recession. these are dangerous times and the economy is way underperforming and i laugh when i hear people like larry summers and all these other great scholars who gave us this economy saying, well, 1% or 2% is about the best we can do. this is the new normal. the secular stagnation, they call it. this is just what we are going to have to live with in the next 25 years. i believe that spoke him -- tha t's hokum. there's no reason that the economy can't grow much faster and it should be growing much faster. the voters are right to say what's going on, why aren't we growing? median, you know, family income has not grown at all in this recovery. this is the first recovery in 50 years that the average family
hasn't felt it in their pocketbook. they're more financially strained than ever before. so, what's going on, why is this happening? i would make the case this is also happening abroad. this explains, in my opinion, everything about why brexit past. -- passed. people are angry and they feel that the government is unresponsive to economic and political needs. and so to answer that question, i wanted to mention the fact that there was a -- one of the most important articles in an economic journal came out a number -- three to four years ago in the journal of economic literature. and it was called "the age of milton freedman," and it talked about a period from 1980 to 2005 which probably is the greatest period of economic growth in the -- in world history. there's almost no question about it. part,hat period, in large i would say in no small part
due to the principles that heritage promotes all the time, the spread of economic freedom -- and what the journal of economic literature was saying they called it "the age of milton freedman" because milton freedman's ideas were ascended in that period from 1980 to 2005. we saw the fall of the berlin wall and we saw what happened in china. and just to give you one statistic that tells you about the amazing progress that was made in that 25-year period when for the most part countries moved toward the economic freedom ideas that are talked about in this publication an index of economic freedom, over one billion people -- over 1 billion people in 25 years -- by the way 25 years is like a nano second. in 25 years, we moved one billion people out of abject poverty. that is an amazing accomplishment. and yet i would make the case and i would love your reflections on this, that age of
-- that things have trended in the wrong direction in the last 10 years and that age of milton freedman unfortunately has come to a halt, maybe not a screeching halt, but it certainly as -- is slowing down as some of the ideas that took hold in the 1980's and 1990's are now in retreat. we see that, for example, in the united states. we saw half of the american voters in the democratic party vote for a socialist. that tells you a lot that some of the ideas that we are talking about have lost favor. and it is a distressing thing to see because as these ideas lose favor, people will become poorer. our creed at the heritage foundation is ideas have consequences. good ideas have good consequences an bad ideas have -- good ideas have good consequences. and bad ideas have bad consequences. one of the things i'd like to have you all comment about -- i've always believed that in this world economy the united states is the hub and every
other country is a spoke. frankly, all the ideas we are trying to promote, if we don't get them right in the united states, the rest of the world doesn't get them right. that's the lesson we learned over reagan. that's why i think reagan was one of the great presidents. they became -- they flourished around the world. and i would submit that because the united states in the last 10 years, and i'm not going to be partisan here, the second term of the bush administration was mostly bad ideas and, of course, the last seven and a half years under obama has almost every idea that's come out of the obama administration with a few exceptions has been the wrong thing to do starting with the bail-outs, obamacare, and every day we are seeing consequences. if you want to see real-world consequences of bad ideas, look at obamacare. it's a perfect example. everything that we predicted is
happening with obamacare. the only thing we predicted that predicted isink we that it would fall apart as quickly as it has. bad ideas do have consequences. that's why publications like this are so vitally important to get people. in my opinion, it wouldn't be that hard to get for for the -- it wouldn't be that hard for the united states and countries to start growing again at a very rapid pace. i believe if you have a change of regime and policy, i said on fox news, we could grow at 4% in five years. 4% in five years. that's like adding another texas to the economy. that's a big deal. it's interesting that everybody says -- hillary clinton saying, well, look, sure, the economy is growing 1%, but we are growing faster than everybody else and we should be applauding that. the reason the rest of the world isn't growing is because we are not growing. if we are not growing, it is so
difficult for these other countries to get it right as well. that's point number one. the second point i want to make is about globalization. and this is really one of the themes of your book, but there's some reflection and second-thinking about globalization right now, whether it's a good thing. you know, when brexit didn't pass -- i mean, when brexit did pass -- i think there's a big difference between a global globalization that harmonizes the world economy, which is a good thing, versus the globalization of government. we need to separate out those two ideas. globalization, everything you talk about in the book about the importance of economic immigration is obviously so important. i mean, trade, especially. if they voluntarily trade, they are both better off. the idea, one of the things that
worries me is that we are seeing a trend towards the left wanting global government. this isn't the black helicopter stuff. there's no question that the left's agenda to globalize a lot of policies. we see this with this, i think, really dangerous -- the climate change deal, that we are going to globalize all these environmental rules and so on. this is an assault against self-governance, and that's a very bad thing. the reason i mention this -- i'm going to challenge you guys on this. i don't know if i disagree with you or not. i want to throw out an idea. you talk about reforming imf and world bank and these institutions and certainly in ways that would improve these organizations. but i want to throw out this idea that maybe the world would be better without them altogether. do we really need an imf? do we really need a world bank? do we really need an oecd?
do we really need the united nations? we've written about that in -- at heritage for 30 years. it's certainly worth thinking about. i guess what i'm challenging you to -- again, i want your answer to this. are these reformable organizations? i was thinking about this the other day. i was listening to npr and they had a long interview, i think it was the president of the world bank. it might have been one of the chief economists. here we are with the world economy that's sinking into a world recession, and one of them spend the entire conversation talking about global warming. look, there's something insane about that. i mean, there are a lot of problems in the world and maybe global warming is a problem but i think most people wouldn't say that you have so many people living in poverty, more and more sinking into poverty, the world is teetering on the verge of a world recession. for the world bank to be talking about global warming is deranged in my opinion. and so i just wonder if we are
better or worse off with these world bank's. and the final point i will make is with respect to energy markets, and i love what you guys wrote in this booklet about the energy issue. and i just think that it's so important and near and dear to my heart, because i have a new book out on energy, and you said it very well about the massive increase in energy production, but there's a war on energy in the world today. the greens are trying to decapitate energy markets right now, whether it's energy gas, nuclear power, coal where we put so many coal miners out of work and we need to privatize these energy markets. you are so exactly right. because if we do -- .verything that we have this microphone i'm talking into, the chair you are sitting in, the lunch we have -- everything is derivative of energy. there is no better care for world poverty other than just -- world povertyr
other than cheap and reliable energy. there's still something like a billion and a half people living in the world, according to economists, that don't have access to the most basic thing of the last 200 years which is electricity. if we want to reduce poverty in the world, make electricity less expensive. the green left agenda is to make electricity more expensive. i don't know. i guess i am a little pessimistic right now about the way things are going. this is a great guidebook to how to get us back on track. i would simply end with the optimistic message, that i do think if the united states starts getting these things rights, they will spread like a virus around the world and we could have another 25-year period of unbelievable prosperity. >> great, thank you. >> do you want me to lead -- >> let me respond to a couple of points. in terms of the world bank and the imf, at least for a start, we should put some kind of traceable ankle bracelet on them
so that the parole officers know what they are doing at all times. that was kind of one of the thrusts of my point. we have our colleagues here in the center who have written extensively on brexit. i think their point is that brexit was a vote against, not globalization, per se, but against top down, undemocratic protectionist leaders coming from brussels, and they reject that, i think for good reason, including having european courts telling british and -- british citizens what to do in regard to their own legal system. we have in our audience dr. david kreuzer, and i might ask the microphone to go to him for a minute to respond briefly about your climate change and green points and that was another area where we talk about rent seeking, environmentalism, and cronyism. i think that's part of it. those would be a couple of my reactions. >> just a quick couple of points.
you know, in terms of steve's comments, are you aware that the u.s. economy is growing less than 3%, less than 3% for nine consecutive years? govon the da.gov -- dea. website. the data goes back to the 1930's -- >> meaning we've never been above 3%. >> never been above 3% in nine consecutive years. it's the first time it's ever kept -- happened since we've been keeping national income accounting. in terms of the imf and things like that, i got my start -- i quit academia at an early age and was fortunate to work with a great mentor in detroit at a large miss western bank -- large midwestern bank. it's interesting working in detroit, because it's like working in a developing country. when we went out to lunch, it was like blackjack. but whenever bad news came out about the city of detroit, he
would look at me and say, cheer up, bill, things are getting worse. it was this thesis that nationstates don't reform. whether they are developing or rich, unless they hit rock bottom. and i think the imf and world bank -- the imf and world bank, i think at one point, they played a role. they were created in 1944 in the early postwar history. there was a massive shortage of dollars. europeans couldn't porches -- dollars and europeans couldn't purchase imports. that was the purpose of the imf, to provide world liquidity. but i don't think they serve a useful purpose anymore, which is why i'm a little more hopeful. things that don't work eventually die. >> i would say on the point -- i also worked worked in detroit as a young man, just by the way.
my perspective is i worked at ford motor company and now we have many better automobiles and trucks and what have you because of global competition. and the system that was built on protectionism of the big three collapsed. that's what you see is the disaster of detroit. can we maybe go to david kreuzer for just a second? i'm sure we have questions from the audience. >> thank you very much. first, i highly recommend steve's book. they nailed the energy problem right on the head. it is that we have cronyism and hysteria driving our energy policy. the hysteria is that we are heading to a climate catastrophe, which the data trends simply do not show. the data from the obama administration's own national oceanicric -- national atmospheric association.
the first poster child was solyndra. the current is a solar thermal desert of the southern california and nevada. gas toly burns natural turn it into pretend solar energy. about 1/3 of the solar energy they sell is produced through natural gas. that's the current poster child for cronyism. haves was mentioned, we energy poverty worldwide that is holding back economic growth. the climate policies are probably more likely to start wars than any potential climate catastrophe. they generate animosity towards the developed world instead of the developed world providing a model for getting people out of poverty.
the world bank and others are pointing to the developed world as the cause of problems for the developing world. the solutions are to extend poverty in the developing world. we need to get away from that. to the extent that the world the's big energy policy is clean burning cook stove which it has been, it's an embarrassment. >> one quick point about that. it is an issue. i agree with everything that you said. one point of extreme liberal hypocrisy is the left's whole mantra right now is about reducing the gap of income between rich and poor. when you think about it, all these green policies of making electricity and energy more expensive, all they are is an extreme regressive tax on low-income people. to the extent that these institutions are holding back energy production and making it , this is doing more than anything to widen the disparity between the rich and
poor. we will open it up for other questions and comments. please just very quickly introduce yourself and ask your question as quickly as possible. this gentleman right back here. >> i'm an attorney here in town. the general question, the underlying thesis of everything that heritage does or anything that you have said here is less regulation means more economic growth. we've had very low economic growth over the last, what, 6, 7, 8 years. but compared to china, there is still far less regulation of the economy in the united states than there is in china, yet china has had an economic growth rate, whether it is 10% eight .ears ago or 5% now why are they doing so much better than we are? >> yeah. did you mean to say they have more or less regulation?
>> chinese have much more. >> you said less. th orey are 80th or 90 something like that. so, why are they doing better than we are? >> yeah. what happens with developing countries is a catch-up phase. the per capita income in the u.s. is $55,000. the per capita income in china -- if you go to china's tier-one and tier-two cities and look at the transformation over the last 25 years, it was not generated by 4%, 5% growth. they were probably growing 9% to 10% for a long time. as an economist, i don't exactly agree with it, but someone who wrote about it in the 1990's, paul krugman, talked about
factor accumulation. what happened with china in 1980, 10% of the population was urbanized. today it's 54%. you have a massive transfer from the farms to the cities, from low productivity areas to a much higher productivity area, service and manufacturing. then you had what we call capital accumulation. the chinese have spent -- [laughter] 50% of gross domestic product on fixed asset investment enormous , capital accumulation. it has accounted for a lion's share of their economic growth. their exports in 2000 accounted 2% -- for 2% of total global exports. today it is 12%, and that's not going to rise much faster. the market and the world economy won't allow it. so that -- so the two major economic engines, those two
things expired. in economics, we call it "factor accumulation." you can generated easily in any country as long as you have political stability. and they've had political stability. it, thedoubt about chinese communist party is incomplete power. in complete power. anyone that challenges the ccp 's crust, no matter who you are. they've had political stability for about 3 1/2 decades, and they've had enormous factor accumulation, so you get to what we call the "mip," "the middle income trap." i challenge you, over the last 40 years, of all these developing countries and there's hundreds of them, how many became high income countries? south korea, taiwan, singapore,
hong kong, i'm not going to include the petro states like kuwait and qatar, populations of 600 thousands -- 600,000. they are simply tiny little petro states. really no one else. i believe china -- china now has to go through productivity growth. its working age population peaked in 2012. it's the fastest aging population in the world. investment, 50% of gdp is not a sustainable equilibrium. they have excess capacity in almost all their industries, from cement to steal, even solar panels, -- to steel, even solar panels. they have to bring that down to about 25% or 30%. if you do the multiplier effect, it means a massive contraction in economic growth. -- thena is in the early
intermediate stages of entering what we call "the middle income trap," unless there are major structural reforms. >> no. maybe another question. >> other questions? >> i hadn't heard any mention of company inversions and the current administration has been trying to do something about companies that have circumvented the tax regulations by moving their headquarters overseas. do you have any thoughts on this? the new administration, no matter which one it is, will come into being. should they continue to approach things this way, or would there be a better way to bring these companies back to america where they belong, rather than just having headquarters overseas and still staying an american company? it's an odd way to do business.
>> there are very few real-life examples that are visible to the naked eye about way -- why tax rates matter than to see what's happening with corporate relocations. and, you know, when i talked about the age of reagan and thatcher, you know, if you look at what happened from 19 -- actually from 1990 through today, the rest of the world has been very, very aggressively cutting tax rates. -- business tax rates. were slightlywe below the world average in the united states, and now we are significantly above the world average, because the rest of the world has been exercising what i call " reaganomics." ireland has the lowest tax rate in the world at 12.5%. so, it is a big problem.
we are stuck at 37%, 38%. the rest of the world is near 20%. almost every rational person in the country, you know, other than hillary clinton and barack obama, really we should do something mighty fast about this to make america more competitive . that means we need to cut our corporate rate as quickly as possible. and so, i think the trump plan brings the corporate rate down to about 50% -- 15%. and i believe if you do that, you're going to see capital flow back in the united states. i don't think there's any question about it. it happened in the 80's when we cut tax rates in the 80's, one of the reasons the u.s. economy grew so much is we became magnet -- magnet for capital. i think that would happen again. i wonder what you all think. >> it certainly makes brexit lookahead -- look good. in terms of what the eu is trying to do to apple right now. i'm sure the british are happy they are leaving. >> yeah, among the so-called
rich countries, the oec countries, correct me if i'm countries,he oedc correct me if i'm wrong, steve, we have the highest -- >> highest. >> highest corporate income tax and i worked in largest sectors and the purpose of company is to maximize profits for the owners. the owners are the shareholders. that's all they should do. maximize profits for the shareholders. >> not triple bottom line. as we write about the corporate social responsibility movement. >> if that means it is an invers ion, so be it. >> let me ask you, before we get to the next question, one thing that has been on my mind that entered the debate about good economic policy. trump has brought this on with some of his ideas on trade, many of which i don't agree with, but there is a rethinking among some economists about whether this idea of multilateral trade agreements or bilateral trade agreements are preferable. i think trump is talking about,
you know, if we are going to do trade deals, they should be bilateral. what are the advantages -- are you comfortable with that development? or should we -- are multilateral agreements better than bilateral? >> i would say it very much depends on who is negotiating them and what are their ultimate objectives. -- that's been one of the problems. brian riley, maybe you could speak to that. it has been a concern with regard to the tt ip and the tpp about harmonization of standards and other antibusiness components of these agreements. what do you think? >> it depends on who is doing the negotiating. will the expand bureaucracies? if we have a good agreement with 150 economies, that's better than an agreement with two economies, but it's a lot harder to get that as well, so i don't
view them as mutually exclusive whatsoever. a goodbe easier to get deal on a bilateral basis, but if you have bilateral deals with a dozen countries where the rules are all different, that might make it more challenging for people to benefit from them. so, i don't think it's an either/or question. of reagan andage thatcher. we have a nafta agreement and i think while not perfect, they did significant things to improve economic freedom. >> one last quick one, if i can. >> go ahead. >> we haven't had a large multilateral trade agreement since 1994, the uruguay round. which president clinton pushed through. there's a trend that no one is talking about that has been -- has me perplexed, and i don't
understand it. since the second world war, global trade -- the growth in global trade has always outpaced by alobal real gdp growth significant margin, every year, with the exception of maybe one or two years, until the last or or five years. the last four or five years, we've seen a collapse in the growth of global trade. you may say, well, of course, the economy is growing slower. that's not my point. the point is the growth in global trade is even slower than the growth in world gdp growth. >> what explains that? >> you know what, i don't know. [laughter] >> i think we have time for one more question. >> we are very depressed. i guess i have a question which is probably not answerable.
when you see economic policy tied, as we do, to morality, and those of us who have half a understand that economic policy that lifts people is andg labeled as "immoral," younger people -- is there any way to educate them? feel, as an old lady, and i think the anger in this country is we understand the policies that might lift people are being labeled "immoral." does it all have to collapse before authority recognizes that? >> i think that might just be a benediction for this event here, but i'm not sure we can answer that.
>> why doesn't everybody take a swing at that? i will go last. from the perspective -- i will broaden the question. there does seem to be a resurgence of, especially on the intellectual end of things, and socialism. we see that in the united states . is that happening? how concerned should we be about it? how much of this is a reflection of just had education -- bad education? >> i think that's part of it. my piece on cronyism and the tendency of the left to do virtue signaling, they call it, and to be on the right side of history and all of that, that's all tied up with having too much power in washington and in the wrong hands, let's say. our goal is to take some of that power away. >> i'm sorry you're depressed. there's a reason we call it "the dismal science." my boss won't speak with me until late in the knee afternoon so he can immediately go out and
get a drink. i don't understand why the millennials -- and there are some here that i see in the audience. i don't see why the millennials vote for left-wing $80 trillion in future unfunded liabilities. $80 trillion. that is social security, medicare, medicaid. broad-basede we had economic growth with the late 90's we had a lot of business spending. we adopted capital expenditure that was driving growth. it was averaging growth at 4% per year. stock is rising. -- was rising. recovery, -- i get sick of hearing larry summers say this is the new normal. .his is crap
it is lousy public policy. that, we are not going to resuscitate economic growth. >> i share your concern about millennials. i have been giving talks on college campuses for 30 years. i think it is worse now than it ever has been. with regard to the basic economic understanding of kids in high school and college today. i have been scratching my head making, why is this --thinking, why is this? why are they so enamored with government power. freedom and liberty are such precious things. give libertynt to to these politicians? the answer lies in what you touched on. what has happened is that people have come to think that capitalism is cronyism. capitalism -- the
left calls it crapitalism because they associate this about the same thing. i would say this about the pope. he is running around saying capitalism is a bad thing whereas pope john paul the second did. the answer is that pope john paul ii grew up in poland. where did this pub grow up -- pope grow up, argentina. he regards capitalism as cronyism. this may be a good point to and on. say, look,s a way to capitalism and cronyism are the opposite. they corrode the powerful forces of capitalism. we need free market capitalism. thank you for your great work on this. please give a nice round of applause. [applause]
[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2016] >> here's a look at our primetime schedule on the c-span networks. starting at 8:00 p.m. eastern, on c-span, hilly clinton, -- democratic presidential candidate hillary clinton speaks at the american legion in cincinnati. on c-span2, book tv. a look at our recent adventures on oakland and santa barbara. on c-span3, american history tv.
programs on native american history. also tonight, c-span's road to the white house coverage continues with donald trump outlining his immigration plan and agenda. he will speak to supporters in phoenix. that starts live at 9:00 p.m. eastern on c-span. >> ahead of his immigration policy speech tonight, republican presidential candidate donald trump visited mexico to meet with mexican president and rita opinion yet to -- ernique pena nieto. after the meeting, they both gave statements to the press. here is that now. [spanish]
>> good afternoon ladies and gentlemen. we will not hear the message of the president of the united trump.of the -- donald >> good afternoon. pres. nieto: on november 8, the american people will choose next president of the united states of america. there is no doubt that the electoral process will continue debate,e of vibrant contrast of ideas, and intense citizen participation. honoring the great tradition of democracy in the united states of america. i have publicly expressed my respect to both mrs. hillary clinton and mr. donald trump. as we have done with my good
friend, barack obama, the next american president will find in mexico and in this government a neighbor willing to work constructively to further strengthen the relationship ourg our nations and face challenges. i strongly believe that great opportunity -- opportunities lie ahead of us if we decide to seize them together as true friends, good neighbors and strategic allies. based from a relationship on mutual respect. we may not agree on every matter, i am confident that we will move together forward. we can be more prosperous and secure than ever before never losing sight of the fact that freedom and independence are the
indispensable foundations of all that we cherish. any close relationship needs to be re-examined and renewed. we should always be open to discuss what works and does not. how can we improve upon things for both sides? how can we clear up misperceptions and understand each other better? a few daysirit of -- ago, i sent a letter to presidential candidates. mr. hillary clinton and donald trump proposing to meet and talk constructively about the future of our country. trump and mr. donald i will look forward to meeting with mrs. clinton. we both have the pleasure to meet here.
but theot agree aesence here shows fundamental coincident, our countries are very important for each other. is veryed states important for mexico just us mexico is very important for the united states. busiest order of the world. crosslegally every day -- ed legally every day by more than one might people and over 400,000 people -- the trade suppresses over half $1 trillion. we innovate and produced together. in matters of national security and cooperation on a daily basis between our governments is
increasingly important for both our countries to face the challenges of a complex world. the conversation we had between mr. trump and myself was very open and constructive. the purpose was to get to know each other and learn about each other's views on the bilateral relationship. on trade, i shared with mr. trump my conviction that i fully nafta has been good both for the united states as well as mexico. our ties are close. according to the u.s. chamber of commerce, over 6 million jobs in america depend on exports to mexico. from the united
states than from germany, spain, japan, and the united kingdom combined. the american manufacturing industry were not lost to other regions of the world precisely because of the development and because we have developed a competitive north american joint manufacturing platform. on average, 40% of the content of mexican exports is made in the united states. as partners, we should work fromher to keep jobs leaving our region. mean thathis does not the trade agreement of north america cannot be enhanced for the benefit of both sides.
nafta is a 22-year-old agreement. the next a mac and president will find in my government -- american president will find in my government a partner willing to find ways to modernize nafta. so it can be more effective in creating market pain jobs and quality -- more good paying jobs and quality across the board. i do not believe trade should be treated as a zero-sum endeavor. where one must lose so the other can win. quite the contrary. it should be seen as efforts creaking value for both sides -- creating value for both sides and making our region the most competitive in the whole world. issues, myorder views are clear. the border should be transformed
into an asset for our region. progress madedous with president obama and with the next u.s. administration, we should continue our efforts to make sure that the mexico-u.s. border is efficient and secured. a large number of american people perceive the u.s. border as a real problem. because undocumented people and illegal drugs across the border -- drugs across the border -- cross the border. the issue. 10 years ago. it has been steadily declining since then. fact, when speaking about migration, it has been negative.
we know there are challenges including a growing number of non-mexicans across our country countriesoss our creating humanitarian crises. complete --s is a and incomplete vision of the border issue because it does not take into account the illegal flows that travel south, guns and cash, every year. thousands of weapons and inlions of u.s. dollars cash enter illegally strengthening cartels and other criminal organizations. they profit from selling drugs in the united states. this happens and it has to be stopped. we need to have a comprehensive approach to the border whereby
we can take into account the flows of undocumented people, illegal drugs, weapons, and cash. many lives can be saved in both our countries. criminal organizations are curtailed from the money and that are in business today. illegal flows of weapons, drugs, and cash in both directions have multiple negative consequences on both sides of the border. as aorder should be viewed joint opportunity for both countries. with country should be investing more in the border, more infrastructure, more people and more technology to make it more secure and efficient. acknowledge the
nations fundamental right to protect its borders, i truly believe that full clever to arerts between allies important. and weortance of mexico should continue working on making our border secure being the utmost importance. also, concerning national security, mexico and the united states work together to face the challenges of a comp lex world. every day -- complex world. every day security agencies from both sides exchange information. wins thes of who presidential election, the next american administration should expect a continued willingness
with us to make the north american region a safer region. mr. trump. here what ite stated in private. my priority as the president of mexico and that of my government is to protect mexicans wherever they might be. and is a responsibility will continue to filling it -- fulfilling it. the mexico community in the united states contribute daily for thek and creativity prosperity and development of both the united states and mexico. mexicans in the united states are honest and hard-working people. they are goodhearted people who values,family, family
they respect community life and respect the law. therefore, mexican people deserve the respect from everyone. andus continue working cement the relationship between mexico and the united states based on mutual respect, trust, and joint ways of addressing the common challenges we face. i conclude my remarks by saying that the mexican government will continue to be absolutely respectful of the american electoral process. the importance of having this constructive dialogue. this is the way because it brings together those of different thinking. because it the way
in light of-- this world -- words, we can build together. based on the foundation of me to respect towards both countries. this is what i shared with the candidate. thank you very much. i would think all of you for your attendance. -- thank all of you for your attendance. >> road to the white house coverage continues on c-span. and just a few moments, hillary clinton speaking at the american legion national convention in cina