(Washington, D.C.) – U.S. Senator Patty Murray (D-WA) today delivered a speech to the Washington Council on International Trade’s (WCIT) 13th Annual Senators’ Conference that focused on the current global economic crisis, her support for open trade policies that will keep the U.S. competitive in the world and continue to create jobs, and the need to build a higher skilled workforce in Washington state.
The full text of Senator Murray’s speech follows:
Thank you so much for that introduction, Rullie. And thank you all for joining us.
Since it was formed in 1973, WCIT has proven to be an incredible forum for Washington state businesses, and I want to thank Kathleen Connors and her staff for their work advocating for Washington state trade.
We’re all in this room because we know our state depends on the global economy. We know that there’s a direct connection between your ability to sell everything from apples to operating systems overseas and how Washington state families put food on the table.
Normally, I would use this time to give you a picture of the political landscape in Washington, D.C., and how this is affecting our trade agenda. About whether Congress is trending more or less protectionist, and how we can work together to support trade. But as I speak to you today, the question of what’s ahead for international trade has been overshadowed by more urgent questions about the future of our global economy.
In just a few months, we have seen a downturn in the U.S. housing market ignite a credit crisis that has spread throughout the financial systems of the world. Banks from England to Iceland to China are struggling. Fear and uncertainty have fueled dramatic swings in the stock markets. And restoring confidence in the world’s financial system is now part of a coordinated, international effort.
There are plenty of reasons to be worried about what the long-term effect of this crisis will be on our economy.
We are paying for the years in which "anything goes" was the governing policy – in which this Administration turned its back while borrowers and lenders made irresponsible choices, and Wall Street investors took outrageous risks.
And hanging over it all are questions about our future: What will our economy look like when this crisis is finally resolved? Has our economic position fundamentally shifted in relation to the
rest of the world? And how do we maintain our leadership?
I do believe we will resolve this crisis. So that’s what I want to talk about with you today.
I want to talk about the steps we’ve already taken, what I believe we need to do in the short term, and how we can ensure our nation maintains its political and economic leadership in the world.
Financial Rescue
The night that Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke, and SEC Chairman Chris Cox came up to Capitol Hill to meet with House and Senate Leadership is a night I will never forget.
As a member of Leadership, I had been in the previous meetings with Secretary Paulson talk about Bear Stearns, AIG and the takeover of Fannie and Freddie.
But walking into that room that night it felt totally different. They had come to ask for something they never believed they would be asking from Congress. All the efforts by the Fed, the Central Banks and by Treasury to try to prevent the economic collapse weren’t working fast enough. We were facing a need for unprecedented actions.
And they came up to Capitol Hill to make it clear something bigger had to be done. Many of us were shocked, and frustrated to learn that the condition of our financial market had deteriorated to this point. My first reaction – and the reaction of many people across the country – was anger. People are furious because this crisis was preventable.
The hard truth is that greed got us to this point. Greed by bankers and brokers who took huge risks to turn short-term profits, greed by lenders who preyed on less-savvy buyers, and greed by individuals across this country who bought homes with loans they didn’t understand and couldn’t repay.
But Congressional leaders stood unified. And we worked hand-in-hand – across the aisle – on a rescue package to prevent the collapse of Wall Street from leading to the collapse of Main Street.
The first proposal from the Administration was laughable. It was a three-page document that gave the Treasury a blank check to do what they wanted with $700 billion of the taxpayer money. Obviously it was DOA once I and other leaders saw it.
So we went to work on a proposal that would provide oversight, transparency and accountability, make sure taxpayers get their money back, and provide strict limits on CEO pay.
Calls from constituents poured into my office while Congress and the Administration worked out a rescue plan. Virtually all of them were opposed to the plan. But I also heard from many of you – telling me how urgent it was that Congress take action. As one letter put it: Families across the state "will be hurt severely through no fault of their own if action is not taken soon."
I voted for the financial rescue, and I believe Congress did the right thing for our country by approving it. And I’m pleased that there is now a coordinated global response to the crisis – which has touched every corner of the world.
The $700 billion financial rescue approved by Congress earlier this month is being used to inject capital into the markets, buy the troubled assets banks now hold on their books, and get money flowing again.
Because we took steps to free up credit banks will be able to make loans, businesses will be able to continue to finance their day-to-day operations – like buying inventory and making payroll, and families will be able to get credit to refinance their mortgages or take out college loans for their kids.
What to Expect from Congress
But it’s going to take time for the markets to stabilize. It’s going to take even longer to see a broader economic recovery.
And now we’re all asking questions about what this means for the future. What’s going to happen in six months – two years – a decade down the line? Is the United States going to maintain its superpower status? And how does the answer to that question affect you as business leaders in the most trade dependent state in the nation?
I wish I had a crystal ball so that I could tell you. But I think a few things are certain. First, Congress will continue to hold hearings and investigations into the root causes of the economic crisis. We must move to re-evaluate and modernize regulations on our financial markets so that we don’t get into this situation again.
Second, lawmakers in Washington, D.C., are already working on plans to help families who were hurting long before the credit crisis hit the financial markets. And I believe that’s one of the first things Congress will take up after the election. We need something to help get the economy going in communities across the country – especially those that have been hardest hit by foreclosures.
The idea in these plans is to boost the economy by helping local businesses, and by putting people to work building roads, bridges, and schools that are desperately in need of repair.
So I think you can expect to see Congress continue to take action to address the economic crisis. And I believe both of those moves are the right thing to do to help get our economy back on track. But I also have one concern that everyone in this room should be aware of. And that is the outlook for international trade in the next year.
Trade
Even before this current financial crisis hit, the number of people in this country worried about trade and its impact on American jobs was growing.
And I am deeply worried that if Americans see our position in the world falling, if they fear their jobs are moving overseas with nothing to replace them this insecurity will begin to affect our trade policies. And we may see more people talk about walling off our country to protect us from competition.
This would be disastrous to the U.S. economy – and to the global economy – and I will fight any efforts to close our doors to trade.
Protectionism helped turn the 1929 stock market crash into the Great Depression. We increased tariffs that essentially pulled the plug on international trade. And that ultimately prevented the U.S. from helping absorb the impact of bank failures and inflation around the world.
By contrast, our ability to buy and sell goods internationally helped avert a global crisis when markets in Asia and Latin America crashed in 1998. And during this current crisis, trade has helped prevent our economy from spiraling even further out of control.
Trade has generated an estimated 2 million new jobs – primarily because we’re actually selling more manufactured goods overseas. And these are good jobs, which pay 15 to 20 percent more than the national average. But many people don’t see it that way. They see only a downside.
A survey this month by the Chicago Council on Global Affairs found that 65 percent of Americans believe that globalization is bad for their job security. Even more worrisome – 64 percent of Americans believe that the distribution of income in this country has become less fair – and 82 percent of those people blame globalization and international trade.
When Americans think of trade, they picture a T-shirt factory that relocated to El Salvador – or the call center that has been outsourced to India. But they don’t see the jobs that are created because trade has – exponentially – expanded the market for our products.
Let me share one more finding from that survey with you – only 24 percent named supporting open trade as one of the things that will help us remain competitive in the world. That’s the mindset we have to fight now.
I’ve talked about this before. Last year, I laid out a roadmap to help us move forward in the new trade landscape. I urged you to meet this challenge head-on, and make the case for the benefits of trade. I’ll continue to fight for you every step of the way. But we all have to work together to make the case for how our state – and our entire country – benefit from trade. It’s more important than ever before that we get the real story out there – and we need to do it before there’s a significant movement to close our doors.
Our Future as a Global Leader
Now – given everything I’ve said so far – it may sound like the outlook for our country is bleak. But I’m optimistic about the future. We’ve learned from mistakes in the past. We’ve faced economic turmoil before. And we’ve always turned things around. We can do it this time too.
But in order to make that happen, we need to develop a strategy for the longer-term.
We need to think seriously about where this nation is going in the future, what our role in the new global economy will be, and – most importantly – what we want it to be.
I believe that if we are going to maintain our leadership in the world, we must overcome some of the biggest challenges we face in this country – and be willing to make investments that will pay dividends in the future.
I think we can do it. So before I close, I want to give you an idea of what I think that entails.
First, we must return to a culture of fiscal discipline and reduce the national debt.
George Bush will leave office having racked up the largest national debt in history. You may have heard that the number has become too big for the National Debt Clock they have in New York City. They’ll have to make the clock bigger to fit the number on it.
Economists say our debt is the biggest challenge we face as we attempt to recover from this current crisis. And we’ve never been in this situation before.
We haven’t been borrowing to pay for investments that will benefit us in the future. We’ve been spending money we don’t have, in order to sustain a way of life we can’t afford, while leaving the bill for our children and grandchildren to pay. We have to go back to living within our means and figure out a way to pay our bills. And we have to do it now.
Second, we’ve got to fix our broken health care system. If our debt is the biggest challenge we face, health care is next. Health care costs are devastating our families, and crippling our businesses and state budgets. Congress will be taking up health care reform when we return next year. And as a senior member of the Health, Education, Labor, and Pensions Committee, I’ll be a key part of that discussion.
This is a difficult problem to solve, but doing nothing is not an option.
Third, we must develop a smart, realistic, and innovative energy policy that will end our addiction to foreign oil, provide a reliable source of energy, and help us protect the environment for future generations.
Fourth, we must start planning now for how we will pay for infrastructure repairs. Everything from roads and bridges, to sewage treatment plants and schools across this country will all require significant investment in the next several years. A sound infrastructure is critical if we are going to remain competitive in the global marketplace. Yet as I speak, we have less money to spend than we did just a decade ago. We must have a strategy to make these investments.
And finally, we absolutely must ensure that American workers are prepared to compete in the global economy. I imagine a future in which we lead the world in new industries from health care to renewable energy. And our workers are the key to making that a reality.
But if they don’t have the skills to take these jobs – if our high schools and colleges aren’t producing graduates with cutting-edge computer, math, science, and reasoning abilities – we will be left behind. Many of you in this room have been talking about this challenge for several years now. Bill Gates has sounded alarm bells about how inadequate our high schools are. I’ve been focused in the Senate on ways to help our workers stay competitive – as well as on new ideas that will help improve our schools at every level – from preschool to college.
This fall, I introduced a bill that would provide incentives for leaders in industry, education, workforce, and economic development to work together in our communities and identify ways to help our students prepare to succeed in the 21st century economy. My bill was the result of discussions I had throughout the state with people from across the spectrum – including many of you. And we’re already jumpstarting the conversation about new partnerships and innovative ideas that improve education and keep our economy strong.
Ultimately, the bill would help students get the experience and education they need to take jobs in emerging industries where there is a high demand for good workers. And it will help you stay competitive in the global economy.
Conclusion
So, in conclusion, this is an extraordinary time. We face serious challenges. And how we ultimately meet these challenges will determine our position in the world economy.
I’ve laid out my ideas for what we need to do to maintain our leadership. At the end of the day, we have to have a serious discussion about what we want our future to look like – and then what that will take. And I believe that you – as industry leaders in this state and in the nation – need to be a central part of that conversation.
Just as your voices were important as we moved toward an emergency response to the economic crisis, your opinions and ideas will continue to be important as we formulate a strategy for the future. And I look forward to working with you in the months and years to come.
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