Remarks by President Bill Clinton – Founder, William J. Clinton Foundation and 42nd President of the United States – About Fostering Innovation and Productivity in the Americas
Government Leaders Forum
March 25, 2009
CRAIG MUNDIE: I now have the honor of introducing a very distinguished guest, former U.S. President Bill Clinton. Addressing the challenges we’ll discuss over the next two days requires both thoughtful political leadership, and innovative public-private partnerships. And I can’t think of anyone who has the same degree of experience and understanding on both of those fronts as President Clinton.
His record and depth of policy knowledge is well known to all of you, as is his commitment to Latin America. As president he helped deepen U.S. bilateral and multi-later relationships in the region, while dramatically expanding trade and economic ties in the hemisphere. Since leaving office he has focused on some of the most critical global challenges we face, through the work of his Clinton Foundation. By building unique partnerships with governments, NGOs, and the private sector the foundation has had a profound impact on key issues like the AIDS epidemic, climate change, and economic development.
As just one example, 1.4 million people living with HIV AIDS are now benefiting from life-saving treatment purchased under the Clinton HIV AIDS Initiative pricing agreement. And he has focused specifically on Latin America through the Clinton Giustra Sustainable Growth Initiative. Launched two years ago, the initiative currently has a range of programs in Colombia and Peru, working to improve child nutrition, expand access to healthcare, and strengthen entrepreneurship. I’d personally like to thank the president for his commitment to these vital issues, and I know we all look forward to his insights on the way ahead in Latin America.
Please join me in welcoming the Former President of the United States, William Jefferson Clinton. (Applause.)
PRESIDENT BILL CLINTON: Thank you very much, Craig. Good morning.
I’d like to thank you, Hernan Rincon, and Linda Zecher and all the others who are responsible for my having the opportunity to fly overnight to get here. I was in the Middle East yesterday, and tomorrow I’m going to down to Peru and Colombia to review some of the projects that Craig mentioned, and to celebrate the anniversary of the Inter-American Development Bank. So, I am delighted to be here at what is for me a good time, because I’m thinking a lot about the United States and the Americas.
Last week, actually about a week and a half ago now, I went to Haiti with Secretary General Ban Ki-Moon to review what was being done there in the aftermath of the four hurricanes and storms that took away 15 percent of their annual GDP. It couldn’t have come at a worst time from my point of view, because I think Haiti is better positioned to advance economically and politically than at any time in the more than 30 years I have been following them; thanks in no small measure to the increased security situation provided by the United Nations troops, under the command of a remarkable Brazilian general.
And President Lula and the government of Brazil have gone out of their way to try to be good partners, and to help Haiti finally escape what seems to be an almost unbroken 100-year history of oppression or just being ignored by outside powers.
So, I’ve been thinking about that, and just before I came up here to speak, I got a call from our secretary of state, who’s on her way to Mexico — (laughter) — who gave me credit for having good timing about the topics I was addressing. (Laughter.)
I’d like to say a few words first about why you came here. Linda Zecher asked me if I — or I asked her if she wanted me to do questions, and she said that that would be fine, and I normally like to spend some time answering questions, because at least when you’re answering questions, you know that you’re talking about something someone else is interested in.
So, if you have any general questions about the government’s policy on the economy or the Americas or any of that, I would prefer that you ask them in questions, and I will do my best at the end to answer them, but I’d like to offer just a few observations about the topic that brings you all here, and what it has to do with our future here in the Americas.
Innovation and productivity
First of all, I like this topic, fostering innovation and productivity. It’s timely, it’s interesting, and it is profoundly important.
It’s timely because the global financial crisis and its manifestations everywhere remind us of the profound interdependence of the 21st-century world, and reminds us, as our forbearers a century ago with the run-up to World War I in the first great era of global trade interdependence were remind, this interdependence has been good for most of us, otherwise we wouldn’t be here in this room today. But it is a decidedly mixed bag. It can be good or bad or both.
It simply means that divorce is not an option. We can’t get away from each other.
The greatest challenges we face today, I believe, all require all of us, whether in private or public life, to embrace responses that are both innovative and increase productivity; the financial crisis, the alienation of the United States from our natural and potential partners here in the Americas and throughout the world, and the persistence of inequality in incomes, education, health care, instability in political and social life, and unsustainability of our economic model because of climate change.
Now, when I was president, I did what I could to promote both innovation and productivity. We invested a lot of your tax money, if you’re a United States citizen, in finishing the sequencing of the Human Genome Project, put aside the first $500 million for development in nanotechnology, gave the National Science Foundation the biggest increase in history, and made an enormous effort to dramatically increase the reach and depth of information technology capacity in ways that involved Microsoft in a number of ways, including our efforts to make sure that we had connected all the schools in America to the Internet by the time I left office. It seems quaint now, but then it was quite a goal.
In energy we were a driving force behind the Kyoto climate change agreement. Even though despite the best efforts that Al Gore and I made, the senate voted against it 98 to nothing. It was one of the few expressions of bipartisan feeling in my entire second term. They all believed the world would come to an end if we actually reduced greenhouse gas emissions.
We have come a very long way from that time. I do not know yet whether we will have a filibuster-proof margin in the senate to adopt a good climate change program, but I hope we will.
We had the first serious discussion of American investment in rapid rail. We voted funds to clean energy and energy efficiency, and a dramatic increase the mileage of our cars.
We had a lot of innovation and increased productivity in social policy as well in the way we did welfare reform or put 100,000 police on the street, and had eight years of declining crime, or changed the tax and support system to advance both work and family, to take 100 times as many people out of poverty as in the previous 12 years, and to reduce income inequality for the first time since the early 1970s. It only lasted four years, but it was sure nice while it lasted.
And all of these things required a commitment to the very topic we’re discussing today. This is a profoundly important topic because to deal with the challenges of the modern world, you have to have both: You have to have innovation in the form of new ideas, new techniques or new applications, and productivity, clear — clear increases in human welfare and in the positive forces of interdependence and reductions of the negative ones.
There are many innovations which are not particularly productive. The securitization of bundled, subprime mortgages was a big innovation, but doesn’t look very productive today.
The clever anti-climate change arguments of Björn Lomborg; they’re very, very innovative, but every new international evaluation of the impacts of climate change tends to indicate that if we do what he says and just put the money into reducing poverty and hope climate change is not so bad, it’s not a very good strategy.
And the last, something that relates to the Americas, and during the last administration President Bush and his defense and security people felt very strongly that I had made an error in committing the United States to the international criminal court, which was set up to provide us an ongoing forum essentially to deal with war crimes, but they could also deal with somewhat less severe offenses if in the course of events either the host country where the crime occurred or the country with jurisdiction over the citizens, usually military people, refused to take any action.
We rewrote the treaty so that American military people then serving in some 70-odd countries on United Nations and other NATO and other approved mission would first be subject to the jurisdiction of the agreements we made with the countries, then in country, then our country, and essentially could only be indicted if they committed war crimes and we refused to do anything about it.
Notwithstanding that, the administration after 9/11 thought I’d made a mistake, and they thought one way to keep America out of the criminal court with minimal embarrassment was to tell all of our Latin America partners that we would have no military cooperation with the militaries of Latin America at a time when we saw the rise of Chavez, the rise of Evo Morales, then Correa in Ecuador, and America’s approach to the global economy under assault everywhere. Our idea of a way to respond to that was to refuse to cooperate with Latin American militaries unless they said it was OK for us to be the only major country in the world not subject to the international criminal court. Now that was highly innovative – (laughter) – but not particularly productive.
So, if this topic is timely, interesting, and important, how do you do it, and who does it?
Who are the innovators?
I just finished reading almost back to back two of Steven Johnson’s book, one was “The Invention of Air,” which is about Joseph Priestly’s remarkable role in the history of science, religion, and politics in the 18th century. Priestly was one of the founders of the Unitarian Church, was a distinguished educator, was very much in favor of the kinds of freedoms and approaches being taken in America, and was an amateur scientist often given credit for discovering oxygen, although it seems now he actually discovered it a year after a German did.
But there’s no question that Priestly was the first scientist to observe the symbiotic relationship between plants and animals, and he did it by accident. He was, in effect, as many were in the 18th Century, as Benjamin Franklin was, who was his friend, he and Franklin were friends, he was studying how much – how long various kinds of animals could live in an oxygen-limited atmosphere.
So, he had these glass canisters, and he put them over a given space, and he’d put a mouse there, and see how long it took the mouse to collapse. And it was a fairly rudimentary experiment. One day he put the canister over a space that also had a plant in it. He assumed the mouse would collapse sooner than it had been collapsing, since the plant was taken up space and presumably absorbing air. When the mouse lived longer, he began to work on this more, and he realized that there was a symbiotic relationship, and that the animal was breathing in whatever the plant was breathing out.
It seems simple, but I say it to make this point. Priestly was an amateur scientist who was given the time, the opportunity to do this, had a fine mind, belonged to a scientific club, stayed in regular touch with Benjamin Franklin, even after he’d left England, and then because he was one of the founders of the Unitarian Church, and because he was a free thinker, was later subject to so much pressure, that he left England and spent the last decade of his life in the United States, virtually unknown, in fact still virtually unknown today, even though he was one of the most important thinkers of the late 18th century.
He was in some ways a professional and in some ways a total amateur. He did it by keeping his eyes open and not being bound by yesterday’s assumptions.
The second book I read by Mr. Johnson is called “The Ghost Map,” and it’s about the hideous outbreak of cholera in London, the second one in the 1850s, which led to the discovery of the causes of cholera, and led to the ability to figure out that the best thing to do was to supply people with water that was not contaminated.
I say that because again an anesthesiologist who was a semi-amateur scientist and a world-class social science investigator, John Snow, made this discovery, and it was confirmed by a local pastor named Whitehead, who also took the time and trouble to send his parishioners to the houses of everybody who lived in the neighborhood, and to the homes of everyone who didn’t, to try to find out if there were surviving relatives, to unravel this mystery.
What’s all that got to do with today? You can be innovative and productive if you care, if you focus, and if you understand how important it is. Now, when people are dying like flies, that focuses your attention.
But I recommend this, because I think that this group has what you have to have, the intelligence, the training, the dedication, the imagination, and the opportunity, whether in your professional capacity or in your amateur capacity, to advance both innovation and productivity.
I noticed yesterday in The New York Times that the No. 1 best-selling nonfiction book today is Malcolm Gladwell’s “Outliers,” which a lot of you at Microsoft have probably read, because it has profiles of Mr. Gates and Mr. Ballmer, and Steve Jobs and Bill Joy. But essentially the book says that genius is important, and hard work is really important, and he says unless you’ve got 10,000 hours in at doing what you’re doing, you probably won’t make a historic difference.
But it is also people’s achievement of product, of culture, and opportunity, and effort put into it, and he talks about, for example, how of the hockey players from Canada in the National Hockey League, 40 percent were born in January, February, and March, only 10 percent were born in October, November, and December, because you become first eligible for the hockey league on January the 1st. So, the oldest kids are always biggest when they’re 5 and 6 years old. They were then presumed to be the best. After the first round, every other step up the ladder is so-called ability based. So, you get an advantage that you never give up.
There are lots of other fascinating things in there, but the point that Gladwell makes is the one I’d like to hammer home to you in this area. We’ve got all these problems rooted in, first, the financial crisis, second the fact that the United States is not working as it should with our natural and potential allies, and third, the persistence of glaring inequalities, instability and unsustainability in the modern world, that cannot be dealt with by government alone, by the private sector alone, and that clearly require both innovation and productivity.
Just a couple of other points. The introduction that Craig gave was kind enough to mention some of the things that I do. Many of them have been aided by either Microsoft directly or by the Gates Foundation, for which I am very grateful.
Asking the right question
But I would like to emphasize the most important issue to me. If you buy what I’m saying, and you obviously do or you wouldn’t have come here to this meeting, the most important question that we all have to face as citizens asking ourselves how should they do these financial bailouts, as members of a company asking ourselves what should Microsoft look like in 10 years; and more to the point, is there anything about this persistent inequality or the immediate financial crisis that would tap our strengths and enable us actually to come out of this on the other side in better shape, and having made our society better.
In all these kinds of debates and most of my life in politics, we discussed two things overwhelmingly: What are you going to do, and how much money are you going to spend on it?
Consider the debate on the stimulus bill. The Democrats, said let’s invest money in clean energy, and the Republicans said, let’s don’t, let’s have more tax cuts. The Democrats said the investments will create more jobs. The Republicans said, no, the tax cuts will. The Democrats said let’s spend $800 billion, and the Republicans said let’s spend $600 billion unless you increase the tax cuts more, in which case you can spend whatever you want. And they had this debate.
They were all debating two things: What are you going to do, how much money are you going to spend on it? There was not enough time, almost none in the public debate I saw, and I’m not being critical because the same was true of the 30 years or so I spent in politics, of what I consider today to be the most important question: How are you going to do it? If you propose to cut taxes, which ones are the most productive? If you propose to invest the money, how can you generate the largest number of jobs, as well as the greatest long term productivity, and put us in the best position in terms of our energy utilization patterns? How?
I have decided to spend the rest of my life in the “how” business, and I think it will be the great question of the next decade.
It’s very hard for people to be in too much denial about climate change. It’s also very hard to answer the question, how are we going to do this on a consistent basis in a way that increases economic opportunity, not decreases it.
It is almost impossible for anybody to deny that America is getting the worst of both worlds in health care. We’re spending 16.5 percent of GDP, insuring 84 percent of the people. None of our competitors, save Switzerland at 12 percent, with a much older population, is over 11. They’re all between 9 and 11, are major wealthy countries, and they insure 100 percent of the people, and get better outcomes.
So, everybody says, well, of course, we should cover everybody, that’s unethical, and of course we shouldn’t spend 20 percent of GDP doing it, we should figure out a way to both cover everybody and move somewhere closer to our competitors. How? Never mind the political difficulties, but how do you develop a strategy?
The non-governmental sector, the NGO movement is overwhelmingly in the “how” business, particularly the good ones. And not just the ones that are well funded, but the ones that go out and scrape these social entrepreneurs for someone else’s funding.
Craig mentioned our AIDS work. The major contribution we made to the advances in AIDS care was to change the pricing model of generic drug manufacturers, who were when I took office charging $500 a person a year for the medicine you pay $10,000 for in America, and they pay $3,500 for in Canada, Europe and Japan. It’s the manufacturer primarily in India and South Africa. I fell into this, just like Joseph Priestly looking at the mouse under the glass with the plant, because I was asked to go down and help raise money for AIDS care in the Caribbean.
So, we began working in the Bahamas, which had the best network, and the third largest number of cases, after Haiti and the Dominican Republic, and I discovered they were already treating some people, but they were paying $3,500 for this $500 medicine. Why? The market was so disorganized that these people could be ripped off by sending that medicine through two different agents who mark it up 7 to 1, which means they had six people die for every one life they saved.
So, we got to unpacking this, and it turned out that even at $500, the whole AIDS market was basically operating like a small town independent jewelry store. It was a low-volume, high-profit margin, uncertain payment business; they might always bring the engagement ring back.
And we convinced them to adopt a grocery store model of high-volume, low-profit margin, absolutely certain payment business. That one simple thing changed the whole economics of care, and we wound up going from $500 to $140, and we’re down to about $120 a person a year, and for the children, the pediatric drugs, from $600 to $190, and then thanks to the funding of a group called UNITAID, another innovative thing, funded by the French airline tax, we can do pediatric AIDS medicine now for $60 a year, and our foundation therefore — and UNITAID — provide the medicine for about two-thirds of the kids in the world who get it.
Why? Simple little ideas that answered the “how” question.
So, when we took this same grocery story theory and applied it to fertilizer in Africa, and we thought of other marketing strategies, the Rwandan coffee farmers who were getting the fair trade coffee price. So, a British entrepreneur who owns a lot of outlets gave them a chance to market their products directly without any intermediary in almost 900 stores in the UK. The result: Their profits went from 16 percent of cost as fair trade producers to 30 percent in a country that 10 years ago had a per capita income of about $260 a person a year, because of the genocide. They were at a thousand dollars a year last year, and going upward, because we answered the “how” question.
We try to do that in the climate change area. A man – I’ll make full disclosure – who’s both a friend and an associate of mine, named Steve Bing, in the climate change, has built the America and I think the world’s first carbon positive airport hangar in Burbank, California. And I visited recently. They have a little place where you go up and look in and watch the meter run backwards. It’s an airport hangar that when it is full of planes being gassed up or having their electrical systems checked out is producing still, even at full utilization, 110 percent of the energy it requires, because of the low energy requirements, and because of its solar capacity.
Now, the important thing about this is it answered the big “how” question. So, what, is this just an indulgence by a wealthy person or others? No. It saves the people who put their planes in the hangar $1,400 a day in jet fuel because they have their daily checkups now with electricity, not turning the engines on, No. 1; and No. 2, the cost of that hangar was $30 a square foot less – not more, less, even with the solar panels, than a similarly sized hangar built about the same time in the same place.
So, I think we all need to be thinking about these “how” questions. When I started having the Clinton Global Initiative in September at the opening of the UN every year, I was trying to answer a question for myself: How could I give people who go to these meetings all over the world and talk about the higher things a forum where they could actually feel good about spending time to do it every year, and the answer was ask them to make a commitment, help them make it, help them monitor it, and if they don’t make one, don’t invite them back next year.
And that’s what we do. I tell everybody the Clinton Global Initiative is shorter, cheaper, and a lot less fun than Davos, and it’s such a pain that you have to actually promise to do something for somebody else, and if you don’t do it, you can never come back again to a shorter, cheaper, less fun meeting in New York traffic at the time all the world leaders are there.
But it’s worked out well. We brought together the politicians, the philanthropists, the business leaders. We bring in NGO people we fly in from all over the world every year to answer together the “how” questions.
So, that’s what I wanted to say to you today. I think that there are all these questions out there that you are well suited to answer, and how can the president’s stimulus plan create more jobs? Well, you could help with that. Microsoft is our main partner on our climate change “Two Degrees” program, so you help us to monitor what we’re doing in basic elementary building efficiency and acquiring technologies. Our climate change project wouldn’t be half as good if it weren’t for your ability to actually tell us whether these things are working, and then come up with a model of best practices to give to cities all around the world that aren’t in our climate change projects.
How can the United States get more money, more impact from the money that we have to spend in fighting AIDS? You could help answer that. Almost nobody will die this year because of the unavailability of medicine or because it costs too much. They’re dying now because the health systems aren’t there in AIDS, tuberculosis, malaria, simple things like bed nets, only marginally more complicated things like rudimentary clinics with one refrigerator powered by some sort of generator to keep blood tests in until they’re properly checked.
How can we actually provide universal health care in America and lower the percentage of our GDP going to health care without undermining quality? In other words, are we really so special that we’re simply either too in the thrall of our yesterday’s interest groups, are too inept to do what all of our competitors have done, and do we have to carry this like a ball and chain around our children and grandchildren’s future, down to the end of time? And what is the role of information technology in escaping the box we have put ourselves in, in health care? I’ll give you a clue: We should start with that Medicare Part D program, the senior citizens’ drug program, which wastes a colossal amount of money.
What would you do to help Puerto Rico? Puerto Rico gets all kinds of tax incentives – this is one of the poorer parts of America – to get manufacturing down there, but they have to import all their energy. So, even with the price of oil dropping, it’s still expensive.
Should the United States in this energy program allocate a special amount of money to Puerto Rico because it has the unique capacity to become completely energy independent, but probably doesn’t have the capacity to get the front-end capital to do it unless we do that? Could Microsoft help them with technology?
Does Haiti have to go down to the end of time being by far the poorest country in our hemisphere, or does the highly competent prime minister and a supportive president at this moment in time mean that we actually could do something affordable to help them escape the past?
What are we going to do with all the garbage we saw that got an Academy Award for “Slumdog Millionaire”? Did you see “Slumdog Millionaire” when they’re playing the stickball game on the airport in Mumbai, and then they run from the police, and they run over a mountain of garbage? That is the Mumbai landfill. It goes on forever. And you saw scavengers making a living walking through the landfill just as they did in the great cities of Europe 150, 200 years ago.
These are enormous economic resources if there was the organization, the capacity, and the upfront capital to shut them down, pay the scavengers to take out the glass and the metal, and take all the organic material and turn it into either organic fertilizer for farmers, biofuels for cars, or my personal favorite, biomass energy to generate electricity. You could recover hundreds and hundreds of acres of downtown Mumbai for poor people, help fight global warming because those landfills reek of methane gas, and find a source of new energy. We’re working on this in Mexico City, in Lagos, and other places. What’s the role of information technology in figuring out what the most economical way to do that is?
Why haven’t we raised appliance standards on 15 well-known appliances, and do you have some way of helping us to measure whether they really will help?
The United States and Brazil a couple of years ago made an agreement to produce biofuels in the Dominican Republic, which could also be sold inexpensively in America, and they would be made from sugar, which would get you out of the corn ethanol, and produces eight gallons per gallon of oil. Why hasn’t that been done? Is there a gridlock that you could help unlock?
Is there some way poor villages could all have personal computers and clean water through solar generators and the water purification techniques of a man named Dean Kamen, who’s a friend of mine, at an affordable price? What’s information technology got to do with that?
Why aren’t there more charter schools in America today, like the KIPP schools, which we know work?
Why haven’t we put every girl in the world in school, since we know it’s the only religiously and morally acceptable practice that always, always lowers the birth rate, and increases the per capita income of a country?
All these things require both innovation and productivity.
So, that’s what I’d leave you with. Not everybody is going to be president or a member of congress or a governor, not everybody is going to be a billionaire, but remember much of the modern world was made by people who were not particularly rich but they did have opportunity, and the time to do it, and they were paying attention.
I have the idea that a lot of you are paying attention.
I’m deeply troubled that America has lost so much ground in its relationship with our neighbors in the last eight years. We want to get it back. But when we regain the ground, we want to do something with this partnership to leave our children a better future.
Thank you very much. (Applause.)
HERNAN RINCON: Thank you very much, Mr. President. Thank you for being here with us today, for taking the time to be here. It’s been an honor to have you.