March 28, 1988
Thank you all very much, and thank you Bill Bourke, for that kind introduction. And thanks to Chairman Reynolds for hosting this event, and thank you all very much. And I'd like to say hello, too, to your Senator John Warner, who is down there, and your Congressman Bliley. I've already said hello to them because I brought one of them with me. [Laughter] But this has all been fascinating, and there's much that I want to say because I think I've seen a magic show already today. [Laughter] But I realize I'm only one of several speakers in this forum, so as Henry the Eighth said to each of his six wives, ``I won't keep you long.'' [Laughter]
Today, in my tour of your plant, I saw an example of why American exports are the highest they've been in the entire history of the United States of America. It's called American free enterprise. Today it's increasingly becoming a high technology operation. And I just wish that all of the negativists who talk about the decline of America or say that we can't compete overseas -- I wish they'd come to this plant and take a look. It might open their eyes.
America is now in the 64th straight month of economic expansion. That's the longest peacetime expansion in our nation's history, beating out the previous record by 6 months already. And we're still going strong. Gross national product rose nearly 5 percent this quarter and a strong 4 percent for the whole of 1987. Such growth in the fifth year of an expansion probably also belongs in the record books. But I don't think one of those 64 months has gone by without some expert or some politician predicting imminent disaster. Sometimes we'll be lucky and escape only with a recession; sometimes it's another Great Depression, according to the so-called experts. I'm sorry, but it seems to me that these people are out of touch. During the Great Depression the prediction that ``prosperity is just around the corner'' became a point of ridicule. The reverse is true today. We've heard during the longest, strongest expansion in our history that ``calamity is just around the corner.''
It's a little like that old story of the traveling salesman who was having kind of a rough day of it and finally gave up and dropped into a local diner and wearily ordered a cup of coffee and a couple of eggs and a few kind words. And the waitress brought the order, put down the eggs, and put down the coffee, and said, "Will there be anything else?'' Well, he said, ``What about the kind words?'' She said, ``Don't eat them eggs.'' [Laughter]
Our administration has no higher priority than the protection of America's economic security. For nearly 8 years, we've fought for policies that have enhanced that security. I'll match our program of low taxes, free and fair trade, reduced increases in government spending, and reductions of Federal regulations against our opponents' calls for more protectionism, higher taxes, and big government spending programs any day of the week. I suspect you'll be hearing more about these two approaches in the months ahead. But the fact is you have to give our critics credit. They're running perhaps the greatest myth-making operation in history. The myths keep evolving as they encounter contrary evidence, but the myth makers don't give up. The three big ones today are the deindustrialization of America, the decline of the middle class, and the loss of American jobs.
The reality, of course, is over 15\1/2\ million new jobs created since the recovery began, and reversing the trend of the late seventies, these new jobs are bigger and better and higher paying jobs. The reality is that after years of high inflation in which the American people saw their buying power shrink beyond recognition the real income of the average American has been rising steadily for 5 years. The reality is that manufacturing exports are surging, and manufacturing productivity is at an all-time high and rising rapidly. Since 1980 the United States manufacturing economy has increased its productivity almost three times as much as in the previous 7 years. One German manufacturing expert put it succinctly: The U.S., he said, is simply ``the best country in the world in terms of manufacturing costs.'' And the economist Warren Brookes predicted that we will make the shift to an export-led economy, said that '88 ``could end with a bang.''
Now, you'd think this would all be cause for rejoicing in Washington -- not among our critics. They've been predicting economic disaster for 5 years. They've waited. They've been patient. And now they've seized their opportunity. They've got a trade bill before Congress that could squelch productivity, destroy American competitiveness, and make all their doomsday myths a reality. In an apparent attempt to import ``Euro-malaise,'' they've written in European-style regulations that would create America's first national rules restricting a company's right to close down facilities and relocate operations. Another example: Honda recently began exporting its first cars from America to Japan. Foreign investment has helped create new American jobs and American exports. It has contributed to the rising productivity of American manufacturing that I mentioned earlier.
So, what do some in Congress propose including in the trade bill? New disclosure requirements that would dampen and discourage foreign investment from coming into this country. But potentially the most serious are mandatory retaliation or automatic protection provisions that could require me and future Presidents to take actions that would be in direct violation of the GATT and seriously harmful to the national interest. If enacted, they could weaken the international trading system and could require the President to start trade wars. It's a bad proposal under any circumstance, but it's particularly bad now that American exports are soaring and American manufacturers are exporting as never before and so are vulnerable to retaliation as never before.
And, yes, too many talk about making America more competitive, but support provisions in the trade bill that would bench some of the best competitors on our team. They talk about saving jobs, but they want provisions that have the potential to destroy thousands, if not millions, of American jobs. They talk about learning from the Japanese, but why did they have to take their lesson from Kamikaze pilots? [Laughter]
You may have been reading lately that the trade bill is making good progress, that a lot of protectionist provisions have been jettisoned. Well, there is some truth to that, but there's a long way to go before the legislation does more good than harm to the U.S. economy. Now, I'll veto if I must. Only wholesale elimination of the objectionable provisions will produce a bill that I can sign. I won't let them destroy the American growth economy. But I'd rather work with Members of Congress to bring about not just an acceptable bill but one that genuinely improves upon our current law.
There are any number of positive things that can be accomplished: renewed negotiating authority so that we can continue to produce compacts like the historic Canada free trade agreement that is so important and that Bill Bourke mentioned. We've advocated a new program that would provide training to workers who are displaced as our economy becomes more competitive. And there are many reforms to existing U.S. laws, such as protection of patents and copyrights and streamlining export controls that would enhance our ability to export. As they continue their work in Congress on this bill, I would note that on Super Tuesday those who had predicted that protectionism would be embraced in the South were proven wrong.
I've often talked about Senator Reed Smoot and Representative Willis Hawley and the bill they coauthored that brought about the collapse of the world trading system and helped send America into the decline of the Great Depression -- the Smoot-Hawley tariff. Well, both of them felt that a bit of demagoging about trade was good politics. It certainly did get them in the history books. And what many people don't realize is that they were both thrown out of office 2 years later when the voters had time to see the effects of their bill. Protectionism isn't just bad economics, it's bad politics. I think the American people have decided that one Great Depression is enough, and they aren't going to give the trade demagogues a second chance.
History points in the opposite direction: more trade, not less; increasing cooperation, not isolationism and retaliation; expanding global networks of investment, production, and communication, not mercantilist national economics shrinking behind tariff barriers. And that's why we've pushed for a new GATT round, which has now been launched to negotiate the most ambitious multinational trade agenda in history. This took some doing at the economic summits that we hold each year with several of our trading partners, and why, as was mentioned earlier, we've negotiated an historic trade agreement with Canada that will expand jobs, growth, and opportunity, as you've been told, on both sides of the border.
The transformation of Reynolds Aluminum that we saw here today is part of a larger picture. The world economy is in the midst of a profound transformation. It's been called the information age, the computer age, the technological revolution. America can either accept the challenge, as you here at Reynolds have done, or we can opt out of competition and, therefore, miss out on the new horizons opening before us.
Let me just end by giving one example that shows just how profound that transformation is. The driving force of the technological revolution is the almost daily revolution in semiconductor technology. Now, to give an idea of the change our generation has wrought, one scientist has made this comparison: If automotive technology had progressed as fast and as far as semiconductor technology has in the last 20 years, he says, a Rolls Royce today would cost less than $3; it would get 3 million miles to the gallon; it would deliver enough horsepower to drive an ocean liner; and six of them would fit on the head of a pin. [Laughter] This is more than simply a productivity explosion. Operating in the mysterious realm of quantum physics, today's computers signal a quantum leap into a new world economy.
Reynolds has put that quantum power to work for it, and to work for U.S. competitiveness. America is still the leader in innovation and entrepreneurial drive. And if we're willing to compete, I have no doubt we'll be the ones leading the way into the new century and the new world economy. And, Bill, when I was listening to you a moment ago, I want to tell you, this is what we're up to with our trading allies in the world, and we want to bring about that very thing you mentioned with regard to our ability to compete on a fair and level playing field, and that's what we're going to keep driving for until we get it -- all the way.
You know, lately, I've got a new hobby, and it's kind of made me stick around longer than I should when I'm speaking. [Laughter] I've been collecting stories that are told in the Soviet Union by their people, among themselves, which reveal they've got a great sense of humor, but they've also got a pretty cynical attitude toward their system. And I told this one -- Bill, you'll have to hear it again -- I told it in the car. I didn't tell this one to Gorbachev. [Laughter] You know, there's a 10-year delay in the Soviet Union of delivery of an automobile. And only 1 out of 7 families in the Soviet Union own automobiles. It's a 10-year wait. And you go through quite a process when you're ready to buy, and then you put up the money in advance. And this happened to a fellow -- and this is their story that they tell, this joke -- that this man, he laid down his money, and then the fellow that was in charge said to him, ``Okay, come back in 10 years and get your car.'' And he said,"Morning or afternoon?'' [Laughter] And the fellow behind the counter said, ``Well, 10 years from now what difference does it make?'' And he said, ``Well, the plumber's coming in the morning.'' [Laughter]
Well, I really meant it about magic. And I just -- here, in the plant I was just through, I saw what I think is miraculous -- and total accomplishment of yours from the machinery that performs the miracles to the miracles that they perform. And I just want to thank you all for letting me be a part of this, and I'll go home feeling a little taller than when I left Washington.
So, I thank you all, and God bless you all.
Note: The President spoke at 3:26 p.m. in the main lobby of the headquarters building. In his opening remarks, he referred to Bill Bourke, president and chief executive officer, and David Reynolds, chairman of the board of directors. Prior to his remarks, the President attended a Virginia State Republican Party fundraising reception at the Hyatt Richmond Hotel. He also toured the foil plant.