Remarks at the Annual Meeting of the National Alliance of Business


September 14, 1987


Secretary Bowen and ladies and gentlemen, before we begin, I have a brief announcement. Today, at my direction, Ambassador Mike Glitman, our INF negotiator, placed on the negotiating table in Geneva our new draft treaty calling for the elimination of all U.S. and Soviet ground-based INF missiles. This new step by the U.S. reflects the fact that the Soviet Union recently agreed to my original proposal to ban this entire class of U.S. and Soviet missiles.


Ambassador Glitman also presented to the Soviet Union today a protocol to our draft treaty that calls for the most stringent verification regime of any arms control agreement in history. This reflects my long-standing insistence that the most effective verification possible is needed in order to ensure that an INF agreement marks a lasting contribution to our efforts to build a safer peace, and I will not settle for anything less.


In short, our new proposal calls for eliminating all U.S. and Soviet INF missiles and launchers within 3 years; a ban on modernizing, producing, or flight testing any INF missile system; a comprehensive verification regime tailored to a double global zero outcome. And with these new actions taken up by the U.S., it's now up to the Soviet Union to demonstrate whether or not it truly wants to conclude a treaty eliminating this class of U.S. and Soviet missiles. With regard to verification, I have to tell you, I'm not exactly a linguist, but in my most recent meeting with General Secretary Gorbachev, I had mastered a phrase, a proverb, indeed, in Russian: Dovorey no provorey; it means trust but verify. [Laughter]


Well, now to the business at hand. I always try to keep my remarks short, and will today. Although, when I run over, I like to remember something President Eisenhower once said. ``One good thing about being President,'' he said is, ``nobody can tell you when to sit down.'' [Laughter] But it's a pleasure being here at this meeting of the National Alliance of Business. Since its founding 20 short years ago, the alliance has been an American leader in addressing a tragedy that concerns all of us: structural unemployment.


Never has your leadership been more effective than in the last 6 years. With Bill Kolberg as your president and now with John Clendenin as your chairman, you're spearheading our country's first public-private partnership to prepare for the future Americans who thought they had no future: the Job Training Partnership. It's easy to forget today that when we came into office Federal job programs had become a national scandal. For 40 years government-sponsored training had achieved little more than to give leaf-raking a bad name.


One study in the late sixties found that the programs of that period had ``not helped business find qualified employees, and the largest percent of businesses said this was because training was given in the wrong skills.'' ``It was impossible,'' a followup study found, ``to track individual trainees through the system; information on the potential labor market was inadequate; the management system was bloated with salaried staff.'' Well, if anything, matters got worse after that. The CETA program of the seventies didn't settle on mere incompetence; it added corruption. In many cities, CETA positions were parceled out as political patronage. And CETA spent millions on such worthy projects as building an artificial rock for rock climbers to practice on.


The worst-hit victims of these federally financed fiascos were the trainees themselves. Most genuinely needed the simple but basic skills of showing up punctually, performing a task that others valued, doing it well, and getting it done on time. Instead, they got laxly supervised make-work. The message came through loud and clear that honest effort will not be honestly rewarded.


Well, thanks to you, all this has changed. When we came into office, we took one look at this mess and said it had to stop. We said that it wasn't enough to get better managers and stricter accountants; we wanted a revolution in approach. The Good Book tells us that excessive pride is a deadly sin.


Well, the failing in these programs started with government's excessive pride. For five decades every Federal training effort had been run by government, because government believed it knew what was best for the unemployed and for the businesses that would hire them. I've always thought that the common sense and wisdom of government were summed up in a sign they used to have hanging on that gigantic Hoover Dam. It said, ``Government property. Do not remove.'' [Laughter]


Well, we said it was time to bring the grace of humility to this prideful city. So, we turned to you. With your help and guidance, the Job Training Partnership is business-run and locally run, not Washington-run. And unlike all the many programs before it, and despite so many voices saying when we started that business would not rise to the challenge of helping the unemployed, you met the challenge. The hard-to-employ are getting trained. They're getting placed. They're keeping good jobs with good pay in good companies. They have reclaimed the American dream.


And they're not alone. Not everyone needs special job training, but everyone is part of a growing economy. In November America will set a record: the longest peacetime economic expansion in our business cycle history -- 59 straight months of growth. Never before has this happened. After a decade-long roller coaster ride down in the seventies, the American family once more has seen its income rising strongly and steadily since our recovery began. And the net worth of American households -- assets minus liabilities -- has been growing right in line with income. This is not a question of the rich getting richer and the poor poorer. No, in fact, if you include pension and Social Security rights, the gap between rich and poor has steadily narrowed, and we expect this to continue.


Too often in the past, blacks lagged behind others as others advanced, but in the last 5 years, black employment has shot forward twice as fast as white employment. Since 1982 the real income of black families has increased almost 40 percent faster than white family income, and the share of black families in the highest income brackets is up by over 70 percent. This August the percentage of blacks employed was the highest on record, as was the percentage of all Americans employed. Economics columnist Warren Brookes looked at this record and concluded that ``on every front -- jobs, income, even household wealth -- this, 1981 through 1986, has been the best 5 economic years in black history.'' Yes, we still have some distance to go, but our economic policies are the headwaters from which economic justice for black Americans will, like a great river, flow.


Yes, all of America has come a long way from the ``malaise'' days of the late seventies. And while getting here wasn't easy, it was simple. We simply got government -- with all its failures and reasons ``why it can't be done'' -- out of the way and let the American people take a crack at putting things right. Now, I know that many still look at our cuts in taxes and regulations and scoff. Sometimes they dismiss the strong economy as a sign of my luck and then keep right on with their old talk of new programs and more spending. Well, maybe they ought to take a moment to look at the facts. I know that may come as a surprising suggestion to many of our critics. I'm not saying they're hostile to the facts, just apathetic about them.


Recently the U.S. Chamber of Commerce examined the facts in the major industrial economies of the world. Their conclusion: More government, beyond a point, really does mean less growth. As the chamber's chief economist, Richard Rahn, concluded: ``For many countries economic growth rates significantly decline and unemployment rates begin to increase when total government spending exceeds the range of 15 to 30 percent of gross national product.'' Well, today the United States is around 35 percent, and that's why I'm determined that the way to close the budget deficit is not by raising the American people's taxes but by cutting the Federal Government's spending.


I've talked a great deal in these last few months about an Economic Bill of Rights for America, including a line-item veto and a balanced budget amendment. And if Congress isn't ready to do what's right, I'm ready to take the message to our State legislatures. Before the decade is out, we owe it to our children to see to it that the Constitution of the United States of America includes a balanced budget amendment. I feel so strongly about this, because I believe that we have it within our power to continue an era of unprecedented growth that will transform America's future and the world's. In industry after industry, America can lead mankind into the 21st century. As the Los Angeles Times reported recently: ``In every part of the country, innovative companies are putting to rest the popular misconception that the United States is deindustrializing.''


Our determination to lower tax rates and increase incentives is paying off. Investment as a share of overall economic activity has risen since our recovery began and is now one-sixth of gross national product, even while in Europe and Japan the investment rates have been falling. And this investment is ushering in a new American industrial age. But some would end this new age of opportunity before it ever begins. In the next few weeks in Washington, you will see the challenge before us. On one side, you'll find those who support what used to be called Reaganomics. Of course, our critics stopped calling policies Reaganomics when our policies started to work. On the other side, you'll find, if I may coin a phrase, pit bull economics. It may look harmless, but let it loose and it'll tear America's future apart with higher taxes, new and costly programs, and protectionist trade policies. It's dangerous.


I can't help but interject here about the fellow that knocked on another man's door, and when he came to the door, said, ``Do you own a black pit bull?'' And the fellow said ``Yes.'' ``Well,'' he said, ``I have to tell you it's dead.'' He said, ``What do you mean it's dead? What happened?'' And he says, ``My Pekinese killed it.'' [Laughter] He says, ``Your Pekinese killed it? How?'' He said, ``It got stuck in his throat.'' [Laughter]


Our opponents talk about the trade deficit and saving American jobs, particularly in manufacturing, even though the foremost authority on job creation and loss has reported that ``in statistically significant terms we haven't eliminated a single manufacturing job'' in more than two decades. Some manufacturing industries are down, but others are up. And in fact, throughout the economy, in all sectors, we have created a record 13\1/2\ million jobs in the last 5 years. And industrial production is surging strongly forward.


But the issue here is not over jobs or family income. We know how to create more jobs and better incomes -- the way we've been doing it. We must have compassion for those workers who have been displaced as their industries have become more efficient. We must help them develop new skills and find new lines of work. We have proposals to do this before Congress, and you've been leading the way in this area, too. But that's not the issue here in Washington. No, the issue is control. Should Washington have more control, or should the American people?


Well, let me be clear, I'm not questioning motives. Many fine and well-meaning people still believe that control is best and most wisely held in the hands of our central government. The way they talk about American people, I find myself remembering a story I once heard about a great baseball manager, Frankie Frisch. One day he sent a rookie out to play center field. The rookie dropped the first flyball that was hit to him, let a grounder go between his feet, and when he did get his hands on the ball he threw it to the wrong base. Frankie stormed out of the dugout, grabbed his glove and said, ``I'll show you how to play this position.'' And the next batter slammed a drive right over second base. Frankie came in on it, missed it completely, and fell down when he tried to chase it. He threw down his glove and yelled at the rookie, ``You've got center field so loused up nobody can play it.'' [Laughter]


Well, that's how many critics may think, but in choosing between big government and the American people, I'm old-fashioned. I stand with the men who wrote the glorious Constitution whose 200th birthday we celebrate this week. I put my trust in the people. In the months ahead and in the battles to reduce Federal spending, prevent destructive protectionism, keep taxes down, we'll decide whether the American economy will retain the vitality that gives our future so much promise. I hope I'll have your support in these battles.


Let me mention one area in particular that I know you care about and where the central issue is, once again, Washington's control: welfare reform. Twenty-three years ago, Washington launched a War on Poverty. Poverty won. [Laughter] But from that failure, we learned many lessons about poverty and getting out of it. We learned that work should be more rewarding than welfare, because work is the only genuine path to self-respect and independence. We learned that welfare should sustain and not disrupt families, because intact, self-reliant families are the best antipoverty insurance ever devised. And we learned that the Federal Government doesn't really know how to apply these and other lessons to the day-to-day problems of the welfare family that's trying to lift itself up.


Successful reforms have been, virtually without exception, those that were homegrown in State capitals, cities, and neighborhoods. And that's why we propose to allow expanded experimentation at the State and local levels. Experiments that work will be tested more broadly. This is just plain common sense, and yet there are those who believe that the Federal Government should once again parachute a single set of reforms on the Nation. The history of just one more reform from Washington is bleak.


For example, a few years ago there was an idea here to replace welfare with what amounted to a guaranteed minimum income. We were told that this would cure the problems in the system. And among other things, it was argued that families would no longer have to break up to receive assistance, so they would stay together. And then somebody said, maybe we should test this in one or two cities before we do it in the Nation as a whole. So, they did. And they found that people worked less and families broke up faster under that plan than they had before.


As in so many other areas, in welfare reform it's time to get the Federal Government to learn some humility and admit what it doesn't know and put its trust in the American people. At the very least, we should insist that the Government will not do more harm than good when it acts. It's time for us to look carefully at the full range of government activities and ask which ones make it harder for the poor to escape poverty; which cut off rungs in the ladder of American opportunity; which make it more difficult to realize the American dream. America is at the dawn of the new age of hope. And let us resolve that all Americans will know the promise of the new age and the new century.


Well, now, before I close, let me add that Washington is, I hope, about to have a great debate. I have nominated one of America's most distinguished legal scholars and jurists, Robert Bork, to the Supreme Court. Well, tomorrow the Senate opens hearings on his confirmation. Judge Bork believes laws should govern our country and if you want them changed you should convince elected legislatures to change them, not unelected judges. This doctrine of judicial restraint shouldn't be controversial in our democracy, but it is. And I hope it'll be fully debated in the weeks ahead.


I say ``I hope'' because too often character assassination has replaced debate in principle here in Washington. Destroy someone's reputation, and you don't have to talk about what he stands for. Well, I hope that Judge Bork's critics will be candid about why they oppose him and not fabricate excuses for attacking him personally. That way we can have a full and open debate on an important constitutional principle. And when the votes are counted, America will win. Thank you, and God bless you.


Note: The President spoke at 1:58 p.m. in the International Ballroom at the Washington Hilton Hotel.