Remarks to the
all talk about the difficulties of getting around in
A special thank you to both Chairman Ollie Delchamps and to Vice Chairman William Kanaga. I'm sorry one of your leaders, a friend of mine, couldn't be with us today: Chamber President Dick Lesher -- the man who is to Federal tax rates what Conan the Barbarian was to anyone who got in his way. [Laughter] Seriously, we've been part of a team that has accomplished much, and we have every reason to be proud. I understand you just saw a film entitled, ``Making It,'' which documents America's entrepreneurial spirit as evidenced in six small, but growing companies; and believe me, I'm honored to have just been able to meet the stars of that film here on stage.
happen to believe that -- I know you agree with me -- that it is this spirit of
enterprise that is the secret of our country's success. Over the 200 years of
our Republic, our economy has produced more wealth, more opportunity, and a
higher standard of living for more people than has ever happened before. In
these last 7 years together, we have sought to unleash that same creative and
economy-building spirit of enterprise that built
The collectivism, excessive regulation, and high tax rates of the last decade brought our people unbearable inflation, sky-high interest rates, economic decline, and national pessimism. Instead of trying to harness the energy and resources of the American people, which seemed to be the goal of our liberal predecessors, we have sought to set them free. And I've always felt, and I think events have proven me right, that the best thing the Government can do for free people is to get out of their way.
So, that's what we set out to do. It was tough going just to clear away the deadweight of excessive regulation, to get the massive increases in Federal spending under control -- and we were only partially successful at that -- and to bring down the tax rates from the economy-killing levels they were at. And then we had to stick to our guns while our program had time to work its magic.
Well, 5 years ago something began that even our harshest critics had trouble ignoring. A surge of energy could be felt across the width and breadth of our country. And much to the dismay of those who said it would never happen in the first place, it just kept coming and coming. Last month we passed a milestone, and today it's fitting that I've come here to recognize it with all of you. It couldn't have happened without you. Together we put in place growth-oriented tax, regulation, and spending policies that have brought our fellow citizens 5 years of uninterrupted economic growth -- the longest peacetime expansion on record.
expansion is not just statistics; it's meant a better life for our fellow
Americans. I've received letters from people all over this country telling me
the wonderful things that they have been able to accomplish. Of course,
everyone hasn't been satisfied, especially those who opposed our reforms in the
first place. And even though this undeniably has been a period of tremendous
economic renewal, there's been a constant drumbeat of doom and gloom, rumors,
and misinformation. Will
we've heard time and again that
while the overall percentages have remained about the same, pervasive change
has been the order of the day in
a year now, our manufacturing output has been rising steadily. Giants in the
manufacturing of new technologies are emerging. Some traditional industries,
all but written off a decade ago, are now making dramatic strides. Steel is,
perhaps, the most impressive example. Business Week reports that
One of the primary goals of our economic recovery program was encouraging investment to keep our companies competitive. Well, now it's paying off. Real investment has risen to about one-sixth of the gross national product, and along with a new spirit of cooperation from the assembly line to the boardroom, it's keeping us competitive and ensuring that the American worker remains the most productive in the world. And speaking of working people, we currently have a higher percentage of our work force employed than ever before in our history. An incredible 14 million new jobs have been created since the expansion began. I think that's something to crow about.
even as we beam with pride, a myth has spread that the new jobs being created
are actually low-paying, dead-end jobs. Well, again, this information may have
wide circulation, but as an old
And this new opportunity is being shared by all Americans, of every race. In the last 5 years, black employment has soared forward twice as fast as white employment. Hispanics have found over 2 million jobs since the recovery began. Perhaps one aspect of this expansion of which I am most proud concerns the advances made by less fortunate citizens. In the late 1970's, an ominous increase in the poverty rate began. Black Americans were among the hardest hit. One of the myths being heard today is that we're in a time when the poor are getting poorer and the rich are richer. Well, in fact, we have at long last turned around the increasing poverty rate that we inherited from those who now criticize us. Black Americans, whose standard of living began dropping in the late 1970's, now are on the way up. Real family income in the black community is up, and since 1982 it has grown almost 40 percent faster than white income. This August the percentage of blacks employed was the highest on record. Now, this is not to say that things are perfect or all the problems are solved. There's still a long way to go, but things are heading in the right direction.
Our goal has been an America with freedom and opportunity for all; an America where, as John Kennedy once said, a rising tide lifts all boats; an America where people can rest assured that their life savings will not be decimated by double-digit inflation; an America, as our Founding Fathers wanted her to be, where government is the servant, not the master; a vital, future-oriented America being catapulted forward by the hard work, creativity, and enterprise of its people; a compassionate and caring America, where the people don't wait for government and bureaucracy, but reach out themselves to help one another and to assist those in need.
Nearly 7 years ago, my friends, this is what we set out to accomplish. And much has been done to achieve these laudable goals. But let us give credit where credit is due. It is the American people who built this recovery. What we did right was simply to believe in them. There are, of course, challenges, serious challenges, to be met in the months ahead. It is in just such times as these, when the pressure is on, when the people look to us for leadership, that we must have the courage to stick with our principles.
A few weeks ago was Halloween. You know, there's a story about a fellow who dressed as the devil for a costume party. And at the party he had a little too much to drink. Being tipsy, he got lost on his way home. But he spotted a small church, and the lights were on, and he decided to go in and see if he could get directions. Well, it was a stormy night, and just as he flung open the door of the church, a lightning bolt, and accompanied by thunder, flashed across the sky. The congregation turned around, and there he was dressed in the devil's costume. Pandemonium broke out. Parishioners ran from the church screaming. They jumped out the windows and raced out the back door. After only a minute or two, the church was completely empty except for one lone, little old lady with a cane who slowly walked up to this fellow who she thought was the devil himself, looked him right in the eye, and said, ``I've been going to this church for 40 years, but I've really been on your side all the time.'' [Laughter]
Well, 1 month ago, pandemonium broke out on Wall Street. The stock market had been rocketing to new highs, smashing old records, and then reaching even higher. When the market turned down, no one who owned stock wanted to be in the group that bore the brunt of a loss, which was expected as part of a long-awaited adjustment. A stampede was the result. It has, as one would expect, unnerved many throughout the country and throughout the world. In making an assessment of the situation, I cannot help but point out that the stock market today is about where it was at the end of 1986, after 4 years of economic growth. It is roughly twice as high as it was when the expansion began. So, while there's every reason for concern, there's no reason to be apocalyptic.
And if explanations are needed, let us not accept myths or unfounded statements about our economy. The Wall Street slide coincided with the following positive economic news: The gross national product was picking up steam, rising to an impressive 3.8-percent annual rate. Inflation, after a brief spurt, was settling back to a modest 2.7 percent. The unemployment rate went to its lowest level in 8 years. New third-quarter statistics from the Department of Commerce underscored that the economy was strengthening almost across the board. Furthermore, manufacturing jobs, many of them export-related, grew by over 300,000 in the 12 months prior to the market slide. Over that period, manufacturing productivity grew by an outstanding 4 percent, and real exports were up more than 13 percent.
There are those, of course, who suggest that nervousness about the high level of Federal deficit spending contributed to skittishness on Wall Street. Well, excessive spending and large deficits have been and remain a vexing problem. But the most recent news on this subject is that deficit spending actually dropped by $73 billion. That's right; we have cut in 1 year one-third of the red ink this year alone.
Now, not even the experts can tell us with certainty what caused the market slide. The important thing from my view is where we go from here. I believe that the movers and shakers of commerce, industry, and investment are most concerned about how and if we will handle the Federal Government's deficit spending. We must make certain that growth forces prevail and that recession is avoided. It's up to us, because the course we follow, the policies we pursue, will determine the future. Let me say without reservation that I see no reason to believe that the market drop should drag our country into recession, because the adjustment still leaves us with a market almost twice the size of when our economic expansion began.
Prize winning economist Paul Samuelson has quipped that Wall Street has
predicted nine of the last six recessions. [Laughter] To be specific, stock
market drops have happened, and on a surprising number of occasions the economy
has kept moving up. The continuing volatility of the market, however,
necessitates that great care must be taken with major economic decisions. Two
significant stock market declines in this century that had two different
aftermaths can help us determine our best course of action. In 1929 the market
crashed, and later the economy sank and stayed sunk. In another case, in 1962
the stock market, over a 4-month period, lost almost a third of its value. This
market slide was followed by the most robust period of growth in
made the difference? Well, after the 1929 market drop, President Herbert Hoover
signed into law protectionist trade legislation; and in 1932, at the depth of
the market crash, the Congress, taking exactly the wrong action, passed tax
increases that condemned the people of
Another difference between 1929 and 1962 was the liquidity provided to the economy by the Federal Reserve System. And I'm pleased that our new Federal Reserve Chairman, Alan Greenspan, is taking all the steps needed to provide the banking system with the necessary liquidity.
country is now looking for cooperation among all responsible government leaders
to bring down the unacceptably high level of deficit spending, but we must do
it in a way that will not threaten the economy. The Senate on Tuesday showed
that it can do its part when it voted to prevent consideration of legislation
exceeding congressional budget targets. And I applaud the Senate's courage.
This housing bill is a classic example of unnecessary spending, just the sort
been a lot of talk in
Now is the time for final action, and now is the time for fairness. I urge the negotiators to produce a budget plan that is enforceable and gets the country on a path toward long-term deficit reduction. Whatever understanding is reached, it must bolster economic growth, and that certainly means it must encompass more than simply extracting more money from the taxpayers' pockets.
as popular as the notion seems to be within the Beltway, I cannot bring myself
to operate under the assumption that our citizens are at fault because they're undertaxed and selfishly putting themselves above the
national interest. During this administration, the tax revenues of the Federal
Government have risen from $600 billion to $854 billion. Between 1980, the
final year of the last administration, and the fiscal year that ended
In fiscal year 1987 we made substantial progress in slowing the growth of Federal spending. I am absolutely committed to working with Congress to ensure that this represented the beginning of a downward trend that will bring our budget back into balance in the not-too-distant future. Hard choices have to be made. The Federal Government can not be all things to all people. Some spending programs are more important than others, and some are a downright waste of taxpayer money. There are cuts out there to be made, and it's in the national interest to make them. More than anything else, in formulating a solution, we must be realistic.
You know, I used to tell a little joke about the Federal Government compared to the private sector and even local and State governments and all. And then I got out of the way of telling that story. But now, with their attitude toward the deficit spending on the part of some of them up there on the Hill, I remember it. And that was the local town that decided to raise its traffic signs from 5 feet of height -- its direction signs -- up to 7 feet to make them more visible to the motorists. And the Government came along and said, oh, we have a program to do that for you. We're going to lower your streets 2 feet. [Laughter] You know, it's imperative, now more than ever, that decisionmakers in this country learn the lessons of history. Ben Franklin once wrote: ``If you will not hear reason, she'll surely rap your knuckles.'' Well, we don't need our knuckles rapped.
was 58 years ago, on
far as raising tariffs, like the Smoot-Hawley catastrophe, we're moving in just
the opposite direction, toward a historymaking,
near-total elimination of trade barriers with our biggest trading partner,
have long felt that the people who came to the
Note: The President
spoke at in the Hall of Flags at