REBECCA QUICK, CNBC ANCHOR: Just six years since its founding the Clinton Global Initiative and its members have improved the lives of 300 million people in more than 180 countries. Their focus is now turning to the home front with new commitments to revive the United States' struggling economy.
And joining us right now from Chicago former President Bill Clinton who's the founding chairman of the Clinton Global Initiative.
And, Mr. President, thanks for being with us this morning.
BILL CLINTON, FORMER U.S. PRESIDENT, CLINTON GLOBAL INITIATIVE FOUNDING CHAIRMAN: I'm glad to do it.
QUICK: You know, we realized that this is a turn towards the home front this year with the Clinton Global Initiative. And with the jobless rate above 9 percent, the unemployment rate above 9 percent, I'm just wonder if you're surprised at this point in the recovery that we haven't made more progress?
CLINTON: A little bit. We've got some assets that aren't fully tapped, potential to really rebuild the manufacturing sector and, you know, manufacturing jobs have been growing more rapidly than normal in the last few months and I think you'll see more of that if we do the right things.
And there's lots of money out there in the banks and in corporations that haven't yet committed either to their shareholders or employees or to overseas investment. But there are also some fairly significant barriers to resuming growth and some of them are even psychological.
But I think we're -- what we're trying to do is to find the areas of opportunity that exist now. Just assuming no significant changes in public policy that could lead to more investment and more rapid job growth.
QUICK: I realize that there's not a silver bullet that will really come in and change the entire situation, but if you had one issue that you could focus in on, one thing you could change to try and get job growth back on track, what would it be?
CLINTON: Well, I have to answer two. First, because one of them is immediate. There needs to be an immediate focus on the three million jobs, probably now more than three million, that are posted, that is, people have offered them for hire.
And those jobs are being filled at only half the rate of previous recessions even though the unemployment rate is higher and it's even higher than stated as we know because there are a lot of people in part-time jobs that want full time jobs.
There are a lot of people who've dropped out of looking for jobs. So they're not in the statistics any more.
And we -- that's how we started yesterday, focusing on that. What can we do to make it easier for employers to find people and to receive assistance to train them on their own before they have to make a commitment to hire them full time. I think if we can cut that gap we can hire another couple of million people. That would lower the unemployment rate, increase the confidence rate and get investment going.
And then the other thing that I think we could do in a hurry is to provide adequate financing to be repaid by building owners from savings and utility rates to retrofit buildings. The unemployment rate in construction is twice the national unemployment rate, in some places three times. And you can't build houses and -- not many commercial buildings being built.
So we ought to put these people to work retrofitting the buildings and let the owners who themselves are cash-strapped pay it back from their utility savings. And all you have to do is work out the financing. And there are four, five different ways you can do that.
Those two things could put a lot of people to work in a hurry while we work on the bigger issues.
QUICK: When we spoke with Michael Dell of Dell Computers yesterday and he said one of the most frustrating things he finds is that you can't find workers who have some of the highly skilled, highly educated workforce that you would expect for some of the jobs that they'd like.
I mean, your first point in terms of what you can do immediately addresses that, but how quick of a fix can you really have for a situation especially when people don't have --
CLINTON: Well, I think --
QUICK: Go ahead.
CLINTON: I think you have to break down the problem there. First of all, there are the relatively modest skill requirement jobs. And in that case, you know, the employers may say well, if I hire this person I'm not really sure. They don't have a lot of experience. And the best way to fix that is to get rid of what I think the economists call job friction by giving training money direct to the employers and say keep them on for a few weeks as trainees, they won't be counted as full employees under the law, and work through all these kinks.
That's worked well in Georgia. We had the former labor commissioner of Georgia here yesterday, Michael Thurman, who started that program.
Then I think for the moderate skill jobs, the ones that you need to upgrade the skills, if the employers themselves can't provide those skills within a period that would be covered by a grant of money they get from training -- that's already been appropriated anyway, we're not talking about increasing spending -- then I think we have to adjust the community college programs in the areas more rapidly.
For the high skilled jobs, the kind Michael Dell is talking about, we have to increase dramatically the number of people in the science and technology, mathematics and engineering who -- graduating from our universities. And what we might have to do in the short run is change our rules again and let more students from other countries come in and then we've got to get more Americans to understand that the job market of the future will require that.
According to the McKenzie Study within just a few years we'll be 1.5 million college graduates short in the areas where the job demand is growing. We cannot afford to lose those high technology jobs to other countries. And that may take a couple of years to be fixed. But it could be fixed literally in a matter of two or three years if we got serious about emphasizing those things.
Yesterday we had a whole group of people commit to helping to train more people who are in science, technology, engineering and math to go in and teach these subjects in our schools and try to get the high school students and the junior high -- the middle school students interested in it so we can funnel them into the universities.
FMR. GOV. JON CORZINE, D-NEW JERSEY: Mr. President, Jon Corzine here. And I'd ask how you would relate to infrastructure spending and actually you asked me to run a commission back in the '90s about capital budgeting, which if we followed your instincts then we probably would have been separating out operating budgets at the federal level versus capital spending, which we would then be able to invest to, I would argue, back in our infrastructure and really lean against that wind of those construction workers that are so highly unemployed in our economy now.
Are you reviewing those kinds of topic --
CLINTON: Yes.
CORZINE: -- when you're talking about stimulating the economy?
CLINTON: Absolutely. First of all, I want to re-emphasize, Governor, what you said. I don't mind it when the government runs a deficit that's a modest percentage of our income to invest in infrastructure because they have enormous paybacks over 30 years, sometimes a 50-year time span. And we are only investing about 2.5 percent of our GDP in infrastructure every year, about half what the Europeans invest and less than a third of what China is investing every year now.
It's a terrible mistake. And we've got the roads and bridges and water and sewer systems and other infrastructure networks to show for it. We've got slower Internet connection times to show for it. We don't have an electrical grid which enables us to build 25 percent of our electricity supply from wind.
It's totally self-sufficient and from the high plains of North Dakota border and Canada down to the west Texas border with Mexico, which the Bush Energy Department said could give us 25 percent of our electricity, because we don't have the infrastructure.
So yes, we did. Yesterday we had a lunch with about 15 private sector executives and a couple of mayors, and one of the things that Rahm Emanuel suggested, you know, there's a big debate -- and Jon, you know more about this than I do so you can probably talk about it -- about whether we should give a tax holiday or at least a dramatically lower tax rate to corporations to repatriate some of the cash they're keeping overseas, because they don't want to tax at the American rate.
And Rahm suggested that we have a lower tax rate and take all the tax money and put it in an investment bank and then try to figure out how to add to it and even offer private investors a chance to invest in it.
It's a variation of an idea that my wife, back when she was still in politics, suggested for an investment bank and others have talked about it. You can then put that into kind of infrastructure spending we need, including, I would argue, building a more energy-efficient economy.
I think there are enormous jobs there and every manufacturing job you create tends to create more than two other jobs in other sectors of the economy and it makes America more competitive, more productive. It means we can move around our roads faster, we can have better rail, we could do, you know, 50 things that would increase the overall productivity of our economy and the quality of life of Americans.
So, yes -- and I'd be interested. I'd like to hear your thoughts, maybe not in this interview, I don't know how much time we've got, but the last time we repatriated money it was a good thing for the government's balance sheet. We reduced the deficits below what it otherwise would have been.
But virtually none of that money was spent by American companies once they got it back here to create new jobs or new businesses. So is there some way to give a differential rebate?
CORZINE: Absolutely.
CLINTON: If there's -- or should we put the money in an investment bank? We need to really think about this and work with corporate America to figure out what to do about it. But I thought Mayor Emanuel had a good idea to start. We could take whatever revenues we could get and begin to establish a serious investment bank and we need to think about capital spending, which has long term benefits, different from current consumption.
I like the food stamp program, for example. I think it keeps a lot of kids who are from poor families better off. One in seven Americans at the height of the recession were receiving food stamp aid. But that's a current expenditure.
You don't want to borrow money over the long run to go to dinner at night. No family wants to do that. But it's OK to have a car loan, a home loan and a small business loan. That's the way the governments budget ought to be organized. And it isn't now because your recommendations were rejected by people in Congress, you say, well, the macroeconomics show that it doesn't matter, you either have a deficit or a balanced budget or a surplus.
It does matter, it matters how you're spending this money.
CARL QUINTANILLA, CNBC ANCHOR: Mr. President, on jobs, whenever we talk to employers and ask them why they're not hiring, it's always inevitably an answer that comes back to fear of regulation. Whether a bank is afraid of Dodd-Frank or a small employer is worried about health care reform. A lot of attention now on this Boeing-NLRB thing.
Is there a way out of that corner? Is it a valid fear? And how do you reverse it?
CLINTON: Well, I don't know enough about the Boeing thing to comment but let's talk about the other two things.
On Dodd-Frank, to me the most important thing that Dodd-Frank accomplished was to make it clear that those who have oversight of the banks, which include obviously the banking regulators but also in some cases the SEC on the investment side, have got to prohibit another situation like we had before this financial crash where Bear Stearns was leveraged at 4-1, Lehman Brothers was nearly that high.
You had basically too much leverage, too little cash supporting highly risky loans. So what they said was, you've got to prevent the financial system from becoming this leveraged again.
I'm sure a lot of them don't like it. But that's just common sense. I mean if you look at Germany and Canada, they have merged banking facilities just like America, that is, a bank can be a commercial bank in the old fashion sense and an investment bank. They didn't get in any trouble because they didn't have as much leverage.
Then I think Dodd-Frank has a system for orderly liquidation which is another way of saying we're not going to bail you out next time. This time the investors and the management have to take the hit for making lots of money off of loans they shouldn't have made. I think that's important.
Dodd-Frank does a whole raft of other things. They may all be good for all I know. But I think one way to clear that up is maybe stagger them in over a more pronounced timetable. I think there's only so much change that institutions can handle at one time.
So -- and I like a lot of the other provisions in Dodd-Frank. But let's -- we need to get to the meat of the coconut, try to get basic understandings with the economic drivers and figure out where to go from there.
On the health care there may be some employers who are complaining because they don't want to pay into the fund to support health insurance for their employees. But most employees are going to be much better off and they have been given a lot of misinformation about it, but small businesses will find it easier to purchase health care than before if they so choose.
And the rates are going to go down in many cases. In the state of Connecticut, where Aetna is headquartered, and it's a great insurance company, but they have already filed a petition with the state regulator in Connecticut to lower their health insurance premiums by 10 percent.
After a decade now where health insurance costs have gone up at three times the rate of inflation they want to lower the premiums because they have to meet the requirement of the law to spend 85 percent of the money and their big plans 80 percent in the small ones on health care and not on profits and promotions.
So I still think that there are a lot of people who just don't know how this is going to work and for most employers I think they'll be better off under this system than they were under the old one.
It's hard to imagine how you can have a worst situation. The day before the financial meltdown, median family income was $2,000 lower than it was the day I left office after inflation, and health care costs have tripled.
The United States -- you guys do a wonderful job of talking about comparative interest rates, comparative investment rates, how we're doing compared to other countries, what's our tax rates are. We're spending 17.2 percent of our income on health care. No other big rich country spends more than 10.5.
I was in the Netherlands the other day which is the third biggest foreign investor in the United States. They have almost $400 billion in investment here. Speaking at the 200th anniversary of a major insurance company that writes all kinds of insurance including health insurance, and I asked the chairman of the company -- I said you write health insurance, don't you? He said yes, and we have an individual mandate and all private insurance.
And I said, what percent of your income are you spending on health care? He said 9 percent. And it's quite enough. We should make most of our money in other areas of insurance. We spend 17.2. That's over a trillion dollars a year we take out of the business economy for health care. And only about $150 billion of that can be attributed to lifestyle choice by Americans.
And the rest of it is because we pay for procedure not for health -- that's the medical system part of it -- and because of the way we finance health care. So I believe that --
QUICK: Part of it is tort reform, too, though, right?
CLINTON: Yes, but nobody -- no serious person who doesn't have a dog in the hunt believes that's more than 2 to 5 percent of the problem. And I'm all for it. I think we need some tort reform in the medical area but that's not where the big numbers are. The big numbers are in too many procedures and the absence of uniform procedures that work.
I'll just give you one example. If I could.
QUICK: Sure.
CLINTON: We lose somewhere between 10 and 30,000 lives a year to infections that people get in the course of health care. We now know from experiments that have been done in the United States and health units around the world including in poor countries that you get uniformly and better results if at various critical places during a hospital stay people have to do sterilization procedures, mostly making sure their hands have no germs.
QUICK: Sure.
CLINTON: And everybody that's done it has gotten the same results. We can save $40 billion in the health care system every year avoiding re- hospitalizations and new procedures if that were done. So far there's only one hospital network in the country that has rigorously implemented that system for every hospital.
Putting a nurse in charge -- it's the only place a nurse gets to tell the doctors what to do in each of the critical junctures. That's the Veterans Administration health care system. So I -- I think that there's massive amount of savings in this health care system which would -- down to the benefit of the government, it would also save money for Medicare, for Medicaid, for everybody else.
The whole system prices could come back toward our competitors. And unless we do that, we're going to have a very difficult time, you know, competing. I'll just give you one example. We're spending, I think, about $300 million over the next couple of years to establish centers of excellence in biotechnology around the country.
Tiny Singapore is spending $3 billions to overtake us as the leader in biotech and to generate all the economic benefits. They expect to float from that in the coming decade. We cannot keep putting our country in an economic hole by spending a trillion dollars more on health care to get worse outcomes that we would if we had any other country's health systems.
QUICK: Right.
CLINTON: So I just don't believe most business people are going to be worse off. Now, I do think some changes need to be made in the health care law. One important one has already been made by bipartisan consensus. And that's changing some of the small business reporting and compliance requirements. That needed to be done. It was done. Good for them.
We could change it. But we shouldn't overlook the fact that we've got to be competitive in every area of national life. And that means we've got to get our costs more in line with our competitors.
QUICK: Mr. President, I want to thank you very much for your time today. We will be watching Chicago later today, where the Clinton Global Initiative will be addressing all these issues and more, but sir, thank you for your time.
CLINTON: Thank you.
CORZINE: Great to see you, Mr. President.
CLINTON: Thanks, Governor. How are you doing?
(LAUGHTER)
END
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