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- *****************************************************
- SECRETARY HILLARY RODHAM CLINTON
- SPEAKER AT GOLDMAN SACHS
- BUILDERS AND INNOVATORS SUMMIT
- Ritz-Carlton Dove Mountain
- Marana, Arizona
- Tuesday, October 29, 2013
- *****************************************************
- Reported by: Carolyn T. Sullivan, RPR
- ELLEN GRAUER COURT REPORTING CO. LLCC
- 126 East 56th Street, Fifth Floor
- New York, New York 10022
- 212-750-6434
- REF: 105182
- MR. BLANKFEIN: That's the first of a ten-minute spiel, but let me introduce
- somebody who needs no introduction. Secretary Hillary Clinton.
- (Applause.)
- MR. BLANKFEIN: Now, when I say I want no introduction, I'm really only
- kidding because I want a real introduction and long.
- SECRETARY CLINTON: I was waiting for it.
- MR. BLANKFEIN: Well, I'll tell you, I'm more interested in the future. So,
- anyway, why don't we just start.
- If you don't mind, can we start with a little bit of a tour of the world and
- say, you know, if you were -- if you were -- let's take a hypothetical. Let's
- say you were Secretary of State.
- (Laughter.)
- MR. BLANKFEIN: What would you be focused on? What would you be focused on
- today? And tell a little bit about how your priorities would be and how you
- would deal with some of it now.
- SECRETARY CLINTON: Well, gee, I'll just have to cast my mind back.
- (Laughter.)
- SECRETARY CLINTON: Well, first, thanks for having me here and giving me a
- chance to know a little bit more about the builders and the innovators who
- you've gathered. Some of you might have been here last year, and my husband
- was, I guess, in this very same position. And he came back and was just
- thrilled by --
- MR. BLANKFEIN: He increased our budget.
- SECRETARY CLINTON: Did he?
- MR. BLANKFEIN: Yes. That's why we --
- SECRETARY CLINTON: Good. I think he -- I think he encouraged you to grow it
- a little, too. But it really was a tremendous experience for him, so I've
- been looking forward to it and hope we have a chance to talk about a lot of
- things.
- But clearly, what's going on in this complicated world of ours is on the top
- of a lot of people's minds. And, you know, let me just briefly say that one
- of the ways I look at domestic as well as international issues is by trying to
- focus not just on the headlines, although those are insistent and demand your
- attention, but to keep an eye on the trend lines. And many of you in this
- room are masters of the trend lines. You see over the horizon, you think
- about products that nobody has invented, and you go about the business of
- trying to do that.
- Well, in diplomacy or politics and national security, foreign policy, it's
- somewhat similar. You have to keep your eye on the trend lines even while
- you're dealing with all of the crises because the trend lines will eventually
- materialize and could be the crisis of next year or in five years. And if
- you're taken totally by surprise, it could be a crisis of long-lasting and
- severe impacts.
- So on the headlines, if you look around right now, obviously people are
- focused on the Middle East, which is a perennial crisis. In Syria, what's
- happening with the charm offensive by Iran and the negotiations that are
- taking place on the nuclear program. The somewhat slow but I think glib signs
- of some economic activity finally in parts of Europe, but that's combined with
- the huge brouhaha over surveillance and the fights that are incumbent upon the
- United States and our intelligence services to respond to.
- But you also have, if you look a little farther afield, some of the fastest
- growing economies in the world now. In sub-Saharan Africa, an area that I
- still think has more promise and potential than is realized by many American
- businesses and entrepreneurs. You've got the continuing problems in
- Afghanistan and Pakistan, South Asia. In broad terms, particularly Pakistan
- remains a very difficult, complex challenge for the United States. And with
- the withdrawal from Afghanistan, it's going to continue to be so. The
- situation in East Asia, it was an unfortunate consequence of the government
- shutdown that the President had to cancel his trip to two major events in
- Asia, the Asia Pacific Economic Community that the United States actually
- started and has served as a very good convening forum around economic issues,
- and the East Asia Summit, which we joined two years ago. And the fact that
- the President of the United States couldn't be there because literally the
- people who manage government travel for the President had been furloughed was
- not exactly a smart message to send to those who are looking to see how
- reliable the United States is, whether it's economic or strategic or any other
- aspect. So it's a constantly challenging environment because things are
- changing so rapidly.
- But the trend lines are both positive and troubling. There is a still
- continuing movement toward open markets, toward greater innovation, toward the
- development of a middle class that can buy the products. As Lloyd was talking
- in his intro about the work that you do creating products and then making sure
- there's markets by fostering the kind of inclusive prosperity that includes
- consumers is a positive trend in many parts of the world now. Democracy is
- holding its own, so people are still largely living under governments of their
- own choosing. The possibilities of technology increasing lifespan and access
- to education and so many other benefits that will redound to not only the
- advantage of the individual but larger society.
- At the same time, you've got other trend lines. There is an increasing
- cooperation among terrorist groups. They're, unfortunately, not defeated
- because they were driven largely out of Afghanistan and have been decimated in
- Pakistan, and they've taken up residence in Somalia and North Africa. The
- Arab Spring, which held such great promise, has not yet been realized. And
- the situation in Syria posits a very difficult and dangerous Sunni-Shiite
- divide that would have broad repercussions across the region. You've got all
- kinds of threats from weapons of mass destruction. One of the positives of
- the last month is getting ahold of the Syria chemical weapons program, which
- in and of itself is a good, even though it doesn't stop the civil war and the
- increasing radicalization of a lot of the groups fighting Assad.
- So we can go down the list, Lloyd, and you can see that, you know, it's like
- anybody's balance sheet. There are promising, positive developments,
- opportunities that you want to take advantage of and you want to push toward
- and expand. And then there are threats and negative developments that you
- want to try to contain insofar as possible, eliminate in the rare instance,
- and try to keep that balance more on the positive side of the ledger so that
- it does promote and protect the values that the people in this room represent,
- freedom and opportunity as well as other underlying aspirations, that so many
- people around the world still look to our country to try to help them realize.
- MR. BLANKFEIN: Just on that, is another trend, perhaps the isolationist may
- be too strong, but let's say the isolationist tendency now. I think the
- President might well have lost his vote on Syria, got a little bit bailed out,
- may turn out to be for the best, may have been the best outcome, but it
- doesn't augur well. There may be a lot of factors. It may be that because
- maybe the Syrian situation is so complicated that we just don't know what to
- do. So, therefore, doing nothing. But, you know, from the left side of the
- Democrat Party, the right side of the Republican Party, it seems like
- there's a kind of a antipathy now for intervention. What do you think the
- trend line is for the United States [unintelligible]?
- SECRETARY CLINTON: Well, I'm an optimist, so I think the trend line continues
- to be positive, but I think you have highlighted one of the issues that, you
- know, concerns me on the -- you know, if you look at the -- the Syria vote is
- a bit of a challenging one to draw large conclusions from because it is a
- wicked problem. There are so many factors at play there. But the underlying
- rejection of a military strike to enforce the red line on chemical weapons
- spoke more about, you know, the country's preoccupation with our own domestic
- situation, the feeling that we need to get our own house in order, that we
- need to get that economy that everybody here is so deeply involved in
- producing more, getting back to growth, dealing with the unemployment figures
- that are still unacceptably high in too many places.
- So it was both a rejection of any military action in the Middle East right now
- and a conclusion that, you know, people of considerable analytical
- understanding of the region could also reach that, you know, you -- we're in
- -- we're in a time in Syria where they're not finished killing each other,
- where it's very difficult for anybody to predict a good outcome and maybe you
- just have to wait and watch it. But on the other side of it, you can't
- squander your reputation and your leadership capital. You have to do what you
- say you're going to do. You have to be smart about executing on your
- strategies. And you've got to be careful not to send the wrong message to
- others, such as Iran.
- But I think in this particular instance, it was primarily the feelings that I
- see as I travel around the country speaking at college campuses, speaking at
- other business kinds of events, different audiences, people are nervous about
- what we're doing here at home. The gridlock, the government shutdown,
- flirting with defaulting on our debt. You know, just really focused people's
- attention on our own shortcomings. And I think that had as much to do with it
- as anything.
- MR. BLANKFEIN: Do you think when -- again, another trend, which is a
- surprising, shocking trend, but nevertheless a trend, the energy sufficiency
- of the United States. What does that mean for, you know, I guess the
- geopolitical politics, implications that will play out over decades. But how
- much are we going to invest in defending the ceilings between Iran and China
- when we're not tied to the oil from the Middle East. China is now importing
- more oil from the Middle East than we are.
- SECRETARY CLINTON: Right.
- MR. BLANKFEIN? So what does that augur for our own commitment?
- SECRETARY CLINTON: Well, look, I think it's mostly, again, on the balance
- sheet metaphor of where we are in the world today. I think it's mostly a
- positive that we are more energy sufficient. Obviously it's imperative that
- we exploit the oil and gas in the most environmentally careful way because we
- don't want to -- we don't want to cause problems that we also will have to
- deal with taking advantage of what is a quite good windfall for us in many
- other respects.
- We were never dependent upon Iranian oil, but the fact that we are now moving
- toward and not only energy independence but potentially using that energy to
- bring more manufacturing back to the United States as well as possibly
- creating an export market from the United States, it just changes the whole
- equation. It puts a lot of pressure on China, in particular, to continue to
- exploit as many energy sources. And I would argue that even though we are not
- worried about getting as much energy from the Middle East as perhaps we were
- in the past that the United States still has to keep those ceilings open.
- 48 percent of the world's trade, obviously that includes energy but includes
- everything else, goes through the South China Sea. Some of you may have seen
- the long article in the New York Times Magazine on the South China Sea this
- past weekend, an issue that I worked on for the entire time was in the State
- Department because China basically wants to control it. You can't hold that
- against them. They have the right to assert themselves. But if nobody's
- there to push back to create a balance, then they're going to have a chokehold
- on the sea lanes and also on the countries that border the South China Sea.
- MR. BLANKFEIN: It's an unfortunate name.
- SECRETARY CLINTON: What, the South China Sea?
- MR. BLANKFEIN: Yeah.
- SECRETARY CLINTON: Yeah, well, it's an unfortunate position they've taken.
- MR. BLANKFEIN: Yeah.
- SECRETARY CLINTON: They have --
- MR. BLANKFEIN: Ours is called the Caribbean. We don't call it the South
- United States Sea.
- (Laughter.)
- SECRETARY CLINTON: Well, you may be forgetting James Madison.
- I think that -- you know, one of the greatest arguments that I had on a
- continuing basis was with my Chinese counterparts about their claim. And I
- made the point at one point in the argument that, you know, you can call it
- whatever you want to call it. You don't have a claim to all of it. I said,
- by that argument, you know, the United States should claim all of the Pacific.
- We liberated it, we defended it. We have as much claim to all of the Pacific.
- And we could call it the American Sea, and it could go from the West Coast of
- California all the way to the Philippines. And, you know, my counterpart sat
- up very straight and goes, well, you can't do that. And I said, well, we have
- as much right to claim that as you do. I mean, you claim it based on pottery
- shards from, you know, some fishing vessel that ran aground in an atoll
- somewhere. You know, we had conveys of military strength. We discovered
- Japan for Heaven sakes. I mean, we did all of these things.
- MR. BLANKFEIN: These are more technical conversations than I thought they
- would be.
- (Laughter.)
- SECRETARY CLINTON: Yes, yes. And then he says to me, well, you know, we'll
- claim Hawaii. And I said, yeah, but we have proof we bought it. Do you have
- proof you brought any of these places you're claiming? So we got into the
- nitty-gritty of --
- MR. BLANKFEIN: But they have to take New Jersey.
- (Laughter.)
- SECRETARY CLINTON: No, no, no. We're going to give them a red state.
- (Laughter and applause.)
- MR. BLANKFEIN: I'll discuss that after I leave here. Let me ask you another
- question because this is also a topical question.
- Let's say, hypothetically, that one country was eavesdropping on another
- country.
- (Laughter.)
- MR. BLANKFEIN: And I didn't hear the crisp denials, but I didn't hear any
- confirmation of it. How would you -- would you be looking forward to giving
- that explanation? How do you go -- what do you do now?
- SECRETARY CLINTON: So, all right. This is all off the record, right? You're
- not telling your spouses if they're not here.
- MR. BLANKFEIN: Right.
- SECRETARY CLINTON: Okay. I was Secretary of State when WikiLeaks happened.
- You remember that whole debacle. So out come hundreds of thousands of
- documents. And I have to go on an apology tour. And I had a jacket made like
- a rock star tour. The Clinton Apology Tour. I had to go and apologize to
- anybody who was in any way characterized in any of the cables in any way that
- might be considered less than flattering. And it was painful. Leaders who
- shall remain nameless, who were characterized as vain, egotistical, power
- hungry --
- MR. BLANKFEIN: Proved it.
- SECRETARY CLINTON: -- corrupt. And we knew they were. This was not fiction.
- And I had to go and say, you know, our ambassadors, they get carried away,
- they want to all be literary people. They go off on tangents. What can I
- say. I had grown men cry. I mean, literally. I am a friend of America, and
- you say these things about me.
- MR. BLANKFEIN: That's an Italian accent.
- SECRETARY CLINTON: Have a sense of humor.
- MR. BLANKFEIN: And so you said, Silvio.
- (Laughter.)
- SECRETARY CLINTON: So, fast forward. Here we are. You know, look, I have
- said, and I will continue to say, we do need to have a conversation with and
- take a hard look at the right balance that we could strike between, you know,
- privacy and security because there's no doubt, and I've seen this and
- understand it, there's no doubt that much of what we've done since 9/11 has
- kept us safer. That's just a fact. It's also kept our friends and our
- partners and our allies safer, as well. The sharing of intelligence requires
- the gathering of intelligence and the analysis of intelligence.
- And so as we have alerted our friends and worked with them on plots and
- threats that we had information about, they've done the same for us. And,
- clearly, they have their own methods of collection. So it's not good enough
- to say, everybody does it, because we should hold ourselves to the highest
- standards, and we should have the right checks and balances in this whole
- system.
- MR. BLANKFEIN: We should do better.
- SECRETARY CLINTON: Well, we do better. I mean, that's the problem. We have
- a lot of information. And not the kind of information that most of our
- citizens are worried about because I really have no evidence and have no
- reason to believe that, you know, we've got people listening to American
- citizens' conversations. But the collection of the metadata is something that
- has proven to be very useful.
- And anybody who has ever traveled in other countries, some of which shall
- remain nameless, except for Russia and China, you know that you can't bring
- your phones and your computers. And if you do, good luck. I mean, we would
- not only take the batteries out, we would leave the batteries and the devices
- on the plane in special boxes. Now, we didn't do that because we thought it
- would be fun to tell somebody about. We did it because we knew that we were
- all targets and that we would be totally vulnerable.
- So it's not only what others do to us and what we do to them and how many
- people are involved in it. It's what's the purpose of it, what is being
- collected, and how can it be used. And there are clearly people in this room
- who know a lot about this, and some of you could be very useful contributors
- to that conversation because you're sophisticated enough to know that it's not
- just, do it, don't do it. We have to have a way of doing it, and then we have
- to have a way of analyzing it, and then we have to have a way of sharing it.
- And it's not only on the government side that we should be worried about. I
- mean, the cyber attacks on businesses, and I'm sure many in this room have
- experienced that, is aimed at commercial advantage. In some instances, when
- it's aimed at defense businesses, it's aimed at, you know, security and
- strategic advantage. But, you know, the State Department was attacked
- hundreds of times every day, some by state-sponsored groups, some by more
- independent operators. But it was the same effect. People were trying to
- steal information, use it for their own purposes.
- So I think maybe we should be honest that, you know, maybe we've gone too far,
- but then let's have a conversation about what too far means and how we protect
- privacy to give our own citizens the reassurance that they are not being spied
- by their own government, give our friends and allies the reassurance that
- we're not going beyond what is the necessary collection and analysis that we
- share with them and try to have a mature conversation.
- MR. BLANKFEIN: Maybe embedded you've already given part the answer, but how
- serious, how bad was it what Snowden and Assange did? What are the -- I mean,
- Assange -- if this were a destroyer and innovator conference, we might have
- had Assange here.
- SECRETARY CLINTON: I wouldn't be here.
- MR. BLANKFEIN: But how much did that hurt us? Aside from the embarrassment,
- clearly some avenues now, some things we relied on that, have been closed off
- for us. I know it was very important to try to get some legislation that
- would have made it legal to get some more of this metadata that's been very
- helpful without having the carriers face liability. That's probably been
- put on the back burner. What are the consequences long term for this in
- terms of our own safety and the safety of the Republic.
- SECRETARY CLINTON: Well, separate the two. The WikiLeaks problem put at risk
- certain individuals. We had to -- we had to form a kind of investigative team
- that looked at all the names and all the documents, which was quite a
- challenge, to make sure that identities that were either revealed or described
- in enough detail that they could be determined would not put people who were
- at risk. I mean, without going into detail, you know, maybe they're -- let's
- just hypothetically say there was somebody serving in a military in a certain
- country who was worried about some of the activities of the military that he
- served because he thought they were doing business with rogue states or
- terrorist networks, and so he would seek out an American diplomat to begin a
- conversation. And the American diplomat would report back about the concerns
- that were being expressed about what was happening in this country. And then
- it's -- you know, it's exposed to the world. So we had to identify, and we
- moved a number of people to safe -- to safety out of where they were in order
- for them to be not vulnerable.
- So on the WikiLeaks, there was the embarrassment factor, there were the
- potential vulnerability factors that individuals faced. The WikiLeaks issue
- was, you know, unfortunate. Private Manning should have never had access to a
- lot of what he did have access to. So, in effect, it was a problem. But it
- didn't expose the guts of how we collect and analyze data.
- A lot of -- without knowing exactly because I don't think we yet have an
- accurate picture of what Snowden put out. You saw where Clapper and Alexander
- and others were testifying that reporters didn't understand what they were
- looking at. That's totally possible. I don't discount that at all. A lot of
- the information that is conveyed is difficult to understand without some
- broader context. So Alexander and Clapper said, look, a lot of what Snowden
- had, which has been interpreted by the press, is not accurate. I can't speak
- one way or the other on that. But what I think is true, despite Snowden's
- denials, is that if he actually showed up in Hong Kong with computers and then
- showed up in Mexico with computers, why are those computers not exploited when
- my cellphone was going to be exploited.
- So I do think that there has been a real loss of important information that
- shouldn't belong to or be made available to people who spend a lot of their
- time trying to penetrate our government, our businesses. And even worse, you
- know, some who are engaged in terrorist activities. I mean, the Iranians did
- a disruption of service attack on American banks a year ago. The Iranians are
- getting much more sophisticated. They run the largest terrorist networks in
- the world.
- So, you know, if Snowden has given them a blueprint to how we operate, why is
- that in any way a positive. We should have the debate. We should have the
- conversation. We should make the changes where they're necessary. But we
- shouldn't put our systems and our people at risk. So I think that WikiLeaks
- was a big bump in the road, but I think the Snowden material could be
- potentially much more threatening to us.
- MR. BLANKFEIN: Let me just introduce one more topic with you, and I'll urge
- everybody to think of some questions if we have time for that.
- But just a general question to start you off on the domestic situation. Is
- the American political system just hopeless? Should we just throw it away,
- start over? You know, go home. Get a parliamentary system. Is it -- because
- I will tell you -- I'm kidding. We -- talking here, and I didn't do this in a
- formal survey, but when we ask entrepreneurs, whether they were social
- entrepreneurs, the people who were talking represented the work they're doing
- in the cities and the businesses represented here, every conversation referred
- to either what the government was doing or what the government wasn't doing
- that it was obvious that they should be doing.
- And then I guess a corollary question to my first approach, should we chuck it
- away, will the elections make a difference. Is the system so gummed up where
- a single senator can so gum up appointments and basically extort legislation
- or stop legislation, is the system so screwed up now that really that we just
- have to have some cataclysm that just gets everybody so frustrated that we de
- facto start over, you know, or practically start over.
- SECRETARY CLINTON: Well, look, I -- I think that everyone agrees that we're
- in a bad patch in our political system and in Washington. It's -- you know,
- there's a lot of good things happening elsewhere in the country. There are a
- lot of mayors, you had Mitch Landrieu here, I was with Rahm Emanuel yesterday.
- There's a lot of innovative, interesting, new ideas being put into practice by
- mayors, by some governors. So I think when we talk about our political
- system, we're really focusing more on what's happening in Washington. And it
- is dysfunctional right now. And it is for a variety of reasons, some of them
- systemic, as you suggested.
- You know, I really have come to believe that we need to change the rules in
- the Senate, having served there for eight years. It's only gotten more
- difficult to do anything. And I think nominees deserve a vote up or down.
- Policies deserve a vote up or down. And I don't think that a small handful of
- senators should stand in the way of that, because, you know, a lot of those
- senators are really obstructionist. They should get out. They should make
- their case. They should go ahead and debate. But they shouldn't be able to
- stop the action of the United States Senate. So I think there does have to be
- some reworking of the rules, particularly in the Senate.
- I think that, as has been discussed many times, the partisan drawing of lines
- in Congressional districts gives people -- gives incumbents certainly a lot
- more protection than an election should offer. And then they're only
- concerned about getting a challenge from the left of the Democratic Party or a
- challenge from the right in the Republican Party. And they're not
- representing really the full interests of the people in the area that they're
- supposed to be.
- California moved toward this non-partisan board, and I think there should be
- more efforts in states to do that and get out of the ridiculous gerrymandering
- that has given us so many members who don't really care what is happening in
- the country, don't really care what the facts are. They just care whether
- they get a primary opponent.
- And then it comes down to who we vote for and what kind of expectations we set
- and who we give money to. Those who help to fund elections, I think it's
- important that business leaders make it clear, why would you give money to
- somebody who was willing to wreck the full faith and credit of the United
- States. I mean, that just makes no sense at all because the economic
- repercussions would have been very bad, and the long-term consequences with,
- you know, the Chinese saying, let's de-Americanize the world and eventually
- move to a different reserve currency wouldn't be, you know, beneficial,
- either.
- So I think there are steps that citizens have to take. It's not just about
- how we rearrange the levers of power and the institutions in Washington.
- But there has to be a new ethos. I mean, we can't let people, as you say, be
- extortionists. And the President was absolutely right not to negotiate with
- people who were acting the way that the minority of the minority was acting on
- the shutdown and the debt limit issue.
- But it's going to take a concerted effort --
- MR. BLANKFEIN: Does it have to get worse first in order for the -- because,
- obviously, in America, we've gone through cycles. Somebody said, boy,
- politics have never been this bad. It's so poison. And I said, well, we did
- have the Civil War, and we got through that. And we had the McCarthy era.
- And so we've gotten into and out of these cycles before. But do you need to
- bounce off some bottom? In other words, does it have to get so bad that the
- electorate rallies to want the spirit of compromise instead of sending --
- because ultimately, it's really the vote -- you know, we blame the
- legislators, but it's the voters. The voters have to realize that the only
- stable, sustainable government is one in which the moderates compromise and
- the fringes get rejected, not the other way around.
- SECRETARY CLINTON: That is exactly. And, you know, post the shutdown/debt
- limit debacle, you know, the Republican Party's ratings dropped dramatically.
- You can see it in Virginia where the Democratic candidate has opened a big
- lead and in part because the Republican candidate for governor looks as though
- he's of the extremists. He's of the Tea Party-like Republicans, and he's
- being punished for it.
- MR. BLANKFEIN: Utah, also.
- SECRETARY CLINTON: Yeah. So you're seeing people say, wait a minute.
- Enough. You know. I may be conservative, but I'm not crazy. And I don't
- want to be represented by people who are crazy and who are threatening, you
- know, the entire structure --
- MR. BLANKFEIN: "I'm not crazy." That's going to be the new rallying cry.
- SECRETARY CLINTON: I think it would be. I like when people say, you know, I
- may be conservative, but I'm not crazy. I'm very reassured.
- MR. BLANKFEIN: Prove it.
- SECRETARY CLINTON: Yeah. You want them to prove it by saying, you know,
- we're going to act differently in our voting and our giving. And it could
- make a very big difference.
- Now, some of the Republicans are also fighting back. I mean, somebody like
- Lamar Alexander, who's been a governor and a senator of Tennessee, and they're
- mounting a Tea Party challenge against him. He's going right at it. He is
- not afraid to take them on. And more moderate Republicans have to do that as
- well. Take back their party from the extremists and the obstructionists.
- And you're right, we've gone through these periods before. We have always had
- this kind of streak of whether it's know-nothingism or isolationism or, you
- know, anti-Communism, extremism. Whatever. We've had it forever from the
- beginning. So it's important that people speak out and stand up against it,
- and especially people who are Republicans, who say, look, that's not the party
- that I'm part of. I want to get back to having a two-party system that can
- have an adult conversation and a real debate about the future.
- MR. BLANKFEIN: Yeah, and one thing, I'm glad -- I'm proud that the financial
- services industry has been the one unifying theme that binds everybody
- together in common.
- (Laughter.)
- MR. BLANKFEIN: So with that, let me -- you notice how I don't make that a
- question.
- Questions from the audience? I think we have microphones coming your way.
- MALE ATTENDEE: Madam President --
- (Laughter and applause.)
- MALE ATTENDEE: My question is, as entrepreneurs, we risk a lot. And Mike
- Bloomberg had 30 billion other reasons than to take office. Do we need a
- wholesale change in Washington that has more to do with people that don't need
- the job than have the job?
- SECRETARY CLINTON: That's a really interesting question. You know, I would
- like to see more successful business people run for office. I really would
- like to see that because I do think, you know, you don't have to have 30
- billion, but you have a certain level of freedom. And there's that memorable
- phrase from a former member of the Senate: You can be maybe rented but never
- bought. And I think it's important to have people with those experiences.
- And especially now, because many of you in this room are on the cutting edge
- of technology or health care or some other segment of the economy, so you are
- people who look over the horizon. And coming into public life and bringing
- that perspective as well as the success and the insulation that success gives
- you could really help in a lot of our political situations right now.
- MALE ATTENDEE: How about in the Cabinet?
- SECRETARY CLINTON: Yeah. Well, you know what Bob Rubin said about that. He
- said, you know, when he came to Washington, he had a fortune. And when he
- left Washington, he had a small --
- MR. BLANKFEIN: That's how you have a small fortune, is you go to Washington.
- SECRETARY CLINTON: You go to Washington. Right.
- But, you know, part of the problem with the political situation, too, is that
- there is such a bias against people who have led successful and/or complicated
- lives. You know, the divestment of assets, the stripping of all kinds of
- positions, the sale of stocks. It just becomes very onerous and unnecessary.
- MR. BLANKFEIN: Confirmation.
- SECRETARY CLINTON: The confirmation process is absurd. And it drives out a
- lot of people. So, yes, we would like to see people, but it's a heavy price
- for many to pay and maybe not one that they're ready to pay.
- MR. BLANKFEIN: Garrett.
- MALE ATTENDEE: Madam Secretary, thank you for everything you've done for the country. I think I speak on behalf of most of the entrepreneurs here, we're optimists. Understandably, post 9/11, most of our framing of United States with respect to the rest of the world has been about fear and threat. I can speak for myself and a lot of people in this room. For us from outside of the country before we immigrated here, America was a symbol of hope.
- How do we reframe what we talk about in terms of the good that America does in
- the world and bringing about the message of hope. Even in this discussion
- what we talked about, we talk mostly about fear and threat. Can you speak to
- us about the hope and the good that we bring to the world.
- SECRETARY CLINTON: Well, yes. I mean, you have to blame Lloyd for the
- questions.
- (Laughter.)
- MR. BLANKFEIN: I'm more associated with fear than hope.
- SECRETARY CLINTON: Well, you're absolutely right. And that still is the
- American character. It's in our DNA. We are a generous, hopeful, optimistic,
- confident people. As you know, I was a senator from New York on 9/11. And,
- you know, the comeback of New York City, its resilience, its confidence in the
- face of a devastating attack was one of the most inspiring chapters of
- American history.
- So there's no doubt that we have a great story to tell. I think,
- understandably, there was a lot of overreaction as well as appropriate
- reaction following 9/11, which is why now, you know, 12 years on, we're
- talking about having a conversation about getting into the right balance on
- privacy and security, but it would also be fair to say, you know, on optimism
- and skepticism. We've got to get back on the optimist scale.
- And, you know, I see it everywhere I go. I mean, a lot of the people I meet
- with and talk to are excited about the future. They want to make a
- contribution, whether it's, you know, in business or in some kind of
- non-profit. There's an enormous amount of pent-up excitement and
- anticipation.
- But a lot of people are worried that there's another shoe that's going to
- drop. That somehow our government, our culture is going to not reflect that
- sense of forward movement. So yes, we do have to get back to telling the
- American Story and telling it to ourselves first and foremost. That's why
- immigration reform is so important. I mean, get immigration reform done you.
- It sends exactly the signal you're talking about.
- (Applause.)
- SECRETARY CLINTON: Get it fixed so that the people who have been here working
- hard, building futures, are given the chance to become American citizens.
- There's no requirement that they do, but they would be given that path to
- citizenship.
- So it still is the case that more people want to come here than anywhere else
- in the world. People still, despite all of the problems of the last decade,
- see through it and see the underlying reality of what a life in America can
- offer them and their children.
- But we need to get back to believing our own story. We need to jettison a lot
- of the skepticism. I mean, there's not a skeptic among you when it comes to
- being an entrepreneur. You couldn't get up in the morning. You couldn't face
- how hard it was. You couldn't do the work that's required. You have to
- believe you're going to make it, you're going to get that breakthrough, you're
- going to be successful, you're going to get those investors. I mean, that is
- a representation of what America has stood for, and we have to champion that.
- And I tell you, I see any society like a three-legged stool. You have to have
- an active free market that gives people the chance to live out their dreams by
- their own hard work and skills. You have to have a functioning, effective
- government that provides the right balance of oversight and protection of
- freedom and privacy and liberty and all the rest of it that goes with it. And
- you have to have an active civil society. Because there's so much about
- America that is volunteerism and religious faith and family and community
- activities. So you take one of those legs away, it's pretty hard to balance
- it. So you've got to get back to getting the right balance.
- And what I really resent most about the obstructionists is they have such a
- narrow view of America. They see America in a way that is no longer
- reflective of the reality of who we are. They're against immigration for
- reasons that have to do with the past, not the future. They can't figure out
- how to invest in the future, so they cut everything. You know, laying off,
- you know, young researchers, closing labs instead of saying, we're better at
- this than anybody in the world, that's where our money should go. They just
- have a backward-looking view of America. And they play on people's fears, not
- on people's hopes, and they have to be rejected. I don't care what they call
- themselves. I don't care where they're from. They have to be rejected
- because they are fundamentally unAmerican. And every effort they make to
- undermine and obstruct the functioning of the government is meant to send a
- signal that we can't do anything collectively. You know, that we aren't a
- community, a nation that shares values.
- I mean, American was an invention. It was an intellectual invention, and we
- have done pretty well for all these years. And these people want to just
- undermine that very profound sense of who we are. And we can't let them do
- that.
- So it's not just about politics or partisanship. It really goes to the heart
- of what it means to be American. And I'll just say that I've been reading a
- lot of de Tocqueville lately because he was a pretty smart guy, and he
- traveled around and looked at this country and came up with some profound
- observations about us. But he talked about how unique early Americans were
- because they mixed a rugged individualism with a sense of, you know, community
- well being. So the individual farmer would quit farming for a day to go
- somewhere to help raise a barn, for example. People understood that the
- individual had to be embedded in a community in order to maximize -- if you
- were a merchant, you needed people to sell to. If you were a farmer, you
- needed people to buy your products. And he talked about the habits of the
- heart. And he said, that's what set us apart from anybody else. And, you
- know, I think there's a lot of truth to that. We are a unique breed, and
- people come here from all over and kind of sign on to the social compact of
- what it means to be an American.
- And we can't afford to let people, for their own personal reasons, whether
- they be political, commercial, or whatever, undermine that. So, yeah, there's
- a lot of to be said. And we need to say it more, and it doesn't just need to
- come from, you know, people on platforms. It needs to come from everybody.
- (Applause.)
- MALE ATTENDEE: Madam Secretary, what is the most important competitive
- advantage that you think the U.S. will keep as compared to a country like
- China?
- SECRETARY CLINTON: Freedom. I think freedom. Freedom of the mind, freedom
- of movement, freedom of debate, freedom of innovation. You know, I just -- I
- don't think we fully value -- we sometimes take it for granted, and we
- sometimes even dismiss it, how much stronger we are. Because in addition to
- that individual freedom that we have in great abundance compared to China, for
- example, we do have checks and balances. We have constitutional order. We
- have protection of intellectual property, we have a court system that we use
- for that purpose. We have a lot of assets that support the free thinking and
- free acting of individuals. And in the long run, that's what I would place
- my bet on. I think that is what gives us such a competitive advantage.
- Now, in the short run, we have to protect ourselves, not in protectionism, but
- in, you know, protecting intellectual property, for example, from every effort
- to undermine what you all do every single day, and we have to be smart about
- it. We have to invest better in education, starting at zero, not starting in
- even kindergarten, because we have to better prepare kids to be competitive in
- a global economy. There's a lot of problems that we have to solve that are
- community, national problems.
- But fundamentally, you know, it's that feeling that, you know what, if you
- really work hard and you have a good idea, you can make something of yourself,
- you can produce something. You know, we have traditionally been a country
- that invented things and made them. Now, we don't do that as much, but I
- think there's a little bit of an understanding we've got to get back to doing
- more of that because that ultimately will give us more jobs, give you more
- opportunities for producing things without fear of being taken advantage of in
- other markets. So I just think the freedom is just absolutely priceless.
- MR. BLANKFEIN: The best people in the world still want to come here.
- SECRETARY CLINTON: Well, and we need to let them. That's the other part of
- the immigration piece. You know, we shut down our borders, we build fences.
- We were talking at the table, you know, we ask people and entice them to come
- here and do their undergraduate and graduate work. And then as soon as they
- get their degree, we tell them we don't want them anymore because our system
- is so messed up that we can't even keep the people we helped educate and want
- to stay here.
- So we have a lot of work to do to fix the systemic bumps in the road that
- we're dealing with, but our underlying strengths are so much greater than
- anybody else. And we need to start celebrating those. Not in some kind of
- empty rhetoric, arm-waving, carrying on which is not rooted in any tough
- decisions, but in a really, you know, positive assessment about what we do
- well and what we can do better and what we need to fix and how we go about
- fixing it, whether it's immigration or education or anything else.
- MR. BLANKFEIN: I don't know what the statistic is this year because I just
- don't know it, but I bet it's the same as last year. I know last year, for
- the entrepreneurs that we had, more than a quarter were born outside the
- United States. And we didn't recruit them for being outside the United
- States. They were going to build their companies in the United States. But
- over a quarter were born outside the United States.
- SECRETARY CLINTON: Well, I think there's even a higher percentage of that on
- the -- what was it, the Fortune list or the Forbes list.
- FEMALE ATTENDEE: Secretary Clinton, I'm Patty Greene from Boston College's
- Goldman Sachs 10,000 Small Businesses. And first off, thank you for all the
- work you've done with women entrepreneurs both domestically and globally over
- your career. That's really meant a lot.
- My question is more domestic based. We have the rather unusually organized
- Small Business Administration, we have the Department of Commerce, and we have
- programs for entrepreneurs with small business pretty much scattered across
- every single other agency. How do you see this coming together to really have
- more of a federal policy or approach to entrepreneurship and small businesses?
- SECRETARY CLINTON: I would welcome your suggestions about that because I
- think the 10,000 Small Business Program should give you an opportunity to
- gather a lot of data about what works and what doesn't work. Look, neither
- our Congress nor our executive branch are organized for the 21st Century. We
- are organized to be lean and fast and productive. And I'm not -- I'm not
- naive about this. It's hard to change institutions no matter who they are.
- Even big businesses in our country are facing competition, and they're not
- being as flexible and quick to respond as they need to be.
- So I know it wouldn't be an easy task, but I think we should take a look at
- how we could, you know, better streamline the sources of support for small
- businesses because it still remains essential. You know, one of the things
- that I would love to get some advice coming out of the 10,000 Small Businesses
- about is how do we get more access to credit in today's current system for
- small businesses, growing businesses, because that's one of the biggest
- complaint I hear everywhere as I travel around the country. People who just
- feel that they've got nowhere to go, and they don't know how to work the
- federal system. Even if they do, they don't feel like they've got a lot of
- opportunities there. So we doo -- this is something we need to look at.
- You know, I don't think -- I don't think our credit access system is up to the
- task right now that is needed. I mean, there are a lot of people who would
- start or grow businesses even in this economic climate who feel either shut
- out or limited in what they're able to do. So we need to be smarter about
- both private and public financing for small businesses.
- MR. BLANKFEIN: I think this may well be our last question, so No. 1. That
- must be the best.
- FEMALE ATTENDEE: Great. Lots of pressure. Thank you so much.
- My question is, you know, we've talked a lot over the last couple of days
- about how more and more young people are looking to start their own businesses
- and moving to entrepreneurship as a career. And I run a company that connects
- a lot of millennials to meaningful work, and I see this interest in technology
- careers, finance careers, non-profit careers, but we don't see as much in
- government careers. And I guess my question is, do you think government is a
- great place for young people to begin their career? And if so, how do we make
- sure that more of our so-called best and brightest consider that as a path?
- SECRETARY CLINTON: Well, I do think it is, but I can understand why people
- would be turning away. I mean, it's not a pretty site what's going on when
- people get furloughed and governments shut down and, you know, the jobs are
- not as rewarding because of all kinds of restrictions. I mean, it's a tough
- environment right now.
- Personally, having, you know, lived and worked in the White House, having been
- a senator, having been Secretary of State, there has traditionally been a
- great pool of very talented, hard-working people. And just as I was saying
- about the credit market, our personnel policies haven't kept up with the
- changes necessary in government. We have a lot of difficulties in getting --
- when I got to the State Department, we were so far behind in technology, it
- was embarrassing. And, you know, people were not even allowed to use mobile
- devices because of security issues and cost issues, and we really had to try
- to push into the last part of the 20th Century in order to get people
- functioning in 2009 and '10.
- And I think we need to make it clear that if we're going to have young people
- of talent who have different choices going into government service where they
- can learn a lot, where they can get a lot of responsibility, there has to be a
- more welcoming environment, there has to be support for young people to feel
- like they're making a meaningful contribution, and that requires, you know,
- changes in some of those same systems that currently don't offer that.
- But, yeah, I do think there are great places in the federal government to
- learn a lot of about substantive issues, about maneuvering through difficult
- systems, about political trade-offs, and I would encourage people to look at
- that.
- MR. BLANKFEIN: Madam Secretary, thank you very much for coming here this
- evening. And I just want to echo the comments that a couple of people have
- made. Just thank you so much for your service. America is so lucky to have
- had you, to have you, and to continue to have you as a servant for us. Thank
- you very much.
- SECRETARY CLINTON: Thank you, sir.
- (Applause.)
- (Concluded at 9:36 p.m.)
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