Interview with Al Hunt for CNBC and the Wall Street Journal

Weekly Compilation of Presidential Documents, May 11, 1998

National Economy

Mr. Hunt. Mr. President, thank you for being with us. Let's talk about the American economy for a moment, which is really the envy of the world today. Federal Reserve Chairman Alan Greenspan says that it's the best economy in modern memory. But in your view, are there one or two developments that could jeopardize these good times?

The President. Well, I think the thing that I'm most concerned about today is the necessity of having growth in every major region of the world to sustain our own. I mean, we're now in a position where about a third of our growth is due to exports, where a significant percentage of them go to Asia. And our own analyses are that the Asian financial crisis, within its present parameters, won't have a terribly destructive impact on the American economy now. But if we had slow growth everywhere at once, it would, which is why I think it's rather important that we support the IMF and have a really disciplined effort to try to help move the Asian countries through this financial period and get them back to growth again.

And I feel the same way about what I'm trying to do in Africa as well. I just think that we have to understand that our welfare is more inextricably tied with others than ever before. So that's one of the things that I'm quite concerned about.

Japanese Economy

Mr. Hunt. In that context, the greatest threat in Asia, most experts think, is Japan. You and Secretary Rubin have encouraged, have cajoled, have pressured the Japanese to try to stimulate their economy, where it always seems to be too little, too late. What are the consequences if that persists, both in Asia and for the United States?

The President. Well, let me say, this last stimulus package, if it's real - that is if it's real money and it's implemented rapidly and vigorously, I think it will be a plus-

Mr. Hunt. You think it's sufficient -

The President. Well, I think - let me finish, if I might. I think that it might be enough on its own terms if, in addition to that, they have other reforms in the economy, you know, to open the economy to subject it to more genuine competition and open markets. Then I think between the two of those things you would really get growth going again. I think at least there is a chance that it is.

One of the problems that the Japanese have in their political system is that, because the pressures against doing these kinds of things are so enormous, very often they can be proposed and then their impact can be watered down or delayed in ways that make it difficult to implement. But if they actually do what the Prime Minister has proposed, and they do it quickly, and they follow it up with other reforms with banking and competitive market reforms, then I think that there is a chance we can see some real movement in Japan. And, of course, that would lead the whole region out.

And Prime Minister Hashimoto has got an enormously difficult challenge now, but he's a very able man; he's a strong man; and he's trying to, I think, really come to grips with this. And I'm hoping that he'll be able to.

Mr. Hunt. You're going to China for almost a week this summer. Is there any chance you'd stop over in Tokyo to talk to the Japanese about this economic situation?

The President. Well, I hope to see Prime Minister Hashimoto for an extended period in Birmingham, in England, at the G-8 meeting before I go to China. I would not like to wait that long. I'd like to have the chance to really sit down and visit with him and see what, if anything else, we can do to help before then. So I'm looking forward to blocking out some good time on my schedule when we're together for the G-8 meeting.

Mr. Hunt. And no reason then to go to Tokyo on your trip to China?

The President. Well, my instinct is to treat this as I would another - any other state visit, just to go and come. But I have been to Japan a couple of times, and I expect to go back again before I leave office. But I think what we need to do is to deal with this financial challenge they face as old friends and allies in a very straightforward way. I don't think that the symbolism of a visit is nearly as important as the reality of a partnership, and I'm going to do my best to be a good partner to them.

G-8 Summit in Birmingham, England

Mr. Hunt. You mentioned the meeting coming up in Birmingham, England. What do you expect to come out of that other than a call for more financial disclosure from other nations and the IMF? Is there any more substantive

The President. Well, I hope so, because I think that we really - I hope we'll do a G-8 version of what we were doing at the Summit of the Americas in Santiago. I thought what we - I hope we'll be talking about how globalization can work to the benefit of all the peoples in our countries, and then how it can only work if we're benefiting other nations as well.

Now, let me just give you an example. Great Britain now has a low unemployment rate, and the Dutch unemployment rate is down, but a number of the other European unemployment rates are still high, even though they're enjoying growth. The Canadians have had strong growth for the last couple of years. Their unemployment rate is only now beginning to yield to it. So there is a lot of interest among the G-8 about how they can generate more jobs without increasing inequality and without undermining growth.