AMERICAN STRENGTH AND RESILIENCE
May 17, 2012
British-American Business Council Transatlantic Conference - Gala Dinner, Edinburgh: May 17, 2012
First Minister, Mr. Chairman, my Lords, distinguished guests, ladies and gentlemen.
Let me say that I have no intention this evening of entering the domestic political arena.
In particular, Alex, I will not get into the thorny issue of Scottish independence…
…even though an American undoubtedly brings immense experience to any debate about independence from the United Kingdom.
However, since those tumultuous early days of American independence, the United States-United Kingdom alliance has grown into the most powerful partnership the world has ever known.
And it is a great pleasure to be here with leaders from government and business – both British and American – who are committed to strengthening that partnership.
This is such a critical relationship with so many dimensions.
One element is the commercial component, which is - and has always been – one of the most important.
So it is good to remind ourselves that United States-United Kingdom trade remains vibrant; that our investment ties are still the largest in the world; and that this relationship supports a million jobs in each country.
I do not have to call to your attention – but I will – that Scotland is a crucial player in these transatlantic commercial links.
The success of its own companies and its skilled and highly-effective workforce makes it an attractive investment opportunity.
That being said, the relationship goes both ways.
American corporations operating here do more than just invest in businesses and equipment, they invest in this country’s greatest resource: its people.
Tonight I thank all those in this room who work to reinforce our economic ties by exchanging capital, goods and ideas on a daily basis.
Not least, of course, the BritishAmerican Business Council and its Scottish chapter, which has prospered under its past leadership and continues to do so under Iain McMillan and his team.
From networking opportunities to its influence over policy on everything from immigration to regulation, hundreds of companies on both sides of the Atlantic benefit from BAB’s work.
It goes without saying that these are testing times - for people, businesses and, indeed, governments in both our countries.
The stagnant economy here in the United Kingdom and the turmoil in the eurozone are two substantive current challenges.
The United States is rooting for rapid recovery in the United Kingdom and a lasting solution to the troubling crisis in Europe.
It is obvious that the eurozone issues today are complex, intense, and accelerating - and that the future prosperity of the global economy rests on them being resolved.
In regards to the United States, I have noticed a trend among some authors, academics and commentators declaring that America is in decline.
The argument goes that a gradual but irreversible erosion of economic superiority, and the effects of two grueling wars is stripping the United States of its power, influence and authority.
Nothing could be further from the truth. I believe emphatically that America is not in decline.
Now, there’s no doubt that the global order is being reshaped and that America faces undeniable challenges.
But we have overcome similar circumstances before.
In the 1950s and 60s the fear was we were falling behind the Soviet Union in technology and ambition.
The 1970s brought recession and unemployment to America; combined with a loss of faith in our system after Vietnam and Watergate.
At the same time, Japan’s economy was taking off.
Then in the 1980s and 90s the tiger economies of East Asia produced an economic miracle of rapid growth unparalleled in modern history.
Each time America’s standing was being questioned. Each time America rose to the particular challenges it faced.
Time and time again the doom mongers and the defeatists were proven wrong. And I am confident that they will be again.
There are many reasons for my conclusion but three factors stand out.
First, our robust economy.
Second, our military prowess.
Third, our powerful international partnerships – including our special relationship with the United Kingdom.
Let me start with the resilience of the United States economy.
Despite being damaged by the most severe recession in more than 70 years, America is still – by far – the world’s largest economy.
Today the United States is responsible for one quarter of all global economic output, just as we have been for more than four decades.
Our economy has grown every quarter since mid-2009.
The trend lines continue to be strong as we look to keep this momentum going.
Unemployment fell to a rate of 8.1 percent last month – a three-year low, and down from a peak of 10 percent in October 2010.
More than four million private sector jobs have been created in the past two years.
There is a renewed consumer confidence - essential to a self-sustaining recovery.
People are no longer paying off their credit cards, they are spending again.
Our banks are well capitalized.
Lending to companies is rising by over 10 per cent a year.
America is still the No. 1 choice for foreign investment.
U.S. exports increased almost 16% last year to $2.1 trillion.
That is well on track to achieving America’s ambitious goal of doubling exports by 2015 under the National Export Initiative.
And manufacturing is making a magnificently strong comeback for the first time since the 1990s.
The United States has added nearly half a million manufacturing jobs since the beginning of 2010.
The revival in United States manufacturing is evidenced by General Electric bringing back operations from China and opening new plants in America.
The French company Michelin is investing $750 million in a new plant and factory expansion in South Carolina.
But there is no better example of the recovery in this sector than the United States automobile industry.
In 2008, 400,000 jobs across the car-making industry were lost.
Two of the big three manufacturers were on the brink of administration.
Today, GM is the No. 1 car-maker in the world, Chrysler is growing faster in America than any other car company, and Ford is posting record profits.
So while always guarding against complacency, we can say that the American economy is on the path to a return to full health - and getting stronger every day.
But our greatest and most enduring strengths come from the fundamentals of our economic approach.
Our philosophy is built on the whole-hearted belief in free trade.
While other nations – including some of the fast-growing emerging economies - still trade behind barriers, countries like the United States and the United Kingdom continue to embrace market-based principles.
BritishAmerican Business knows better than most the benefits of retaining a reciprocal, open trading environment.
Free trade means every country, every business, and even every individual, has a chance to compete.
That in turn creates the very jobs and wealth that lift people and communities out of poverty – both at home and abroad.
America has firmly rejected protectionist policies; reaffirming our commitment to open markets with a number of new international free trade agreements – and more in the works.
Another distinct advantage America enjoys is the entrepreneurial spirit embedded in our DNA.
Our faith in free enterprise helps stimulate creativity and innovation.
Today our companies – many of them small start-ups - are at the forefront of the high-growth, R&D-based industries of the future.
Industries such as information technologies, cyber-security, renewable energy, environmental goods and services, healthcare and biotechnology.
It’s a similar story here in the United Kingdom – and in particular in Scotland, which is a global leader in offshore and renewable energy production.
Another factor is the strength of America’s educational institutions.
Six of the top 10 universities in the world are located in the United States - the other four, by the way, are in the United Kingdom.
The excellence of our institutions helps us to cultivate some of the world’s best and brightest minds.
I am proud that America remains the No. 1 destination for foreign students.
We can claim more Nobel Prizes than any other country: 332 versus 118 for runner-up – again, the United Kingdom.
Collaborations between United States business and United States academic institutions are unmatched anywhere in the world.
Our solid recovery from the depths of the financial crisis, combined with our underlying strengths, are why I believe the United States will continue to be a vibrant and vital global economic power.
A strong economy, of course, underwrites our second enduring strength: the capability and reach of our military and intelligence services.
Clearly, we are in a period of transition; turning the page on a decade of war and at the same time restoring our national finances.
Despite what some might say, America is not dismantling its national defenses.
The truth is that in the wake of 9/11 and our response to it, our defense budget grew at an extraordinary pace.
In 2001 – the year of the attacks – annual defense spending was $319 billion. By 2011 it had more than doubled to $691 billion.
So as we look ahead to the next 10 years, we are revising and re-balancing our military priorities and defense spending accordingly.
But this adjustment is in no way going to undermine America as the foremost military power on earth.
Our defense budget was – and still is - larger than the next 10 countries combined.
Today, our strategy encompasses a more agile, flexible, rapidly deployable and technologically advanced military - complemented with strong alliances and multilateral cooperation.
Which brings me to America’s third core strength, which is the power of our partnerships.
Partnerships are essential in the 21st century.
Today’s challenges are too many, too immense, and too complex for one country to go it alone.
This administration is intent on expanding and intensifying United States engagement with other nations and with international institutions.
Not as a super-power believing unilateral force alone can solve everything, but as a super-partner using “smart power”.
As a result, the United States now has a range of formidable alliances on every continent.
We play a central role within the G8, G20, the World Bank, the IMF – and, of course, within the United Nations and NATO.
We are also forging new relationships across Asia-Pacific, which is fast-becoming a strategic and economic center of gravity.
But turning our face towards Asia-Pacific does not mean turning our back on Europe.
We are continuing to reinforce ties with our oldest and strongest allies, including our essential relationship with the United Kingdom.
As President Obama said during the Prime Minister’s recent visit, he has made strengthening this alliance one of his highest foreign policy priorities.
That is why he was able to declare that – today - the special relationship is “the strongest that it has ever been”.
As someone who sees it up close every working day I know that is true.
Yes, of course, America has enormous challenges.
Unemployment is stubbornly high.
Aggressive partisanship is causing dysfunction in Congress.
Geopolitical events such as the eurozone crisis, high oil prices, and the Arab Spring – to name a few - have serious implications.
So nothing I have said this evening is intended to sound either boastful or complacent.
We recognize that there is a lot of work to do to maintain our leadership in a turbulent world undergoing significant transformation.
But the lesson from history is that America has always shown the capacity to overcome its difficulties.
Our weaknesses pale in comparison to our resilience and our strengths.
In the past decade, we’ve endured the deadliest terrorist attacks in modern history; two conflicts that have lasted longer than both world wars; and a global financial crisis on scale unprecedented in a generation.
Through it all, America has retained its global leadership. And the sources of our influence are many and they are durable.
Our economy is unequaled.
Our military power unrivaled.
And our international partnerships unsurpassed.
That’s why tonight I can say with confidence that for every argument designed to show our decline, the reality points to the fact that ultimately our best days are still ahead.