THE WHITE HOUSE
Office of the Press Secretary
(New York, New York)
________________________________________________________________________
For Immediate Release January 15, 1998
PRESS BRIEFING
THE REVEREND JESSE JACKSON
Windows on the World
World Trade Center
New York, New York
4:08 P.M. EST
REVEREND JACKSON: Questions.
Q I wonder if you could share your thoughts on the problems -- the investigation of Alexis Herman.
REVEREND JACKSON: I don't know anything about it. I don't.
Let me say, since you're searching for something to talk about, Wolf, what I'm really working on -- In this conference entitled "Expanding the Marketplace: Key to Economic Growth" even with the tremendous growth, wealth, prosperity, it's been mostly vertical. Thus, the gap between the wealthy and the workers is at a historic length. There must be more horizontal growth of the wealth and the prosperity.
And another dimension is that we must look upon these urban areas, more focused African American and Hispanic, as a market. If we think in market terms, then Wall Street has missed a great opportunity to build market in areas that fit all the prerequisites for market. People occupy choice land. More trained people than most third world countries. Collectively, $600 billion gross spendable income. Markets closer, more safe and more secure. And yet these markets are largely under-utilized or undeveloped.
So look at Manhattan. Last night we had Donald Trump here, as well as Charlie Rangel and investors. I said, why -- you are the largest investor on the lower side of Manhattan, why not the upper side? Same island between the same two rivers connected by the same bridges -- what's happening? He said, well, one thing is that the same tax incentives for build on 57th Street apply to 125th. Therefore, there are no more advantages, while more impediments. That should be a signal of some punctuation of a challenge that could turn into a possibility.
In Harlem, for example, there are no automotive dealerships. So I said to Jack Nassau (sp) today, from Ford, who is the heir apparent at Ford, and to Roy Gilliam (sp) from General Motors, you guys are speaking about competing with the Asian auto market exports, how can you leave a community with as many car drivers and owners as the area north of Central Park with a dealership. So we challenged them to establish dealerships there.
There is no grocery food chain there -- there are grocery chain operators here. In part because of lack of market confidence there are substantially no pension funds invested there. And so we seek to corral the private sector to look at vast areas of undeveloped market and under-utilized talent, and then challenge the government to begin to match in some formula, in some ratio, private sector investment.
Lastly, if you were 10 miles high, as I said in my speech today, looking down, and you saw a vast green area and a vast brown area or scorched zone, if that scorched area was topsoil and not sand, you'd figure out some way to irrigate and expand the green, because as sure as the wind blows the brown will encroach upon the green. So we stand to profit more by expanding the green than we would do by paying to not expand.
Again, I'm convinced the private sector must be driven by enlightened economic interests and reasonable profit to make that move. And when Wall Street sends that signal it's going to affect the government's disposition as well.
Q What did you think of the President's comments that the role of government should be really quite limited in all of this?
REVEREND JACKSON: Well, frankly, the government serves as a catalyst. It's a step in the major direction. There is basic political stability in the community -- you can have open, free and fair elections, and the government right now is providing far more infrastructure and investment in the form of mostly aid and limited trade, then the private sector -- the private sector is the force of the most wealth, the most flexibility, in many ways the most ingenuity and creativity -- it does not unleash that energy on developing the market under its nose. How could the Big Three in Detroit lose 30 percent of its market to foreign car manufacturers unless it did not relate to in some reciprocal trade fashion its market?
We know what's about to happen now in the Korean meltdown. They plan to export their way out of that crisis. They buy 8,000 U.S. cars a year, a 1.2 car owners there, they're making $2 million a year. They intend to export their way out of this hole. If, in fact, the Big Three automakers and the African American and Hispanic markets are trading partners, then that gives us some strength to keep that bailout balanced enough so as not to be the victims of the dumping of cars and steel and cheap labor. But it means we must operate in the future as partners.
Q You've been here in a very visible way today, a three-day conference. Can you see any results from your presence on Wall Street?
REVEREND JACKSON: I think one of the evidences -- we have now bought stock in 50 corporations and that access to shareholders' meetings and the access to heads of corporations has begun to create major reevaluation within those companies.
For example, these companies know that they need a diverse, educated work force which should come out of our schools to relate to a diverse consumer market, that is high volume consumers. So in a real sense, Wall Street cannot embrace Prop 209 because Prop 209 reduces the amount of educated people, reduces diversity in the workplace. If it reduces our ability to relate to a diverse consumer market and reduces high-volume consumers, it's anti-business. So diversity really is pro-growth, because it expands the base of educated people. It expands the base of the work force, expands its ability to relate to a diverse market and produce high-volume consumers.
So my point is that corporate America cannot lay back under the guise of conservatism and silence and not speak for its own interests in education. If you continue to cut back on the educational opportunities that we now see taking place in California, it's going to hurt business. Thirty-five percent of our work force is white male. If women and people of color were not being trained, we would either have to slow down production or import labor. And so clearly, if Wall Street is pro-growth, it's for diversity. It's for affirmative action. It's for inclusion.
Furthermore, our being here as exposed a gross weakness in Wall Street. That is to say, the extent to which it has been basically an all-white male closed arrangement, behind that wall, like behind the Wall of China, it has missed a whole body of investors. For many women and people of color take their savings, put them in the bank or the S&L, as opposed to putting them into the stock market. By not having a diverse body of stockbrokers, they do not have the capacity to penetrate the broader American market. And so if Wall Street is to grow, it too must expand the walls and build bridges to the broader emerging markets in America.
There is no emerging market that spends $600 billion a year that is as close as, as big as, as educated as the emerging black and Hispanic markets in this country. And we say to Wall Street, let's engage in reciprocal trading relationships, stop the restraint of trade practices that leads to a trade deficit and an imbalance of trade. There is no race gap. There is no race gap. There is an investment gap. There is a trade gap. There is the historical legal gap that creates an imbalance of opportunities. And now we want to close that bridge and do so by expanding -- by evening the playing field and expanding the marketplace.
And every time there has been these traumatic moves about race inclusion, you let Jackie Robinson in, its expands the baseball market. You let women in through Title IX, it expands the basketball market. Whenever you can show evidence of inclusion, you also see evidence of growth.
Now, I hope that the President's initiative on trying to have racial reconciliation will deal with the structural gap. And business must take the initiative on closing the structural gap. It will not be enough to have a well-meaning dialogue, but business must close the opportunity and the investment gap. In that way, we heal the breach and we make this a more perfect union.
Q Representative Gephardt said recently that the White House and moderate Democrats didn't seem to have an activist enough agenda for the Democratic Party. Do you agree with that? And what would you like to see Democrats do?
REVEREND JACKSON: Well, Democrats and the White House all too often have adjusted to our environment, and we at Rainbow/Push are serving as the catalyst. After all, the Democrats did not have an active enough agenda in Montgomery in 1995, but we served as a catalyst. And the best of leadership responded to the legitimacy of our quest.
The party was not activist enough in 1963 and we marched on Washington. But they responded because Dr. King made the choice between Bull Connor and Dr. King. The party did not have an activist enough agenda on the right to vote. I remember Dr. King saying to Lyndon Johnson, after getting the Nobel Peace Prize, we thank you, Dr. King for doing great work, and we honor you. He said, well, thank you, Mr. Johnson, but we deserve the right to vote. And Johnson said, you know, I like you very much and I respect you very much, but I can't give you the right to vote unilaterally. I can't, and if I were to do it, we would lose the South for 25 years. He said, but the bad news -- I can't, but the Congress won't.
And so neither the White House nor the Congress was activist enough. But in Selma we served as catalysts by taking our case to the broader public. And Johnson had the choice between George Wallace and King, he chose Dr. King's -- history.
In some sense, our being here on Wall Street is a catalyst, saying, expand the private sector, inclusion is the key to economic growth, use under-used talent, develop undeveloped talent as the alternatives to jails, expand the marketplace, use untapped financial investors. This idea is so contagious, you're going to see -- leaders, catch up with this movement.
We know, for example -- I just talked with him about several development formulas -- South Africa is a $100 million fund. That group has more latitude for South African targeted investment than there is such a fund here. Alderman Rostenkowski came from Poland a few years ago, and they needed some development formula. We made available to Poland something called the Polish-American Development Bank, 40-year loans at three-quarters of 1 percent, first payment due in 10 years. It was a development formula.
So we're now looking at all these various development formulas that we financed around the world, and saying let's invert those formulas and put them on targeted zones in this country and see them as investments. When our companies go to Korea, Taiwan, North, South Vietnam, there was no infrastructure. They helped to build it. They build manufacturing plants. They build facilities. They use pension funds for that. The populations there are less literate than we are. The amount of money they spend is less than we spend.
So we're not saying -- look, you heard him talk a lot today about the fund -- about diverse -- use of foreign development. We say, good, let's apply some of those funding formulas to expand the marketplace among the biggest, safest, more secure development market in the world, which is here at home.
Q Was your principal reason for calling this conference your concern that Wall Street brokerage firms are not diverse enough in their employment? Or was that Wall Street generally is not providing capital to minority-owned businesses and neighborhoods that need greater capital? I'm not clear --
REVEREND JACKSON: Well, there is a combination of reasons. First of all, the Community Reinvestment Act has not been fully enforced, and that has left these vast areas without capital. We have not effectively marshaled some small portion of pension funds, maybe less than 3 percent, and perhaps built some kind of American Development Bank to use that money in a targeted way for expanding the markets, for example.
There is a dearth of fair gender and ethnic employment on Wall Street, but the worst part, Wall Street is missing opportunities for growing markets. They are missing opportunity for investors with money. They're missing opportunities for areas where -- you see, if we chose not to invest in Indonesia, we would miss growth. We would not inherit any of these social byproducts -- investing.
Here, if we don't invest and grow, we pay to not grow. And since five of every six jobs is in the private sector, since the wealth is in the private sector, and the flexibility is in the private sector, indeed the power is in the private sector, the unregulated power, then this sector must take a significant initiative on the green-lining of America. Corporate America stands to gain.
If this were Gingrich here, for example, why is his incentive minimized to do this? Because his power is based upon a relatively small district, and if he can recycle his allies -- he does not want any expansion, any annexation, he does not want growth. He wants to control his base. And so if he can feed his base a cultural bait of security and some high-paying jobs, and if he can feel Wall Street -- I'll give you some tax breaks and get some financial support there, then he grows in power.
Wall Street cannot settle for a small recycled base. Wall Street and corporate America need growth. It needs a diverse educated population. It needs high-volume consumers. And so Wall Street will choke on conservatism. It must be progressive and expansive in inclusion to maintain sustained growth.
Q Reverend Jackson, you say that minority America invests a lot as far as retail purchasing on a consistent basis in this country. Why is it that Wall Street and the private sector has not looked at that and said, hey, maybe we should have incorporated minorities in our structure a long time ago?
REVEREND JACKSON: I think it's a vision deficit disorder. And I call it cultural blindness. We tend to recycle the habits of our culture without much courage and will to risk breaking out of that cycle. For example, one could ask, why didn't -- why did baseball owners miss Satchel Page, Josh Gibson and all those baseball players? They were there. They used to come to New York and play. They just could not -- the culture -- they settled for a small cultural circle. Once Branch Rickey (sp) took the cataracts off the eyes they said, oh, there's Jackie Robinson there, but so is Hank Aaron, and Willie Mays and Roberto Clemente. So once the cultural blindness came off, you begin to see a kind of expansion and growth. We saw the same thing in the football and basketball arena. These are thriving, growing industries because of diversity.
Or why couldn't the Southern politicians see the disadvantages to the South of the Cotton Curtain? All of them kept the Cotton Curtain up, but when the Cotton Curtain came down Jimmy Carter could become President from South Georgia, Clinton could become President from Arkansas, Gore could be on the ticket from Tennessee. Two Southerners on one ticket, nobody felt offended because the walls had been brought down. Or why couldn't those who sought to keep walls up in Atlanta see that they could never have the Olympics behind the Cotton Curtain, or the Atlanta Braves behind the Cotton Curtain? I call it a vision deficit disorder.
In South Africa, the same force that fought so hard to keep Mandela in jail, that fought so hard to ban the ANC, with the walls down South Africa is about to become the economic capital of Africa, because it in fact has the most economic infrastructure, the most technology, and the most ability to exploit resources on the continent. And so it would seem in retrospect absurd that they would keep -- they thought security was in apartheid, which is a closed market; security really is in growth.
And so a part of what the civil rights struggle has done historically has been to pull down these walls and build bridges. And I say Wall Street, it has missed much money, much talent and many investors because it has in fact been behind that wall.
Q Reverend Jackson, you chose to hold this conference on Martin Luther King's birthday. Do you see this as the next step in -- is the emphasis on investment and diversity sort of the next step in what might have been called the civil rights movement?
REVEREND JACKSON: You know, the first assignment he gave me in 1966 was to direct Operation Bread Basket, the economic arm of the organization. At that time we negotiated with national -- the first time blacks had ever built a chain store on Chicago's south side. We negotiated with Adlai Stevenson who was then state treasurer, for the first time, to help alter the law to put money in minority banks. We negotiated with all the dealerships, all the manufacturers to get black dealers for the very first time, between 1966 and 1968. Black advertising agencies like Berel (sp) came out of that period. Byron Lewis came out of that period. Magazines like Earl Graves came out of that period. Much of our work in Bread Basket was focused on the private sector. But we always knew there was some balance between private sector economic opportunity and public sector infrastructure, protected by public laws -- there was always that tension.
As I look at our struggle to make this a more perfect union, if I were writing a freedom symphony -- as I said earlier today -- and there were four movements in that symphony, the first movement would be to end slavery.
Let's not forget, African Americans help to subsidize our economy. For 250 years we were listed as commodities on the Stock Exchange. Many of your older investment firms here began in the South as stock brokering firms, and shipping firms shipping slaves as commodities and picking cotton in the South and trading it here on Wall Street. I mean, for the first 250 years it was illegal for us to trade; we were not citizens -- a trade gap.
The next 100 years in what we call the Great Giveaway, the Homestead Act gave away millions of acres of land -- a kind of white affirmative action program. The land grant colleges, we could not attend them. On that land was the oil wells, the Railroad Trust Act -- we gave away millions of acres of land for railroad development for private economy. The government did the research on the radio industry and the TV industry; we could not be a part of that.
That's a 350-year quantifiable trade gap. So if one phase was to end slavery, movement A, movement B, public accommodations -- Dr. King, '64 -- movement three, the right to vote; movement four, Wall Street -- the capital of capital; the place from which the resources flow to invest here and around the world.
Q Reverend Jackson, the President stressed in his remarks that there is only so much the federal government can do. Later today he's going to announce $120 million grant to New York to hire more cops. Is that, do you think, the most efficient -- given that the crime rate here has already dropped substantially, do you think that's the most efficient way the federal government can spend money to encourage investment in the kind of communities you're talking about?
REVEREND JACKSON: Well, of course, I would rather see a fund set up -- there's a $100 million African Development Fund; there was an $8 million fund that Giuliani and Patakis scrapped once they came in. If you took the same amount of money to invest in the African Development Fund or the Polish American Development Fund, and got the private sector to match it, say, three or four to one, and then you begin to put premiums on chain stores that built in the red-line zone and train people there -- that put premiums on automotive companies that put dealerships or manufacturing plants in the red-line zone, you would then begin to raise the tax base which would be a factor on the quality of education.
Right now what our cops are really doing, they're being hired to transport underdeveloped and under-utilized youth to Ryker's Island, which is the most expensive, non-productive institution in the city, indeed in the state. The number one growth industry in upstate New York is the jailed industrial complex. And so, clearly, we're going to pay a bigger price for less returns on jails and police, and get a far greater return on our investment if it's a front-side investment on economic development and educational development.
If you built a major plant, say, in the uptown section of Manhattan, now we would have to import the labor because our youth are not being trained to do it. And that, obviously, should be the real emphasis, in my judgment.
Q Sir, you said you wanted to appeal to Wall Street's enlightened self-interest. Don't you think by the end of the day Wall Street is going to be more persuaded by enforcement power of the laws, either for civil action, lawsuits or enforcement actions of the federal government, if there is discrimination?
REVEREND JACKSON: It's a combination of things. I mean, some -- they may move an inch on the morality of it. They may move on a scale of 10. They may move two or three inches because of legal enforcement if there is a watchdog. And by and large, civil rights agencies are not staffed to do the watchdog, and they realize that. It takes about seven years to get to an EEOC suit, for example -- 100,000 backlogged EEOCs -- there's not much enforcement there.
They may move two or three inches temporarily on a boycott if they are embarrassed and their image is tarnished. But they tend to move in a more sustained way on enlightened economic interest when they see profitability. That's the case they can make with their shareholders. That's the case they can make at bonus time.
And I say we have a plan to challenge them to look at safer, more secure, wealthier market than those that they pursue abroad. We want to be competitive in the global marketplace.
Q Reverend Jackson, who owns these different strategies and incentives, and the like? Basically, aren't you paying businesses to do business in a place where they would normally not go?
REVEREND JACKSON: I'm sorry? I didn't hear you.
Q Are you basically paying businesses to do business in a community or in an area where they normally would not go? Let's say, if you have them an empowerment zone incentive or a tax break. Basically, aren't' you kind of paying them?
REVEREND JACKSON: Well, it's not unusual for cities to provide tax incentives or subsidies to get a stadium built there, or an industrial park there. It's not unusual for countries to have incentives for the relocation of plants in their countries and they promise them land, and workers and market. And so the market is competitive. And if we are red-lined out of the competition for what's in the market, we obviously cannot grow.
We say if the market is looking for valuable land, then look at between East and Hudson River, look at St. Louis on the Mississippi River, look at New Orleans on the Gulf of Mexico, look at Houston, look at South Side Chicago. We're saying we have land, we're saying we have trained, under-utilized people, we're saying we have labor, we're saying that we have high-volume consumers, we're saying we are accessible and we are American-ready. Therefore, invest here. And when there's investment, and expansion and growth, there are all winners.
We're saying, let us -- in other words, don't shackle us, deny us the right to compete in the global marketplace for capital for the growth. For example, one thing right now we're working on is that -- a minority business has to be 51 percent owned to go public -- to get public capital. Well, that does not apply to the majority community. I mean, GM does not have to have 51 percent ownership to go public. I mean, that was designed at first to stop front companies. And while it was a paternalistic measure to protect us from fronts, it's even more devastating -- suppose a company has 30 percent ownership. If you have that much control in a public company, that's enough to attract capital and grow. So there are even strings or chains that limit our ability to have access to that money.
Now, not to mention on Wall Street, 1,500 brokers got a million-dollar bonus at Christmas time, and there are so few brokers until we cannot get our share. But more than that, maybe if Wall Street was using the whole playing field, not just a limited number, there would be more bonuses for more people and more growth.
Q Are you happy with the progress of the President's race initiative?
REVEREND JACKSON: Well, the race initiative is a moral concern and it is a legitimate one, but there is something missing in it. The assumption is that there is a race gap that can be closed with good dialogue and better understanding. The fact is, there is no race gap. There is an investment gap. There is a historical legal gap. There is a trade deficit based upon restraint of trade. Those are structural gaps that must be closed with structural procedures.
We offer a plan that's mutually beneficial. This coming -- well, last weekend you saw Pittsburgh play Denver and San Francisco play Green Bay. And you had whites and blacks knocking each other out and drawing blood and fighting in the mud. And you had fans on both sides, white and black, drinking beer, eating popcorn and eating hot dogs. And with all of that emotions and physical fighting, there was no racial incidents.
Why? You had blacks in Green Bay pulling against blacks in San Francisco. You had whites in San Francisco pulling against whites in Green Bay? Why was race not even an issue? Because whenever the playing field is even and the rules are public and the goals are the same height, it's no longer an issue. If, however, blacks had to run 12 yards for a first down and whites had to run eight yards, if blacks had to run 120 yards and whites had to run 80 yards because they inherited some yards, you would have tension there.
That's why evening the playing field of economic opportunity and educational opportunity addresses a structural gap. As I said earlier today, what's missing is, the President has taken the initiative economically and made Wall Street the wealthiest it has ever been, and yet those who have been the biggest beneficiaries have not assumed their role in the dialogue or to heal the breach.
Here's what I'm trying to say. If I were a quarterback, and I once was, and I ran a bootleg, I would want my blockers in front of me. If he's out speaking that we must reconcile and the biggest beneficiaries are just laying back getting bonuses watching him get hit, they're not pulling their weight. They must be at this table.
As I said earlier today before you guys got there, they remind one time of two drunks on the railroad track drinking wine. And one wino said, after he got real high, I think I'll buy this railroad. The other wino said, thank God, I want to sell it. Have a drink on me. Now, they were dialoguing, but until the man who owns the railroad and controls the train schedules is at the table, there is no capacity to alter anything.
So we're saying, those who own the railroad and the trains, who have the capital, who have the training, they must be at that table and convince the majority of whites that diversity is in their interest. Title 9, for example -- the majority of beneficiaries of affirmative action are white women, and women of other hues, plus people of color. So it's a majority, not a minority, issue.
The second point is, WNBA is seen as a private initiative, come from the government. Because of Title 9, you must now split the scholarships 50 percent, 50 percent women, quota, by the way. And so young girls can get scholarships -- basketball, track, and swimming and the like. And then you get women athletic team, women coaches, and sports directors, women sports announcers, women's sportswear, women in the Olympics, -- a WNBA. WNBA has not reduced the fans for the NBA, it means you simply must now buy a basketball for your daughter and your son. Inclusion has expanded the marketplace. That's the case that we continue to make. And that's what's happening here.
Q You have a two-pronged argument here that you want Wall Street to both create access to capital and jobs for people. Do you think they're going to respond by doing both, or are they more likely to choose one or the other?
REVEREND JACKSON: Wall Street will grow through inclusion. If it includes more women, it will have more women investors. If Wall Street includes the emerging black and brown markets as brokers, as investors, Wall Street will expand. If Wall Street uses its resources to help us mobilize pension funds dedicated to development, Wall Street will grow, labor will grow, the undeveloped will become developed, the under-utilized will become utilized, and we'll have a stronger economy.
You must know that Wall Street stands to gain, and Main Street stands to gain, and those around the corner stand to gain if the economy expands and is inclusive and uses the capital and the human resource of people historically it has had cultural blindness to block it from, my last point.
Q Reverend Jackson, President Clinton says that he wants to introduce fast track legislation. What are your thoughts on fast track and reintroducing it this year?
REVEREND JACKSON: Well, obviously if you have fast track and labor is not and environmentalists are not in the train, they'll lie on the track and block it. The reason why we have John Sweeney coming here tomorrow morning, the next time that we expand we should have labor, environmentalists, and business in the same room to work out the deal where business gets profits, labor gets secure jobs, and we all can breathe free.
If we expand with shared growth, we can expand the tracks. But the idea of business running over labor and labor blocking business creates lots of pain, lots of tension, and no winners. I say, let's have a new approach to expanding trade so it is horizontal as well as vertical, and it's shared.
Thank you very much.
END 4:47 P.M. EST