Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

• Economic Development and Commerce (EDC) - trade relations between the U.S. and Canada; information technology as an economic development tool for small businesses; and removing barriers to electronic commerce
• Human Resources (HR) - mentoring and professional sports; promoting responsible fatherhood: programs that work; and recommendations from the Second National Fatherhood Summit
• Natural Resources (NR) - emergency preparedness for America's communities; American agriculture: looking forward; and roundtable discussion of perspectives on national energy policy
• Other Governors' Session - Governors and Corporate Fellows roundtable discussions
• 1997-98 Chair Ohio Gov. George Voinovich's Initiative - Investing in America’s Future: Working Harder, Working Smarter
• Plenary Session Discussion Subjects - Governing in a digital age; state initiatives to better serve children from birth to age 3; state competition in the global economy; and the impact of world changes on the United States economy and foreign policy

Points of Interest:

During presentations on government in the digital age, it was emphasized that although government transactions were similar in many respects to transactions in the private sector, only a fraction of those actions were available online despite growing citizen demand and the potential for cost savings. Even when government agencies had established websites, those sites were "first generation," providing information but not delivering service.

Concern was expressed about the potential for state revenue to dry up as more people purchased goods and services over the Internet, absent sales tax. Governors talked about the potential impact on those who—because they could not afford computers—would carry a disproportionate tax burden, as well as the question of whether and when the Internet and Internet transactions would and should be taxed.

Governors were presented with the results of a two-year survey conducted by NGA of state early childhood activities. Of the 49 states and territories responding:

• 42 Governors had mentioned the importance of early childhood development in their State of the State addresses.
• 46 states had passed legislation improving early childhood services.
• 42 states had sponsored or cosponsored community events focused on raising awareness about the importance of early childhood development.
• 41 states had identified or were developing goals and measurable indicators of success for improving the condition of young children and families.
• 42 states and territories were participating in the Hallmark Immunization Greeting Card Program [see points of interest during the 1997 annual meeting] or a similar immunization effort.
• 42 states were coordinating services and strengthening the capacity of local communities to address the needs of their youngest children.

Three presenters told of creative ways in which childhood development, and awareness of its importance, were being promoted. Ervin Duggan of the Public Broadcasting Service told Governors about a four-year-old project called Ready to Learn that had been partnered by the Corporation for Public Broadcasting, Congress, and the U.S. Department of Education to broadcast at least seven to nine hours a day of high-quality children's educational programming. A total of 135 public TV stations in 40 states were reaching out to their communities with a minimum of 10 training workshops annually that gave intensive training to parents, teachers, and day care providers in ways of enriching the lives of small children.

Murray Gaylord of the Ad Council noted that his organization, which had been created by President Franklin D. Roosevelt to support the war effort, was responsible for public service ads from "loose lips sink ships" during World War II to the recent "friends don't let friends drive drunk." As part of a 10-year commitment to focus on children, the Ad Council already had 36 national campaigns in progress, covering issues such as infant immunization, learning disabilities, child abuse, and early childhood development. Gaylord referred to a project that the Ad Council had partnered with Governor George Voinovich of Ohio called "Help Me Grow," which in just one month had resulted in a 17-percent increase in public awareness in Ohio of the importance of healthy brain development in children.

John Fahey of the National Geographic Society (NGS) said that in celebration of the 10-year anniversary of the Society's education foundation, NGS was donating an updated world map to all 113,000 public and private elementary, middle, and high schools in the country.

A plenary session was devoted to discussion of the effects of globalization on the U.S. and on state governments. Pulitzer Prize winner Daniel Yergin said that in the mid-20^th Century, governments grew in response to market failure during the Depression. But beginning in the 1980s, new faith in market credibility and deregulation came about as the result of such factors as the collapse of the Soviet Union; the Asian economic miracle; the integration of markets, trade, investment, capital markets, and foreign exchange markets; and new technologies that were interconnecting the world. Accordingly, government was becoming less of an active intervenor and more of an umpire—a rule setter, as it were, helping to make the game work. But the permanence of this change would depend on whether: (1) market oriented systems led to employment and growth; (2) it proved fair or resulted instead in a concentration of wealth and abuse of power; (3) unease with the global economy—manifested by such phenomena as fundamentalism in the Middle East—could be overcome; (4) environmental concerns were met; and (5) an aging population looked more to government to meet its needs. Yergin stressed the importance of states establishing investment-friendly environments that helped create links for businesses to the global market.

Lawrence Summers, Deputy Secretary of the Treasury, addressed U.S. economic relations with Asian nations. He said that our stock market's performance was increasingly tied to markets abroad, as a result of which the current financial crisis in Asia presented a significant a threat to U.S. security. American exports to economies in crisis were down nearly one-third, which had a particularly negative impact on states like California, half of whose exports went to Asia. Consequently, a goal of the Clinton Administration was to help restore stability and growth in Asia and prevent contagion of the financial crisis, in keeping with which Summers urged the Governors to endorse continuing U.S. support to the International Monetary Fund. In response to a question about how multinationals based in the United States could be made to show first loyalty to the U.S. and our workers, Summers said that any steps to force loyalty could result in firms relocating. Moreover, he expressed the view that external investment was ultimately beneficial to the U.S. economy, because multinationals required the importation of American equipment and products as they penetrated other markets.

Former Secretary of State Henry Kissinger argued that never before had there been an information system by which resources could be shifted around the world with such speed and in such quantity. The result was to create a category of investments that were heavily and perhaps exclusively speculative, and a series of financial possibilities geared to short-term profits, which had the potential for harming the world economy.

Memorable Quotes:

Lawrence Summers, Deputy Secretary of the Treasury, said: "...I am convinced that when somebody writes the history of this period, the last 15 years of the 20^th century...remarkable as it may seem right now, the end of the Cold War will be the second story in that history book. And the first story will be that this was the period when the age of the market started three billion people around the world, half of humanity...on a period of rapid growth and a surge towards modernization, an event that potentially ranks in economic history with the Renaissance and the Industrial Revolution."

Summers also said: "...increasingly national economics is becoming like gubernatorial economics...just as no state in the United States would prosper if our national economy were suffering grievously, so too, no national economy will continually prosper if the global economy is suffering."

Henry Kissinger, former Secretary of State, said: "We are now so powerful that we may have the illusion that foreign policy is not a key problem and that we can focus entirely on domestic issues. And it is said that that's what our public wants...But I want to remind you of one thing. Historically democratic publics have not forgiven their leaders for disasters that occurred even when they resulted from policies the public seemed to want. Chamberlain was the most popular man in England in 1938 and was finished in 1940. So in many respects, in all respects I would say, America is the hope of the world. But one of our challenges is expressed in a [Chinese] proverb...When there is turmoil under the heaven, little problems are dealt with as if they were big problems, and big problems are not dealt with at all. When there is order under the heavens, big problems are reduced to little problems, and little problems should not obsess us. My point is let's make sure [first]...that we're dealing with big problems and secondly, that we're reducing them to little problems."

Selected Policy Positions Adopted:
(1) Calling for increased funding for the Airport Improvement program (AIP) and for a guarantee that all revenue dedicated to the Airport and Airway Trust Fund be spent each year for its intended purpose; (2) calling for the federal government to permit state programs controlling the pollution associated with animal feeding operations to operate in lieu of any new federal requirements; (3) recommending that the U.S. not sign or ratify any international agreement mandating new commitments to reduce or limit greenhouse gas emissions unless developing nations were also required to make reductions in the same compliance period; and (4) in keeping with the Governors' commitment to the National Education Goals, setting forth principles for the federal role in education, including supporting the state focus on schools, helping states focus on schools with the greatest need, letting parents be teachers, providing flexibility to experiment and build on reform efforts, and strengthening the commitment to research and information collection and dissemination.