Home | En Español | Contact Us | A to Z 

Secretary Cuomo's Remarks to the
Chamber of Commerce

Long Beach, California
Monday, September 25, 2000

Mr. Murray, thank you very much for having me here today. Thank you, Mayor Beverly O'Neill, The Mayor has the formula that is going to take Long Beach forward - the formula that in many ways is needed to take many cities forward. Because Long Beach has seen probably one of the truest examples of what's actually going on in this economy. Long Beach has taken a difficult period and flipped it. You get a sense of the energy, and the motion, and the momentum that Long Beach has.

That is about leadership. I can tell you about many cities all across the country. The one variable that you cannot replicate is local leadership. That spirit, and that energy - that is Beverly O'Neill. That is the people in this room. That's why Long Beach is making the great strides that it's making.

I want to begin with that point. Because I believe Long Beach in many ways can be a model of what we're going through. When we look at this economy, we tend to talk about how well the national economy is doing, the strongest economy in history. With this President in the White House for eight years, it seems every six months the economic advisors come to the President and say, Mr. President, this is the best the economy can do. For sure, this is the best. You can't get any better than this combination of factors -- interest, unemployment, et cetera. But then six months later, the same advisors come back and say, no, this time, for sure, is the best that we can do.

Net, the economy overall is doing great. But that is a net number. What it doesn't show are the cities who are struggling in the transformation. We talk about the new economy as an information-based, high-tech economy. That's great if you were born in the high-tech economy. But you have many cities that were doing something else. That older industry stopped, or downsized, or moved overseas. Then those cities have to make a radical transformation into this new economy.

It is easier said than done. Long Beach is doing that extraordinarily well. I literally have seen it. When I first started working with the Mayor, we were talking about the challenges. We were talking about what is right for a city that, basically, was involved in the defense industry -- McDonnell Douglas, and they're downsizing, they're moving. The jobs are coming down -- 50,000 jobs.

How do you handle this transition? What do you do? What replaces the economy that was? How do you retrofit, if you will, the economy going forward? Cities all across the nation are struggling with it. But very few are doing it as well as you are doing it. The three T's. The three T's, the Mayor would say. Technology, Trade, Tourism. That is the economy of tomorrow. Good. Now you have to make it happen.

I think one of the lessons is that the private sector alone cannot do this. It is the private sector in combination with government as the facilitator, as the promoter, that is really the equation that's going to work. Why? Because in many ways the private sector itself creates the issues and it is the private sector that is doing the transformation. That is what is shifting the paradigm. You felt it with the defense industry.

You know, the City of Akron says it painfully clearly. The City of Akron did one thing, they made tires in Akron. That's what they did. That was the economy. There was no such thing as diversification. They made tires. You went into the City of Akron, you were welcomed with a very big tire. 'Welcome to Akron, tire capital of the United States'. You went to the Chamber of Commerce, they had a little tire on their lapels. The bottom of their shoes were tire treads. It was a city that loved their tires. Then, one day, they wake up and the tire industry moved overseas. Moved to China, downsized, wherever it went for the cost of labor. Of course, for the City of Akron, what do you now do? You wake up one morning and literally you're out of business.

Akron went through a very difficult period where there was a sense of loss. We worked very hard with the City of Akron and came up with a new vision. It turns out that there was an element in the manufacture of tires for the polymers. Polymer research and polymer development is very important in plastics design, rubber - over plastics, and has many other applications. Akron is now going to retrofit and become the polymer capital of the world. They have a new vision and they're going to do this and we're going to put up a big sign of a polymer as soon as I figure out exactly what it is. This is going to be the new vision and they're going to go forward with this vision.

But this is much easier said than done. It is the private sector that creates that issue. Even the ordinary growth of the private sector can create issues and challenges. You look at the affordable housing crisis in California. It is unbelievable. I was looking at the numbers coming out. You can't find affordable housing. About half the renters can't pay fair market rent. What the market is charging. How can that be?

It's actually a product of the strong economy. The economy is so strong, it's driving up the rent. We don't build subsidized housing anymore. We basically went out of that business as the federal government. Why? Because there wasn't a need and we said we'll turn it over to the private sector.

But what's happening now is the private sector's creating more jobs than we have apartment units. California's creating all those jobs - 399,000 jobs - at the same time that we created 147,000 housing units. That shortfall is the affordable housing crisis. So the private sector alone isn't going to do it.

The private sector, working in partnership with government - then we have a formula that's going to work - that assumes that government does its side of the bargain. I'm very aware of that.

I'm not saying that by itself, government is the solution. Many times in the past government was more of a problem, frankly, than part of the solution. I head a department that was one of the more challenged federal departments, the Department of Housing and Urban Development. They wanted to eliminate it four or five years ago when I took over. Why? Because the sense was it was more of a negative than a positive. More of a liability than an asset.

We said give us a chance.

Let us go in there and redesign government literally from the ground up. Today HUD is 20 percent smaller and does 30 percent more. Our main subdivision was something called FHA - Federal Housing Administration. The FHA does mortgage insurance - homeowner's insurance. When we took over, FHA was 5,000 employees. Today it is just under 3,000 employees. Ten years ago, FHA had a value of minus $2 billion. Now it's valued at more than $16 billion.

So you can make government work if you bring intelligent business principles and you're willing to go when you make the tough decisions -- you can make government work.

We also changed the policies behind it. When you think of government in this arena, economic development, you have two extreme points of view, in my opinion. You have extreme conservative, let's call it, and extreme liberal schools of thought.

The extreme conservative would say if the private market isn't addressing it, you can't address it. The conservative market would say, look, if Akron is out of business, son, Akron's out of business. Who are you to tamper with the private market? You can't correct this. The private market has a wisdom and when the private market leaves you behind, then you're left behind.

Yes -- but then you would lose Akron, and then you would lose Toledo, and then you would lose Buffalo, and then you would lose Rochester.

The extreme liberal intervention - say, look, the private market left this behind. We, government, must now step in and provide our own economy because the private sector isn't. Now you have something which was basically a government-sponsored economy. Instead of having a housing market, you have public housing. Instead of having people who work, you have a welfare system and food stamps. Neither extreme works.

The moderate position -- the best of both worlds -- was government working with the private sector, with the private sector in the lead. Can we promote and facilitate the private sector? For sure we can. Can we offer economic incentives that will bring the private sector to places where they wouldn't go? Sure, we can. Can you work on retrofitting Long Beach and say, look, we'll offer low interest loans because - was only doing economic transfer measures. So have the federal government offer a low interest loan to spur the economic development in the area. But always using the private sector as a lead.

That is the synthesis that you have perfected here in Long Beach. That's what we're working on nationwide. You just do it better than most other places have done it. That's why it's been an honor to work with you and to learn from you.

I also think, given your example, this economy is going to continue to get better. I've heard all the praises, I've heard all the experts. I'm sure we're going to have our dips and our valleys. I don't believe that any of the cycles have died and gone away, but I believe the overall trajectory is going to be strong. All the numbers indicate that, all the trends indicate that. The economy can be a great engine to pull this nation to a place even higher. I really believe that we haven't even begun to tap our potential.

You think we're doing well with this stock market and 22 million new jobs, the lowest unemployment rate in 30 years? Imagine what we can do when we take this model and take this creativity and we bring this to all the places that are left behind. We bring it to every city. We bring it to all the people who are not working because, for all our strength, remember we still have a big part of this country that is still in the shadow of this economy.

Your job is done when the 13 percent of the people who live in poverty in Long Beach are working people. That's when your job is done.

This nation's job is done when the story of transformation that is Long Beach is brought to Akron, and is brought to Boise, and is brought to all those cities that are left behind.

My job as the Housing Secretary is done when all the people who are in public housing are in schools learning and doing the best they can with their God given talent.

You think this is a strong nation? Imagine when we bring everyone into the game. When we bring our women into the workforce -- dollar for dollar, man for man - not 73 cents to a man's dollar. Imagine when we get our unemployed and we bring them in. Imagine when we finally do something about the problem of children who grow up in poverty.

For all our strengths, today we have one out of six children in poverty. But when we have the wisdom to say let's use this moment in history, let's use this strong economy - stronger than ever - highest surplus in history. Let's really invest in this country in a way we've never done before. Not foolishly. Intelligently. Like Long Beach has done. Imagine what we can do. You here have demonstrated a model possibility that the nation should notice.

Thank you very much.

Content Archived: January 20, 2009

FOIA Privacy Web Policies and Important Links [logo: Fair Housing and 

Equal Opportunity]
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Telephone: (202) 708-1112 TTY: (202) 708-1455