OPENING REMARKS FROM "PUTTING AMERICA BACK TO WORK" CONFERENCE

AUSTIN – Mr. Pauken’s opening remarks at the Texas Workforce Conference on “Putting America Back to Work” held in Austin last week. Among the speakers at the conference were Gov. Perry, Lt. Gov. Dewhurst, PUC Chairman Barry Smitherman, Boone Pickens, Clayton Williams, Mike Greene and former Texas Secretary of State Phil Wilson. The Conference focused on developing an economic strategy to get our country out of this national economic recession. As we prepare for the inauguration of a new President, it is critical that we engage in a serious discussion and debate as to how best to get our economy back on the right track.

Chairman Tom Pauken

Both outgoing and incoming Washington policymakers seem to believe that short term stimulus spending packages, a bailout of troubled Wall St. financial institutions (institutions, by the way, that bear a large share of the blame for our current credit crisis), and setting interest rates at an artificially low level will get us out of this national recession. Which begs the question: If cheap money and credit excess got us into this mess in the first place, how can we expect that even cheaper money and greater credit excess will make things better in the long run?

As John Riley of Cornerstone Investment Services notes, “the primary problem in the United States is too much debt. (Debt to GDP is over 400%. In 1930, it was just under 300%. In 1980, it was 91%) Consumers, corporations, and the state and Federal governments are loaded beyond any previous levels with debt.”

But, that is not the case with the state government here in Texas.

One of the issues we will be focusing on at this conference is “The Texas Economic Model.” Thanks to the leadership of Gov. Rick Perry, Lt. Governor David Dewhurst, and our Texas legislative leaders, Texas is better positioned economically than any other large state in our country to handle these difficult economic times. When many states raised taxes and went on spending sprees during the boom times, Gov. Perry and the Texas Legislature resisted the temptation to tax and spend as if there were no tomorrow. As a result, Texas has a substantial budget surplus while California is facing a $40 billion budget deficit.

As our speakers discuss that Texas Economic Model during the course of this conference, isn’t it one that other states should consider adopting, rather than running to the federal government and asking for a massive bailout? And, isn’t the Texas Economic Model of fiscal prudence, low taxes, and policies to encourage job creation one that our nation at large should follow? You will hear from Gov. Perry and other state leaders on that subject today.

You also will hear shortly from some of our leading energy experts in the country on how we can put in place policies to lessen our dependence on foreign energy. A strategy to further that objective makes sense on national security grounds, to help reduce our unsustainable trade deficits, and to encourage the creation of good jobs here in the United States.

We cannot allow ourselves to be held hostage by continuing to depend on unstable sources of energy, in the Middle East, and in countries such as energy-rich Venezuela where an anti-American President, Hugo Chavez (a Fidel Castro want to be) holds sway.

We also will examine other important issues which are critical to getting our economy back on the right track. How do we ever get federal spending under control before it is too late? Or, are we all Keynesians now who don’t need to worry about the long term consequences of massive budget deficits at the federal level?

How do we rebuild our U.S manufacturing sector which at the national level is in a depression and even in Texas is barely treading water? I would argue that, if the United States intends to remain the strongest economy in the world, it must revitalize its manufacturing base and put Main Street producers back in charge of our private sector.

Common sense tells me that we need to return to our core economic principles if we are “to put America back to work.” That means the encouragement of fiscal responsibility at every level of government but, most particularly at the national level. It demands the preservation of a sound dollar and a new business tax system which rewards savings and investment in the United States, rather than one that encourages the leveraging of companies with high levels of corporate debt while outsourcing good jobs abroad. We need to focus on developing an educational system which teaches our young people the basics along with the skills that our employers actually need. We also must re-kindle that strong work ethic which once was such a distinctive feature of the American character whereby individuals took pride in their work and in using the talents that God gave them.

With the example we have set here in Texas, we need to encourage the politicians in Washington to pay more attention to the Texas economic model. The Wall St. Journal has editorialized that other states should “be more like Texas.” Let me take that one step further and add that our national government should be more like our Texas government.