Remarks of the President and Vice President to Silicon Valley

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E X E C U T I V EO F F I C EO FT H EP R E S I D E N T

THE WHITE HOUSE

Office of the Press Secretary

______________________________________________________________

For Immediate ReleaseFebruary 22, 1993

REMARKS BY THE PRESIDENT

AND VICE PRESIDENT TO

SILICON GRAPHICS EMPLOYEES

Silicon Graphics

Mountain View, California

10:00 A.M. PST

THE PRESIDENT:First of all, I want to thank you all for the

introduction to your wonderful company.I want to thank Ed and Ken --we

saw them last night with a number of other of the executives from Silicon

Valley -- people, many of them with whom I've worked for a good length of

time; many of whom the Vice President's known for a long time in

connection with his work on supercomputing and other issues.

We came here today for two reasons, and since mostly we just want

to listen to you I'll try to state this briefly.One reason was to pick

this setting to announce the implementation of the technology policy we

talked about in the campaign, as an expression of what we think the

national government's role is in creating a partnership with the private

sector to generate more of these kinds of companies, more technological

advances to keep the United States always on the cutting edge of change

and to try to make sure we'll be able to create a lot of good new jobs

for the future.

The second reason -- can I put that down?We're not ready yet

for this.The second reason I wanted to come here is, I think the

government ought to work like you do.(Applause.)And before that can

ever happen we have to be able to get the people, the Congress, and the

press who have to interpret all this to the people to imagine what we're

talking about.

I have, for example, the first state government in the country

that started a total quality management program in all the departments of

government, trying to figure out how we could reinvent the government.

And I basically believe my job as President is to try to adjust America

in good ways so that we can win in the 21st century, so that we can make

change our friend and not our enemy.

Ed said that you plan your new products knowing they'll be

obsolete within 12 to 18 months, and you want to be able to replace them.

We live in an era of constant change.And America's biggest problem, if

you look at it through that lens, is that for too many people change is

an enemy, not a friend.I mean, one reason you're all so happy is you

found a way to make change your friend, right?Diversity is a strength,

not a source of division, right?(Applause.)Change is a way to make

money, not throw people out of work, right?

If you decentralize and push decisions made down to the lowest

possible level you enable every employee to live up to the fullest of

their ability.And you don't make them -- by giving them a six-week

break every four years, you don't force them to make these sharp

divisions between your work life and your private life.It's sort of a

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seamless web.These are things we need to learn in America, and we need

to incorporate even into more traditional workplaces.

So I'd like to start -- we'll talk about the technology policy

later, and the Vice President, who had done so much work, will talk a lot

about the details at the end of this meeting.But I just want to start

by telling you that one of our missions -- in order to make this whole

thing work we're going to have to make the government work differently.

Example:We cut the White House staff by 25 percent to set a

standard for cutting inessential spending in the government.But the

work load of the White House is way up.We're getting all-time record

telephone calls and letters coming in, and we have to serve our

customers, too.Our customers are the people that put us there, and if

they have to wait three months for an answer to a letter, that's not

service.

But when we took office, I walked into the Oval Office -- it's

supposed to be the nerve center of the United States -- and we found

Jimmy Carter's telephone system.(Laughter.)All right.No speaker

phone, no conference calls, but anybody in the office could punch the

lighted button and listen to the President talk.(Laughter.)So that I

could have the conference call I didn't want but not the one I did.

(Laughter and applause.)

Then we went down into the basement where we found Lyndon

Johnson's switchboard.(Laughter.)True story -- where there were four

operators working from early morning till late at night -- literally,

when a phone would come and they'd say, "I want to talk to the Vice

President's office," they would pick up a little cord and push it into a

little hole.(Laughter.)That's today -- right?

We found procedures that were so bureaucratic and cumbersome for

procurement that Einstein couldn't figure them out, and all the offices

were organized in little closed boxes -- just the opposite of what you

see.

In our campaign, however -- we ran an organization in the

presidential campaign that was very much like this.Most decisions were

made in a great big room in morning meetings that we had our senior staff

in, but any 20-year-old volunteer who had a good idea could walk right in

and say, "here's my idea."Some of them were very good and we

incorporated them.

And we had a man named Ellis Mottur who helped us to put together

our technology policy who said -- he was one of our senior citizens; he

was in his 50s.(Laughter.)And he said, "I've been writing about high-

performance work organizations all my life.And this is the first one

I've ever worked in and it has no organizational chart.I can't figure

out what it looks like on paper, but it works."

The Vice President was making fun of me when we were getting

ready for the speech I gave Wednesday night to the Congress; it was like

making sausage.People were running in and out saying, put this in and

take this out.(Laughter.)But it worked.You know, it worked.

(Applause.)

So I want to hear from you, but I want you to know that we have

hired a person at the Office of Management and Budget who has done a lot

of work in creating new businesses and turning businesses around -- to

run the management part of that.We're trying to review all these

indictments that have been issued over the last several years about the

way the federal government is run.But I want you to know that I think a

major part of my missions is to literally change the way the national

government works, spends your tax dollars, so that we can invest more and

consume less and look toward the future.And that literally will

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require rethinking everything about the way the government operates.

The government operates so much to keep bad things from happening

that there's very little energy left in some places to make good things

happen.If you spend all your time trying to make sure nothing bad

happens there's very little time and money and human energy left to make

good things happen.We're going to try to pare away a lot of that

bureaucracy and speed up the decision-making process and modernize it.

And I know a lot of you can help.Technology is a part of that, but so

is organization and empowerment, which is something you've taught us

again today.And I thank you very much.(Applause.)

We want to do a question and answer now, and then the Vice

President is going to talk in more detail about our technology policy

later.But that's what we and Ed agreed to do.He's my boss today; I'm

doing what he -- (laughter.)So I wonder if any of you have a question

you want to ask us, or a comment you want to make.

Yes, go ahead.

QNow that Silicon Graphics has entered the supercomputer

arena, supercomputers are subject to very stringent and costly export

controls.Is part of your agenda to review the export control system,

and can industry count on export regulations that will keep pace with

technology advances in our changing world?

THE VICE PRESIDENT:Let me start off on that.As you may know,

the President appointed as the Deputy Secretary of Commerce John

Rollwagon who was the CEO at Cray.And he and Ron Brown, the Secretary

of Commerce, have been reviewing a lot of procedures for stimulating U.S.

exports around the world.And we're going to be a very export-oriented

administration.

However, we are also going to keep a close eye on the legitimate

concerns that have in the past limited the free export of some

technologies that can make a dramatic difference in the ability of a

Gaddafi or a Saddam Hussein to develop nuclear weapons or ICBMs.

Now, in some cases in the past, these legitimate concerns have

been interpreted and implemented in a way that has frustrated American

business unnecessarily.There are, for example, some software packages

that are available off the shelves in stores here that are, nevertheless,

prohibited from being exported.And sometimes that's a little bit

unrealistic.On the other hand, there are some in business who are

understandably so anxious to find new customers that they will not

necessarily pay as much attention as they should to what the customer

might use this new capacity for.And that's a legitimate role for

government, to say, hold on, the world will be a much more dangerous

place if we have 15 or 20 nuclear powers instead of five or six; and if

they have ICBMs and so forth.

So it's a balance that has to be struck very carefully.And

we're going to have a tough nonproliferation strategy while we promote

more exports.

THE PRESIDENT:If I might just add to that -- the short answer

to your question, of course, is yes, we're going to review this.And let

me give you one example.Ken told me last night at dinner that --he

said, if we export substantially the same product to the same person, if

we have to get one permit to do it we'll have to get a permit every time

we want to do the same thing over and over again.They always give it to

us, but we have to wait six months and it puts us behind the competitive

arc.Now, that's something that ought to be changed, and we'll try to

change that.

We also know that some of our export controls, rules and

regulations, are a function of the realities of the Cold War which aren't

there anymore.But what the Vice President was trying to say,

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and he said so well -- I just want to reemphasize -- our biggest security

problem in the future may well be the proliferation of nuclear and

nonnuclear, like biological and chemical weapons of mass destruction to

small, by our standards, countries with militant governments who may not

care what the damage to their own people could be.So that's something

we have to watch very closely.

But apart from that, we want to move this much more quickly and

we'll try to slash a lot of the time delays where we ought to be doing

these things.

QMr. President, Mr. Vice President, you've seen scientific

visualization in practice here.As a company we're also very interested

in ongoing research in high-performance computing and scientific

visualization.Can we expect to see a change in the national scientific

agenda that includes scientific visualization?Right now I don't see the

scientific visualization as being represented, for example, on the FCCSET

committee.

THE VICE PRESIDENT:It is a good question.One of the people

who flew out here with us for this event and for the release of the

technology policy in just a few minutes is Dr. Jack Gibbons, who is in

the back of the room -- the President's science advisor and head of the

Office of Science and Technology Policy.And he will be in charge of the

FCCSET process.That's an acronym that -- what does it stand for, Jack -

- the Federal Coordinating Council on Science and Engineering Technology.

And visualization will play a key role in the deliberations of the

FCCSET.

We were actually, believe it or not, talking about this a little

bit with Dr. Gibbons on the way over here.I had hearings one time where

a scientist used sort of technical terms that he then explained --it made

an impression on me.He said, if you tried to describe the human mind in

terms applicable to a computer you'd say we have a low bit rate but high

resolution.(Laughter.)Meaning --this is one of the few audiences I

can use that line with.(Laughter and applause.)

But he went on to explain what that means.When we try to absorb

information bit by bit, we don't have a huge capacity to do it.That's

why the telephone company, after extensive studies, decided that seven

numbers were the most that we could keep in short-term memory.And then

they added three more.(Laughter.)But if we can see lots of

information portrayed visually in a pattern or mosaic, where each bit of

data relates to all of the others, we can instantly absorb a lot of

information.We can all recognize the Milky Way, for example, even

though there are trillions of points of light, stars, and so forth.

And so the idea of incorporating visualization as a key component

of this strategy is one that we recognize as very important and we're

going to pursue it.

THE PRESIDENT:Let me just add one thing to that.First of all,

I told the crowd last night that the Vice President was the only person

ever to hold national office in America who knew what the gestalt of the

gigabit is.(Laughter.)But anyway -- and now we're going to get some

very funny articles out of this.They're going to make fun of us for

being policy wonks.(Laughter.)

Let me say something to sort of take this one step further.This

whole visualization movement that you have been a part of in your line of

work is going to merge in a very short time with the whole business in

traditional education theory called applied academics.We're now finding

with just sort of basic computer work in the elementary schools of our

country dramatic differences in learning curves among people who can see

the work they're doing as opposed to people who are supposed to read it.

And we're now finding that the IQs of young people who might take a

vocational track in school may not be

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all that different from kids that would stay in a traditional academic

track and wind up at Stanford, but their learning patterns are

dramatically different.

And there are some people -- this is a huge new discovery,

basically, that's coming into the whole business of traditional

educational theory.So someday what you're doing here will revolutionize

the basic teaching in our schools, starting at kindergarten and going

forward, so that the world of work and the world of education will begin

to be merged backwards all the way to the beginning.And it's going to

be, I think, the most important thing we've ever done.And very

important for proving that in a diverse population all people can reach

very high levels of achievement.

MR. MCCRACKEN:The President and Vice President have also come

here today to present a new national technology policy for the country.

Do you want to --

THE PRESIDENT:We'll answer some more questions.(Applause.)

I'm going to forego my time and just let him announce the policy, so we

can hear some more questions.Got to give the man equal time, I know.

(Laughter.)

QI'd just like to say, I didn't vote for you; I wish I

had.(Laughter.)

THE PRESIDENT:I hope you feel that way four years from now.

(Laughter and applause.)

QWell, that's actually why I'm standing up -- I really see

a possibility in what you stand for and I really think this is why you

were elected.That you say you stand for change; you said that during

your campaign.I think the company believed that.They're counting on

you -- I'm nervous -- and I just want to say we're really with the

country behind you.I think that's why the statistics are saying that

we're willing to have our taxes increased, we're willing to have cuts,

because you say you're really going to do it this time and decrease the

deficit.I hope to God that you do.We need it not just for this

present time, but by your actually fulfilling on this it will make a

major change in how we feel about government; that when government says

they're going to make a difference and they really come through, it will

make a huge impact for the future.And I'm really personally behind you

all the way.I wish I'd voted for you.(Applause.)

THE PRESIDENT:Thank you.I really appreciate that.Let me

make one comment in response if I might.I think it's important -- and

you can help others understand this -- to understand why we have to

reduce the deficit, which is something that is normally not done when

unemployment is high.And unemployment is still too high.Even though

we're in an economic recovery, most of our recovery is due to high

productivity from firms that, in turn, this time are not hiring new

people for all kinds of reasons.

And we have to reduce the deficit for two reasons:Number one,

if we don't -- we're already spending 15 percent of your tax money just

to pay interest on past debt.If we don't change present patterns we'll

be over 20 cents by the year 2000.That's money we should be spending on

education and technology in the future.

Number two, the more money we take out of the pool of funds for

borrowing the more expensive it is for companies like this and other

companies that have to go into the markets and borrow to borrow.Just

since the election, since we made it clear we were going to try to bring

the deficit down, long-term interest rates have dropped .7 of one

percent.That is a huge savings for everybody that is going to borrow

money or that has a variable interest rate on a loan, whether it's a

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home mortgage or a business loan or a car loan or whatever.That's

important.

The second thing we're trying to do that I know you will also

appreciate is to shift the balance of money we do spend more away from

consumption toward investment.Investments in education technology,

environmental cleanup, and converting from a defense to a domestic

economy.That one of the bizarre things that happened to us in the '80s

is that we increased the deficit first through defenses expenses and then

through exploding health care costs and increasing interest payments.

But we reduced our investments in the future and the things that make us

richer.

So those are the changes we're trying to effect.Let me just

make one other point.I will not support raising anybody's taxes unless

budget cuts also pass.(Applause.)

QOne of the things that Silicon Graphics has been really

successful is selling into the international markets, approximately 50

percent of our revenues come internationally, including a substantial

market in Japan.What types of programs does your administration plan to

help the high-growth companies of the '90s sell to the international

markets?

THE PRESIDENT:Two things.First of all, we intend to try to

open new markets and new markets in our region.That is, I believe that

high-growth companies are going to -- to keep America growing, I believe

high-growth companies are going to have to sell south of the border more.

And to do that we have to negotiate trade agreements that will help to

raise incomes in those countries even as we are growing.That's why I

support, with some extra agreements, the NAFTA agreement; and why I hope

we can have an agreement with Chile, and hope we can have an agreement

with other countries like Argentina that are making a serious effort to

build market economies.Because we want to build new markets for all of

you.

With Japan, I think what we have to do is to try to continue to

help more companies figure out how to do business there and keep pushing

them to open their markets.I don't want to close American markets to

Japanese products, but it is the only nation with which we have a

persistent and unchanging structural deficit.

The product deficit with Japan is not $43 billion, which is our

overall trade deficit, it is actually about $60 billion in product, in

manufactured production.So we have -- we've got a lot of problems we

have to work out there.

With Europe, we sometimes are in surplus, we're sometimes in

deficit, but it's a floating thing.So it's more or less in balance.

With developing nations like Taiwan and Korea, those countries had big

surpluses with us, but as they became richer they brought them down, so

that we're more or less in balance.We have our biggest trade

relationship with Canada and we're more or less in balance.

So we have to work on this Japanese issue while trying to help

more of you get involved.Let me make one final comment on that.I

think we should devote more government resources to helping small and

medium-size companies figure out how to trade, because that's what the

Germans do with such great success and why they're one of the great

exporters of the world.They don't waste a lot of money on the real big

companies that have already figured it out, but they have extra efforts

for small and medium-size companies to get them to think global from the

beginning of their endeavors.And I think we're going to have to do more

of that.

QIn addition to concerns about the economy, Silicon

Graphics employees are also concerned about the environment.Your

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economic plan does a great job of promoting R