`I Think We Can Run A Better Ship'

On June 29, six days before his scheduled departure for Europe, President Clinton met with BUSINESS WEEK in the Oval Office for an interview on his international agenda. Fielding questions from Senior Editor Lee Walczak and White House Correspondent Susan B. Garland, Clinton discussed the upcoming economic summit, the dollar, and other key


On whether the dollar's dive will cast a pall over the Naples summit:

I'm concerned about it. But when you look at where we are, [the U.S.] has 75% of the GDP [growth] of the G-7 [Group of Seven], almost 100% of the new jobs, and the second-lowest deficit as a percentage of GDP. We are not indifferent to the value of our currency. But we think that the fundamental strength in our economy is something that should inspire confidence. If the past is any indication, the market will sort itself out at an appropriate level.

On prospects for the economic summit:

For all the currency talk, growth in the G-7 [countries] is higher than it was last year. So there will be some optimism. I see this meeting as putting in place a framework for where the advanced countries will be going in the 21st century.

On ways the allies can create jobs:

The G-7 can accommodate more growth without inflation. It takes substantial growth to start generating new employment, particularly in countries where wages are high and benefits costly. And every country needs to examine the flexibility of its workforce.

On the run-up in interest rates and whether it signals dismay at Clinton- omics:

I can't answer that. If someone had told me 18 months ago that you'd have 3.4 million new jobs, no inflation, and three years of declining deficits, [markets] would have been euphoric....And I know that when interest rates started up, the chairman of the Federal Reserve said it was a tribute to the strength of the American economy.

On reports he has lost his temper over recent Fed interest-rate hikes:

That's not true. We have shown great discipline in not commenting on Fed actions. I want steady, sustained growth. I think that's what Chairman [Alan] Greenspan wants.

On the slow progress in gaining a sweeping market-access deal with Japan:

First of all, I never wanted to use the dollar to reduce the trade deficit. I don't think that a country can devalue its way to prosperity. What you want is a dollar value set by reasonable market conditions. What's happened in Japan is that when the economy stopped growing, that had a big impact on purchasing by consumers and therefore on imports. And with the political situation changing, the opportunity for sustained policy change hasn't been there. That's just something we've got to face.

On his White House staff shakeup:

Last year, our Administration had [one of the] most successful years ever. However, we are now facing an even more daunting agenda: trying to pass health care, the crime bill, welfare reform, campaign financing and lobbying reform, and GATT in a highly charged political environment. That is going to require a very high level of discipline and all the political skills we can muster.

[New Chief of Staff] Leon Panetta has the best combination of skills in dealing with Congress and the press and is able to run a very tight ship. One of the reasons I relate to him is that when he was a member of Congress, he represented a New Democratic constituency, entrepreneurs who wanted activist government but not a bigger one. So he's philosophically attuned to the forces that brought me here.

On whether he bears some blame for the disorganized White House:

I am ultimately responsible for the failings of the White House. But it is important that you draw a distinction between disorganization, which is dysfunction, and creative tension and debate. I like to hear different points of view. A lot of Presidents have gotten in trouble by having well-

organized processes that had no honest debate about them. I don't intend to let that happen. But I think we can run a better ship.

On prospects for health-care reform:

Once we get bills on the floor [of Congress], there's a good chance we can get a bill that sets up a mechanism for all Americans to be covered, for disciplining costs, and for banning unfair insurance practices. I'm not changing my position [on universal coverage]. I don't want to get into a Jesuitical debate on what constitutes that. And I don't want to sign a fraud.

On predictions that the Republicans will score big gains in the mid-term


In the 20th century there has just been one mid-term election where the party of the President has not lost seats. I believe if we can keep our economic recovery going and keep hammering on the achievements, we'll do reasonably well--maybe even surprisingly well.

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