U.S. Secretary of Commerce Gina M. Raimondo will reflect on economic growth, innovation, and American competitiveness in conversation with Professor Betsey Stevenson. September, 2023.
0:00:01.9 Celeste Watkins-Hayes: Good afternoon. Very much enjoying the Ford School energy. Welcome. Welcome, welcome. I am Celeste Watkins-Hayes, the Joan and Sanford Weill Dean of the Gerald R. Ford School of Public Policy here at the University of Michigan. And I'm delighted to welcome all of you here this afternoon for today's Policy Talks event.
0:00:26.5 CW: Please join me in giving a warm Ford School welcome to our special guest, Secretary of US Commerce, Gina Raimondo.
0:00:45.7 CW: Before we bring her out, I want a welcome Congresswoman Debbie Dingell, I see joining us in the audience today. As I said to Debbie, you show up. Thank you so much for your presence here.
0:01:02.6 CW: Also, former Deputy Secretary of State Steve Biegun is here. Welcome back to The Ford School.
0:01:12.5 CW: Steve taught with us last year as a Towsley Policymaker in Residence. So welcome back, welcome back.
0:01:16.8 CW: So it's wonderful to see our Ford School community gathered here, students, faculty and staff, and a big welcome back to our 50 plus alumni in the room, back in Ann Arbor for homecoming weekend.
0:01:30.2 CW: Welcome as well to those of you from across the University of Michigan campus and beyond, who are tuning in online with special thanks to our media partners at Detroit Public Television and PBS Books.
0:01:41.9 CW: Today's conversation will be facilitated by Ford School Professor Betsey Stevenson, a widely published labor economist and former chief economist of the US Department of Labor.
0:01:53.2 CW: Professor Stevenson served as a member of the Council of Economic Advisors from 2013 to 2015, where she advised President Obama on social policy, labor market and trade issues, and she is a member of our faculty here at the Ford School.
0:02:10.1 CW: Our esteemed guest today is the Honorable Gina M. Raimondo, the 40th US Secretary of Commerce who was sworn in by Vice President Kamala Harris on March 3rd, 2021. She was formerly the Governor of Rhode Island and its first woman governor, sworn into office in January 2015, and winning a second term in 2018. She also served as chair of the Democratic Governors Association in 2019.
0:02:41.8 CW: In preparation for today's event, we invited our students to engage over the past two weeks, submitting questions they'd wanna hear addressed on the issues they care most about.
0:02:50.1 Betsey Stevenson: We've received dozens of thoughtful questions on a variety of topics that fall under the broad purview of the DOC, and Professor Stevenson will weave those questions into the conversation.
0:03:02.8 CW: So with that, please join me in welcoming Professor Stevenson and today's very special guest, US Secretary of Commerce, Gina Raimondo.
0:03:29.4 BS: This is amazing. Thank you for being here. I know everybody's excited to see you.
0:03:34.0 Gina M. Raimondo: It's amazing to be here.
0:03:37.4 BS: So I wanted to start by saying that I have always thought Secretary of Commerce might be the hardest job, because Commerce has such a diverse collection of agencies in it, such that one minute you might be talking with NOAA about climate change, then you gotta pivot really quickly to talking about broadband and telecommunications, or challenges with export controls under BIS, and then you're thinking about how American businesses can control.
0:04:05.3 BS: Is there a golden thread you use to pull all of Commerce together?
0:04:12.1 GR: It's a great question. So first, let me say how excited I am to be here, and I guess it's homecoming. Is this homecoming? So go blue. Big time, go blue.
0:04:28.0 GR: I also would be remiss if I didn't take just a second to acknowledge the folks who are fighting for their rights and benefits at the UAW. President has said he's standing with them, and I think about it, Ford, GM, UAW, American symbols. Iconic symbols of greatness.
0:04:53.2 GR: So we hope that they stay at the table on both sides, 247, until we get a win-win solution here, because we need it and the workers deserve what they're looking for, which is decent wages.
0:05:07.5 GR: On your question. So when I first got the job at Commerce, it is very hard to find a through line. Just for everyone here, I run the Office of Space Commerce, so I'm in charge of air traffic control for space. I run NOAA. If you don't know anything about red snapper or right whales, Rice's whales, fish habitat, salmon, I'm your woman.
0:05:37.9 GR: Seriously, I have thousands of people who work for me in NOAA. We handle all broadband and spectrum issues, wireless spectrum ORAN, 5G, security in the network. We have...
0:05:50.8 GR: I don't know if you guys know what export controls are, but keeping our most sophisticated semiconductors out of the hands of China, we do that. We handle all export promotion, I mean it's 56,000 people doing just about everything.
0:06:04.9 GR: So when I got there, I said, "Okay Gina, how am I gonna lead this organization?" Because the only thing that a leader has to do is set a vision that motivates people to go for it every day.
0:06:16.5 GR: And where I landed was US competitiveness. Really, the through line that I decided to draw was everything we're doing should be focused on enhancing America's ability to compete in the world.
0:06:31.6 GR: So providing every American with affordable internet, which is something we're doing, allows us to compete. You can't compete in the world if right now one-third of people who live in rural America don't have access to the internet. Think about that.
0:06:48.6 GR: Depriving China of our most sophisticated technology into their military allows us to compete. Investing in chips and making semiconductors again in America, allows America to compete in the thick of the AI work.
0:07:03.1 GR: So that's the through line we've decided to draw, is US competitiveness. And I think it's working, by the way. When I hear people, no matter what they're... 'Cause in NOAA they work on climate, you can't compete as a country if you don't deal with the issues of climate. So that's the through line we've chosen.
0:07:24.7 BS: I really loved that you shared the bit about the right whale, because I once found a giant whale bone on my beach and I had to get a special permit from commerce that allowed me to keep the bone because it was not an endangered whale that I might have slaughtered. [chuckle]
0:07:38.8 GR: And I promise you some Commerce Secretary did a hearing about that.
0:07:45.8 GR: Because whenever I go before Congress for a hearing about, say semiconductors, inevitably the first or second question is about salmon, red snapper, right whale, Rice's whale.
0:07:57.8 BS: That's awesome. Well, you'd let us straight to a question that a lot of people wanted to talk about, which is trade. So your through line is American competitiveness. We got a lot of questions about trade, and I group them into two bunches. Who should we be trading with, is one bunch. And then how do we make sure everybody is benefiting from trade?
0:08:17.9 BS: Let's start with the first bucket, because everywhere I go, people are talking about near-shoring, friend shoring and diversifying trade. You went to China, so [chuckle] what do you think?
0:08:32.5 BS: Who should we be trading with? What are your takeaways from your trip through China?
0:08:36.9 GR: I think trade is great as long as everyone plays by the same rules. And in the case of China, they do not play by the rules. And other countries don't play by the rules.
0:08:46.9 GR: So Chinese government massively over-subsidizes steel, aluminum semiconductors and then dumps that cheap steel into the global market, brings prices down for everyone. That's not fair. Puts American workers out of work. We need a vibrant steel industry in the United States. You cannot be a great country if you can't make basic things like steel and aluminum and chips.
0:09:13.5 GR: And so if China were, or any country for that matter, were to play by the rules, then you can have trade which doesn't hurt workers and doesn't disadvantage American businesses.
0:09:30.1 GR: Actually, a lot of what I do in commerce, we do both. We help companies promote their trade, for example, I try to help a lot of small companies to learn how to trade, but we're also on the protect side.
0:09:42.4 GR: So we will level what's called the countervailing duty, which I realize it's like 4 o'clock on a Friday before homecoming, so you don't wanna be hearing about countervailing duty, but essentially it's a little tariff. So if we find out China, Vietnam, etcetera, is subsidizing something, we put a tariff on it to level the playing field for US workers.
0:10:07.8 GR: With respect to friend-shoring and such, here's how I think about it. I took this job because the president asked me to work with him to rebuild American manufacturing. That's why I took the job.
0:10:20.8 GR: I come from a manufacturing family, I come from a manufacturing state. You cannot be a great country unless you have enough manufacturing. But that being said, we cannot make everything in America. So I think we have to figure out what must we make here, like chips and sometimes that requires a subsidy.
0:10:41.2 GR: And then for other things, like we do, when you talk about friend-shoring, we have to find places that share our values, that play by the rules, that treat workers fairly, that respect the environment, and look, those are friends that we're talking about, to work with them.
0:11:05.1 GR: And so I'm spending a lot more time in the Indo-Pacific actually, like Indonesia, Malaysia, Vietnam. Today actually, before I came here, I was on the phone with the new prime minister of Thailand to say, "Raise your labor standards, raise your worker standards, have transparency, play by the rules, and then we can work together in our supply chains." I mean, we learned all a big lesson about supply chains. If you buy 100% of things from one country, that's tough.
0:11:33.5 GR: So it's just as much about creating jobs, but also about portfolios. It's a portfolio. It's like the simple thing, don't put all your eggs in one basket. I remember being, I used to be the governor of Rhode Island. Is anyone from Rhode Island? Yay, where are you from?
0:11:52.3 S?: I'm from East Greenwich.
0:11:53.8 GR: Love that.
0:11:58.0 GR: But I remember in the dark days of COVID, I personally was on the phone in the middle of the night, calling mostly China companies to get ventilators. 'Cause they were all made in China. We couldn't access it. And that's a risk we can't afford, so that's why we have to go to friends to do some off-shoring.
0:12:20.9 BS: I really like that you highlighted the diverse diversification of trade, you don't want it all in one place, 'cause as an economist, that's what I think is really important.
0:12:28.6 BS: But it's interesting when I hear people talk about friends, sometimes they're talking about national security, but you talked about people doing the right thing. Is there a bit of both?
0:12:40.6 GR: Absolutely. As you say, I was just in China. And it was a productive visit, I went saying we wanna ratchet down the tension and trade where we can, by the way, trade where we can. But what I was clear about is there's no compromise on national security.
0:13:00.4 GR: So our most sophisticated technology, we can't trade with them. Period. If we find that they are stealing our intellectual property or getting into our telecom networks, well, you gotta shut that down. So yes, absolutely.
0:13:20.2 BS: So are there things that you think we can do better to make sure that we compensate losers from trade? Or that we make sure everybody, every American is actually benefiting from trade?
0:13:37.2 GR: So again, I grew up in Rhode Island, as I said. When I was a kid growing up in Rhode Island in the '70s, jewelry manufacturing was at a peak. And everyone, including my dad and all of his friends, had a jewelry manufacturing job.
0:13:56.0 GR: And then the jobs all went away, all went to China and these guys, mostly guys, were kind of stuck. My Dad was 56 at the time, and it was really hard for my family. And there was no training for him. He was 56. We were like solidly middle class, working class. He couldn't retire at 56. It was brutal.
0:14:21.9 GR: So if there's going to be dislocation for workers, we have to be there for them. Train them, provide pathways into another kind of job. And historically we haven't done a good job of that. As a country, we have programs to do that, but I think if we honestly assess the effectiveness of those programs, they haven't been very effective. Again, I saw it as governor in my state.
0:14:53.2 GR: So what has tended to happen is people are out of luck, out of a job. And good luck with that. So yes, I think we have to do a much, much, much better job. By the way, I think the same thing as it relates to technology.
0:15:06.0 BS: I was just about to ask you that. I was like, I think I have to skip over to now talk about it. Because what do we do about the people who are losing jobs due to technology?
0:15:13.4 GR: We better be there for them. Look, I learned this lesson also in the pandemic. Governor of Rhode Island in the pandemic, a state of a million people. At one point in time, I had 110,000 Rhode Islanders collecting unemployment. That's crazy.
0:15:34.5 GR: And disproportionately women, by the way, because people who were put out of work were retail, hospitality. I put them out of work. I closed all the restaurants, we closed all the retail. Right?
0:15:46.9 GR: And I spent a lot of time personally talking to women in their mid-40s or 50s who had spent their whole lives working at say, JCPenney, Macy's as clerks. Or maybe at a bank or maybe... You know? And those jobs were going away, not just because of the pandemic, they then went away permanently. They closed due to the pandemic, but then they went away.
0:16:15.0 GR: And you just look at, they happen to all be women, these guys are afraid, they want to work, they're smart, they deserve to work, but they've only ever known one thing, they don't have a college degree and they need and deserve help.
0:16:32.7 GR: So what we did, I used about $50 million of our federal stimulus money and created an applied job training initiative. When you're governor you call every CEO and they all take your call, and I said, "I want a guarantee of hiring a certain number of workers who go through this particular training, if they graduate."
0:16:56.5 GR: And that's what we did. And we had thousands, I can't remember now, seven or 8000 people we were able to put to work, former bar tenders or retail clerks or bank tellers who became cyber technicians, digital backbone jobs, inside sales for Salesforce or Adobe or Microsoft.
0:17:19.7 GR: That's hard work. That is easy to say and hard to do. It requires employer commitment, and it requires really purposeful intentional like apprenticeships and job training. But we have to do it at scale because otherwise, whether it's AI or digitization or online sales, people are gonna be put out of work.
0:17:44.6 GR: And I am not, I am not... This is not President Biden's view or etcetera, my view is, I am not in favor of universal basic income. Give people jobs and pay them decent wages. And to say we can't figure that out, I think is a cop out.
0:18:03.2 BS: I'm glad you raised this, 'cause you're essentially pointing to some lessons learned from the pandemic, and here in the post-pandemic, one of my favorite things is the tremendous return of people into the labor force.
0:18:17.5 BS: You talked about how women were the ones who lost all the jobs. We now have prime age women participating in the labor force at all time high rates, way above anything they were doing prior to the pandemic. One lesson might be state training programs helped work to make those transitions.
0:18:36.6 BS: What else are you hearing when you go out and talk to CEOs? Has flexibility helped bring people back into the labor force? How are they seeing this from the employer side? What brought all these people back to work so quickly, and how do we imitate that going forward?
0:18:54.7 GR: Yeah, excellent question. I don't know that I have any answer. So I think flexibility is a huge piece of the puzzle, particularly for women, but I think that yeah, CEOs will tell you that.
0:19:12.2 GR: When I talk to CEOS though, they're mostly frustrated that they can't hire fast enough.
0:19:17.8 BS: Maybe that's part of the answer. How we get people back to work faster is having CEOs that can't hire fast enough. [chuckle]
0:19:27.1 GR: Yeah. You know the labor market better than I do, but we are still at historic lows of unemployment. I think now, you can correct me, but it's like 10 and a half million job openings in the United States. And when you talk to CEOs they'll tell you, "We could grow faster if we could hire faster," but this job skills mismatch, I think is quite real.
0:19:53.2 GR: In other words, folks that are looking for a job now, by and large, don't have the skills for the jobs that are open. And that's why I think it's time for a wholesale dramatic change in transformation in the way we educate and train people in America.
0:20:14.1 GR: Much more investments in career and technical education in high school, much broader use of apprenticeships beyond just the building trades, but for technical jobs. And much better job helping people to continue to be educated in their career. Because that's what you hear most from CEOs. You know, I have...
0:20:39.3 GR: One thing I did as secretary working with the Department of Defense, is we set up a cyber security technician apprenticeship program. Mostly because the DOD couldn't hire enough cyber techs. And very quickly, within months after an intentional program, we were able to find, train and get placed, I think almost 10,000 cyber apprentices, non college, four-year college degree people.
0:21:07.3 GR: So anyway, I think of this is something that we gotta find the people who are under-employed, find people who are underemployed and figure out a way to get them to be operating at the top of their skill level.
0:21:26.2 BS: Let's talk a little bit more directly about the CHIPS and Science Act. I wanted to ask, this administration clearly has a desire to reinvigorate American manufacturing, you said President Biden asked you take this job to do that.
0:21:48.1 BS: I think you've already sort of told us why you think that's so important, but I guess I wanted to give you a chance to say why you think that's so important, but then what else do we do to make... What are the other kinds of fields that we need to be preparing people for?
0:22:03.4 BS: And what are the other kinds of policies that you're working on or that are part of commerce, to try to make sure that people are getting the skills they need, and employers and workers are able to find each other?
0:22:18.2 GR: One thing I would say is, with this incredibly tight labor market, employers are finally willing to hire differently. And that has changed, I've seen a big change, even in the past few years.
0:22:32.7 GR: So for example, five or six years ago, CEOs would complain that they can't hire enough people, but yet they would use the same checklist for hiring people. Four-year college degree, five years of experience, regardless of whether that was actually relevant. Now, they're finally... Because they are so desperate, they're innovating themselves.
0:23:04.8 GR: So half of the the equation is training people differently, the other half is hiring differently and opening your mind to hiring someone who has competency, but not a traditional resume. And so I'm finally seeing that and that's very exciting.
0:23:18.9 GR: On the manufacturing side, look with semiconductors and certain other areas, it's about national security as much as it is about creating jobs in America. I mentioned the steel industry.
0:23:32.8 GR: If you look at certain products, penicillin, active pharmaceutical ingredients, semiconductors and others, we are really almost dangerously dependent on like one or two other countries for 90 or 100% of the supply. You never do that even in your own personal finances, like rely so heavily on one thing, particularly for things so critical, steel and chips and such.
0:24:04.1 GR: Right now the United States makes 0% of the most sophisticated semiconductors in America. 93% we buy from Taiwan and the rest from Korea. So again, I believe in manufacturing jobs, but that is a red hot national security risk that we have to address, and that's part of why I'm so focused on it.
0:24:32.1 BS: So what steps can we take or are we taking to address our comparative lack of elements that are critical in chip production?
0:24:42.3 GR: Well, you know, look, the truth of it is, a lot of this is a pure subsidy, it's about 30% to 40% more expensive to build one of these huge factories in the United States relative to Taiwan and China, Malaysia. So some of it is just a subsidy to build them.
0:25:03.3 GR: The other is, we have to massively as a country, massively increase the number of chemists, engineers, computer scientists, material scientists, technicians that we produce.
0:25:22.5 GR: So everyone here is too young to remember this, but in the years after President Kennedy said, "We're gonna put a man on the moon," this country tripled the number of chemists it produced and quadrupled the number of engineers it produced.
0:25:39.2 GR: There have been moments in our history where the country has mobilized behind a goal and achieved great things. In that case the goal was putting somebody on the moon, and then the education system and the research and development followed.
0:25:54.0 GR: In this case, we want to produce more chips in the United States. The education system has to file in behind that, behind that vision, to triple and quadruple the number of engineers, scientists and some people that we produce. Because that is what will enable us to achieve the goal. Otherwise we'll have empty fabs and no trained people to work in them.
0:26:23.4 GR: Right now, I think there's 100,000 open unfilled semiconductor technician spots in the country, and those are jobs you can have after college with some... Excuse me, after high school with some training.
0:26:40.1 GR: Also girls, there's no girls and women in these jobs.
0:26:46.3 BS: Yeah.
0:26:46.9 GR: I'm telling you right now, we will not achieve this moonshot or any moonshot, whatever your passion is, climate, solving climate, etcetera, unless we figure out a way to get girls into these jobs. Including construction jobs.
0:27:09.1 BS: I love that you went there, and so I had to chase pivot a little bit. Because now I wanna ask, okay, so you guys put child care into CHIPS, which people thought was a little crazy.
0:27:21.6 GR: I am not a crazy person.
0:27:27.5 BS: I think people didn't see it coming, right? That's how we would get child care subsidies and supports, is by putting it into CHIPS. And I wanted to have you explain a little bit of how that's working and whether you think that's gonna be a model for going forward, for making sure that we get family-friendly workplaces?
0:27:46.3 GR: So you asked me before, how do we get more people into the workforce? How do we get women to stay in the workforce? How do we get women in these high wage jobs? It will not happen without affordable child care. I don't see it at scale.
0:28:01.8 GR: Most people pay more for child care than they do for their mortgage. Again, you guys are not at that stage in your life yet. Take it from me, this is true.
0:28:14.0 BS: Oh wait, here's how you can help them. Most people pay more for child care than people pay for college tuition. [chuckle]
0:28:19.8 GR: True. College tuition, college loans, a mortgage. Like it's a lot. So a lot of people say, "Well, forget it. I'll stay home." Right? If I can't make a minimum of $90,000 a year in my job, well then I'll just stay home.
0:28:42.3 BS: So I did... What Professor Stevenson is saying is when we put out the application for CHIPS I said that every company who wants to apply for money has to show us a workforce plan and a child care plan. And that was met with... It was a bit controversial.
0:29:04.4 GR: Because people would say, "This is a national security program, why are you pushing a social agenda?" And here's my answer to that. This has nothing to do with the social agenda. In the process of building all these new factories, we're gonna create 110,000 construction worker jobs, and about 150,000 jobs inside the semiconductor facilities.
0:29:33.1 GR: Right now the unemployment rate among people in the building trades, the construction workers, is like 1 to 2%. Basically zero. I gotta find 110,000 of them. And then the same for inside the, they're called fabs, but they're factories.
0:29:54.7 GR: So I said, "Unless you CEOs show me a way that you're gonna be successful at recruiting and retaining women in these jobs, you're not getting taxpayer money." 'Cause it's too risky. You will fail. My job is to protect the taxpayer.
0:30:12.6 GR: You will not be successful with taxpayer money if you can't hire and find the skills you need at the pace you need to be successful. And I don't think you can do that unless you have women, and I don't think you do that unless you have child care.
0:30:24.3 GR: So this is my analysis. How is it working? It's early days, but it's going well. You wanna hear something? None of the CEOs complained. Only politicians complained. All the CEOs...
0:30:36.9 GR: No, this is true. So none of the semiconductor companies have complained. They say to me, "You're right, we need help finding workers. Help me train people, help me attract people." So they haven't been complaining, we're working back and forth.
0:30:53.9 GR: By the way, I didn't say they had to provide free child care, I didn't say they had... I just said show me your plan. Show me you're thinking about it. The only people who've complained are people on Capitol Hill.
0:31:05.5 BS: They think it's some kind of social policy.
0:31:08.7 GR: That think it's some kind of social policy. But if you're a business person running a business, struggling to hire people, they're like, "You're absolutely right."
0:31:17.1 GR: By the way, I also started something called a Million Women in Construction. Right now there's a million women who work in the construction industry in the United States. I said, "Let's double it. Let's get another million women." Not scientific, I just said another million.
0:31:34.2 GR: Again, a goal. Set a goal, mobilize behind it. Why did I say that? Because if you look at the percent of people in the building trade, plumbers, pipe fitters, electricians, welders, it's the same percent of women today as it was 25 years ago. Low. Single digits.
0:32:00.5 GR: These are fantastic jobs. Women cluster in... Women without a college degree cluster in jobs like certified nursing assistant, home health aide, $15 an hour on average. That's poor. You're working full-time, poor.
0:32:20.7 GR: If you go be a plumber, 40... $50 an hour to start, with a pension, with benefits. So I figure it's a twofer. It helps pull women out of poverty and helps get these fabs built.
0:32:36.5 BS: On the child care, I think it's also worth noting that men also leave construction when they're parents, due to child care problems. Because construction's such weird hours, it can cause a lot of problems. For any custodial parent, male or female, sometimes that helps. That it's not social policy, it's just helping people stay in a job.
0:33:04.2 GR: No, no, you're exactly right. If you have to be on the work site at 06:00 in the morning? But you know, my view is, people say to me, "Oh, well we can't have women 'cause we can't have child care at 06:00 in the morning." I'm like, really?
0:33:16.0 GR: We innovate. This is the United States of America. We have innovated our way around every major problem. I'm pretty sure if we put our mind to it, we can figure out a solution. I'm not sure exactly what it is, but figure it out.
0:33:31.7 BS: Well, speaking of innovation, one of the, I think the big things that hanging over all of us is this big shift in terms of AI and large language models, and I know that's something you've been working on and thinking about.
0:33:48.1 BS: Do we need to regulate differently? How do we...
0:33:51.5 GR: I'm sure none of you have written a term paper using ChatGPT.
0:33:55.9 GR: Nervous laughter.
0:34:01.7 GR: Yes, we do need to regulate. It's two sides to the coin, I guess. On the one hand, to think about the opportunities, it is pretty exhilarating when you think about how much faster we can find cures for cancer, how much faster we can... Really on the medical side it seems so exciting.
0:34:27.8 GR: But right now the risks seem scarier than the upsides seem exciting, because we don't have any safety guardrails in place. And so I think it'll take Congress a while before they legislate. Which means, what do we do right now?
0:34:54.0 GR: And I was very proud of the president when he brought in on the CEOs of the biggest large language model companies and said, "Listen, we need action today, we can't wait a year or two for Congress," and they came together around a certain set of commitments that they were willing to make.
0:35:14.6 GR: Showing us like watermarking so you can know what's an AI-generated piece of content versus the real person, safety guardrails around how the models are made, how the models are tested, being honest and open about biased results, what's the data they test on.
0:35:34.2 GR: So I do think ultimately this will need to be regulated, mostly around safety. And that's an exciting thing so that we can go forward with all the upside. But right now the administration and the president is working on an executive order around this, just to put forward safety guidelines that industry will follow.
0:36:02.7 GR: For them to be truly enforceable with a penalty and teeth, you need legislation, but I think the president has moved quickly to say it's in everybody's interest to not let this spiral out of control to the downside.
0:36:19.7 GR: I do think though, this election will be wild.
0:36:25.4 BS: Yeah.
0:36:25.8 GR: For AI. For a lot of reasons, we're not gonna talk about politics.
0:36:31.3 GR: But some of the AI-generated videos, you cannot tell the difference.
0:36:36.9 BS: Yeah. Well, that's why I wanted to follow up to say, do we need think about intellectual property differently, and authorship and how people are required to cite authorship differently?
0:36:50.5 GR: So one of the other things that the Commerce Secretary does is we run the US Patent Office, patent and trademark office, and Kathi Vidal who runs that is amazing. If you're interested in that, you should have her come to talk to you.
0:37:06.0 GR: Yes, we have a whole work stream under way to figure out exactly that, how do you protect what is generated in this new world.
0:37:20.9 BS: So you've got that side, but then of course, we've also talked about trade. And trade was the thing we use to negotiate with other countries, that was like our big form of multilateral, some multilateral trade agreements.
0:37:32.1 BS: Do we need to start thinking about cross-border regulation when it comes to AI? Or a new global governance set of issues? Outside of tax, which is what's happening over at Treasury. But to your lane, thinking about...
0:37:50.4 BS: 'Cause this is the complaint that these companies make, 'cause if you do anything here, it's just we're just gonna move to another country and it'll flow back over.
0:38:01.1 GR: Yes, yes, yes, yes, yes. Yes and fast. So these models are portable. Particularly Open AI models can go anywhere. And look at... AI in the hands of bad actors, gets pretty scary very fast.
0:38:23.0 GR: So yes, is the answer. We have to, and we will very quickly get with Europe, Japan, India, and say what are safety guidelines and rules of the road, globally. Global safety guidelines and rules of the road that we can all agree to. And the time to do it is now, before every country goes off and does their own legislation that is not coordinated.
0:38:57.3 GR: I mean, for other pieces of technology it's hard to harmonize, 'cause the US has already done its thing, Europe's done its thing, it's like cemented in law, data localization and data flows, it's harder. We have such opportunity right now. Countries haven't legislated. They haven't legislated yet.
0:39:20.5 GR: So it's a very cool opportunity to get with our allies who share our values around democracy, privacy, human rights, anti-discrimination, and set these global rules of the road.
0:39:35.3 BS: Well, the other thing is, even if we don't and somebody else does, sometimes our companies end up having to follow those rules. And just, when you were saying that, it made me realize we're all about to get single chargers for our cell phones, thanks to the European regulation on that.
0:39:50.0 BS: And once companies have to meet the regulations in Europe, then they ask, "Well, should we just meet that for other countries?"
0:39:57.3 GR: Completely right. Yeah.
0:40:00.1 BS: So if we're not part of the conversation...
0:40:02.4 GR: You get left behind, yeah. Or even worse, if countries who don't share our values set the rules of the road, that's very bad.
0:40:13.2 BS: Yeah.
0:40:15.2 GR: So for example, another thing that I work on is in the internet. There are standards for the internet, and there's something called the ITU, International Telecommunications Union.
0:40:29.4 GR: We worked really hard to make sure that an American was in charge of that standard-setting body. Russia was, had another candidate. You know, China and Russia line up around certain candidates, the United States and other democracies line up around other... And that one it's, do you want a closed internet or an open internet? And AI, what kind of safety guardrails do you want?
0:41:00.3 GR: And you wanna do that with countries that share your values around, like I said, human rights, discrimination, etcetera.
0:41:07.4 BS: So you're at the University of Michigan, and one of the things that you might not know is, at least for the economists, our pride enjoy of this university is our survey research.
0:41:16.8 GR: PSID.
0:41:20.1 GR: I lived my whole college career by that PSID.
0:41:28.6 GR: I studied economics back in the day, you can relate to this, where we used to have to load the data on tapes. There are these big tapes. And I was a research assistant, so you get up at like 05:00 in the morning and go load the PSID tapes so the data would come off. So by the time the professor and you get into the office at like 10:00, the data came off the tape.
0:41:52.3 GR: Come on, back me up. Do you not remember this?
0:41:57.7 GR: So anyway, I got through college on the basis of PSID. I have admired you for a long time. And now I run the Census Bureau. So I've gone from being a data nerd to a huge data nerd.
0:42:12.5 BS: Not sure where I'm going with this, but I do wanna tell you, my partner Justin will get up in the morning to look at the data and he's like, "Time to run the tapes." And I'm like, "You've got to stop saying that."
0:42:22.7 BS: "'Cause only people older than you, and they're getting fewer and fewer of us who even know what you're talking about."
0:42:28.2 GR: Yeah, I tell that story to my kids and they don't even get that. Like, "What's tape?"
0:42:33.2 BS: "What do you mean the tapes?" Well, that's okay. My kids still think it's confusing that I used to talk on the phone attached to a wall. They're like, "You used to just like lean against a wall and talk on the phone?" [chuckle] Yeah, those are the...
0:42:44.3 GR: Now, the reason I was pointing out the PSID is, yes, you run Census and BEA. These are our statistical agencies. How do you see it and how do you think about making sure that Americans have reliable data?
0:43:01.0 GR: I think it's a huge deal. So we run the Census Bureau, and BEA, Bureau of Economic Affairs.
0:43:10.9 BS: Economic Analysis. No, you're right. You're right. [chuckle] I was trying to help you and I got it wrong.
0:43:17.4 GR: We were call ourselves, we're the nation's data agencies. When I took over as Commerce Secretary, you might recall the census in the last administration had a lot of challenges, and the people who work in the census were so beaten down.
0:43:42.4 GR: So the first thing I did was I said, "This is gonna be data-based, science-based, professionally run, zero political interference." And I don't know if they believed me at first. Who could blame them? But I think we really... The people who work in the Census and BEA are like top flight statisticians, economists, econometricians, and they just wanna get to the right answer.
0:44:17.9 GR: So the first step, my whole point here, the first step is just leave 'em alone and let them do their job. The data is what the data is. That being said, where we are trying to push the agencies to be more, for lack of better term, customer-friendly, consumer-friendly.
0:44:34.4 GR: So, is anyone majoring in economics?
0:44:40.7 BS: I think they're all policy students.
0:44:40.8 GR: They're all policy students.
0:44:42.5 BS: But they'll have to take economics.
0:44:44.4 GR: Okay. Well, you take an economics class. Anyone take an economics class?
0:44:47.1 BS: Yes, they all have to. Everybody.
0:44:50.8 GR: I think what makes a great economist is asking the right questions. Ask the questions that are the right questions. And then you have to collect the right data and analyze the data to answer your questions.
0:45:07.8 GR: So what we're trying to do is figure out, how do we broaden the questions that we ask to collect data on the smallest of small businesses, on how people are working flexibly. You know what I mean? Like modernize the questions we ask so we get more relevant data that the consumers of our data, people like you, want.
0:45:35.7 GR: And so that's where we're trying to go. No political interference, but update to collect the data that's... If you're trying to get a picture of today's labor market, you have to ask a different set of questions than you asked 30 years ago, 'cause people work differently.
0:45:51.1 BS: I have to say, I was actually really impressed by how quickly the agencies moved to add new questions in the wake of COVID. I honestly didn't think it was possible for them to move that quickly, to adapt.
0:46:00.9 GR: Thank you.
0:46:06.5 BS: So I think it's really important. And did issues of data reliability come up at all on your trip to China? 'Cause I don't think they have the exact same approach that the US government has.
0:46:17.1 GR: It didn't, to be truthful. It could have, but I had a long list and we didn't get to it. But it is an issue. Because they're like US, just today, early this morning, I had a conversation with the leading business person who leaves for China tomorrow, and he said, "We're nervous about investing, because we don't have accurate data which is an accurate picture of what's going on in the economy, so you can't really make an investment."
0:46:45.7 BS: Uncertainty is not good for making decisions.
0:46:46.5 GR: Correct.
0:46:48.5 BS: Well, I wanna thank you for taking the time to come out and talk with all of us today.
0:46:51.0 GR: So fun.
0:46:53.7 BS: Super fun. We're all thrilled that you are here. And I wanna thank you for your service to the country and everything you're doing.
0:47:00.6 GR: Thank you. Thank you.
0:47:03.2 BS: I know how hard the work is, and sometimes it's under-appreciated.
0:47:04.2 GR: You're very nice to say that. I very much appreciate that. I'm so pleased to be here. We've been trying to get this on the books for a while, and finally were able to make it happen. I'm grateful for you and for being hosted.
0:47:18.0 GR: I would like to ask each and every one of you students to think about serving the country at some point in your lives. You could run for office, you could do your local school board, neighborhood organization, get a job in the federal government, state government, local government, join the military.
0:47:41.5 GR: And you don't have to do it forever. You may, that'd be great if you did. But I'm asking you all to think about serving in some way, in some capacity, at some point in your career.
0:47:57.6 GR: Because everything we just talked about, pandemic, national security, climate, women in the workforce, AI, challenges with safe AI, none of it was going to get solved, unless the best and the brightest who have the skills and the right sense of ethics get into the business of trying to solve these, and make the policies and enact the policies that will make a difference. It won't.
0:48:32.6 GR: But if you do, then we will solve these problems. It's easy to get discouraged when you think about the magnitude of what we're dealing with, just in this little discussion today it's daunting.
0:48:49.9 GR: But I have been in politics now for 15 years, state level and now federal level. I was state treasurer, governor, secretary. And I am way more optimistic now than when I started. Yeah, facts.
0:49:13.1 GR: I am way more optimistic than when I started. And I'm in it, I'm in the swamp every day.
0:49:22.0 GR: But I'm telling you guys, if you serve, it'll be better. If you don't, it won't. So just think about it, is my ask of you.
0:49:32.8 BS: Well, thank you so much.
0:49:35.3 GR: Yeah.
0:49:39.4 BS: Oh, Debbie Dingell.