June 30, 2014
Host: Ted Simons
- The Export-Import Bank of the United States provides loans and loan guarantees to businesses when other financing is not available. The bank’s charter will lapse on September 30 unless Congress acts. Business groups are concerned about the possible demise of the bank. Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business at Arizona State University, will talk about what the bank does and its importance.
- Dennis Hoffman - Director, L. William Seidman Research Institute, W. P. Carey School of Business at Arizona State University
| Keywords: business
Ted Simons: The Export-Import Bank of the United States is designed to boost U.S. Business interests overseas, but the bank’s charter expires at the end of September, and business groups are concerned that Congress will refuse to reauthorize the agency. Dennis Hoffman is Director of the Seidman Research Institute at ASU’s W.P. Carey School of Business. He’s here to talk about what the bank does and its impact on the economy. What does this bank do?
Dennis Hoffman: Well first Ted, this is great. This is, you know, the fight du jour. At least it's not the debt ceiling this time. I think this is an important issue to some businesses, but whether or not this bank stays or goes is a far different issue than some of the recent debates we've had. You know, on the side of getting rid of this bank. Let me back up. The bank really is designed to provide credit for these export-based transactions that take place. Trade depends upon credit. You know 98% of this credit comes from the private sector. Only 2% comes from this bank. But yet it remains controversial. Those folks want to get rid of it and they range from Ralph Nader to the Tea Party, by the way. There's a strange union, but they want to get rid of this because they don't support big businesses, they see that this bank supports two primary businesses in the U.S. and that's Caterpillar and Boeing, although there's a vast array of smaller businesses that also are supported.
Ted Simons: Correct me if I'm wrong here, but looking into this it sounds like it subsidizes already subsidized foreign government buyers, is that remotely in the ballpark?
Dennis Hoffman: Well possible, possibly you could think of it that way. So therefore, it's redundant, you know get rid of a little bit of g, that means a little less government, taxes can go down, yadda, yadda, yadda. The challenge with that particular argument and that is what's advanced by those who want to get rid of it, is this is a competitive environment. And you will be ceding some jobs to foreign governments that don't get rid of their export financing subsidies and that would be places like Japan, Korea, you know, to some degree Europe does this, although Europe and the U.S. have this mutual agreement around airlines in terms of their domestic markets. But nonetheless, there will be some job loss here in the U.S. if Boeing and Caterpillar don't get this break.
Ted Simons: Have we seen job losses just because of the debate regarding reauthorization?
Dennis Hoffman: Well, probably not. I don't think -- you know, I don't think it's reached that level and I think that markets will find a way. So if Caterpillar and Boeing lose this subsidy, then they're going to have to take it out of their employees, they're going to have to take it out of their returns to their shareholders or they're going to have to find some alternative means of financing.
Ted Simons: I've heard it called cronyism. And I've also heard it say cronyism and really not all that effective. Valid?
Dennis Hoffman: Well, you know, the incentives are everywhere and people have to understand this. I'm told that Texas has the best tax structure and that's why all businesses move to Texas. Well, they also have the biggest incentive fund. It's $20 billion. Texas' incentive fund annually is almost as big as the entire U.S. Export-Import Bank. So, you know, these are -- these are big deals, incentives are at play and we would like to say in a perfect world we could get rid of crony capitalism but it's a tougher game to play if you're the first one to get rid of it.
Ted Simons: Well with that in mind, we talked about what the critics say. Supporters, including President Obama, who wants to extend that charter I think five years and he wants to increase the amount that the bank can lend. What would be the impact of that?
Dennis Hoffman: Well, if it's used strategically to promote exports in this country and, by the way, we have not done that aggressively like other countries have. It could be job-growing. It could be economy-enhancing but you do have to figure out optimal ways of doing it. I'm hearing, you know, arguments around picking certain industries. Well, we want to only support small businesses. Well, we only want to support those businesses that are friendly to the environment. You know, now you've got even a second level of government intervention here. You know, to me a job is a job. If it's a job at a begin business or if it's a job at a small business. You know, Boeing obviously is very important in this state, although not a division that relies that much on the Export-Import Bank. But big businesses are important to the labor market picture Tucson without Raytheon for example, the big businesses are very important.
Ted Simons: So we've gotten one side saying kill it, the other side saying extend it and give it more money to work with. Are there reforms somewhere in the middle that could make it at least most folks happy?
Dennis Hoffman: There could be compromises I think that you would want to look at this and make sure that there's not, you know, dirty dealing here somewhere or, you know, people are getting undue benefits, that there is definitely a need. I think you can get into the data with Caterpillar, for example. If caterpillar doesn't get this incentive on selling goods to China, will Korea and Japan actually be able to compete, have a competitive advantage against them? It seems to me that's an empirical question, we could investigate it and come to a conclusion.
Ted Simons: And again September 30th is that date that, do you think it's going to be extended?
Dennis Hoffman: I don't know at this point, you know. I think the Tea Party may be looking for a victory and this could be a place where they choose to go.
Ted Simons: Dennis good to have you here. Thanks for joining us.
Dennis Hoffman: Great to be here Ted.
Ted Simons: Tomorrow on Arizona Horizon, join us for another clean elections debate, this time between Republican candidates running for Secretary of State. A debate Tuesday evening at 5:30 and 10:00, right here on Arizona Horizon. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.
Superintendent of Public Instruction Huppenthal
- Arizona Superintendent of Public Instruction John Huppenthal has admitted to making anonymous online statements that have offended several groups of people. Huppenthal will tell his side of the story.
- John Huppenthal - Superintendent of Public Instruction, Arizona
| Keywords: politics
Ted Simons: Arizona Superintendent of Public Instruction John Huppenthal is under fire for posting controversial and anonymous online statements that many Arizonans found offensive. John Huppenthal joins us now on Arizona Horizon. And we thank you for joining us.
John Huppenthal: It's always great to be with you.
Ted Simons: Well can’t be easy but we're going to try to figure out what’s going on here and the first question is why? Why did you feel the need to make the online postings that you made?
John Huppenthal: Ted, I shouldn't have. It was a mistake. And I let my family down; I let my team at the Department of Education down and most of all I let the citizens of Arizona down, so it was a mistake. I shouldn't have done it. And I've apologized for it. But the important thing is we've got a job to do and we're working on that job. My team is working on that job, often in a spectacular fashion. Let me give you one example. We have a program in Arizona, English for all students, it's structured English immersion. We reclassify, we moved over 90% of our students into our regular classes with skills in reading, speaking and writing English. It is one of the more spectacular education success stories across the nation.
Ted Simons: You have this education success story. And yet, no one wants to hear about it. They want to know why, they want some answers from you. They want you to explain yourself as to why you made the postings and why you did it anonymously.
John Huppenthal: Well Ted, it was a mistake. I shouldn't have done it. And I apologized for it. You know, I let my family down. These writings didn't reflect most of all my actions as superintendent. Let me give you another example. We have a program called Move on When Reading that requires that students have basic reading skills by the end of 3rd grade. Three years ago, we had 44,000 students that failed that classification. It is another one of these spectacular success stories. We moved that down to 22,000 students that are at risk now. It's a huge success story. It's been a partnership that we've had with Governor Brewer, with the state board of education and we've done a phenomenal job partnering with the school districts. Some of the school districts, over 90% of their students, they've rescued them as a result of this program.
Ted Simons: I think some of those school districts, some of those educators, some of the students, some of the parents, some of the teachers, they still want to know why. I understand that you have now said it was a mistake and you have apologized for this, but people want to know why. What made you sit there in front of your computer and engage in these kinds of debates and do it anonymously?
John Huppenthal: Ted, I have a passion for public policy. It drives me and everything that I do. And it's a passion to serve the community. And to do it with a great deal of knowledge. My blog comments, they were offensive, they were hurtful, I've repudiated them. The um the um when I go home at night, I study every single night, I go and I read, I have over 600 books on my kindles, I have four kindles, I fluctuate between all those. We expect leaders to have a profound knowledge. My blog comments didn’t -- the blog comments that people have read don't reflect that profound knowledge and I seek that I feel deeply apologetic for those blog comments. But they absolutely were a mistake. Let's go back to what we've done. These things that we've done as a department have been phenomenal. Just last week, I met with the superintendent of a small school district and he was telling me, he was just euphoric. The previous year it had taken him 40 days to do a report and with the work we've done at reducing administrative costs, it only took him four and a half hours. We're now $300 per student below the national average in administrative costs. That's $330 million that have been freed and up reduced administrative costs. We have been a part of driving that as a park department, stripping out all the bureaucracy and paperwork.
Ted Simons: You mentioned that you were apologetic for these postings and these statements and yet your original response did not sound apologetic, and a former Superintendent of Public Instruction, Lisa Graham Keegan, says when she first contacted you, you were not apologetic and you stood by what you said and the actions of saying them. What changed?
John Huppenthal: Well I don't want to characterize my conversation with somebody else. I absolutely -- my blog comments were a mistake. I have repudiated them. They were hurtful to my family. They were especially hurtful to my team at the department of education. But we have a job to do. And we are moving forward with that job. Let me give you another example. We through our nutrition department, we have partnered with the spiritual leaders in neighborhoods that are high in poverty to be able to deliver summer food programs. The spiritual leaders I've talked to are ecstatic about that program. It's a huge breakthrough. They never felt like they were a part of that whole process in the past and with them being able to be part of the delivery. These are the actions that I've taken as superintendent, the Move on When Reading program, the partnership with Governor Brewer there, the whole variety of these, the nutrition programs.
Ted Simons: And again, how do you think those people feel when they read you describing people on assistance as lazy pigs getting air conditioning, free healthcare, flat screen TVs which you said are typical of poor people. How do you think they feel?
John Huppenthal: That blog comment was offensive. It was hurtful. I've repudiated it. I've apologized for it.
Ted Simons: But what made you say it in the first place? People want to know. They understand that you're apologetic but what made you say it in the first place?
John Huppenthal: Well, I have a deep passion for coming from my disadvantaged background myself; I have a deep passion for moving people out of poverty and off of welfare. When you look at the data on welfare, it is shocking. A child who grows up in a welfare environment by the age of three, they have heard 30 million fewer words than their comparable compatriots. That deep passion I have for acting and which I've acted continuously to try to provide opportunity every way we can in Arizona.
Ted Simons: And yet you've just made an argument for what you believe. I didn't hear lazy pigs in that statement. What made you think -- what made you think you could say these things about these people, anonymously, and no one would ever find out?
John Huppenthal: Those comments don't reflect the way I think. They don't reflect what's in my heart. And they especially don't reflect the actions that I've taken as superintendent.
Ted Simons: You mentioned -- please go ahead.
John Huppenthal: I mean we've worked and we work hard at our agency and, you know, when we talked about the people that were in there, it's common for me to leave the department at 7:00 or 8:00 at night and to walk by office after office, there are people still there working on the mission. So especially I let them down. But, you know, the work goes on. We're doing amazing things in that agency.
Ted Simons: Did you post any of these online comments from your office?
John Huppenthal: There were a couple evidently that were posted from the office.
Ted Simons: Appropriate to do that, do you think?
John Huppenthal: You know I'm a superintendent of public instruction, 24 hours a day, seven days a week. The -- the comments that I posted typically were highly factual comments, things like saying, letting people know that over the last several years, automobile thefts have gone from 48,000 down to 18,000. So the question is as we ponder data like that, we discuss it in various forums, why? Why has this huge reduction in automobile theft?
Ted Simons: Do you think it's because of Russell Pearce's immigration ideas?
John Huppenthal: My hypothesis is I'm very interested in what role education played in that reduction in auto thefts. Who steals cars? It's young people that steal cars. Either people who are still in school, or it’s people who are just out of school. I regard that as something that's enormously fascinating. What is -- why have we experienced an unbelievable 32,000 reduction in automobile thefts?
Ted Simons: It sounds like --
John Huppenthal: These are the kinds of discussions that--
Ted Simons: Right.
John Huppenthal: These are things that are typical of the way I think and how I discuss things.
Ted Simons: But it sounds like you already had it figured out when you said we have a lot fewer Caucasians working now that the Hispanics have left but crime is much lower, no money and no one is stealing it. What do you mean about that?
John Huppenthal: My blog comments were offensive. Those comments -- I apologized for those, they were deeply hurtful. The thing that I have always had a concern about was when we were dealing with all of these issues that we be very knowledgeable and so in this particular case, my fellow conservatives have made the case that there is a reduction in employment that's associated with immigration. And what I was pointing out there is look at Texas. Texas took a different path than Arizona, and they have taken different employment path for native Texans and we see the same thing in Arizona.
Ted Simons: So you're not completely repudiating that statement?
John Huppenthal: The -- the -- that statement there was offensive in how it was worded. And it was hurtful. I am repudiating that statement and I'm apologizing for it.
Ted Simons: Another one is we’re condemning ourselves to a second rate future if we don’t reestablish the melting pot with a strong flow of immigrants engaging in economic activity and not crime, the assumption there being that the immigrants were engaging in crime. We all need to stamp out, stomp out Balkanization, no Spanish radio stations, no Spanish billboards, no Spanish TV stations, no Spanish newspapers, this is America, speak English. What did you mean by that?
John Huppenthal: Well, that comment was offensive, it was hurtful. And frankly, Ted it's ridiculous. I just -- I just have a deep passion for an understanding, particularly in growing up on the south side of Tucson, that English is the language of opportunity and that we have a moral obligation to pass this onto all of the students, English language learners. I am so proud of the fact that we are moving 90% of these students into our regular classrooms with skills in reading, writing and speaking. That’s -- those are the things that I have passion for.
Ted Simons: Did the fact that your comments -- we got you.
John Huppenthal: I reject those.
Ted Simons: Did the fact that you were posting anonymously, did that make you say things that you wouldn't ordinarily say? Would you stand in front of a group of educators and say MAS, Mexican American Studies equals KKK?
John Huppenthal: Now, you know, there were a number of those blog comments -- they were offensive, they were hurtful. I've apologized for them. But again, actions are what counts in the end in what we do in society. What we have done is we have worked our self to the point of exhaustion and successfully to make opportunity for students who come from poverty homes, poverty neighborhoods, students of challenge, and we have a whole string of accomplishments and we can talk about how we have taken a posture of being servants to these homes and to these families.
Ted Simons: And yet why should a Latino kid from a poor family trust you? As Education Chief? Why should a Latino educator, Latino families, especially those from low-income areas, why should they trust you, regardless of what you've done or what you want to do, when they know, they think they know and most folks would assume that this is somewhere in your heart, when they read this stuff, why should educators in general trust you?
John Huppenthal: Well Ted, those comments are nowhere in my heart. And let me you now, in terms of the trust issue, this last week, I went down to Tucson, went down to high minority, high-poverty school, where I have a math project going and I thought wow this might be a little prickly and I walked in there and there were a lot of teachers there and they came over to me and they asked me about it and I apologized for it and we had an incredible day as these students did over 500 math problems each. The bottom line, they should trust me because we are getting things done for them. We are moving programs forward to support them. We are moving the students up academically; our academic results have been moving steadily. We're allowing them to achieve reading skills; we're opening up the doors of economic opportunity.
Ted Simons: And yet they see you, when you thought you were anonymous, when no one was going to find out who was saying this, saying this kind of stuff. I mean, again it sounds like -- all right. Are you going to resign or are you going to stay in office?
John Huppenthal: Ted, absolutely I am staying in office. There is -- we have a job to do. And we are doing that job every single day and we are accomplishing it often in a spectacular fashion.
Ted Simons: Are you going to stick --
John Huppenthal: I talked about Move on When Reading.
Ted Simons: Yes, you have.
John Huppenthal: I talked about our nutrition programs, across the board, when you go out and talk to people out in the community, I mean I had the conversation with that superintendent who talked about the massive reduction in paperwork, that's freeing up $300 million available for the classroom. We're going to free up another $100 million just with the reduction in paperwork.
Ted Simons: Are you going to run for re-election? Continue running for re-election?
John Huppenthal: Absolutely, Ted, I'm continuing to run for re-election.
Ted Simons: Do you -- have you been treated fairly in all this?
John Huppenthal: Ted, when you overstep your bounds like this, you have no right to be treated fairly. I made a serious mistake. I shouldn't have done it. I apologized for it. I'll let other people speak to that issue as to whether I've been treated fairly.
Ted Simons: What do you think?
John Huppenthal: You know Ted, I've been in this business for 30 years. I've taken a lot of criticism over time. I view it as part of the territory. What's given me great pleasure over time is the work that I do, being able to reduce the cost of government so we reduce taxes but also make government more effective so we get the great things government does done. We can still get those done.
Ted Simons: What have you learned from all this?
John Huppenthal: The lessons learned is that you're on the front page with every single comment you make and you know, you have an obligation in this office to uphold a certain standard of honor for students, for teachers and for parents and when you fall short on that, you're going to be held accountable in some pretty serious and severe ways.
Ted Simons: And again, you think you're being held accountable in a fair fashion?
John Huppenthal: You know I'll let other people speak to that. I accept the criticism; I've thought deeply about it, have had a lot of discussions. My daughter called me up in tears talking to me about it. I've done, you know -- it's been pretty hurtful. You know people who work in 12, 13 hour days for you, believing in the mission, when you let those down. But now, we're continuing on with the job. We have a lot of people that we're serving and we're doing great work and we're going to keep doing that great work.
Ted Simons: Superintendent Huppenthal we thank you so much for joining us tonight on Arizona Horizon.
John Huppenthal: Thank you, Ted.