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George Shultz Addresses the Sub-Cabinet

January 24, 2003
George Shultz Addresses the Sub-Cabinet

QUESTION: [Inaudible] -- Department of Transportation. You've had a wonderful career of public service and we all have heard the call and have come to public service. But I think what's important for us to do as well is to initiate others coming to public service as we have, so that we can have folks around that can create that learning environment that you spoke about.

What might we do to get the call to other people and to others to fill our bench, if you will, for those who will come behind us to public service?

SEC. SHULTZ: Well, I think it's all example. How do you perform and the attitudes that people have. I also believe that there is room for a lot of initiatives in the administration and I've talked to Clay enough to know that he has this on his mind.

How do you make it more inviting to go through the process of getting to where you are in a job somewhere? [LAUGHTER] And it's not very pretty what happens to people. After all, you drove Henry Kissinger out of town and he's pretty formidable. And there's a talent. And if the country has got itself into position where it can't use a talent like that, there's something wrong.

So, I think there's something that needs to be fixed and it's something the administration, I know, thinks about. I know serious people in the Congress think about it and Pat thinks about it. It's one of the reasons that her Council is of such importance that it's thinking about this issue all the time.

So, I think there's a real important issue and it's got a lot of dimensions to it, but there needs to be -- more inviting. A suggestion I've made and I've made it to everybody under the sun and everybody said it's a great idea, but nobody does anything about it -- I'll make it again.

But I think particularly at a time when there's a certain emergency nature to a lot of what's going on that you ought to create an emergency service corps. And get it passed by the Congress, so it's understood that it's not something the President just asserts, that gives the ability under Presidential direction to reach out to people in the private sector who have something special to offer.

Put a restriction on it. They can't be there more than six months, maximum, maybe four months, but there are a lot of people out there in the private sector who know a great deal about things you're working on and you don't have very good access to them. And one of the reasons you don't have access is all these rules that make it hard. So, try to create something that makes it a little easier to get somewhere.

And it's interesting to me -- I've worked on the problem of terrorism for a long time, including recently. And a lot of the action will be, if we are attacked in this country -- will be somewhere, some city, some place.

And, so, there are all sorts of recommendations. You can see it in the Homeland Security bill; you see it in all kinds of ways. There are things that probably cities and states, and so forth, need to buy. And probably a lot of the financial support for that is going to come from the federal government.

So, if you had any chance of buying something within the space of a month, you better have a way of getting around the federal procurement rules, because they will cause you to take at least a year to buy anything it seems. I'm exaggerating.

You question is a good question. It's not as inviting now as it was. Paul Nitze, does that ring any bells, one of the great public servants, tells a story in his autobiography about his entry into government service. He was a partner at Dillon Reed and a man named Jim Forestall, who was the first Secretary of Defense, had been a partner at Dillon Reed.

And as World War II was coming President Roosevelt I guess saw that he didn't have any contact with the financial community or the business community and sort of totally alienated and he persuaded Jim Forestall to come to Washington and work in his executive office and try to do something about that.

So, according to Paul Nitze, he's down in Texas trying to do some deal. And he gets a cable from Forestall saying, I need you in Washington, be here at 10 AM Monday morning.

So, he drops what he's doing and he goes there and Forestall says to him, well, here I am in what was called the Old State Building, I have this big room, that's my office. I put another desk over there, that's for you [LAUGHTER] We've been assigned a very wonderful woman out here who's is going to be our secretarial help.

I have rented a house over in Georgetown and I've got a room there for you. I have no money to pay you. So you have to stay on the Dillon Reed payroll, but get to work. Here's what we got to do. So, Paul says, in that totally illegal way, I started my career [LAUGHTER] with the government.

Well, Clay, how about it. [LAUGHTER] You've got to find ways to attract the Paul Nitzes to come to work and not only the Paul Nitzes, but everybody deserves to be thought of as an honorable person unless you're proven otherwise, rather than starting the other way around.

So, I think there's some work to do for the people who come behind. And I know it's on Clay's mind and a lot of other people's mind and I hope something can be done about it, because there would be a lot of support for that.

QUESTION: My name is Ed Fox, I am with USAID. With all of your experience with the various departments, OMB and elsewhere, you are very familiar -- that although we represent the government, we are really not the government. The government is the hundreds of thousands of career employees out there that work with us.

Our challenge in many ways to be successful is to figure out how to have them accept what we're trying to do and work with us. They were here before we got here; they're going to be here afterwards.

And I know that you were greatly respected by the career servants in all of the departments that you worked. Do you have any words of wisdom for those of us on how to manage those employees and get the best out of them in order to achieve what we can for the President?

SEC. SHULTZ: I remember again when I became Secretary of Labor and people told me, you're a Republican Secretary of Labor, you have no chance. This department is owned by the AFL-CIO. They're on the other side of everything. Forget it.

It didn't turn out that way, because I had a terrific group of people who came with me. I said I want a guy from management who's dealt with labor and I asked who's the best person in the country and everybody told me it was a guy named Jim Hudson, who was Vice President of Lockheed. But he would never come. So, we asked him and he came.

Then I said, I need a guy from the labor movement. I didn.t want a lawyer who represents the labor movement. I want someone who ran for office, sits at the bargaining table, who is a real labor [unintelligible] and who will be sympathetic with us. And I found a guy named Bill Essery [phonetic], he was the best.

We have a manpower administration to work in, Arnie Webber, who subsequently went on to be all kinds of things, including President of Northwestern. He and I had worked on manpower problems. He was about the best person there was to do that.

We had as our solicitor general Larry Silverman who's done pretty well as a judge. We had an outstanding group of people. And I could mention some others, Art Fletcher, Libby Kuntz [phonetic], and others. But it was an outstanding group of people.

We were in a sense professional at what we were doing. We worked hard and when there was a hard decision to be made, we made it. Too often I saw people come up to a hard decision and they sort of stepped aside and let the bureaucrat make it.

They don't respect that. They'll make it, but they know it's not their decision to make. Some decisions are to be made there, but a lot of the decisions, it's up to the political people to step up and make those calls. And when you do that, they'll respect you and they'll follow you. So, that was my experience there and it's been pretty much the experience elsewhere.

One other point -- people have different ways of going about things, but this was particularly on my mind when I became Secretary of State. Because in a sense you're going to run a big department -- there are two ways in which you can manage it -- there are lots of ways, but there are two main ways.

One is that you can get some bright people around you, five or six or seven or so, and they're your intimate colleagues. And you sort of work everything through them. And that can work.

But you don't see people in the department that way. They see people in the department. My instinct was not to do it that way. There had been great successes doing it that way, but I thought that wasn't the way I wanted to do it.

So, I had one senior substantive Foreign Service officer as my executive assistant. A Foreign Service officer, because I needed somebody who really understood the Foreign Service and understood, as they say over there, the building. And was respected.

And then I said to all the Assistant Secretaries, my staff and if I want a staff paper, or something or other, I.m asking you. And I also have a little check system, because got something called the Policy Planning Bureau over there, and they can give me another view.

And then I found as an economist, as a trained economist there are -- there are lots of people in the federal government who are labeled economists. And they're almost always very able, knowledgeable people. And their trade is to know something about an issue that has to do with economics, like how do you negotiate air rights or how you negotiate fishing or how you do something or other. And that's called an economist.

But that's not the way a professional economist thinks. That's a different matter, a little price theory, and so forth. And, so, I got frustrated, frankly, by some of the memos I got from -- that came up that seemed to me virtually illiterate as far as genuine economics is concerned.

And, so, we created in the Department of State at the time a little Council of Economic Advisers with the help of the Council. So we got three or four people who were there and they were trained economists.

And people said, how -- nobody's going to pay attention to them. I said I know how to get them to pay attention. They sent me a memo, I'd write on the memo, what does my little CEA think about it and send it back. And then they have to go ask them what they thought about it.

And pretty soon they passed by them and pretty soon they'd get a little education on how to think in economic terms. So, it's sort of the long way around in response to your question, Ed.

But I think it's a matter of standing up to your responsibilities, working hard, being professional about it and making the hard calls. Don't duck the hard calls, because they're there and they're going to be controversial, but that's -- that's the job of the political appointee. And you got to do it. And when you do it and fight for it, you get respect.

Eduardo, my gosh, I knew I shouldn.t have asked for another question.

QUESTION: Eduardo Aguirre, Export-Import Bank. I'd like to move on to maybe our backyard, if you will, Latin America. The United States through various administrations has been pretty much of a catalyst to bring democracy to Latin America, with the exception of Cuba, of course.

Right now these democracies are going through some growing pains, if you will. I'd like for you to just kind of broad brush, what's your macro view of where the hemisphere is going in terms of the process, transparency, democracy, and so forth.

SEC. SHULTZ: Well, it's kind of a rocky time as you point out. The President, as I've listened to him talk about these things, is very much of the view that foreign policy starts in our neighborhood, Canada, Mexico, Caribbean, Central America, South America.

And I believe he has expressed a number of times the vision of a North American/South American trade agreement. So, I think it's got to be front and center. And with all due respect to the problems that are on everybody's front page, those things are there and they need to be addressed.

I think there is a lot of room for the application of the idea of accountability. And when people blunder badly in the way they manage their finances -- it seems to me we ought to be saying, well, we're as unhappy as you are that there is this myth. And the worst thing in the world that can be done is to bail it out. So, you do it again and don't learn anything from it.

And, somehow, I think we have to have the steel in our backbones to say that if things are wrong, why are they wrong and if the answer is something that you have to change, well, change it. But we're leaning forward. We're with you.

My contacts with people in Latin America, which have been quite a lot -- they love to be loved. They'll love you, but they love to be loved. They loved to be paid attention to. And we should pay attention to them.

And there are all sorts of ways of doing it. And the President can do so much, but it's a big government here. We're running a global foreign policy and we need to be leaning forward and working with what's there.

We have a new President in Brazil. Brazil's half of Latin America. He's the guy that caused everybody to be -- he's starting out a little bit better than most people thought he might.

And I was interested to see that the President sent, I believe, his special trade representative, Bob Zoellick, down to represent him at the inauguration. That's a very high level representation. And it's chosen well, because it is -- because the subject matter is about trade and economics and so on.

And, so, that tells me you got your eye on the ball. But it's a hard -- there are some unpleasant things going on and I don't have to go through them all with you. But we need to be leaning into those issues and being part of the solution, as far as I can see, as the Zoellick example that I cited goes -- that's where the President is trying to go.

Well Clay said last question, so I assume his word is the last word. [LAUGHTER/APPLAUSE]

Let me just say once more, however, so you know it, that you're working hard -- a lot of people know that. Anybody who's ever been in government knows that. You're working very intensely. What you're doing makes a difference and people thank you for it.

I was kind of astonished the night before last. We were in New York and it was an odd dinner, it was a football dinner. I played football in college. And as I told you, I got hurt. But anyway, I played football in college. And the Ivy League for reasons I don't know, some people in the Ivy League got together and they hold a dinner every couple of years. A thousand people showed up.

Each school nominates somebody to speak for five minutes about football and life or whatever. And all the people there were the head of Goldman Sachs, the head of this and the head of that. It was a bunch of heavy hitters. There was only one person who got a standing ovation, both when I was introduced and when I finished, was me.

And the other speakers were good. They were funny, they had something to say. And that wasn't me. That was an expression that I think people have of thanks for public service. So, I know sometimes it doesn't feel like anybody knows what you're doing or cares or if they care it's because they want to whack you for something or other. [LAUGHTER]

But there is an underlying reality that people know what you're doing is important and they appreciate it and I want to assure you I appreciate it. Thank you. [APPLAUSE]

CLAY JOHNSON: George, it's been an honor and a privilege for us to have you with us today. Thank you so much.

I still see a lot of cookies in the middle of the table. You all are encouraged to stay until they are all gone. Continue your conversations and so forth. And we look forward to seeing you back, probably in this venue, in another six weeks or so, with somebody else to share their thoughts and experiences with us about their experience in federal government. Thank you so much George. Thank you all for coming.


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