we're thrilled to welcome important business leader in america but i first must say one of miami beach's most distinguished residents fred hochberg. fred is as most of you know was chairman of the us export import bank for the full tenure of president obama's time inoffice . as a consequence he learned all kinds of lessons he's going to share with us tonight. i'm personally moved by fred's whole story. the story of his mother elaine vernon, somebody i worked with for many years and fred will touch on that when he speaks and how he helped transform frankly her already incredible company into something much larger and more impactful by having a mother of that same generation whose still alive, i'm amazed by that group of women who went off and did extraordinary things and now having made my way through only the first portion of his book, not to steal any of of his thunder but the idea that she bought an advertisement in 17 magazine in 1951 into what was, just moved to me deeply and he may tell you about the impact of the ad itself so with that please point me in welcoming fred hochberg [applause] >> jonathan, thank you. my purpose will be much more casual, i'll be sitting on the sofa, no, all these other people sitting on the sofa, not just me. my book was published 10 days ago and as john mentioned, books and books is selling them in the back and it makes a spectacular gift, if you can't find a gift for someone in your life this will fill it and i hope to convince you of that inthe next 15 minutes or so . i'll start with since jonathan heated up in the introduction of the book, i think about global trade and going beyond was my mother, she came to this country, lillian vernon, that was not her birth name. she decided enough of changing my name over and over again, i'm going to take the name of my company so she became a lillian vernon after divorce number three but they left germany in 1933, moved to amsterdam the same year that anne frank left frankfurt and moved to amsterdam and they were about the same age. but my grandfather had decided he left his business behind that he was going to, he knew he had to leave europe and he was a businessman so he had some means and they lived in palestine. then they lived in havana and then he came to new york. and summoned my grand mother and two children and my grandmother went to renew their visa and they were not originally pieces in 1937 but i'm sure if they let you get on the boat they would let you get off the boat so they arrived in 1937, mymother was 10 . her brother who was drafted into the u.s. army and sent back to germany to fight and died there in 1944 at 20 years old and his name was six free. thankfully when they came to this country they changed his name to fred and they called me fred as opposed to sing freed or anything else. it's just fred thank god and not sing freed which would not have been enjoyable to go through life with a name like siegfried so how i got the idea for writing this book, i was the longest-serving chairman of the import export bank and that bank briefly was started by fdr in 1934 to support more jobs because he realized during the depression one of the ways was to export more goods and we needed a bank to do so. so a twist of fate, the first time the bank was chartered was to sell things to russia. the deal fell through so then they rechartered the bank and the very firsttransaction was minting american silver in philadelphia into coins for the government of cuba . of course, since then the export import bank is barred from doing any business with you about so it's ironic that the first transaction was with cuba andit is now off-limits . so that experience of working for president obama for years and our job was to finance us exports, to support us jobs just as it was in 1934 and what occurred to me over that eight-year period to 2017 was what happened to trade? what happened to the conversation about trade? when did trade get to besuch a four letter word ? and i was then offered when i left the administration to give, to become a fellow at the institute of politics at the university of chicago and you teach of course the students and the students interview you to decide if you're going to be interesting enough and let's be clear, if i decide to teach a course on resetting america's trade agenda in the 20th century nobody would be in this room much less a classroom of 20-year-olds or the export import bank . they would put me to sleep so i had to come up with what would be catchy that would get a 19 or 20-year-old might want to take time of their day to come and i came up with this title and i learned in the direct marketing business you have to have a strong beginning, the middle can be okay and a strong ending so i made sure that we had a couple of great speakers at the very first two classes, larry summers was one of them and wrote them in so people think you miss a great class, you've got to come next week so hence that. a few overarching things. the title of the book is "trade is not a four letter word", how sick every day products make the case for trade and when i tried to do is tell the story of trade, how it impacts your life and then it's him important part of your life and yet so easily mischaracterized and misunderstood and a little bit out at our peril but one of the things , i'll give you the take away in the beginning in case you fall asleep or want to leave early, trade has winners and losers and politicians are very good at never wanting to acknowledge that . some people win, some people lose this country of taking car of people who lost out. people whose lives were disrupted, whose sense of self-esteem, their communities were emptied out and we did a bad job of acknowledging that. and many economists say we are creating 1,000,000 and a half jobs a year , so if some counties get lost by trade even if it's 20 or25,000, that's nothing . that is nothing unless you're one of those 25,000 people. and a lot of that was concentrated in places like ohio , wisconsin, michigan and pennsylvania, and that's a very smart group. what do those four states have in commonevery four years ? every four years they have something in common and i think that's funny when it came to trade, very much in our american psyche. for such a long time and here we are in miami beach. it is not a surprise that a lot of that human population is in miami in florida. florida has been a battleground state and our cuba policy, a lot of it has to do with the geography of where humans live in this country. so geography has a lot to do with the trade issue and politics and many people on both coasts have enjoyed all the benefits of trade and we haven't had a first-hand experience of where it's been hurtful, where it's hollowed out communities and disrupted family lives so that's one of the things i talk about in the book, i don't want to give you all the answers because i don't want to ruin the ending. another thing is we have a lot of talk about trade deals like the transpacific partnership or us mca or the china deal. trade deals are really not about jobs. they are about labor rights and about intellectual property, there are about dispute resolution, and there are about a lot of things, they're not reallyabout jobs . i'll give you an example. in the transpacific partnership to the united states and 11 other countries on the pacific, it is a 5000 page document which i would not recommend. it does not read like anovel . the word jobs appears six times. two of the six times are because it's the name of the australian and japanese labor department so there are four references to jobs in 5000 pages . global oil, that has 11 mentions it's just a case in point, there's not a lot of jobs and if you look at what nafta was designed to do in 1994, jobs had nothing to do with it. so trade is about jobs, exports are about jobs but not trade deals and one of the things were also looking at now and i'm happy to address this in the q&a is we the united states have taken a sort of we want to work with our partners and john phillips is here and i remember being at john and linda's home in italy and there were some films you showed about world war ii that a number of filmmakers had, and you look at them, devastation of world war ii and the united states took a leadership role in forming things from nato, the organization from economic cooperation and development, the wto was then but it was spoke out and all these ways were to find ways we can work together to make sure something is horrible as world war ii never happened again . we are in a period now where you are pursuing a policy in the united states of much more unilateral. it's our way or the highway. you're going to take our view or not. it's a different way that we operated were close to 70 years. it seems to work, it's the style of this president but it is not the style we've used in the past to get things done so let me give you a flavor of a couple of products. i don't know, does anybody in this room? i use the iphone in this book but first let me ask, who did 10,000 steps today? very good. i know judy, you did 15. how many steps today with mark 15. >> so the iphone, and the reason i put the iphone is to talk about what's called bilateral trade deficits, something our president is obsessed with . so the iphone was designed in the united states. the rare minerals that are used for the circuitry come from rwanda and the democratic republic of the congo. the chip that measures judy steps comes from the netherlands. the gyroscope that you can turn this way or sideways and it's always proper comes out ofswitzerland . the main mechanism of the phone actually comes from samsung, their biggest competitor inkorea . a glass which i frequently crack comes from corning new york. so this would not have existed a global trade, without a sense of trade,, we would not have aniphone . it is assembled in china and as a result this is considered by the world, not just the united states as a chinese import. so it comes to the united states, apple is very preparatory, big surprise. they cost about $230 or an iphone comes to the state and sells for about $1000 area of the $230, $8.46, something less than $10 actually goes to china. and yet, people $230 for a phone or about 16, $18 billion a year of our trade deficit with china is the iphone and yet a very small portion comes from china so i use that example to say this is not a very good way to look at a bilateral trade deficit which the president is obsessed with and i put in the book , i have a barber in washington when i lived there for eight years named homer, i took a picture has been and put it ontwitter . i run a substantial trade deficit with homer on an annual basis. he buys nothing fromme . i'm okay with it and he seems fine with it as well so we can get very hung up on a trade deficit. when you go to the gas station you put 20 or $30 of gas in your car, you ran a deficit but you got 20 or $30 worth of gas so we get a lot of productsfrom china and it helped us keep inflation down . yes, china has not been agood actor . yes, china takes advantage of the rules. yes, they overly subsidize their companies, the state owned enterprises as they're called and we need to address those issues but they're not really avillain . we as the global community need to find ways to put them in line but this fixation, this obsession about bilateral trade deficits is wrongheaded and part of it is wrongheaded because if you look at the china deal that was talked about in the state of the union that were going to listen toor hear 10 days from now , we will hear how this is the best trade deal ever done. the most, i can't think of too many superlatives to describe it, but it's really a purchase agreement and it's a purchase agreement because we got so concerned about the bilateral trade deficit that that's what the deal is not and having run the export import bank for president obama i'm all for annex or $200 billion worth of exports, that's a good thing but that's not what the trade deal is necessarily about so that's one of the things i'm trying to cover in this book is to give us a better understanding of those kinds of issues . so another example i will share with you and then i'll give you one more is the most american car on the road today, it is not a chevrolet. it's not a ford . and it's not a general motors , someone at the back of the room knows. it's a honda odyssey. actually as a quirk, there was a book the week of publication in washington and instead of 75 books they sent 16 books and that was discovered about five hours or so before the book event so they said, they couldn't figure out how to get, because each book did not have that large so they called for and got an over driver to take 50 bucks down the washington and coincidentally it went in a honda odyssey which seems appropriate. so i put the honda odyssey in to make the case for what, we don't even know what an american product is because if you look at the top 20 most american cars on the road, all three are either made by mercedes, honda, acura or japanese companies. the chevrolet corvette which we think of as the most iconic american car comes in at 12 or 13 so we have to just reorient what by american means and of course, the least american car you can probably buy is a chevy mart which is one percent us made. so first of all, in the first foreign manufacturers set up shop in the united states, surprisingly as a research book was gw, 1949, four years after world war ii and they imported a grand total of three vehicles . today, more people are employed by quote unquote foreign markets of automobiles, we have a globalized supply chain and i visited one company in pueblo mexico that makes shock absorbent brake pads and it's one of the reasons from this globalized supply chain i believe that we have saved the american autoindustry . i don't know about you but i remember many a car growing up that either the drawers didn't fit well, thewindows leads . mine use this letter a little bit, you had to turn the engine off for a little bit so it stopped. and as a result, we created lemon laws and the japanese competition in the 80s, we improved the competition, got our cars better and by the century american cars are as good as anything else.it is routine for cars to run over 100,000 miles, is not the case when many of us were growing up. after three or four yearsyou had to trade in your car . so that's an example of where one globalized supply chain and the fact of where these cars are made is very different from today.if you look at the fordmustang for example , thetransmission comes from china . the buick cassava is assembled as a corian transmission and yet it is a buick. the ford 150 truck, the most iconic one is only 56 percent american versus the honda odyssey. so part of it is rethinking what it means to be an american product and i'll close and we can open up with one of my favorite products that's in the book which is the taco bowl and i put this in the book because donald trump made that taco bowl so famous when he had it on cinco de mayo which is more an american holiday and and a mexican holiday and the taco bowl was actually invented at disneyland. a man named c albert doolin was in texas and met a mexican immigrant living there who made taco pies and bought the patent, brought it back to disneyland at a place called taco defreitas and decided to reshape enjoyable and hand hence the taco bowl was invented at disneyland. so many foods, chops and we was invented here, corned beef and cabbage was invented here, many of these products we think of as foreign were invented here and the taco bowl is a perfect example. you cannot have a taco bowl that you can enjoy 365 days a year , kelly began in alaska, maine, texas, california were it not for global trade. we now import 85 percent of our avocados as we are eating so many avocados that we consume more avocados than we do raspberries or asparagus or anything else and for super bowl fans which is just eight days, nine days from now, we will smash 140 million pounds of avocados on that one day. so a lot of guacamole and chips on super bowl sunday so that's what we will see there but the beef, we consume more beef than we produce so we import the beef . let us from the terrible e. coli epidemic we had recently , almost 99 percent of the lettuce in this country comes from arizona so when we have an outbreak like that it's thankful that we have imports that we are able to balance that need and not run out. and don't put in the taco bowl but one of the things i discovered as i was working on this book is the blueberry and blueberries used to be enjoyed, you enjoy them maybe in july, certainly in august, early september and that's it . now we import, half of them come from chile and as a result we consume double the amount of blueberries we did he or 20 years ago because it's part of what we eat every day so the whole importing created the market, it did not destroy a market and just like in the automobile i believe that the import of a foreign car and the quality that they brought actually i believe saved the american auto industry versus left to its own devices so with that i would just open it up for questions and we can make this aconversation . >> yes sir, and who are you? >> i'm a lawyer in miami. [inaudible] >>. >> the reason the export import bank is able to do the job it does is because it provides a government guarantee of loss so if we make a loan, we actually don't even make a loan, we guarantee a loan so you're in the insuranceagency . because the full faith and credit of the united states government is what makesthose loans work because otherwise the private sector would do it . [inaudible] you could say where putting the taxpayer on the hook but an eight years i was there wegenerated in profit , literally a cash transfer from our checking account in the treasury of $3.8 billion, that the excess . >> you're making my argument, it should be a private company. >> we would not be able to do it as a private company. the fact we are able to make loans in areas and it's funny, what borrowers need frequently as the backing of the us government and frequently , in the specifications requires what they callexport credit agency support . if you don't have that backing you have a noncompliant bid . let me say this, 98, 99 percent of the trade in this country is done by the private sector. this is only dealing with that which the private sector cannot or is unwilling to do and just to give you the data point, china has four banks that do the work of our export import bank and in 2 years , they generated the amount of loans that it took some back 80 years to do so if we really want to compete with china, if we got want to go toe to toe with competitors like china, japan, korea, that's what's required. we may not like it, in an ideal world we don't need it but i haven't found an ideal perfect world . yes. judy. [inaudible] you mentioned tpp and the question of the china deal that was the trade deal thatwas just completed . both administrations were there for using trade as an instrument of policy . so if you acknowledge that the products are a useful thing and the benefit of globalization as such, what is your take on trade becoming used as a policy tool rather than what you just asserted its real value is. >> i think trade has often been a policy tool. it does bring countries together. i saw this firsthand atthe export import bank , building rail systems, transportation systems together with us companies, us workers and those countries create much better ties with those countries than others so certainly trade is important. right now we're also using trade as a weapon and that is , we are threatening tariffs in europe unless they sign on with iran. in the past been to fi