President Ainlay, members of the faculty, parents and friends,
Most particularly, all of you soon to be awarded diplomas of Union College:
This is the most glorious day of any educational institution. I am delighted and honored to be joining those of you about to receive a degree from Union College.
Of course, your degree reflects a reward for years of effort. I’m certain there is joy in genuine accomplishment.
I suspect there may also be a sense of apprehension. You are closing one chapter of your life. You are entering into a world that right now doesn’t seem so economically hospitable. I assure you that sense of apprehension extends to me as well. It is a little presumptuous at this point to add another lecture to your Union College years. So I’ve done a bit of research on both Union and on commencement speeches. These results are reassuring.
Union College has been around a very long time. During those years there have been twenty-four serious recessions and financial crises. Those crises seem to come more frequently these days, and this one, to be sure, is among the more serious. It is, however, far from the worst, and I have confidence that Union College has you well prepared for dealing with the challenges ahead.
So far as my role is concerned, there has been a poll of college students as to the characteristics of great commencement speeches. Three criteria stand out: preparation, relevance, and above all, brevity.
Well, I will try my best. I thought it would be good to test my instincts about a relevant message with others.
I have just been in China, so I put the question to a small group of young and successful Chinese business leaders: “What message should I give to newly minted American college graduates?” The answer cam back instantaneously and forcibly, “Learn Chinese.”
The next day, with an older, more mature group of officials and senior bankers, I repeated the question. “Learn Chinese and come to China,” was the first response. But then there was another more surprising answer: “Go to Africa,” presumably after learning Chinese.
“Why Africa?” I innocently asked. Well, didn’t I understand that, despite the poverty, Sub-Saharan Africa is the fastest growing region in the world. China, far more than either Europe or the United State, is actively investing there, looking for natural resources and future markets.
What these exchanges hammered home to me were two realities in the world you are entering. The first is that the 21st Century is indeed a world wide open. Chinese trapped into a closed economy only 30 years ago now see their language and their economy as part of a global society. India isn’t far behind, and between them there are two and a half billion people.
The second reality is that the United States cannot and must not assume that it will be able to play so dominant a role, either economically or culturally, as when I was a new college graduate. The opportunities are enormous, not just in economic terms, but this country is going to have to work hard to keep up.
Right now, we are in a crisis largely of our own making. For too many years, as individuals and as a nation, we’ve been spending beyond our means. No doubt, as one small part of the prevailing culture, this campus has been bombarded with pre-approved credit cards. For sure, Washington has been acting on the proposition that the nation’s credit card is unlimited. If the fact that we have, year-by-year, been borrowing hundreds of billion of dollars from abroad sounds dangerous, and long extended, it is.
Taken all together, our collective debts, public and private, have more than doubled relative to the national income since the time you were born. It stands at three and a half times the GDP, an amount that is difficult to carry.
That financial music could not go on, and now we are paying the piper. Unpaid debts have piled up. Millions of homes financed by mortgages that should never have been written face foreclosure. Some of our largest and proudest financial firms have failed or required emergency assistance. Millions of jobs have been lost.
Fortunately, now there are signs the abrupt downward slide in the economy may be slowing. With massive government spending and monetary expansion we have headed off the kind of deep depression that faced some earlier Union College graduates. But there is a long way to go to restore sustainable prosperity. We have to learn to save more, to invest more, to stay on the leading edge of technology. In some ways we have to challenge ingrained habits of thinking and working.
I also think Union College has helped prepare for those changes and will get us back on track.
The past couple of decades have been seen as a triumph of finance – new and more complex financial instruments, a huge growth of financial institutions, enormous compensation for traders, speculators, and finance executives out of line with all previous experience. At one point, profits of financial institutions accounted for 40 percent of all the profits of American corporations, way above any previous relationships.
I think we know now it has been a hollow victory. The real income of average workers barely rose. Chronic deficits in our foreign trade have been the order of the day as our manufacturing became less competitive. In some industries our technological lead has been threatened. Professional analysis bears out what we feel in our daily life: our roads and bridges are decaying; our airports and air control are challenged; our water supply and waste management is threatened.
It seems to me that the current big recession is one big wake up call. It can be and it must be the start of a corrective process. We are forced to reorient our economic priorities, national and personal, reorient them for the better. Right now the priority is to get our private debt under control. Happily, the infrastructure is beginning to get attention.
In the broadest terms, I think we have to move, we are moving, for an emphasis on finance toward science, toward technology, toward engineering – real engineering not the financial engineering that has failed to live up to its promise.
That’s where Union College comes in. It has been unusual for a relatively small college born and steeped in the liberal arts to have placed so much emphasis on maintaining its leading edge in science and the education of engineers.
I’ve sat on the stage of a lot of university commencements in recent years, prestigious universities with strong graduate programs in math and science and engineering. What is so noticeable as they accept their degrees is the number of Ph.D. students from China and India, from Eastern Europe, from Japan – and the relative paucity of Americans. More and more these days, men and women from abroad are going home.
One of this country’s leading venture capitalists suggested to me only half in jest that if we want to retain our lead in technology, we had better staple a green card to their degrees.
Of course, the simple truth is that we can’t depend on others to bail us out. I’ve been impressed, as part of President Obama’s Economic Recovery Advisory Board, of the emphasis that our business members, our economists, our union leaders alike place on both the challenge and the enormous opportunities this century is bringing to deal with global warming, to find our way to energy efficiency and independence, to lead the green revolution.
It is truly an enormous challenge that can transform our economy and our politics. A respect for science, for experimentation, for hard facts, will be essential. But so will a strong sense of our culture, of what has brought us together as a nation, of how we can weld a new consensus so that we can move together to meet the new priorities.
You have been at the right place to help understand both the hard sciences and the cultural setting.
I won’t let you go without adding a final point.
You may be graduating from college, but your education is not finished – far from it. From some of you it will be the job you want, for some a graduate program, for others perhaps a sense you are at loose ends or in the midst of facing a different kind of school, the school of hard knocks. Let me say to those of you in that category, it could well be a learning experience that turns out to be the most useful of all in discerning what you want in a full life.
Don’t forget, all of you, that you are young. You have time, time to experiment, to take a risk, to sort out what’s best for you.
Go learn Chinese, go to Africa, or stay right at home and join Teach for America or any one of a million things that can provide a sense of reward and satisfaction.
It’s a bigger world, a competitive world, but a world of opportunity.
I trust you make the most of it. Good luck.