Announcer (00:00):
Ladies and gentlemen, the Vice President of the United States, J.D. Vance.
J.D. Vance (00:07):
Good morning, everybody. How we doing? It's great to be here. Thanks to everybody for having me today. In particular, Ben and Mark. And I just got to say hello to Ben and Catherine backstage, but I know apparently Mark has the flu right now. So Mark, wherever you are, I think I had the same flu a few weeks ago. It sucks, but I'm sure you'll get through it. And it's great to be with you all and it's great to talk about the importance of American dynamism and what our administration is going to do to support so many of the country's most groundbreaking and compelling companies.
(00:56)
I know that you guys are working hard every single day, and I think it's pretty good news that as of a couple of months ago you have an administration that's working with you and facilitating your hard work instead of making it harder to innovate, which is I think what the last administration did. Though in defense of Joe Biden, he was asleep most of the time. I don't think he totally realized what he was doing, but certainly didn't make it easier, his administration did not for our innovators.
(01:21)
Now, as some of you may have seen, and I talked about this with Ben backstage, I spoke at a conference in Paris last month where my message to a group of CEOs and foreign leaders was that we should embrace the future head-on. We shouldn't be afraid of artificial intelligence, and that particularly for those of us lucky enough to be Americans, we shouldn't be fearful of productive new technologies. In fact, we should seek to dominate them. That's certainly what this administration wants to accomplish.
(01:48)
I suspect that most of you in this room are of like-mind. And if you're not, I don't know why the hell you're at the American Dynamism Conference, but I received some pushback from people who are worried about the disruptive effects of AI. One journalist suggested the speech highlighted the tension between the, "Techno-optimists and the populist right of President Trump's coalition," and today I'd like to speak to these tensions as a proud member of both tribes.
(02:16)
And let me put it simply, while this is a well-intentioned concern, I think it's based on a faulty premise. This idea that tech-forward people and the populists are somehow inevitably going to come to a loggerheads is wrong. I think the reality is that in any dynamic society technology is going to advance, of course. And speaking as a Catholic, I think back to Pope John Paul II's opening lines of the encyclical Laborem Exercens, "Through work man must earn his daily bread and contribute to the continual advance of science and technology, and above all to elevating unceasingly the cultural and moral level of the society within which he lives."
(03:03)
Now, I quote the Holy Father not only because I'm a fan of his, but also because he rightly understood that in a healthy economy technology should be something that enhances rather than supplants the value of labor, and I think there's too much fear that AI will simply replace jobs rather than augmenting so many of the things that we do.
(03:22)
Now in the 1970s, if you go back a little ways, many feared that the automated teller machine, what we call the ATM, would replace bank tellers. In reality, the advent of the ATM made bank tellers more productive, and you have more people today working in customer service in the financial sector than you had when the ATM was created. Now they're doing slightly different jobs, of course. Yes, they're doing more interesting tasks also, and importantly, they're making more money than they were in the 1970s.
(03:52)
Now when we innovate, we do sometimes cause labor market disruptions. That happens, but the history of American innovation is that we tend to make people more productive and then we increase their wages in the process, and I think all of us believe that's a good thing.
(04:09)
Now after all, who would claim that man was made less productive by the invention of the transistor or the metal lathe or the steam engine? Real innovation makes us more productive, but it also I think dignifies our workers. It boosts our standard of living. It strengthens our workforce and the relative value of its labor. And as Americans, all of us should be particularly proud of our extraordinary heritage. I think it is American heritage of inventing things and of our nation's status to this day as the world's foremost driver of research and development.
(04:42)
But all of this, the role that technology plays in a labor market and whether we greet innovative breakthroughs with excitement or with trepidation depends on the purpose of our economic system in the first place. And I think this is where the populists have an important point. It should be no surprise that when we send so much of our industrial base to other countries we stop making interesting new things right here at home.
(05:07)
Look, for example, at ship building. Now if you go back to World War II, America constructed thousands of so-called Liberty ships to carry troops, cargo and other things, building them at a pace of three ships every two days, three ships every two days. Now we build about five commercial ships across an entire year in the United States of America, and as a result, the United States today accounts for 0.1%, one-tenth of 1% of global ship building.
(05:38)
China, on the other hand, now makes more commercial ships than the rest of the world combined. In fact, one of Beijing's state-owned firms built more commercial ships just last year than all of America has produced since the end of World War II. So while we remain the leader in technology and innovation, I think there are troubling signs on the horizon.
(06:00)
And I raise all this to ask, does this sound like a regime, I'm speaking of China, that will pass up on the opportunity to use AI or any other technology to advance their own interests and further undermine the interests of their rivals? I think the answer is obvious, and that's why America, we've got to be tech forward. Yes, there are concerns. Yes, there are risks, but we have to be leaning into the AI future with optimism and hope because I think real technological innovation is going to make our country stronger.
(06:29)
So deindustrialization poses risks both to our national security and our workforce. It's important because it affects both. And the net result is dispossession for many in this country of any part of the productive process. And when our factories disappear and the jobs in those factories go overseas, American workers are faced not only with financial insecurity, they're also faced with a profound loss of personal and communal identity.
(07:00)
And so to come full circle on this alleged tension between the populists and the techno-optimists, I can understand a reaction of skepticism when we talk about the revolutionary potential of new invention and artificial intelligence and all the other incredible technologies that you guys are working. But I think that that tension is a little overstated, and so I'm going to come back to what's dividing some of the tech-optimists and the populists on our side.
(07:30)
I think the populists, when they look at the future and when they compare it to what's happened in the past, I think a lot of them see alienation of workers from their jobs, from their communities, from their sense of solidarity. You see the alienation of people from their sense of purpose. And importantly, they see a leadership class that believes welfare can replace a job and an application on a phone can replace a sense of purpose.
(07:57)
I remember a Silicon Valley dinner in particular back when I was in my tech days, where my wife and I were sitting around talking to some of the leaders of the important technology firms of the United States, and this was probably in 2016 or 2017. And I was talking about my real worry that we were heading in a direction where America could no longer support middle class families working on middle class wages. And importantly, that even if you had enough economic dynamism to provide the wealth to ensure those people could afford to buy a house and afford their food and so forth, that even if you replaced the financial element of their jobs, you would destroy something that was dignified and purposeful about work itself.
(08:42)
And I remember one of the tech CEOs who was there, the CEO, you would know his name if I mentioned it, he was the CEO of a multi-billion dollar company, he said, "Well, I'm actually not worried about the loss of purpose when people lose their jobs." And I said, "Okay, well, what do you think is going to replace that sense of purpose?" And he said, "Digital, fully immersive gaming." And then my wife texted me underneath the table and said, "We have to get the hell out of here. These people are effing crazy."
(09:13)
Now, I don't think that, of course, that CEOs views are representative of most people in this room, but when I think about a lot of the workers based on what they've seen in the past are very worried about the future because frankly, their leadership has failed to serve them. And then I think about this from the perspective of a lot of the tech optimists. I think a lot of the tech optimists they see over regulation. They see stifling innovation. I mean, you guys are builders. They are builders. And while they may sympathize with those who lost a job, they're much more frustrated that the government won't allow them to build the jobs of the future. And they know that as hard as it is to build a business in digital media, it's still harder to build one in robotics or life sciences or energy in what we call the world of atoms. They see a government that makes their lives harder and they mistrust anyone who looks to that government for aid.
(10:09)
And what I propose is that each group, our workers, the populists on the one hand, the tech optimists on the other, have been failed by this government, not just the government of the last administration, but the government in some ways of the last 40 years because there were two conceits that our leadership class had when it came to globalization.
(10:30)
The first is assuming that we can separate the making of things from the design of things. The idea of globalization was that rich countries would move further up the value chain while the poor countries made the simpler things. You would open an iPhone box and it would say designed in Cupertino, California. Now the implication, of course, is that it would be manufactured in Shenzhen or somewhere else. And yeah, some people might lose their jobs in manufacturing, but they could learn to design or to use a very popular phrase, learn to code.
(11:03)
But I think we got it wrong. It turns out that the geographies that do the manufacturing get awfully good at the designing of things. There are network effects, as you all well understand. The firms that design products work with firms that manufacture. They share intellectual property. They share best practices, and they even sometimes share critical employees.
(11:24)
Now, we assume that other nations would always trail us in the value chain, but it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends. Now that was the first conceit of globalization.
(11:38)
I think the second is that cheap labor is fundamentally a crutch, it is a crutch that inhibits innovation. I might even say that it's a drug that too many American firms got addicted to. Now if you can make a product more cheaply, it's far too easy to do that rather than to innovate. And whether we were offshoring factories to cheap labor economies or importing cheap labor through our immigration system, cheap labor became the drug of Western economies. And I'd say that if you look in nearly every country from Canada to the UK that imported large amounts of cheap labor, you've seen productivity stagnate, and I don't think that's not a total happenstance. I think that the connection is very direct.
(12:23)
Now, one of the debates you hear on the minimum wage, for instance, is that increases in the minimum wage force firms to automate. So a higher wage at McDonald's means more kiosks, and whatever your views on the wisdom of the minimum wage, I'm not going to comment on that here, companies innovating in the absence of cheap labor is a good thing. I think most of you are not worried about getting cheaper and cheaper labor. You're worried about innovating, about building new things, about the old formulation of technology is doing more with less. You guys are all trying to do more with less every single day.
(12:55)
And so I'd ask my friends, both on the tech optimist side and on the populist side, not to see the failure of the logic of globalization as a failure of innovation. Indeed, I'd say that globalization's hunger for cheap labor is a problem precisely because it's been bad for innovation. Both our working people, our populists and our innovators gathered here today have the same enemy, and the solution I believe is American innovation.
(13:25)
Because in the long run, it's technology that increases the value of labor. Innovations like the American system and the interchangeable parts revolution it sparked, or Ford's moving assembly line that skyrocketed the productivity of our workers, that's how American industry became the envy of the world. And that's what I really want to talk about today, why innovation is key to winning the worldwide manufacturing competition, to giving our workers a fair deal and to reclaiming our heritage via America's great industrial comeback, and I believe that's what we're on the cusp of, a great American industrial comeback.
(14:02)
Because innovation is what increases wages. It's what protects our homelands, and I know we have a lot of defense technology companies here. It's what saves troops lives on the battlefield. And I know everyone here today largely agrees. It's why we have some of the greatest inventors and thinkers in energy, precision machining, countless critical high-value industries just in this room.
(14:28)
And I think the other thing that unites all of you is that you're builders, and I use that word deliberately. I was very moved by Mark's manifesto from a few years ago about America. We are a nation of builders. We make things. We create things. Each of you came to the summit not because you developed some flash in the pan application, but because you're building something very real. You're raising new factories. You're turning profits back into R&D, and you're creating new good paying jobs for your fellow Americans. And this is why I'm such huge fans of yours, of Ben's and Mark's and of the entire endeavor. And that we recognize now, in our administration, is the time to align our work interests with those of all of you. It's time to align the interests of our technology firms with the interests of the United States of America writ large.
(15:19)
Now, all of you in your own ways have answered that call. After all, there's nothing forcing anyone to be in the room today. Each one of you could have set up headquarters in Southeast Asia or China, I'm sure, and you would've done quite well for yourselves financially. But you're here, I hope because you love your country, you love its people and the opportunities that it's given you, and you recognize that building things, our capacity to create new innovation in the economy cannot be a race to the bottom.
(15:49)
Now America's not going to win the future by ditching child labor laws or paying our workers less than Chinese or Vietnamese laborers. We don't want that, and it's not on the table. We can only win by doing what we always did, protecting our workers and supporting our innovators and doing both of those things at the same time.
(16:08)
And so I want to talk a little specifics here. The Trump administration's great plan for staging the great American manufacturing comeback is simple. You're making interesting new things here in America, great. Then we're going to cut your taxes. We're going to slash regulations. We're going to reduce the cost of energy so that you can build, build, build. Our goal is to incentivize investment in our own borders, in our own businesses, our own workers, and our own innovation. We don't want people seeking cheap labor. We want them investing and building right here in the United States of America. And so if you'll allow it, I'd like to talk about a few ways that the Trump administration is already pursuing a pro-innovation economy that allows our workers to thrive and our companies to out-compete their foreign peers. In short, an economy that is vibrantly America-first that serves Americans from all walks of life and of every kind.
(17:03)
Now first President Trump is starting with, and is dead serious, about rearranging our trade and tariff regime internationally. We believe that tariffs are a necessary tool to protect our jobs and our industries from other countries, as well as the labor value of our workers in a globalized market. In fact, combined with the right technology, they allow us to bring jobs back to the United States of America and create the jobs of the future.
(17:31)
Just look in the past few months at the auto industry as an important example. When you erect a tariff wall around a critical industry like auto manufacturing, and you combine that with advanced robotics and lower energy costs and other tools that increase the productivity of US labor, you give American workers a multiplying effect. Now that in turn allows firms to make things here at a price competitive basis.
(17:57)
Our President gets that, which is why last month we posted 9,000 new auto jobs after many, many years of stagnation or even decline in the auto sector. It's why just weeks in we already have new plant or production announcements from Honda, from Hyundai and Stellantis worth billions of dollars and thousands of additional jobs on top of the ones that were already created. Now this takes work. It took in the President's first term, the President ripping up NAFTA and creating a new US deal for American manufacturers in North America. But there's important work and we're going to do it.
(18:35)
Now second, all of this is why the President is approaching the issue of illegal immigration as aggressively as he has because he knows that cheap labor cannot be used as a substitute for the productivity gains that come with economic innovation, and so we've cracked down on illegal immigration at the border where the results speak for themselves. Last month, migrant crossings were down 94% to their lowest number all time and that happened just in two months of serious border enforcement. Thanks to President Trump's leadership, last month for the first time in over a year, the majority of job gains went to American citizens born on US soil, and that's important. For the first time in over a year, the majority of job creation actually went to American citizens.
(19:23)
The third, this administration is focused on reducing our input costs for our manufacturers and for everybody else. Achieving energy abundance, and I know Doug Burgum was here earlier and will be here later, is top of mind because when we look at some of the most exciting applications of new technologies, we realize it's going to take a lot of power to keep them running.
(19:44)
And we're thrilled to have our friends from the United Arab Emirates, a number of the business leaders and government leaders in town this week for meetings with our government. And one of the things they consistently hammer upon is something that unfortunately too few of our European allies tend to get, is that if you want to lead in artificial intelligence, you have got to be leading in energy production, so we are going to set the pace there and we are going to lead from the front.
(20:09)
Now we are already seeing, the good news is, signs of progress, even just a couple of months in. Gas and diesel prices are dropping. The cost of a barrel of US crude is way down. And last Wednesday, the administration took major steps to make energy even cheaper and liberate our companies from stifling environmental regulations.
(20:29)
Now that is great, but of course there's a lot more work we have to do over the next four years. Getting a tax bill right is especially critical for all of you and for all of your workers. We know how important it is to restore 100% bonus depreciation for capital investments as well as full expensing for R&D. Again, we want people to invest in America, and we're going to make sure the tax code reflects that.
(20:52)
In order to build on the success of the original tax law, meaning the tax law from the President's first administration, our administration is working to broaden some provisions that are critical to the industrial base, like expanding full expensing to cover factory construction. For business owners, including manufacturers, making the 2017 tax cuts permanent will provide further confidence and predictability to invest in new technology and equipment, hire more American workers and grow all of your businesses. And we have a lot more to do, but the country's already starting to see the payoff of this administration's bold economic agenda.
(21:33)
For producers and consumers alike, inflation is finally starting to come down. Core CPI last week dropped to its lowest number since April of 2021. And when it comes to the labor market, last month's jobs report showed a massive reversal, 10,000 new manufacturing jobs created where the previous year we had lost over 100,000 manufacturing jobs.
(21:55)
As you may have heard the President say, in less than two months since he's took office, he's already secured more than $1.7 trillion in new investments across the United States. That's hundreds of thousands of new jobs in manufacturing, AI, other hard tech sectors and more. So we think there's a lot to be excited about. There's a lot that we are excited about and we certainly hope that you guys are excited too.
(22:21)
But the fundamental premise, the fundamental goal of President Trump's economic policy is I think to undo 40 years of failed economic policy in this country. For far too long we got addicted to cheap labor, both overseas and by importing it into our own country, and we got lazy. We overregulated our industries instead of supporting them. We overtaxed our innovators instead of making it easier for them to build their great companies, and we made it way too hard to build things and invest things in the United States of America. That stopped two months ago, and it will continue to stop and we'll continue to fight for American workers and the American businesses that hire them and that support them.
(23:06)
So I want to thank you all for two things. Number one, I want to thank you all for doing what you do. Again, you could have chosen the easy path. Every single person in this room, as the President would say, you're all very high IQ. You're some of the most talented people in the United States of America. You chose to build a business right here in the United States of America. And for that, I'm grateful.
(23:27)
But the second thing I want to say is that I think you're not just building your own business. I think that you were part of a great American industrial renaissance. Whether it's the war of the future, the jobs of the future, the economic prosperity of the future, we believe that we must build it right here in the United States of America. So thank you all for building, thank you all for building in America, and thank you all for building the kind of society that I want to raise my children in. God bless you all. Thanks for having me.
