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Thank you all very much. Thank you all, officials of both organizations, and welcome to Washington. Let me say I apologize; I'm afraid I might have kept you waiting for a few minutes. Let me pay my respects to the man that comes on next with all the facts, John Robson, who is a Deputy at Treasury -- an enormous job. He is a successful businessman and great success in academia. Elected to come and serve his country, and he's doing a superb job. So, you're going to hear from one of our very, very best in a minute.
But as for now, a lot of dust gets kicked up around here these days. They say, if you stay too long, it's easy to forget just how well things are going in the land of the free. Last year, though, was a remarkable year for job-creating, which I think of is the matrix in this get-together here today. The entrepreneurial core of American business did well. Small businesses created over a million and a half new jobs in 1989 alone, about two-thirds of the jobs created in the entire Nation and almost equal to the entire labor force of the city of Los Angeles.
Also last year, the number of woman-owned small businesses created notably in mining, construction, and transportation increased at twice the rate of those owned by men. Nineteen eighty-nine was an important year for another reason: because it reminded us of the role that government should and shouldn't play in enterprise. It set off a collective movement toward democracy worldwide that has us all looking up from our work for a moment in wonder, bearing witness as the world confirmed the wisdom of our forefathers. They understood the importance of a limited government -- those forefathers -- so they fought for a social order that gave free reign to ambition and unleashed the power of individual aspiration. We rose, in fact, as a nation of upstarts who didn't know their place. This was a new idea: that government, far from fearing private initiative, should be all for it. It still seems like a new idea.
Last year, from Lima to Warsaw to Moscow to Memphis, we were reminded that the power of any economy flows not from an entrenched centralized bureaucracy elite but from the vitality of free competition, free market, and free wills. Men, women, immigrants, Americans of every kind, from every corner of this great country, are empowered by opportunities, by the degree of choice and the kind of motivation that only free markets can provide.
Adam Smith shocked the establishment 200 years ago with something we've realized only recently: that everyone has a natural desire and a natural right to improve their situation, to truck and barter and bargain in trade, everyone from a CEO to a kid with a pocketful of marbles. Society benefits from that creative, competitive impulse.
In this century, we defined that impulse as the American Dream. The dream has done more than endure: it is as dynamic as ever, as every one of you proves every single day. Every man and woman who builds an enterprise, from a shoeshine stand to a multinational, understands what it is I'm talking about here. It is what has made us a nation of imagination, of mavericks willing to take a gamble on the unexpected, the untried, the untested, the untraditional.
They're out there, moving in every direction and working to create new economic orders out of chaos -- building empires out of garages, foreseeing needs, forming strategies, finding investors, and founding corporations of every kind. That is free enterprise. That's what we're working here to try to encourage. But it's not just free enterprise alone, free enterprise by itself: it's an entirely new way of looking at the world that no longer assumes that bureaucratic, top-down organization is the answer. Rather than stifling individual creativity and responsibility, we want to encourage initiative. This new vision of freedom and democracy is circling the globe. We want this democracy to mean opportunity for everyone.
So, we began with the lessons that our forefathers left us about limited government, which revealed an obstacle to opportunity they faced then that we face now. I'm talking, of course, about excessive taxes. Limited government must mean limited taxes. This government should not be preventing people from investing in small businesses, nor should it swallow a third of the business you've spent your life building. But that's what our taxation of capital gains does, and that's why we are working to cut the rate on long-term held assets and counting on your support.
For anyone launching a small business -- whatever their age, their background, or condition -- a capital gains cut makes it easier to attract start-up capital. For growing businesses, it means more investment for the long term, and for all Americans, it means opportunity and the kind of continued job creation that only new and expanding businesses bring about. So, we're fighting for this tax cut. It does, as John will tell you, raise revenue to the Treasury, creates jobs, puts us on a more equal footing with out trading partners, and underwrites American ingenuity and creativity and businesses of every kind.
We see Japan taxing capital gains at 5 percent; Korea and Taiwan, I believe, is 0. And you look around the world, and you find that those countries that are doing well in stimulating investment have much lower rates on capital gains. So, we've got to do more to fuel the kind of flexible, creative energy that drives American business. On the wide range of issues concerning business owners across this country, from deficit reduction to education to product-liability reforms -- something I'm very interested in -- and especially health-care cost containment, we are with you working towards solutions. And we're also encouraging the kinds of creative thinking that business will need to retain and attract talent, like flexible workplace policies, telecommuting, and choice in child care.
We greatly appreciated the well-thought-out book of policy recommendations recently produced by your two groups. We're working on a range of ideas to help business move with markets as they change, from encouraging more R D research and experimentation to allowing joint production ventures that let American firms pool their skills, build new production facilities, and share investment risks.
But the principle that encompasses our thinking on all of these issues is something our forefathers knew and the rest of the world reminded us of last year: No state has yet managed to mandate prosperity or creativity -- no state at all. And the cruelest societies are those that are static and stagnant, cultures that run counter to human nature and human aspiration. But the surest sign of a nation's kindness is the kind of social and economic mobility that it allows people. What the world learned in the Revolution of '89 is that democracy is another way of saying opportunity, that government's best role and greatest security is not in consolidating power but in empowering the individual. And the truest kindness the state can offer the people is to govern with a gentle hand.
After two centuries, we're still convinced that government should be limited. But if our experience has taught us anything, it's that the creative potential of men and women with a mission is unlimited. You are such people; you are such men and women. So, this administration salutes you and will do everything in our power to support the work you do. I've left out the major fiscal problems facing our country, but again, I'll ask John to touch on that -- hammering away at keeping the deficit under control, trying to keep the lid on spending.
Let me just give you one anecdote on that. I sent legislation up in March, early March, asking the House and Senate to act on it in early April. And what it was about was helping democracy in Panama and helping democracy in Nicaragua. And there's a provision for a special supplemental in the way the Congress operates. And it was a dire emergency. And we need that, we need that money to help Violeta Chamorro [President of Nicaragua] solidify their democracy. We need it to help the people of Panama -- incidentally, I had a very good visit yesterday with President Endara [of Panama] -- but what happened to it? It goes up to the Congress. The House of Representatives added about billion to the spending on Nicaragua and Panama. None of it related to Nicaragua. None of it related to Panama. All of it related to other priorities they had. It goes over to the Senate, and the same thing is happening. I don't know what the total is over there now, but not only did they add a lot of domestic spending but they put on contentious provisions on abortion and contentious provisions on capital punishment. No matter how one feels on these issues, that hasn't anything to do with Nicaragua; it hasn't anything to do with Panama.
I just wanted to kind of debrief here and vent my frustration with the process, thinking that perhaps you'd understand. [Laughter]
But I'm not here to complain, because I feel it's a real responsibility to try to get things moving on these priorities that I think you and I share, and that is limited government, control the spending side as best you can, guard against excessive taxation, and encourage through saving and investment and as best we can to guarantee our own productivity and competitiveness into the future. I need your help, I welcome the support that you have given us, and I am very grateful you came our way. Thank you all, and God bless.
Note: The President spoke at 2:25 p.m. in Room 450 of the Old Executive Office Building.