U.S. Treasury Secretary Jack Lew visited Minneapolis on Monday to argue that the United States is a bright spot in a tumultuous global economy, to reaffirm the Obama administration's support for the Trans Pacific Partnership and to underscore the need for government to ensure that economic growth benefits all Americans.
"The U.S. economy is looking to me like it's going to remain stable and strong for some time," said Lew, the top economic official in Obama's Cabinet. "There's a lot more work to do, but I think the world looks to the U.S. economy as a pillar of strength in a global economy that's very uncertain."
The economy is adding an average of 186,000 jobs each month in 2016, wages are growing, more people are entering the workforce and consumer sentiment remains strong, Lew said. Business investment, however, is lagging, and "the economy's doing better for the people at the top than for average working people."
Lew swept from place to place Monday in a caravan of sport-utility vehicles, meeting with businesspeople and politicians such as Gov. Mark Dayton and Minneapolis Mayor Betsy Hodges, U.S. Bank CEO Richard Davis, Ecolab CEO Doug Baker, Mortenson Co. Chairman David Mortenson and Land O'Lakes CEO Chris Policinski.
In the morning, he held an admiring news conference at the new park in the shadow of U.S. Bank Stadium. In the afternoon, he toured Seward Co-op Friendship Store in south Minneapolis, a bright new grocery that opened in October and employs about 100 people, more than half of them people of color.
"I am pleased to hear that the economy in Minneapolis is going well," he said. "The story in Minneapolis is also the story around the country, about the need for growth to be inclusive."
Government spending on infrastructure is crucial, he said. Reform of the business tax code, strong public-private partnerships focused on training workers and better international trade ties will also be important, he said.
In an interview, Lew said those political leaders who support the Pacific trade pact — now deeply unpopular and rejected by both presidential candidates — must do a better job explaining it.
"The facts of what the Trans Pacific Partnership does are very different from the way it's described in the political debate," said Lew, a former White House chief of staff and one of Obama's most trusted lieutenants. "We've gotten economies which collectively are going to be where the growth of the future comes from to buy into high standards for labor, high standards for environmental protection, high standards for level of business practices."
Nations such as Vietnam and Mexico have already begun to raise business standards to prepare for the trade pact's ratification, he said. Since population growth will be concentrated in those countries and others that have signed the agreement, he said, it's important for the United States to help write the rules of trade with them.
"We want to sell services in that market," he said. "We want to sell products."
Tying the loss of manufacturing jobs to such a trade deal, as candidates from both political parties have done, misses the mark, he said. Manufacturing employs fewer people — both in the United States and in developing economies — because robots do more of the work in all types of factories. No one can reverse that trend, Lew said.
Asked whether the national debt — now nearly $20 trillion — is a crisis, Lew said it's not. In fact, he said, with low interest rates now is a perfect time to borrow to build infrastructure and invest in other ways that can boost long-term economic growth.
"It can't be 'devil may care' — I've been part of bringing the deficit under control several times in my career," he said. "But it can't be the single preoccupation."
As a percentage of the economy, U.S. debt is "under control," he said. The nation paid down the debt for a few years during the 1990s, but when the Great Recession hit, the government had to get the economy moving and revenue was shrinking.
"We saw the deficit go to 10 percent of GDP and we've brought it down to under 3 percent of GDP," he said. "Stabilizing it gives us a period now where we have to worry about investing in the country. Frankly, if you gave me a choice as an economic matter to invest more in infrastructure construction that was financed by borrowing more, that would be a better investment for the country because it would build a larger economy that produces more revenue in the future."
Lew and his entourage visited Seward Co-op's new grocery store because it was built with the help of the government's New Markets Tax Credit program. The program, which Lew helped create in the late 1990s while working in the Clinton administration, is meant to create jobs and improve the lives of residents in low-income communities.
Seward Co-op used the tax credits to build its current location on Franklin Avenue, and used them again to finance the new, $11.5 million grocery store at the corner of 38th Street and Third Ave. S. Three-quarters of the store's 100 employees are full-time, and wages start at nearly $13 per hour, with opportunity for advancement.
Sales at the new store were more than 50 percent above projections through the end of June, at about $10.8 million, said Sean Doyle, the general manager of the Seward Co-Op, which employs about 350 people total.
"This is exactly what you want to see come out of the New Markets Tax Credit," Lew said. "You want to see an anchor in the community that makes a community stronger, that hires people, that trains people, that builds capacity for the future."
Adam Belz • 612-673-4405 Twitter: @adambelz
