Charlie Rose talks to... Jack Lew
The Treasury secretary discusses the evolution of economic sanctions and the power of finance in the war on Islamic State Give us a sense of what you believe economic sanctions have achieved. What should be on the agenda at the G-20 meeting in September—
They’ve evolved dramatically in the last 10 years. They started out as blunt instruments—an example is the embargo on Cuba. If you do it alone, without the support of the world, it doesn’t work very well, doesn’t change policy. By working systematically as a global community to put pressure on Iran, it actually changed Iran’s calculus. Iran decided to come to the table, to negotiate, to back away from its work on a nuclear weapon. And we’ve learned how important it is, when you reach an agreement, that there has to be relief from the sanctions. Otherwise, no one will ever respond to a sanctions regime by changing their policy.
As we emerge from the global economic crisis that started with the financial crisis here, we’ve seen many economies not getting to the kind of robust levels of growth they need. As much as we want it to do better, the U.S. has actually done very well compared to the rest of the world. The truth is, for us to continue growing, against international headwinds, means that the core of the U.S. economy is actually doing even better. We’re probably losing about half a percent of GDP a year due to international pressures. The real economy has been moving ahead steadily. We’re seeing it in car sales. We’re certainly seeing it in employment, with 14.5 million new jobs.