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—

Bloomberg Businessweek (North America) - - Politics / Policy -

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.

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