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Saturday, January 30, 2010

US China Relationship Sours Over $6.4 Billion Weapons Sales To Taiwan; China Overtakes U.S. as Largest Saudi Customer

US China Relationship Sours Over $6.4 Billion Weapons Sales To Taiwan; China Overtakes U.S. as Largest Saudi Customer

The already strained relationship between US and China is took a turn for the worse when US announced $6.4 billion in arms sales to Taiwan.

The United States is planning to sell $6.4 billion in arms to Taiwan, a move that will infuriate China and test whether President Barack Obama's efforts to improve trust with Beijing will carry the countries through a tense time.

The United States, which told China of the sale only hours before the announcement, acknowledged that Beijing may retaliate by cutting off military talks with Washington, which happened after the Bush administration announced a multibillion-dollar arms sale to Taiwan in 2008.

The U.S. is "obstinately making the wrong decision," China's Foreign Ministry said in a statement Saturday after Vice Foreign Minister He Yafei warned Ambassador Jon Huntsman the sale would "cause consequences that both sides are unwilling to see." The vice minister urged that the sale be immediately canceled, it said.

Despite its size, the U.S. weapons package dodges a touchy issue: F-16 fighter jets that Taiwan covets are not included. Senior U.S. officials said they are aware of Taiwan's desire for F-16s and are assessing Taiwan's needs.

The arms package includes 114 PAC-3 missiles and other equipment, costing more than $2.8 billion; 60 UH-60M Black Hawk helicopters, costing $3.1 billion; information distribution systems and other equipment, at $340 million; two Osprey Class Mine Hunting Ships, at a cost of about $105 million; and other items.

U.S. officials say the Obama administration's China policy is meant to improve trust between the countries, so that disagreements over Taiwan or Tibet do not reverse efforts to cooperate on nuclear standoffs in Iran and North Korea, and attempts to deal with economic and climate change issues.

China aims more than 1,000 ballistic missiles at Taiwan; the U.S. government is bound by law to ensure the island is able to respond to Chinese threats.

Obama's national security adviser, Jim Jones, said Friday that both Washington and Beijing do things "periodically that may not make everybody completely happy."

China Suspends Military Exchanges With The US

China's response was easy to predict: China summons US defence attache over Taiwan deal.

China says it will suspend its military exchanges with the United States over a multi-billion dollar American arms deal with Taiwan. Beijing has now summoned the US defence attache to lodge a 'solemn protest' against the deal.

The last time America sold arms to Taiwan - in October 2008 - China also stopped military relations with the US. Relations between Beijing and Taipei have improved recently and Taiwan insists it will promote peace across the Taiwan Strait.

This can easily blow over as it did in 2008, or it might be the start of increasing military as well as economic strains. For now, I would expect it to blow over.

By the way, China's protest could easily be political posturing. If China and Taiwan unite (which I think is inevitable), look at what China will immediately have access too.

* UH-60M Black Hawk Helicopters
* Patriot Advanced Capability-3 Missiles
* Osprey Class Mine Hunting Ships
* Information Technology

US would be wise to consider the strong likelihood that whatever military equipment we give Taiwan will eventually fall into the hands of China. All it takes is a vote by the people of Taiwan to bring it about.

Still want to give F-16 fighter jets to Taiwan?

In spite of what China says or how puffy it reacts to these weapons deals, perhaps that is just what China really wants.

China Overtakes U.S. as Largest Saudi Customer

While on the subject of China, please consider Saudi Aramco CEO Says China Overtakes U.S. as Largest Customer.

Saudi Arabian Oil Co., the world’s biggest crude producer, is exporting about 1 million barrels a day to China, more than to the U.S., Chief Executive Officer Khalid al-Falih said.

“We are already exporting more to China than to the U.S.,” he said today in an interview in Davos, Switzerland. “We are prudent and careful about where to invest but our eyes are focused on China and we will continue to look for all opportunities.”

The Saudi company, which owns an interest in a refinery in China’s Fujian province, is in talks with China Petroleum & Chemical Corp. to take a stake in a 200,000-barrel-a-day plant in Shandong. It is also expanding its Ras Tanura refinery on Saudi Arabia’s east coast and the Port Arthur plant in Texas, al-Falih said.

“Long term there will be a lot of consolidation and retirement of old and inefficient refineries,” he said in the interview. “We are building refineries that are going to be the most efficient, well-configured and able to deliver the products and we are comfortable that over their life cycle they will be very profitable. We are not designing them for the markets of 2008, 2009 but we are putting them in place for the next three to four decades.”

Aramco has shut in about a third of its 12 million barrels a day of oil output capacity to prevent a price slump. Crude prices rose to a record in July 2008, before tumbling 69 percent by the end of that year as the recession curbed demand. Oil has since rebounded 65 percent, and traded at $73.43 a barrel at 5:04 p.m. London time today.

While the US is wasting trillions of dollars fighting needless wars, inventing fictional enemies, and keeping troops stationed in 150 countries around the globe (all energy wasting activities), China is quietly building state-of-the-art refinery capacity for the next decade.

Mike "Mish" Shedlock

US Foreign Aid to Israel

US Foreign Aid to Israel

Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. From
1976-2004, Israel was the largest annual recipient of U.S. foreign assistance, having been
supplanted by Iraq. Since 1985, the United States has provided nearly $3 billion in grants
annually to Israel.

This Congressional Research Service report provides a useful overview of official US aid to Israel but does not address tax subsidies and other privileges extended to the Jewish state.

Of Course Palestine Matters to Jihadists by Marc Lynch Bin Laden back on the airwaves

Of Course Palestine Matters to Jihadists by Marc Lynch

Bin Laden back on the airwaves

Friday, January 29, 2010

Are Middle East Negotiations Dead?

MJ Rosenberg's Foreign Policy Matters
Are Middle East Negotiations Dead?

President Obama's "State of the Union" left out the traditional call for the renewal of Israeli-Palestinian negotiations which, for years, has been boilerplate in Presidential addresses to Congress.

I imagine Obama left it out because his previous calls fell on deaf ears in Israel, with Prime Minister Netanyahu continuing to expand settlements.

And Netanyahu's announcement yesterday that Israel intends to annex Ariel, a West Bank settlement of 15,000 that is 25 miles deep into the West Bank, could be the death knell for negotiations. The Ariel announcement means that the borders of Israel would extend so far into the West Bank that a contiguous Palestinian state could not be created.

For their part, Palestinians resist negotiations because they have gone nowhere and succeed only in taking the onus off Israel during them.

Palestinians also argue that Israel uses periods of negotiations to seize more land without conceding anything, on the grounds that any "concession" would cause right-wingers in the governing coalition to walk out.

In fact, just yesterday, President Obama himself alluded to the fragility of Israel's coalition as an excuse for not applying pressure (as if we should care whether a right-wing coalition in Israel survives).

Palestinians have been especially reluctant to yield to the US call for negotiations ever since we forced the Palestinian Authority to reject the Goldstone Report on war crimes against their own people, making them look like utterly ridiculous marionettes.

So, Palestinians believe, they are better off without negotiations, letting the pressure on Israel build.

It may not work, but negotiations haven't worked either.

So where does that leave Palestinians? Are they completely without recourse?

Not at all. They can demand their rights without reference to statehood and without negotiations to achieve them. That means they punt on the question of one state, two states, or three states (don't forget Gaza). They demand their rights whether they are exercised within Israel or within their own country. After all, basic human rights are guaranteed to all people, whether in their own state or as a minority in another country.

These rights are specifically guaranteed in the Universal Declaration of Human Rights, which was ratified by the United Nations with the support of, among others, the United States and Israel. (It was written by Eleanor Roosevelt, the US delegate).

The rights it guarantees (the right to vote, equality before the law, freedom of movement and resistance, peaceful assembly and association, the right to own property and not to be deprived of it, among others) are precisely the rights denied to the Palestinians of Gaza, West Bank, and East Jerusalem.

Why shouldn't the Palestinians demand these rights, laying aside the question of a state with internationally recognized borders until the Israelis are ready to seriously discuss returning to the pre-'67 borders?

But would Israelis agree to granting Palestinians basic human rights? That is hard to say. The far right has a strong racial animus to Arabs and would be reluctant to see any change in the status quo.

But that is not true of most Israelis. Most Israelis are deeply troubled by the occupation but cannot imagine how it would be possible to evacuate hundreds of thousands of settlers from their West Bank homes. They might be relieved if the Palestinians focused on rights rather than territories.

After all, Israel's options would then be clear. Either grant the Palestinians fundamental rights or confront the settlement demon and begin the process of de-occupation and the preservation of Israel as a Jewish state.

But what if Israel said "no"? "No" to rights. "No" to ending the occupation. Then what?

That is where the issue of consequences would rise. Israeli-Palestinian negotiations have repeatedly collapsed when Israel has refused to fulfill a commitment to which it agreed.

It accepts a proposal and then supplements it with a host of unilateral conditions. It then says it cannot implement the original commitment until its new conditions are met.

Or it uses the device employed when President Obama demanded a settlement freeze. Netanyahu changed the subject by accepting, in nebulous terms, the two-state solution and coupling that with a partial freeze. But he exempted East Jerusalem, the area of most significance to the Palestinians and where most of the settlement expansion is now occurring.

That transparent gambit won him praise from Secretary of State Clinton and the easing of US pressure.

Saying "no" had no consequences.

But saying no to a Palestinian call for fundamental human rights would have to produce consequences, of one kind or another. If it doesn't -- if Israel pays no price for simultaneously maintaining the occupation and refusing to accord rights to those under occupation -- then Palestinians will come to believe that they have no recourse at all except submission. And that isn't going to happen.

What would happen is that the Palestinians would go to the United Nations, to the European Union, and even to the United States to seek those consequences. And these would most likely come in the demand for sanctions. There is already a burgeoning BDS (Boycott, Divestment, Sanctions) movement that is seeking to bring down the occupation the way a similar movement brought down apartheid.

Is this what Israelis want? Do they really want those concerned about the occupation to be forced to turn to an option this extreme?

I know that the last thing I want is a successful international movement that would boycott and sanction Israel as if it was apartheid South Africa. But it's probably inevitable unless Israelis come to their senses and begin the process of ending the occupation while the decision is still theirs to make.

As for the United States, President Obama needs to stop worrying about the survival of Israel's right-wing coalition. He should instead focus on the survival of Israel itself, not to mention the well-being of Palestinians whose suffering is mightily abetted by US policies (and arms). And that means pressure, pressure, pressure. For Israel's own sake.

I used to believe that there was no alternative to negotiations. I was wrong. There is. And, at this rate, its day will arrive soon.

Will an (alleged) assassination shatter the Hamas-Israel cease-fire?

Will an (alleged) assassination shatter the Hamas-Israel cease-fire?

Hamas is claiming that one of its leaders, Mahmoud al-Mabhouh, was
killed by Israeli operatives in his hotel in Dubai on January 20 and
threatening a response "in the appropriate place and time." The story
is all over the Arab media, in many cases as a red-bannered breaking
news story. Israel does not yet have a comment that I've seen. Hamas
says that UAE authorities are cooperating in the investigation, and
the first reports out of Dubai are that the killers were European and
part of a "professional criminal gang". Whatever the truth of the
incident, the alleged assassination threatens to disrupt the uneasy
ceasefire which has held between Hamas and Israel over the last year,
and to further strain the already dismal prospects of either Fatah-
Hamas reconciliation, attempts to alleviate the suffering of Gaza, or
a resumption of Israeli-Palestinian peace talks. Let's hope that it
doesn't spark a new cycle of violence.

The de facto cease-fire between Hamas and Israel has been no secret.
Israelis have often pointed to these efforts by Hamas to prevent
attacks against Israel over the last year as evidence that Operation
Cast Lead succeeded in establishing deterrence. As Israeli Defense
Minister Ehud Barak recently said, for instance, "The deterrence
achieved during Operation Cast Lead still exists, and it is strong."
Palestinian Authority (Ramallah) Prime Minister Salam al-Fayyad
similarly raised some eyebrows at Davos yesterday by highlighting that
in practice Hamas and the PA agreed on security: "it is clear that
Hamas has been trying to prevent attacks on Israel, it is no secret,
it has been trying to do that, it is not saying it is doing it but it
is doing it.” This argument has been used against Hamas by its Arab
rivals such as Egypt and the PA, who have pointed to the de facto
ceasefire to mock their claims to be "resisting" Israel. Israelis,
including Barak, have argued repeatedly that what rocket fire there
has been from Gaza has been due to the difficulties Hamas has faced in
controlling more radical groups --- not from Hamas itself.

Why would Israel put this de facto ceasefire at risk by an
assassination? First off, it's impossible to say at this point
whether they did --- no evidence has yet been presented to back up
Hamas's claims. Much of the Arab public immediately believed it,
though, as it immediately recalled the botched operation against
Khaled Meshaal in Amman a decade ago, as well as the assassinations
of leading Hamas figures such as Ahmed Yassin and Abd al-Aziz al-
Rentissi in 2004. That doesn't mean that it's true. But since
Hamas has already gone public with the accusation and promised
revenge, it may spark off a dangerous cycle anyway.

What if it's true? There should be questions about the legitimacy and
morality of assassinating one's enemies abroad, one would think. But
that seems unlikely in this day and age, when the United States openly
brags of its Predator strikes, discusses them primarily in terms of
whether or not they "work" as opposed to whether or not they are legal
or morally acceptable, and muses about whether or not to target Anwar
al-Awlaki (the radical Islamist in Yemen who is also an American
citizen). The international norms against such assassinations have
been thoroughly degraded by the Global War on Terror, and the Obama
administration has escalated rather than reined in such measures.

So the real debate is more likely to be about the logic of the
assassination and whether it "works." But it's not obvious what that
would even mean in this context -- it makes little strategic sense.
If Israelis and the PA both acknowledge that Hamas has been
controlling attacks against Israel from Gaza, what is gained by a
provocation such as this? Would it have "worked" if Hamas fails to
respond, demonstrating its impotence? Would it have "worked" if
Hamas does respond, killing innocent Israeli civilians and possibly
triggering another round of horrific violence? Would it have "worked"
if a Hamas retaliation (or even an unfulfilled threat of retaliation)
offers a pretext for maintaining or intensifying the blockade of
Gaza? At this point I'm seeing a blizzard of Arab commentary on the
subject but no real consensus. But smaller things have sparked
disastrous confrontations in the past, and I only hope that this one
does not.

UPDATE: as a friend points out, "it makes no sense" hardly rules it
out. Just looking back at the botched 1997 Israeli assassination
attempt against Khaled Meshaal, as masterfully chronicled in Paul
McGeough's Kill Khaled, is enough to show that. The Meshaal episode,
also authorized by a government led by Benjamin Netanyahu, targeted
the rising Hamas leader on the streets of Israel's closest partner in
the Arab world using agents holding foreign (Canadian) passports.
King Hussein was so furious and humiliated that he demanded not only
an antidote to the poison used on Meshaal but also the release of a
number of Hamas leaders from Israeli prisons (including Shaykh Ahmed
Yassin). It would have been difficult to make a sensible case for
that attempt either. So we'll just see how this one unfolds, I'm

Foreign Affairs in Obama's State of the Union: Caught between the Utopian and the Propagandistic Juan Cole



Foreign Affairs in Obama's State of the Union: Caught between the Utopian and the Propagandistic

Juan Cole

Understandably, President Obama concentrated on domestic issues, especially job creation, in his State of the Union address. But there were a few paragraphs toward the end about foreign affairs that I want to talk about. While I thought the speech generally strong, and the flash polls suggest that the public did, as well, I felt that there were significant problems with the foreign policy passages that signal trouble ahead.

' In Afghanistan, we are increasing our troops and training Afghan Security Forces so they can begin to take the lead in July of 2011, and our troops can begin to come home. We will reward good governance, reduce corruption, and support the rights of all Afghans – men and women alike. We are joined by allies and partners who have increased their own commitment, and who will come together tomorrow in London to reaffirm our common purpose. There will be difficult days ahead. But I am confident we will succeed.'

This passage was one of the few lauded by Virginia Governor Bob McDonnell in the Republican response. But it is among the weaker parts of the speech.

1. Reserve Col. Lawrence Sellin, a Ph.D. and a veteran of the Iraq and Afghanistan wars, summarized the problems with training the Afghan army:

a. The US has already spent more than $17 bn. since 2001 building the Afghanistan National Army, but without much success.

b. Although the government of President Hamid Karzai claims that the army numbers 100,000 now, in fact some battalions are at half strength and not combat ready. The chance that the ANA can be expanded to 240,000 effective soldiers for another $16 bn. in a year or two is slim to none.

c. If a new Afghan army can be built at all, it will take at least 4 years, and it is not plausible that US troops will withdraw beginning in 2011. Moreover, Memos of US ambassador Karl Eikenberry in Kabulinsist that President Hamid Karzai is unreliable and refuses to try to take command of the country, so that he is not deploying the army he already has. The profound divisions within the Obama camp, among the most experienced Afghan hands, make it anything but certain that the counter-insurgency strategy of Gen. Stanley McChrystal, to which Obama committed himself, can succeed.

d. Veteran NBC war correspondent Richard Engel maintains that staff officers work short hours and are corrupt. Only some of the small companies of troops deployed in the countryside can effectively be said to be at war. Even these are 90% illiterate, and some have received only 2 weeks of 'show and tell' training. Drug use is rampant among troops, and some 25 percent go AWOL. See Engle on the Rachel Maddow show:

As is often the case, in this paragraph Obama was attempting to please both right and left, with a troop escalation advertised as a mere prelude to withdrawal. But the task, of training an effective 240,000-man AFghanistan National Army is an enormous one and cannot be even partially completed by summer 2011.

He then turned, more sure-footedly, to Iraq.

' As we take the fight to al Qaeda, we are responsibly leaving Iraq to its people. As a candidate, I promised that I would end this war, and that is what I am doing as President. We will have all of our combat troops out of Iraq by the end of this August. We will support the Iraqi government as they hold elections, and continue to partner with the Iraqi people to promote regional peace and prosperity. But make no mistake: this war is ending, and all of our troops are coming home.'

Obama sees the Iraq War as irrelevant to the war on terrorism, and is putting all his military eggs in the Afghanistan basket. He is quite clear that the US military is departing Iraq on the timetable worked out with the Iraqi parliament, virtually no matter what. I've noted hisdetermination and consistency on the Iraq withdrawal elsewhere.This passage is the strongest on foreign policy, and he sent an unmistakeable message that he in my view has too seldom discussed with the American public.

Obama goes on to pledge to work on nuclear disarmament and maintains that such negotiations (mainly with Russia) will enhance US credibility with the international community in dealing with North Korea and Iran

Doesn't actually sound very likely to me.

' These diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of these weapons. That is why North Korea now faces increased isolation, and stronger sanctions – sanctions that are being vigorously enforced. That is why the international community is more united, and the Islamic Republic of Iran is more isolated. And as Iran's leaders continue to ignore their obligations, there should be no doubt: they, too, will face growing consequences. '

Sanctions won't work on Iran to produce regme change. They can keep a country weak and harm civilians, as we saw in iraq. But they cannot dislodge a ruling elite in an oil country, because oil is too easily smuggled and converted into cash, which can then be squirreled away by the ruling party. Congress's infatuation with sanctions on Iran is highly unlikely to be productive, especially since China declines to go along with them.

Moreover, Washington's tightening of sanctions may make it harder for Obama to engage the regime in serious negotiations, as he had earlier pledged to do. This speech is essentially a capitulation to Neoconservative themes on Iran, rather than retaining Obama's central plank of keeping negotiating lines open to Tehran.

' That is the leadership that we are providing – engagement that advances the common security and prosperity of all people. We are working through the G-20 to sustain a lasting global recovery. We are working with Muslim communities around the world to promote science, education and innovation.'

I'm not sure what this last part, about promoting education and innovation in the Muslim world, even means, and cannot think of any practical change in US development policy with regard to the Muslim world in the past year. The big steps toward education and science are being undertaken by Qatar's government in its Education City and the new Saudi King Abdulaziz University of Science and Technology. It may be that Obama is referring to the planned $7.5 bn. in aid pledged to Pakistan, some of which would go toward education.

In any case, Obama's reference to relations with the Muslim world was essentially a soft throw-away line. What would improve US relations with Muslims would be a swift movement toward a two-state solution in Israel and Palestine and an end to the Israeli blockade of Gaza's children. A frank acknowledgment that the US has been powerless to make headway on this essential issue would have been welcome. So too would be an acknowledgment by the president of the justice of the letter calling on Israel to desist from its blockade of Gaza circulated by 54 Democratic members of the House of Representatives, in a rare act of defiance toward the powerful Israel lobbies.

This is the final relevant paragraph:

' As we have for over sixty years, America takes these actions because our destiny is connected to those beyond our shores. But we also do it because it is right. That is why, as we meet here tonight, over 10,000 Americans are working with many nations to help the people of Haiti recover and rebuild. That is why we stand with the girl who yearns to go to school in Afghanistan; we support the human rights of the women marching through the streets of Iran; and we advocate for the young man denied a job by corruption in Guinea. For America must always stand on the side of freedom and human dignity. '

The attempt to position the US military occupation of Afghanistan and the sabre-rattling and threatened sanctions against Iran as somehow beneficial to women in those countries is a continuation of Bush administration rhetoric that is unworthy of Obama. These themes may appeal to the Mavis Leno faction of American feminists, but are unconnected to Afghan and Iranian women's lived reality. The position of women in Afghanistan is better now than under the Taliban, but the new Afghanistan is still an Islamic republic, and president Karzai pandered for votes among the Shiite Hazaras by allowing Shiite law to operate among them on personal status issues, rather than national law. One implication of this step is that Hazara women are now liable to marital rape. So this is the liberation the Obama administration is bringing Afghan women? Moreover, Obama's escalation of the war will have a negative impact on women and families caught in the crossfire. It is a foolish argument to make because so easily disproven.

Moreover, many of the female protesters in Iran have been traditionalists in full veil, who support the ideals of the regime but were disappointed that Ahmadinejad stole the election. The idea that the Iranian opposition is made up of people just like Obama and his supporters is an American myth.

These few paragraphs on foreign policy in the speech were among its weakest. The plans for Afghanistan and nuclear disarmament seemed thin and utopian. The threats launched against Iran seemed empty. The use of a kind of 'imperial feminism' to justify Obama's escalation of the Afghanistan war seemed just pandering to some of his constituency without holding much promise of genuine change for Afghan women. As for Iran, further economic sanctions will harm women and families most of all. Only in his express determination to withdraw from Iraq on schedule did Obama achieve the fire and conviction characteristic of much of the rest of the speech.

While it now seems as though the domestic economy and job creation are far more important than these foreign policy issues, the issues of Afghanistan, Pakistan (not mentioned), Iran and Palestine will likely generate among the more important crises in Obama's presidency, and he needs desperately to get a better handle on them and take control of policy, or his opponents will maneuever him into playing either Lyndon Johnson or Jimmy Carter. Just because he says he would be satisfied with a single term is no reason to let the hawks impose one on him.

Iran and Obama's State of the Union Address: Back to the Future

Iran and Obama's State of the Union Address: Back to the Future

In a State of the Union address that devoted less time or attention to foreign policy than any recent counterpart, President Obama provided disturbing evidence as to the ongoing strategic regression of his administration’s Iran policy.

Obama has moved, during just one year in office, from relatively forward-leaning expressions of interest in engaging Iran on the basis of “mutual interests” and in an atmosphere of “mutual respect” to rhetoric reminiscent of President George W. Bush’s description of an “axis of evil” (North Korea, Saddam Husayn’s Iraq, and the Islamic Republic of Iran) in his 2002 State of the Union address. Last night, Obama equated Iran’s nuclear activities with North Korea’s nuclear weapons program—even though there is no doubt that North Korea has built nuclear weapons and no evidence that the Islamic Republic has done so or even tried to do so. (For good measure, the President effectively put the status of Iranian women in the same category as that of their Afghan sisters. While one can take issue with restrictions still in place on Iranian women, the educational, professional, and social standing of women in the Islamic Republic is among the highest in the greater Middle East and clearly superior to the status of women in Afghanistan.)

There was no mention of engaging Tehran in last night’s speech. Instead, the emphasis—as during George W. Bush’s administration—was on isolating and punishing Iran. With regard to the nuclear issue, in particular, Obama said that “as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences.” (Departing from his prepared text at this point in the speech, the President added starkly: “That is a promise.”)

To the extent that there is room left in Obama’s Iran policy for diplomacy, it is diplomacy of the sort pursued by the George W. Bush administration during its second term in office—engagement with America’s regional and international allies, to marshal support for intensified multilateral pressure on Iran, not engagement with the Islamic Republic with the aim of resolving differences and realigning U.S.-Iranian relations. One could accurately characterize this as diplomacy about Iran, rather than diplomacy with Iran. It certainly does not amount to “change we can believe in”.

Obama’s retreat from any serious effort to develop a genuine strategy for engaging Tehran is matched by the absence of a comprehensive strategy for dealing with the array of challenges confronting the United States in the broader Middle East. The President said, literally, nothing—not a word—about the Israeli-Palestinian conflict or Arab-Israeli peacemaking. His remarks on Iraq and Afghanistan focused on how U.S. military involvement in these conflicts is coming to an end. It would seem that, under President Obama, America’s “grand strategy” for the Middle East has been reduced to killing as many jihadist terrorists as possible.

The lack of a comprehensive strategy for the broader Middle East has important implications for the Obama administration’s approach to Iran. In his speech last night, President Obama evinced no recognition that a more constructive relationship with Tehran is essential for the United States to achieve its high-priority policy objectives in the region. There was certainly no sign of interest in engaging the Islamic Republic regarding post-conflict stabilization in Iraq or Afghanistan.

Iranian officials and analysts in Tehran have already begun to suggest that, if the United States moves ahead with additional sanctions or other coercive measures, Tehran might feel compelled to reduce its cooperation in Iraq and Afghanistan. Indeed, Iran declined to attend an international conference on Afghanistan in London this week. According to Iran’s Foreign Ministry spokesman, Iran opted not to take part because

the approach of the conference is in line with increasing military action, following double standards on [fighting] terrorism, overlooking the roots or problems and not using regional potentialities in solving the problems in Afghanistan (emphasis added).

The Obama Administration’s approach could well end up increasing the risks of proxy conflicts between the United States and the Islamic Republic in both Afghanistan and Iraq.

Besides President Obama’s rhetoric, we observed what we thought was another important indicator of the strategic drift—and, consequently, the poor prospects of success—in the Obama Administrtion’s foreign policy. Secretary of State Hillary Clinton did not attend last night’s State of the Union address. To be fair, she is in London attending the aforementioned conference on Afghanistan and a similar meeting on Yemen, so she had an acceptable excuse. But, on the same day that President Obama would deliver his State of the Union speech, Secretary Clinton gave an interview to PBS in which she indicated that she did not anticipate staying on as America’s chief diplomat in an Obama second term. The Secretary professed to be worn out by the rigorous demands of her job. We do not doubt that Secretary Clinton is working hard. But we took her statements as a tacit vote of no confidence in the direction of American foreign policy under President Obama. A year in, there have been no foreign policy successes of note. The prospects for major achievements over the next 2-3 years are not good. Most likely, what Secretary Clinton can look forward to during the balance of her tenure is a hard and unrewarding slog. From that vantage, a return to private life might not look so bad.

Other harbingers about the direction of America’s Iran policy are not good. The Israel Project—which describes itself as an international non-profit organization devoted to educating the press and the public about Israel while promoting security, freedom, and peace…to help protect Israel, reduce anti-Semitism and increase pride in Israel”—announced earlier this week that it had purchased air time on CNN, CNN Headline News, Fox News Channel, and MSNBC for an extensive ad campaign, starting on the day of President Obama’s State of the Union address and continuing for three days thereafter. This campaign is intended to highlight the Iranian “threat” to Israel—and, by extension, to the United States. (To see the signature ad in the campaign, click here .) The text of the ad script reads, in part

Imagine Washington, DC under missile attack from nearby Baltimore. Since 2005, Israel has been targeted by 8,000 rocket and missile attacks from HAMAS and Hezbollah. Iran has helped fund, train, and arm these terrorist groups. A nuclear Iran is a threat to peace, emboldens extremists…and could give nuclear materials to terrorists with the ability to strike—anywhere.

This, of course, harkens back to the same kinds of advertising and public “educaction” that helped to pave the way for the American invasion of Iraq. And, in a manner reminiscent of the run-up to congressional action on the Iraq Liberation Act in 1998, the House Committee on Foreign Affairs Subcommittee on the Middle East and South Asia is now scheduled to hold a hearing next week on what the United States can do to assist the opposition in Iran.

We always knew that President Obama would have to be prepared to fight in order to take America’s Iran policy in a new direction that truly served American interests and promoted regional stability. We were never sure he was really up to this fight. But, it is truly disappointing to see how rapidly he is pre-emptively surrendering to the other side.

--Flynt Leverett and Hillary Mann Leverett

Presidential assassinations of U.S. citizens BY GLENN GREENWALD

WEDNESDAY, JAN 27, 2010 06:28 EST
Presidential assassinations of U.S. citizens

A Yemeni anti-terrorist soldier.
(updated below - Update II)

The Washington Post's Dana Priest today reports that "U.S. military teams and intelligence agencies are deeply involved in secret joint operations with Yemeni troops who in the past six weeks have killed scores of people." That's no surprise, of course, as Yemen is now another predominantly Muslim country (along with Somalia and Pakistan) in which our military is secretly involved to some unknown degree in combat operations without any declaration of war, without any public debate, and arguably (though not clearly) without any Congressional authorization. The exact role played by the U.S. in the late-December missile attacks in Yemen, which killed numerous civilians, is still unknown.

But buried in Priest's article is her revelation that American citizens are now being placed on a secret "hit list" of people whom the President has personally authorized to be killed:

After the Sept. 11 attacks, Bush gave the CIA, and later the military, authority to kill U.S. citizens abroad if strong evidence existed that an American was involved in organizing or carrying out terrorist actions against the United States or U.S. interests, military and intelligence officials said. . . .

The Obama administration has adopted the same stance. If a U.S. citizen joins al-Qaeda, "it doesn't really change anything from the standpoint of whether we can target them," a senior administration official said. "They are then part of the enemy."

Both the CIA and the JSOC maintain lists of individuals, called "High Value Targets" and "High Value Individuals," whom they seek to kill or capture. The JSOC list includes three Americans, including [New Mexico-born Islamic cleric Anwar] Aulaqi, whose name was added late last year. As of several months ago, the CIA list included three U.S. citizens, and an intelligence official said that Aulaqi's name has now been added.

Indeed, Aulaqi was clearly one of the prime targets of the late-December missile strikes in Yemen, as anonymous officials excitedly announced -- falsely, as it turns out -- that he was killed in one of those strikes.

Just think about this for a minute. Barack Obama, like George Bush before him, has claimed the authority to order American citizens murdered based solely on the unverified, uncharged, unchecked claim that they are associated with Terrorism and pose "a continuing and imminent threat to U.S. persons and interests." They're entitled to no charges, no trial, no ability to contest the accusations. Amazingly, the Bush administration's policy of merely imprisoning foreign nationals (along with a couple of American citizens) without charges -- based solely on the President's claim that they were Terrorists -- produced intense controversy for years. That, one will recall, was a grave assault on the Constitution. Shouldn't Obama's policy of ordering American citizens assassinated without any due process or checks of any kind -- not imprisoned, but killed -- produce at least as much controversy?

Obviously, if U.S. forces are fighting on an actual battlefield, then they (like everyone else) have the right to kill combatants actively fighting against them, including American citizens. That's just the essence of war. That's why it's permissible to kill a combatant engaged on a real battlefield in a war zone but not, say, torture them once they're captured and helplessly detained. But combat is not what we're talking about here. The people on this "hit list" are likely to be killed while at home, sleeping in their bed, driving in a car with friends or family, or engaged in a whole array of other activities. More critically still, the Obama administration -- like the Bush administration before it -- defines the "battlefield" as the entire world. So the President claims the power to order U.S. citizens killed anywhere in the world, while engaged even in the most benign activities carried out far away from any actual battlefield, based solely on his say-so and with no judicial oversight or other checks. That's quite a power for an American President to claim for himself.

As we well know from the last eight years, the authoritarians among us in both parties will, by definition, reflexively justify this conduct by insisting that the assassination targets are Terrorists and therefore deserve death. What they actually mean, however, is that the U.S. Government has accused them of being Terrorists, which (except in the mind of an authoritarian) is not the same thing as being a Terrorist. Numerous Guantanamo detainees accused by the U.S. Government of being Terrorists have turned out to be completely innocent, and the vast majority of federal judges who provided habeas review to detainees have found an almost complete lack of evidence to justify the accusations against them, and thus ordered them released. That includes scores of detainees held while the U.S. Government insisted that only the "Worst of the Worst" remained at the camp.

No evidence should be required for rational people to avoid assuming that Government accusations are inherently true, but for those do need it, there is a mountain of evidence proving that. And in this case, Anwar Aulaqi -- who, despite his name and religion, is every bit as much of an American citizen as Scott Brown and his daughters are -- has a family who vigorously denies that he is a Terrorist and is "pleading" with the U.S. Government not to murder their American son:

His anguish apparent, the father of Anwar al-Awlaki told CNN that his son is not a member of al Qaeda and is not hiding out with terrorists in southern Yemen.

"I am now afraid of what they will do with my son, he's not Osama Bin Laden, they want to make something out of him that he's not," said Dr. Nasser al-Awlaki, the father of American-born Islamic cleric Anwar al-Awlaki. . . .

"I will do my best to convince my son to do this (surrender), to come back but they are not giving me time, they want to kill my son. How can the American government kill one of their own citizens? This is a legal issue that needs to be answered," he said.

"If they give me time I can have some contact with my son but the problem is they are not giving me time," he said.

Who knows what the truth is here? That's why we have what are called "trials" -- or at least some process -- before we assume that government accusations are true and then mete out punishment accordingly. As Marcy Wheeler notes, the U.S. Government has not only repeatedly made false accusations of Terrorism against foreign nationals in the past, but against U.S. citizens as well. She observes: "I guess the tenuousness of those ties don’t really matter, when the President can dial up the assassination of an American citizen."

A 1981 Executive Order signed by Ronald Reagan provides: "No person employed by or acting on behalf of the United States Government shall engage in, or conspire to engage in, assassination." Before the Geneva Conventions were first enacted, Abraham Lincoln -- in the middle of the Civil War -- directed Francis Lieber to articulate rules of conduct for war, and those were then incorporated into General Order 100, signed by Lincoln in April, 1863. Here is part of what it provided, in Section IX, entitled "Assassinations":

The law of war does not allow proclaiming either an individual belonging to the hostile army, or a citizen, or a subject of the hostile government, an outlaw, who may be slain without trial by any captor, any more than the modern law of peace allows such intentional outlawry; on the contrary, it abhors such outrage. The sternest retaliation should follow the murder committed in consequence of such proclamation, made by whatever authority. Civilized nations look with horror upon offers of rewards for the assassination of enemies as relapses into barbarism.

Can anyone remotely reconcile that righteous proclamation with what the Obama administration is doing? And more generally, what legal basis exists for the President to unilaterally compile hit lists of American citizens he wants to be killed?

What's most striking of all is that it was recently revealed that, in Afghanistan, the U.S. had compiled a "hit list" of Afghan citizens it suspects of being drug traffickers or somehow associated with the Taliban, in order to target them for assassination. When that hit list was revealed, Afghan officials "fiercely" objected on the ground that it violates due process and undermines the rule of law to murder people without trials:

Gen. Mohammad Daud Daud, Afghanistan's deputy interior minister for counternarcotics efforts, praised U.S. and British special forces for their help recently in destroying drug labs and stashes of opium. But he said he worried that foreign troops would now act on their own to kill suspected drug lords, based on secret evidence, instead of handing them over for trial.

"They should respect our law, our constitution and our legal codes," Daud said. "We have a commitment to arrest these people on our own" . . . .

Ali Ahmad Jalali, a former Afghan interior minister, said that he had long urged the Pentagon and its NATO allies to crack down on drug smugglers and suppliers, and that he was glad that the military alliance had finally agreed to provide operational support for Afghan counternarcotics agents. But he said foreign troops needed to avoid the temptation to hunt down and kill traffickers on their own.

"There is a constitutional problem here. A person is innocent unless proven guilty," he said. "If you go off to kill or capture them, how do you prove that they are really guilty in terms of legal process?" . . .

So we're in Afghanistan to teach them about democracy, the rule of law, and basic precepts of Western justice. Meanwhile, Afghan officials vehemently object to the lawless, due-process-free assassination "hit list" of their citizens based on the unchecked say-so of the U.S. Government, and have to lecture us on the rule of law and Constitutional constraints. By stark contrast, our own Government, our media and our citizenry appear to find nothing wrong whatsoever with lawless assassinations aimed at our own citizens. And the most glaring question for those who critized Bush/Cheney detention policies but want to defend this: how could anyone possibly object to imprisoning foreign nationals without charges or due process at Guantanamo while approving of the assassination of U.S. citizens without any charges or due process?

UPDATE: In comments, sysprog documents the numerous countries condemned in 2009 by the U.S. State Department for "extra-judicial killings." I trust that it goes without saying that it's different (and better) when we do it than when They do it, because we're different (and better), but it still seems worth noting.

UPDATE II: James Joyner argues that this "hit list" policy is not much different than our drone attacks in Pakistan, which Obama has substantially escalated, and that "no one seems to be complaining about the President's authority" to kill suspected Terrorists there. Actually, there are substantial questions about the legality of those drone attacks, though the complete secrecy behind which the program operates makes those questions very difficult to address. Beyond that, though, there's a substantial difference between a government which (a) targets foreign nationals whom it claims are part of a enemy organization and (b) targets its own citizens for assassination without any due process. They both have substantial legal and moral problems, and killing innocent foreigners is obviously no better than killing one's own innocent citizens, but (a) is at least a fairly common act of war, whereas (b) -- as the U.S. Government itself has long argued -- is a hallmark of tyranny. There's a much greater danger from allowing a government to target its own citizens for extra-judicial killings.

The state of the labor market Economic Letter—Insights from the Federal Reserve Bank of Dallas

The state of the labor market
Economic Letter—Insights from the Federal Reserve Bank of Dallas

by Russ Roberts on January 28, 2010

in Work

Phenomenal charts from the Dallas Fed. (HT: Mark Thoma). But very depressing.

Trillions For Defense, But Not One Cent For Common Sense

Here’s a quote for the day from Thomas Paine’s Common Sense:

Society in every state is a blessing, but government, even in its best state, is but a necessary evil; in its worst state an intolerable one: for when we suffer, or are exposed to the same miseries by a government, which we might expect in a country without government, our calamity is heightened by reflecting that we furnish the means by which we suffer.

One of the principal ways in which we’re continually forced to “furnish the means by which we suffer” is defense spending, which is completely left out of Obama’s proposed spending freezes.

While we’re left bickering over what domestic programs to trim down, the US will still manage to cough up $33 billion for our troop surge in Afghanistan, as well an additional $14.2 billion over the next two years to help train Afghan army and police forces. This $14.2 billion comes on top of the $6.6 billion already allocated for that reason. And this doesn’t include the costs of the war in Iraq, and now we learn that Congress has disgorged over $1 trillion dollars for both wars since 2001 …

After a certain number of zeroes, the figures become almost too vast to contemplate. They seem meaningless, unreal. They give you that same shrinking feeling of vertigo that you experience when you look up at the stars on a clear night. But they aren’t meaningless or unreal. This utterly grotesque, utterly pointless level of military spending will, with absolute certainty, bankrupt and ruin this country. The process is well under way.

And for what reason? Allow General David Petraeus to explain. He recently sat down for an interview with the Times of London. When asked to comment about a possible timeline for our withdrawal from Afghanistan, this is what he said:

I haven’t heard of a timetable. Nor of discussions of a timetable other than of course what was in the President’s speech about beginning a transition of certain security tasks based on conditions. Conditions meaning enemy situation, Afghan Security Force capacity and capability and so forth. So what there has been focus on however has been to refine the discussion of indeed what those conditions should include, what considerations should be part of discussions about transition and indeed what transition actually means.

Over eight years and $1 trillion dollars into this mess, and there is absolutely no end in sight. On the contrary, our resolute warriors are still quibbling about “what conditions should be part of discussions about transition, and indeed what a transition actually means.”

Every day, people die on behalf of this kind of arrogant, evasive, mealy-mouthed gibberish. I can’t think of a more heroic death, can you? And here at home, we’re spending ourselves right into the soup kitchen because of it. But it won’t be seriously discussed or debated in Washington. Heavens, no! You can’t seriously discuss reducing the military budget in Congress any more than you can discuss fellatio in church. No, Obama will only attack deficits with a scalpel — a scalpel labeled “domestic spending,” that is.
…Read on

The New Pentagon Budget: Paying Even More; Still Buying Less

Enough has leaked regarding the Pentagon's "new" 2011 budget and the also "new" Quadrennial Defense Review to understand their basic character and many details. In advance of the official release of these documents on Monday, I have written up my findings and conclusions.

This piece is available at at,15202,209782,00.html and at the Huffington Post at

It is also below:

The New Pentagon Budget: Paying Even More; Still Buying Less

The new budget now being trotted out for the Pentagon is a tired old document, bereft of the many significant changes needed to revive our decaying defenses. Worse, the Pentagon's masters and its peanut galleries in Congress, the press, and think tanks opine delusions that anything significant is changing.

Much will be made of a few reluctant acknowledgements of reality and old news painted as noteworthy. The Navy won't plan on, for now, a new cruiser it can't afford even under the wildest budget growth assumptions. The Army will continue redesigning the vehicles for its "system of system" target hunting technologies that we now know can't find even primitive enemies. The Air Force will press on for a new bomber to try, yet again, to attack what it called decades ago "critical nodes." The Marine Corps will declare a return to its amphibious warfare heritage: to fight its way onto hostile shores - something it has not done since 1945.

The new spending level for the Pentagon reinforces the non-change. At $708 billion, we will witness yet another year of "real growth:" a trajectory we have been on since 1999. As usual, we will be told that the increases are because we live in a dangerous world, as evidenced by the continuing, if not expanding, wars President Obama wants to fight directly or indirectly in at least five countries. We will also be told of the "austere" nature of the Pentagon budget for its spending back home; although it is the largest DOD money plan since 1946.

A dangerous world it may be, but significantly less so than the one we saw in the Cold War when we faced hundreds of Soviet divisions in Europe and tried to address unending brushfire - or worse -- wars all over the world, least some new communist regime tip the scales of perceived balance against us. The relative calm we witness today, nonetheless results in an American defense budget that is today about $200 billion higher than the average Pentagon Cold War budget.

A new report from the Congressional Research Service now tells us that the Bush/Obama wars have cost just over $1 Trillion, but that is just 19 percent of the $5.3 Trillion spent by the Pentagon in the same period. The conflicts that impel the growth in the budget actually comprise only a fifth of its size.

Excluding the cost of the wars, the "base" Pentagon budget has also gone up dramatically: 25 percent, or over another Trillion dollars. What we have gotten for that huge increase illuminates the disturbing nature of our decay. The Navy and Air Force are both smaller and equipped with major hardware that is, on average, older than at any point since the end of World War II. The Army and Marine Corps have seen increases to a few combat formations but are only marginally above their post-World War II lows. A gargantuan increase in spending has brought forth major decay in two military services and insignificant up-ticks in two others.

Where did the added money go? According to the Government Accountability Office almost $300 billion went into mismanagement in the form of cost overruns for hardware. (Expect a new GAO report this spring finding the cost overruns have grown.) Much of the rest of the money for acquisition went into "successful" hardware programs that were so much more expensive to buy and maintain than what they were replacing that we literally shrunk the force with more money, while simultaneously spending more to support this new equipment at lower operating and training levels.

With better justification, but exacerbated by a herd of politicians anxious to pander, another huge cost increase has been in military manpower. Largely indiscriminant pay increases and gigantically expensive programs for healthcare, retirement, disability, and family survivors have now set the rate of increase in military manpower spending well above the rate of increase in the rest of the Pentagon budget. The uncontrolled costs for manpower and hardware have made the two competitors for each other's wallets: advocates for hardware try to raid the personnel budget, and the advocates of high manpower costs spend the money as a political necessity - without the slightest reflection on how to pay for it all, or the implications.

You will search in vain for rescue from these trends in the new budget. Anyone paying the slightest attention knows both of these wolves have passed the door, but no one in the Pentagon or Congress (repeat; no one) has the political spine to confront the trends and reverse them.

Instead of exploring real reform, the nation's national security leadership spawns justifications for business as usual. Paralleling the 2011 Pentagon budget is a new national security master plan, the Quadrennial Defense Review, written by the Pentagon's top leadership. They proudly announce that they have discarded simplistic formulas to justify America's defense bloat and have come up with a new construct. The document reveals that the only thing they changed is the terminology.

Neither the new budget nor the new QDR bring anything significantly innovative, or even original. The decay -- at ever increasing cost - continues. There will be a reckoning; the longer we dither, the worse it will be.

Winslow T. Wheeler directs the Straus Military Reform Project at the Center for Defense Information in Washington. He can be reached at
Winslow T. Wheeler
Straus Military Reform Project
Center for Defense Information
301 791-2397

Volcker’s axe is not enough to cut banks to size

Volcker’s axe is not enough to cut banks to size

What Housing Recovery? Nationwide, Defaults Are on the Rise

What Housing Recovery? Nationwide, Defaults Are on the Rise

Parsing the State of the Union

Parsing the State of the Union:

A welcome spur for small business equity
C. Boyden Gray, Financial Times, January 28, 2010
US president Barack Obama's State of the Union proposal to eliminate capital gains taxes on small business investment would do more to correct the excesses of Wall Street than any other idea to come out of the White House, writes C. Boyden Gray.

"State of the Union: A Muddled Message"
Marshall Auerback, Naked Capitalism, January 28, 2010
If nothing else, it's clear that the state of Obama's rhetoric is strong.

Obama Needs To Teach The Public How to Get Out Of The Mess We're In, But He's Not
Robert Reich, January 28, 2010
We need a second stimulus directed at states and locales. I wish our educator-in-chief would say that loud and clear, explain why, and then do it.

Bernanke's reappointment

Bernanke's reappointment:

Ben Bernanke Reconfirmed: Will He Get the Message?
Mark Thoma, Maximum Utility, January 28, 2010
The Senate voted 70-30 to reconfirm Ben Bernanke as Fed chair for another four years.

A Colossal Failure Of Governance: The Reappointment of Ben Bernanke
Simon Johnson, The Baseline Scenario, January 28, 2010
Ultimately, sensible democratic governance prevails in the United States. Sometimes it takes a while.

Now confirmed, Bernanke must rebuild confidence
Robert J. Samuelson, Washington Post, January 29, 2010
Now that the Senate has confirmed him for a second term as chairman of the Federal Reserve , Ben Bernanke has, or ought to have, a very simple agenda: improve confidence.

A Just Cause, Not a Just War by Howard Zinn

A Just Cause, Not a Just War by Howard Zinn

Senate OKs New Sanctions on Iran Sanctions could harm key foreign energy companies

Senate OKs New Sanctions on Iran

Sanctions could harm key foreign energy companies

The State of the Empire Not so good, says Justin Raimondo

The State of the Empire

Not so good, says Justin Raimondo

Thursday, January 28, 2010

U.S. to Outline New Iran Sanctions

U.S. to Outline New Iran Sanctions
Jay Solomon and Joe Lauria, The Wall Street Journal
State of the UnionEditor's Note: With President Barack Obama warning North Korea and Iran of increased isolation in his first State of the Union address, the United States will reportedly present the five permanent members of the UN Security Council, plus Germany, a list of Iranian individuals and firms to target with sanctions, according to the Wall Street Journal. Meanwhile, German Chancellor Angela Merkel signals support for broad-based sanctions as Siemens, Europe's biggest engineering conglomerate, announced an end to business with Iran.
Full Article

De-Baathification as a Political Tool

De-Baathification as a Political Tool
Iraqi elections The recent decision to bar fifteen primarily Sunni political parties and more than 500 individuals from running in Iraq’s March parliamentary elections has damaged sectarian reconciliation efforts and affected the integrity of the election process.

U.S.–China: Google Is Just the Beginning

U.S.–China: Google Is Just the Beginning
Google in China As tensions over trade disputes and UN sanctions continue to hamper bilateral cooperation, Douglas Paal suggests that leaders in both Washington and Beijing must improve their capacity to handle disputes and cooperate at the same time.

Guantanamo's Impact on U.S. National Security

Guantanamo's Impact on U.S. National Security
President Obama’s self-imposed deadline for closing the U.S. military detention facility in Guantanamo Bay has passed. Christopher Boucek outlines the reasons why the administration missed the deadline, the importance of Guantanamo to broader U.S. counterterrorism objectives, and the options for a long-term solution.

Obama Faces Test Amid National Security Crisis Jessica Tuchman Mathews

Obama Faces Test Amid National Security Crisis
Jessica Tuchman Mathews

Quick Take: Obama's Foreign Policy One Year In Douglas H. Paal

Quick Take: Obama's Foreign Policy One Year In
Douglas H. Paal

Solid and Promising Jessica Tuchman Mathews

Solid and Promising
Jessica Tuchman Mathews

U.S. Foreign Policy—Obama's First Year

U.S. Foreign Policy—Obama's First Year
In addition to the global economic crisis, President Obama has begun to address many other serious foreign policy challenges, including Iran, Afghanistan, the Israeli-Palestinian conflict, strengthening the nonproliferation regime, and relations with China. In a special BBC broadcast to 40 million people worldwide, Carnegie experts assessed his efforts and discussed handling the challenges that lie ahead.

Wednesday, January 27, 2010

It's Time To Get Serious! by Barack Obama released by the White House

It's Time To Get Serious!
from Clusterstock by Barack Obama

Following is the prepared text of President Obama's State of the Union address, delivered Jan. 27, 2010, as released by the White House:

Madame Speaker, Vice President Biden, Members of Congress, distinguished guests, and fellow Americans:

Our Constitution declares that from time to time, the President shall give to Congress information about the state of our union. For two hundred and twenty years, our leaders have fulfilled this duty. They have done so during periods of prosperity and tranquility. And they have done so in the midst of war and depression; at moments of great strife and great struggle.

It's tempting to look back on these moments and assume that our progress was inevitable – that America was always destined to succeed. But when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach, victory was very much in doubt. When the market crashed on Black Tuesday and civil rights marchers were beaten on Bloody Sunday, the future was anything but certain. These were times that tested the courage of our convictions, and the strength of our union. And despite all our divisions and disagreements; our hesitations and our fears; America prevailed because we chose to move forward as one nation, and one people.

Again, we are tested. And again, we must answer history's call.

One year ago, I took office amid two wars, an economy rocked by severe recession, a financial system on the verge of collapse, and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted – immediately and aggressively. And one year later, the worst of the storm has passed.

But the devastation remains. One in ten Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. For those who had already known poverty, life has become that much harder.

This recession has also compounded the burdens that America's families have been dealing with for decades – the burden of working harder and longer for less; of being unable to save enough to retire or help kids with college.

So I know the anxieties that are out there right now. They're not new. These struggles are the reason I ran for President. These struggles are what I've witnessed for years in places like Elkhart, Indiana and Galesburg, Illinois. I hear about them in the letters that I read each night. The toughest to read are those written by children – asking why they have to move from their home, or when their mom or dad will be able to go back to work.

For these Americans and so many others, change has not come fast enough. Some are frustrated; some are angry. They don't understand why it seems like bad behavior on Wall Street is rewarded but hard work on Main Street isn't; or why Washington has been unable or unwilling to solve any of our problems. They are tired of the partisanship and the shouting and the pettiness. They know we can't afford it. Not now.

So we face big and difficult challenges. And what the American people hope – what they deserve – is for all of us, Democrats and Republicans, to work through our differences; to overcome the numbing weight of our politics. For while the people who sent us here have different backgrounds, different stories and different beliefs, the anxieties they face are the same. The aspirations they hold are shared. A job that pays the bills. A chance to get ahead. Most of all, the ability to give their children a better life.

You know what else they share? They share a stubborn resilience in the face of adversity. After one of the most difficult years in our history, they remain busy building cars and teaching kids; starting businesses and going back to school. They're coaching little league and helping their neighbors. As one woman wrote me, "We are strained but hopeful, struggling but encouraged."

It is because of this spirit – this great decency and great strength – that I have never been more hopeful about America's future than I am tonight. Despite our hardships, our union is strong. We do not give up. We do not quit. We do not allow fear or division to break our spirit. In this new decade, it's time the American people get a government that matches their decency; that embodies their strength.

And tonight, I'd like to talk about how together, we can deliver on that promise.

It begins with our economy.

Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there's one thing that has unified Democrats and Republicans, it's that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal.

But when I ran for President, I promised I wouldn't just do what was popular – I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.

So I supported the last administration's efforts to create the financial rescue program. And when we took the program over, we made it more transparent and accountable. As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks.

To recover the rest, I have proposed a fee on the biggest banks. I know Wall Street isn't keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.

As we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.

That's why we extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65% cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.

Let me repeat: we cut taxes. We cut taxes for 95% of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food, and other necessities, all of which helped businesses keep more workers. And we haven't raised income taxes by a single dime on a single person. Not a single dime.

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That's right – the Recovery Act, also known as the Stimulus Bill. Economists on the left and the right say that this bill has helped saved jobs and avert disaster. But you don't have to take their word for it.

Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act.

Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created.

Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn't be laid off after all.

There are stories like this all across America. And after two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again.

But I realize that for every success story, there are other stories, of men and women who wake up with the anguish of not knowing where their next paycheck will come from; who send out resumes week after week and hear nothing in response. That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight.

Now, the true engine of job creation in this country will always be America's businesses. But government can create the conditions necessary for businesses to expand and hire more workers.

We should start where most new jobs do – in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides its time she became her own boss.

Through sheer grit and determination, these companies have weathered the recession and are ready to grow. But when you talk to small business owners in places like Allentown, Pennsylvania or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they are mostly lending to bigger companies. But financing remains difficult for small business owners across the country.

So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I am also proposing a new small business tax credit – one that will go to over one million small businesses who hire new workers or raise wages. While we're at it, let's also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.

Next, we can put Americans to work today building the infrastructure of tomorrow. From the first railroads to the interstate highway system, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.

Tomorrow, I'll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. There are projects like that all across this country that will create jobs and help our nation move goods, services, and information. We should put more Americans to work building clean energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean energy jobs. And to encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America.

The House has passed a jobs bill that includes some of these steps. As the first order of business this year, I urge the Senate to do the same. People are out of work. They are hurting. They need our help. And I want a jobs bill on my desk without delay.

But the truth is, these steps still won't make up for the seven million jobs we've lost over the last two years. The only way to move to full employment is to lay a new foundation for long-term economic growth, and finally address the problems that America's families have confronted for years.

We cannot afford another so-called economic "expansion" like the one from last decade – what some call the "lost decade" – where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation.

From the day I took office, I have been told that addressing our larger challenges is too ambitious – that such efforts would be too contentious, that our political system is too gridlocked, and that we should just put things on hold for awhile.

For those who make these claims, I have one simple question:

How long should we wait? How long should America put its future on hold?

You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China's not waiting to revamp its economy. Germany's not waiting. India's not waiting. These nations aren't standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs.

Well I do not accept second-place for the United States of America. As hard as it may be, as uncomfortable and contentious as the debates may be, it's time to get serious about fixing the problems that are hampering our growth.

One place to start is serious financial reform. Look, I am not interested in punishing banks, I'm interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.

We need to make sure consumers and middle-class families have the information they need to make financial decisions. We can't allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.

The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.

Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history – an investment that could lead to the world's cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched. And no area is more ripe for such innovation than energy. You can see the results of last year's investment in clean energy – in the North Carolina company that will create 1200 jobs nationwide helping to make advanced batteries; or in the California business that will put 1,000 people to work making solar panels.

But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.

I am grateful to the House for passing such a bill last year. This year, I am eager to help advance the bipartisan effort in the Senate. I know there have been questions about whether we can afford such changes in a tough economy; and I know that there are those who disagree with the overwhelming scientific evidence on climate change. But even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future – because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.

Third, we need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. And that's why we will continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia.

Fourth, we need to invest in the skills and education of our people.

This year, we have broken through the stalemate between left and right by launching a national competition to improve our schools. The idea here is simple: instead of rewarding failure, we only reward success. Instead of funding the status quo, we only invest in reform – reform that raises student achievement, inspires students to excel in math and science, and turns around failing schools that steal the future of too many young Americans, from rural communities to inner-cities. In the 21st century, one of the best anti-poverty programs is a world-class education. In this country, the success of our children cannot depend more on where they live than their potential.

When we renew the Elementary and Secondary Education Act, we will work with Congress to expand these reforms to all fifty states. Still, in this economy, a high school diploma no longer guarantees a good job. I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans. Instead, let's take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let's tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years – and forgiven after ten years if they choose a career in public service. Because in the United States of America, no one should go broke because they chose to go to college. And it's time for colleges and universities to get serious about cutting their own costs – because they too have a responsibility to help solve this problem.

Now, the price of college tuition is just one of the burdens facing the middle-class. That's why last year I asked Vice President Biden to chair a task force on Middle-Class Families. That's why we're nearly doubling the child care tax credit, and making it easier to save for retirement by giving every worker access to a retirement account and expanding the tax credit for those who start a nest egg. That's why we're working to lift the value of a family's single largest investment – their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments. This year, we will step up re-financing so that homeowners can move into more affordable mortgages. And it is precisely to relieve the burden on middle-class families that we still need health insurance reform.

Now let's be clear – I did not choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn't take on health care because it was good politics.

I took on health care because of the stories I've heard from Americans with pre-existing conditions whose lives depend on getting coverage; patients who've been denied coverage; and families – even those with insurance – who are just one illness away from financial ruin.

After nearly a century of trying, we are closer than ever to bringing more security to the lives of so many Americans. The approach we've taken would protect every American from the worst practices of the insurance industry. It would give small businesses and uninsured Americans a chance to choose an affordable health care plan in a competitive market. It would require every insurance plan to cover preventive care. And by the way, I want to acknowledge our First Lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make our kids healthier.

Our approach would preserve the right of Americans who have insurance to keep their doctor and their plan. It would reduce costs and premiums for millions of families and businesses. And according to the Congressional Budget Office – the independent organization that both parties have cited as the official scorekeeper for Congress – our approach would bring down the deficit by as much as $1 trillion over the next two decades.

Still, this is a complex issue, and the longer it was debated, the more skeptical people became. I take my share of the blame for not explaining it more clearly to the American people. And I know that with all the lobbying and horse-trading, this process left most Americans wondering what's in it for them.

But I also know this problem is not going away. By the time I'm finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether. I will not walk away from these Americans, and neither should the people in this chamber.

As temperatures cool, I want everyone to take another look at the plan we've proposed. There's a reason why many doctors, nurses, and health care experts who know our system best consider this approach a vast improvement over the status quo. But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Here's what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.

Now, even as health care reform would reduce our deficit, it's not enough to dig us out of a massive fiscal hole in which we find ourselves. It's a challenge that makes all others that much harder to solve, and one that's been subject to a lot of political posturing.

So let me start the discussion of government spending by setting the record straight. At the beginning of the last decade, America had a budget surplus of over $200 billion. By the time I took office, we had a one year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program. On top of that, the effects of the recession put a $3 trillion hole in our budget. That was before I walked in the door.

Now if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis, and our efforts to prevent a second Depression have added another $1 trillion to our national debt.

I am absolutely convinced that was the right thing to do. But families across the country are tightening their belts and making tough decisions. The federal government should do the same. So tonight, I'm proposing specific steps to pay for the $1 trillion that it took to rescue the economy last year.

Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't. And if I have to enforce this discipline by veto, I will.

We will continue to go through the budget line by line to eliminate programs that we can't afford and don't work. We've already identified $20 billion in savings for next year. To help working families, we will extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, investment fund managers, and those making over $250,000 a year. We just can't afford it.

Now, even after paying for what we spent on my watch, we will still face the massive deficit we had when I took office. More importantly, the cost of Medicare, Medicaid, and Social Security will continue to skyrocket. That's why I've called for a bipartisan, Fiscal Commission, modeled on a proposal by Republican Judd Gregg and Democrat Kent Conrad. This can't be one of those Washington gimmicks that lets us pretend we solved a problem. The Commission will have to provide a specific set of solutions by a certain deadline. Yesterday, the Senate blocked a bill that would have created this commission. So I will issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans. And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law that was a big reason why we had record surpluses in the 1990s.

I know that some in my own party will argue that we cannot address the deficit or freeze government spending when so many are still hurting. I agree, which is why this freeze will not take effect until next year, when the economy is stronger. But understand – if we do not take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery – all of which could have an even worse effect on our job growth and family incomes.

From some on the right, I expect we'll hear a different argument – that if we just make fewer investments in our people, extend tax cuts for wealthier Americans, eliminate more regulations, and maintain the status quo on health care, our deficits will go away. The problem is, that's what we did for eight years. That's what helped lead us into this crisis. It's what helped lead to these deficits. And we cannot do it again.

Rather than fight the same tired battles that have dominated Washington for decades, it's time to try something new. Let's invest in our people without leaving them a mountain of debt. Let's meet our responsibility to the citizens who sent us here. Let's try common sense.

To do that, we have to recognize that we face more than a deficit of dollars right now. We face a deficit of trust – deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap we must take action on both ends of Pennsylvania Avenue to end the outsized influence of lobbyists; to do our work openly; and to give our people the government they deserve.

That's what I came to Washington to do. That's why – for the first time in history – my Administration posts our White House visitors online. And that's why we've excluded lobbyists from policy-making jobs or seats on federal boards and commissions.

But we can't stop there. It's time to require lobbyists to disclose each contact they make on behalf of a client with my Administration or Congress. And it's time to put strict limits on the contributions that lobbyists give to candidates for federal office. Last week, the Supreme Court reversed a century of law to open the floodgates for special interests – including foreign corporations – to spend without limit in our elections. Well I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. They should be decided by the American people, and that's why I'm urging Democrats and Republicans to pass a bill that helps to right this wrong.

I'm also calling on Congress to continue down the path of earmark reform. You have trimmed some of this spending and embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. Tonight, I'm calling on Congress to publish all earmark requests on a single website before there's a vote so that the American people can see how their money is being spent.

Of course, none of these reforms will even happen if we don't also reform how we work with one another.

Now, I am not naïve. I never thought the mere fact of my election would usher in peace, harmony, and some post-partisan era. I knew that both parties have fed divisions that are deeply entrenched. And on some issues, there are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, about our national priorities and our national security, have been taking place for over two hundred years. They are the very essence of our democracy.

But what frustrates the American people is a Washington where every day is Election Day. We cannot wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about their opponent – a belief that if you lose, I win. Neither party should delay or obstruct every single bill just because they can. The confirmation of well-qualified public servants should not be held hostage to the pet projects or grudges of a few individual Senators. Washington may think that saying anything about the other side, no matter how false, is just part of the game. But it is precisely such politics that has stopped either party from helping the American people. Worse yet, it is sowing further division among our citizens and further distrust in our government.

So no, I will not give up on changing the tone of our politics. I know it's an election year. And after last week, it is clear that campaign fever has come even earlier than usual. But we still need to govern. To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve some problems, not run for the hills. And if the Republican leadership is going to insist that sixty votes in the Senate are required to do any business at all in this town, then the responsibility to govern is now yours as well. Just saying no to everything may be good short-term politics, but it's not leadership. We were sent here to serve our citizens, not our ambitions. So let's show the American people that we can do it together. This week, I'll be addressing a meeting of the House Republicans. And I would like to begin monthly meetings with both the Democratic and Republican leadership. I know you can't wait.

Throughout our history, no issue has united this country more than our security. Sadly, some of the unity we felt after 9/11 has dissipated. We can argue all we want about who's to blame for this, but I am not interested in re-litigating the past. I know that all of us love this country. All of us are committed to its defense. So let's put aside the schoolyard taunts about who is tough. Let's reject the false choice between protecting our people and upholding our values. Let's leave behind the fear and division, and do what it takes to defend our nation and forge a more hopeful future – for America and the world.

That is the work we began last year. Since the day I took office, we have renewed our focus on the terrorists who threaten our nation. We have made substantial investments in our homeland security and disrupted plots that threatened to take American lives. We are filling unacceptable gaps revealed by the failed Christmas attack, with better airline security, and swifter action on our intelligence. We have prohibited torture and strengthened partnerships from the Pacific to South Asia to the Arabian Peninsula. And in the last year, hundreds of Al Qaeda's fighters and affiliates, including many senior leaders, have been captured or killed – far more than in 2008.

In Afghanistan, we are increasing our troops and training Afghan Security Forces so they can begin to take the lead in July of 2011, and our troops can begin to come home. We will reward good governance, reduce corruption, and support the rights of all Afghans – men and women alike. We are joined by allies and partners who have increased their own commitment, and who will come together tomorrow in London to reaffirm our common purpose. There will be difficult days ahead. But I am confident we will succeed.

As we take the fight to al Qaeda, we are responsibly leaving Iraq to its people. As a candidate, I promised that I would end this war, and that is what I am doing as President. We will have all of our combat troops out of Iraq by the end of this August. We will support the Iraqi government as they hold elections, and continue to partner with the Iraqi people to promote regional peace and prosperity. But make no mistake: this war is ending, and all of our troops are coming home.

Tonight, all of our men and women in uniform -- in Iraq, Afghanistan, and around the world – must know that they have our respect, our gratitude, and our full support. And just as they must have the resources they need in war, we all have a responsibility to support them when they come home. That is why we made the largest increase in investments for veterans in decades. That is why we are building a 21st century VA. And that is why Michelle has joined with Jill Biden to forge a national commitment to support military families.

Even as we prosecute two wars, we are also confronting perhaps the greatest danger to the American people – the threat of nuclear weapons. I have embraced the vision of John F. Kennedy and Ronald Reagan through a strategy that reverses the spread of these weapons, and seeks a world without them. To reduce our stockpiles and launchers, while ensuring our deterrent, the United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly two decades. And at April's Nuclear Security Summit, we will bring forty-four nations together behind a clear goal: securing all vulnerable nuclear materials around the world in four years, so that they never fall into the hands of terrorists.

These diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of these weapons. That is why North Korea now faces increased isolation, and stronger sanctions – sanctions that are being vigorously enforced. That is why the international community is more united, and the Islamic Republic of Iran is more isolated. And as Iran's leaders continue to ignore their obligations, there should be no doubt: they, too, will face growing consequences.

That is the leadership that we are providing – engagement that advances the common security and prosperity of all people. We are working through the G-20 to sustain a lasting global recovery. We are working with Muslim communities around the world to promote science, education and innovation. We have gone from a bystander to a leader in the fight against climate change. We are helping developing countries to feed themselves, and continuing the fight against HIV/AIDS. And we are launching a new initiative that will give us the capacity to respond faster and more effectively to bio-terrorism or an infectious disease – a plan that will counter threats at home, and strengthen public health abroad.

As we have for over sixty years, America takes these actions because our destiny is connected to those beyond our shores. But we also do it because it is right. That is why, as we meet here tonight, over 10,000 Americans are working with many nations to help the people of Haiti recover and rebuild. That is why we stand with the girl who yearns to go to school in Afghanistan; we support the human rights of the women marching through the streets of Iran; and we advocate for the young man denied a job by corruption in Guinea. For America must always stand on the side of freedom and human dignity.

Abroad, America's greatest source of strength has always been our ideals. The same is true at home. We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we are all created equal, that no matter who you are or what you look like, if you abide by the law you should be protected by it; that if you adhere to our common values you should be treated no different than anyone else.

We must continually renew this promise. My Administration has a Civil Rights Division that is once again prosecuting civil rights violations and employment discrimination. We finally strengthened our laws to protect against crimes driven by hate. This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are. We are going to crack down on violations of equal pay laws – so that women get equal pay for an equal day's work. And we should continue the work of fixing our broken immigration system – to secure our borders, enforce our laws, and ensure that everyone who plays by the rules can contribute to our economy and enrich our nations.

In the end, it is our ideals, our values, that built America – values that allowed us to forge a nation made up of immigrants from every corner of the globe; values that drive our citizens still. Every day, Americans meet their responsibilities to their families and their employers. Time and again, they lend a hand to their neighbors and give back to their country. They take pride in their labor, and are generous in spirit. These aren't Republican values or Democratic values they're living by; business values or labor values. They are American values.

Unfortunately, too many of our citizens have lost faith that our biggest institutions – our corporations, our media, and yes, our government – still reflect these same values. Each of these institutions are full of honorable men and women doing important work that helps our country prosper. But each time a CEO rewards himself for failure, or a banker puts the rest of us at risk for his own selfish gain, people's doubts grow. Each time lobbyists game the system or politicians tear each other down instead of lifting this country up, we lose faith. The more that TV pundits reduce serious debates into silly arguments, and big issues into sound bites, our citizens turn away.

No wonder there's so much cynicism out there.

No wonder there's so much disappointment.

I campaigned on the promise of change – change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change – or at least, that I can deliver it.

But remember this – I never suggested that change would be easy, or that I can do it alone. Democracy in a nation of three hundred million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That's just how it is.

Those of us in public office can respond to this reality by playing it safe and avoid telling hard truths. We can do what's necessary to keep our poll numbers high, and get through the next election instead of doing what's best for the next generation.

But I also know this: if people had made that decision fifty years ago or one hundred years ago or two hundred years ago, we wouldn't be here tonight. The only reason we are is because generations of Americans were unafraid to do what was hard; to do what was needed even when success was uncertain; to do what it took to keep the dream of this nation alive for their children and grandchildren.

Our administration has had some political setbacks this year, and some of them were deserved. But I wake up every day knowing that they are nothing compared to the setbacks that families all across this country have faced this year. And what keeps me going – what keeps me fighting – is that despite all these setbacks, that spirit of determination and optimism – that fundamental decency that has always been at the core of the American people – lives on.

It lives on in the struggling small business owner who wrote to me of his company, "None of us," he said, "…are willing to consider, even slightly, that we might fail."

It lives on in the woman who said that even though she and her neighbors have felt the pain of recession, "We are strong. We are resilient. We are American."

It lives on in the 8-year old boy in Louisiana, who just sent me his allowance and asked if I would give it to the people of Haiti. And it lives on in all the Americans who've dropped everything to go some place they've never been and pull people they've never known from rubble, prompting chants of "U.S.A.! U.S.A.! U.S.A!" when another life was saved.

The spirit that has sustained this nation for more than two centuries lives on in you, its people.

We have finished a difficult year. We have come through a difficult decade. But a new year has come. A new decade stretches before us. We don't quit. I don't quit. Let's seize this moment – to start anew, to carry the dream forward, and to strengthen our union once more.

Thank you. God Bless You. And God Bless the United States of America.