The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.
Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee believes that domestic production and employment are the primary conceptual measures of economic activity.
The committee views the payroll employment measure, which is based on a large survey of employers, as the most reliable comprehensive estimate of employment. This series reached a peak in December 2007 and has declined every month since then.
The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis. In concept, the two should be the same, because sales of products generate income for producers and workers equal to the value of the sales. However, because the measurement on the product and income sides proceeds somewhat independently, the two actual measures differ by a statistical discrepancy. The product-side estimates fell slightly in 2007Q4, rose slightly in 2008Q1, rose again in 2008Q2, and fell slightly in 2008Q3. The income-side estimates reached their peak in 2007Q3, fell slightly in 2007Q4 and 2008Q1, rose slightly in 2008Q2 to a level below its peak in 2007Q3, and fell again in 2008Q3. Thus, the currently available estimates of quarterly aggregate real domestic production do not speak clearly about the date of a peak in activity.
Other series considered by the committee—including real personal income less transfer payments, real manufacturing and wholesale-retail trade sales, industrial production, and employment estimates based on the household survey—all reached peaks between November 2007 and June 2008.
The committee determined that the decline in economic activity in 2008 met the standard for a recession, as set forth in the second paragraph of this document. All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months.
The committee’s primary role is to maintain a monthly chronology of the business cycle. For this purpose, the committee mainly relies on monthly indicators. It also considers quarterly indicators and maintains a quarterly chronology. In its deliberations, the committee relied on a number of monthly and quarterly economic indicators published by government agencies. The Appendix to this announcement lists these indicators and their sources. The Appendix also describes the calculations required to reproduce the series that the NBER committee examined in its deliberations.
The Month of the Peak
The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.
Payroll employment, the number of filled jobs in the economy based on the Bureau of Labor Statistics’ large survey of employers, reached a peak in December 2007 and has declined in every month since then. An alternative measure of employment, measured by the BLS’s household survey, reached a peak in November 2007, declined early in 2008, expanded temporarily in April to a level below its November 2007 peak, and has declined in every month since April 2008. For a discussion of the difference between payroll and household survey employment measures, see Mary Bowler and Teresa L. Morisi, “Understanding the Employment Measures from the CPS and CES Surveys,” Monthly Labor Review, February 2006, pp. 23–38.
The committee uses real personal income less transfer payments from the Bureau of Economic Analysis as a monthly measure of output. The deduction of transfer payments places the data closer to the desired measure, real gross domestic income. To adjust personal income less transfer payments from nominal to real terms (that is, to remove the effects of price changes), the committee uses the deflator for gross domestic product. Because this deflator is only available quarterly, the committee interpolates the published series to approximate a monthly price index for GDP. The resulting monthly measure of real personal income less transfers is an imperfect measure of monthly real output because of definitional differences between personal income less transfers and gross national income and because we use the interpolated price index. Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June.
Real manufacturing and wholesale-retail trade sales from the Census Department is another monthly indicator of output. It is an imperfect measure of the production of goods and services for at least three reasons. First, it covers only goods and not services. Second, it does not deduct the sales of imported goods. Because the real value of imports declined substantially over the relevant period, the measure understates the growth of output. Third, the government does not publish a price index corresponding to the coverage of the measure. The committee uses the same interpolated GDP deflator as discussed above. Real manufacturing and wholesale-retail trade sales reached a well-defined peak in June 2008.
The last monthly measure of production is the Federal Reserve Board’s index of industrial production. This measure has quite restricted coverage—it includes manufacturing, mining, and utilities but excludes all services and government. Industrial production peaked in January 2008, fell through May 2008, rose slightly in June and July, and then fell substantially from July to September. It rose somewhat in October with the resumption of oil production disturbed by hurricanes in the previous month. The October value of the industrial production index remained a substantial 4.7 percent below its value in January 2008.
The committee noted that the behavior of the quarterly estimates of aggregate production was not inconsistent with a peak in late 2007. The income-side estimate of output reached its peak in the third quarter of 2007. The product-side estimate reached a temporary peak in the same quarter, but rose to a higher level in the second quarter of 2008.
The Quarter of the Peak
The committee determined that the peak quarter of economic activity was the fourth quarter of 2007. When the monthly peak occurs in the last month of a quarter, the NBER’s long-standing procedures dates the quarterly peak either in the quarter containing the monthly peak or in the subsequent quarter. Thus, the committee could have dated the quarterly peak in 2008Q1 if it had determined that economic activity was higher in that quarter than in 2007Q4. However, the committee determined that this was not the case. Most notably, both payroll employment and the income-side estimate of domestic production were lower in 2008Q1 than in 2007Q4, and the product-side estimate of domestic production was only slightly higher. The committee found that the peak quarter was the one containing the peak month, 2007Q4.
Although the indicators described above are the most important measures considered by the NBER in developing its business cycle chronology, there is no fixed rule about which other measures may contribute information to the process in any particular episode.
Committee members are: Robert Hall, Stanford University (chair); Martin Feldstein, Harvard University and NBER President Emeritus; Jeffrey Frankel, Harvard University; Robert Gordon, Northwestern University; James Poterba, MIT and NBER President; David Romer, University of California, Berkeley; and Victor Zarnowitz, the Conference Board. Christina Romer of the University of California, Berkeley, resigned from the committee on November 25, 2008, and did not participate in its deliberations of November 28.
Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER’s recession dating procedure?
A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. As an example, the last recession, in 2001, did not include two consecutive quarters of decline. As of the date of the committee’s meeting, the economy had not yet experienced two consecutive quarters of decline.
Q: Why doesn’t the committee accept the two-quarter definition?
A: The committee’s procedure for identifying turning points differs from the two-quarter rule in a number of ways. First, we do not identify economic activity solely with real GDP, but use a range of indicators. Second, we place considerable emphasis on monthly indicators in arriving at a monthly chronology. Third, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, “a significant decline in activity.” Fourth, in examining the behavior of domestic production, we consider not only the conventional product-side GDP estimates, but also the conceptually equivalent income-side GDI estimates. The differences between these two sets of estimates were particularly evident in 2007 and 2008.
Q: Isn’t a recession a period of diminished economic activity?
A: It’s more accurate to say that a recession—the way we use the word—is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when economic activity is contracting. The following period is an expansion.
Q: How do the movements of unemployment claims inform the Bureau’s thinking?
A: A bulge in jobless claims would appear to forecast declining employment and rising unemployment, but we do not use the initial claims numbers in our discussions, partly because there is a lot of week-to-week noise in the series.
Q: What about the unemployment rate?
A: Unemployment is generally a lagging indicator, particularly after the trough in economic activity determined by the NBER. For instance, the unemployment rate peaked 15 months after the NBER trough month in the 1990-91 recession and 19 months after the NBER trough month in the 2001 recession. The unemployment rate (which the committee does not use) tends to lag behind employment (which the committee does use) on account of variations in labor-force participation.
Q: Is the expansion of real GDP (as measured using the product-side estimates) in the first quarter of 2008 consistent with the identification of a recession starting in December 2007?
A: The committee considers a range of indicators of economic activity, and many of them suggest declining activity in the first quarter of the current calendar year. These include payroll employment and the income-side estimates of domestic production.
Q: In December 2007, was there a clear peak in economic activity or was there a flat period around that time?
A: The committee found that economic activity measured by production was close to flat from roughly September 2007 to roughly June 2008, while activity measured by employment reached a clear peak in December 2007. The committee judged that the weight of the evidence suggested that the peak occurred in December 2007.
Q: Are there estimates of monthly real GDP?
A: Yes. Macroeconomic Advisers, a consulting firm, prepares estimates of monthly real GDP. Many of the ingredients of the quarterly GDP figures are published at a monthly frequency by the Bureau of Economic Analysis. Macroeconomic Advisers aggregates them, and then uses a statistical procedure to adjust the monthly estimates for each quarter to make them consistent with the Commerce Department's official quarterly figure. The monthly GDP numbers are fairly noisy and are subject to considerable revision. Estimated monthly real GDP reached one peak in January 2008 and another, higher peak in June 2008.
Q: Has the committee ever changed a cycle date?
A: In the past, the NBER has made some small changes to cycle dates, most recently in 1975. No changes have occurred since 1978 when the Business Cycle Dating Committee was formed. The committee would change the date of a recent peak or trough if it concluded that the date it had chosen was incorrect.
Q: Typically, how long after the beginning of a recession does the BCDC declare that a recession has started?
A: Anywhere from 6 to 18 months. The committee waits long enough so that the existence of a recession is not at all in doubt. It waits until it can assign an accurate date.
Q: When the BCDC says that the recession began in December, is there a specific date in December?
A: The committee identifies the month when the peak occurred, without taking a stand on the date in the month. Thus, December 2007 is both the month when the recession began and the month when the expansion ended.
Q: Does the NBER identify depressions as well as recessions in its chronology?
A: The NBER does not separately identify depressions. The NBER business cycle chronology identifies the dates of peaks and troughs in economic activity. We refer to the period between a peak and a trough as a contraction or a recession, and the period between the trough and the peak as an expansion. The term depression is often used to refer to a particularly severe period of economic weakness. Some economists use it to refer only to the portion of these periods when economic activity is declining. The more common use, however, also encompasses the time until economic activity has returned to close to normal levels. The most recent episode in the United States that is generally regarded as a depression occurred in the 1930s. The NBER determined that the peak in economic activity occurred in August 1929, and the trough in March 1933. The NBER identified a second peak in May 1937 and a trough in June 1938. Both the contraction starting in 1929 and that starting in 1937 were very severe; the one starting in 1929 is widely acknowledged to have been the worst in U.S. history. According to the Bureau of Economic Analysis, real GDP declined 27 percent between 1929 and 1933, roughly ten times as much as in the worst postwar recession. If the term Great Depression is used to mean the period of exceptional decline in economic activity, it refers to the period from August 1929 to March 1933. If it is used to also include the period until economic activity had returned to approximately normal levels, most economists would judge that it ended sometime in 1940 or 1941. However, just as the NBER does not define the term depression or identify depressions, there is no formal NBER definition or dating of the Great Depression.
Q: When did the NBER first establish its business cycle dates?
A: The NBER was founded in 1920, and published its first business cycle dates in 1929.
Q: When was your committee first formed?
A: When Martin Feldstein became president of the NBER in 1978. Robert Hall has chaired the committee since its inception.
Q: How is the committee's membership determined?
A: The President of the NBER appoints the members, who include directors of the macro-related programs of the NBER plus other members with specialties in business-cycle research.
Q: How long does the committee expect the recession to last?
A: The committee does not forecast. _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Les indices ont lourdement chuté suite à l'annonce de la récession aux Etats-Unis et après la publication de statistiques macro-économiques catastrophiques.
Après un gain de 16% sur le Dow Jones et de 15,84% sur le Nasdaq Composite sur les cinq dernières séances, les indices américains tombent de haut. De très haut. Le Dow Jones perd en fin de séance 7,70% à 8149,09 points et le Nasdaq Composite 8,95% à 1398,07 points.
La séance a été plombée par l'officialisation de la récession américaine. Pour le Bureau national de la recherche économique (NBER) la baisse significative de l'activité économique du pays a en effet commencé en décembre 2007, et cette tendance risque de se poursuivre. Dans un communiqué diffusé lundi, le NBER a déterminé qu'un «pic dans l'activité économique est intervenu en décembre 2007. Le pic marque la fin de l'expansion qui avait commencé en novembre 2001 et le début d'une récession», a expliqué le NBER dans un communiqué, ajoutant que «cette phase d'expansion économique a duré 73 mois». Suite à cette annonce, Wall Street a creusé ses pertes, dans un marché déjà bien affecté par de mauvaises statistiques économiques. En effet, l'indice manufacturier ISM pour novembre est ressorti à 36,2, en baisse par rapport à octobre, et est ainsi inférieur au consensus de 37. En octobre, l'indice avait atteint 38,9, son plus bas niveau depuis 1982. Quant aux dépenses de construction pour octobre, elles ont accusé un repli de 1,2% par rapport à septembre, alors qu'une baisse de 0,9% était attendue.
Les valeurs du jour
Les constructeurs automobiles General Motors (-12,40%), Ford (+4,41%) et Chrysler mettent la dernière touche aux plans de restructuration qu'ils présenteront demain. En pleine crise, les «Big Three» désirent que l'Etat leur accorde une aide supplémentaire de 25 milliards de dollars. Un premier prêt de 25 milliards de dollars avait déjà été voté en septembre.
L'assureur AIG (-17,91%) va céder sa banque privée, AIG Private Bank à Aabar investments PSJC d'Abu Dhabi pour 254 millions de dollars.
Un fond de Citigroup (-22,20%) va procéder au rachat de la société d'autoroutes Itinere qui appartient à l'espagnol Sacyr Vallehermoso pour 7,9 milliards d'euros. Par ailleurs, selon le Wall Street Journal, la banque pourrait vendre une petite division japonaise, NikkoCiti Trust & Banking.
Johnson & Johnson (-2,68%) a annoncé l'acquisition de la société Mentor Corp pour 1,1 milliard de dollars, dont 1,07 milliard en numéraire soit 31 dollars par action.
Microsoft (-5,55%) serait en pourparlers avec Yahoo pour le rachat de l'activité moteur de recherche de la société pour 20 milliards de dollars, selon le journal anglais Sunday Times. Le journal a également expliqué que Microsoft pourrait modifier l'équipe dirigeante. Cependant, Roos Levinhson, l'ancien dirigeant de Fox interactive, a déclaré que cela était «une fiction totale».
Selon le WSJ, Delta Airlines (-9,65%) aurait modifié ses commandes auprès de Boeing pour deux appareils. La compagnie devrait réduire ses commandes de 787, mais augmenter celles de 777. _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Американские индексы Dow Jones и Nasdaq Composite после роста в ходе пяти предыдущих сеансов на 16% и 15,84% соответственно резко упали (на 7,7% и 8,95%), как только официально было объявлено о рецессии в американской экономике, пишет Le Figaro. По данным Национального бюро экономических исследований (NBER), существенное снижение экономической активности в стране началось еще в декабре 2007 года и продолжается до сих пор: пик экономической активности, пришедшийся на декабрь 2007 года, положил конец периоду экспансии, начавшемуся в ноябре 2001 года, и ознаменовал начало рецессии, говорится в докладе. После этого заявления потери фондового рынка Уолл-стрит, и без того пострадавшего от неблагоприятных экономических показателей, усугубились. Индекс деловой активности (ISM) в ноябре достиг минимальных с 1982 года показателей (36,2). Расходы на строительство сократились на 1,2% по сравнению с сентябрем, против ожидаемого снижения на 0,9%.
"Большая тройка" автопроизводителей - General Motors, Ford и Chrysler – собирается завтра представить свои планы реструктуризации и обратиться к государству с просьбой предоставить им кредит в размере 25 млрд долларов. Издание напоминает, что в сентябре эти компании уже взяли в долг такую же сумму. _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Я вот тут призадумался о причинах кризиса..... А может всё гораздо проще? Все эти рассуждения о причинах кризиса, сводящиеся к рассуждениям о безответственном поведении американского капитализма, яйца выеденного не стоят? Всё это лишь дымовая завеса?
А может причина стара как мир: "Всё уже украдено до нас" (с)?
Вот несколько недель назад ФБР арестовало Bernard L. Madoff
On December 11, 2008, Federal Bureau of Investigation agents arrested Madoff on a tip-off from his sons, Andrew and Mark, and charged him with one count of securities fraud. On the day prior to his arrest, Madoff told his senior executives at the firm that the management and advisory segment of the business was "basically, a giant Ponzi scheme." Five days after his arrest, Madoff's assets and those of the firm were frozen and a receiver was appointed to handle the case. Madoff's alleged fraud may be valued at a loss of up to a US$50 billion in cash and securities. Banks from outside the U.S. have announced that they have potentially lost billions in U.S. dollars as a result. To date, it is the largest investor fraud ever attributed to a single individual.
Так этот Мадофф и не скрывает что мошеничал, сам признался что выстроил финансовую пирамиду
But on Wednesday, the complaint said, Madoff told senior employees that the advisory business was a fraud, that he was "finished," had "absolutely nothing," that "it's all just one big lie" and that it was "basically, a giant Ponzi scheme."
Ну, теперь он, натурально рыдает: мой бизнесс потерял 50 млрд! Естественно, что при таком раскладе, он и сам мечтал отдаться в руки правосудия...
Madoff said the business had lost about $50 billion and that he planned to turn himself in to authorities in a week
...и посодействовать по мере сил обманутым вкладчикам (отдать то наворованное что не удалось спрятать на момент ареста, какие-то жалкие 200-300 млн. долларов)
But, the complaint said, he told the employees he wanted to distribute the $200 million to $300 million he had left to certain selected employees, family and friends. _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Все остальные тоже банально крали деньги (кто сколько может украсть на своём рабочем месте) используя ту или иную финансовую схему те или иные ухищрения, целенаправлено надуваю пирамиду и имитируя обалденный экономический рост?
Все эти ссылки, что это, мол, американский капитализм такой своеобразный, никаких ограничений не признаёт (laisser faire) и поэтому произошёл крисис, - всё это туфта?
Тот кто крал, деньги украл - и затаился. Самых нерасторопных взяли (Мадофф).
Ну а теперь американское правительство своим планом спасения просто возмещает украденное из кармана налогоплательщика? _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
It was a crime of epic proportions: a multibillion-dollar Ponzi scheme that wiped out fortunes, drained retirement nest eggs, ruined charities and foundations, and even pushed some investors to commit suicide.
Six months after the scandal came to light, the battle lines over Bernard Madoff's punishment have been drawn. His lawyer insists 12 years in prison is enough. Prosecutors demand a 150-year sentence that would guarantee the 71-year-old spends his final days behind bars.
Some victims were expected to call for harsh punishment at the disgraced financier's sentencing Monday in federal court in Manhattan. Ten have told U.S. District Judge Denny Chin they wish to speak out in court.
Madoff also will speak to the shame he has felt and to the pain he has caused, his attorney, Ira Sorkin, said in court papers.
"We seek neither mercy nor sympathy," Sorkin wrote. But the lawyer urged Chin to set aside the emotion and hysteria attendant to this case as he determines the sentence.
There was no shortage of emotion in recent e-mails and letters to the judge by victims.
Carla and Stanley Hirschhorn wrote that they lost their life savings - "a living nightmare that we can't wake up from."
Miriam Siegman expressed outrage at the spectacle of a man playing with his victims - thousands of them - who he knew were facing a kind of death, playing with them as a cat would with a mouse.
Prosecutors argued in court papers Friday that federal sentencing guidelines allow the 150-year sentence. Any lesser term, they said, should at least be the equivalent of a life sentence.
"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote.
The jailed Madoff already has taken a severe financial hit: Last week, a judge issued a preliminary $171 billion forfeiture order stripping Madoff of all his personal property, including real estate, investments, and $80 million in assets his wife Ruth had claimed were hers. The order left her with $2.5 million.
The terms require the Madoffs to sell a $7 million Manhattan apartment where Ruth Madoff still lives. An $11 million estate in Palm Beach, Florida, a $4 million home in Montauk and a $2.2 million boat will be put on the market as well.
Before Madoff became a symbol of Wall Street greed, the former Nasdaq chairman had earned a reputation as a trusted money manager with a Midas touch. Even as the market fluctuated, clients of his secretive investment advisory business - from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax - for decades enjoyed steady double-digit returns.
But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them it was all just one big lie.
Madoff pleaded guilty in March to securities fraud and other charges, saying he was deeply sorry and ashamed. He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.
Aside from an accountant accused of cooking Madoff's books, no one else has been criminally charged. But the family, including his wife, and brokerage firms who recruited investors have come under intense scrutiny by the FBI, regulators and a court-appointed trustee overseeing the liquidation of Madoff's assets.
The trustee and prosecutors have sought to go after assets to compensate thousands of burned victims who have filed claims against Madoff. How much is available to pay them remains unknown, though it's expected to be only a fraction of the astronomical losses associated with the fraud.
The $171 billion forfeiture figure used by prosecutors merely mirrors the amount they estimate that, over decades, flowed into the principal account to perpetrate the Ponzi scheme. The statements sent to investors showing their accounts were worth as much as $65 billion were fiction.
The investigation has found that in reality, Madoff never made any investments, instead using the money from new investors to pay returns to
existing clients - and to finance a lavish lifestyle for his family.
In bankruptcy filings, Trustee Irving Picard say family members used customers accounts as though they were their own, putting Madoff's maid, boat captain and house-sitter in Florida on the company payroll and paying nearly $1 million in fees at high-end golf clubs on Long Island and in Florida.
Picard has sought to reclaim ill-gotten gains by freezing Madoff's business bank accounts and selling legitimate portions of his firm. (Its season tickets for the Mets went for $38,100.) He's also sued big money managers and investors for billions of dollars, claiming they were Madoff cronies who also cashed in on the fraud.
The defendants include leading philanthropists Stanley Chais and Jeffry Picower - from whom Picard is seeking at least $5.1 billion alleged to have come out of victims' pockets - and hedge fund manager J. Ezra Merkin. All have denied any wrongdoing. _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Following is the transcript of President Obama's State of the Union address, delivered Jan. 27, 2010, as released by the White House:
Madam 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 220 years, our leaders have fulfilled this duty. They've done so during periods of prosperity and tranquility. And they've 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 the 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, as 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 a 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 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. And for those who'd 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; 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, asking 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're 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, 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. One woman wrote to me and said, "We are strained but hopeful, struggling but encouraged."
It's 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. (Applause.) 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. (Applause.)
And tonight, 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, and everybody in between, it's that we all hated the bank bailout. I hated it -- (applause.) I hated it. You hated it. It was about as popular as a root canal. (Laughter.)
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 that program over, we made it more transparent and more accountable. And as a result, the markets are now stabilized, and we've recovered most of the money we spent on the banks. (Applause.) Most but not all.
To recover the rest, I've proposed a fee on the biggest banks. (Applause.) Now, 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. (Applause.)
Now, 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 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.
Now, let me repeat: We cut taxes. We cut taxes for 95 percent of working families. (Applause.) 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. (Applause.)
I thought I'd get some applause on that one. (Laughter and applause.)
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. (Applause.)
Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. (Applause.) Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. (Applause.) And we're 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. (Applause.) That's right -– the Recovery Act, also known as the stimulus bill. (Applause.) Economists on the left and the right say this bill has helped save 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's why I'm calling for a new jobs bill tonight. (Applause.)
Now, the true engine of job creation in this country will always be America's businesses. (Applause.) 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 -- (applause) -- companies that begin when an entrepreneur -- when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they're ready to grow. But when you talk to small businessowners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies. Financing remains difficult for small businessowners across the country, even those that are making a profit.
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. (Applause.) I'm 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. (Applause.) While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment. (Applause.)
Next, we can put Americans to work today building the infrastructure of tomorrow. (Applause.) 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. (Applause.) There are projects like that all across this country that will create jobs and help move our nation's goods, services, and information. (Applause.)
We should put more Americans to work building clean energy facilities -- (applause) -- and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. (Applause.) And to encourage these and other businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America. (Applause.)
Now, the House has passed a jobs bill that includes some of these steps. (Applause.) As the first order of business this year, I urge the Senate to do the same, and I know they will. (Applause.) They will. (Applause.) People are out of work. They're hurting. They need our help. And I want a jobs bill on my desk without delay. (Applause.)
But the truth is, these steps won't make up for the seven million jobs that 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 can't afford another so-called economic "expansion" like the one from the 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've been told that addressing our larger challenges is too ambitious; such an effort would be too contentious. I've been told that our political system is too gridlocked, and that we should just put things on hold for a while.
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? (Applause.)
You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations -- they're not 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're making serious investments in clean energy because they want those jobs. Well, I do not accept second place for the United States of America. (Applause.)
As hard as it may be, as uncomfortable and contentious as the debates may become, it's time to get serious about fixing the problems that are hampering our growth.
Now, 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. (Applause.) We can't allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.
Now, the House has already passed financial reform with many of these changes. (Applause.) And the lobbyists are trying to kill it. But we cannot let them win this fight. (Applause.) And if the bill that ends up on my desk does not meet the test of real reform, I will send it back until we get it right. We've got to get it right. (Applause.)
Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history -– (applause) -- 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 investments in clean energy -– in the North Carolina company that will create 1,200 jobs nationwide helping to make advanced batteries; or in the California business that will put a thousand people to work making solar panels.
But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies. (Applause.) 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. (Applause.)
I am grateful to the House for passing such a bill last year. (Applause.) And this year I'm eager to help advance the bipartisan effort in the Senate. (Applause.)
I know there have been questions about whether we can afford such changes in a tough economy. I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here's the thing -- 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. (Applause.)
Third, we need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) 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. (Applause.) 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. (Applause.)
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. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that's why we'll 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 and Panama and Colombia. (Applause.)
Fourth, we need to invest in the skills and education of our people. (Applause.)
Now, this year, we've broken through the stalemate between left and right by launching a national competition to improve our schools. And 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 the inner city. In the 21st century, the best anti-poverty program around is a world-class education. (Applause.) And in this country, the success of our children cannot depend more on where they live than on their potential.
When we renew the Elementary and Secondary Education Act, we will work with Congress to expand these reforms to all 50 states. Still, in this economy, a high school diploma no longer guarantees a good job. That's why 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. (Applause.)
To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans. (Applause.) Instead, let's take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. (Applause.) And let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years –- and forgiven after 10 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. (Applause.)
And by the way, it's time for colleges and universities to get serious about cutting their own costs -– (applause) -- 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 access to every worker 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 refinancing so that homeowners can move into more affordable mortgages. (Applause.) And it is precisely to relieve the burden on middle-class families that we still need health insurance reform. (Applause.) Yes, we do. (Applause.)
Now, let's clear a few things up. (Laughter.) I didn't 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. (Laughter.) I took on health care because of the stories I've heard from Americans with preexisting conditions whose lives depend on getting coverage; patients who've been denied coverage; families –- even those with insurance -– who are just one illness away from financial ruin.
After nearly a century of trying -- Democratic administrations, Republican administrations -- 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 kids healthier. (Applause.) Thank you. She gets embarrassed. (Laughter.)
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. (Applause.)
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, the process left most Americans wondering, "What's in it for me?"
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. (Applause.)
So, 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. (Applause.) Let me know. Let me know. (Applause.) I'm eager to see it.
Here's what I ask Congress, though: Don't 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. (Applause.) Let's get it done. Let's get it done. (Applause.)
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, the year 2000, America had a budget surplus of over $200 billion. (Applause.) 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. All this was before I walked in the door. (Laughter and applause.)
Now -- just stating the facts. 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. That, too, is a fact.
I'm 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. (Applause.) So tonight, I'm proposing specific steps to pay for the trillion dollars that it took to rescue the economy last year.
Starting in 2011, we are prepared to freeze government spending for three years. (Applause.) 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. (Applause.)
We will continue to go through the budget, line by line, page by page, 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'll extend our middle-class tax cuts. But at a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year. We just can't afford it. (Applause.)
Now, even after paying for what we spent on my watch, we'll 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. (Applause.) 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.
Now, yesterday, the Senate blocked a bill that would have created this commission. So I'll issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans. (Applause.) And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law that was a big reason for why we had record surpluses in the 1990s. (Applause.)
Now, I know that some in my own party will argue that we can't address the deficit or freeze government spending when so many are still hurting. And I agree -- which is why this freeze won't take effect until next year -- (laughter) -- when the economy is stronger. That's how budgeting works. (Laughter and applause.) But understand –- understand if we don't 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 would 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 including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that's what we did for eight years. (Applause.) That's what helped us into this crisis. It's what helped lead to these deficits. We can't 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. (Laughter.) A novel concept.
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 have to take action on both ends of Pennsylvania Avenue -- to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve. (Applause.)
That's what I came to Washington to do. That's why -– for the first time in history –- my administration posts on our White House visitors online. That's why we've excluded lobbyists from policymaking 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 with Congress. It's time to put strict limits on the contributions that lobbyists give to candidates for federal office.
With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. (Applause.) I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. (Applause.) They should be decided by the American people. And I'd urge Democrats and Republicans to pass a bill that helps to correct some of these problems.
I'm also calling on Congress to continue down the path of earmark reform. Applause.) Democrats and Republicans. (Applause.) Democrats and Republicans. You've trimmed some of this spending, you've embraced some meaningful change. But restoring the public trust demands more. For example, some members of Congress post some earmark requests online. (Applause.) Tonight, I'm calling on Congress to publish all earmark requests on a single Web site before there's a vote, so that the American people can see how their money is being spent. (Applause.)
Of course, none of these reforms will even happen if we don't also reform how we work with one another. Now, I'm not naïve. I never thought that the mere fact of my election would usher in peace and harmony -- (laughter) -- 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, they've been taking place for over 200 years. They're the very essence of our democracy.
But what frustrates the American people is a Washington where every day is Election Day. We can't wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about the other side -– a belief that if you lose, I win. Neither party should delay or obstruct every single bill just because they can. The confirmation of -- (applause) -- I'm speaking to both parties now. The confirmation of well-qualified public servants shouldn't be held hostage to the pet projects or grudges of a few individual senators. (Applause.)
Washington may think that saying anything about the other side, no matter how false, no matter how malicious, is just part of the game. But it's precisely such politics that has stopped either party from helping the American people. Worse yet, it's sowing further division among our citizens, further distrust in our government.
So, no, I will not give up on trying to change the tone of our politics. I know it's an election year. And after last week, it's 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 problems, not run for the hills. (Applause.) And if the Republican leadership is going to insist that 60 votes in the Senate are required to do any business at all in this town -- a supermajority -- then the responsibility to govern is now yours as well. (Applause.) 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. (Applause.) So let's show the American people that we can do it together. (Applause.)
This week, I'll be addressing a meeting of the House Republicans. I'd like to begin monthly meetings with both Democratic and Republican leadership. I know you can't wait. (Laughter.)
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'm 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's 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 for the world. (Applause.)
That's the work we began last year. Since the day I took office, we've renewed our focus on the terrorists who threaten our nation. We've 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've 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.
And in Afghanistan, we're 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. (Applause.) We will reward good governance, work to reduce corruption, and support the rights of all Afghans -- men and women alike. (Applause.) We're joined by allies and partners who have increased their own commitments, and who will come together tomorrow in London to reaffirm our common purpose. There will be difficult days ahead. But I am absolutely 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. (Applause.) We will support the Iraqi government -- we will support the Iraqi government as they hold elections, and we will 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. (Applause.)
Tonight, all of our men and women in uniform -- in Iraq, in Afghanistan, and around the world –- they have to know that we -- that they have our respect, our gratitude, 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. (Applause.) That's why we made the largest increase in investments for veterans in decades -- last year. (Applause.) That's why we're building a 21st century VA. And that's why Michelle has joined with Jill Biden to forge a national commitment to support military families. (Applause.)
Now, even as we prosecute two wars, we're also confronting perhaps the greatest danger to the American people -– the threat of nuclear weapons. I've 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. (Applause.) And at April's Nuclear Security Summit, we will bring 44 nations together here in Washington, D.C. 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. (Applause.)
Now, these diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of nuclear weapons. That's why North Korea now faces increased isolation, and stronger sanctions –- sanctions that are being vigorously enforced. That's 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 a promise. (Applause.)
That's the leadership that we are providing –- engagement that advances the common security and prosperity of all people. We're working through the G20 to sustain a lasting global recovery. We're working with Muslim communities around the world to promote science and education and innovation. We have gone from a bystander to a leader in the fight against climate change. We're 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 bioterrorism or an infectious disease -– a plan that will counter threats at home and strengthen public health abroad.
As we have for over 60 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's why, as we meet here tonight, over 10,000 Americans are working with many nations to help the people of Haiti recover and rebuild. (Applause.) That's why we stand with the girl who yearns to go to school in Afghanistan; why we support the human rights of the women marching through the streets of Iran; why 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. (Applause.) Always. (Applause.)
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're 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; 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. (Applause.) We finally strengthened our laws to protect against crimes driven by hate. (Applause.) 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. (Applause.) It's the right thing to do. (Applause.)
We're going to crack down on violations of equal pay laws -– so that women get equal pay for an equal day's work. (Applause.) And we should continue the work of fixing our broken immigration system -– to secure our borders and enforce our laws, and ensure that everyone who plays by the rules can contribute to our economy and enrich our nation. (Applause.)
In the end, it's 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 that they're living by; business values or labor values. They're 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 to silly arguments, 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 that I can deliver it.
But remember this –- I never suggested that change would be easy, or that I could do it alone. Democracy in a nation of 300 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 and pointing fingers. 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 50 years ago, or 100 years ago, or 200 years ago, we wouldn't be here tonight. The only reason we are here 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 their 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, that 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 someplace they've never been and pull people they've never known from the 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. (Applause.) Let's seize this moment -- to start anew, to carry the dream forward, and to strengthen our union once more. (Applause.)
Thank you. God bless you. And God bless the United States of America. (Applause.) _________________ A la guerre comme a la guerre или вторая редакция Забугорнова
Я вот тут призадумался о причинах кризиса..... А может всё гораздо проще? Все эти рассуждения о причинах кризиса, сводящиеся к рассуждениям о безответственном поведении американского капитализма, яйца выеденного не стоят? Всё это лишь дымовая завеса?
А может причина стара как мир: "Всё уже украдено до нас" (с)?
Да, именно украдено.
'You, sir, are a dirty, rotten, scoundrel': Victims' fury as disgraced financier Allen Stanford is jailed for 110 years
Stanford was convicted in March of 13 or 14 counts of fraud
He had been running his Ponzi scheme for two decades
Prosecutors sought maximum sentence of 230 years
Stanford was once considered 605th richest man in the world
Organized series of high-paying cricket matches between England and a Caribbean side
By Bob Graham
PUBLISHED: 22:01 GMT, 14 June 2012 | UPDATED: 22:01 GMT, 14 June 2012
A Texan tycoon who defrauded almost £5 billion from investors and used his wealth to bankroll international cricket matches in England was jailed for 110 years yesterday.
Allen Stanford, who for 22 years ran investment scams with an estimated 17,000 victims, was once one of the richest men in America, worth more than £1.2 billion.
The courtroom in Houston was packed with many of his victims to hear the sentence handed down, the majority of whom were small business owners.
Two of the estimated 17,000 victims of Stanford’s fraud were allowed to address the court.
Convicted financier Allen Stanford arrives at Federal Court in Houston for sentencing
Jailbird: Convicted financier Allen Stanford arrives at Federal Court in Houston for sentencing
Jaime Escalona, who represented Latin American victims, addressed the hearing before turning to stare directly at Stanford to tell him: 'You, sir, are a dirty, rotten, scoundrel.'
The other victims’ spokesman, Angela Shaw, of the Stanford Victims Coalition, said of the fraudster: “Allen Stanford has stolen more than billions of dollars. He took our lives as we knew them.” She said some 28,000 people had lost money in the scam.
Yet, even in his final hour of shame the former tycoon couldn’t help but deny it all and to blame others. 'I’m not a thief.....I did not defraud anybody,' he said.
'The US government are responsible ruining the business....they destroyed it and turned it to nothing. Stanford was a real brick-and-mortar global financial empire.'
Stanford was convicted in March of 13 of 14 counts of fraud
Guilty: Stanford was convicted in March of 13 of 14 counts of fraud
Stanford now plans to appeal against the conviction and sentence even though he was officially declared “indigent” – penniless.
The court has now to appoint lawyers who will be funded out of a scheme similar to Britain’s own legal-aid and it is estimated to run into tens of millions of dollars.
During yesterday’s sentencing, Stanford’s 40-minute rambling account was the first time he had actually spoken to the court about what had taken place during the 22-years his banking empire existed.
He claimed he was a scapegoat and blamed the federal government and a court-appointed receiver who took over his companies in 2009 for tearing down his business empire and preventing his investors from getting any of their money back.
He said: “ I’m not here to ask for sympathy or forgiveness or to throw myself at your mercy but I will tell you I did not run a Ponzi scheme. I didn’t defraud anybody.”
Stanford was once considered one of the richest men in the U.S., with an estimated personal net worth of more than £1.2billion. His financial empire stretched from the U.S. to Latin America and the Caribbean.
Calling Stanford arrogant and without remorse, prosecutors said he used the money from investors who bought certificates of deposit, or CDs, from his bank in Antigua to fund a string of failed businesses, bribe regulators and pay for a lavish lifestyle that included yachts, a fleet of private jets and sponsorship of cricket tournaments.
Stanford added moments before being led away: “If I live the rest of my life in prison …. I will always be at peace with the way I conducted myself in business.”
Disgraced tycoon Stanford’s schemes were the second largest in US financial history – second only to Bernie Madoff, the so-called ‘King of Con’ - who was given 150 years for his £11.2-billion Ponzi scheme.
The majority of the victims were small businesses or private investors, looking to cash-in on interest rates above bank rate.
Cricket fan: The then Sir Allen Stanford poses with the England team during the Stanford 2020 Super Series match between England and Middlesex in 2008. He was later stripped of his knighthood
Cricket fan: The then Sir Allen Stanford poses with the England team during the Stanford 2020 Super Series match between England and Middlesex in 2008. He was later stripped of his knighthood
During the 2008 Stanford Super Series, the financier was photographed bouncing the wife of English cricket player Matt Prior on his knee
Cheeky: During the 2008 Stanford Super Series, the financier was photographed bouncing the wife of English cricket player Matt Prior on his knee
Happier times: Allen Stanford poses with Stanford Superstars following their victory at the end of the Stanford 20/20 Super Series match between England and Stanford Superstars in 2008
Happier times: Allen Stanford poses with Stanford Superstars following their victory at the end of the Stanford 20/20 Super Series match between England and Stanford Superstars in 2008
Mike Bishop, of Houston, Texas, who lost round £900,000 said outside the court: “ This was a wholesale failure by government agencies who regulate companies such as Stanford. They are as responsible.
“Here in Texas we believe in capital punishment but I would not wish it on Stanford, I want him to wake up every morning in his prison cell and reflect on what he did to us all.”
Stanford, ever the showman, entered the courtroom dressed in green prison fatigues and grinning all over his face.
When handcuffs were taken off he waved to his elderly mother Sammie Stanford who sat in the well of the court alongside Stanford’s daughter Randi.
Prosecutors had asked the court for a sentence of 230 years in prison. The prosecutor told Judge David Hittner: “ 230 years will not get anyone their money back but on sleepless nights they will know that he got the maximum.”
In June 2008 Stanford signed a controversial deal with the England and Wales Cricket Board (ECB) for a series of five Twenty20 cricket games between England and a Caribbean side nicknamed the ‘Stanford All-Stars.’ The winners would collect a prize-fund of £13.6-million and the losers would get nothing.
Left in the lurch:: Stanford Bank headquarters in Panama City, Panama
Left in the lurch:: Stanford Bank headquarters in Panama City, Panama
Stanford arrived at Lords cricket ground in London in a helicopter containing treasure chests laden wish cash
The U.S. government wants Allen Stanford to forfeit $5.9billion from his massive Ponzi scheme, even though the convicted financier has been declared indigent
From prince to pauper: The man who was once transporting chests filled with cash in his helicopter (left) has been declared indigent and having to rely on court-appointed lawyers
During the tournament, Stanford was pictured sitting with the England players wives, at one sitting bouncing the wife of wicketkeeper Matt Prior on his knee.
His next trick was to fly into Lords aboard a personalised helicopter laden with treasure chests of cash. He planned to be the saviour of English cricket, even though he admitted he never really understood the game.
By the time of his arrest, in February 2009, the ECB has severed all ties with Stanford and his honorary knighthood provided by the government of Antigua had been stripped.
The jury that convicted Stanford also cleared the way for U.S. authorities to go after about £212-million in stolen investor funds sitting in the financier’s frozen foreign bank accounts in London, Canada and Switzerland.
Three other former Stanford executives are scheduled for trial in September. A former Antiguan financial regulator was indicted and awaits extradition to the U.S.
Prosecutors said Stanford had treated his victims like “roadkill”. They had asked for a prison sentence spanning more than two centuries, calling him a “ruthless predator” who stole from investors “simply to satisfy his own greed and vanity.”
HOUSTON (Reuters) - Former billionaire Allen Stanford was sentenced to 110 years in prison on Thursday for running a $7 billion scheme in which he stole money from his investors to finance an extravagant lifestyle in the Caribbean.
U.S. District Judge David Hittner said Stanford's actions were among the most "egregious criminal frauds," and investors who lost money said Stanford's crimes were worse than those of Bernard Madoff, another Ponzi schemer.
In March, a jury convicted Stanford of 13 charges including fraud and conspiracy for selling certificates of deposit from his bank in Antigua to thousands of investors in the United States and Latin America. He had already spent some of those proceeds on yachts, girlfriends, sponsorship of a cricket tournament and other accoutrements of a high-rolling life.
Stanford denied committing fraud or running a Ponzi scheme and, in a statement that went on for 40 minutes, he blamed the U.S. government for ruining a business he said had enough assets to repay its depositors. "They destroyed it and turned it to nothing," he said.
Stanford insisted: "I am not a thief."
Prosecutor William Stellmach told the judge: "This is a man utterly without remorse. He treated his victims like roadkill."
One of the victims, Angela Shaw, said Stanford preyed on retired teachers, veterans and refinery workers - unlike Madoff, who targeted the wealthy.
"He stole more than millions. He stole our lives as we knew them," Shaw said.
Madoff pleaded guilty in March 2009 to running a Ponzi scheme and is serving a 150-year sentence. A third major Ponzi schemer, Minnesota businessman Tom Petters, is serving a 50-year prison term for a $3.65 billion scheme.
Attorneys who have followed the Stanford case said the judge was justified in handing him such a long sentence.
"The number can easily be justified by the size of the money involved in the fraud, the lack of remorse, no acceptance of responsibility, impact on the victims and financial institutions," said Wendell Odom, a Houston-based attorney. "But when you think about 110 years and know that is a life sentence, it is very sobering."
Philip Hilder, a former federal prosecutor and criminal defense attorney in Houston, said Hittner likely just followed the federal sentencing guidelines.
"While it is exorbitant, the judge sentenced to what the guidelines called for," Hilder said.
During a six-week trial earlier this year, jurors heard how Stanford International Bank in Antigua issued certificates of deposit with above market interest rates that were peddled by an army of highly incentivized brokers. Customers in the United States and Latin America were promised a safe, highly liquid investment, but Stanford invested the money in real estate, and private equity companies.
He also spent the funds building a lavish lifestyle for himself and his estranged wife, children and girlfriends. He owned yachts, mansions in Florida and the Caribbean and spent millions of dollars promoting the sport of cricket by sponsoring international tournaments from his base on Antigua.
In a memo to the court last week, prosecutors said Stanford used the firm's private jets to fly a tailor from Bergdorf Goodman in New York to Antigua to take his measurements and to fly in koi for his pond on the island of St. Croix, prosecutors said.
Hittner told the packed hearing that he had personally read each one of the 350 letters written by defrauded investors detailing the impact on their lives.
"I owed it to each writer to consider them," the judge said.
Defense attorney Ali Fazel told reporters he was worried the judge would give Stanford, 62, the full 230 years sought by prosecutors, but nonetheless described the sentence as harsh. "It will be tough on him," said Fazel, adding that the sentence would be appealed.
Stanford's attorneys had asked for a sentence of about three years, the same amount of time he has been in federal custody.
Stanford will remain in a federal detention center in Houston for the next 30 to 60 days while the Bureau of Prisons decides where he will serve his sentence.
After court adjourned, Stanford's mother, Sammi Stanford, said she had been prepared for a sentence that will keep her son in prison for the rest of his life. "I didn't expect anything different."
(Reporting by Anna Driver and Eileen O'Grady; editing by Gunna Dickson) _________________ A la guerre comme a la guerre или вторая редакция Забугорнова