Suggested Answers - Short Quiz

THIS SECTION CONTAINS A TRANSCRIPT OF PRESIDENT OBAMA'S JUNE 4 CAIRO SPEECH FOLLOWING THE SUGGESTED ANSWERS TO THE SHORT QUIZ (since it relates to Q&A 12).
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johnkarls
Posts: 2034
Joined: Fri Jun 29, 2007 8:43 pm

Suggested Answers - Short Quiz

Post by johnkarls »

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Question 1

Is Greider merely providing an optimistic version of what we already studied 16 months ago in Feb 2008 when our topic was - "The Best Government Money Can Buy: Bribery and Extortion" focusing on "The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity" by Norm Scheiber (New Republic Senior Editor) and "Homo Politicus" by Dana Milbank (Washington Post Columnist), both of whom described Washington as a cess pool in which "campaign contributions" (aka bribes) dictate everything that happens, except when the pols turn the tables by "shaking down" the lobbyists for "campaign contributions" (aka extortion)?

Answer 1

Yes.

Question 2

What makes Greider think for a moment that the citizenry, using such tools as the internet, have the time or interest in taking control of their own democracy?

Answer 2

His optimism. Apparently he has never seen “Jay Walking” on the “Tonight Show” during which Jay Leno interviews random people on the street and proves repeatedly that the average American knows virtually nothing about government or politics and is certainly unqualified to compete on Fox TV’s “Are You Smarter Than A Fifth Grader?”!!!

Question 3

What does our own experience with Drinking Liberally and Reading Liberally tell us with regard to Question 2? For example, of the 332 Living Liberally chapters, how many of them are Reading Liberally chapters that examine issues in any depth?

Answer 3

Although there are more than 300 Drinking Liberally chapters, it appears we are the only Reading Liberally chapter. LivingLiberally.org actually lists 6 Reading Liberally chapters but -

(1) Although Denver actually had one in operation – getting started a year or so after we did in the Fall of 2005 – it flamed out after only a year;

(2) Charlotte never existed;

(3) NYC with both a “regular” and “classic” chapter listing has no info for meetings or how to sign-up for mailings; and

(4) Although the Cambridge MA chapter claims to have monthly meetings, you can sign up for its mailing list and you never receive anything.

Question 4

And how many of our members normally respond to our six-degrees-of-separation appeals to contact our elected officials with regard to specific issues and contact their friends/acquaintances in a never-ending chain to do the same (please see, for example, all of the appeals listed on this bulletin board starting with this month's on "Separate BUT UNEQUAL Public Schools" and last month's on "Human Intelligence vs. Surging in Afghanistan From 17,000 U.S. Troops to 70,000 and Beyond")?

Answer 4

I would be too depressed to ask. After each appeal, there are typically 2-3 return messages saying how happy the person felt to be empowered to contact the governmental official on an issue s/he cared about. And usually the 2-3 return messages are from different people than those who have responded in the past. But nobody has ever said that they sent the appeal onwards to friends and acquaintances.

Question 5

Where would the citizenry obtain the necessary information to take control of their own democracy?

Answer 5

From a free press, the sine qua non of a democracy. Which, of course, is why our First Amendment “Freedom of the Press” and "Freedom of Speech" are so important!!!

In this regard, it is mind-boggling to recall that Hitler came to power through elections.

And even more mind-boggling to read, instead of William Shirer’s “Rise and Fall of the Third Reich,” to read his “Berlin Diary” which covers his days as an American War Correspondent in Berlin from September 1939 when Britain declared war on Germany until Pearl Harbor in December 1941. During those 2.25 years, Hitler did NOT care what foreign war correspondents reported to their home countries because his Propaganda Minister, Joseph Goebbels, could and did prevent any such information from leaking out to the German population!!! (And Goebbels even convinced the German population that Germany was under attack from Czechoslovakia and Poland before Germany invaded each of them!!!)

Question 6

True, the news media is being transformed away from print newspapers and traditional TV network news programs toward bloggers, but doesn't this really mean a major degradation in obtaining news since (a) nobody can afford any longer to maintain a staff of reporters to cover, for example, foreign affairs whereas in the past there was considerable competition among news organizations to provide coverage, and (b) what quality control exists over the content of the bloggers, even the large ones that are able to maintain a staff?

Answer 6

Yes, there is a major degradation underway. But this is a feature of a free economy and the general lack of interest of the citizenry to care about government and politics.

After all, if the public won’t buy it, who is going to produce it???

Question 7

The media and academics often decry low voter turnout rates, but would we really want anyone who doesn't even have enough interest in voting to have a voice in our democracy?

Answer 7

Obviously, we would like everyone to take an interest in government and politics. But…

Question 8

Is President Obama a good example of the potential for citizens taking control of their government?

Answer 8

Yes.

Question 9

Will President Obama be able to accomplish much of anything with a Congress whose committees (regardless of which party is in control) are described by Norm Scheiber and Dana Milbank (please see Question 1) as "wholly-owned subsidiaries" of the companies/industries they supposedly oversee?

Answer 9

Probably not.

Question 10

Is Greider's faith in democracy misplaced? After all, U.S. Senators were not popularly elected until 1913 (prior to that they were typically appointed by state governors and/or legislatures), and the Electoral College for electing the U.S. President shares a similar history of distrust by the Founding Fathers of entrusting decisions to mere citizens!

Answer 10

The Founding Fathers were a group of primitive farmers whose ideas of 233 years ago were rather quaint.

Indeed, their document has had to be amended 27 times, including 3 times to free African-Americans following the Civil War and even then the Supreme Court repeatedly refused to enforce various provisions of the 3 Civil War amendments.

And the 19th Amendment permitting women the right to vote did not occur until 1920.

And we haven’t “declared war” since World War II even though it is technically still required – indeed, Harry S. Truman called the Korean War (1950-53) a “police action” which, accordingly, did not require a Declaration of War, at least in his opinion.

Nevertheless, Greider’s optimism is commendable because it correctly points out that we, the people, have the power to control our government IF WE HAVE THE WILL!!!

Question 11

In this regard (faith in democracy), and taking as an example one specific policy recommendation that both President Obama and William Greider have made, is it really possible to tax U.S.-based multinational companies to make them behave the way President Obama and William Greider would like to see (specifically, retaining American jobs rather than exporting them to China and India)?

Answer 11

No.

European-based multinational companies (MNC’s) will always be able to locate their manufacturing in China, India and other low-cost labor markets without home-country taxation.

Accordingly, taxing the out-sourcing profits of American MNC’s when the U.S. imports of their foreign-based competition are not subject to taxation on the out-sourcing profits that produced those goods will only bankrupt the American MNC’s.

Democrats (and apparently President Obama as well) have always relished attacking corporations. But “there is no free lunch” – the stock of American corporations is overwhelming owned by American pension plans and the endowment funds of American universities which use the funds to provide scholarships for inner-city students.

Indeed, newer MNC’s are effectively based in tax havens, though their stock trades on the same stock exchanges as American and European MNC’s. The newer tax-haven MNC’s can “rent” the Dutch tax-treaty network (the best in the world) for a mere 4.5% tax rate (a Dutch company with a Swiss branch obtains standard tax rulings from the Dutch that 90% of the profit is attributable to the Swiss branch and from Switzerland that 90% of the profit is attributable to the Dutch home office). And anyway, the newer MNC’s would only stash under their Dutch holding company their marketing subs that operate in the U.S., Europe, etc., and have virtually no profits. Virtually all of the profits (as has been true for most American and European MNC’s for the last 2-3 decades) would be stashed in a Singapore non-resident company that captures close to 100% of the worldwide profits of the MNC in its contract-manufacturing arrangements in China, India, etc. Accordingly, that profit for the newer MNC’s would go directly to the parent company incorporated, say, in the Netherlands Antilles (a tax haven but one that would not be taxed by the Dutch on the trickle of profits from the American and European marketing subs that cycles through Dutch holding company). For older European-based MNC's, that profit would also cycle through the Dutch holding company and attract a 4.5% tax (since profits of pure tax-haven companies are not exempt) and, as we will see below, for an American-based MNC, that profit would be stuck in the Singapore non-resident company which could only utilize the funds to buy commercial paper of unrelated American companies.

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There are only two ways to prevent the exportation of American jobs to China, India and other low-wage countries.

The first is import barriers – tariffs and quotas. Which, of course, would raise prices because the goods that Americans are forced to buy are now made by high-wage American workers rather than low-wage workers in China, India, etc. But it could be done.

The second is socialism. Industries that the government wants to protect could be owned by the government. Or companies whose workers want to protect their jobs, could be owned by the workers.

However, neither type of socialism has a promising track record.

Britain and several other European countries nationalized many of their industries in the years following World War II. However, the workers in those industries treated the government the way they would have treated capitalist owners – and the governments found themselves having to raise prodigious amounts of tax from the rest of society to subsidize the losses of the nationalized industries. Accordingly, they were eventually forced to de-nationalize.

Even the old Soviet Union and the Peoples Republic of China have de-nationalized (a personal friend took all of the large PRC companies public).

There have been a few examples of major companies that were owned by their workers. And, indeed, many decades ago Congress enacted the Employee-Stock-Ownership Plan (“ESOP”) rules conferring tax benefits for workers who purchased their companies.

The most prominent and typical example was United Airlines – a “legacy carrier” which was acquired, the FIRST time it went into bankruptcy, by its employees through ESOP’s. However, the pilots, flight attendants, mechanics, etc., all owned their separate pieces of the company and couldn’t agree on how to split the pie!!! So they fought, and soon United Airlines was back in Bankruptcy Court with the workers being displaced by the creditors as the new owners.

*****
Which only illustrates a hidden feature of socialism. Employee ownership of United could not prevent from shrinking United’s “pie” that the workers would split as United continued to compete with the newer non-unionized airlines.

And employee-owned (or governmentally-owned) companies can NOT keep the “pie” from shrinking as the socialized companies continue to try to compete with low-price imports from low-wage countries such as China, India, etc. by foreign-based MNC’s.

Only tariffs and quotas can do that. Otherwise employees will see their wages sink to the level of China, India, etc., regardless of who owns their company.

Question 12

Taking another specific policy recommendation that both President Obama and William Greider have made (eliminating American nuclear weapons), how does that ideal square with the "common wisdom" following World War II that that war had been caused by America's isolationism following World War I?

Answer 12

In his recent Prague speech, President Obama proposed eliminating from the world all nuclear weapons, including American nuclear weapons.

World War II started when Hitler began invading neighbouring countries that had too strong a memory of World War I trench warfare to summon the will to resist.

(Indeed, Hitler’s own generals nearly revolted for the same reason when Hitler staged his first invasion – but couldn’t resist “taking candy from babies” when they realized that other countries also had no stomach for war, at least until Hitler picked on the Brits and, in what they call their “Great Patriotic War,” the Russians who sustained 25 million casualties.)

Would it be far fetched to imagine that in a nuclear-free world – a Kim Jong-il (North Korean de facto President because his father, Kim Il-sung who died in 1994, is “Eternal President”) or a Mahmoud Ahmadinejad (Iran’s President) or Al Qaida (following the fall of the Pakistani government) acquires nuclear weapons and immediately begins to overrun the rest of the world???

Do you think that Hitler, with whom the U.S. was in a tight “horse race” to see who would develop the atomic bomb first, would have shrunk from using it to conquer the world in short order???

Actually Kim Jong-il already has atomic weapons and we are not really doing anything that would be effective in preventing Iran from acquiring them.

So will the American public likely follow President Obama down the path of unilateral nuclear disarmament in such a dangerous world???

*****
Hopefully, President Obama’s June 4th Cairo speech will be more promising.

And he could easily solve the Iranian and Israel/Palestinian problems in one fell swoop!!!

Unlike Kim Jong-il who has demonstrated an utter disregard for his people by letting many millions of them die of hunger during his 15 years in power, the Iranian clergy (which rules Iran through puppets such as President Ahmadinejad and through their own democratic religious following (each cleric’s rank is determined by how many of the faithful “pray behind you”)) does seem to care deeply about its population.

Accordingly, Iran should be susceptible to deterrence – if the deterrence is credible.

In this regard, many of us will recall the fun we had at Hillary Clinton’s expense in the materials for our 13 December 2007 meeting 18 months ago, because Hillary Clinton had proposed extending the American nuclear umbrella to the “Gulf State Six,” each of whom is poised to go nuclear as soon as Iran acquires the atomic bomb.

We pointed out that for the Cold War concept of MAD (mutual assured destruction) to be successful, the policy has to be credible ON THREE LEVELS – the American public has to support its own possible annihilation in a nuclear holocaust to save Oman (one of the Gulf State Six), Iran has to believe America is ready for self-immolation in a nuclear holocaust to save Oman, and Oman itself has to believe both that America is ready for self-immolation in a nuclear holocaust to save it as well as that Iran believes that to be true.

Indeed, the issue of credibility is why Charles de Gaulle took France out of NATO and developed French nuclear weapons -- because de Gaulle did not even believe the American nuclear umbrella was credible for preventing Russian tanks from rolling to the Atlantic!!!

Obviously, Clinton’s proposal was a sophomoric suggestion by some junior staffer that sounded good if nobody thought about it.

However, Israel’s threats to take out Iran’s nuclear capabilities (the way Israel took out Iraq’s in 1981 by bombing Osirak) are credible!!!

(Though, of course, we have discussed that with more than 500 Iranian nuclear facilities, many of which are too far underground to be bombed successfully, Israel would have to mount some 500 simultaneous commando raids with appropriate air cover to capture the 500 facilities long enough to send explosive teams down the elevators to take out the facilities.)

But Israel doesn’t really need to do this.

From overseeing the tax planning of the 10-year takeover in the 1970’s of Aramco (100% ownership of all Saudi oil & gas) by the Saudi government, I could tell zillions of stories that demonstrate that the Saudi government could care less about persecuting Jews or Israel – they are only afraid, as individuals, of assassination at the hands of Palestinians.

The Gulf State Six (which include Saudi Arabia) could probably be motivated by their fear of Iran to “lay down the law” with the Palestinians to achieve a two-state peace with Israel. Though it would probably be more accurate to say “buy them off” by providing enough economic support that Palestinians going forward enjoy the highest standard of living in the world!!! (After all, there aren’t that many Palestinians, so how much could it cost???) And if a significant majority can be “bought off,” the majority should have little trouble policing hard-core terrorists whose actions would jeopardize the new standard-of-living of the majority.

Following which Israel, no longer a pariah in the Arab world, would provide the credibility for a nuclear-security pact of the Gulf State Six + Israel. Iran would not think for a moment that Israel, which has been threatening to attack their nuclear sites, would not relish the opportunity if asked by Iran’s Arab neighbours.

Let’s keep our fingers crossed!!!

Question 13

With regard to the question of obtaining and properly evaluating information, how is it that nobody has uttered a peep about the decision of Congress to remove several trillion dollars from the U.S. commercial paper market prior to the recent economic collapse? And why is that catastrophic decision papered over by both Congress and the media with the myth that lending to U.S. corporations was primarily done by banks?

Answer 13

By 2004-05, U.S. companies had accumulated in foreign tax havens approximately $5 trillion representing their accumulated profits from exporting American jobs to China, India, etc.

Under existing U.S. tax law, those profits could not be repatriated to the U.S. parents without paying the full 35% U.S. corporate income tax. And they could not, for example, be lent to the U.S. parent group without the loans being treated as “constructive dividends” triggering the U.S. tax.

HOWEVER, the funds could be loaned to unrelated U.S. companies without triggering the tax. Accordingly, approximately $5 trillion of commercial paper of U.S. corporations was owned by tax-haven subsidiaries of other U.S. corporations.

Item 5 (“Exhibit C – Exempting Out-Sourcing Profits From Income Tax”) under "Participant Comments" on this bulletin board for our 14 February 2007 meeting 16 months ago on the subject of “The Best Government Money Can Buy: Bribery and Extortion” explains all this in excruciating detail.

It also details that Congress permitted the commercial paper to be liquidated and the proceeds representing the accumulated out-sourcing profits to be repatriated to their U.S. parents for a special one-time U.S. income tax rate of only 5.25% -- if accomplished (for companies whose fiscal year is the calendar year) by the end of 2005.

It is estimated that approximately $3-4 trillion of accumulated out-sourcing profits were repatriated at the special 5.25% rate and largely used by the U.S. parent corporations to buy back their own stock.

Meanwhile, the U.S. companies that had borrowed that $3-4 trillion by issuing commercial paper suddenly found themselves unable to “roll over” their commercial paper!!!

Is it any wonder that $3-4 trillion of sudden contractions by U.S. companies that could no longer “roll over” their commercial paper contributed to the economic collapse that was being felt less than two years later causing Congress to pass its first economic-stimulus bill in early 2008???

Though why should any of us be surprised that our pols (assisted by the media) have papered over the problem caused by Congress by creating the myth that lending to U.S. corporations was largely done by U.S. banks that are no longer lending to them???

johnkarls
Posts: 2034
Joined: Fri Jun 29, 2007 8:43 pm

President Obama's Cairo Speech (re Q&A 12)

Post by johnkarls »

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Editorial Note - It's nice to be e-mailed transcripts of Presidential speeches, etc., which is a benefit of having contacted President Obama with ReadingLiberally-SaltLake "Calls to Action"!!!

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THE WHITE HOUSE
Office of the Press Secretary
(Cairo,Egypt)

________________________________________________
FOR IMMEDIATE RELEASE June 4, 2009

REMARKS BY THE PRESIDENT
ON A NEW BEGINNING
Cairo University
Cairo, Egypt

1:10 P.M. (Local)

PRESIDENT OBAMA: Thank you very much. Good afternoon. I am honored to be in the timeless city of Cairo, and to be hosted by two remarkable institutions. For over a thousand years, Al-Azhar has stood as a beacon of Islamic learning; and for over a century, Cairo University has been a source of Egypt's advancement. And together, you represent the harmony between tradition and progress. I'm grateful for your hospitality, and the hospitality of the people of Egypt. And I'm also proud to carry with me the goodwill of the American people, and a greeting of peace from Muslim communities in my country: Assalaamu alaykum. (Applause.)

We meet at a time of great tension between the United States and Muslims around the world -- tension rooted in historical forces that go beyond any current policy debate. The relationship between Islam and the West includes centuries of coexistence and cooperation, but also conflict and religious wars. More recently, tension has been fed by colonialism that denied rights and opportunities to many Muslims, and a Cold War in which Muslim-majority countries were too often treated as proxies without regard to their own aspirations. Moreover, the sweeping change brought by modernity and globalization led many Muslims to view the West as hostile to the traditions of Islam.

Violent extremists have exploited these tensions in a small but potent minority of Muslims. The attacks of September 11, 2001 and the continued efforts of these extremists to engage in violence against civilians has led some in my country to view Islam as inevitably hostile not only to America and Western countries, but also to human rights. All this has bred more fear and more mistrust.

So long as our relationship is defined by our differences, we will empower those who sow hatred rather than peace, those who promote conflict rather than the cooperation that can help all of our people achieve justice and prosperity. And this cycle of suspicion and discord must end.

I've come here to Cairo to seek a new beginning between the United States and Muslims around the world, one based on mutual interest and mutual respect, and one based upon the truth that America and Islam are not exclusive and need not be in competition. Instead, they overlap, and share common principles -- principles of justice and progress; tolerance and the dignity of all human beings.

I do so recognizing that change cannot happen overnight. I know there's been a lot of publicity about this speech, but no single speech can eradicate years of mistrust, nor can I answer in the time that I have this afternoon all the complex questions that brought us to this point. But I am convinced that in order to move forward, we must say openly to each other the things we hold in our hearts and that too often are said only behind closed doors. There must be a sustained effort to listen to each other; to learn from each other; to respect one another; and to seek common ground. As the Holy Koran tells us, "Be conscious of God and speak always the truth." (Applause.) That is what I will try to do today -- to speak the truth as best I can, humbled by the task before us, and firm in my belief that the interests we share as human beings are far more powerful than the forces that drive us apart.

Now part of this conviction is rooted in my own experience. I'm a Christian, but my father came from a Kenyan family that includes generations of Muslims. As a boy, I spent several years in Indonesia and heard the call of the azaan at the break of dawn and at the fall of dusk. As a young man, I worked in Chicago communities where many found dignity and peace in their Muslim faith.

As a student of history, I also know civilization's debt to Islam. It was Islam -- at places like Al-Azhar -- that carried the light of learning through so many centuries, paving the way for Europe's Renaissance and Enlightenment. It was innovation in Muslim communities -- (applause) -- it was innovation in Muslim communities that developed the order of algebra; our magnetic compass and tools of navigation; our mastery of pens and printing; our understanding of how disease spreads and how it can be healed. Islamic culture has given us majestic arches and soaring spires; timeless poetry and cherished music; elegant calligraphy and places of peaceful contemplation. And throughout history, Islam has demonstrated through words and deeds the possibilities of religious tolerance and racial equality. (Applause.)

I also know that Islam has always been a part of America's story. The first nation to recognize my country was Morocco. In signing the Treaty of Tripoli in 1796, our second President, John Adams, wrote, "The United States has in itself no character of enmity against the laws, religion or tranquility of Muslims." And since our founding, American Muslims have enriched the United States. They have fought in our wars, they have served in our government, they have stood for civil rights, they have started businesses, they have taught at our universities, they've excelled in our sports arenas, they've won Nobel Prizes, built our tallest building, and lit the Olympic Torch. And when the first Muslim American was recently elected to Congress, he took the oath to defend our Constitution using the same Holy Koran that one of our Founding Fathers -- Thomas Jefferson -- kept in his personal library. (Applause.)

So I have known Islam on three continents before coming to the region where it was first revealed. That experience guides my conviction that partnership between America and Islam must be based on what Islam is, not what it isn't. And I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Islam wherever they appear. (Applause.)

But that same principle must apply to Muslim perceptions of America. (Applause.) Just as Muslims do not fit a crude stereotype, America is not the crude stereotype of a self-interested empire. The United States has been one of the greatest sources of progress that the world has ever known. We were born out of revolution against an empire. We were founded upon the ideal that all are created equal, and we have shed blood and struggled for centuries to give meaning to those words -- within our borders, and around the world. We are shaped by every culture, drawn from every end of the Earth, and dedicated to a simple concept: E pluribus unum -- "Out of many, one."

Now, much has been made of the fact that an African American with the name Barack Hussein Obama could be elected President. (Applause.) But my personal story is not so unique. The dream of opportunity for all people has not come true for everyone in America, but its promise exists for all who come to our shores -- and that includes nearly 7 million American Muslims in our country today who, by the way, enjoy incomes and educational levels that are higher than the American average. (Applause.)

Moreover, freedom in America is indivisible from the freedom to practice one's religion. That is why there is a mosque in every state in our union, and over 1,200 mosques within our borders. That's why the United States government has gone to court to protect the right of women and girls to wear the hijab and to punish those who would deny it. (Applause.)

So let there be no doubt: Islam is a part of America. And I believe that America holds within her the truth that regardless of race, religion, or station in life, all of us share common aspirations -- to live in peace and security; to get an education and to work with dignity; to love our families, our communities, and our God. These things we share. This is the hope of all humanity.

Of course, recognizing our common humanity is only the beginning of our task. Words alone cannot meet the needs of our people. These needs will be met only if we act boldly in the years ahead; and if we understand that the challenges we face are shared, and our failure to meet them will hurt us all.

For we have learned from recent experience that when a financial system weakens in one country, prosperity is hurt everywhere. When a new flu infects one human being, all are at risk. When one nation pursues a nuclear weapon, the risk of nuclear attack rises for all nations. When violent extremists operate in one stretch of mountains, people are endangered across an ocean. When innocents in Bosnia and Darfur are slaughtered, that is a stain on our collective conscience. (Applause.) That is what it means to share this world in the 21st century. That is the responsibility we have to one another as human beings.

And this is a difficult responsibility to embrace. For human history has often been a record of nations and tribes -- and, yes, religions -- subjugating one another in pursuit of their own interests. Yet in this new age, such attitudes are self-defeating. Given our interdependence, any world order that elevates one nation or group of people over another will inevitably fail. So whatever we think of the past, we must not be prisoners to it. Our problems must be dealt with through partnership; our progress must be shared. (Applause.)

Now, that does not mean we should ignore sources of tension. Indeed, it suggests the opposite: We must face these tensions squarely. And so in that spirit, let me speak as clearly and as plainly as I can about some specific issues that I believe we must finally confront together.

The first issue that we have to confront is violent extremism in all of its forms.

In Ankara, I made clear that America is not -- and never will be -- at war with Islam. (Applause.) We will, however, relentlessly confront violent extremists who pose a grave threat to our security -- because we reject the same thing that people of all faiths reject: the killing of innocent men, women, and children. And it is my first duty as President to protect the American people.

The situation in Afghanistan demonstrates America's goals, and our need to work together. Over seven years ago, the United States pursued al Qaeda and the Taliban with broad international support. We did not go by choice; we went because of necessity. I'm aware that there's still some who would question or even justify the events of 9/11. But let us be clear: Al Qaeda killed nearly 3,000 people on that day. The victims were innocent men, women and children from America and many other nations who had done nothing to harm anybody. And yet al Qaeda chose to ruthlessly murder these people, claimed credit for the attack, and even now states their determination to kill on a massive scale. They have affiliates in many countries and are trying to expand their reach. These are not opinions to be debated; these are facts to be dealt with.

Now, make no mistake: We do not want to keep our troops in Afghanistan. We see no military -- we seek no military bases there. It is agonizing for America to lose our young men and women. It is costly and politically difficult to continue this conflict. We would gladly bring every single one of our troops home if we could be confident that there were not violent extremists in Afghanistan and now Pakistan determined to kill as many Americans as they possibly can. But that is not yet the case.

And that's why we're partnering with a coalition of 46 countries. And despite the costs involved, America's commitment will not weaken. Indeed, none of us should tolerate these extremists. They have killed in many countries. They have killed people of different faiths -- but more than any other, they have killed Muslims. Their actions are irreconcilable with the rights of human beings, the progress of nations, and with Islam. The Holy Koran teaches that whoever kills an innocent is as -- it is as if he has killed all mankind. (Applause.) And the Holy Koran also says whoever saves a person, it is as if he has saved all mankind. (Applause.) The enduring faith of over a billion people is so much bigger than the narrow hatred of a few. Islam is not part of the problem in combating violent extremism -- it is an important part of promoting peace.

Now, we also know that military power alone is not going to solve the problems in Afghanistan and Pakistan. That's why we plan to invest $1.5 billion each year over the next five years to partner with Pakistanis to build schools and hospitals, roads and businesses, and hundreds of millions to help those who've been displaced. That's why we are providing more than $2.8 billion to help Afghans develop their economy and deliver services that people depend on.

Let me also address the issue of Iraq. Unlike Afghanistan, Iraq was a war of choice that provoked strong differences in my country and around the world. Although I believe that the Iraqi people are ultimately better off without the tyranny of Saddam Hussein, I also believe that events in Iraq have reminded America of the need to use diplomacy and build international consensus to resolve our problems whenever possible. (Applause.) Indeed, we can recall the words of Thomas Jefferson, who said: "I hope that our wisdom will grow with our power, and teach us that the less we use our power the greater it will be."

Today, America has a dual responsibility: to help Iraq forge a better future -- and to leave Iraq to Iraqis. And I have made it clear to the Iraqi people -- (applause) -- I have made it clear to the Iraqi people that we pursue no bases, and no claim on their territory or resources. Iraq's sovereignty is its own. And that's why I ordered the removal of our combat brigades by next August. That is why we will honor our agreement with Iraq's democratically elected government to remove combat troops from Iraqi cities by July, and to remove all of our troops from Iraq by 2012. (Applause.) We will help Iraq train its security forces and develop its economy. But we will support a secure and united Iraq as a partner, and never as a patron.

And finally, just as America can never tolerate violence by extremists, we must never alter or forget our principles. Nine-eleven was an enormous trauma to our country. The fear and anger that it provoked was understandable, but in some cases, it led us to act contrary to our traditions and our ideals. We are taking concrete actions to change course. I have unequivocally prohibited the use of torture by the United States, and I have ordered the prison at Guantanamo Bay closed by early next year. (Applause.)

So America will defend itself, respectful of the sovereignty of nations and the rule of law. And we will do so in partnership with Muslim communities which are also threatened. The sooner the extremists are isolated and unwelcome in Muslim communities, the sooner we will all be safer.

The second major source of tension that we need to discuss is the situation between Israelis, Palestinians and the Arab world.

America's strong bonds with Israel are well known. This bond is unbreakable. It is based upon cultural and historical ties, and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied.

Around the world, the Jewish people were persecuted for centuries, and anti-Semitism in Europe culminated in an unprecedented Holocaust. Tomorrow, I will visit Buchenwald, which was part of a network of camps where Jews were enslaved, tortured, shot and gassed to death by the Third Reich. Six million Jews were killed -- more than the entire Jewish population of Israel today. Denying that fact is baseless, it is ignorant, and it is hateful. Threatening Israel with destruction -- or repeating vile stereotypes about Jews -- is deeply wrong, and only serves to evoke in the minds of Israelis this most painful of memories while preventing the peace that the people of this region deserve.

On the other hand, it is also undeniable that the Palestinian people -- Muslims and Christians -- have suffered in pursuit of a homeland. For more than 60 years they've endured the pain of dislocation. Many wait in refugee camps in the West Bank, Gaza, and neighboring lands for a life of peace and security that they have never been able to lead. They endure the daily humiliations -- large and small -- that come with occupation. So let there be no doubt: The situation for the Palestinian people is intolerable. And America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own. (Applause.)

For decades then, there has been a stalemate: two peoples with legitimate aspirations, each with a painful history that makes compromise elusive. It's easy to point fingers -- for Palestinians to point to the displacement brought about by Israel's founding, and for Israelis to point to the constant hostility and attacks throughout its history from within its borders as well as beyond. But if we see this conflict only from one side or the other, then we will be blind to the truth: The only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security. (Applause.)

That is in Israel's interest, Palestine's interest, America's interest, and the world's interest. And that is why I intend to personally pursue this outcome with all the patience and dedication that the task requires. (Applause.) The obligations -- the obligations that the parties have agreed to under the road map are clear. For peace to come, it is time for them -- and all of us -- to live up to our responsibilities.

Palestinians must abandon violence. Resistance through violence and killing is wrong and it does not succeed. For centuries, black people in America suffered the lash of the whip as slaves and the humiliation of segregation. But it was not violence that won full and equal rights. It was a peaceful and determined insistence upon the ideals at the center of America's founding. This same story can be told by people from South Africa to South Asia; from Eastern Europe to Indonesia. It's a story with a simple truth: that violence is a dead end. It is a sign neither of courage nor power to shoot rockets at sleeping children, or to blow up old women on a bus. That's not how moral authority is claimed; that's how it is surrendered.

Now is the time for Palestinians to focus on what they can build. The Palestinian Authority must develop its capacity to govern, with institutions that serve the needs of its people. Hamas does have support among some Palestinians, but they also have to recognize they have responsibilities. To play a role in fulfilling Palestinian aspirations, to unify the Palestinian people, Hamas must put an end to violence, recognize past agreements, recognize Israel's right to exist.

At the same time, Israelis must acknowledge that just as Israel's right to exist cannot be denied, neither can Palestine's. The United States does not accept the legitimacy of continued Israeli settlements. (Applause.) This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop. (Applause.)

And Israel must also live up to its obligation to ensure that Palestinians can live and work and develop their society. Just as it devastates Palestinian families, the continuing humanitarian crisis in Gaza does not serve Israel's security; neither does the continuing lack of opportunity in the West Bank. Progress in the daily lives of the Palestinian people must be a critical part of a road to peace, and Israel must take concrete steps to enable such progress.

And finally, the Arab states must recognize that the Arab Peace Initiative was an important beginning, but not the end of their responsibilities. The Arab-Israeli conflict should no longer be used to distract the people of Arab nations from other problems. Instead, it must be a cause for action to help the Palestinian people develop the institutions that will sustain their state, to recognize Israel's legitimacy, and to choose progress over a self-defeating focus on the past.

America will align our policies with those who pursue peace, and we will say in public what we say in private to Israelis and Palestinians and Arabs. (Applause.) We cannot impose peace. But privately, many Muslims recognize that Israel will not go away. Likewise, many Israelis recognize the need for a Palestinian state. It is time for us to act on what everyone knows to be true.

Too many tears have been shed. Too much blood has been shed. All of us have a responsibility to work for the day when the mothers of Israelis and Palestinians can see their children grow up without fear; when the Holy Land of the three great faiths is the place of peace that God intended it to be; when Jerusalem is a secure and lasting home for Jews and Christians and Muslims, and a place for all of the children of Abraham to mingle peacefully together as in the story of Isra -- (applause) -- as in the story of Isra, when Moses, Jesus, and Mohammed, peace be upon them, joined in prayer. (Applause.)

The third source of tension is our shared interest in the rights and responsibilities of nations on nuclear weapons.

This issue has been a source of tension between the United States and the Islamic Republic of Iran. For many years, Iran has defined itself in part by its opposition to my country, and there is in fact a tumultuous history between us. In the middle of the Cold War, the United States played a role in the overthrow of a democratically elected Iranian government. Since the Islamic Revolution, Iran has played a role in acts of hostage-taking and violence against U.S. troops and civilians. This history is well known. Rather than remain trapped in the past, I've made it clear to Iran's leaders and people that my country is prepared to move forward. The question now is not what Iran is against, but rather what future it wants to build.

I recognize it will be hard to overcome decades of mistrust, but we will proceed with courage, rectitude, and resolve. There will be many issues to discuss between our two countries, and we are willing to move forward without preconditions on the basis of mutual respect. But it is clear to all concerned that when it comes to nuclear weapons, we have reached a decisive point. This is not simply about America's interests. It's about preventing a nuclear arms race in the Middle East that could lead this region and the world down a hugely dangerous path.

I understand those who protest that some countries have weapons that others do not. No single nation should pick and choose which nation holds nuclear weapons. And that's why I strongly reaffirmed America's commitment to seek a world in which no nations hold nuclear weapons. (Applause.) And any nation -- including Iran -- should have the right to access peaceful nuclear power if it complies with its responsibilities under the nuclear Non-Proliferation Treaty. That commitment is at the core of the treaty, and it must be kept for all who fully abide by it. And I'm hopeful that all countries in the region can share in this goal.

The fourth issue that I will address is democracy. (Applause.)

I know -- I know there has been controversy about the promotion of democracy in recent years, and much of this controversy is connected to the war in Iraq. So let me be clear: No system of government can or should be imposed by one nation by any other.

That does not lessen my commitment, however, to governments that reflect the will of the people. Each nation gives life to this principle in its own way, grounded in the traditions of its own people. America does not presume to know what is best for everyone, just as we would not presume to pick the outcome of a peaceful election. But I do have an unyielding belief that all people yearn for certain things: the ability to speak your mind and have a say in how you are governed; confidence in the rule of law and the equal administration of justice; government that is transparent and doesn't steal from the people; the freedom to live as you choose. These are not just American ideas; they are human rights. And that is why we will support them everywhere. (Applause.)

Now, there is no straight line to realize this promise. But this much is clear: Governments that protect these rights are ultimately more stable, successful and secure. Suppressing ideas never succeeds in making them go away. America respects the right of all peaceful and law-abiding voices to be heard around the world, even if we disagree with them. And we will welcome all elected, peaceful governments -- provided they govern with respect for all their people.

This last point is important because there are some who advocate for democracy only when they're out of power; once in power, they are ruthless in suppressing the rights of others. (Applause.) So no matter where it takes hold, government of the people and by the people sets a single standard for all who would hold power: You must maintain your power through consent, not coercion; you must respect the rights of minorities, and participate with a spirit of tolerance and compromise; you must place the interests of your people and the legitimate workings of the political process above your party. Without these ingredients, elections alone do not make true democracy.

AUDIENCE MEMBER: Barack Obama, we love you!

PRESIDENT OBAMA: Thank you. (Applause.) The fifth issue that we must address together is religious freedom.

Islam has a proud tradition of tolerance. We see it in the history of Andalusia and Cordoba during the Inquisition. I saw it firsthand as a child in Indonesia, where devout Christians worshiped freely in an overwhelmingly Muslim country. That is the spirit we need today. People in every country should be free to choose and live their faith based upon the persuasion of the mind and the heart and the soul. This tolerance is essential for religion to thrive, but it's being challenged in many different ways.

Among some Muslims, there's a disturbing tendency to measure one's own faith by the rejection of somebody else's faith. The richness of religious diversity must be upheld -- whether it is for Maronites in Lebanon or the Copts in Egypt. (Applause.) And if we are being honest, fault lines must be closed among Muslims, as well, as the divisions between Sunni and Shia have led to tragic violence, particularly in Iraq.

Freedom of religion is central to the ability of peoples to live together. We must always examine the ways in which we protect it. For instance, in the United States, rules on charitable giving have made it harder for Muslims to fulfill their religious obligation. That's why I'm committed to working with American Muslims to ensure that they can fulfill zakat.

Likewise, it is important for Western countries to avoid impeding Muslim citizens from practicing religion as they see fit -- for instance, by dictating what clothes a Muslim woman should wear. We can't disguise hostility towards any religion behind the pretence of liberalism.

In fact, faith should bring us together. And that's why we're forging service projects in America to bring together Christians, Muslims, and Jews. That's why we welcome efforts like Saudi Arabian King Abdullah's interfaith dialogue and Turkey's leadership in the Alliance of Civilizations. Around the world, we can turn dialogue into interfaith service, so bridges between peoples lead to action -- whether it is combating malaria in Africa, or providing relief after a natural disaster.

The sixth issue -- the sixth issue that I want to address is women's rights. (Applause.) I know –- I know -- and you can tell from this audience, that there is a healthy debate about this issue. I reject the view of some in the West that a woman who chooses to cover her hair is somehow less equal, but I do believe that a woman who is denied an education is denied equality. (Applause.) And it is no coincidence that countries where women are well educated are far more likely to be prosperous.

Now, let me be clear: Issues of women's equality are by no means simply an issue for Islam. In Turkey, Pakistan, Bangladesh, Indonesia, we've seen Muslim-majority countries elect a woman to lead. Meanwhile, the struggle for women's equality continues in many aspects of American life, and in countries around the world.

I am convinced that our daughters can contribute just as much to society as our sons. (Applause.) Our common prosperity will be advanced by allowing all humanity -- men and women -- to reach their full potential. I do not believe that women must make the same choices as men in order to be equal, and I respect those women who choose to live their lives in traditional roles. But it should be their choice. And that is why the United States will partner with any Muslim-majority country to support expanded literacy for girls, and to help young women pursue employment through micro-financing that helps people live their dreams. (Applause.)

Finally, I want to discuss economic development and opportunity.

I know that for many, the face of globalization is contradictory. The Internet and television can bring knowledge and information, but also offensive sexuality and mindless violence into the home. Trade can bring new wealth and opportunities, but also huge disruptions and change in communities. In all nations -- including America -- this change can bring fear. Fear that because of modernity we lose control over our economic choices, our politics, and most importantly our identities -- those things we most cherish about our communities, our families, our traditions, and our faith.

But I also know that human progress cannot be denied. There need not be contradictions between development and tradition. Countries like Japan and South Korea grew their economies enormously while maintaining distinct cultures. The same is true for the astonishing progress within Muslim-majority countries from Kuala Lumpur to Dubai. In ancient times and in our times, Muslim communities have been at the forefront of innovation and education.

And this is important because no development strategy can be based only upon what comes out of the ground, nor can it be sustained while young people are out of work. Many Gulf states have enjoyed great wealth as a consequence of oil, and some are beginning to focus it on broader development. But all of us must recognize that education and innovation will be the currency of the 21st century -- (applause) -- and in too many Muslim communities, there remains underinvestment in these areas. I'm emphasizing such investment within my own country. And while America in the past has focused on oil and gas when it comes to this part of the world, we now seek a broader engagement.

On education, we will expand exchange programs, and increase scholarships, like the one that brought my father to America. (Applause.) At the same time, we will encourage more Americans to study in Muslim communities. And we will match promising Muslim students with internships in America; invest in online learning for teachers and children around the world; and create a new online network, so a young person in Kansas can communicate instantly with a young person in Cairo.

On economic development, we will create a new corps of business volunteers to partner with counterparts in Muslim-majority countries. And I will host a Summit on Entrepreneurship this year to identify how we can deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world.

On science and technology, we will launch a new fund to support technological development in Muslim-majority countries, and to help transfer ideas to the marketplace so they can create more jobs. We'll open centers of scientific excellence in Africa, the Middle East and Southeast Asia, and appoint new science envoys to collaborate on programs that develop new sources of energy, create green jobs, digitize records, clean water, grow new crops. Today I'm announcing a new global effort with the Organization of the Islamic Conference to eradicate polio. And we will also expand partnerships with Muslim communities to promote child and maternal health.

All these things must be done in partnership. Americans are ready to join with citizens and governments; community organizations, religious leaders, and businesses in Muslim communities around the world to help our people pursue a better life.

The issues that I have described will not be easy to address. But we have a responsibility to join together on behalf of the world that we seek -- a world where extremists no longer threaten our people, and American troops have come home; a world where Israelis and Palestinians are each secure in a state of their own, and nuclear energy is used for peaceful purposes; a world where governments serve their citizens, and the rights of all God's children are respected. Those are mutual interests. That is the world we seek. But we can only achieve it together.

I know there are many -- Muslim and non-Muslim -- who question whether we can forge this new beginning. Some are eager to stoke the flames of division, and to stand in the way of progress. Some suggest that it isn't worth the effort -- that we are fated to disagree, and civilizations are doomed to clash. Many more are simply skeptical that real change can occur. There's so much fear, so much mistrust that has built up over the years. But if we choose to be bound by the past, we will never move forward. And I want to particularly say this to young people of every faith, in every country -- you, more than anyone, have the ability to reimagine the world, to remake this world.

All of us share this world for but a brief moment in time. The question is whether we spend that time focused on what pushes us apart, or whether we commit ourselves to an effort -- a sustained effort -- to find common ground, to focus on the future we seek for our children, and to respect the dignity of all human beings.

It's easier to start wars than to end them. It's easier to blame others than to look inward. It's easier to see what is different about someone than to find the things we share. But we should choose the right path, not just the easy path. There's one rule that lies at the heart of every religion -- that we do unto others as we would have them do unto us. (Applause.) This truth transcends nations and peoples -- a belief that isn't new; that isn't black or white or brown; that isn't Christian or Muslim or Jew. It's a belief that pulsed in the cradle of civilization, and that still beats in the hearts of billions around the world. It's a faith in other people, and it's what brought me here today.

We have the power to make the world we seek, but only if we have the courage to make a new beginning, keeping in mind what has been written.

The Holy Koran tells us: "O mankind! We have created you male and a female; and we have made you into nations and tribes so that you may know one another."

The Talmud tells us: "The whole of the Torah is for the purpose of promoting peace."

The Holy Bible tells us: "Blessed are the peacemakers, for they shall be called sons of God." (Applause.)

The people of the world can live together in peace. We know that is God's vision. Now that must be our work here on Earth.

Thank you. And may God's peace be upon you. Thank you very much. Thank you. (Applause.)

END
2:05 P.M. (Local)

Pat
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Transferring $3-4 Trillion From Commercial Paper to Stock

Post by Pat »

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It is worth noting the “flip side of the coin” that John Karls described in Q&A 13 when he explained how approximately $5 trillion of profits of US-based multinational companies from out-sourcing American jobs had accumulated in tax-haven subsidiaries and could only be used to purchase the commercial paper of unrelated US companies.

John focused on the economic dislocation caused when Congress suddenly decided that the US companies that had outsourced American jobs could suddenly by the end of 2005 cause their tax-haven subs to liquidate their investments in commercial paper of unrelated US companies and dividend the funds to their US parents for a measly 5.25% special US income tax rate (vs. the normal 35%).

John described how the US parents caused their tax-haven subs to reduce their holdings of commercial paper by $3-4 trillion with the funds largely used to buy back the stock of the US parents.

John also described how the American companies that had NOT out-sourced American jobs suddenly at the end of 2005 found that they could not “roll over” $3-4 trillion of their commercial paper and were forced to down-size!!!

And that it should be no surprise that $3-4 trillion of down-sizing in early 2006 forced Congress to enact its first “economic stimulus” plan in early 2008, a mere 24 months later.

THE “FLIP SIDE OF THE COIN” THAT JOHN DID NOT DESCRIBE WAS THE EFFECT OF ALL THIS ON THE STOCK MARKET!!!

FOR THE 24 MONTHS OF 2004-2005, THE DOW JONES INDEX REMAINED FAIRLY CONSTANT, NEVER STRAYING MUCH FROM THE 10,000 LEVEL.

WITH $3-4 TRILLION OF STOCK BUY-BACKS BEGINNING IN EARLY 2006 AND THE RE-INVESTMENT OF THAT $3-4 TRILLION IN THE STOCK MARKET, THE DOW JONES INDEX SHOT UP TO 13,700 WITHIN 18 MONTHS!!!

THE MARKET IS NOW ABOUT 8,500 – WHICH IS ABOUT WHERE IT SHOULD BE MID-RECESSION BEFORE THE NEXT UP-TURN IN THE ECONOMY IS REFLECTED IN STOCK PRICES (THE STOCK MARKET USUALLY “LEADS” THE ECONOMY BY 12-18 MONTHS) IF THE STOCK MARKET HAD NEVER BEEN ARTIFICIALLY INFLATED TO 13,700 BY CONGRESS’ ACTION!!!

YES, A LOT OF STOCK VALUE “WENT UP THE FLUE” DURING THE LAST 18 MONTHS. BUT THE VAST MAJORITY OF VALUE THAT “WENT UP THE FLUE” WAS ARTIFICIALLY CREATED BY CONGRESS’ DECISION TO TRANSFER $3-4 TRILLION FROM THE COMMERCIAL PAPER MARKET TO THE STOCK MARKET!!!

MANY PEOPLE WHO “GOT OUT AT THE TOP” WERE UNJUSTLY ENRICHED. AND MANY PEOPLE BOUGHT AT THE TOP AND THEN WATCHED THEIR SAVINGS DISAPPEAR. ALL AS A RESULT OF CONGRESS NOT KNOWING WHAT IT WAS DOING!!!

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