This action might not be possible to undo. Are you sure you want to continue?
50 53 55 57 64 68
We Will Remake America
Address by BARACK OBAMA, the 44th President of the United States
74 78 82 85 88
Preparing for the Next Game
Address by MARK GERENCSER, Booz Allen Hamilton, Senior Vice President
The Vitality of American Democracy
Address by GEORGE W. BUSH, President of the United States
A Second American Revolution
Address by CRAIG BARNES, author, playwright and trial lawyer
American Recovery and Reinvestment
Address by BARACK OBAMA, President-elect of the United States
The State of American Business 2009
Address by THOMAS J. DONOHUE, President and CEO, U.S. Chamber of Commerce
Guardian of the Constitution
Address by STEPHEN BREYER, U.S. Supreme Court Justice
J.M. BERNHARD JR., Chairman, President and CEO, The Shaw Group Inc.
Troubled Asset Relief Program
Address by NEEL KASHKARI, Interim Assistant Secretary for Financial Stability
The Rich and Super-Rich in a Post-Crisis World
Address by FRANCES ALDRICH SEVILLASACASA, former President and CEO of U.S. Trust
Connecting and Protecting Our Planet
Address by JAMES C. MAY, President and CEO, Air Transport Association of America
It’s Not Just About Us It’s About the Patients
Address by NANCY H. NIELSEN, MD, PhD, President, American Medical Association
A Moral Test of Our Times
Address by W. RALPH BASHAM, Commissioner, U.S. Customs and Border Protection
The besT ThoughTs of The besT minds on currenT naTional quesTions ImpartIal • ConstruCtIve • authentIC
VITAL SPEECHES OF THE DAY
We Will Remake America
DELIVERING THE GIFT OF FREEDOM TO FUTURE GENERATIONS
Address by BARACK OBAMA, the 44th President of the United States Delivered at his Presidential Inauguration, Washington, D.C., January 20, 2009 y fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition. Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents. So it has been. So it must be with this generation of Americans. That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet. These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America’s decline is inevitable, and that the next generation must lower its sights. Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met. On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord. On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics. We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious
gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness. In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risktakers, the doers, the makers of things - some celebrated
POLICY OF VITAL SPEECHES The publisher of Vital Speeches of the Day believes that it is indeed vital to the welfare of the nation that important, constructive addresses by recognized leaders in both the public and private sectors be permanently recorded and disseminated—both to ensure that readers gain a sound knowledge of public questions and to provide models of excellence in contemporary oratory. These speeches represent the best thoughts of the best minds on current national and international issues in the fields of economics, politics, education, sociology, government, criminology, finance, business, taxation, health, law, labor, and more. It is the policy of the publisher to cover both sides of public questions. Furthermore, because Vital Speeches of the Day was founded on the belief that it is only in the unedited and unexpurgated speech that the view of the speaker is truly communicated to the reader, all speeches are printed in full. When it is necessary to condense a speech for reasons of unusual length or the use of extraneous matter, it is so stated. Speeches featured in Vital Speeches of the Day are selected solely on the merit of the speech and the speaker, and do not reflect the personal views or pre-established relationships of the publisher. Subscribers are urged to call the editor’s attention to any speeches that have impressed them as outstanding so that copies may be secured for review. Editor Tom Daly IV email@example.com (843) 881-8733 Creative Director Amy Wimmer Production Specialist Dean Shirley Marketing Director Jennifer Zuverink Product Manager Jenny Babich Product Specialist April Schroeder Product Specialist Tara Wise VP/Center for Professional Excellence Scott M. Accatino Telephone (888) 303-2373 Fax (602) 427-0374
Vital Speeches of the Day (ISSN 0042-742X) is published monthly by McMurry, McMurry Campus Center, 1010 E. Missouri Ave., Phoenix, AZ 85014. SUBSCRIPTIONS U.S., $75.00/year; Foreign, $95.00/year E-mail firstname.lastname@example.org Back issues, $8.00, plus postage. Microfilm and microfiche editions, $38.00 per volume, subscribers only. Vital Speeches is indexed in the Reader’s Guide to Periodical Literature. An annual index is printed each December and distributed to all subscribers. Cumulative Indicies available: Volumes 1-25 and Volumes 26-50, $75.00 each, plus postage. Volume Binders for Vital Speeches, $15.00 plus postage. Publisher Periodical postage paid at Phoenix, AZ and additional mailing offices. POSTMASTER: Send address changes to 1010 E. Missouri Ave., Phoenix, AZ 85014.
but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom. For us, they packed up their few worldly possessions and traveled across oceans in search of a new life. For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth. For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn. Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction. This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America. For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do. Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage. What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public’s dollars will be held to account - to spend wisely, reform bad habits, and do our business in
the light of day - because only then can we restore the vital trust between a people and their government. Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart not out of charity, but because it is the surest route to our common good. As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience’s sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more. Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint. We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hardearned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you. For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we
cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace. To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society’s ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist. To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it. As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all. For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter’s courage to storm a stairway filled with smoke, but also a parent’s willingness to nurture a child, that finally decides our fate. Our challenges may be new. The instruments with which we meet them may be new. But those values upon
VITAL SPEECHES OF THE DAY
which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task. This is the price and the promise of citizenship. This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny. This is the meaning of our liberty and our creed why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath. So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America’s birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people: “Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it].” America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children’s children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God’s grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
freeze their finances. This is a tribute to those who toil night and day to keep us safe -. I received a briefing on the threats to our nation. President of the United States Delivered to the nation. As the years passed. But there can be little debate about the results. and their two beautiful girls. America has gone more than seven years without another terrorist attack on our soil. providing AIDS medicine to dying patients -. the intelligence community. Our nation is blessed to have citizens who volunteer to defend us in this time of danger. and that liberty and justice light the path to peace. they do not willingly choose leaders who pursue campaigns of terror. homeland security and diplomatic personnel. And I join all Americans in offering best wishes to President-Elect Obama. The first decade of this new century has been a period of consequence -. America is promoting human liberty. and break up their plots. When people live in freedom. I remember talking to brave souls who charged through smoke-filled corridors at the Pentagon. Under one. I thank you for the prayers that have lifted my spirits. a small band of fanatics demands total obedience to an oppressive ideology. Barbara and Jenna. And this great republic born alone in liberty is leading the world toward a new age when freeFEBRUARY 2009 . his wife Michelle. I vowed to do everything in my power to keep us safe. and marks unbelievers for murder. But I never did. most Americans were able to return to life much as it had been before 9/11.law enforcement officers. terrorists took nearly 3. bUSH 53 The Vitality of American Democracy EVERY DAY I HAVE bEEN INSPIRED bY THE GREATNESS OF OUR COUNTRY. it has been my honor to serve as your President. Every morning. Afghanistan has gone from a nation where the Taliban harbored al Qaeda and stoned women in the streets to a young democracy that is fighting terror and encouraging girls to go to school. and to husbands and wives whose loved ones became heroes aboard Flight 93. intelligence analysts. And America owes you a debt of gratitude. the presidency will pass to a successor chosen by you. This evening.GEORGE w. the world will witness the vitality of American democracy. D. And in the long run. whose examples have provided strength for a lifetime. 2009 F ellow citizens: For eight years. The other system is based on the conviction that freedom is the universal gift of Almighty God. I thank the American people for the trust you have given me.to bring dying patients back to life. Over the past seven years. and human dignity. surrounded by rescuers who had been working around the clock. January 15. We’re standing with dissidents and young democracies. who gave me her fallen son’s police shield as a reminder of all that was lost.September the 11th. 2001. and grace that I have witnessed these past eight years. This is a moment of hope and pride for our whole nation. BUSH. and the future of our nation. When people have hope in the future.C. And above all. Iraq has gone from a brutal dictatorship and a sworn enemy of America to an Arab democracy at the heart of the Middle East and a friend of the United States. And I still carry his badge. So around the world. AND UPLIFTED bY THE GOODNESS OF OUR PEOPLE Address by GEORGE W. the American people. human rights. Tonight. In a tradition dating back to our founding. This is the belief that gave birth to our nation. And I thank you for the countless acts of courage. generosity. to my parents.. Standing on the steps of the Capitol will be a man whose history reflects the enduring promise of our land. with a thankful heart. and the men and women of the United States Armed Forces. to Laura.a time set apart. Five days from now. And to all our men and women in uniform listening tonight: There has been no higher honor than serving as your Commanderin-Chief. who brought joy to this house and love to my life. I have cherished meeting these selfless patriots and their families. I have asked for a final opportunity to share some thoughts on the journey that we have traveled together.000 lives in the worst attack on America since Pearl Harbor. Our nation is equipped with new tools to moni- tor the terrorists’ movements. and sparing mothers and babies from malaria. advancing this belief is the only practical way to protect our citizens. a new Department of Homeland Security has been created. to our wonderful daughters. Tonight I am filled with gratitude -. The battles waged by our troops are part of a broader struggle between two dramatically different systems. and the FBI have been transformed. they will not cede their lives to violence and extremism. There is legitimate debate about many of these decisions. Washington. I remember Arlene Howard. And with strong allies at our side. The military. my thoughts return to the first night I addressed you from this house -. we have taken the fight to the terrorists and those who support them. That morning. condemns women to subservience.to Vice President Cheney and members of my administration. I remember standing in the rubble of the World Trade Center three days later.
I have experienced setbacks.18 years above the age limit. Murdering the innocent to adVSOTD. we lift our eyes to the broad horizon ahead. and determined to strike again. But with the courage of our people and confidence in our ideals. And may God bless you and our wonderful country. This good man was 60 years old -. We will show the world once again the resilience of America’s free enterprise system. Across our country. This is a nation where citizens show calm in times of danger. a former inmate who leads a faith-based program to help prisoners returning to society. I have confidence in the promise of America because I know the character of our people.a Marine -.54 dom belongs to all nations. and for the past year he has trained in battlefield medicine. constantly growing and renewing itself. America’s air and water and lands are measurably cleaner.COM VITAL SPEECHES OF THE DAY vance an ideology is wrong every time. Our enemies are patient. And so. Like all who have held this office before me. This is a nation that inspires immigrants to risk everything for the dream of freedom.and others we cannot foresee tonight -.citizen of the United States of America. When I met Dr. and never fail. “I like the dreams of the future better than the history of the past. Lieutenant Commander Krissoff could not be here tonight. All Americans are in this together. But his petition for a waiver was granted. We see it in Julio Medina. and this has made some uncomfortable. because he will soon deploy to Iraq. America did nothing to seek or deserve this conflict. it can be tempting to seek comfort by turning inward. It has been the privilege of a lifetime to serve as your President. and uplifted by the goodness of our people. protectionism. a principal who opened a new charter school from the ruins of Hurricane Katrina. we will restore our economy to the path of growth. We must resist complacency. Yet I’ve always acted with the best interests of our country in mind. While our nation is safer than it was seven years ago. We see America’s character in Bill Krissoff -. Thank you. and between the two of them there can be no compromise. But we must reject isolationism and its companion. We have faced danger and trial.America must maintain our moral clarity. security and prosperity at home depend on the expansion of liberty abroad. For eight years. Every taxpayer pays lower income taxes. We must always be willing to act in their defense -. I’ve often spoken to you about good and evil. The addicted and suffering are finding new hope through faith-based programs.and to advance the cause of peace. who charged into an ambush in Iraq and rescued three of his fellow Marines. And even in the toughest times.resilient and hopeful. But I hope you can agree that I was willing to make the tough decisions. May God bless this house and our next President. the gravest threat to our people remains another terrorist attack. Retreating behind our borders would only invite danger. I have followed my conscience and done what I thought was right. If America does not lead the cause of freedom. But every day I have been inspired by the greatness of our country.” As I leave the house he occupied two centuries ago. he delivered some surprising news: He told me he wanted to join the Navy Medical Corps in honor of his son. never falter. America is a young country. But good and evil are present in this world. You may not agree with some of the tough decisions I have made. I share that optimism. We must keep our resolve. for the final time: Good night. and compassion in the face of suffering.a surgeon from California. These virtues give me an unshakable faith in America. Freeing people from oppression and despair is eternally right. A new Medicare prescription drug benefit is bringing peace of mind to seniors and the disabled. Krissoff and his family. We see examples of America’s character all around us. and we must meet them. Vulnerable human life is better protected. In the face of threats from abroad. that cause will not be led. But we have been given solemn responsibilities. this great nation will never tire. I have been blessed to represent this nation we love. We see America’s character in Dr. And together. Funding for our veterans has nearly doubled. When challenges to our prosperity emerged. These are very tough times for hardworking families. Facing the prospect of a financial collapse. with determination and hard work. And we must never let down our guard. students are rising to meet higher standards in public schools. As we address these challenges -. and there are some guiding principles that should shape our course. And I will always be honored to carry a title that means more to me than any other . we see the best of our country . We’ve seen it in Staff Sergeant Aubrey McDade. where he will help save America’s wounded warriors -. caring and strong. In citizens like these. This nation must continue to speak out for justice and truth. and there’s more ahead. full of vitality. . His son. At the same time.and uphold the legacy of his fallen son. everywhere. There are things I would do differently if given the chance. we must continue to engage the world with confidence and clear purpose. President Thomas Jefferson once wrote. we’ve also strived to expand opportunity and hope here at home. but the toll would be far worse if we had not acted. we rose to meet them. we took decisive measures to safeguard our economy. And the federal bench includes wise new members like Justice Sam Alito and Chief Justice John Roberts. In the 21st century. The decades ahead will bring more hard choices for our country. There have been good days and tough days. And Laura and I have invited some of them to join us in the White House this evening. Nathan -. Tony Recasner. my fellow Americans.gave his life in Iraq.
and too often focused on scoring political points instead of the prob- T lems they were sent here to solve. If nothing is done. We are still home to the most brilliant minds. Many families cannot pay their bills or their mortgage. and invest in our future. but we can rebuild that lost trust and confidence. Politicians spent taxpayer money without wisdom or discipline. There is no doubt that the cost of this plan will be considerable. It is time to trade old habits for a new spirit of responsibility. or relying on the worn-out dogmas of the past. D. Just in the past year. Many workers are watching their life savings disappear. a bad situation could become dramatically worse. and we won’t get out of it by simply waiting for a better day to come. This crisis did not happen solely by some accident of history or normal turn of the business cycle. It’s a plan that represents not just new policy. That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth. We should never forget that our workers are still more productive than any on Earth. The unemployment rate could reach double digits. which translates into more than $12. We can restore opportunity and prosperity. But equally certain are the consequences of doing too little or nothing at all. Our economy could fall $1 trillion short of its full capacity. We could lose a generation of potential and promise. Now. too little regulatory scrutiny. we must end the culture of anything goes that helped create it – and this change must begin in Washington. another 2. too many Wall Street executives made imprudent and dangerous decisions. and set a new course for our nation. perhaps many years.. and too little accountability.000 in lost income for a family of four. there have been some years that simply rolled into the next without much notice or fanfare.8 million Americans who want and need full-time work have had to settle for part-time jobs. and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. President-elect of the United States Delivered to the nation. The result has been a devastating loss of trust and confidence in our economy. This is one of those years. In short. That is why we need to act boldly and act now to reverse these cycles. It is time to finally change the ways of Washington so that we can set a new and better course for America. Washington. That’s why we need to put money in the pockets of the American people. not our capacity for future greatness. I know that we can do it again. If we act with the urgency and seriousness that this moment requires. For years. Banks made loans without concern for whether borrowers could repay them. only government can provide the short-term boost necessary to lift us from a recession this deep and severe.C. create new jobs. And many. and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. but it will be if we don’t take dramatic action as soon as possible. For if we hope to end this crisis. We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past. as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. and our government.bARACk ObAMA 55 American Recovery and Reinvestment MY ECONOMIC PLAN Address by BARACK OBAMA. this recession could linger for years. our financial markets. Our problems are rooted in past mistakes. but a whole new approach to meeting our most urgent challenges. many Americans are both anxious and uncertain of what the future will hold. Manufacturing has hit a twenty-eight year low. and confidence in our economy. Many businesses cannot borrow or make payroll. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington. It will certainly add to the budget deficit in the short-term. but at this particular moment. I don’t believe it’s too late to change course. It is true that we cannot depend on government alone to create jobs or long-term growth. 2009 hroughout America’s history. the most creative entrepreneurs. Our universities are still the envy of the world. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world. and the most advanced technology and innovation that history has ever known. the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. where an inability to lend and borrow stops growth and leads to even less credit. That’s why we need to re-start the FEBRUARY 2009 . for that will lead to an even greater deficit of jobs. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending. And we are still the nation that has overcome great fears and improbable odds. incomes. DC. January 8. seeking profits with too little regard for risk. Nearly two million jobs have now been lost. It will take time.
We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes. Our government has already spent a good deal of money. all around the country. and reduce the need to repeat expensive medical tests. but a foundation for long-term economic growth. protect our power sources from blackout or attack. we will begin to rebuild America. we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work. and public universities with 21st century classrooms. This will cut waste. 95% of working families will receive a $1. we will equip tens of thousands of schools. research. safer planet in the bargain. But we’ll also do more to retrofit America for a global economy. and libraries. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system. That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. and informed by independent experts wherever possible. but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. and schools by eliminating the backlog of well-planned. we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines. but whether they create jobs. It is not just another public works program. we will make the immediate investments necessary to ensure that within five years. Government at every level will have to tighten its belt. labs. That also means an economic recovery plan that is free from earmarks and pet projects. Instead of politicians doling out money behind a veil of secrecy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money. and technology that will lead to new medical breakthroughs. To improve the quality of our health care while lowering its cost. firefighters and others who provide vital services.56 flow of credit and restore the rules of the road that will ensure a crisis like this never happens again. new discoveries. but we’ll help struggling states avoid harmful budget cuts. the deficit starts to come down. Finally. and deliver clean. there is so much work to be done.000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas. as long as they take responsibility and use the money to maintain essential services like police. worthy and needed infrastructure projects. while our plan will save the public sector jobs of teachers. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. new technology. and developing the new energy technologies that will lead to even more jobs. We’ll provide new computers. education. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. decisions about where we invest will be made transparently. so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. cops. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. all of America’s medical records are computerized. grow our economy. fire. saving consumers and taxpayers billions on our energy bills. and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech. To give our children the chance to live out their dreams in a world that’s never been more competitive. I understand that some might be skeptical of this plan. more savings. constructing fuel-efficient cars and buildings. That’s why our goal is not to create a slew of new government programs. Yes. It means expanding broadband lines across America. We have to make tough choices and smart investments today so that as the economy recovers. we will double the production of alternative energy in the next three years. This must be a time . and a cleaner. That’s why we’ll invest in priorities like energy and education. health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. To build an economy that can lead this future. this recovery and reinvestment plan will provide immediate relief to states. we’ll put people to work repairing crumbling roads. and entire new industries. we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now. To finally spark the creation of a clean energy economy.COM VITAL SPEECHES OF THE DAY corner of our nation. alternative forms of energy to every VSOTD. and health care. and put the American Dream within reach of the American people. eliminate red tape. high-wage jobs of the future. bridges. And it means investing in the science. In the process. and families who are bearing the brunt of this recession. workers. even as. I understand that every member of Congress has ideas on how to spend money. That’s why the overwhelming majority of the jobs created will be in the private sector. And as I announced yesterday. community colleges. To help Americans who have lost their jobs and can’t find new ones. To get people spending again. and benefit local communities. Many of these projects are worthy. But this emergency legislation must not be the vehicle for those aspirations.
That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. and fear itself. He served the government in numerous capacities including Counsel to two Presidents. but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. More families will lose their savings. I once told him that he was not Herschel Bernardi. December 15. It will not come easy or happen overnight. to help bring about nuclear disarmament. U. and that change must begin now. whether by helping to organize seminars at the Schloss in Salzburg or by helping newly independent FEBRUARY 2009 . and do our part for our nation and for posterity. Stage One: Who is Herschel Bernardi? Stage Two: Get me Herschel Bernardi. Germany. at some point. to stop racial segregation. but so is the severity of our situation. to get the plan passed in the next few weeks. Thank you. We should have an open and honest discussion about this recovery plan in the days ahead. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles. and may God Bless America. But who is Herschel Bernardi? That’s the point. a sense of common purpose above the same narrow partisanship. on weekends if necessary. And that is what we will do. Now. No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. More dreams will be deferred and denied. I know the scale of this plan is unprecedented. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. we may 57 not be able to reverse.S. That means using our full arsenal of tools to get credit flowing again to families and business. but I urge Congress to move as quickly as possible on behalf of the American people. 2008 loyd Cutler was a great friend. That’s why I’m asking Congress to work with me and my team day and night. to improve urban housing. and it is not a future I will accept as President of the United States. And our nation will sink deeper into a crisis that. more Americans will lose their jobs. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust. During Stage Two he built a great law firm. and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?” More than any program or policy. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy. and it is altogether likely that things may get worse before they get better. we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. For every day we wait or point fingers or drag our feet. investors. No longer can we allow special interests to put their thumbs on the economic scales. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers. That is not the country I know. President Carter and President Clinton. and listen to one another. God Bless You. depression. and it is the same approach that helped lead us to this day of reckoning. But that is all the more reason for Congress to act without delay. And he continuously worked to establish the rule of law throughout the world. Stage Four: Who is Herschel Bernardi? Lloyd Cutler’s Stage One was brief. to create better legal procedures. this recovery plan alone will not solve all the problems that led us into this crisis. he headed numerous profes- L sional committees seeking.STEPHEN bREYER when leaders in both parties put the urgent needs of our nation above our own narrow interests. to stop apartheid. and businesses from the reckless greed and risk-taking that must never endanger our prosperity again. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. And if we do – if we are able to summon that spirit again. Herschel Bernardi was a comedian who said that a career has four stages. It is time to set a new course for this economy. Guardian of the Constitution THE COUNTER EXAMPLE OF DRED SCOTT Address by STEPHEN BREYER. Supreme Court Justice Lloyd Cutler Distinguished Visitorship in Law. for example. while restoring confidence in our markets. if are able to look out for one another. Stage Three: Get me someone like Herschel Bernardi. it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war. The American Academy in Berlin. then I have no doubt that years from now. Berlin. We have already tried the wait-and-see approach to our problems.
In that case. Louis. “We need Cutler” was the profession’s watchword. But he did not explain why. but how that has come to be is a complicated question. And for that very reason it can tell us something about the more general question. Stage Three almost occurred when President Clinton. Peter Blow. . as a matter of course. And I am honored that you have asked me to give a lecture in honor of him. over time. John Emerson. Scott’s wife. He served on the Court for only six years.” He was the “lawyer as statesman. the reasoning. It is this Cutler-like belief that helps explain why I now wish to re-examine the Dred Scott case. the Supreme Court has sometimes been called upon to decide legal issues that may have a significant political impact. possessing what one observer called a “moonlight mind. Benjamin Curtis wrote the main dissent in Dred Scott. first in state. the Supreme Court held that no African-American could be a citizen entitled to sue in federal court and that no African-American could become free simply because he was taken into a free state by his owner. took Scott with him to St. Lloyd Cutler taught his friends. President Andrew Jackson evicted the Indians. eventually. They argued that their lengthy stay in free territory legally had made Scott a free man. or how. Lloyd was interested in governmental institutions. look back to the mid-Nineteenth Century. and the topical lessons of Dred Scott.COM VITAL SPEECHES OF THE DAY that have great political impact. supposedly saying. “Find me someone like Lloyd Cutler. finally. And how the Court can. or perhaps his wife Harriet.” a mind that gave “all the light of day without its glare. that was not always the case. Missouri. resigning after the Dred Scott decision. looking for a White House Counsel to the President told his staff. or should.” Americans have gradually. Stage Four never happened. By examining that case in detail.” And. For example. and Benjamin Curtis.” So you can see how pleased. He was an excellent lawyer. particularly those that interpret and apply a Constitution. Dr. including our courts. lawyer. He believed that we can learn something about this matter. Curtis was a native of Massachusetts.” He had argued for a gradual end to slavery. make its decisions in such cases is a topic of abiding interest. This evening I hope to illustrate the relation by speaking about a single case — the Dred Scott decision. not only from our past successes. argued that a court is better suited than a legislative or executive body to insist that the Constitution be followed — particularly in an instance where doing so is politically unpopular. first. Sanford. I am to find that the American Academy has established fellowships and a lectureship honoring the memory of this man. public servant. indeed delighted. Taney was born in Maryland in 1777 to a family of tobacco farmers. Scott. Roger Taney. an institution which he viewed to be an “evil” and a “blot on our national character. After Emerson died. courts included. The answer. I hope to find something of value for our present day judicial institutions. as Attorney General. President Millard Fillmore appointed him to the Supreme Court in 1851 in part because of his reputation as a “moderate” on the slavery issue. all who knew him to understand that law is a profession imbued with a “spirit of public service. And he was an intensely practical man. to work and to work well. and they brought a lawsuit. Roger Taney. Scott married. Louis with Scott. he sold Scott to an army doctor. or the other branches of government. Taney advised the President that the “African race. A longtime supporter of Andrew Jackson. hold whatever rights they enjoy” at the “mercy” of the “white population. of Emerson’s wife and. Let us.58 Nations write Constitutions. despite an 1834 Court determination that the Cherokee Indians owned Northern Georgia. Dred Scott was a legal and practical mistake. wrote the majority opinion in the Dred Scott case. developed customs and traditions that lead them to accept and follow Court decisions. Harriet. in such an instance. then. . including Fort Armstrong in the free State of Illinois and Fort Snelling in the free territory of Northern Missouri (now Wisconsin). Scott and his family ultimately became the property. but also from our past mistakes. Scott was born a slave on a Virginia plantation in the early 1800s.” he had represented abolitionists. and Scott’s newly born child. one of the Founders of our Constitution. court. Throughout its history. On the other hand. even when free. then in federal. Alexander Hamilton. And let us consider the background. has something to do with the way in which the Court has responded to legal issues VSOTD. Emerson took Scott with him from base to base. his associates. the immediate consequences. The Court decided Dred Scott in 1817 at a time when political tensions about slavery ran high. namely. a question that itself touches on politics. Teacher. he became Attorney General in the Jackson administration and was appointed Chief Justice in 1835. . Three individuals play key roles in this story: Dred Scott. and he had freed his own slaves. the issues.” only to end up convincing Lloyd Cutler himself to take the position. was not satisfied with this arrangement. Chief Justice John Marshall “has made his decision. it can tell us what courts cannot and should not do when politics and law overlap. a case in which the Supreme Court reached a decision that many believe is its worst mistake. During his three-year stay at Fort Snelling. And while we now assume. that the Court’s decisions will be followed. The case I have chosen stands at the intersection of law and politics – an intersection of great interest to Lloyd. the public. He wanted our democratic institutions. in part. Emerson then returned to St. Chief Justice of the United States. His first owner. will do what the Court says. . of his wife’s brother. Eliza. now let him enforce it. to the era of slavery in the United States.
You should also keep in mind that slavery was the main political issue of the day. The issues were the following: First. and the majority. or feared.” i. They included language that said Congress.” and perhaps for financial reasons as well. Sanford was a citizen of New York. a question about the Court’s power to hear the case: The law suit was properly in federal court only if a “citizen” of one State was suing a “citizen” of another State. including two United States Senators. The Court initially considered the jurisdictional question. and sold as slaves” is “entitled to sue as a citizen in the courts of the United States. Even if we assume. And in 1854 it departed from the Missouri compromise principles. could not possibly have included freed slaves. population grew in the Northwest. even in the territories. thereby securing the election of pro-slavery Senators and helping the South to maintain its political power. permitting two states north and west of Missouri. Sanford) in a lower federal court. the North feared that the South would use every political and legal device within reach to extend slavery into new territories. that the law made him a free man. namely Kansas and Nebraska. Court notes reveal that a majority agreed to a compromise: Justice Grier would write a short jurisdiction-based opinion rejecting Scott’s claim. however. Writing in language that has since become 3 FEBRUARY 2009 . That court. the next day Curtis read. for example. as he said. a jurisdictional question. rejected Scott’s claim. that the Court would use the Dred Scott case to clarify the legal status of slaves brought by their owners into free territory. 1857. is whether “a negro. in effect postponed the question. That question. stating that it must accept Missouri’s decision. rejected his claim.STEPHEN bREYER in part because. would soon mean a Congress that abolished slavery. Taney then rewrote his opinion.” The Chief Justice. however. was he then a “citizen” of Missouri? Second. it wanted the Supreme Court to find that the right to own slaves. which was to be determined by “adding to the whole number of free persons. held that the answer to this question is “no. releasing his final version in May. slaves. he is not a “citizen. Here is why: The Constitution allows the suit only if the case arises “between citizens of different States. in 1845. On May 12 the Court asked for reargument on the jurisdictional question.” Before the Missouri court decision was final. Congress had forbidden slavery in territories North and West of Missouri. however. Emerson) in a Missouri state court. says Taney. was a right the Constitution required the North to respect. A prominent attorney. giving it sufficient political power to block abolitionist efforts.. On March 6. And Scott appealed to the United States Supreme Court. while it forbid slaves to vote) meant that the South was overrepresented in the lower House of Congress (and in the vote count for President). The upshot is that in 1854 the legal status of slaves in the territories was of enormous political importance. . and the South began to fear abolitionist legislation. Taney read his lengthy opinion from the Bench. writing into the Constitution a series of compromises. three fifths of all other persons. He 3 59 pointed to earlier Missouri cases holding that a slave who resided for a time in free territory became a free man. This method of counting (allowing the South more representatives based on its slaves. not only to maintain its evil institution. The Missouri Supreme Court. Three prominent lawyers. The Legal Issues Dred Scott initially brought his case (against his owner Mrs. During the first half of the Nineteenth Century. prior to 1808. . then what about the basic issue on the merits? Did the law make Scott a free man? The lawyers argued this case over the course of four days in February 1856. Scott brought the same suit (against his new owner. and that apportioned legislators (in the lower house of Congress) among the States according to population. That fact cost the South its political advantage. that prohibited any amendment affecting that bar. Chief Justice Taney reassigned the opinion to himself. it admitted California as a free state. The South feared those territories. setting forth highly legalistic arguments.” And that group. represented Sanford. The Decision Let me turn now to the decision itself. The Constitution’s Framers.” Even if Dred Scott is a free man. those taken from Mexico in 1848.e. aware that the South would not join a Union that prohibited slavery. The North feared that a pro-slavery interpretation of the Constitution would permit the South. with Scott. but to spread slavery throughout the Nation. rather than in the Southwest as the South had expected. the Chief Justice says. his dissent. . noting that “times are not now as they were when the former decisions were made. At the same time. Many hoped.” The word “citizens” is limited to “citizens of the United States when the Constitution was adopted. In this atmosphere Congress had to decide how to treat new territories. it admitted Texas as a slave state. to choose themselves whether to become slave states or free states. the compromise unraveled. in 1850. if Scott was a “citizen” and jurisdiction was proper. The case attracted considerable attention. Why not? “Public opinion” would not have allowed it. whose ancestors were imported into this country. he doubted his usefulness on the Court “in” its “present state. later a member of President Lincoln’s cabinet (along with Benjamin Curtis’s brother) represented Scott. if free. could not prohibit the “migration or importation” of slaves into the United States. When two of the Justices said they would write a dissent. In the 1830s. and then released.
. manumitted here. Further. if the language of some old federal statutes suggests that freed slaves are not “citizens.” and consequently can sue a citizen of a different State in federal court. the Missouri Compromise for example. became freemen and therefore. Moreover.” Further.” the language of other old federal statutes suggests the precise opposite. in reply. then nonetheless went on to do just that.” And that purpose is similarly served whether a party to the case is of “white” or “African descent. Massachusetts. many of the Founders. . and the Supreme Court of the fifth state. New Jersey. without (Curtis says) entering “into an examination of the existing opinions of that period respecting the African race. . Connecticut. The majority might have reached this conclusion by simply relying on the fact that Missouri state courts had reached it. federal courts often second-guessed state courts on state law matters. one finds five states. Its statutory claim proves nothing. New Hampshire. points out that a court that lacks jurisdiction cannot decide anything further.” showing that the latter were not included among the former. looking back to the Republic’s founding in 1789. How can one say then that the Framers intended to exclude all but “white” persons from the Clause’s protection? The Court. made this clear. In addition. for. some Attorneys General of the United States had expressed that view. . who is a citizen of a State by force of its Constitution or laws. must not “give to the words of the Constitution a more liberal construction in their favor than they were intended to bear when the instrument was framed and adopted .” Even northern states. Rhode Island. the Court majority held that Dred Scott’s claims lacked legal merit. VSOTD. .” a “calm comparison” of the assertion in the Declaration of Independence that “all men are created equal” with the “individual opinions and acts” of its authors “would not leave these men under a reproach of inconsistency. and forbid inter-racial marriage. And in respect to slavery both common law and foreign law were uniform and clear. if born within North Carolina. could not have intended the “equality” they preached to extend to slaves or former slaves. . As Curtis pointed out.” and certainly when the slave married and had children in that place. his three-year sojourn in the free Territory of Northern Missouri and in the free state of Illinois did not emancipate him. state delegates explicitly voted down by a vote of eight to two. the slave became free. particularly where the matter concerned common law. these states imposed some disabilities on those freed slaves. are citizens of North Carolina. in the territory’s “civil or military affairs.” Curtis. New York. and New Hampshire (states where abolitionist sentiment was strong and slavery had been outlawed) forbid slaves to serve in the state militia. . “every free person born on the soil of a State. to all the privileges and immunities of free citizens in the several States.” Why? For one thing.” taking “part. as excluding from its term “citizen” some of those very persons who were allowed (in those states) to vote on the Constitution’s ratification? For another thing. the Constitution guarantees to “citizens of each State . In his view. Finally. which then included freed slaves among their citizens. Finally. could anyone have thought that the South would have granted “privileges and immunities” to former slaves whom the North considered free? The court. is also a citizen of the United States. the purpose of the jurisdictional clause was to extend federal judicial power “to those controversies into which local feelings or interests might so enter as to disturb the course of justice.” so that the guarantee would have applied only to free white inhabitants. It must be construed now as it was understood then. after having held that it had no jurisdiction to decide the merits of Dred Scott’s legal claim. but the laws of the first four states permitted those freed slaves to vote.” That is because. .” though Curtis concedes that he can go on to express his views on the merits because he believes jurisdiction exists. some contemporaneous federal statutes distinguished between “citizens” and “persons of color. silent on the subject. Taney explains that public opinion at that time considered Africans “so far inferior” to the “white race” that they had “no rights which the white man was bound to respect. when a master took a slave into free territory. living there “for an indefinite period of time. in 1789. Curtis. Taney concludes.” for example.60 infamous. Indeed. in a powerful dissent. in violating this basic legal rule the majority “transcends the limits of the authority of the court. North Carolina.” Curtis also states that the majority’s arguments are unusually weak. important federal statutes. Nor is its “privileges and immunities” argument convincing once one learns that the Constitutional provision simply repeats an older guarantee in the Articles of Confederation that entitled “free inhabitants of each of these States . and federal courts should follow state courts as a matter of state law. themselves slaveholders.” It would show that they “were ready and anxious to make” the “great natural rights which the Declaration of Independence asserts .” How.COM VITAL SPEECHES OF THE DAY . limited their educational opportunities. strongly disagreed. in the 1850s that was not always so. such as Massachusetts. and the . . effectual wherever a necessary regard to circumstances would allow. had explicitly held that “slaves. and North Carolina. not statutory law. for they insisted that the law of the locality determined the status of the slave. a North Carolina amendment that would have inserted the word “white” between the words “free” and “inhabitants. at the time the earlier language was adopted. But.” How can one read the Constitution. Granted. all privileges and immunities of the several States.
is not war-ranted by the Constitution and is therefore void.STEPHEN bREYER law of Wisconsin. the New York State Senate judiciary committee’s report stated that the decision had “destroyed the confidence of the people in the Court. — disgraceful to the judge who uttered it and to the tribunal which sanctioned it. But it cannot interfere with the rights of citizens entering or living within that territory — any more than if they were citizens of states. When Congress passed the Northwest Ordinance in 1787 it did not think that law violated the Magna Carta. and structure of the Constitution make clear that this Clause applies only to those territories that were territories in 1789. buying the Territory of Louisiana from France.” Curtis. his house. the majority conceded. history. 3) The Fifth Amendment’s Due Process Clause protects the ownership rights of slave holders even when they take their slaves into free territories and into free states to live for extended periods of times.” The report said the opinion paved the way for slavery’s 3 FEBRUARY 2009 . would never be heard of again.. and that neither Dred Scott himself. . enacting ordinances and laws excluding slavery from various of the territories (e. slave state A to live permanently in free state B.” Rather the Clause insists that the federal government “guard” and “protect” the slave “owner in his rights. . unchristian. “the Supreme Court . the phrase “due process of law” comes from the Magna Carta. That is because the Constitution forbids Congress to “deprive” a “person” of “property” without “due process of law. the Territories Clause certainly does give Congress the right to hold territory acquired from a foreign nation.” As for the Fifth Amendment’s Due Process argument. When interpreting the Constitution. And. has an implied power to hold territory for the sole purpose of turning that territory into new states. The Majority reasoned that the laws of Congress did not apply. which prohibited a citizen from holding and owning property of this kind .” and described Taney’s statement that “the colored race” had “no rights which white men were bound to respect” as “inhuman.” But. and a few other States. That majority held: 1) Scott cannot bring his case in federal court because freed slaves are not citizens of the United States. says that Congress “shall have the power to dispose of and make all needful rules and regulations respecting the territory or other property of the United States. Sec 3.” It recognizes the “right of property of the master in a slave. were made free by being carried into this territory.” Art. It had to concede that the Constitution’s “Territories Clause. What law would then govern the slave. . . replies to the majority’s argument as follows: First.” another observer wrote. without foundation in the law of nature or the unwritten common law. his grandchildren? State B has no such laws. are unconstitutional. the Northwest Ordinance. Curtis writes. Congress lacked the power to make those laws. namely certain land belonging then to Virginia.” For example. were they such citizens the Constitution would forbid the federal government to interfere with their rights to own slaves.g. Cl2. the language. a slave is not an ordinary piece of “property. from A or from C or from whatever other slave state he happened to be from. adopting the common law position discussed earlier. The South and Southern sympathizers reacted favorably. IV. brought with him his own law. coming to B. even if they had been carried there by the owner with the intention of becoming a permanent resident.” Nor could “due process of law” mean that a slave remains a slave when his master moves from. the locality around Fort Snelling. to make all necessary rules for governing that territory. his children. nor any of his family.” Still Curtis and two others were in dissent. which those States intended to cede to the federal government.” Slavery is a “right existing by positive law . The Aftermath The Chief Justice issued his opinion in the Spring of 1857. the Missouri Compromise) and explicitly excluding slavery from at least eight States carved out of either Louisiana or other acquired territories. Congress has acted upon that assumption since the Nation was founded. than property of any other description. the slave’s wife. And State B’s judges could not work with a proliferating legal system under which each slave. gave Dred Scott his freedom. says the majority. atrocious. thought they may exist in many States were ever supposed to be in conflict with the principle of Magna Carta incorporated into the State Constitutions. however. and to include among those rules a prohibition against slavery. says Curtis. Horace Greely’s New York Herald Tribune described the holding as “wicked” and “inhumane. 2) Many congressional anti-slavery-spreading statutes.” And nothing gives “Congress a greater power over slave property . . The Court’s majority of six had prevailed. Congress. carving it into at least six present States. in its view.” “If epithets and denunciations could sink a judicial body. More importantly. . . for. including the Missouri Compromise.” The Court’s conclusion: It “is the opinion of the Court that the act of Congress. And “I am not aware that such laws.” predicted that it would be “overruled. North Carolina. But the Northerners’ reaction was vehemently negative. President Buchanan (perhaps forewarned) favorably referred to the opinion in his March Inaugural Address and in his December State of the Union Address. a “practical construction nearly contemporaneous with the adoption of the Constitution and continued by repeated instances through a long series of years may 61 influence the judicial mind and in doubtful cases should determine the judicial mind. say. .
The Oxford Companion to the Supreme Court says that “American legal and constitutional scholars consider the Dred Scott decision to be the worst ever rendered by the Supreme Court.” For example: Frederick Douglass. it helped bring about Lincoln’s nomination and election as President. despite this “devilish decision” produced by “the slaveholding wing of the Supreme Court. even in a highly visible. that view conflicted with some yet more basic principle that the Founders had held.” Indeed. and these circumstances together led to that most fierce War between the States. fourteenth. but at the least the decision energized the anti-slavery North.” The second lesson reinforces the optimistic judicial view that. who set them all free. But its reasoning is by far the strongest. however. so I feel confident that this is what he would want to know. i. Lincoln fed the North’s fear of spreading slavery by asking. 3 VITAL SPEECHES OF THE DAY kindly. he added.” The “decision. and basic civil rights to the newly freed slaves. The first concerns judicial rhetoric. writing that others might have thought this (as Taney wrote). and fifteenth amendments to the Constitution. . and now. refers only to racially discriminatory marriage and military service laws — laws that are consistent with citizenship and hence do not significantly undercut Curtis’s argument.” These judgments reflect the immorality of the decision. Chief Justice Taney remained on the Court until his death in 1864. devoted a New York lecture to the subject. And the justice knows it. Scott had died of tuberculosis. What is the answer to Curtis’s claim that five States treated slaves as citizens (hence they were American citizens) at the time the Constitution was written? He supports the claim by pointing to a state Supreme Court decision (explicit on the point) and to the fact that five States allowed freed slaves to vote. Its language is not the most colorful. I suggest five. just as they have already decided that under the Constitution neither Congress nor the Territorial legislature can do it.” he concluded. reared and consecrated to freedom. the opinion’s reasoning — not simply the author’s conclusion — can make all the difference. Taney. Northern supporters widely circulated the Curtis dissent in the form of a pamphlet.” Lincoln based his Coopers’ Union speech — a speech that made him a national political figure — on Curtis’s dissent. And the Nation added the thirteenth.” Chief Justice Charles Evans Hughes said the decision was a “self-inflicted wound that almost destroyed the Supreme Court. and Dred Scott and his family were bought by a son of his original owner Peter Blow. the well-known abolitionist. What “is necessary for the nationalization of slavery? It is merely for the Supreme Court to decide that no State under the Constitution can exclude it. Curtis’s opinion was but one of three dissents. But what can people today learn from it? Lloyd Cutler believed strongly in learning from experience.” Historians debate the precise role Dred Scott played in bringing on the Civil War. politically controversial case with public feeling running high. does not help. will emphasize its judicial origin in order to make the sentiment appear legitimate. What lessons can we learn from Dred Scott? By reading with care one can draw certain lessons that remain relevant today. the decision did keep the Nation awake. An experienced Supreme Court justice does not write such a phrase ignorant of the fact that others will repeat it. it paints the Taney majority into a logical corner from which it has never emerged. more so than can be found in other Supreme Court opinions.” “an abomination. then a Republican candidate for Senate. the North won.” then “some future decision of the Supreme Court will authorize a slave driver . Curtis’s disdainful reply seems right: “I shall not enter into an examination of the existing opinions of that period respecting the African race. What is the answer to Curtis’s jurisdictional argument? If Dred Scott was not a “citizen. including opinions that Taney wrote. saying that.” then the Court Topical Lessons History has not treated Dred Scott (or Roger Taney) VSOTD. Eventually.COM . He argued for the Founders’ view of the Constitution — a view that denied the despotism of slavery — unless.. Modern critics describe the case as. “infamous. The public will simply ignore the effort to put moral distance between the sentiment and the author. ending slavery while securing equal treatment. It became the Republican Party’s rallying cry. when a judge writes an opinion. in reply.” “my hopes were never brighter than now. “is a means of keeping the nation awake on the subject.” the Court “cannot” make “evil good” or “good evil. for example. of which there was none. Today as in 1857 the language a judge uses to set forth his argument matters.” and “judicial review at its worst.e. voting rights. If “a master may take his slave into a free State without dissolving the relation of master and slave. Taney’s words about Americans of African descent having no “rights that a white man must respect” is lurid. The language was morally repugnant then. Putting the words in the mouths of others. to call the roll of his manacled gang at the foot of the monument on Bunker Hill.” while calling for a “calm comparison.62 spread to free states. Abraham Lincoln. spoke often about the decision. .” “odious. Within a year. describing it as a “legal astonisher.” a “ghastly error. Benjamin Curtis resigned from the Court immediately after Dred Scott. On a more individual level.” while arguing that Taney’s “whites only” views had turned “our once glorious Declaration” of Independence into a “wreck” and “mangled ruin.” “notorious. Indeed.
it had no business deciding the merits of the case. The kindest view of the majority’s opinion sees it as seeking a political objective. As Frederick Douglass predicted. abolitionist lectures. institutional. the post-Civil War amendments to the constitution. say Wisconsin. Georgia law. holding the Missouri compromise unconstitutional and depriving Congress of the power to maintain slavery-free territories in the process. It promoted the political standing of that anti-slavery Party. It did not slow the momentum toward civil war. most importantly. The constitution does so by creating political institutions strong enough to permit the “people” to govern themselves. peaceful resolution of the slavery question (perhaps through eventual abolition). Finally. A third lesson concerns the relation between court decisions and politics. The Court’s decision did nothing to heal the Nation. yet the Majority’s proposed legal system is not a practical system. Their view about what is politically expedient could well turn out to be completely wrong. Virginia law. would have to govern well into the future the family relationships of different slave families brought permanently to live in that single free State? How could one harmonize the Majority’s view of the Territories’ Clause with the fact that federal legislation enacted under the authority of that Clause had led to the admission into the Union of several new States? It is not surprising that modern historians believe that the Curtis dissent paints the more accurate historical picture. The concept of a political treaty among sovereigns. Yet the Constitution’s language does not support such a reading. Such a view would permit the majority to argue for a reading of the Constitution consistent with a need to secure a consensus that included slave States before the Nation embarked upon a course that would lead to abolition. Many in Congress had asked the Court to “umpire” the great political issue dividing the Nation. permitting the “slave driver” to bring his “manacled gang” to the foot of Bunker Hill. is not compatible with this more basic constitutional objective. and protecting basic individual liberty from State interference. ordain and establish this Constitution. Dred Scott tells us something about morality’s relation to law. assuring individuals equal protection of the laws. given the strength of the Curtis reasoning. . Such. and informed Northern reaction reflected Curtis’s analysis. overturned the legal precedent they created. If it lacked jurisdiction. the court would promote an eventual. Nor. it was a view about a treaty that linked states. The Court’s decision must find its constitutional justification in a view of the underlying document as no more than a political compact among independent States. The protection it provides the slave trade expired in the year 1808. Neither is it surprising that Lincoln’s speeches. (And. guaranteeing voting rights. if the Dred Scott majority doubted that fact in 1859. not about a constitution that created a central government.. say Alabama law. It helped Abraham Lincoln obtain the Republican Party’s nomination for President.. can one reconcile this vision with the Constitution’s most basic objective. If that is what Taney believed. Dred Scott adds another. and ethical arguments that militate strongly against 63 judges of a constitutional court holding up their fingers to the political winds. while protecting basic personal liberties across (the Framers hoped) the centuries. There are. was the case in Dred Scott. etc. It reinforced the North’s fears of southern dominance by. But to such reasons. Taney and his majority might have thought that by reaching out unnecessarily to decide a politically sensitive legal question.e. And as a purely legal matter the anti-slavery constitutional amendments resulting from the Civil War effectively reversed the Dred Scott decision. The fourth lesson concerns the Constitution seen as a whole. of course. administer a legal system under which different slave state laws. in the words of New York’s legislature.” language broad enough to cover Dred Scott. with its central focus upon compromise about slavery in particular. the creation of a single nation. focusing primarily upon slavery. Judges are not necessarily good politicians. purely practical consideration. How could judges of a single free State or territory. it solidified the case for abolition thereby helping to “awaken” America to the strength of that case. by settling the constitutional status of slavery in the territories. jurisprudential. The constitutional guarantees of equal State representation in the Senate and the census-related super-majority status of slave States in the House of Representatives were written in terms that permitted the political destruction of the protection they offered the South. UnFEBRUARY 2009 .) The upshot is that Taney’s vision of the constitution was not a constitutional vision. The Preamble says that “We the People of the United States . . i. defining citizenship. One cannot easily reconcile Taney’s vision with the expressed abolitionist hopes of many of the Framers. Nor. as history shows us.STEPHEN bREYER lacked jurisdiction to hear the case. determining policies and resolving problems ranging in subject matter from defense to territorial expansion to commerce. What sound response can the majority make to Curtis’s explanation of the scope of the Constitution’s Due Process and Territories Clauses? The Constitution is a practical document. is it surprising that those opposed to slavery circulated Curtis’s dissent (not the other dissents) in pamphlet form throughout the Nation. ending slavery. he was wrong. Hamilton’s writings make clear that the very point of granting such a Court the power of judicial review was to offer constitutional security where doing so is politically unpopular. A famous and good novel of the day. of course.
it teaches us the importance of practical interpretation of the law that is also consistent with our nation’s underlying values. I will provide a comprehensive update on the Treasury Department’s progress in implementing the Troubled Asset Relief Program (TARP).. Dred Scott teaches us the importance of solid reasoning and well-reasoned language. in word and deed. Lloyd Cutler. Not a bad bargain. Troubled Asset Relief Program MANY CHALLENGES LIE AHEAD Address by NEEL KASHKARI. since no one knows who would win such a war (the North almost lost). as true patriots. design our programs. perhaps increased. Should you agree? If you do. To understand how courts do act. They are the same lessons he taught. a man who lived up to this admonition: lawyer. well describes the moral incoherence of slavery. We have made remarkable progress since the President signed the law only 97 days ago. But. There is thus much we can learn from this single episode in our nation’s history. We at Treasury have responded quickly to adapt to events on the ground. D. an examination of Dred Scott. nothing about the Missouri Compromise. The authorities and flexibility granted to us by Congress have been essential to developing the programs necessary to meet these objectives.” And the audience broke into applause. He asks if you will agree to a single paragraph unsigned opinion for the entire Court. 2009 G ood afternoon. the prospects for an eventual abolition of slavery will be unaffected. First. in which the Court upholds the lower court on the ground that the matter is one of Missouri law in respect to which the Missouri Supreme Court must have the last word. including cases involving the protection of individual rights. “Say no. throughout his career. the Court’s “worst case. for that kind introduction. and morality VITAL SPEECHES OF THE DAY — these lessons still might apply to the work of a Supreme Court judge. Cicero wrote that “it is our duty to honor and revere those whose lives are conspicuous for conduct in keeping with their high ethical standards and who. Throughout the crisis. in particular about the kinds of cases modern courts must resolve. particularly in instances where the Constitution points one way and public opinion the other. or might best act. advocate and builder of the rule of law both at home and abroad. I will give an update on execution of the programs Treasury VSOTD.C. the majority will say nothing about citizenship. politics. then. And a contemporary personal experience showed me the relation between that moral incoherence and judicial decision-making. Washington. and I join you tonight in honoring. These lessons help us understand the role of the judge in a politically sensitive case. Imagine that Chief Justice Taney comes to your chambers and proposes a narrow ground for deciding the case. I will brief you about five areas. my friend and mentor. constitutional vision. to protect taxpayers. today under such circumstances. I would also like to thank the Brookings Institution for hosting us today. Today. That applause made clear the moral nature of the judge’s legal obligation in that case. Given the severity of the financial crisis.” My lecture has been written in honor of. reason. we did not have the luxury of first building the operation.COM . it will not diminish its own position in the eyes of much of the Nation. We are in an unprecedented period and market events are moving rapidly and unpredictably. Interim Assistant Secretary for Financial Stability Delivered to the Brookings Institution. Thank you. A program as large and complex as the TARP would normally take many months or years to establish.64 cle Tom’s Cabin. As a result the Court will create no significant new law. to stabilize financial markets and reduce systemic risk. then designing our programs and then executing them. public servant. can teach us something about rhetoric. and three.” at least sets us upon the path to finding answers to that contemporary question. January 8. have rendered efficient service to their country. Martin. Then a small voice came from the back of the room. Suppose you were Benjamin Curtis. I asked the audience to consider a hypothetical question. and then spend some time taking questions from the audience and having a discussion. and. we have always acted with the following critical objectives in mind: one. two. nothing about slavery in the territories and the Due Process Clause. Lloyd Cutler would have appreciated these lessons. to support the housing market by avoiding preventable foreclosures and supporting mortgage fi- nance. we had to build the Office of Financial Stability.all at the same time. it will not issue an opinion that increases the likelihood of civil war. we need to know more. and execute them . He will agree to this approach provided that there is no dissent. and it teaches us the important role that morality and values play — or should play — at the interpretation of law and politics. But. When discussing Dred Scott at a law school conference. The audience was uncertain. A close examination of the Dred Scott opinion.
I will provide an update on our efforts to meet the highest standards for compliance and oversight. hired necessary outside vendors. We funded our full commitment of a $4 billion loan to Chrysler. 3 Term Asset-Backed Securities Lending Facility Support of the consumer finance sector is a high priority for Treasury because of its fundamental role in fueling economic growth. Fourth. I will update you on some of the measurements we look at to judge if our programs are working. Like other forms of credit. Update on TARP Programs I will begin with the Capital Purchase Program (CPP). In fact. and we funded the first $4 billion of a $13. Our work will not let up until the last application has been reviewed and processed. We started from scratch. and they also include significant taxpayer protection provisions. Last week. The terms of these loans require the companies to move quickly to develop plans demonstrating long-term viability. The largest investment under the CPP has been $25 billion and the smallest less than $2 million. we knew that our program would need to address the short-term needs of the auto finance companies as well. but efficient processing model.NEEL kASHkARI has implemented under the TARP. Finally. This progress is remarkable not only in its speed and quality. We expect their review to continue over the next few months. Because the finance companies serve as the lifeblood of the automakers. Absent congressional action. we funded a $5 billion investment in GMAC. as well as Puerto Rico. Our investment committee meets virtually every day to review applications as soon as they are sent to us by the regulators and we close transactions often within days of approval. We are pleased with the large number of banks that have applied. which would more likely use it to stay afloat. Treasury began funding transactions under this program.4 billion commitment to GM . I will review the progress we’ve made in building the Office of Financial Stability. viable banks of all sizes. affordable consumer credit depends on ready access to a liquid and affordable secondary market – in this case. and hundreds more have already been pre-approved by Treasury. but also in its scope. I will review the thorough reporting requirements we continue to meet. We continue to process applications quickly but carefully to ensure our program guidelines and goals are met. representing every state in the country. recruited and built a world class team. We also committed to an additional $1 billion loan to GM to be used to participate in a rights offering at GMAC as part of its recapitalization in becoming a bank holding company. Treasury was forced to act to prevent a significant disruption of the automotive industry that would pose a systemic risk to financial markets and negatively affect the real economy. designed the program details. Completing investments in more than 200 institutions across the nation in 3 65 less than 90 days is a feat that I believe is unmatched in the public or private sectors. including Community Development Financial Institutions. People often ask: why are we investing in healthy banks? Shouldn’t the TARP be used for failing banks? Healthy banks are in the best position to support their communities by extending credit. and implemented a complex.the last $4 billion of which depends on future congressional action. In that time. and then to restore confidence so credit could flow to our consumers and businesses. There is a huge demand for the program: the number of applications under-review at the regulators is in the thousands. The regulators are working diligently to get through their review and forward recommended applications to us as quickly as they can. We have reviewed applications from every state in the nation and touched almost every banking market with applications from small and large banks alike. It has been 86 days since Secretary Paulson announced the Capital Purchase Program. we find that institutions need more time to complete their legal requirements than Treasury needs to execute the investments. These financings were designed to use our limited remaining resources to address the participating companies’ short-term needs while providing them enough time to begin the hard work with all stakeholders that will be necessary to achieve viability. the asset-backed credit market. A dollar invested in a healthy bank is far more likely to be used to promote lending to creditworthy borrowers than a dollar invested in a failing bank. Automotive Industry Financing Program Next. with applications for upcoming investments of a few hundred thousand dollars. we have invested $178 billion in 214 institutions in 41 states across the country. Last week. On October 14. Second. Third. The Federal Reserve is setting-up a $200 billion 3 FEBRUARY 2009 . I will discuss Treasury’s actions under TARP to support the auto sector. no other authority existed within the federal government to stave off a disorderly bankruptcy of one or more auto companies. While the TARP was designed to stabilize the financial sector. Secretary Paulson announced that we would allocate $250 billion of the financial rescue package for a voluntary capital purchase program for healthy. The CPP was designed to first stabilize the financial system by increasing the capital in our banks. the legislation provided sufficiently broad authority to act to stabilize the domestic automotive industry.
3 Building the Office of Financial Stability Let me now turn to our work to establish the Office of Financial Stability. This program provides guarantees for assets held by systemically significant financial institutions that face a risk of losing market confidence due in large part to a portfolio of distressed or illiquid assets.COM . identifying their permanent successor. First. with numerous staff calls between meetings. we have many applications to process for the CPP over the next several months. The only political position within in the TARP is the Assistant Secretary position. Congressional committees of jurisdiction are the traditional bodies of oversight and Treasury has participated in five Congressional hearings on the TARP since the EESA was passed. We have also worked closely with the GSA to acquire dedicated space for the entire team. new people joining the team each week. design our programs. GM and Chrysler. Recruiting excellent people was the first and most important part of successfully establishing the office. consider that last week alone. We signed and funded over $15 billion in our Capital Purchase Program. Under the TARP. and execute them . the loss of confidence in a major financial institution could result in significant market disruptions that threaten the financial strength of similar institutions. and a total of $13 billion to GMAC. I will briefly review Treasury’s interaction with each body. operationalizing our programs. hiring permanent staff. Treasury is exploring use of this program to address the $5 billion guarantee provisions of our recent agreement with Citigroup. seasoned. a $20 billion investment in Citigroup. In each case. which is chaired by Federal Reserve Chairman Bernanke. setting up the office. our team closed $48 billion of transactions. we had to build the Office of Financial Stability. The next Administration will inherit an Office of Financial Stability that is fully-staffed and executing extremely well. We have worked very hard to make sure there would be continuity so the program does not slow down. For a sense of the execution challenges this team has already successfully faced. two. In addition. auto loans. student loans and small business loans. financial veterans from across the government and private sector to help launch the program. the objective of which is to foster financial market stability. I mentioned that a program as large and complex as the TARP would normally take many months or years to establish. 3 VSOTD. We have worked very hard to ensure the transition to the next Administration is smooth. specifically credit cards. the Financial Stability Oversight Board. the interim official was charged with: one. non-agency residential mortgage-backed securities or other asset classes. three.all at the same time. two. the Special Inspector General. 3 VITAL SPEECHES OF THE DAY four. Asset Guarantee Program We established the Asset Guarantee Program under section 102 of the EESA. As I previously mentioned. The law requires the Board to meet once a month. This investment in Citigroup includes important restrictions on executive compensation and corporate expenses as well as provisions to protect the taxpayers. We moved in this past Monday and we expect the Special Inspector General will move to the same space in the next few weeks. We started by tapping the very best.66 program to support consumer finance securitization markets. three. In an environment of high volatility and severe financial market strains. the Congressional Oversight Panel. Almost all of the remaining positions are being filled by people who are planning to remain with the program after the transition. Compliance and Oversight I will now turn to oversight. the Congress established four additional avenues of oversight: one. Today we have almost 90 dedicated TARP staff. and four. In many cases. The facility may be expanded over time and eligible asset classes may be expanded later to include other assets. including full-time employees we have hired since the law was signed and experienced detailees we have recruited from across the government. We have made sure the team is in place to see that work through. Treasury and the Federal Reserve continue to make progress in establishing this facility. those detailees are choosing to become permanent members of the TARP team. Treasury also established the Targeted Investment Program. the law also requires appointment of a Senate-confirmed Special Inspector General to oversee the 3 Targeted Investment Program As part of our recent $20 billion investment in Citigroup. which will enable a broad range of institutions to step up their lending and enable borrowers to have access to lower-cost consumer finance and small business loans. That process has worked extremely well. Second. we moved immediately to establish the Financial Stability Oversight Board. Treasury will provide $20 billion in this facility. and. such as commercial mortgage-backed securities. but it has met multiple times since the law was signed. This does not include the numerous main Treasury employees who are spending most of their time on TARP We also have a robust pipeline of outstanding . which we expect to become operational in February. We were successful in quickly recruiting outstanding interim leaders for key positions in the office. Given the severity of the financial crisis. the Government Accountability Office. We have also posted the bylaws and minutes of the Board meetings on Treasury’s website.
respectively. • Second. the law requires Treasury to publish a Tranche Report to Congress within seven days of each $50 billion commitment that is made. including one this week. Third. one indicator that points to 3 . which has declined by about 275 basis points since before Congress passed the EESA. Thank you and I would be happy to take your questions. In addition. design our programs. This capital needs to get into the system before it can have the desired effect. November 21 and our second meeting on Thursday. there is no single action the federal government can take to end the financial market turmoil and the economic downturn. FEBRUARY 2009 Measuring Results Finally. and consumers and businesses will remain cautious about taking on new loans. since the law was signed and about 312 and 242 basis points. 3 67 reduced risk of default among financial institutions is the average credit default swap spread for the eight largest U. all of our reporting requirements on time. Reporting and Transparency Next. Oversight Panel was recently formed and we had our first meeting on Friday. understand why we are doing it. respectively. Treasury expects to see more credit extended. Because call report data is infrequent. We have published eleven transaction reports so far. and know the effects of our actions. we also plan to augment that analysis with a selection of data we plan to collect monthly from the largest banks we have invested in for a more frequent snapshot. the law requires Treasury to provide a detailed report on the overall program within 60 days of the first exercise of the TARP purchase authority and then monthly thereafter. The increased lending that is vital to our economy will not materialize as fast as any of us would like. but it will happen much faster as a result of deploying resources from the TARP to stabilize the system and increase capital in our banks. People need to see what we are doing. We have worked around the clock to build the Office of Financial Stability. The Congressional Oversight Panel posed a number of questions to Treasury and we provided a detail response which we published on our website on December 31. the law calls for the Government Accountability Office to establish a physical presence at Treasury to monitor the program. To date. December 18. banks will remain cautious about extending credit. and will continue to do so. from their peak levels before the CPP was announced. As confidence returns. the law called for the establishment of a Congressional Oversight Panel to review the TARP That . • First. Another key indicator of perceived risk is the spread between LIBOR and OIS: 1-month and 3-month LIBOR-OIS spreads have declined about 202 and 147 basis points. The financial system is fundamentally more stable than it was when Congress passed the legislation. I have participated in multiple briefings with the GAO and our respective staffs are meeting almost daily for program updates and to review contracts. Reporting results to Congress and the American people is a critical responsibility of the TARP . • Finally. Treasury is executing at a rapid speed. While it is difficult to isolate one program’s effects given policymakers’ numerous actions. While we have made significant progress. We plan to use quarterly call report data to study changes in the balance sheets and intermediation activities of institutions we have invested in and compare their activities to a comparable set of institutions that have not received TARP capital investments. Treasury has published four Tranche Reports. People also ask: when will we see banks making new loans? It is important to note that almost $75 of the $250 billion CPP has yet to be received by the banks. I will address the important issue of measuring the results of our programs.S. the law requires Treasury to publish a Transaction Report within two business days of completing each TARP transaction.NEEL kASHkARI program. Treasury has met . We are confident that we are pursuing the right strategy to stabilize the financial system and support the flow of credit to our economy. but the authorities Congress provided last fall dramatically expanded the tools available to address the needs of our system. People have then asked: how will you track lending activity? Treasury has been working with the banking regulators to design a program to measure the lending activities of banks that have received TARP capital. the most recent this week. As Secretary Paulson has said. we recognize challenges lie ahead. The law defined numerous reporting requirements for the TARP which I will briefly review here. Treasury provided workspace for our auditors within days of the President signing the law. and execute them and will hand the next Administration a program that is staffed and fully operational. We have published two such reports so far. People often ask: how do we know our programs are working? The most important evidence that our strategy is working is that we have stemmed a series of financial institution failures. I will discuss reporting requirements and transparency. As long as confidence remains low. banks. I meet weekly with the Inspector General and our staffs meet regularly. Finally. we are still at a point of low confidence – both due to the financial crisis and the economic downturn. All of our reports are posted on the Treasury website. We welcome the Senate’s confirmation of Neil Barofsky as the Special Inspector General. but it will take some time to review and fund all the remaining applications.
Air Transport Association of America Delivered to the European Aviation Club. I think we can all agree that energy—and fuel—are also critical to the sustainability of life. “a faith-based energy policy”— meaning: “We pray for warm winters and cool summers and we pray that we don’t see another spike in the price of oil. or to create conditions that are unfavorable to the sustainability of life on the planet. comes from the use of fossil fuels to run our power plants and factories to provide for our transportation needs.” in this regard. tired. But this happens within a closed system. and to see so many friends in the audience who are members of the Association of European Airlines. On a vastly larger scale. or plant-eating animals. With all of the turmoil we are seeing in financial markets and the world economy. and the astronauts survived. to recall an event that could have been one of the great disasters in human exploration. It was cramped and chilly and they were more than 300. splashing down in the Pacific three days later— cold. experts from different disciplines at Mission Control frantically piled together materials identical to those onboard the spacecraft. 2008 I t is a pleasure to address the European Aviation Club . But which instead stands as a classic example of human ingenuity and cooperation in times of crisis: the Apollo 13 mission to the moon. President and CEO.57 a barrel on October 17. As the Apollo 13 spacecraft was hurtling toward the moon on April 14.” Some problem! The blast caused a sudden loss of oxygen. 1970. humans exhale about six million tons of CO2 a day—about 16 times the weight of the Empire State Building. With only two hours to find a solution. MAY. And this leads to a closely related second problem. . the earth’s atmosphere really is comparable to the pocket of air inside the lunar module. I’m sure that I am not the only one in this room who thinks we need something more than what some have called. it may be useful. Around the world. and set about building a crude but workable air filtration system. none of us can survive for more than a few days or weeks without the fuel that comes from food. ever-dwindling and nonrenewable. . however. Against long odds. . Lovell and his fellow astronauts shut down the main ship and moved into the lunar module. there is little doubt that the long-term trend line in oil prices is upward—as well as highly volatile—with a few experts predicting that the price could reach $500 a barrel within a few years. the astronauts were in imminent danger of dying—due to a byproduct of the act of breathing. . Then they guided the astronauts through the very same sequence of steps that they had just discovered. As human beings. Even though the price of oil fell as low as $68. we have a problem. the flight VSOTD. it would have inflicted severe harm on airlines around the world. Then. We got a harsh taste of what that means this summer when oil prices soared to an intra-day high of $147. To conserve supplies. our supplies of fossil fuels are finite. which they feared had been damaged in the explosion. as the world watched. This is no longer a closed system in human time scales. We cannot allow rising levels of greenhouse gases—and of CO2 most especially—to jeopardize this air pocket. The AEA and the ATA—which represents the principal airlines in North America—have had a close working relationship spanning many decades. I’d like to begin with a bit of history. a new danger arose: rapidly rising levels of carbon dioxide—CO2—inside their tiny cabin were making the cabin environment unsustainable.68 VITAL SPEECHES OF THE DAY Connecting and Protecting Our Planet TRANSPORTATION AND THE ENVIRONMENT Address by JAMES C. and perhaps inspirational. power and water. Brussels. Our “carbon footprint. dehydrated . but safe. I think we can all agree on that. it all worked. Ironically. By the same token. Not wanting it to enter the moon’s orbit. Turning fossil fuels into energy puts carbon back into the atmosphere that plants removed millions of years ago. the environment and air traffic management. 2008. which I will then relate to a trio of issues that are uppermost in the minds of any aviation audience today: energy.COM . of course. is zero. Miraculously.000 kilometers from home. it was rocked by an onboard explosion. Because they are fixed in geologic time. since then. “Houston. which caused Commander Jim Lovell to utter the famous words. The amount of carbon that we exhale cannot exceed the amount of carbon that we consume in eating plants. to say nothing of the damage to other industries. We—meaning all of us who are inhabitants of the spaceship Earth—are looking for the same kind of safe deliverance for our planet and ourselves. Had the price of oil stayed at more than $100 a barrel through this fall.” Another example of human ingenuity during the Apollo 13 saga came in how the flight controllers managed to change course—without turning on the spacecraft’s service propulsion engine. it did circle the moon and find its way home. The problem. October 30. Belgium. Apollo 13 never did make to the moon.27 a barrel on July 11.
which is working to hasten the production and use of biofuels and other alternative fuels. I am glad to see the progress that was made this 69 summer with legislation in the European Parliament supporting the Single European Sky ATM initiative. such as the Airbus A380 and the Boeing 787 Dreamliner. however.S. Globally. and we know that it works. This heavy continuing investment in new airplanes and new technology has led to an exceptional environmental track record. airlines are committed to making a further 30 percent improvement in fuel efficiency. We can do that right now by moving from talk to action in the modernization of Air Traffic Management—the third of the trio of issues that I mentioned at the outset of this talk.2 billion metric tons of CO2—the equivalent of taking 13 million cars off the road each year. What most people fail to realize is that aviation has made similar strides in suppressing emissions through increased fuel efficiency. the highly sophisticated use of orbital mechanics will one day allow passengers to go half way around the world in less than an hour—in planes that will fly directly into orbit and then cruise for long distances at many times the speed of sound. bio-jet blends in 2010. Over the next two decades. Congress has said it will take up NextGen in 2009 and ATA will continue to press hard for congressional approval. modernizing air traffic management represents a smart investment for the environment . . Congress thus far has failed to approve robust funding for our NextGen ATM project. For Europe. MAY controllers—with the help of a slight nudge from the less powerful lunar descent engine—“slingshotted” the spacecraft around the moon on a trajectory that used the moon’s gravity to speed its return to earth. This biggest of airplanes is also almost spookily quiet. We know that the technology to support a major advancement in this part of our aviation infrastructure exists. and U. and for energy independence alike. . and open up new airspace for future growth. greenhouse gas emissions—much less than the 25 percent produced by FEBRUARY 2009 . airlines have done even better. and 100 percent bio-jet fuels in 2013. Studies in the United States and Europe show that modernizing the air traffic management system by using satellitebased navigation technology will reduce fuel burn and resulting greenhouse gas emissions by 10 to 15 percent. While there is a way. the single most effective way of reducing emissions is to increase fuel efficiency—or to reduce the fuel burn that results in emissions. Because it lacks a true bird’s-eye view of what is happening in the airspace below. According to the U. ATA and its members are playing a leading role in the Commercial Aviation Alternative Fuels Initiative (CAAFI). the airlines. In tests conducted at Atlanta Hartsfield and at Dallas-Fort Worth.S. today’s ground-based system is unable to route planes to their destinations in the most direct and efficient manner . You can’t “see” the reduction in greenhouse gas emissions like you can hear the reduction in noise. As our friends at Boeing and the European Aeronautic Defence and Space Company will attest. The U. optimize traffic flows. spare passengers the needless aggravation and inconvenience that come from far too many canceled and delayed flights. the United States and other parts of the world. improving their fuel efficiency by 110 percent between 1978 and 2007. but it’s there. relieve congestion. CAAFI goals include certification of a 50 percent synthetic fuel in the near term. Environmental Protection Agency. Just as our colleagues at AEA have done in Europe. . and plan to spend tens of billions more over the next two decades as they replace older airplanes with the newest and most advanced airplanes. aviation’s fuel efficiency has improved by 70 percent since the 1970s. There is one thing that never fails to impress people who see the new Airbus A380 take off or land for the first time. we at ATA have worked long and hard in pushing for the adoption of a satellite-based air traffic management system—to replace the ground-based system of today. ATA carriers are committed to the goal of replacing jet fuel with more environmentally friendly fuels. U.300 pounds of CO2 for every flight. airline industry is united in its support for a comprehensive energy policy aimed at reducing our country’s dependence on imported oil and at developing other more environmentally friendly sources of energy.jAMES C.S. governments and politicians— in the United States and Europe.S. Imagine Brussels to Tokyo in one hour . U. It will also reduce costs.S.S.S. . with no need for engines and zero emissions over most of the trip! But we don’t have to wait for that to happen in order to put Space Age technology to work to reduce airplane emissions. commercial aviation is responsible for just 2 percent of U. working with FAA. or to reroute them quickly for changes in weather patterns. Airlines have spent tens of billions of dollars to achieve those gains in fuel efficiency. For the immediate future. have found that continuous descent arrivals (which will be a key feature of advanced air traffic management systems) result in significant savings of CO2—one airline alone is saving 1. And our industry is definitely prepared to do its part— both in conserving energy from traditional sources and in supporting the development of new and nontraditional sources. . That equates to saving an additional 1. . The U. and elsewhere—must summon the will to resolve differences and to move forward on air traffic management.
You don’t have to fly from Belgium to France. carriers. Just last week. which could have switched to natural gas a long time ago. IPCC projects that airline CO2 emissions will increase to just 3 percent of total CO2 emissions and to 5 percent of total greenhouse gas emissions in 2050. even though U. . we want our industry to grow. That’s the main reason why many U. Although the UK government doubled the amount of the duty only two years ago. Some members of the European Parliament have said that they couldn’t care less if half of the world’s airlines failed .S. And then. Now I do not intend to burden you with a tale of woe regarding the financial condition of U. tripling by 2020. Even with expected growth. we also have the European legislation to add aviation to the European Emissions Trading Scheme. As a result. Those are staggering amounts of money. In my view. our carriers. Frankly. . Indeed. inclusion of aviation is contrary to international law and bad policy. which is both a taxation measure—via the auctioning revenues collected by States—and a subsidization measure—as airlines will be forced to buy emissions allowances from industries that have done far less to improve their fuel efficiency and reduce greenhouse gas emissions. the average price per gallon of U. Having lost tens of billions of dollars this decade. the Dutch ticket tax. At the time of the last Great Depression.” the real purpose behind these taxes is to add to general revenues. What they share is a failure to think through the environmental consequences of what is proposed in the name of the environment.31.71 to $3. They would drive some airlines to the wall. But the hard truth is that airlines—like other businesses—must generate profits in order to spend it on new investment. because other (supposedly more environmentally friendly) modes of transport could take their place. Today it is. Among our other concerns. airlines have been sitting on the sideline through the biggest new-order boom in aviation history. these measures threaten to do serious damage to world aviation. Though fashioned as “environmental measures. we believe that we can do better than that. the UK Air Passenger Duty and the recently announced Irish and Belgium departure taxes.S. it is easy enough to go by train. And they would have the effect of killing investment in new energy-saving and emissions-reducing equipment. the Middle East and Asia. Within the aviation community. While all of these revenue-raisers VSOTD. How can it make any sense—under the Emissions Trading scheme—to have energy-efficient airlines. As a matter of fact. aviation accounts for 3 percent of total greenhouse gas emissions and 2 percent of CO2 emissions. they account for only about 10 percent of the combined Boeing and Airbus backlog. for instance. There is. Masquerading under the banner of supposedly “protecting” the environment. and will continue to be strongly opposed by the United States and many other countries. I would be the first to assert that airlines have a built-in economic incentive to fly green—with fuel being the number-one cost center—exceeding even labor. And the fact is that the Intergovernmental Panel on Climate Change—an independent body with no reason to favor the aviation industry—projects that under the most likely scenario. including portions not over Europe. as a group. fuel has increased from 10 to 15 percent of airline operating costs to about 35 to 40 percent. which are already struggling due to the combination of high oil prices and economic recession. the proposal to revise and further increase the UK Air Passenger Duty is perhaps the worst among them. we should establish a carbon-neutral growth target. We have to combat that with the facts. pay huge subsidies to cement companies. This is dangerous nonsense. As that has happened. But I do wish to draw attention to a proliferation of new aviation taxes and charges within the European Union. the European Council formally approved Parliament’s inclusion of aviation. But there is no real alternative to aviation if you want to go from Brussels to Tokyo or from Brussels to New York. What these measures share is a punitive attitude toward aviation. have been much less able to afford new airplanes than other carriers in Europe.COM VITAL SPEECHES OF THE DAY are egregious. What they share is a raw and unconsidered anti-aviation hysteria.S.70 the balance of the transportation industry. So yes. but didn’t? It is estimated that the European Cap-and-Trade System would impose an annual cost to airlines (over and above the cost of jet fuel) of several billion dollars in 2012. the European scheme will tax emissions from entire international flights. we are highly motivated to invest in more fuelefficient airplanes and technologies. fully 80 percent of the greenhouse gases in aviation occur on trips for which there truly is no substitute form of transportation. While aviation’s greenhouse gas emissions are very small. commercial airlines will remain a relatively small greenhouse gas emitter despite strong long-term growth in airline traffic.S. carriers carry close to a third of world airline traffic. jet fuel has increased nearly five-fold—going from $0. and yet the taxes take money from airlines that the airlines could otherwise invest in more fuel-efficient and greenhouse gasefficient technologies. The airline industry will be forced to squander further resources in challenging this illegal duty in court. Globally. the world economy was not vitally dependent upon commercial aviation. Some critics are exaggerating the effects of this growth to serve what may well be an anti-aviation agenda. none of the funds collected go to environmental projects. they now are seeking an even greater increase—they are increasing the amounts collected by 520 million pounds per year—to address shortfalls in their national budget. Since 2002. .
This leads to my three concluding points: First. I am not one of them. kidneys. It has even approved guidance on how mutually agreeing States might include aviation under emissions trading schemes—guidance supported by all ICAO Member States. D. alternative fuels. but even if oil moves by ship. Our wise Founding Fathers created astounding documents outlining principles of freedom that have endured for over two centuries. ICAO has continually adopted standards that have driven down aircraft noise and emissions. and scores of other countries have stated their opposition. Think of how people in the oil field services industry would be affected if they were suddenly unable to get urgently needed tools and replacement parts. It begins with recognition of the vital connection between energy and environmental issues. We can do that here. because live organs are normally delivered by commercial air. There is a better way. Air cargo fills all kinds of critical needs. We live in a country whose very founding is based on respect for in- dividual rights. This is a task that demands the development of comprehensive energy policies and genuine partnership between the public and private sectors and academia. it takes skilled workers to get it out of the ground. There’s an excellent reason why the cargo carried by air is 89 times more valuable per unit of weight than cargo carried by truck or train. All through history. The International Civil Aviation Organization has an important role to play in the climate change arena. . RALPH BASHAM. A Foundation of Freedom We Americans are a privileged people. If there were no planes. If there were no cargo-carrying planes. you might think that there would be no interruption in the flow of oil. If I may draw one final lesson from the crippled spacecraft that made it back to earth on an empty fuel tank. As the Apollo 13 space mission proved. If governments implement any new charges on aviation. enterprising people have surprised themselves— and others around them—by finding ingenious solutions to the most complex problems. including its treatment of aviation. They should get on with the task of building them—both to protect the environment and to lessen the need for imported oil. and research and development into further environmental breakthroughs in new aircraft and engine technology. ICAO is a proven change leader and it is addressing climate change. It commissioned the first—and only—climate change analysis by the IPCC.S. which infringes upon national sovereignty by seeking to regulate emissions on a quasi-global basis. liberty. We cannot address the one without addressing the other and we must take advantage of all of the synergies that exist between them. then—at a bare minimum—they should reinvest the monies col- 71 lected back into aviation—into such things as aircraft equipage for a satellite-based air traffic management system. Among those founding principles is the right to “life. Customs and Border Protection Delivered to the Human Trafficking Symposium. The United States will challenge this. to the enormous detriment of people everywhere. governments must recognize that policies that siphon money out of aviation are counterproductive: The airlines should not be prevented from reinvesting in everimproving technologies that reduce emissions. Second. governments and politicians have dillydallied for too long in considering new ATM systems. we must all recognize the need for developing alternative fuels. I believe that there are multiple violations to international law in the unilateral approach to cap-and-trade taken by the EU. Do we want these productivity-enhancing supply chains to collapse? Common sense tells us that if global aviation were to shut down tomorrow. Third.C. So let us continue to support the efforts of the ICAO to come up with mutually agreedupon next steps on aviation and climate change. Washington. Commissioner. Over the years. and it crafted guidance on state-of-the-art approaches to minimizing fuel burn and emissions. most of the people waiting in hospitals for organs—hearts.” Our founding documents also set out our nation’s FEBRUARY 2009 . RALPH bASHAM And let’s look at air cargo as well. U. global commerce would soon follow .. A Moral Test of Our Times HUMAN TRAFFICkING Address by W. September 9. and the pursuit of happiness. And think of the justin-time inventory systems made possible by worldwide supply chains. livers and lungs—would be out of luck. 2008 H 3 uman trafficking is a serious global problem—and a tragic crime. it is that one should never underestimate the human capacity for doing “impossible” things. . great challenges are best addressed collectively. We’re here today to find ways to end this barbaric practice.w. There are some who doubt that we will ever be able to replace fossil fuels.
000 in their possession. Irina found that she would not be VSOTD. When the suspects were taken into custody. Some of these people needed medical attention. we have fought—and died—so that others could enjoy those same freedoms—in Europe…in Korea and Vietnam…and now in the Middle East. Instead. Most trafficked for sexual purposes. And. But not all are so lucky. Her passport was taken away. but the madam claimed she had stolen money and the police sent her back. She tried to escape. Human dignity can’t be bought or sold.000 square foot house. the story changed. The understanding was that his brother could work off the money when he arrived. many become trapped against their will. the traffickers wouldn’t let his brother go. The State Department estimates that between 600. Her life became a series of hotel rooms.S. forced labor and domestic servitude. too. CBP Agents responded to the Riverside County Sheriff’s Department. The majority are female. It happens right here in America. I was in the Middle East recently. and Africa. They set out with high hopes. rape. poverty and political repression drive these victims to seek a better life. The marginalized status of women in many societies puts them at a higher risk of being targeted by traffickers. Let me give you a recent example: in Riverside. government corruption drives the trade.000 a month.COM . The Problem Our nation and our laws are built on this foundation of freedom. trafficking of human beings is the third largest source of money for organized crime. Many times they are promised jobs or educational opportunities. including Victor’s brother. all were held against their will. this occurs all too often across our country—and around the world.000 right here in the United States. and young people from Mexico. CBP’s Border Patrol office in Tampa now has the traffickers and victims. California. The right of all men. She accepted a family friend’s offer of $500 to take a quick trip to the Middle East to bring back merchandise to sell. and when he was unable to produce it. When she had her documentation. She was resold to another madam…and saddled with a huge debt for her misbehavior. All are Mexican nationals in the country illegally. When she arrived. Sixty-four illegal aliens—men. take away their travel documents.72 belief in God-given rights. and children from Eastern Europe. Unfortunately. Latin America. from Mexico for $1. In some countries. Victims are often beaten and brutalized. The conditions in the house were deplorable. Unfortunately. They thought it was a routine call for translation assistance. But we know there are those who—for power or money—will trample these laws and the rights of others. they had $17. Freedom is not for sale. are trafficked for forced prostitution. The good news for Irina is that she was able to escape with the help of the Russian Embassy. a tourist visa and a plane ticket. and in our briefings from the Consulate. too. They face diseases.000 people are trafficked across borders each year. we were told that this kind of trade is pervasive—especially in countries that were once part of the former Soviet Union. but a prostitute. She was threatened. Victor Gomes-Lopez told deputies that his brother had arranged to be brought into the U. madams. women. Honduras. Asia. (70%) Men. and clients. in even more desperate conditions. women. and El Salvador—held captive in a 1. Trafficking generates billions of dollars in profit each year and is one of the world’s fastest growing criminal activities. and children to live free—and that includes freedom from fear and harm. Traffickers isolate them. For centuries.500. Consider Irina’s story: Irina is a 16-year-old Russian high school student. and even murder. Ecuador. disfigurement. 3 VITAL SPEECHES OF THE DAY a waitress. Most can’t speak the language and are fearful of their captors—not only what they will do to them.000 and 800. those hopes are crushed and what they experience is modern day slavery. what they found was shocking. seven people were arrested on human trafficking charges. This time the Sheriff’s Office was involved. As many as 17. Irina was told she would be a waitress in a local café for $1. as we will surely hear today. and force the victims to rely on them. in custody. But. we know this isn’t just a problem that occurs in foreign countries. Most still children. The United Nations indicates that after guns and drugs. Desperate conditions. Customs and Border Protection Officers and Border Patrol Agents come across these atrocities every day. Victor was able to arrange a second meeting. but all too often. they would owe huge sums of money for the arrangements that had already been made. but what they threaten to do to their family members. Her parents were told that if she didn’t go. Irina received a passport. Just last Thursday in Manatee County. women. Instead the traffickers demanded the money up front. Florida.
Russian.w. our Border Patrol Agents encounter hundreds a day in between the ports of entry. and there is a small window of opportunity to detect those who are being trafficked. unfortunately. CBP—its Officers and Agents—are guardians of our nation’s borders. victims of human trafficking are much like victims of domestic violence. RALPH bASHAM Children are the most vulnerable. and frequently counselors and parental figures to victims of all sorts of crimes.” (International Association of Chiefs of Police video. Smuggling is voluntary. Spanish. everything…and I didn’t have anything. 2006) Human Rights But victims of trafficking do have rights. And. and to be alert to signs that a person’s freedoms are restricted. I really believed what my trafficker said. I believe everything she said because she’s been living here for a long time. We have posted signs at airports and ports of entry in many languages besides English—among them. and whether they have control over their documents. And certainly. Others are forced to work in sweatshops—from sunup until sundown—and to sleep on dirty floors. we have a large part to play in stopping the atrocity of human trafficking.S. Last year. Trafficking is not. All of our officers and agents are trained to detect traffickers and victims of trafficking. We might ask how the person arrived in the U. They may mistrust law enforcement because they are illegally in the country…or because they fear they will be punished for the criminal acts they were forced into. Over 1 million a day—over 400 million a year. U. they may believe they have no rights. Much like refugees. the mass humanity that CBP processes through our ports of entry is staggering. We distribute information in these different languages to arriving visitors. But. OASISS is a bilateral agreement between Mexico and the U. one of the most important ways Customs and Border Protection can fight against this despicable crime is to educate—both our officers and the general public. But. to listen carefully. On any given day. Other laws protect the rights of victims. 3 . And programs. She speaks English. President Bush signed into law the: • Trafficking Victims Protection Reauthorization Act— and • the PROTECT Act. 3 73 This information lets potential victims know that we will help. One trafficking victim revealed: “I didn’t believe in police. and Chinese. Or they may feel shame for what they have been forced to do. It’s an offense. She has money. When we encounter situations where we suspect trafficking. Customs and Border Protection has the widest authority of any law enforcement agency in our government. there is a clear distinction between trafficking and smuggling. The Border Enforcement Security Task Forces—or 3 FEBRUARY 2009 Campaign to Educate It’s sometimes difficult to detect human trafficking. They may fear retribution on other family members. not only against the individual. As you’ve heard today. And. we launched an education campaign. our officers are trained to ask questions creatively. such as OASISS—the Operation Against Smugglers and Traffickers Initiative on Safety and Security—have been created to protect trafficking victims. My trafficker said they will put you in jail. which is the acronym for Prosecutorial Remedies and Other Tools to End the Exploitation of Children Today. Vigilance is one of our core values. they may be allowed to stay in the country temporarily during an investigation or prosecution. but against humanity. to help identify and prosecute violent human traffickers. Many are forced into begging rings and beaten if they don’t bring in enough money. They will send you back. She said in this country. Our officers are frequently the first people these victims see.S. We are uniquely positioned to intercept victims of traffickers—and the traffickers themselves. Law enforcement officers are protectors of people. And I believe. enforcers of laws. In 2003. too.” and “Uvisas” that allow victims of trafficking to apply for legal permanent residence status. You’ve heard today about special “T-visas. Street kids and runaways are defenseless and have no choice but to do what they are told. Once that window closes. CBP’s Part There is no end to what criminals will do to attain power and money—and the trafficking in fellow human beings is one of the most insidious of crimes.S. including the authority to detain people or products at the border. it may be too late to intervene and save them. She knows. Both of these laws strengthen the tools law enforcement can use to combat trafficking. You will hear more about these rights and protections this afternoon. dogs have more rights.
Could I see a show of hands? How many played in High School? In college? Beyond college? Like many of you. I loved the highly structured nature of the game. Where adults were protectors. you know I am the grandfather of 12. really fast. He beat me by three steps. 2008 hank you Al for that kind introduction It’s great to be part of the AFCEA and this solution series. • the Department of Justice. Immigration and Customs Enforcement—or ICE. One brother. I was in the defensive secondary and as a cornerback my job was to bump and cover Kenny. We share information and provide assistance to victims—and help to ensure that criminals in this illegal trade are prosecuted. in quite different ways. And I grew up in a time when children were allowed to be children—to be innocent and hopeful—and full of dreams for a bright future. D. the great Jackson brothers. Senior Vice President Delivered at the AFCEA Solution Series Cyberspace: Challenges and Solutions for National Security.” It wasn’t considered a political or religious statement. I believe that is one of the reasons I chose law enforcement as a career. Basically you memorize your role and tactic for each play and then exVSOTD. My most notable football memory is playing against. Where adults could be trusted and believed—not feared.C. We now have ten BEST teams located along the border. Washington. Yuma. The New MORE Global Game “Game changer” often implies a great performance by an individual or team that propels them to victory. CBP also works closely with other federal agencies: • the Department of Health and Human Services. Then it happened: Kenny went long and fast. The defense reacts synchronously to the offense— and vice versa. and I. Freedom and protection are their rights. as they were locally known. On their opening drive they had several consecutive first downs. Kenny Jackson.. It provided clear roles and responsibilities for each and every player.COM T ecute. I plan to use a sports analogy to convey my message. If you have ever heard me speak. and those little children influence me in many ways. Law enforcement officers protect the most vulnerable in our society. not exploiters. Customs and Border Protection is committed to saving lives and protecting the freedoms of people like Irina…and Victor’s brother…and the thousands of others whose names we don’t yet know. Booz Allen Hamilton. As I share my own ideas. became a wide receiver for the Philadelphia Eagles. I look forward hearing your questions and other presentations so that we can build better cyber solutions together. I grew up in a time when we were expected to follow the Golden Rule—“do unto others as you would have others do unto you. So it would be helpful to know how many folks in the audience played organized football. OK-it may have been five. December 10. The series offers us a great opportunity to exchange views and work more closely together as we search for credible ways to improve our national security in the cyber arena. Play calling was linear and sequential. were game changers. I remember him vividly. He was tall and fast. just like Kenny did for South River High School in 1976. But I thought I was ready. You and I must fight for all those who can’t fight for themselves. On that day he. A Moral Test Human trafficking is a great moral test of our times—as much as AIDS…as much as ethnic cleansing… as much as terrorist attacks against innocents. and unlike many other aspects of a teenager’s life. and • our sister agency. Preparing for the Next Game CYbER MEGACOMMUNITIES Address by MARK GERENCSER. It took me a while to get my breath back and I’m not sure my football pride ever returned. It was just a good rule for living. 3 . and caught a perfectly thrown pass for a 40-yard touchdown. and Imperial Valley. It was a guide for being a responsible citizen and a 3 VITAL SPEECHES OF THE DAY good neighbor. it seemed straightforward. Thank you again for coming together today to raise awareness about this important issue. I played football in high school. including new teams in Phoenix. Those 12 children make me want to work even harder to create a world that is safe for all the children of the world.74 BEST units—work with domestic and foreign law enforcement to dismantle criminal organizations.
the situation was like fielding a US football team against a European soccer team. But as we look deeper. The game appears to be somewhat imbalanced. But it also quickly became clear that we were talking fundamentally about a business competitiveness issue. Addressing Our Cyber Vulnerabilities At the Defense Industrial Base meeting. and we use special teams and special capabilities under 75 special circumstances. there are enough similarities between the two sports that it seems like it might work. and dynamic reaction as play progresses with the time clock constantly running. The New Cyber Protocol: Convert Spectators Into Players Today. even an American competitiveness issue. There’s a lot of cross-over. maybe arcane or even undefined. And this is where things become compelling for us in industry. Justice or Homeland Security protect us. Whether we like it or not. significant differences emerge.’ We have also introduced more cybernetic automation into our industries. backup.MARk GERENCSER Rather than using “game changer” to describe an event or “play. While these “game” changers have enhanced the performance of business. helmets. Some of the rules we now play under are obscure. comes increased vulnerability. or DIB CEO forum that assembled a number of CEOs to discuss ways of improving the cyber security of our entire defense industrial base.” Our interdependencies with the Government bring us into “the game. With increased complexity. These are great first steps – necessary. senior government executives shared their views on the compliance requirements and actions needed to address our cyber vulnerabilities.” So. on a soccer field. so we do not know the plays. Consequently. the problem almost intractable. compelling. Our adversaries’ actions bring us into “the game. At first glance. many of whom. We think and act in linear ways against a networked world. we in industry. The cyber security challenge we now face as a Nation in large part results from an expansive network that we’ve created to meet the demands of our economy and our citizens. unfortunately. we are ALL now in the game. thigh pads. our military and our critical infrastructures.” I’ll use it to describe a rapidly evolving game that comes with an incomplete set of rules and a constant changing set of players. so we lack mutual trust and understanding that could go a long way toward bridging the gaps of a new playbook. well considered – almost everything we would hope for to get started on a tough issue like cyber. We try to play international soccer by our domestic football rules. The soccer team has a clear cycle-response-time advantage over the football team. and sometimes braces. With scads of heavy equipment. Imagine securing the supply network that supports a multi-trillion dollar global defense enterprise. And that game is the cyber game. First – let’s look at the players. Perhaps most importantly. and the value of what we’re talking about—about half of the GDP of the United States of America.” Our roles in critical infrastructures bring us into “the game. they’ve also created a more complicated operating environment. Move and countermove occurs within the proscribed set of time limits under many well-established rules. As possession changes. On our side. can no longer sit passively watching the Departments of Defense. with different roles and skills onto the field. Some make 3 FEBRUARY 2009 . Bringing in industry partners into the cyber game to help address the cyber problem introduces challenges similar to getting the spectators to play a sport that they previously only watched. shoulder pads. We didn’t practice with the team. the spectators are being pulled from their seats and put into the game. where each player switches seamlessly from offense to defense. Wow. we really don’t know each other well. are often unknown. Other significant differences start to surface when play begins. This past quarter I attended the Defense Industrial Base. When the US football team has the ball. Soccer players.” So. we field the offense to execute a set of plays against a structured defense. the game comes to a halt to allow in a different set of players. so we lack the skills. on the other hand. Our DIB hosts also addressed the need for integrating our military cyber capabilities. we cycle through offensive and defensive teams. just wear shin guards. we operate sequentially under parallel external conditions. the game gets even trickier. And that’s when it struck me -. Yesterday’s mindset will not work today nor will it work tomorrow. They. or more specifically. football players are well protected though a bit encumbered. chest protectors. Over the past two decades we have altered our business models on a global scale to take advantage of the so-called ‘network-effect. We haven’t actively trained with the teams. Einstein said. we are now in the game. It also means that it’s cheaper to outfit a soccer team than a football team—so the entry costs to play have come down. they have more maneuverability and are more agile. Unlike any other time before. In a sense. “The significant problems we face cannot be solved by the same level of thinking that created them. not just a compliance challenge. tailbone pads. our processes and our operations. Compare this to the fluidity of the soccer team. what a task! Now extend that to the 17 other infrastructures that the Government has labeled as “critical” and the word complexity becomes an understatement.
organizational and sector boundaries to attain the goals they cannot achieve separately. bold new operating models. The Government is pursuing more effective ways to integrate capabilities and operational control authorities. The cyber security challenges can’t be won with a partial team. we’re not sure of our precise role. because a diverse set of perspectives and skills were essential to see and understand the whole thing. This past Sunday was the 67th anniversary of Pearl Harbor. we need a complete team. we need a mindset shift that includes: an updated policy and legal foundation. private business and non3 VSOTD. accountability. business and society work together in a new. regardless of these barriers and uncertainties. beyond the DIB activities. The Secretary of Defense recently linked operational control authority between two functional components in different organizations. make no sense to anyone because we’re trying to apply football rules to soccer. Open. coordinated manner beyond traditional public private partnership arrangements. our people and industry like no previous event since the founding of the Republic. training and education for the whole team. or our obligations. more to come! However. And today’s soccer game might be tomorrow’s basketball game or some combination of games we’ve never seen before. Yet. A megacommunity approach provides the persistent mechanism that includes all the players on the team and helps them adapt in a coordinated way to the new game. We should not and cannot wait for the so-called Cyber Pearl Harbor to take action. our limits. It requires a new paradigm of operating—one that adapts and grows with the changing game that we constantly face. there hasn’t been a full-team integration—that is. ideas and resources are shared. Organization. We aren’t playing together. In order to win. and a few. we need to execute in new ways that break through old boundaries and dispatch old paradigms. Booz Allen recently chartered a survey conducted by the Economist Intelligence Unit (EIU) that reached more than 250 business executives and senior officials from all three sectors: Government. We Need A Mindshift The Unified Command Plan or UCP08 revisions and organizational realignments that integrate play are a first step. and 65 percent expect to be hit again in the next 12 months. and morphs to the changing game in an understood and effective way. In this construct.76 no sense to us. Why? For one.COM VITAL SPEECHES OF THE DAY profits. and role integrity are necessary but insufficient. we in industry may lose our intellectual capital or our proprietary research or trade secrets. and cultural perspectives to formulate the theory and its principles. it costs precious time. It does this by implementing a new form of leadership and a new organizational imperative. only two percent of respondents have not seen attacks on their systems. And it took four authors from different educational backgrounds. Of the US government mangers’ response. And while we all know the game is on. and there are further thoughts of increased integration with our exploitation and intelligence capabilities. Instead of writing a book on globalization. Maybe. This situation calls for a new type of collaboration now. I’m not sure we fully grasp the stakes. the evidence and actions on all our parts is to the contrary. we have to find an approach that persists. Seventy-seven percent of respondents said their organizations had experienced some form of cyber attack in the past year. and eight out of ten expect an intrusion over the next year. So far. As relative newcomers. those that fail to learn from past mistakes put themselves at risk. Nor can it be solved by organizational changes alone: merely moving lines and boxes around. I am sure that we don’t have a sufficient mechanism in place to help move us forward. For example. and. In order to play the game properly. A surprise attack that unified our government. maybe even our competitive viability. In short. At Booz Allen Hamilton we call this a “Megacommunities” approach. We interviewed over 100 leaders from around the globe to include heads of companies and heads of state. willingness to share information. we must play together. but we need much more. This promises to create a tighter linkage between our football’s defensive and offensive squads. We discovered this phenomenon while researching a book on globalization and executive leadership. idle capacity put to use and community value is realized. the primary response to our cyber challenge has come from the Government. With that delay. Since yesterday’s football game is today’s soccer game. In addition. Megacommunities exhibit the power of a network . the Government may lose secrets or operational capability and military effectiveness. Megacommunities are collections of organizations whose leaders and members deliberately come together across national. or worse. we took a turn and wrote one to document our discovery. Yet. and Integrated Approach While history does not exactly repeat itself. One where the Government. The Megacommunity: The New. We wanted to understand and communicate the theory behind the practice we had observed. we simply can’t reorganize each time the game changes. a commitment to align and use our collective resources. 90 percent of all respondents believe that we need to be working together on cyber. adapts. with industry and society.
And stakeholders will usually only arrive at this conclusion by sharing their different perspectives. But our premise was that maybe we could create a megacommunity before a crisis. The second step.MARk GERENCSER as defined by Metcalf—where the value of the network increases geometrically in proportion to the number of its members. and aligned members resources to address this dreaded disease. Einstein observed. There’s the much-needed group that’s come together over the past year to focus on Alzheimer’s. Identifying and understanding the overlapping vital interests among the stakeholders is critical to balancing these tensions. even more important. make it bigger. When peering through that hole an observer sees something round. like Edison. logical. interaction. a disease that’s the sixth leading cause of death and that strikes an American every 71 seconds. They give us a larger view -. Engagement enables members to converge on overlapping vital interest. Yet another is being looked into with multi-national involvement to address and curtail the proliferation of weapons of mass destruction. and collaboration or in other words it’s about developing the playbook. we need to understand. share and integrate all of our perspectives. it provides a mechanism by which stakeholders. Now they start playing. it’s clear that Government. The third step helps stakeholders realize they have an overlapping vital interest and that they are all affected by the challenge: that is. And the fifth and final step? Commit to action. Einstein’s logic implies we need to be thinking larger and more holistically. That’s why it’s critical not to require stakeholders to “change their stripes” or lose their identity in order to fit in with the team. or even regulation. can 3 FEBRUARY 2009 . We need to understand each dimension such as the physical.or to recognize the ball. I’ve come to believe that this approach holds tremendous potential to address our cyber challenges. To address cyber and fully understand the game. Now drill a hole in an adjacent side of the box. than the sharing mechanism itself. applications. to provide input on direction. who’ve traditionally been spectators. and. We. In order for the Megacommunity to succeed and achieve broader.or in this instance. If nothing else. It can’t be about just embracing one view. The answer of course is that they are both right. It’s a football. Now place the football in a sealed box and drill a hole through one side of the box. A megacommunity is defined by the issue it seeks to address. We’re learning that Megacommunities can be initiated. understand the new game. Members initiate activities as a consequence of mutual interest. to 77 generate flexible structures. One way of appreciating this approach is to imagine a three dimensional object—like a football. but incomplete. Thomas Edison understood the power of the network. he also invented the dynamo and electric transmission lines. developed a strategic plan. To me. Another Megacommunity created was one that increases the talent pool of cleared professionals in support of National Security. we need to be thinking about networks. While most famous for the invention of the light bulb. and when looking through that hole. industry and society have much to gain from forming a Cyber Megacommunity. Megacommunity: The Power of Multiple Perspectives As we address cyber. can’t rely only on the light bulb -. which manage participation and maintain momentum. virtual. and playing to win. This would mitigate its effects or possibly even preclude or avoid the event. if you can’t solve the problem. It derives its value from the differing perspectives and different capabilities of its members. For example. Maintaining stakeholder identity and expression is essential for longterm sustainability and success of the megacommunity. incentives. So how do we go about it? The first step is to connect as many stakeholders as you can. share perspectives to understand the problem -.a more complete view – a Megacommunity view! There’s a huge value in harnessing those perspectives and realizing the network value of the entire community. We recently learned that what stakeholders share is as important or. Now both observers could debate whether the object in the box is a circle or an ellipse. agreed upon goals for all stakeholders. The Center for Health Transformation initiated the creation of the Megacommunity by bringing together a diverse group of stakeholders. technology — to solve the problem. the supply chain. perhaps. not smaller. After observing the functional power of Megacommunities. Building Megacommunities All Megacommunities have inherent tensions that can be leveraged but need to be balanced. Several Megacommunities have spontaneously formed in reaction to disaster or crisis events. The fourth step creates a mechanism for exchange. He actually wasn’t after the light bulb as much as he was seeking to construct something more: the electric utility. This is analogous to only considering the players’ equipment and not the entirety of the game. one sees an ellipse. one formed as a result of the Indonesian Tsunami. it’s essential for members to focus on “mutual success” over maximizing their own immediate interests. persona and human social layers that comprise it. and global effects more holistically. Members engage and disengage based on their perceived value in the Megacommunity. Additional perspectives of the members make it bigger. They launched a war game to attack Alzheimer’s that identified the overlapping vital interests.
and. Sometimes there is social collapse. the Government can’t do it for us nor can they do it alone. I think his demeanor when he gave the speech in Grant Park on Tuesday night was Lincolnesque. Most progressives see the forces for continuation of the old order. I’d like to tell you that I have two sons who both have pursued sports that I did not. Historically. Not in any way. does not think that much will change. I thought. Thank you for listening… A Second American Revolution GOOD MEN AND DESPERATE TIMES ARE RIPE FOR CHANGE Address by CRAIG BARNES. and the resolve to win. as in 1968. Historically. Andrew Bacevich in his new book. Things like ice hockey. To win the game. Seeds of delicate Threeawn and the Sideoats have almost all scattered. There were no balloons and confetti. as with John Kennedy. be into an ideological chaos from which may emerge changes more profound and deeper than any since the American Revolution. next week. Bill Moyers is also doubtful. At that time in February. players. flexibility. Remember. That said. So. I believe that Barack Obama has demonstrated something more than capability. agility and strength. and even pole vaulting. let me respectfully dissent. The seasons were visibly changing on that morning and maybe too.domination of big money-as stronger than the forces for change. The Megacommunity can be that mechanism. Roosevelt had to be just right and the times terribly wrong to create a New Deal. It’s clear that the threat. In summary: the cyber game is always changing. a nation essentially in paralysis. The Gramma grass had gone black and at this time of year the long. Illinois at the beginning of that first term 148 years ago. protect the freedoms that we value so dearly. The constellation of forces at play in this season of American history are not like those surrounding any election for at least 75 years and in some ways the augurs of change are greater than at any time since the founding of the republic. No glorification of his personal achievement. the Business Executives for National Security. VITAL SPEECHES OF THE DAY My eldest son recently tried out and made the Langley HS wrestling team. the combination is rare. I have observed that there are a fundamental set of elements at the foundation of all sporting games: physical fitness. Markets were gyrating. New Mexico. Not a t all. regardless of who is president. He needs to learn the tactics and I need to learn the rules. I stepped outside into the smell of pinôn pines under a bright blue-sky morning. a conjunction of great character and terrible times has not occurred in this country since the 1930s. author. the federal union was already 3 . tall Little Blue Stem turns purple. Stay tuned for those results.78 engage actively and meaningfully in the cyber game they face today and THE NEW ONE they certainly face tomorrow. non-profits and society with the hopes of initiating a Cyber Megacommunity. looking for a place to land. Santa Fe.COM T Therefore I think that things will not remain the same. We just need a mechanism to bring together all the players so we can perform to our best ability. and resolve needed to win the cyber game. maintain the global competitiveness as a world economy and leader. or BENS. 1861. We might even. I believe we as a Nation have the heart. hundreds of thousands of kernels of life. there are a fundamental set of elements for all games: heart. As a matter of fact. A Cyber Megacommunity offers a way to assemble that team and provide that mindset. Recession mounting. will be conducting a Cyber War Game bringing together many key stakeholders from Government. business. In closing. We seldom see revolutionary change without seeing both great characters and terrible times. The Limits of Power. but no social collapse. taken by winds and rain. the stakes are high! We need to ensure our National Security. It’s a new game for us. Lincoln had to be just right and the times just wrong to bring about a new birth of freedom. rules and tools are constantly morphing and advancing. The cost of not addressing this problem is huge and growing. Sometimes there will be a fine leader. Aspen leaves lay golden across our steps and scattered out into the grasses around the house. Until now. 2008 wo weeks ago. cross country. VSOTD. something more than charisma. His demeanor rather reminded us of the speech that Lincoln himself gave when he boarded the train to leave Springfield. more than organizational talent or knowledge of history and the law. November 6. today. But. passion. passion. Polls were swinging toward Obama. Extending that thought broader. playwright and trial lawyer Delivered to Renesan. but only mediocre leadership. we need both a complete team and a new mindset. I saw my first match last week. the world was changing.
Further. bankers are not yet in November lending to other bankers. are now diluted. like Lincoln. A revolution in thought will be required to adjust to new realities. and the world is divided between good and evil. to systemic change? Will he help us redefine ourselves. Both pieces of the equation have to be present for fundamental change to occur. conservatives have quietly been standing capitalism on its head. Rampant self-interest leads to the common good. Philosophically. capitalism.” wrote the poet Archibald Macleish near the middle of the last century. First. or regulation 3 For 30 years. when given the responsibility to unify. The market regulates and therefore the government does not need to regulate. He did not feed our addiction for glitter and superficiality. we have been guided by myths that greed is good. When Clinton was elected. in the autumn of 2008. That means that the most elevated practitioners of capitalism do not trust the judgment of other bankers to whom they might lend. the conditions in which we find ourselves. at least. This is the destiny we say we own. The Bush prescription. To say it another way. In 2008./. This has been the governing philosophy of American conservatives since Reagan. wondering how America will survive this man. there was as sense of euphoria. or reservation. re-direct and strengthen a nation in emotional. weak and unpersuasive. I want to explore this second half of the equation. Smith’s formula has evidently not worked and the Bush administration has ushered in a massive program of government interventions. At the same time. He went on for 20 minutes without stopping. South Carolina had already taken action to secede. This autumn. savings are drying up. At this moment we have both the man and. These metaphors are not dead. Because-and this is my thesis-it is so comprehensive and because Obama is so unusual we may be on the verge of something extraordinary. strength comes from guns. In foreign policy we are at the end of raw militarism. ”A world ends when its metaphor has died. Lincoln knew it. but no popcorn and no fine wine. economic and military disarray? In Grant Park Tuesday night. $1. or that is do not trust the judgment of the other most elevated practitioners of capitalism. realistically. but at the end of 2008 they are gasping. I heard a man in the barber chair next to me this morning moaning over the election and in desperate fear for America.. He will be a steady hand. we are at the end of raw capitalism. in spite of the $700 billion bail out in October. Obama will preside over the first steps in this transition. Rather more. Altogether we are experiencing. According to Adam Smith’s version of capitalism the free market was supposed to set value and establish morality. or will he take the country to new level of resolve. Today./ And we. put on the shell/ And drag it at the sea’s edge up and down. urging everyone to go shopping was a formula that brought us all a great deal of superficial prosperity that 3 FEBRUARY 2009 . militarism and dualism. like parasite crabs. “Empty as a conch shell by the waters cast/ The metaphor still sounds but cannot tell. One particularly egregious example will suffice: Benefits for a former CEO of the now-failed AIG included stock options (in 2007) in the amount of $1. or no longer teach. for thirty years. It is very close to obscene. His remarks were somber. he will be a man who suffers over the war.2 billion. the web of beliefs that we have held dear in America is being shredded and torn by new realities of many kinds. Domestically. if it comes to that someday will not be because he is black. His greatness. He meant to suggest that when the images of old metaphors no longer have meaning. He gave us a promise to do his best to bind us together. Such excess in the face of world poverty and hunger is the opposite of moral. But I do not agree. raw self-interest does not regulate for the common good or establish public morality. It is profoundly immoral. Further. But Obama in Grant Park on Tuesday night was different than Clinton. contrary to Adam Smith.CRAIG bARNES unraveling. without a conceptual explanation for how we got into this mess or how we get out. Today. But will he simply put water on the flames. no one in either party has a star to steer by. an unusual man spoke to a nation eager for hope and gave to them sobriety and intention. Like Lincoln. create a fundamental shift or a revolutionary change in consciousness? That depends upon t he other part of the equation. The fundamental conditions of 2008 and for the foreseeable future. That means that those at the bottom of the economy can no longer trust either elevated practitioners of capitalism at the top or themselves to provide a cash bridge into the future. sunk deeper into the gravity of the place in which our country finds itself. alternate energy and the economic collapse. we are at the end of simplistic dualism. then the age is over.. Credit is still tight. Who could celebrate. a collapse of the theory of the unbridled free market. It is now clear to this administration and to everyone else that. he will be a man who assembles serious and contentious advisors to deal with global warming. That is especially so since the CEO did not apparently know what he was doing to keep his company alive. The shredding is comprehensive and unprecedented. the terrible times.2 billion as a reward for incompetence should make Adam Smith red in the face. I think that this man is the best we have had for a very long time. a theory upon which Americans have feasted without doubt. The old myths that have supported these three pillars 79 of American faith. inspire. unfortunately. capitalism. writhing on the ground.
victory in the old sense of conquest of territory is insane. heroes. Hedge funds do not do that. We are at a crossroads in global civilization for which traditional military power does not offer a solution. a new formula in words. and not just with the weather. eventually by the production of new real wealth. To plan to “win” the war on terror militarily is equally delusional. to the issues of population growth. and perhaps bankruptcy. not when one of the parts runs by itself. With Toyota building cars in America and Germans owning Chrysler. Such a theory does not explain the real world in which debts must be paid.One. stealth bombers. or Napoleon in the 19th. Seas are rising. The icecaps are shrinking. either. Deserts are heating up. Capitalism may be partly good and partly not so good. commercial value. in turn with $5 billion of investment in Sudanese oil and owning more than $300 billion in US Treasury Bills. Let me say it again. or the Hun or even Hitler in the 20th will no longer lead to success against the threat we face in the 21st. Gambles cannot be the basis of new real wealth. it does not work because tanks and guns do not protect against ideas. This means that a way of seeing the world that might have been appropriate against Charles V of Spain of the 16thcentury. Famine is spreading. or to the independent practically autonomous governments of giant multilateral corporations. A second pillar of American policy. fueled. it does not work because tanks and guns destroy cities and people that we need to keep whole and undestroyed. but continued tension and competition and hatred and nationalism that has persisted continuously through these last 900 years.80 we cannot now pay for. no land to conquer. The seasons of civilization VSOTD. diplomatically. First. In the four years to come. militarism is obsolete because it tends to destroy territory rather to preserve it and preserve it we must if we are to expand markets. The result is that the whole wide world of finance has come grinding to a halt. at the water hole. And third. Derivatives do not do that. feed on the deaths of heroes. They are only gambles. Its identification of good and evil is fed by defeat. The Neo Cons thought the steering wheel could go it alone. Two. the spark plugs and the carburetor. or an economic ideology to guide us out of this confusion is to be hopeful beyond the evidence. When it comes to commerce and trade. and most significantly. It turned out to be a formula for grief. with Indians telephoning computer repair advice to Santa Feans. Water and food are in short supply. but the poor are sinking under. around the poppy field. No Westerner in his right mind would go around claiming that the West “won” the Crusades. no nuclear threat to dismantle that will assist with any of these problems. But Islamic terrorism feeds on martyrdom and therefore feeds on defeat.COM VITAL SPEECHES OF THE DAY change. They explicitly went for American control. The steering wheel of a car may feel very important but it is useless without the tires. Conversations in mud huts. tanks and guns do not stop global warming or any of the other more serious problems that endanger our survival. But if capitalists have discredited capitalism so in the last 70 years have socialists discredited socialism and to say that any presidential advisor knew. . “Victory” in an interdependent world is to take a slogan a strategy for modern foreign policy and that is frankly also delusional. Europe. not peace. To go out and defeat Islamic terrorism with tanks and guns is therefore to go out and promote terrorism. The very rich stay rich. Its sense of purpose is fed by defeat. the alarming increase in the number of failing states from Pakistan to Zimbabwe. There is no one to shoot. strength will not be defined by victory militarily so much as by innovations culturally. post-World War II has been reliance upon military strength to keep us safe. Contrary to the orthodoxy of the last 30 years. credit as the source of commercial and industrial growth only works if there is. therefore. Credit default swaps do not do that. Conquest is no more appropriate to today’s competition with China and Russia or Germany and Japan than bows and arrows. to the stupendous gap between the incomes of those who run corporations and those who work for them. Second. Nuclear weapons. and propaganda and demonstrates t he need for the eternal struggle. or now knows. no one else knows how this will come out. and China. But it is not the whole good. that tanks and guns do not protect against ideas: The biggest fear of many Americans is Islamic terrorism. The conservative view of victory is the same as the illusion of victory in the Crusades. We now see that raw militarism does not work for three reasons . tossed on a sea of ideological contradictions. That victory. as a result. There would be no surer way to fuel the fury of millions of Islamists. a return to the economy of additional real. to the disproportionate influence of big money on politics. to the contradictions of free trade and fair labor. and all the developing nations. innovations that wean us from carbon fuels. militarism does not solve our most pressing problems. are today adrift. Capitalism as a religion of consumption on credit is now demonstrably flawed. Military defeat creates martyrs. Dhubai looking more like New York than New York looks like New York. It is not just John Greenspan who does not know. infra-red night sensors and body armor do not serve us to design a response to global warming. Populations are exploding. They were wrong. Venezuela making oil compacts with Russians. Victory in the modern era will be when all the parts run smoothly. Islamic terrorism’s yearning for justice is fed by defeat. America. and Wal Mart creating labor camps in China. if there was such a thing. or a slogan. complementing each other. Finally.
demonize and view the world with disdain. all the way to the wars of Dick Cheney and his attempt to extend American empire to the deserts of Iraq. subordination of the weak. or even today the fundamentalists of all stripes who scream out words of hate and terror.000 years AD. inside the fence. It is not some “them. the Ammonites. we were told that man has dominion over the earth. was different than Spain. globally. Further. the Edomites and the Hittitesbut the world is no longer tribal. it is all these things that make us al l. as if it were either good or bad and in the simplification misses the chances for solutions that do not fit formulas of capitalism. It is the way we think of danger. these boundaries drawn from the sky are no 81 longer a true reflection of the real economic.000 years. and finally. Those attacks were primitive. a multi. through the wars of the Romans against Cleopatra. and the supreme centrality of patriarchal property. or not of the people of the true faith. It is all of us inside and outside the fence. They have been choosing sides and each has fostered the view that there are two worlds. that men shall rule women and that this hierarchy is to protect those who are good from those who are evil. In the last 1. the other evil. disconnection from the earth. we are beyond the simple construct of the nation state. unlike the aftermath of any election in our history. and Russians eating Georgian oranges. For survival in today’s world we must address a challenge that is not outside the fence. facing communism. Judaism and Islam have all three been doing just that. This is the view that won out in Athens in 500 BC and has remained in our mythology ever since. throug h the wars of Popes against the Cathars and eventually even the Templars. we would then say. or even to discipline children and our own obscene waste on weapons (that are totally irrelevant to resolve these threats). political or cultural world. We saw a lot of that nationalistic feeling in China this last summer. It is not a true view of the real world. The values expressed in that earliest biblical literature are similar to those in Greek mythology of the same period and were of hierarchy. is irrelevant to conquer or influence the trading habits of China or India. them. or empire. one part good. In the first three chapters of Genesis. it is not the Hun against democracy. dominion. As if we could wall danger out. But more than this they probably reflect the way we as a nation thought after the Second War. It is not true because it is too simple. It attempts to explain a diverse and multi-sided world. China was different from Italy and that is who we were. or someone who associates with terrorists. It is none of those threats that in the past led us to believe that we could divide the world into two. 2) Militarism which has been the mainstay of our foreign policy for 50 years. It is all of us. It was the way of recent campaign attacks on Obama as someone not like us. or outside the chosen people. or the way we think in democracies facing totalitarianism. Each of the three religions has promoted the idea of two. those who did not were barbarians. The nation state is a 16th-17th century ideology that came to us on the heels of feudalism. We were told to choose sides. or health insurance. beyond capitalism’s failings and beyond militarism’s obsolescence. as if it came from the outside. the world in 2008 is ideologically chaotic because it is unexplained and the future is uncharted: 1) Classical economic doctrines lauding raw self interest are collapsing around us and there is no sensible concept of socialism to replace capitalism. that survival comes from power against the forces of nature. or in any case on the other side of some moral fence. of someone on the other side of its religious confession. one good-which is us. French or Chinese.polar world. not only are we beyond tribes. or the Babylonians who held the Israelites.CRAIG bARNES Which brings us to our third major ideological precipice. 3) After three millennia.” It is not in those cultures that originally gave rise to Judaism. we are therefore entering into an age of ideological confusion. altogether. The nation state. a dualistic way of seeing the world. But with China making goods for Italy and India watching American movies and Georgians speaking Russian. But of course we cannot wall us out. Christianity. and Islam. The revolution that is before us in this election year is therefore not just about electing a black man or regaining wages for the working poor. rejection of intuition. is a concept dissolving beneath our feet.and one less goodwhich is everyone else. The problem is no one outside the fence. is deluFEBRUARY 2009 . the Western world has been dominated by a dualistic view. or Papists undermining English Protestants. (Many of you will know this already and some of you will be familiar with my discussion of these themes in my book In Search of the Lost Feminine. written about 1. France. not from life in harmony with nature. or the Moors invading Spain. From the wars of the Athenians against king Minos of Crete. or Huguenots undermining French Catholicism. Germany or Japan. our own denial of the larger community of needs. As if the world were divided into two parts. like the tribe before it. The greater reality is that. The way of thinking that is obsolete is not just the way under Con movement and the seemingly irresistible urge to attack and vilify. Those who agreed were Greeks. and it is our own energy use and our own profligate consumption. fuels rather than diminishes terrorism. or the Communists against freedom. or us vs. and is irrelevant to address global warming that could cut us all down. our own denial of our responsibility to pay taxes.) This dualistic view is tribal-King Solomon against the Moabites. the even larger transition that is upon us. Christianity. It is not the Trojans who bedeviled the ancient Greeks.
Obama to a country wallowing in this ideological uncertainty. We are not even at the beginning of the end. President and CEO.S. You all have believed at some level that in spite of your fears and doubts. You in this room have all been working toward this end for years. We’ve been doing this report for 11 years now and this year has been the toughest. DONOHUE. National Chamber Foundation. Instead of seeking to protect the interests of lobbyists and large corporate interests who have held sway in Washington for years. We could be marking a new step in the progress of humankind toward greater dignity and compassion. Many of you know that we begin each New Year at the Chamber trying to take stock of the current state of business and what lies ahead for the U.COM O private enterprise? The Chamber has developed a policy agenda and operational plan that we hope can address these extraordinary challenges and questions. confidence. 3 Responding to an Economy in Recession We begin with the simple premise that Americans should support public and private efforts to help our fellow citizens through these tough times. I’d like to express our appreciation to Keith White and all the folks at Congressional Quarterly for partnering with us on this event. he seems VITAL SPEECHES OF THE DAY intent upon maintaining his independence. and another 3 percent drop in the first quarter of 2009. The Chamber’s chief economist. A number of long-established businesses have simply ceased to exist. Marty Regalia. In Pakistan.5 to 9 percent. he sends signals of his intention to include them in his cabinet. That means new priorities.C. D. as Winston Churchill once said. we could be on the verge of something great and profound. Barring another economic shock. The Chamber is also going to support our new President as he works with Congress to craft an economic recovery package to restore credit. So we must ensure that programs to help the jobless and their families are adequate for the times. the country turned fascist. Instead of a self-righteous new president set upon ”spending his political capital” to work his will on non-believers and the rest of the world. I believe that both the good man and the desperate times are therefore right for significant change. recently it has turned to murder. Our nation is in a recession. Our earliest Greek philosophy and its dependent religions have prepared us for a world no longer extant. But we are at the end of the beginning. In Germany when this happened in the 1930s. agendas. And in the midst of a severe financial crisis and a neartotal freeze-up of credit markets. Major industries have been severely challenged.82 sional. Even so. it could somehow come true. instead of being self interested. Washington. Thanks also to the economists and other participants who are going to give us their conventional and hopefully unconventional wisdom this morning. we’ve seen government assume an unprecedented role in the private economy. unemployment will likely rise through the year to 8. 2009 n behalf of the National Chamber Foundation. and our beliefs. Instead of some hidden core of personal insecurity. Some are struggling to survive. and political realities. Chamber of Commerce Delivered to the State of American Business Conference. we should reach or bounce along the bottom of the recession by mid-year. which you should have at your places. It also means a whole new set of appointees and regulators for business to deal with. Now comes Mr. his stated purpose is to bind the nation together. our approach. We lay out an ambitious agenda and try to handicap our prospects for getting things done in Washington. You can review the details in our report--but allow me to share with you the essence of our priorities. Over 2 million Americans lost their jobs last year and about $7 trillion dollars in shareholder wealth has disappeared. consumption.. A new government is about to take over. or geared to the pursuit of power for its own sake. We pull all this together in an annual State of American Business report. Take heart. . We are not at the end of anything. This is important because there will be some difficult months ahead. Instead of hammering the other party. U. But here. economy. January 8. In Russia when this happens. will elaborate later this morning--but we are looking at a GDP decline of at least 5 percent in the quarter that just ended. this new man of ours comes with a high moral purpose.S. And policymakers must do everything possible to ensure that companies can keep Americans on the job and continue to provide the best possible level of benefits to their employees. The State of American Business 2009 PRESERVING THE SPIRIT OF ENTERPRISE Address by THOMAS J. How long will it last? What does it mean for the future of VSOTD. he comes with an apparent inner core of bedrock self-assurance. the country turns to the right.
South Korea. No pork barrel spending or special interest provisions should be added – and that includes special interest provisions for companies. We know it will be more difficult to get Congress to approve bilateral trade deals. No single act would do more to restore confidence to world markets than to successfully complete a Doha agreement. Yet our international agenda extends well beyond trade agreements. But the reports of its death have been greatly exaggerated. and credit? We want a plan that will help struggling workers and businesses. and the retirement savings of American families. FEBRUARY 2009 Advancing Competitive Reforms As we provide support and stimulus to help our fellow citizens and revive the economy. government stands to lose more revenue if we do nothing than by passing a stimulus package. autos. welcoming them here and protecting our investments and intellectual property abroad. That’s why we applaud the President-elect’s commitment to making infrastructure a centerpiece of his recovery program. Given last year’s campaign rhetoric and the election results. and fuels while continuing to improve energy efficiency. We are going to push this even further than many of our members may want us to do. After the crash of 1929. The world’s financial markets and our global trading system are under great stress. use more coal. Economists from the left. and temporary. at a time when protectionist impulses are rising at home and abroad. One of the best kept secrets in the country today is that there are significant ways we can improve health care access. Business will make these investments if and when government removes the legal and regulatory roadblocks that now stand in the way. targeted. Making infrastructure part of the recovery package is just a down payment. We should develop alternative energies. . 3 83 We need to produce more American energy from all sources-traditional and alternative. real estate. it will be prepared to make far greater investments in all kinds of infrastructure – from energy and water systems. As the private sector recovers. some of our industries would love to find a way out of providing health care benefits for employees. and right all tell us this. The Chamber plans to tell this story throughout the coming health care debate. To meet our workforce needs.THOMAS j. the business community must lead the fight against isolationism. I mentioned the 1930s. growth. overhaul job training programs. There’s going to be another big debate over health care. we are the world’s largest exporter and 95 percent of people we want to sell something to live somewhere else. families. we also must build and invest in the future. We don’t need and cannot afford another New Deal. We must also make sure that we don’t reenact the disastrous mistakes of that decade. How can there be a genuine recovery without a business recovery--especially in key sectors such as housing. We’re going to remind our new leaders and policymakers that business must be a central part of any recovery. retail. We must avoid a big and permanent expansion of government payrolls and powers. engines. working with our association partners. affordability. Given the endlessly rising costs. It would be the height of economic folly to target businesses or any group of Americans for a major tax increase in the midst of a recession. We’re still going to fight hard for them—just as we will for Doha. to seaports and airports. Remember. center. And. It’s time to rebuild America’s infrastructure. spur investment and consumption. When you read our report. But we’re not supporting a blank check.and the taxes and compliance costs will grow year after year after year. We can’t sue our way to economic recovery. We must drill for more oil and gas. and pass comprehensive immigration reform. and add long-term value to our economy. is going to be very engaged in financial and capital markets reform. These policies worked so well that a deep recession became a Great Depression. We must preserve and advance the gains that our Institute for Legal Reform has made in reining in lawsuit abuse. The 2008 election was all about change. effective. We must facilitate the flow of job-creating investments around the world. finance. and quality – without a government takeover. the principal policy responses were to raise taxes and shut off trade. The trial bar has a long list of measures it wants to pass in order to generate new lawsuits – and we’ve got to stop them. But be careful what you wish for! A government-run or government-driven system will carry with it a major mandate on businesses -. The Chamber. and expand nuclear power – all in an environmentally responsible way. to telecommunications and transportation. we must reinvent our public schools. you will see a strong focus on reforms that address the fundamental competitive challenges facing our country. Economic stimulus should be smart. it’s a huge competitive drag. We need to apply a defibrillator to the economy and jolt it back to life. and retirees. DONOHUE and investment to this economy. It’s not change if you go backwards to the policies and approaches of the 1930s. a robust trade agenda has already been declared deadon-arrival. Next week. Our task is to convince lawmakers to sensibly strengthen the rules and close regulatory gaps – without smothering the capital formation process that is so essential to jobs. From the budgetary perspective. and Japan where I’ll be meeting with the leaders of all three countries. Though they rarely say it in public. I’ll be in China. We’ve been calling for the modernization of market regulations for years.
then you can get up off the floor and try again. or worst of all. In fact. changed. We also need to better tap the enormous potential that small businesses have to become exporters. persuasion. But we’re not going to cry in our soup or hide in a VSOTD. The nation should renew its commitment to fiscal and budgetary responsibility. the trial lawyers also have a long list of measures to expand litigation across our economy and society. This is the spirit that drives the 25 million mostly small businesses that represent the true engine of growth and opportunity in our country. lobbying. could topple. with every tool at our disposal. the unions’ attempt to replace private ballot elections in organizing drives with an abusive card check system. provides health care and retirement benefits. programs. and expand employment lawsuits. We know how to count votes. The Chamber is going to work with and support the new administration and Congress wherever we can. Neither should the business community. and sign their name on the front of a lot of paychecks. then attention and care must also be paid to those 25 million businesses that actually create the wealth. They will have a serious fight on their hands as well. Now more than ever. credit and confidence have been restored. federation. for whatever reason. Taxpayer dollars used to back financial rescue should be returned to the Treasury—with interest. that free markets don’t work. Most of that consumption is with our agreement. or legislation. Dealing with a New Government Here’s the bottom line. As I have mentioned. represent industries. develop a new idea or service. That’s why it is imperative that once markets are fully stabilized. We’ve always believed that a reasonable level of regulation is necessary. we’re pretty realistic at the Chamber. government spends a lot of time and effort focused on those who. impose a multi-billion dollar ergonomics rule. at best. Environmental activists want the EPA to impose topdown regulations to control CO2—an approach that would strangle all kinds of economic activity and threaten our access to affordable fuel and power. Any proposal that would delay recovery or eliminate American jobs should be delayed. own. But that’s not all. In fact. The unions also want to have government arbitrators force a first contract down the throats of American companies. And if you fail. the government had to act in order to prevent a systemic collapse. I’m talking about our responsibility to preserve the spirit of enterprise in this country -. We are optimistic that there will be significant common ground on many of the issues I have mentioned. We’re going to fight. and invests in future jobs and growth. and ensuring that the conditions exist so that commerce and markets can function. They want to make companies pay for leave taken under the FMLA. And now. or rejected. I am not talking about agendas. The Chamber will invest major resources this year to build up our communications. regulators and Preserving the Spirit of Enterprise Now. Through education. And government must get out of the business of thinking that it should finance. we started hearing a lot of dire predictions – that capitalism is dead. And we must improve job-training programs and other assistance for those Americans who are dislocated by changes in the worldwide economy. Government has an essential role to play in protecting health and safety. political. government should return to its traditional role. and grassroots operations to fight all necessary battles on behalf of our members and the business community. a wealth distributor – not a wealth creator. the agenda that organized labor wants to ram through Congress falls into this category. government itself is. take a risk. legal. and positive growth has begun. There are better and more sensible ways to address climate change. But we will not hesitate to oppose ideas that will further damage our economy at the worst possible time. They are the ones who come in early every morning. If they try to do too much too fast--and pile a mountain of new burdens on the private sector--the entire system that keeps people employed. If we want recovery and long-term prosperity. do you know who was President the first time our government stepped in to stop a major financial panic? His name was George Washington. you should be rewarded and not punished. Clearly. And we know that prevailing on some business issues in Congress and in the regulatory agencies is going to be harder than it has been ever before.84 We’ll discuss ways to lower commercial barriers and expand our critical relationships across Asia.COM . By the way. If you think about it. leave late at night. Don’t believe it. Of course. the voice of business and free enterprise must be heard. work hard. consume the nation’s wealth.the idea that if you take a responsible risk and profit by it. run American companies. Those who work in companies. dialogue. As the financial crisis deepened last fall. 3 3 VITAL SPEECHES OF THE DAY bunker. we hope to convince our new leaders that economic recovery and jobs must come first in 2009. and that America is in decline. or serve in chambers of commerce must step up and face an extraordinary responsibility. there are some who believe that economic decisions are better made by governments. and grassroots action. keeping our nation safe. And we have never said that free enterprise is perfect or pure – only that it is better than any economic system ever devised.
Let’s get the country moving again and start addressing the competitive challenges that we’ve ignored for too long. Let’s expand our commercial engagement worldwide and apply positive American leadership to solve big problems. this is the 11th year we’ve done this.M. Despite its mistakes. that combination makes the nuclear renaissance a topic of supreme interest to my company. After going decades without building a new nuclear power plant in this country. Unfortunately. as long as we preserve and strengthen the American private sector and the risk-taking ingenuity of our businesses. Chairman. As you might imagine. since fuel accounts for more than 90 percent of a gas plant’s costs. So while Henry Hub prices currently are about half of what they were during the summer. let’s work with our new leaders to 85 revive our economy and put Americans back to work. Delivered to Power-Gen International 2008. 2008 hank you David for that warm introduction.j. And let’s never tire in our fight to preserve the spirit of enterprise so that our children and grandchildren can enjoy all the bounty and opportunity that comes with economic freedom. fuel accounts for about one quarter of a nuclear plant’s operating costs. bERNHARD jR. Without a doubt. Today. BERNHARD JR.. It’s a pleasure to be here at Power-Gen 2008 to speak with you about the nuclear renaissance that’s upon us and some of the challenges facing our industry as we go forward. President and CEO. As many of you know. price increases of this magnitude make it even easier for electric utilities to consider other forms of generation. and that economic reality is one reason why utilities are again considering nuclear power.two wellrespected leaders in the power industry. That first plant was engineered. Those developments include: • rising fossil-fuel prices. I can’t begin without noting that I’m here today to talk about the nuclear renaissance exactly 51 years since the commercial nuclear age was born. So in this New Year. We all need to make a special effort to move the country in the right direction. December 2. it’s a model that the Europeans are desperately trying to get out from under! If this is the course America is now on. and we also hold a 20 percent ownership stake in Westinghouse. T a growing mandate to reduce greenhouse gas emissions. natural gas prices have been highly volatile during the past decade. They’d like to see us move towards a European model of “social democracy” -. and benefits to the people. One alternative is gas-fired generation. The Shaw Group Inc. This is the most important year. Nuclear power. as everyone in this room knows. the safe and reliable performance of America’s current fleet of nuclear plants. throughout our history. Nuclear Renaissance FOUNDATION FOR “HOPE AND CHANGE” J. As I said. Florida. which provides about half of the electricity generation in the U. If we do this. price fluctuations hit gas-fired generation the hardest. Orlando. the American business community is the one institution in our society that.where government plays a central role in choosing favored industries and distributing income. and continue to the lead the world. we are experiencing a renewed interest in this technology thanks to a convergence of developments that make nuclear power a logical choice. and • concerns about our dependence on foreign oil. politicians—and not by markets. I’ll start with fossil-fuel prices. and workers. At a time when it’s already tough to gain regulatory approval for a new coal plant. has nearly tripled in price over the past year. designed and constructed by a team led by Westinghouse Electric Company and Stone & Webster Engineering Corporation -. But it doesn’t have to be. Our nation will prosper again. Not if the business community steps up to the plate. the U. wealth. In case they haven’t noticed. has really worked. the old Stone & Webster is part of The Shaw Group.. Let me briefly address each of those factors. Coal. • increased energy demand.M. Department of Energy forecasts that electric• • FEBRUARY 2009 . is impacted far less by rising fuel costs. and occasional excesses. on the other hand. 1957 -in Shippingport. According to the Nuclear Energy Institute. On December 2. Pennsylvania -.S. The fact is. And we will thank the federal government for doing what it needed to do to protect the American people and then stepping back to let the private sector grow and thrive. investors or consumers. and good morning ladies and gentlemen. electric utilities are quick to recall the price spikes and supply disruptions following Hurricane Katrina and Hurricane Rita in 2005. this is an exciting time for all companies in our industry. then we will be back here next year in a much improved condition. entrepreneurs. Another factor that is driving the nuclear renaissance is the anticipated growth in energy demand. than America is in trouble.America’s first commercial nuclear power plant began operation.S.
4 percent. carbon taxes and a continued prohibition on offshore drilling – it’s hard to deny that we’ll be driving cars that consume fewer fossil fuels and emit fewer greenhouse gases. As you know. In the past. baseload nuclear power. nuclear actually will have the ability to reduce our dependence on foreign oil. combined-cycle gas.COM .S. power generation – at a minimum. Let’s assume that that the U. nuclear plants have added more than 5. biomass and geothermal must play a larger role in our energy mix going forward. Which brings me to the third – and most recent – development driving the nuclear renaissance: growing concern about greenhouse gas emissions and the importance that President-elect Obama has placed on developing new sources of clean energy. 30. and the average nuclear plant runs 18 to 24 months between outages.” Well. while only 15 percent gave them a low safety rating – the lowest percentage since the VSOTD. U. however. safe. automakers with a financial package they say is crucial to stave off bankruptcy. let’s fast-forward a few years. and Consider these statistics: First. there are a number of compelling reasons for a rebirth of nuclear power plant construction in this country. four decades later that word is: Hybrids. The survival of the Big Three automakers. But the safe. auto industry has survived and that it is producing hybrid and electric-powered vehicles. A recent survey by Bisconti Research found that 69 percent of Americans now support the construction of more nuclear power plants. nuclear power must maintain its 20 percent share of U. since oil-generated electricity has gone the way of the dinosaur. the United States will need to increase electricity production by 25 percent – the equivalent of adding about 260 baseload power plants to the grid. That will require the construction of 45 to 50 new nuclear plants by 2030.3 percent. reliable and ever-improving performance of America’s 104 operating reactors over the years is a fourth reason behind the re-emergence of this industry. power uprates at U. including: • inefficiencies in our regulatory and licensing processes. hybrid vehicles? The answer is simple: clean. isn’t just about cash. nuclear plants a high safety rating. In the future. Even if we agree that alternatives like wind.S. that simple truth would seem to make carbon-free nuclear power a cornerstone of any “green” energy policy. this nuclear renaissance is being fueled by the ongoing desire to reduce our nation’s dependence on foreign oil.S. if this nation and the Obama administration are truly serious about controlling global warming. To meet this demand. 43. Finally.S. auto industry will also be determined by its ability to offer the fuel-efficient hybrid vehicles that will be required when the 111th Congress enacts the high capital costs associated with nuclear power plant construction and the financing required to build these plants Therefore. By comparison. And until we can prove the viability of carbon capture and sequestration for coal-fired plants. lawmakers will also need to free up the $25 billion in loan guarantees that they approved earlier this year to help U. solar. in the environmentally friendly world that the upcoming Obama presidency promises us – one with cap-andtrade. the fact remains that we currently have just two options for baseload power: coal and nuclear. the suggestion of building dozens of new nuclear plants would have been met with laughter. experts say that we will need to build at least 200 nuclear plants by 2050. Finally. however. The question then becomes: How are we going to generate the electricity to recharge these battery-powered. Ultimately. auto industry to weather the current economic crisis may determine how fast we transition to hybrid vehicles. This kind of performance has not gone unnoticed. As you can see.8 percent. 72 percent gave U. coal and nuclear are our only sources of baseload generating capacity. people have dismissed any connection between nuclear power and our consumption of oil.8 percent . Yes. and solar. Going forward.8 percent in 2007 – up from 66 percent in 1990. But this renaissance isn’t without its challenges. As I said a moment ago. the future of the U.500 megawatts of capacity to the grid. Indeed. while also maintaining operation of the current fleet. which is the equivalent of five or six new nuclear plants. Plastics. Of course.S. nuclear plants had an average capacity factor of 91. automakers retool to produce fuel-efficient cars.86 ity consumption will increase 1 percent annually through 2030. 19. Just as important.S. There are potential hurdles that could slow or delay the current momentum we have. Second. And if we want to actually reduce carbon emissions. according to the Energy Information Administration.S. 3 VITAL SPEECHES OF THE DAY survey question was first asked in 1984. only nuclear can claim that it does not emit greenhouse gases during operations. Congress continues to debate whether to provide U. • an aging workforce and a shortage of skilled labor. wind. the ability of the U. Back in the 1990s. if Congress wants to ensure that a financial bailout package for Detroit is a prudent investment of taxpayer money. in 2007 coal-fired plants had an average capacity factor of 71. Those of you who are about my age probably remember the famous line from the movie The Graduate – when the next-door neighbor played by Walter Brooke tells Dustin Hoffman: “I just want to say one word to you … just one word.S. But rather than getting bogged down in this particular policy debate.S. refueling outages now average just 40 days compared with 104 days in 1990. • the increased demands to be placed on the supply chain.
The fact is.S. the industry has another tried-and-true method of managing spent fuel from nuclear power plants: interim on-site storage. we also have an incoming president who has said that he is against Yucca Mountain.” Georgia Power. America’s nuclear plants have stored spent fuel in steel-and-concrete containers and vaults since 1986. with Yucca Mountain the focus of intense study. when President Carter ended the nation’s efforts to develop commercial reprocessing. Russia and the United Kingdom have developed programs that recycle the radioactive material rather than have it accumulate in steel-and-concrete canisters waiting for a repository to open someday in the far-off future. spent fuel canisters have shrugged off crash tests with speeding locomotives. • Second. His reason had nothing to do with the viability or safety of reprocessing technology. that could mean the use of safe. Japan. Of course. reprocessing and the broader issue of supFEBRUARY 2009 . since the United States imports more than 80 percent of the uranium it uses for its nuclear fuel supply. the global nuclear power industry has demonstrated that spent fuel can be safely managed on site for decades. bERNHARD jR. Naturally. The fact is. As you may know. recapturing the energy content of spent fuel would reduce our dependence on foreign sources of energy. Furthermore. reprocessing is a proven technology – not just in other countries. Here is where we stand today: While the United States has spent more than two decades and nearly $10 billion trying to prove the suitability of Yucca Mountain for spent fuel disposal. reprocessing would reduce the amount of time that spent fuel is stored at plant sites and it would significantly reduce the volume of high-level waste that ultimately would need to be disposed of in a permanent repository. NRC-approved on-site storage for 100 years or more. at least 16 U. our shareholders and our entire industry. but here in the United States. and many of today’s plants were built on that assumption. Rather. during the development of the civilian nuclear power program in the 1950s. according to the Nuclear Regulatory Commission. money in the Nuclear Waste Fund – which currently is being used to finance on-site spent fuel storage and the study of Yucca Mountain – is available to initiate reprocessing in the United States.j. Beyond “contemplating. futuristic technology. reprocessing was first devel• 87 oped by the United States during World War II to provide plutonium for the Manhattan Project. Many people regard reprocessing as an unproven. reducing the risk that the plutonium falls into the hands of terrorists. In the absence of reprocessing. At this very moment. But in the meantime. The United States proceeded down that path until 1977. here are five reasons why the time is right to revive serious discussions about reprocessing in this country: • First. President-elect Obama has said that we need to demonstrate that spent fuel can be safely managed before he will support the construction of new nuclear power plants. to prove their robustness against a variety of threats. we must wait for the Nuclear Regulatory Commission to make the final call on whether this remote location is safe and suitable to serve as the nation’s repository for high-level waste. electric utilities are contemplating the construction of more than 30 new nuclear power plants.M. the president believed that America’s reprocessing activities ran counter to our international nonproliferation efforts. South Carolina Electric & Gas and Progress Energy have signed agreements with Shaw and our AP1000 consortium partner Westinghouse for six new units – the first reactors ordered by U. Congress passed the Nuclear Waste Policy Act of 1982 and 1987 – directing the Department of Energy to build a deep geologic repository. Unfortunately. while we finally have plant orders and an international mandate to transition to a carbon-free energy infrastructure. And they have emerged from gasoline-fueled fires blackened but uncompromised. France. In fact. When it comes to interim storage. • Fourth. • Fifth. many scientific and engineering studies indicate that Yucca Mountain is suitable for the long-term disposal of nuclear waste.S. electric utilities in more than 30 years. the Nuclear Regulatory Commission is so confident in interim storage that it recently concluded that spent fuel can be safely stored at or near a reactor site for an additional 60 years after a reactor is shut down. Shaw/Areva MOX Services is building a mixed-oxide fuel fabrication facility in South Carolina for the Department of Energy that will use existing technology to recycle nuclear weapons into fuel for civilian nuclear power plants. Moreover. That’s exciting news for our employees. Unfortunately. these debates about interim storage and Yucca Mountain serve as distractions that keep us from discussing the real solution to spent fuel management: reprocessing. For some operating plants. • tougher air-quality standards and other regulations that make the use of fossil fuels economically unattractive. Moreover. For those of you who don’t see the obvious benefits of recycling spent nuclear fuel. having a reprocessing capability would enable the United States to transform spent fuel being stored in other nations into fuel for clean energy production. • Third. finally a solution for managing spent nuclear fuel … which is what I’d like to focus on during the next few minutes. and in those 22 years not one radiological incident has occurred. it was widely believed that all of the spent fuel from civilian reactors would be reprocessed.
During the past decade.S. for hosting this Global Business Forum. the time for action is now. utilities have submitted 17 combined Construction and Operating License applications to the Nuclear Regulatory Commission for 26 new nuclear units.88 porting the nuclear renaissance are just two of many policy decisions that await the new president and 111th Congress. world-class business leaders and grateful to the University of Miami. over the course of a typical nuclear construction project. these jobs pay 36 percent more than average salaries in the local area. With all of this activity. social and political implications of global connectivity. Without a doubt. EPC companies.S. and where we are going. energy independence and a cleaner environment. we too can shape the future of the United States by making the nuclear renaissance a reality that will improve the lives of Americans for decades to come. various players have done their part to lay the foundation for the next generation of nuclear power plant construction: • The Nuclear Regulatory Commission streamlined the application and review process. Miami.S. once a nuclear power plant is completed. The timing of this Forum could not be more opportune to discuss where we are. and EPC companies have launched major projects for component and module fabrication. organized labor and others – to work together to ensure that all Americans understand the widespread benefits that will be created by a national commitment to building a new fleet of nuclear power plants. 2009 T hank you for your kind introduction and for the invitation to be with all of you today. Florida.000 craft workers would be employed as work transitions from one phase to another. the nuclear renaissance is ready to take off. In addition.COM . The challenge now is for everyone in our industry – electric utilities. As a result. Here are a few economic benefits that the nuclear renaissance will provide: • First. the U. its operation and maintenance would generate 400 to 700 permanent jobs. it will be paid for with private capital and built by private citizens. Historically. VSOTD. I applaud President Donna Shalala and Dean Barbara Kahn for having the foresight to bring together business leaders to share their knowledge and vision on the economic. economy for decades to come. • Third. By working together. • The power industry has submitted four next-generation. increased income and increased tax revenues.” With the president’s leadership. Thank you for your kind attention. my undergraduate alma mater. Trust Delivered to the University of Miami. While some cynics on Wall Street are waiting for actual construction to occur before they buy-in to the nuclear renaissance. The Rich and Super-Rich in a Post-Crisis World EVERY RIGHT IMPLIES RESPONSIbILITY Address by FRANCES ALDRICH SEVILLA-SACASA. • Second. Rather. nuclear power industry has constructed the perfect foundation on which Presidentelect Obama can build his vision of “hope and change. Instead. the fact is that few initiatives can achieve the “hope and change” promised by our incoming president like the nuclear renaissance: jobs for the middle class.S. upwards of 4. a national commitment to build 50 new nuclear power plants by 2030 – and to develop a reprocessing capability – would reinvigorate the U. and I look forward to your questions. January 16. former President and CEO of U. standardized plant designs to the NRC for approval.” That reality did not end with last month’s elections. As we heard countless times during the recent presidential campaign. • If you multiply those benefits by the number of nuclear plants that will be needed to facilitate the environmental change promised by President-elect Obama. And while these seem like issues of importance to only a select group. how our global interconnectedness is helping or hindering us. the average nuclear plant annually generates $430 million in sales of goods and services in the local community and $40 million in total labor income. you quickly have strong economy that’s no longer fueled by hope. the significant investments of time and money already made by this industry and its stakeholders demonstrate that the renaissance is real. and • Electric utilities have gone to their state public utility commissions to demonstrate the need for new generation. the nuclear renaissance won’t be fueled with deficit financing by the federal government. That’s because the nuclear renaissance offers an industry-driven jobs program unrivaled since the great infrastruc- VITAL SPEECHES OF THE DAY ture projects of FDR’s Work Progress Administration. electric utilities. making the prospects of ordering new nuclear plants more attractive to U. you have an economy that’s driven by the reality of increased jobs. “History is about to be made. But unlike those Depression-era programs. at probably the most challenging time most of us have ever experienced. I am honored to be in the presence of such impressive. economic growth.
but all are impacted. Many of the families I served 25 years ago were primarily concerned with wealth preservation. Wealthy families today are far more global. But. What started out as a depreciation of U. investors were generally content with a consistent and steady return that would be just enough to provide a reasonable hedge against inflation. our confidence. will learn more before we rest easily again. the added complexities of more sophisticated. When the global financial markets awoke last March to news that Bear Stearns was in trouble and that the Federal Reserve Bank was engineering a rescue by JP Morgan. During that time. information was not as widespread and immediate as it is today. Few of the great fortunes had been made by new entrepreneurs. Nearly half is still in North America. I have had the good fortune during that time of working with fascinating families from all walks of life in many parts of the world. and global wealth creation. as is the need for wealth advisors who manage large quantities of data well and have access to a wide range of products and services. the euphoria that economic growth and profits would continue to rise ever higher. investors had less knowledge and fewer global investment opportunities. The nerve-wracking roller-coaster economic ride we have been on can be explained by greed. and as even the wealthiest global families are experiencing wealth deterioration. our intentions for the future. some more than others. The face of wealth has changed considerably over the past thirty years. lost wealth and lost opportunities are plaguing every country. Moreover. the state of the world’s economies certainly has changed very quickly over the past year and certainly not for the better. That was not true in World War II. and. These families. partly due to the onset of technology as we know it today. Much of today’s wealth that I encounter has been created by entrepreneurs who were able to execute upon a good idea. our savings accounts. and 25 of those specializing in wealth management.S. overwhelmingly. took their risks in their businesses. and who gained access to the rapidly developing global capital markets and other sources of funding. how basic values. most of the wealthy global families I met had either inherited their wealth or had built up successful family businesses over many years and even generations. That was not true in the Great Depression. With the bottom seeming to fall out of the financial plans of so many people across the world. what happens on Wall Street is felt thousands of miles away. we have experienced a period of tremendous economic expansion. In those days there were fewer and less complex investment choices. Even with the drastic. Also. oftentimes generating vast amounts of liquidity for their families. how truly interconnected the world is today and how vast our impact is on other countries and on the lives of individuals we have never met. there was hope that skepticism about Bear Stearns’ liquidity would end and it might survive. up FEBRUARY 2009 . as we try to get our bearings. Today. and a general reluctance to see the good times end. problem also proved wrong. And. I am repeatedly struck by how rapidly things have changed in just three short decades. many smaller local family businesses which were no longer able to successfully compete with larger and more global enterprises either created strategic partnerships. once again. in real time. and we. There are still estimates that the total global wealth available for investment may reach $50 trillion within a few years. the number of high net worth individuals appears to be growing.FRANCES ALDRICH SEVILLA-SACASA As we have heard loud and clear at this Forum. yet. and. real estate values because of sub-prime mortgages turned quickly into a global credit freeze. real estate and other assets plummets. Twenty-five years ago. and as the value of securities. thanks to the amazing information superhighway. I have spent the past 30 years of my life in global financial services. much broader and interconnected global capital markets. global investors are looking for signs that would give them hope and optimism for the future. Over the past three decades that has changed. We have learned many lessons from the crisis. and the orderly transition of their patrimony to successive generations. typically. The restoration of confidence to investors is fundamental. the Fed’s belief that Bear Stearns was too connected to fail was wrong. merged. What happens in Japan or in China or Germany or Iceland affects all of us. frightening developments in the markets. hence. goals. the confidentiality and safety of their assets. It affects our pocketbooks. Unfortunately. We have also seen a surge in wealth from corporate executives with lucrative compensation packages consisting of stock and options and from talented world-class athletes and entertainers. as they felt comfortable that they could control the outcome based on their knowledge and experience in the business. I will address my thoughts on how the upheaval in the markets will shape the industry and the needs of investors going forward. innovation. have numerous international investment opportunities available. the belief elsewhere that this was a sole U. the rapid development of global capital markets. As you heard. unfortunately. Lost jobs. we can not forget that we live in a world where we are a click away from each other. and aspirations remain the same. Too few bankers in too few countries understood the real nature of global connectedness. undoubtedly. yet this is a 89 highly complex issue in the globally connected world of today. many of which had been in the family for generations. As I think about this. or they sold their companies. The economic crisis that we all are trying desperately to tame and to understand underscores. and the globalization of the world. but Europe and Asia Pacific nations are increasingly producing ultra high net worth individuals.S. Given the unprecedented current state of affairs.
and thought leadership. They have been educated at the finest universities. many of the families I speak with are seeking many of the same attributes that were important decades ago: Wealth preservation. and are more inclined to help make the world a better place for successive generations. This is one of the most encouraging aspects of the new globalization which we are just beginning to understand and promote. pride. they are dependent on their Blackberries. We have the onerous chore now of reprogramming our psychological selves when it comes to making money. an alarming irrational exuberance that should have been a warning to everyone. In fact. People will want to do business with and invest in companies that operate at the highest level of ethics and integrity. We will have to remind our investor families of an old saying: If it seems too good to be true. The relatively new industry of wealth management will have to retool very quickly as well as financial services. but also with the underlying investments that are made. but also about world issues. issues that are vital to a family’s self-identification. Companies needed to be managed for quarterly profits to satisfy Wall Street and. in a hedge fund or as part of a private equity investment. what are families and investors looking for today? Not surprisingly. These are issues that have to do with the “softer side” of wealth which financial advisors today need to be prepared to handle. This has to do not only with the firms that advise high net worth clients. it is clear. We will return to those basic principles. not just the financial services sector. as well as of their own countries. safety of assets. we all grew accustomed to instant gratification and to quick and easy profits. But. survival. sometimes studying abroad for their degrees. bonding. Increased regulation and more aggressive enforcement. but clearly was not. to use Alan Greenspan’s term. all of whom. several generations gather. At times. They are knowledgeable and sophisticated about what investment opportunities and trends and challenges are emerging around the globe. but the reality is that many of these basic requirements were being overlooked in more exuberant times. the parents. while having VSOTD. which will be a critical component of the global economic recovery. are coming. and some of the most highly regarded institutions and families have been victims of fraud. whether those investments are made outright by the family. diversification. and they remain much more connected with the world at large through social networking sites. They value innovation. the world has evolved and so have people. Most families and investors have seen their wealth and savings impacted over the past year. Global forums and conferences are bringing together like-minded people with energy and vision as well as wealth and passion to give to others. This will result in greater transparency and disclosure regarding complex financial instruments. speed. the grandchildren. So. The more successful advisors are those who can communicate more effectively and quickly with global families and are sensitive to a wide variety of cultures. have different financial needs and concerns and level of sophistication. are the family’s philanthropic goals adequate and up to date? I have been in many meetings where only a fraction of the time is spent on reviewing the investment portfolio and most of the time is spent on all of the other “softer” issues. through a bank. Today’s younger generation of global families has largely received more superior formal educations than their parents or grandparents did. And they can deal effectively with different generations – the grandparents. Throughout my career I have been to literally hundreds of family meetings where.90 until the current crisis. but . how is the family governing itself. we must restore investor confidence. investors. many families had set aside “risk capital” in order to seek extraordinary opportunities for extraordinary returns. and we are all learning invaluable lessons. The purpose is generally to review the family’s investment portfolio and financial needs and goals. But what has struck me about these meetings is how quickly the conversation turns into the “softer issues” that the families are facing: Is the next generation being properly prepared to carry on. Affluent families today are not only more passionate about their children and grandchildren. and appropriate planning strategies. And gaining this new mindset will not be easy. and they will slow down the pace of Wall Street. and access to instant information. periodically. and provide transparency. There will be less use of leverage and we will probably rely on the use of less complex securities.COM VITAL SPEECHES OF THE DAY to adapt to the requirements of the newer generations as wealth transfer to the baby boomers and their children continues. it probably is. I am convinced all of us must become more accustomed to more reasonable rates of growth and returns. This will have an effect on all companies. In the recent boom years. were generally willing to take far more risk for the prospect of better returns. They are more informed and they are far more technologically savvy than their parents. Not only will they themselves look to invest in companies that are aligned with their interests in this regard. And we wealth managers have to take our clients along for the educational ride. In addition to instilling consumer confidence. that have sound risk management controls. They are generally well traveled. I realize that none of this sounds profound or even new. All these new signs of new times will temper the growth of profits. generally. There is also an increased interest in educating and preparing successive generations to be responsible citizens of the world. And yet we have to prepare our investors for a far different climate. obviously. and legacy. hence. the children. there seemed to be.
in particular. their employers. at one time. if you will. that is. Our efforts were the work of every state and specialty society . the following: “I believe that every right implies a responsibility. The examples set by Bill and Melinda Gates. in a veto-proof majority.” Timeless words and aspirations. November 8. Rockefeller Jr. and each other will help restore the much needed trust and confidence. their advisors. I have spoken about the prevailing global crisis as it relates to the financial services industry and. We made sure our patients knew exactly who in Congress opposed us. and across the country last spring and summer. NIELSEN.NANCY H. the leading member of the country’s second generation of the super-rich. not wealth or power or position. President. I am convinced. the son of the Rockefeller who built that family’s great wealth and thus. I’m thinking of a particular Thursday at the end of June. It’s Not Just About Us It’s About the Patients AMERICAN DOCTORS STAND READY TO HELP Address by NANCY H. that his character. We will undoubtedly continue to muddle through tough economic and market crises for some time. F We all stood together because someone had to stand up for our patients and for those who take care of them. and many others are being scrutinized with interest by other wealthy families who want to improve the world and leave their mark. is of supreme worth. keep the promise of Medicare alive for patients and the doctors who treat them. put their families on the road to financial success. We will miss you terribly. that a man’s word should be as good as his bond. Standing against us were the health plans who believed their work was more valuable than ours. American Medical Association Delivered to the AMA Interim Meeting. shared with us all the importance of hope and the joy that he felt along his “journey through the circle of life. we made sure it was no picnic. I went to the halls of Congress to ask the Senate to do what the House of Representatives had done. as true today and tomorrow as they were decades ago. The Senate voted. 91 their communities and the world at large.. their business partners. On your behalf. 2008 ive months ago in Chicago. the wealth management industry. We have reviewed some basic concepts.C. Call it the summer of the Medicare meltdown. Ron. you are a hero to the profession. That was the spirit that infused our work in Washington. Their success in promoting change in health and the environment is encouraging to others and. every opportunity an obligation. and create a better life for successive generations. As President-Elect Barack Obama said a few days ago: “The very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. On behalf of all of us here assembled. commitment to social responsibility and sustainable business strategies producing consistent. to stand with doctors and patients. about focusing on the patients we serve. people want to highlight the importance of time-honored values in their everyday lives. We knew that would upset some in Congress.. will be duplicated around the globe.” Many years ago one of our wealthiest Americans. you know that Ron has passed away. But we believed it was long past time for Congress to do the right thing.everyone in this House of Medicine. PhD. make a contribution to the world.” By now. they went home. that thrift is essential to well-ordered living and that economy is a prime requisite of a sound financial structure whether in government. Marriott Orlando World Center. Warren Buffet. thanks to you. In tens of thousands of phone calls and e-mails. in part. their employees. I want to talk about our profession. But. Late that night. the Senate failed to stop the 10. though not new and at times overlooked. that in the sacredness of a promise. Standing with me were physicians and champions for medicine. their customers. NIELSEN they will also take an active role in their philanthropic and charitable endeavors. Ron Davis. and reasonable profits. about a time of change. Standing with me at the press conference were seniors and the disabled. wrote. Those efforts grew into a crescendo roar of doctors. but I remain optimistic about the lessons learned and about the future. FEBRUARY 2009 . Florida. generally. their financial providers. our patients made sure Congress knew their outrage. and upset those who wanted to protect health insurance companies. Orlando. He was with his cherished wife Nadine and their three sons. which I believe investors going forward will be more cognizant of when making investment decisions: Strong corporate governance. every possession a duty. You know the rest of this story. John D. Dr. I am optimistic because I believe that. patients and many others who believe that Medicare should protect seniors’ access to care. and we will honor you always. business or personal affairs. It was the 4th of July recess. This afternoon. my dear friend and colleague. reliable. D. And then.6 percent cut. Demanding basic principles from their governments. MD. You know this story.
Howard Hiatt.000 jobs in October alone. We could catalog the grains of sand alphabetically or chronologically. Dr. for our nation. They include the medical home. Right now annual health care costs exceed $2 trillion. And now. for our patients. This time. the government reported that employers cut 240. but it’s new to other specialties. Those 75 million Americans are delaying or failing to obtain preventive care.” Each farmer depends on the commons to raise his herd. we can try to protect the status quo. . fears about unfair medical liability cases.92 And that vote held. I am. given the preposterous 21 percent cut that is programmed to occur in 14 months. It is high time we do something about it and I’m not talking about single-payer. There’s an old Chinese saying. We are the most innovative.” The allocation of scarce resources is likened to a herd of cattle grazing on a common pasture. I want to share with you an analogy made famous 40 years ago by scientist Garrett Hardin in his essay. We went from a 10. despite a presidential veto. In our nation’s sick economy. Today we pay twice what other countries with better health outcomes pay. But we rank last or next to last in many health indices. our nation is in the midst of one the most challenging financial crises in our history. And so far in 2008. that’s compared with Australia. We as a nation have to do some serious soul searching. Right now. And this time. And. New Zealand and the United Kingdom. We’ve already convened some of those discussions. The resources that society can devote to health care is the medical commons. There is absolutely an urgency. much higher. It will probably not surprise you that North American physicians are the most unhappy in the entire world. Forty-six million Americans have no health insurance.” Yet when each farmer has an extra head of cattle grazing. the “commons.COM VITAL SPEECHES OF THE DAY about half the preventive services that are recommended.” Each of us could write a book about what makes up that sand. We need to be prepared to be constructive rather than defensive in these discussions because our services are 21 percent of health care costs and what we order is a much bigger slice of the pie. That’s 16 percent of our nation’s GDP Costs are estimated to reach $4 . and that made a huge difference. I’m talking about responsible change that builds on the strengths of the current system. all the things that leave us drained and disheartened. “What makes one tired is not the high mountain far away. you also know the story really doesn’t end there. It’s interference with our ability to make necessary decisions for our patients. we rank 19th among 19 developed countries in mortality that could be helped by health care. That’s a big swing That’s real money for every physician in the nation who sees Medicare patients and it’s a victory worth celebrating. Our health care system ought to be the best in the world but currently it is not. Right now. And. then dean of the Harvard School of Public Health. and payment for quality sometimes called “value-based purchasing. we must all continue to work together.” There was a recent worldwide survey of physician attitudes about their work. But. and another 29 million are underinsured. But there is lots more for us to do than Medicare payment. talking about comprehensive change. We need to use the next few months to have intensive discussions between our states and specialty societies. annual health care costs are the number one reason for bankruptcy. the commons is depleted. accountable health organizations.surgeons have had those from some time. But the status quo is not serving patients well. We stood together. self-reliant and creative nation in the world. So. Now. Each farmer also has an understandable interest in raising more cattle to improve his own livelihood. both with Medicare and with private payers who often link closely with Medicare fees. There will certainly be more discussions. resilient. some 1. Americans get VSOTD. concerns about cost will be the allconsuming issue. “Just one more cow won’t cause stress on the commons. pressure on time spent with patients. Isn’t it time to build a bridge to a new and better health system? A system where patients are better served and physicians are happier and more fulfilled in their work? We need to come together to deal with what is driving our national debate about health care and that is cost. Nineteenth out of 19. Many things are under consideration in Washington. however. we have only 14 months to work with Congress as they create a new payment formula.2 million jobs have been lost. the stakes are higher. The options include bundled payments . only 14 months for them to replace the fatally flawed SGR. It’s the constant “sand in our shoes. job losses mean the loss of health insurance. Germany. Right now. concerns about cost took center stage. trillion and 20 percent of GDP in 10 years.1 percent positive update in January. for us to protect our patients’ access to care. Even before the global financial meltdown. We’re facing a 21 percent cut in January of 2010. It is no different in other countries. So that’s an update on Medicare payment and it’s a preview of serious discussions and decisions that must be made which will affect us all. wrote about the “medical commons” and how it was at risk. Canada. It’s all the things that hinder our power to heal. In 1976. determined. but the sand in one’s shoes. “The Tragedy of the Commons. and doctors are angry and unhappy. It’s lots more than payment issues.” There may be more options. You know that a bigger specter looms.6 percent cut to a 1. and all who rely on it suffer. Just yesterday. That means deaths that might have been prevented by health care. The farmer thinks. We need fundamental change in our health care system for ourselves.
and society should not have to provide everything. is how to join with others in decisions about the medical commons. At the same time. but post-secondary education is a privilege and a responsibility. And it sounds just like the farmer adding one more head of cattle in “The Tragedy of the Commons. So let’s not yearn for the impossible past.” they tell us. For sure we have to define the expectations of personal responsibility. mowing it down. Dr. harm patients. and the challenge that remains today. Joining with others that is the key if we are to protect the commons that serve us all. Our society has decided that K-12 education is a right. The nation will be well served by learning from our professionalism. Do you remember this pivotal question during one of the presidential debates? “Is health care a right. what any other country in the world spends. the broader population seems to be moving fairly rapidly to the view that health care is a right. We will likely not be alone in these decisions. and what should be society’s concerns? There was a time in our country when thrifty Americans could save for the rainy day of illness and hospitalization. Take education as an example of setting parameters. and harm all of us. Just today. So let’s look at that amount as the medical commons. if that’s the country’s decision? Who will define the parameters of this right to health care? Because everyone cannot have everything. So there must be a shared responsibility to protect the medical commons. but we don’t. But who should be making the decisions about appropriateness of care. As we have learned better how to save lives and improve lives. And. the cost of medical care has skyrocketed. But who will pay for this right. the Bush FEBRUARY 2009 . government funds 48 percent of the health care costs in this country. particularly in dealing with chronic conditions. But the size of our country’s medical commons right now is 16 percent of GDP twice . Our profession demands that we put the needs of the patient before other concerns. even those who work very hard at being responsible. NIELSEN Hiatt’s seminal article raised issues that continue to plague us today. we should be 93 leading the discussion. But physicians don’t feel part of a commons. Let’s ask what we can do to serve our patients better. But we have to recognize that when one or another among us is driving a John Deere through the medical commons. And what is the response by our critics? “Oh it’s easy. A warped medical liability system drives up costs and enriches the wrong people. During this economic downturn. Our ability to care for patients is threatened by the uncertainty of the annual death dance with Congress over Medicare fees. And maybe that would be fine if we had better health outcomes. We have to be honest enough to recognize that more is not always better. Defining parameters for health care “rights” and “responsibilities” will require society’s honest deliberation and some difficult decisions. nor can it afford to do so. but how they would be controlled was not spelled out. and society should settle for no less. Administrative costs in the United States are at least twice what they are in other countries that have better health outcomes. Waste and abuse harm the commons.” The challenge for the medical profession which he posed. Shareholder profits and outrageous CEO salaries scandalize us. We’re not there anymore. our livelihood is threatened by hostile insurers with clever schemes to delay and deny payment. is it really credible to believe that the size of the medical commons will grow? Probably not. Let’s consider how to preserve our ability to practice medicine sustainably and protect the viability of the resources we have so that all Americans can obtain the health care they need. costs were cited by both candidates as a serious concern. Hiatt reaffirmed that the “physician must do all that is permitted on behalf of his patient” because “the patient and the physician want no less. What is fair to expect the individual to do? What should be up to the individual. We have to acknowledge that orders we write drive up health care costs. A few specialty societies have done this. we must be willing to step up and do something about it. but we can’t be left out. and the clinical variations that patients can present. because we know the science. we don’t think too much about it.NANCY H. It’s a responsibility that our patients must share as well. it sometimes even is harmful. We have to advocate for comparative effectiveness research so it is clear what new drugs and devices and technologies are worth the cost and which are not. because we all use the commons. We have to work strenuously in our specialty societies and in the Physician Consortium to develop good measures of appropriate care. Right now.” Individually. costs of bio-engineered medications and costs of hospitalization have far outstripped the means of most Americans. a privilege or a responsibility?” Whatever our personal convictions on the answer to this question. and we should emulate them. about overuse or misuse? It is our professional responsibility. “Why don’t you just work harder and see more patients?” That sounds a whole lot like putting lipstick on a pig to me. Let’s come together to deal with what’s driving the debate in this country as in others--cost. Let’s think about what we need to do ourselves. It is naïve to think that government won’t have a role to play in health care financing. Costs of treatment. Physicians and patients with insurance are insulated from the real costs of medical care. But these high costs are absolutely not just about us. During the presidential campaign. do we? We have no assurance that any money saved by actions on our part would go to expanding health care or covering the uninsured or reforming our nation’s health care system.
and this includes countries with single-payer systems. I believe in this land of boundless freedom and opportunity. First. We need change. We are heterogeneous in our backgrounds. And cutting benefits won’t address why costs are rising. nonmaleficence (do no harm).” Here’s the choice . That’s why we have a central role to play. But we have an additional burden because so many are uninsured. to balance autonomy and justice. Every day and every night. including 570 relating to Medicare alone. So let’s be firm in our resolve. Even though many do not trust Washington politics. if we allow reason to be trumped by rhetoric. to the transcendent themes that have been part of our profession throughout the ages and across multiple cultures. together. are we prepared to participate in that societal debate? Because the debate is going to happen. After 9/11. The pieces are in flux. “The kaleidoscope has been shaken.cut benefits or control costs. But in the current environment. As we participate with the rest of society in this debate. They are also debating the proper balance between the role of government and the private marketplace.000 physicians in this country. I believe we can do this. VSOTD. in our ideological beliefs. to build the bridge to a better health system. We learned them in medical school: beneficence. this is for us . But it is for so much more than us. Because if we go into the coming debate with our arms crossed defiantly across our chest with our options pre-determined. they may see it as their only option. This time. let us re-order this world around us. on those core principles upon which our profession is built. Make no mistake. I believe that we can and should have the best health care system in the world. flexible in our strategies. It is not just about us. we cannot allow the discussion to descend into ideology and inflammatory labels. To put it in perspective. and allows us to regain the joy and simple dignity of caring for our patients.COM .94 Administration has proposed cutting services to Medicaid patients to preserve “fiscal integrity. Soon they will settle again. who will be for me? If I am only for me. then we will have lost our chance to shape the change. I believe we have the courage to do it now. I am not in favor of a single-payer system. We need to return to the core values that brought us to medicine in the first place. So I ask you. one that builds on the strengths of our system. We need to help craft a solution that is based on our professional ethics--one that is equitable and just. It’s time to bring the best of ourselves to the nation. It VITAL SPEECHES OF THE DAY requires us to take a hard look at how we do things. Remember that Great Britain in 1948 crafted its National Health System just after London sustained widespread bombing and destruction. we will bear the responsibility. patients and physicians. addresses current weaknesses. We need to embrace our role as healers in a time of need. physicians across this land offer heroic service to individual patients. they turn to government for protection. self-awareness and a commitment to excellence. In many countries. instead of concentrating on what divides us. and grounded in the ethical principles that have been the bedrock of our profession throughout the ages. But physicians and patients will have to live with the outcomes. of serving humanity with humility. Sound familiar? We also are struggling with costs and questioning what is the appropriate balance of government and the private sector. in our political views.we have to remove the sand from our shoes. We all use the commons and that is why we all have to do our part to protect it. America’s doctors stand ready to help. dramatic rises in health care costs are forcing them to debate how to sustain their health care systems. We’re in a time when our country is demanding change. when people are scared. what am I?” There are about 900. But this time. If we do. I believe that we have the talent and dedication to step forward and build that health care system. let’s look at two things that are happening in other countries with health outcomes that are better than ours. I am in favor of a health care system that works better for all of us. There is great concern in our country. it will be our fault. “If I am not for me. Before they do. As Hillel said so many centuries ago.” As our nation speeds toward change. Being responsible stewards of medicine is an act of justice. We need to help calm those fears. The medical profession and our patients are well served by this diversity. British Prime Minister Tony Blair said. This is not just about doctors. autonomy and justice. Let’s harness that energy for our patients and ourselves. and removes the sand from our shoes. Don’t think that the current economic crisis will take the spotlight away from health care or that the global financial meltdown will make it impossible for reform to occur. We must build a bridge to a health care system that serves Americans more justly. We can pass an 18-point plan of “Thou Shalt Nots” and add them to the more than 4500 existing House policies and directives on the nation’s health care system. then we may be excluded from the reform debate just as we were excluded 15 years ago. let’s concentrate on what unites us. For sure. Our House of Delegates is well served by our strong opinions and vigorous debates.
Vital Speeches of the Day has been the only single source of speeches by America’s top thought leaders. and with absolutely no editorial commentary. teach you new skills and keep you in touch with the state of the art. visit www. whether by a CEO in Dubai. absolutely free. Every issue of Vital Speeches International will stimulate your creativity. an Oxford professor or the head of an organization such as Doctors Without Borders. a politician in Tokyo. Vital Speeches International shows you what today’s great ideas are. Each 40-page monthly issue of Vital Speeches International brings you the very best oral communication.95 Introducing a new global edition of the classic publication. For over 75 years.com/intl and download the inaugural issue. and how they’re expressed. unedited. When Vital Speeches subscribers stand on the podium. FEBRUARY 2009 . Download a FREE issue today! To get a sense of the breathtaking global reach of Vital Speeches International and the quality of the speeches it contains. so you can draw your own conclusions without the ﬁlter of the media. they stand out—because they’re standing on the shoulders of the best speakers in the world. Vital Speeches of the Day.vsotd. Now there’s a brand new publication that extends beyond our borders and brings you speeches by the most inﬂuential leaders from around the world: Vital Speeches International.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.