President Barack Obama Weekly Address January 24, 2015 (Video/Trascript )

President Barack Obama Weekly Address The White House January 24, 2015

Hi, everybody.  This week, in my State of the Union Address, I talked about what we can do to make sure middle-class economics helps more Americans get ahead in the new economy. 

See, after some tough years, and thanks to some tough decisions we made, our economy is creating jobs at the fastest pace since 1999.  Our deficits are shrinking.  Our energy production is booming.  Our troops are coming home.  

Thanks to the hard work and resilience of Americans like you, we’ve risen from recession freer to write our own future than any other nation on Earth. 

Now we have to choose what we want that future to look like.  Will we accept an economy where only a few of us do spectacularly well?  Or will we commit ourselves to an economy that generates rising incomes and rising chances for everyone who makes the effort?

I believe the choice is clear.  Today, thanks to a growing economy, the recovery is touching more and more lives.  Wages are finally starting to rise again.  Let’s keep that going – let’s do more to restore the link between hard work and growing opportunity for every American. 

That’s what middle-class economics is – the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules. 

Middle-class economics means helping workers feel more secure in a world of constant change – making it easier to afford childcare, college, paid leave, health care, a home, and retirement. 

Middle-class economics means doing more to help Americans upgrade their skills through opportunities like apprenticeships and two years of free community college, so we can keep earning higher wages down the road. 

Middle-class economics means building the most competitive economy in the world, by building the best infrastructure, opening new markets so we can sell our products around the world, and investing in research – so that businesses keep creating good jobs right here.

And we can afford to do these things by closing loopholes in our tax code that stack the decks for special interests and the superrich, and against responsible companies and the middle class.

This is where we have to go if we’re going to succeed in the new economy.  I know that there are Republicans in Congress who disagree with my approach, and I look forward to hearing their ideas for how we can pay for what the middle class needs to grow.  But what we can’t do is simply pretend that things like child care or college aren’t important, or pretend there’s nothing we can do to help middle class families get ahead. 

Because we’ve got work to do.  As a country, we have made it through some hard times.  But we’ve laid a new foundation.  We’ve got a new future to write.  And I’m eager to get to work. 

Thanks, and have a great weekend.

Can Capitalists Save Capitalism?

by Thomas B. Edsall

Source:  The New York Times

Key Democrats have reached agreement on a set of policies known as “inclusive capitalism”: a forceful market-oriented economic agenda intended to counter inequality, restrain the accrual of vast wealth at the top and provide the working and middle classes with improved economic opportunities.

From the White House to Congress to liberal think tanks, recent Democratic proposals would substantially alter the rules of the marketplace. These include major revisions of the tax code, legislation to pressure corporations to increase pay to match productivity growth and an expansion of refundable tax credits to include low-income workers as well as households making as much as $80,000 a year.

According to a report by the former Treasury secretary Lawrence Summers and Ed Balls, a top British Labor Party politician, unless there is serious government intervention, inequality and a lack of financial resources among those in the bottom half of the income distribution will result in “insufficient aggregate demand – too little spending by consumers and businesses to keep gross domestic product at its capacity.” Developed nations “need new social and political institutions to make 21st century capitalism work for the many and not the few,” Summers and Balls wrote.

“Inclusive capitalism,” according to its advocates, seeks “to make our economic system more equitable, more sustainable and more inclusive.” It is an international movement that has now made its way into Democratic Party circles.

Mark Carney, the Canadian governor of the Bank of England, articulated a fundamental premise of inclusive capitalism in a speech delivered in Britain last May: “Just as any revolution eats its children,” Carney said, “unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.” Among the attendees at the conference in London in May were such Democratic and liberal luminaries as Bill Clinton; Eric Schmidt, executive chairman of Google; and Summers, who served President Obama as a top economic adviser.

Two of the earliest advocates of inclusive capitalism were the late C.K. Prahalad, professor of business at the University of Michigan, and Stuart L. Hart, professor emeritus of strategic management at Cornell. In a widely cited 2002 article, “The Fortune at the Bottom of the Pyramid,” Prahalad and Hart argued that powerful corporations could — must — improve the conditions of the world’s poor by promoting commercial activity, employment opportunities, access to credit, and wealth creation among those at the bottom of income distribution – a group they refer to as the fourth tier, the world’s poorest four billion people.

Prahalad’s core thesis was that the poor could be the

engine of the next round of global trade and prosperity. If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.

The concept of inclusive capitalism has expanded over the past 13 years to apply to those at the bottom and middle of the ladder in developed nations, including the United States. The fundamental “inclusive capitalism” argument is that business enterprises lose profit-making opportunities when consumers have little money to spend. Inadequate purchasing power among the many threatens corporations and poses a direct danger to the top 1 percent, and, indeed, to capitalism itself.

As testimony to the power of the concept of “inclusive capitalism,” President Obama in his State of the Union address called for the enactment of tax policies designed to provide a larger share of market-driven economic growth to the working and middle classes. In a May 7, 2014, speech in Dublin, “Global Lessons for Inclusive Growth,” Jason Furman, chairman of the Council of Economic Advisers, outlined central elements of the White House agenda. Administration policies, Furman argued, would result in “higher median incomes, lower poverty rates, and broader, more inclusive growth.”

Representative Chris Van Hollen, ranking Democrat on the House Budget Committee, outlined additional inclusive capitalism policies in “An Action Plan to Grow the Paychecks of All, Not Just the Wealth of a Few.”

The Summers-Balls report – “The Report of the Commission on Inclusive Prosperity” – is the most comprehensive summary. This report, which uses the phrase “inclusive capitalism” more than a dozen times, was published by the Center for American Progress, a Democratic think tank founded by John Podesta – Bill Clinton’s former chief of staff who in February will join Hillary Clinton’s exploratory presidential campaign.

Those pressing the Democratic Party to take more populist stands contend that the lack of a persuasive Democratic economic program contributed to, or drove, devastating losses in the 2014 elections in states as diverse as North Carolina, Maryland, Iowa and Colorado. According to an Oct. 13, 2014, Gallup pre-election survey, voters believed Republicans were better equipped to handle the economy than Democrats by 50 percent to 39 percent.

If policies grounded in “inclusive capitalism” become central to the party platform, it will mark the party’s strongest commitment to the economic interests of working- and middle-class Americans since Franklin Roosevelt’s New Deal. The new agenda stands apart from Lyndon Johnson’s War on Poverty, which was focused primarily on the “Other America” of the very poor.

The most damaging contemporary American trend that the proposals seek to counter is the sharply declining share of national income flowing to labor, and the parallel increase in the share flowing to owners of capital. This trend, which accelerated sharply in 2000, is shown in Figure 1, a graphic produced by the White House.

Photo

The share of total income going to labor. The gray bars indicate recessions. Credit whitehouse.gov, from a speech by Jason Furman

“We need to share the wealth,” said Senator Charles E. Schumer, chairman of the Senate Democratic Policy and Communications Committee and a leading proponent of the party’s focus on economics.

 

Schumer, in an interview, voiced strong enthusiasm for the Summers report. “It could bring together the left and center and even parts of the right,” Schumer suggested.

In his State of the Union address, Obama put it this way: “Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America.”

His plan calls for the imposition of new taxes on the wealthy and on major financial institutions, totaling $320 billion over 10 years. The money would be used to finance tax cuts and credits for low-to-moderate-income men and women, and to make attendance at community colleges tuition-free.

Not only would Obama raise capital gains tax rates from 23.8 to 28 percent for couples making more than $500,000 in taxable income, but he would eliminate a provision in tax law that allows the very rich to avoid taxation on much of the wealth passed on to their children and he would end a current exemption from taxation on the increase in the value of stocks, bonds and other assets when passed on through inheritance.

This exemption, technically called the “stepped up basis,” is crucial to the unrestricted intergenerational transfer of wealth, a practice that many liberals, and even some conservatives, contend conflicts with equality of opportunity. The Obama plan additionally calls for a .07 percent fee on financial institutions with more than $50 billion in assets that would produce $110 billion in revenue over 10 years.

Van Hollen, in turn, would raise revenues by imposing a transaction tax on stock trades. He would use the money to finance a $1,000 tax credit for workers making less than $100,000 annually, a $20,000 deduction for two-earner families, an annual $250 payment to those who put at least $500 into an approved retirement pension plan, and to substantially increase child care tax credits.

Van Hollen would also bar large corporations from deducting C.E.O. and other corporate compensation over $1 million unless employees got pay raises reflecting increases in worker productivity and the cost of living.

The Summers-Balls report includes many of the proposals outlined by Obama and Van Hollen. Balls warned on his blog that “unfettered markets and trickle-down economics are leading to increasing levels of inequality, stagnating wages and a hollowing out of decent, middle income jobs.”

Their report addresses four major economic developments broadly undermining wages and working conditions:

First, that “increasing global economic integration has also meant increased competition for many workers who produce tradable goods and services.”

Second, that “advances in robotics and artificial intelligence have put intermediate-skill jobs at risk in what economists call a hollowing out of the labor market.”

Third, that “Major corporations have opted to use subcontracting to perform basic functions, and many workers are now classified as independent contractors, eroding basic labor law protections.”

And fourth, “corporations have come to function much less effectively as providers of large-scale opportunity. Increasingly, their dominant focus has been on maximization of share prices and the compensation of their top employees.”

In addition, Summers and Balls argue that competition in the banking sector has broken down and “will need interventions to support the reasonable functioning of the free market.”

What do these points actually signify in practice? In a section titled “U.S. Policy Response,” Summers and Balls call for making parent companies responsible for the working conditions of employees of subcontractors; adopting government policies favoring employee stock ownership so that workers benefit from the growing share of national income flowing to capital as opposed to wages; and imposing tough and costly sanctions on employers who use illegal tactics to fight unionization.

Not stopping there, Summers and Balls call for a substantial boost in the $24,000 pay ceiling under which employees must get time and a half for overtime work beyond 40 hours a week; increased infrastructure spending of $100 billion a year, or $1 trillion over 10 years; and strengthened provisions in trade agreements guaranteeing collective bargaining rights and basic environmental protections to reduce the movement of American companies to countries with the lowest labor standards.

Among their other proposed policy initiatives are creation of an income tax credit for those with moderate pay levels. It would start at $23,260 for joint filers with children, just where the current earned-income tax credit phases out. At $85,000, the credit would diminish, reaching zero at $95,000. They would also change the mortgage interest and property tax deductions into tax credits. Deductions inherently provide larger benefits to those in higher tax brackets. Credits provide equal benefits to all who qualify.

Republican leaders in Congress have already stiff-armed these proposals.

In response to Obama’s plan to tax the wealthy to boost breaks for the working class, Michael Steed, spokesman for the speaker of the House, John A. Boehner, said in a statement, “More Washington tax hikes and spending is the same old top-down approach we’ve come to expect from President Obama that hasn’t worked.”

“The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code,” Senator Orrin Hatch, chairman of the Senate Finance Committee, said in a statement,

Taken together, the Obama, Van Hollen, and Summers interpretations of “inclusive capitalism” are a victory for the left of the Democratic Party. This is especially the case for the Economic Policy Institute, which has been conducting a lonely fight for stronger legislative and regulatory initiatives to counter stagnating wages.

Josh Bivens, the research director at E.P.I., said in an email that the proposals did indeed “look like a shift in the Democratic Party on economic policy.” He said his hope was that “the next two years becomes a competition about who is willing to be the most aggressive in trying to boost low/middle-class incomes.”

Dean Baker, co-director of the Center for Economic and Policy Research, called the Obama plan “a pretty big deal. Raising the capital gains tax rate and ending the stepped-up basis at death are changes that almost exclusively hit the wealthy, and they amount to a fair bit of money.”

  

While none of the proposals, or their advocates, acknowledge this explicitly, one of the objectives of the evolving Democratic economic agenda is to get back support among whites without college degrees – the polling shorthand version of what is sometimes still called the white working class.

In 2014, these voters, who made up 36 percent of the electorate, cast their ballots for Republican House candidates by a 30-point margin (64-34 percent). This was nearly double the 16-point Republican margin among white college graduates, 57-41.

Inclusive capitalism has its critics on the left, nicely summed up by the Guardian columnist Nafeez Ahmed. He argued last May that the inclusive capitalism movement represented “less a meaningful shift of direction than a barely transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising.”

Andrew Grove, founder of Intel, put the push toward “inclusive capitalism” in a more positive light. “Our generation has seen the decisive victory of free-market principles over planned economies,” he told the Economist in 2012. “So we stick with this belief largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.”

While the new agenda has no chance of passage in the Republican-controlled Congress, Democrats plan to use the tenets of inclusive capitalism in the 2016 elections. One Democratic goal in putting specific policies forward is to use them as wedge issues to force Republicans to choose between their affluent backers and their supporters in the white working class. This will be no easy task because a decisive majority of whites without college degrees has been voting against Democratic candidates for two decades, making it very difficult for the party to break what has been a Republican hammerlock since 1994.

President Barak Obama: The State of the Union Address (Video/Transcript)

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans:

We are fifteen years into this new century.  Fifteen years that dawned with terror touching our shores; that unfolded with a new generation fighting two long and costly wars; that saw a vicious recession spread across our nation and the world.  It has been, and still is, a hard time for many.

But tonight, we turn the page.

Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999.  Our unemployment rate is now lower than it was before the financial crisis.  More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years.

Tonight, for the first time since 9/11, our combat mission in Afghanistan is over.  Six years ago, nearly 180,000 American troops served in Iraq and Afghanistan.  Today, fewer than 15,000 remain.  And we salute the courage and sacrifice of every man and woman in this 9/11 Generation who has served to keep us safe.  We are humbled and grateful for your service.

America, for all that we’ve endured; for all the grit and hard work required to come back; for all the tasks that lie ahead, know this:

The shadow of crisis has passed, and the State of the Union is strong.

At this moment – with a growing economy, shrinking deficits, bustling industry, and booming energy production – we have risen from recession freer to write our own future than any other nation on Earth.  It’s now up to us to choose who we want to be over the next fifteen years, and for decades to come.

Will we accept an economy where only a few of us do spectacularly well?  Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?

Will we approach the world fearful and reactive, dragged into costly conflicts that strain our military and set back our standing?  Or will we lead wisely, using all elements of our power to defeat new threats and protect our planet?

Will we allow ourselves to be sorted into factions and turned against one another – or will we recapture the sense of common purpose that has always propelled America forward?

In two weeks, I will send this Congress a budget filled with ideas that are practical, not partisan.  And in the months ahead, I’ll crisscross the country making a case for those ideas.

So tonight, I want to focus less on a checklist of proposals, and focus more on the values at stake in the choices before us.

It begins with our economy.

Seven years ago, Rebekah and Ben Erler of Minneapolis were newlyweds.  She waited tables.  He worked construction.  Their first child, Jack, was on the way.
They were young and in love in America, and it doesn’t get much better than that.

“If only we had known,” Rebekah wrote to me last spring, “what was about to happen to the housing and construction market.”

As the crisis worsened, Ben’s business dried up, so he took what jobs he could find, even if they kept him on the road for long stretches of time.  Rebekah took out student loans, enrolled in community college, and retrained for a new career.  They sacrificed for each other.  And slowly, it paid off.  They bought their first home.  They had a second son, Henry.  Rebekah got a better job, and then a raise.  Ben is back in construction – and home for dinner every night.

“It is amazing,” Rebekah wrote, “what you can bounce back from when you have to…we are a strong, tight-knit family who has made it through some very, very hard times.”

We are a strong, tight-knit family who has made it through some very, very hard times.

America, Rebekah and Ben’s story is our story.  They represent the millions who have worked hard, and scrimped, and sacrificed, and retooled.  You are the reason I ran for this office.  You’re the people I was thinking of six years ago today, in the darkest months of the crisis, when I stood on the steps of this Capitol and promised we would rebuild our economy on a new foundation.  And it’s been your effort and resilience that has made it possible for our country to emerge stronger.

We believed we could reverse the tide of outsourcing, and draw new jobs to our shores.  And over the past five years, our businesses have created more than 11 million new jobs.

We believed we could reduce our dependence on foreign oil and protect our planet.  And today, America is number one in oil and gas.  America is number one in wind power.  Every three weeks, we bring online as much solar power as we did in all of 2008.  And thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.

We believed we could prepare our kids for a more competitive world.  And today, our younger students have earned the highest math and reading scores on record.  Our high school graduation rate has hit an all-time high.  And more Americans finish college than ever before.

We believed that sensible regulations could prevent another crisis, shield families from ruin, and encourage fair competition.  Today, we have new tools to stop taxpayer-funded bailouts, and a new consumer watchdog to protect us from predatory lending and abusive credit card practices.  And in the past year alone, about ten million uninsured Americans finally gained the security of health coverage.

At every step, we were told our goals were misguided or too ambitious; that we would crush jobs and explode deficits.  Instead, we’ve seen the fastest economic growth in over a decade, our deficits cut by two-thirds, a stock market that has doubled, and health care inflation at its lowest rate in fifty years.

So the verdict is clear.  Middle-class economics works.  Expanding opportunity works.  And these policies will continue to work, as long as politics don’t get in the way.  We can’t slow down businesses or put our economy at risk with government shutdowns or fiscal showdowns.  We can’t put the security of families at risk by taking away their health insurance, or unraveling the new rules on Wall Street, or refighting past battles on immigration when we’ve got a system to fix.  And if a bill comes to my desk that tries to do any of these things, it will earn my veto.

Today, thanks to a growing economy, the recovery is touching more and more lives.  Wages are finally starting to rise again.  We know that more small business owners plan to raise their employees’ pay than at any time since 2007.  But here’s the thing – those of us here tonight, we need to set our sights higher than just making sure government doesn’t halt the progress we’re making.  We need to do more than just do no harm.  Tonight, together, let’s do more to restore the link between hard work and growing opportunity for every American.

Because families like Rebekah’s still need our help.  She and Ben are working as hard as ever, but have to forego vacations and a new car so they can pay off student loans and save for retirement.  Basic childcare for Jack and Henry costs more than their mortgage, and almost as much as a year at the University of Minnesota.  Like millions of hardworking Americans, Rebekah isn’t asking for a handout, but she is asking that we look for more ways to help families get ahead.

In fact, at every moment of economic change throughout our history, this country has taken bold action to adapt to new circumstances, and to make sure everyone gets a fair shot.  We set up worker protections, Social Security, Medicare, and Medicaid to protect ourselves from the harshest adversity.  We gave our citizens schools and colleges, infrastructure and the internet – tools they needed to go as far as their effort will take them.

That’s what middle-class economics is – the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.  We don’t just want everyone to share in America’s success – we want everyone to contribute to our success.

So what does middle-class economics require in our time?

First – middle-class economics means helping working families feel more secure in a world of constant change.  That means helping folks afford childcare, college, health care, a home, retirement – and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year.

Here’s one example.  During World War II, when men like my grandfather went off to war, having women like my grandmother in the workforce was a national security priority – so this country provided universal childcare.  In today’s economy, when having both parents in the workforce is an economic necessity for many families, we need affordable, high-quality childcare more than ever.  It’s not a nice-to-have – it’s a must-have.  It’s time we stop treating childcare as a side issue, or a women’s issue, and treat it like the national economic priority that it is for all of us.  And that’s why my plan will make quality childcare more available, and more affordable, for every middle-class and low-income family with young children in America – by creating more slots and a new tax cut of up to $3,000 per child, per year.

Here’s another example.  Today, we’re the only advanced country on Earth that doesn’t guarantee paid sick leave or paid maternity leave to our workers.  Forty-three million workers have no paid sick leave.  Forty-three million.  Think about that.  And that forces too many parents to make the gut-wrenching choice between a paycheck and a sick kid at home.  So I’ll be taking new action to help states adopt paid leave laws of their own.  And since paid sick leave won where it was on the ballot last November, let’s put it to a vote right here in Washington.  Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave.  It’s the right thing to do.

Of course, nothing helps families make ends meet like higher wages.  That’s why this Congress still needs to pass a law that makes sure a woman is paid the same as a man for doing the same work.  Really.  It’s 2015.  It’s time.  We still need to make sure employees get the overtime they’ve earned.  And to everyone in this Congress who still refuses to raise the minimum wage, I say this:  If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it.  If not, vote to give millions of the hardest-working people in America a raise.

These ideas won’t make everybody rich, or relieve every hardship.  That’s not the job of government.  To give working families a fair shot, we’ll still need more employers to see beyond next quarter’s earnings and recognize that investing in their workforce is in their company’s long-term interest.  We still need laws that strengthen rather than weaken unions, and give American workers a voice.  But things like child care and sick leave and equal pay; things like lower mortgage premiums and a higher minimum wage – these ideas will make a meaningful difference in the lives of millions of families.  That is a fact.  And that’s what all of us – Republicans and Democrats alike – were sent here to do.

Second, to make sure folks keep earning higher wages down the road, we have to do more to help Americans upgrade their skills.

America thrived in the 20^th century because we made high school free, sent a generation of GIs to college, and trained the best workforce in the world.  But in a 21^st century economy that rewards knowledge like never before, we need to do more.

By the end of this decade, two in three job openings will require some higher education.  Two in three.  And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need.  It’s not fair to them, and it’s not smart for our future.

That’s why I am sending this Congress a bold new plan to lower the cost of community college – to zero.

Forty percent of our college students choose community college.  Some are young and starting out.  Some are older and looking for a better job.  Some are veterans and single parents trying to transition back into the job market.  Whoever you are, this plan is your chance to graduate ready for the new economy, without a load of debt.  Understand, you’ve got to earn it – you’ve got to keep your grades up and graduate on time.  Tennessee, a state with Republican leadership, and Chicago, a city with Democratic leadership, are showing that free community college is possible.  I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today.  And I want to work with this Congress, to make sure Americans already burdened with student loans can reduce their monthly payments, so that student debt doesn’t derail anyone’s dreams.

Thanks to Vice President Biden’s great work to update our job training system, we’re connecting community colleges with local employers to train workers to fill high-paying jobs like coding, and nursing, and robotics.  Tonight, I’m also asking more businesses to follow the lead of companies like CVS and UPS, and offer more educational benefits and paid apprenticeships – opportunities that give workers the chance to earn higher-paying jobs even if they don’t have a higher education.

And as a new generation of veterans comes home, we owe them every opportunity to live the American Dream they helped defend.  Already, we’ve made strides towards ensuring that every veteran has access to the highest quality care.  We’re slashing the backlog that had too many veterans waiting years to get the benefits they need, and we’re making it easier for vets to translate their training and experience into civilian jobs.  Joining Forces, the national campaign launched by Michelle and Jill Biden, has helped nearly 700,000 veterans and military spouses get new jobs.  So to every CEO in America, let me repeat:  If you want somebody who’s going to get the job done, hire a veteran.

Finally, as we better train our workers, we need the new economy to keep churning out high-wage jobs for our workers to fill.

Since 2010, America has put more people back to work than Europe, Japan, and all advanced economies combined.  Our manufacturers have added almost 800,000 new jobs.  Some of our bedrock sectors, like our auto industry, are booming.  But there are also millions of Americans who work in jobs that didn’t even exist ten or twenty years ago – jobs at companies like Google, and eBay, and Tesla.

So no one knows for certain which industries will generate the jobs of the future.  But we do know we want them here in America.  That’s why the third part of middle-class economics is about building the most competitive economy anywhere, the place where businesses want to locate and hire.

21^st century businesses need 21^st century infrastructure – modern ports, stronger bridges, faster trains and the fastest internet.  Democrats and Republicans used to agree on this.  So let’s set our sights higher than a single oil pipeline.  Let’s pass a bipartisan infrastructure plan that could create more than thirty times as many jobs per year, and make this country stronger for decades to come.

21^st century businesses, including small businesses, need to sell more American products overseas.  Today, our businesses export more than ever, and exporters tend to pay their workers higher wages.  But as we speak, China wants to write the rules for the world’s fastest-growing region.  That would put our workers and businesses at a disadvantage.  Why would we let that happen?  We should write those rules.  We should level the playing field.  That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.

Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense.  But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities.  More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China.  Let’s give them one more reason to get it done.

21^st century businesses will rely on American science, technology, research and development.  I want the country that eliminated polio and mapped the human genome to lead a new era of medicine – one that delivers the right treatment at the right time.  In some patients with cystic fibrosis, this approach has reversed a disease once thought unstoppable.  Tonight, I’m launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes – and to give all of us access to the personalized information we need to keep ourselves and our families healthier.

I intend to protect a free and open internet, extend its reach to every classroom, and every community, and help folks build the fastest networks, so that the next generation of digital innovators and entrepreneurs have the platform to keep reshaping our world.

I want Americans to win the race for the kinds of discoveries that unleash new jobs – converting sunlight into liquid fuel; creating revolutionary prosthetics, so that a veteran who gave his arms for his country can play catch with his kid; pushing out into the Solar System not just to visit, but to stay.  Last month, we launched a new spacecraft as part of a re-energized space program that will send American astronauts to Mars.  In two months, to prepare us for those missions, Scott Kelly will begin a year-long stay in space.  Good luck, Captain – and make sure to Instagram it.

Now, the truth is, when it comes to issues like infrastructure and basic research, I know there’s bipartisan support in this chamber.  Members of both parties have told me so.  Where we too often run onto the rocks is how to pay for these investments.  As Americans, we don’t mind paying our fair share of taxes, as long as everybody else does, too.  But for far too long, lobbyists have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight.  They’ve riddled it with giveaways the superrich don’t need, denying a break to middle class families who do.

This year, we have an opportunity to change that.  Let’s close loopholes so we stop rewarding companies that keep profits abroad, and reward those that invest in America.  Let’s use those savings to rebuild our infrastructure and make it more attractive for companies to bring jobs home.  Let’s simplify the system and let a small business owner file based on her actual bank statement, instead of the number of accountants she can afford.  And let’s close the loopholes that lead to inequality by allowing the top one percent to avoid paying taxes on their accumulated wealth.  We can use that money to help more families pay for childcare and send their kids to college.  We need a tax code that truly helps working Americans trying to get a leg up in the new economy, and we can achieve that together.

Helping hardworking families make ends meet. Giving them the tools they need for good-paying jobs in this new economy.  Maintaining the conditions for growth and competitiveness.  This is where America needs to go.  I believe it’s where the American people want to go.  It will make our economy stronger a year from now, fifteen years from now, and deep into the century ahead.
Of course, if there’s one thing this new century has taught us, it’s that we cannot separate our work at home from challenges beyond our shores.

My first duty as Commander-in-Chief is to defend the United States of America.  In doing so, the question is not whether America leads in the world, but how.  When we make rash decisions, reacting to the headlines instead of using our heads; when the first response to a challenge is to send in our military – then we risk getting drawn into unnecessary conflicts, and neglect the broader strategy we need for a safer, more prosperous world.  That’s what our enemies want us to do.

I believe in a smarter kind of American leadership.  We lead best when we combine military power with strong diplomacy; when we leverage our power with coalition building; when we don’t let our fears blind us to the opportunities that this new century presents.  That’s exactly what we’re doing right now – and around the globe, it is making a difference.

First, we stand united with people around the world who’ve been targeted by terrorists – from a school in Pakistan to the streets of Paris.  We will continue to hunt down terrorists and dismantle their networks, and we reserve the right to act unilaterally, as we’ve done relentlessly since I took office to take out terrorists who pose a direct threat to us and our allies.

At the same time, we’ve learned some costly lessons over the last thirteen years.
Instead of Americans patrolling the valleys of Afghanistan, we’ve trained their security forces, who’ve now taken the lead, and we’ve honored our troops’ sacrifice by supporting that country’s first democratic transition.  Instead of sending large ground forces overseas, we’re partnering with nations from South Asia to North Africa to deny safe haven to terrorists who threaten America.  In Iraq and Syria, American leadership – including our military power – is stopping ISIL’s advance.  Instead of getting dragged into another ground war in the Middle East, we are leading a broad coalition, including Arab nations, to degrade and ultimately destroy this terrorist group.  We’re also supporting a moderate opposition in Syria that can help us in this effort, and assisting people everywhere who stand up to the bankrupt ideology of violent extremism.  This effort will take time.  It will require focus.  But we will succeed.  And tonight, I call on this Congress to show the world that we are united in this mission by passing a resolution to authorize the use of force against ISIL.

Second, we are demonstrating the power of American strength and diplomacy.  We’re upholding the principle that bigger nations can’t bully the small – by opposing Russian aggression, supporting Ukraine’s democracy, and reassuring our NATO allies.  Last year, as we were doing the hard work of imposing sanctions along with our allies, some suggested that Mr. Putin’s aggression was a masterful display of strategy and strength.  Well, today, it is America that stands strong and united with our allies, while Russia is isolated, with its economy in tatters.

That’s how America leads – not with bluster, but with persistent, steady resolve.

In Cuba, we are ending a policy that was long past its expiration date.  When what you’re doing doesn’t work for fifty years, it’s time to try something new.  Our shift in Cuba policy has the potential to end a legacy of mistrust in our hemisphere; removes a phony excuse for restrictions in Cuba; stands up for democratic values; and extends the hand of friendship to the Cuban people.  And this year, Congress should begin the work of ending the embargo.  As His Holiness, Pope Francis, has said, diplomacy is the work of “small steps.”  These small steps have added up to new hope for the future in Cuba.  And after years in prison, we’re overjoyed that Alan Gross is back where he belongs.  Welcome home, Alan.

Our diplomacy is at work with respect to Iran, where, for the first time in a decade, we’ve halted the progress of its nuclear program and reduced its stockpile of nuclear material.  Between now and this spring, we have a chance to negotiate a comprehensive agreement that prevents a nuclear-armed Iran; secures America and our allies – including Israel; while avoiding yet another Middle East conflict.  There are no guarantees that negotiations will succeed, and I keep all options on the table to prevent a nuclear Iran.  But new sanctions passed by this Congress, at this moment in time, will all but guarantee that diplomacy fails – alienating America from its allies; and ensuring that Iran starts up its nuclear program again.  It doesn’t make sense.  That is why I will veto any new sanctions bill that threatens to undo this progress.  The American people expect us to only go to war as a last resort, and I intend to stay true to that wisdom.

Third, we’re looking beyond the issues that have consumed us in the past to shape the coming century.

No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families, especially our kids.
We are making sure our government integrates intelligence to combat cyber threats, just as we have done to combat terrorism.  And tonight, I urge this Congress to finally pass the legislation we need to better meet the evolving threat of cyber-attacks, combat identity theft, and protect our children’s information.  If we don’t act, we’ll leave our nation and our economy vulnerable.  If we do, we can continue to protect the technologies that have unleashed untold opportunities for people around the globe.

In West Africa, our troops, our scientists, our doctors, our nurses and healthcare workers are rolling back Ebola – saving countless lives and stopping the spread of disease.  I couldn’t be prouder of them, and I thank this Congress for your bipartisan support of their efforts.  But the job is not yet done – and the world needs to use this lesson to build a more effective global effort to prevent the spread of future pandemics, invest in smart development, and eradicate extreme poverty.

In the Asia Pacific, we are modernizing alliances while making sure that other nations play by the rules – in how they trade, how they resolve maritime disputes, and how they participate in meeting common international challenges like nonproliferation and disaster relief.  And no challenge – no challenge – poses a greater threat to future generations than climate change.

2014 was the planet’s warmest year on record.  Now, one year doesn’t make a trend, but this does – 14 of the 15 warmest years on record have all fallen in the first 15 years of this century.

I’ve heard some folks try to dodge the evidence by saying they’re not scientists; that we don’t have enough information to act.  Well, I’m not a scientist, either.  But you know what – I know a lot of really good scientists at NASA, and NOAA, and at our major universities.  The best scientists in the world are all telling us that our activities are changing the climate, and if we do not act forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive disruptions that can trigger greater migration, conflict, and hunger around the globe.  The Pentagon says that climate change poses immediate risks to our national security.  We should act like it.

That’s why, over the past six years, we’ve done more than ever before to combat climate change, from the way we produce energy, to the way we use it.  That’s why we’ve set aside more public lands and waters than any administration in history.  And that’s why I will not let this Congress endanger the health of our children by turning back the clock on our efforts.  I am determined to make sure American leadership drives international action.  In Beijing, we made an historic announcement – the United States will double the pace at which we cut carbon pollution, and China committed, for the first time, to limiting their emissions.
And because the world’s two largest economies came together, other nations are now stepping up, and offering hope that, this year, the world will finally reach an agreement to protect the one planet we’ve got.

There’s one last pillar to our leadership – and that’s the example of our values.

As Americans, we respect human dignity, even when we’re threatened, which is why I’ve prohibited torture, and worked to make sure our use of new technology like drones is properly constrained.  It’s why we speak out against the deplorable anti-Semitism that has resurfaced in certain parts of the world.  It’s why we continue to reject offensive stereotypes of Muslims – the vast majority of whom share our commitment to peace.  That’s why we defend free speech, and advocate for political prisoners, and condemn the persecution of women, or religious minorities, or people who are lesbian, gay, bisexual, or transgender.  We do these things not only because they’re right, but because they make us safer.

As Americans, we have a profound commitment to justice – so it makes no sense to spend three million dollars per prisoner to keep open a prison that the world condemns and terrorists use to recruit.  Since I’ve been President, we’ve worked responsibly to cut the population of GTMO in half.  Now it’s time to finish the job.  And I will not relent in my determination to shut it down.  It’s not who we are.

As Americans, we cherish our civil liberties – and we need to uphold that commitment if we want maximum cooperation from other countries and industry in our fight against terrorist networks.  So while some have moved on from the debates over our surveillance programs, I haven’t.  As promised, our intelligence agencies have worked hard, with the recommendations of privacy advocates, to increase transparency and build more safeguards against potential abuse.  And next month, we’ll issue a report on how we’re keeping our promise to keep our country safe while strengthening privacy.

Looking to the future instead of the past.  Making sure we match our power with diplomacy, and use force wisely.  Building coalitions to meet new challenges and opportunities.  Leading – always – with the example of our values.  That’s what makes us exceptional.  That’s what keeps us strong.  And that’s why we must keep striving to hold ourselves to the highest of standards – our own.

You know, just over a decade ago, I gave a speech in Boston where I said there wasn’t a liberal America, or a conservative America; a black America or a white America – but a United States of America.  I said this because I had seen it in my own life, in a nation that gave someone like me a chance; because I grew up in Hawaii, a melting pot of races and customs; because I made Illinois my home – a state of small towns, rich farmland, and one of the world’s great cities; a microcosm of the country where Democrats and Republicans and Independents, good people of every ethnicity and every faith, share certain bedrock values.

Over the past six years, the pundits have pointed out more than once that my presidency hasn’t delivered on this vision.  How ironic, they say, that our politics seems more divided than ever.  It’s held up as proof not just of my own flaws – of which there are many – but also as proof that the vision itself is misguided, and naïve, and that there are too many people in this town who actually benefit from partisanship and gridlock for us to ever do anything about it.

I know how tempting such cynicism may be.  But I still think the cynics are wrong.

I still believe that we are one people.  I still believe that together, we can do great things, even when the odds are long.  I believe this because over and over in my six years in office, I have seen America at its best.  I’ve seen the hopeful faces of young graduates from New York to California; and our newest officers at West Point, Annapolis, Colorado Springs, and New London.  I’ve mourned with grieving families in Tucson and Newtown; in Boston, West, Texas, and West Virginia.  I’ve watched Americans beat back adversity from the Gulf Coast to the Great Plains; from Midwest assembly lines to the Mid-Atlantic seaboard.  I’ve seen something like gay marriage go from a wedge issue used to drive us apart to a story of freedom across our country, a civil right now legal in states that seven in ten Americans call home.

So I know the good, and optimistic, and big-hearted generosity of the American people who, every day, live the idea that we are our brother’s keeper, and our sister’s keeper.  And I know they expect those of us who serve here to set a better example.

So the question for those of us here tonight is how we, all of us, can better reflect America’s hopes.  I’ve served in Congress with many of you.  I know many of you well.  There are a lot of good people here, on both sides of the aisle.  And many of you have told me that this isn’t what you signed up for – arguing past each other on cable shows, the constant fundraising, always looking over your shoulder at how the base will react to every decision.

Imagine if we broke out of these tired old patterns.  Imagine if we did something different.

Understand – a better politics isn’t one where Democrats abandon their agenda or Republicans simply embrace mine.
A better politics is one where we appeal to each other’s basic decency instead of our basest fears.

A better politics is one where we debate without demonizing each other; where we talk issues, and values, and principles, and facts, rather than “gotcha” moments, or trivial gaffes, or fake controversies that have nothing to do with people’s daily lives.

A better politics is one where we spend less time drowning in dark money for ads that pull us into the gutter, and spend more time lifting young people up, with a sense of purpose and possibility, and asking them to join in the great mission of building America.

If we’re going to have arguments, let’s have arguments – but let’s make them debates worthy of this body and worthy of this country.

We still may not agree on a woman’s right to choose, but surely we can agree it’s a good thing that teen pregnancies and abortions are nearing all-time lows, and that every woman should have access to the health care she needs.

Yes, passions still fly on immigration, but surely we can all see something of ourselves in the striving young student, and agree that no one benefits when a hardworking mom is taken from her child, and that it’s possible to shape a law that upholds our tradition as a nation of laws and a nation of immigrants.
We may go at it in campaign season, but surely we can agree that the right to vote is sacred; that it’s being denied to too many; and that, on this 50^th anniversary of the great march from Selma to Montgomery and the passage of the Voting Rights Act, we can come together, Democrats and Republicans, to make voting easier for every single American.

We may have different takes on the events of Ferguson and New York.  But surely we can understand a father who fears his son can’t walk home without being harassed.  Surely we can understand the wife who won’t rest until the police officer she married walks through the front door at the end of his shift.  Surely we can agree it’s a good thing that for the first time in 40 years, the crime rate and the incarceration rate have come down together, and use that as a starting point for Democrats and Republicans, community leaders and law enforcement, to reform America’s criminal justice system so that it protects and serves us all.

That’s a better politics.  That’s how we start rebuilding trust.  That’s how we move this country forward.  That’s what the American people want.  That’s what they deserve.

I have no more campaigns to run.  My only agenda for the next two years is the same as the one I’ve had since the day I swore an oath on the steps of this Capitol – to do what I believe is best for America.  If you share the broad vision I outlined tonight, join me in the work at hand.  If you disagree with parts of it, I hope you’ll at least work with me where you do agree.  And I commit to every Republican here tonight that I will not only seek out your ideas, I will seek to work with you to make this country stronger.

Because I want this chamber, this city, to reflect the truth – that for all our blind spots and shortcomings, we are a people with the strength and generosity of spirit to bridge divides, to unite in common effort, and help our neighbors, whether down the street or on the other side of the world.

I want our actions to tell every child, in every neighborhood:  your life matters, and we are as committed to improving your life chances as we are for our own kids.

I want future generations to know that we are a people who see our differences as a great gift, that we are a people who value the dignity and worth of every citizen – man and woman, young and old, black and white, Latino and Asian, immigrant and Native American, gay and straight, Americans with mental illness or physical disability.

I want them to grow up in a country that shows the world what we still know to be true:  that we are still more than a collection of red states and blue states; that we are the United States of America.

I want them to grow up in a country where a young mom like Rebekah can sit down and write a letter to her President with a story to sum up these past six years:

“It is amazing what you can bounce back from when you have to…we are a strong, tight-knit family who has made it through some very, very hard times.”
My fellow Americans, we too are a strong, tight-knit family.  We, too, have made it through some hard times.  Fifteen years into this new century, we have picked ourselves up, dusted ourselves off, and begun again the work of remaking America.  We’ve laid a new foundation.  A brighter future is ours to write.  Let’s begin this new chapter – together – and let’s start the work right now.

Thank you, God bless you, and God bless this country we love.

What’s Been the Effect of Western Sanctions on Russia?

by Priyanka Boghani
Source: Frontline

Watch: Putin's Way

When Russia annexed Crimea from Ukraine last March, the United States and European Union responded with an economic weapon — sanctions.

The first few rounds, applied in March and April of 2014, targeted Russian and Crimean officials, as well as businessmen seen to have close ties to President Vladimir Putin — his “inner circle” — with travel bans and asset freezes.

Since then, the West has steadily expanded its sanctions against Russian entities, targeting major businesses and parts of Russia’s financial, energy and military industries.

FRONTLINE talked to Anders Åslund, senior fellow at the Peterson Institute for International Economics, on Jan. 8, 2015 about the effects and consequences of Western sanctions on the Russian economy. Åslund served as an economic adviser to the Russian and Ukrainian governments in the 1990s.

Which round of sanctions do you think really had an effect on the Russian economy? How would you measure that?

The sanctions the U.S. imposed came in two big chunks. The first concerned Crimea, and they were only personal sanctions for Crimean and Russian leaders involved in the Crimean drama.

Then, the important sanctions were imposed on July 16, which are called sectoral sanctions.

We can see that no money has been going into Russia after July. No financial institutions dared to provide Russia with any financing more than a month after that. And that we know from talking to banks. …

The point is that the [July] financial sanctions have worked out as far more severe in their effect than anyone seems to have believed.

Would sanctions alone have damaged Russia’s economy without the current plunging oil prices?

There are three major causes for Russia’s economic troubles. The first cause is the corruption and bad economic policies that Putin pursues, which on their own would lead to stagnation, or at most 1 percent growth.

The second element is the falling oil prices. The oil prices have now fallen so much that Russia’s total export revenues this year will be two-thirds of what they have been before. That means that Russia will have to cut its imports by half. This is a big blow.

This is then reinforced by the financial sanctions, so that Russia cannot mitigate this blow by borrowing money. By ordinary standards, Russia is perfectly credit-worthy with a public debt that is only 10 percent of GDP. But if you don’t have access to financial markets, then it doesn’t matter how credit-worthy you are, because you’re not credit-worthy so-to-say.

[Editor's Note: On Jan. 9, Fitch Ratings cut Russia's credit rating to BBB-, one step above junk.]

What has been the impact on the Russian public so far?

The big impact is that the prices of buckwheat have increased as much as 70 percent. Basic food stuff has increased sharply. We’re seeing consumer panic in Russia because of the falling exchange rate. And the falling exchange rate is mainly because of the oil prices, but it’s also the financial sanctions. People are fearful of the situation and we’re seeing that the exchange rate is jumping up and down. It’s moving either way every so often by 5 percent in a day. The worst we’ve seen is it has gone down by 10 percent in a day.

There’s fundamental financial instability in Russia now, and this will have a big impact on the banking system. We’ve so far seen one medium-sized bank going under and two of the big state banks have needed recapitalization. We will see more of that.

And this of course will hit the GDP. My guess is we’ll see a decline in the order of 10 percent this year.

One of the initial rounds of sanctions targeted members of Putin’s so-called inner circle, including Gennady Timchenko [founder of commodity trading company Gunvor], Igor Sechin [chairman of Rosneft, Russia's leading petroleum company], Arkady and Boris Rotenberg [magnates with majority stakes in construction firm Stroygazmontazh, and banks SMP and Investcapitalbank] and others. Were these sanctions largely symbolic, or did they do some real damage?

 

I think they’ve done real damage. These people… many of them are billionaires. They’re used to living in grand style, and now they are not allowed to travel to Europe and the U.S.

It’s particularly [the fact] that they’re not allowed to go to Europe that hurts them.
[Gennedy Timchenko] lives in Geneva. What I hear is that he moved back to Moscow because it became so impossible. Another of them — Boris Rotenberg — lives in Finland. Both Timchenko and Rotenberg are actually Finnish citizens.

A recent Bloomberg investigation found that companies linked to Timchenko and Arkady Rotenberg actually received more state contracts after being sanctioned. Does that mean the strategy of targeting Putin’s “inner circle” has in some way backfired?

 

Putin indeed has given Timchenko and Rotenberg more contracts through Gazprom. It now looks as if Putin is making the same mistake as [deposed President] Viktor Yanukovych did in Ukraine, giving ever more to his friends and very little to the others. Putin has been very good previously at distributing widely, but now he has tightened it so that it only goes to his close friends, and that is not likely to be popular.

And what do you think that could lead to, in terms of sentiment?

The elite [who aren't part of his inner circle] are utterly alienated from Putin now. I don’t think they will rise in any way against Putin, but they will take money out of the country as fast as they can, so it will further destabilize the country.
The question is what will happen in the big industrial cities outside the most wealthy cities — Moscow and St. Petersburg. It would be surprising if we don’t see some social unrest down the road, because these are big blows to ordinary people.

Are further sanctions possible? What would next steps look like?

My view is that the sanctions are so severe that it’s simply not necessary to reinforce them further. It’s also easier to keep the Western front together. The U.S. has, in this case, been very careful to keep a united front with the whole of the European Union. The administration has thought that it’s more important to keep unity with the E.U. than impose even more severe sanctions. I think that policy has borne fruit now.

Have sanctions been seen as a success from the U.S. government’s perspective?

I would think that one could strongly argue that, because what’s happened is that Russia cannot get international financing from any source. Russian international reserves declined last year by $135 billion. We haven’t gotten the final number, but that’s the order. There has been a huge outflow of reserves from Russia. And of course, the Russian economy is now in a serious financial crisis, which is, to a considerable extent, caused by the financial sanctions.

Are Russians trying to get around the sanctions? Is that even possible?

They clearly are trying to get around it. They’ve been trying to get money from China. But it’s very striking that the Chinese are not providing financing for Russia, because like everyone else they’re afraid of the American financial regulators. …

The Digital Arms Race: NSA Preps America for Future Battle

By Jacob Appelbaum, Aaron Gibson, Claudio Guarnieri, Andy Müller-Maguhn, Laura Poitras, Marcel Rosenbach, Leif Ryge, Hilmar Schmundt and Michael Sontheimer
Source: Der Spiegel
The NSA's mass surveillance is just the beginning. Documents from Edward Snowden show that the intelligence agency is arming America for future digital wars -- a struggle for control of the Internet that is already well underway.

Normally, internship applicants need to have polished resumes, with volunteer work on social projects considered a plus. But at Politerain, the job posting calls for candidates with significantly different skill sets. We are, the ad says, "looking for interns who want to break things."

Politerain is not a project associated with a conventional company. It is run by a US government intelligence organization, the National Security Agency (NSA). More precisely, it's operated by the NSA's digital snipers with Tailored Access Operations (TAO), the department responsible for breaking into computers.

Potential interns are also told that research into third party computers might include plans to "remotely degrade or destroy opponent computers, routers, servers and network enabled devices by attacking the hardware." Using a program called Passionatepolka, for example, they may be asked to "remotely brick network cards." With programs like Berserkr they would implant "persistent backdoors" and "parasitic drivers". Using another piece of software called Barnfire, they would "erase the BIOS on a brand of servers that act as a backbone to many rival governments."

An intern's tasks might also include remotely destroying the functionality of hard drives. Ultimately, the goal of the internship program was "developing an attacker's mindset."

The internship listing is eight years old, but the attacker's mindset has since become a kind of doctrine for the NSA's data spies. And the intelligence service isn't just trying to achieve mass surveillance of Internet communication, either. The digital spies of the Five Eyes alliance -- comprised of the United States, Britain, Canada, Australia and New Zealand -- want more.

The Birth of D Weapons
 
According to top secret documents from the archive of NSA whistleblower Edward Snowden seen exclusively by SPIEGEL, they are planning for wars of the future in which the Internet will play a critical role, with the aim of being able to use the net to paralyze computer networks and, by doing so, potentially all the infrastructure they control, including power and water supplies, factories, airports or the flow of money.

During the 20th century, scientists developed so-called ABC weapons -- atomic, biological and chemical. It took decades before their deployment could be regulated and, at least partly, outlawed. New digital weapons have now been developed for the war on the Internet. But there are almost no international conventions or supervisory authorities for these D weapons, and the only law that applies is the survival of the fittest.

Canadian media theorist Marshall McLuhan foresaw these developments decades ago. In 1970, he wrote, "World War III is a guerrilla information war with no division between military and civilian participation." That's precisely the reality that spies are preparing for today.

The US Army, Navy, Marines and Air Force have already established their own cyber forces, but it is the NSA, also officially a military agency, that is taking the lead. It's no coincidence that the director of the NSA also serves as the head of the US Cyber Command. The country's leading data spy, Admiral Michael Rogers, is also its chief cyber warrior and his close to 40,000 employees are responsible for both digital spying and destructive network attacks.

Surveillance only 'Phase 0'
 
From a military perspective, surveillance of the Internet is merely "Phase 0" in the US digital war strategy. Internal NSA documents indicate that it is the prerequisite for everything that follows. They show that the aim of the surveillance is to detect vulnerabilities in enemy systems. Once "stealthy implants" have been placed to infiltrate enemy systems, thus allowing "permanent accesses," then Phase Three has been achieved -- a phase headed by the word "dominate" in the documents. This enables them to "control/destroy critical systems & networks at will through pre-positioned accesses (laid in Phase 0)." Critical infrastructure is considered by the agency to be anything that is important in keeping a society running: energy, communications and transportation. The internal documents state that the ultimate goal is "real time controlled escalation".

One NSA presentation proclaims that "the next major conflict will start in cyberspace." To that end, the US government is currently undertaking a massive effort to digitally arm itself for network warfare. For the 2013 secret intelligence budget, the NSA projected it would need around $1 billion in order to increase the strength of its computer network attack operations. The budget included an increase of some $32 million for "unconventional solutions" alone.

President Barack Obama Weekly Address January 17, 2015 (Video/Trascript )

President Barack Obama

Weekly Address

The White House

Hi, everybody.  Every day, we get thousands of letters and emails at the White House from Americans across the country – and every night, I read ten of them.  They tell me about their hopes and their worries, their hardships and successes.  They’re the Americans I’m working for every day – and this year, several of these letter writers will join me at the Capitol when I deliver my annual State of the Union Address on Tuesday night.

Carolyn Reed wrote to me from Colorado to tell me she was able to expand her business, thanks to a loan from the Small Business Administration.  Today, she and her husband own seven Silver Mine Sub Shops – and last year, they raised wages for all their hourly employees.

Victor Fugate, from Butler, Missouri, wrote to tell me that he was unemployed for a while a few years ago, but today he’s earned his degree and found a full-time job.  Victor said that he and his wife were able to afford their student loans because our country offered millions of Americans the chance to cap their monthly payments as a percentage of their income – and, because of the Affordable Care Act, they now have the security and peace of mind of affordable health insurance.

While serving in Afghanistan, Jason Gibson was gravely wounded—he lost both his legs.  When I first met him in the hospital, he was just beginning his long, difficult road to recovery.  But last year, Sergeant Gibson wrote to tell me that with the help of our extraordinary doctors and nurses, he’s making extraordinary progress.  He just moved into a new home, and he and his wife just had a baby girl.

Stories like these give us reason to start the new year with confidence.  2014 was the fastest year for job growth since the 1990s.  Unemployment fell faster than any year since 1984.  Our combat mission in Afghanistan has come to a responsible end, and more of our heroes are coming home.  America’s resurgence is real.

Our job now is to make sure that every American feels that they’re a part of our country’s comeback.  That’s what I’ll focus on in my State of the Union – how to build on our momentum, with rising wages, growing incomes, and a stronger middle class.  And I’ll call on this new Congress to join me in putting aside the political games and finding areas where we agree so we can deliver for the American people.

The last six years have demanded resilience and sacrifice from all of us.  All of us have a right to be proud of the progress America has made.  And I hope you’ll tune in on Tuesday to hear about the steps we can take to build on this progress, and to seize this moment together.

Thanks everybody, and have a great weekend.

Tasso Azevedo: Hopeful lessons from the battle to save rainforests (Video/Transcript)

 
When the Portuguese arrived in Latin America about 500 years ago, they obviously found this amazing tropical forest. And among all this biodiversity that they had never seen before, they found one species that caught their attention very quickly. This species, when you cut the bark, you find a very dark red resin that was very good to paint and dye fabric to make clothes. The indigenous people called this species pau brasil, and that's the reason why this land became "land of Brasil," and later on, Brazil. That's the only country in the world that has the name of a tree. So you can imagine that it's very cool to be a forester in Brazil, among other reasons.
 

 Forest products are all around us. Apart from all those products, the forest is very important for climate regulation. In Brazil, almost 70 percent of the evaporation that makes rain actually comes from the forest. Just the Amazon pumps to the atmosphere 20 billion tons of water every day. This is more than what the Amazon River, which is the largest river in the world, puts in the sea per day, which is 17 billion tons. If we had to boil water to get the same effect as evapotranspiration, we would need six months of the entire power generation capacity of the world. So it's a hell of a service for all of us.
 

 We have in the world about four billion hectares of forests. This is more or less China, U.S., Canada and Brazil all together, in terms of size, to have an idea. Three quarters of that is in the temperate zone, and just one quarter is in the tropics, but this one quarter, one billion hectares, holds most of the biodiversity, and very importantly, 50 percent of the living biomass, the carbon. Now, we used to have six billion hectares of forest -- 50 percent more than what we have -- 2,000 years ago. We've actually lost two billion hectares in the last 2,000 years. But in the last 100 years, we lost half of that. That was when we shifted from deforestation of temperate forests to deforestation of tropical forests.
 

 So think of this: In 100 years, we lost the same amount of forest in the tropics that we lost in 2,000 years in temperate forests. That's the speed of the destruction that we are having.
 

Now, Brazil is an important piece of this puzzle. We have the second largest forest in the world, just after Russia. It means 12 percent of all the world's forests are in Brazil, most of that in the Amazon. It's the largest piece of forest we have. It's a very big, large area. You can see that you could fit many of the European countries there. We still have 80 percent of the forest cover. That's the good news. But we lost 15 percent in just 30 years. So if you go with that speed, very soon, we will loose this powerful pump that we have in the Amazon that regulates our climate.
 

Deforestation was growing fast and accelerating at the end of the '90s and the beginning of the 2000s. (Chainsaw sound) (Sound of falling tree) Twenty-seven thousand square kilometers in one year. This is 2.7 million hectares. It's almost like half of Costa Rica every year.
 

So at this moment -- this is 2003, 2004 -- I happened to be coming to work in the government. And together with other teammates in the National Forest Department, we were assigned a task to join a team and find out the causes of deforestation, and make a plan to combat that at a national level, involving the local governments, the civil society, business, local communities, in an effort that could tackle those causes.
 

So we came up with this plan with 144 actions in different areas. Now I will go through all of them one by one -- no, just giving some examples of what we had done in the next few years. So the first thing, we set up a system with the national space agency that could actually see where deforestation is happening, almost in real time. So now in Brazil, we have this system where every month, or every two months, we get information on where deforestation is happening so we can actually act when it's happening. And all the information is fully transparent so others can replicate that in independent systems. This allows us, among other things, to apprehend 1.4 million cubic meters of logs that were illegally taken. Part of that we saw and sell, and all the revenue becomes a fund that now funds conservation projects of local communities as an endowment fund. This also allows us to make a big operation to seize corruption and illegal activities that ended up having 700 people in prison, including a lot of public servants. Then we made the connection that areas that have been doing illegal deforestation should not get any kind of credit or finance. So we cut this through the bank system and then linked this to the end users. So supermarkets, the slaughterhouses, and so on that buy products from illegal clear-cut areas, they also can be liable for the deforestation. So making all these connections to help to push the problem down. And also we work a lot on land tenure issues. It's very important for conflicts. Fifty million hectares of protected areas were created, which is an area the size of Spain. And of those, eight million were indigenous lands.
Now we start to see results. So in the last 10 years, deforestation came down in Brazil 75 percent.
 

(Applause)
 

So if we compare it with the average deforestation that we had in the last decade, we saved 8.7 million hectares, which is the size of Austria. But more importantly, it avoided the emission of three billion tons of CO2 in the atmosphere. This is by far the largest contribution to reduce greenhouse gas emissions, until today, as a positive action. One may think that when you do these kinds of actions to decrease, to push down deforestation, you will have an economic impact because you will not have economic activity or something like that. But it's interesting to know that it's quite the opposite. In fact, in the period when we have the deepest decline of deforestation, the economy grew, on average, double from the previous decade, when deforestation was actually going up. So it's a good lesson for us. Maybe this is completely disconnected, as we just learned by having deforestation come down.
 

 Now this is all good news, and it's quite an achievement, and we obviously should be very proud about that. But it's not even close to sufficient. In fact, if you think about the deforestation in the Amazon in 2013, that was over half a million hectares, which means that every minute, an area the size of two soccer fields is being cut in the Amazon last year, just last year. If we sum up the deforestation we have in the other biomes in Brazil, we are talking about still the largest deforestation rate in the world. It's more or less like we are forest heroes, but still deforestation champions. So we can't be satisfied, not even close to satisfied. So the next step, I think, is to fight to have zero loss of forest cover in Brazil and to have that as a goal for 2020. That's our next step.
 

Now I've always been interested in the relationship between climate change and forests. First, because 15 percent of greenhouse gas emissions come from deforestation, so it's a big part of the problem. But also, forests can be a big part of the solution since that's the best way we know to sink, capture and store carbon. Now, there is another relationship of climate and forests that really stuck me in 2008 and made me change my career from forests to working with climate change. I went to visit Canada, in British Columbia, together with the chiefs of the forest services of other countries that we have a kind of alliance of them, like Canada, Russia, India, China, U.S. And when we were there we learned about this pine beetle we learned about this pine beetle that is literally eating the forests in Canada. What we see here, those brown trees, these are really dead trees. They are standing dead trees because of the larvae of the beetle. What happens is that this beetle is controlled by the cold weather in the winter. For many years now, they don't have the sufficient cold weather to actually control the population of this beetle. And it became a disease that is really killing billions of trees. So I came back with this notion that the forest is actually one of the earliest and most affected victims of climate change.

 

 So I was thinking, if I succeed in working with all my colleagues to actually help to stop deforestation, maybe we will lose the battle later on for climate change by floods, heat, fires and so on. So I decided to leave the forest service and start to work directly on climate change, find a way to think and understand the challenge, and go from there.

 

 Now, the challenge of climate change is pretty straightforward. The goal is very clear. We want to limit the increase of the average tempreatrure of the planet to two degrees. There are several reasons for that. I will not get into that now. But in order to get to this limit of two degrees, which is possible for us to survive, the IPCC, the Intergovernmental Panel on Climate Change, defines that we have a budget of emissions of 1,000 billion tons of CO2 from now until the end of the century. So if we divide this by the number of years, what we have is an average budget of 11 billion tons of CO2 per year. Now what is one ton of CO2? It's more or less what one small car, running 20 kilometers a day, will emit in one year. Or it's one flight, one way, from São Paulo to Johannesburg or to London, one way. Two ways, two tons. So 11 billion tons is twice that.

 

Now the emissions today are 50 billion tons, and it's growing. It's growing and maybe it will be 61 by 2020. Now we need to go down to 10 by 2050. And while this happens, the population will grow from seven to nine billion people, the economy will grow from 60 trillion dollars in 2010 to 200 trillion dollars. And so what we need to do is to be much more efficient in a way that we can go from seven tons of carbon per capita per person, per year, into something like one. You have to choose. You take the airplane or you have a car.

 

 So the question is, can we make it? And that's the exactly the same question I got when I was developing a plan to combat deforestation. It's such a big problem, so complex. Can we really do it? I think so. Think of this:

  Deforestation means 60 percent of the greenhouse gas emissions in Brazil in the last decade. Now it's a little bit less than 30 percent. In the world, 60 percent is energy. So if we can tackle directly the energy, the same way we could tackle deforestation, maybe we can have a chance.

 

 So there are five things that I think we should do. First, we need to disconnect development from carbon emissions. We don't need to clear-cut all the forests to actually get more jobs and agriculture and have more economy. That's what we proved when we decreased deforestation. The economy continues to grow. Same thing could happen in the energy sector. Second, we have to move the incentives to the right place. Today, 500 billion dollars a year goes into subsidies for fossil fuels. Why don't we put a price on carbon and transfer this to the renewable energy? Third, we need to measure and make it transparent where, when and who is emitting greenhouse gases so we can have actions specifically for each one of those opportunities. Fourth, we need to leapfrog the routes of development, which means, you don't need to go to the landline telephone before you get to the mobile phones. Same way we don't need to go to fossil fuels to the one billion people who don't have access to energy before we get to the clean energy. And fifth and last, we need to share responsibility between governments, business and civil society. There is work to do for everybody, and we need to have everybody on board.

 

So to finalize, I think the future is not like a fate that you have to just go as business as usual goes. We need to have the courage to actually change the route, invest in something new, think that we can actually change the route. I think we are doing this with deforestation in Brazil, and I hope we can do it also with climate change in the world.

 

Thank you.

 

(Applause)