lazy Susan也博客

今早看到的新闻说，美国前劳工部长赵女士在一个论坛上称赞中国人的储蓄习惯，说美国人应该向中国人学习。

个人直觉的感受是美国人近来似乎喜欢把危机的原因归咎于中国人，比如，Bernanke认为美国的次贷危机与中国人重男轻女，喜欢生儿子有关。难道赵女士能逆“潮流”而动？

再仔细一看，赵女士在论坛上接受采访时是这样说的。大体是说，中国人爱储蓄, it’s very good sometimes,……

电视上的字幕直接就把这句话翻译成中国人的储蓄习惯很好，至于sometimes，就根本不见了踪影。

媒体的本领真是与时俱进，sometimes……

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

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

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

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

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

I know -- I know there has been controversy about the promotion of democracy in recent years, and much of this controversy is connected to the war in Iraq.  So let me be clear: No system of government can or should be imposed by one nation by any other.
 
That does not lessen my commitment, however, to governments that reflect the will of the people.  Each nation gives life to this principle in its own way, grounded in the traditions of its own people.  America does not presume to know what is best for everyone, just as we would not presume to pick the outcome of a peaceful election.  But I do have an unyielding belief that all people yearn for certain things:  the ability to speak your mind and have a say in how you are governed; confidence in the rule of law and the equal administration of justice; government that is transparent and doesn't steal from the people; the freedom to live as you choose.  These are not just American ideas; they are human rights.  And that is why we will support them everywhere.  (Applause.)

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

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

AUDIENCE MEMBER:  Barack Obama, we love you!

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

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

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

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

Likewise, it is important for Western countries to avoid impeding Muslim citizens from practicing religion as they see fit -- for instance, by dictating what clothes a Muslim woman should wear.  We can't disguise hostility towards any religion behind the pretence of liberalism.
 
In fact, faith should bring us together.  And that's why we're forging service projects in America to bring together Christians, Muslims, and Jews.  That's why we welcome efforts like Saudi Arabian King Abdullah's interfaith dialogue and Turkey's leadership in the Alliance of Civilizations.  Around the world, we can turn dialogue into interfaith service, so bridges between peoples lead to action -- whether it is combating malaria in Africa, or providing relief after a natural disaster. 

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

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

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

Finally, I want to discuss economic development and opportunity.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

END        
2:05 P.M. (Local)

THE WHITE HOUSE

Office of the Press Secretary
(Cairo,Egypt)

________________________________________________
FOR IMMEDIATE RELEASE               June 4, 2009
 

REMARKS BY THE PRESIDENT
ON A NEW BEGINNING

Cairo University
Cairo, Egypt

1:10 P.M. (Local)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

看到年轻人求知若渴的面庞，温家宝娓娓而谈：“也许有人会说，没有时间读书。但是一个人一天总可以抽出半个小时读三四页书，一个月就可以读上百页，一年就可以读几部书。读书要有选择，读那些有闪光思想和高贵语言的书，读那些经过时代淘汰而巍然独存下来的书。这些书才能撼动你的心灵，激动你的思考。我们不仅要读书，而且要实践；不仅要学知识，而且要学技术。要‘读活书、活读书、读书活’，即不仅要学会动脑，而且要学会动手；不仅要懂得道理，而且要学会生存；不仅要提高自己的修养，而且要学会与人和谐相处。”

温家宝加重语气说，当前，世界正经历着一场前所未有的金融危机。战胜这场危机，不仅要靠物质的力量，还要靠精神的力量。战胜这场金融危机，从根本上还是要靠人，靠知识的力量和科技的革命。在这个乍暖还寒的时候，我们提倡读书更具有现实意义。通过读书温暖人心、提振信心、寄托希望，通过读书掌握知识、增强本领、勇于创新。大家要记住一个真理：书籍是不能改变世界的，但读书可以改变人，人是可以改变世界的。读书可以给人智慧，可以使人勇敢，可以让人温暖。我曾在中国政府网在线交流时说过，我愿意看到人们在坐地铁的时候能够手里拿上一本书。因为我一直认为，知识不仅给人力量，还给人安全，给人幸福。

My most handsome (of course) and poorest colleague (But I'm not sure,need to be falsifiedJ) Steven yesterday wrote a feature“中国经济严重放缓，阵阵春风难敌刺骨寒意”。

 发布会

结论：中国的节假日跟外国不太一样，所以不能像外国那样提供GDP的环比数据；但是，中国的用电量与工业产值的关系，还是可以参考美国的……

看了这篇文章，很感慨啊。可也只能与时俱进了。

"In many ways, we are headed for a thrilling new world of media. Technology allows journalists today to tell stories in ways that were never possible before, to reach audiences larger than ever, and to build a tight and more intimate bond with the public. For young journalists, there can be remarkable opportunity as old media models crumble and as an entrepreneurial culture takes hold in a field that has long been dominated by overbearing media behemoths. There is a lot to be excited about, and a lot that is healthy."


"There will be many experiments, many new models. Some will be nonprofit. But many will seek to make a profit, a big one. An era of entrepreneurship for journalism has begun. Entrepreneurship comes with greater risks…. There also are risks for the practice of journalism. There are risks that journalism will turn cynically to the quick, the easy, and the cheap — that a story's greatest accomplishment will be to get a million page views, rather than to correct an injustice, or unearth wrongdoing, or give voice to people who would not otherwise be heard."

这两天发现满大街都是穿黑色长筒袜的美腿。看来风潮在变啊。开始胡思乱想女人裙摆的高度跟经济有多少相关性……

昨天的报道。

Jan 22nd 2009
From The Economist print edition

The risks involved in buying government debt

CHUCK PRINCE was not the first Citibank executive to put his foot in his mouth. Long before the ex-boss of the big American bank talked about his willingness to “keep dancing” during the credit boom, Walter Wriston, a former CEO, proclaimed, “Countries do not go bankrupt.” Not long afterwards, Citibank fell victim to the third-world debt crisis.

In fact, governments have made a habit of stiffing foreign creditors. King Edward III of England was an early example, repudiating his debt to Florentine bankers back in 1339. The Russian revolutionary government repudiated tsarist debt at great cost to French investors, and South American countries are serial defaulters—Ecuador being the latest example.

But now the attention has switched from the developing to the developed world, and in particular the euro zone. Greece, Spain and Portugal have already suffered debt downgrades by the rating agencies; Ireland may follow.

The recession and, in particular, the financial crisis are at the heart of this reversal of fortunes. Bank bail-out packages involve the transfer of risk from the private sector to the public sector. This makes sense in the short term; the appetite for government debt is vast, and expands at times of financial crisis. Governments have the luxury of repaying their obligations over the long term and have shown they can recover from huge debts incurred at times of war. In addition, because of their ability to create money, governments can always repay debt denominated in their own currency, albeit at the risk of inflation. That is why such debt is regarded as risk-free (or in Britain, gilt-edged), although only inflation-linked bonds may merit that description.

Debt incurred in a foreign currency is another matter. Countries that run persistent current-account deficits eventually reach a crisis. The time-honoured answer is to devalue, or depreciate, the currency so that exports can become more competitive and the deficit can be closed. (Britain appears to be following this route at the moment, willingly or not.)

For foreign creditors, such a devaluation represents a partial default (just as for domestic creditors of conventional bonds, inflation is a creeping default). Bond investors thus took delight at the creation of the euro; eliminating the threat of devaluation meant they were willing to buy the debt of smaller euro-zone countries at much lower yields than before.

All that has changed in the past 12 months. Greece is now paying 5.6% for ten-year debt, two-and-a-half percentage points more than Germany and four-tenths of a point more than Poland, which is not even in the euro zone. Greek government debt is set to pass 100% of GDP this year, according to Deutsche Bank; only Italy among euro members has a higher ratio. The position is deteriorating alarmingly; Austria, Greece, Ireland and Spain are all expected to see their debt-to-GDP ratios rise by ten percentage points this year.

Such countries now face a vicious circle; higher financing costs weigh on economic activity, increasing both the size of the deficit and the cost of financing it. Devaluation is not an option; leaving the euro would be incredibly disruptive and would push up financing costs even further. Nor can euro members inflate the cost of the debt away, since they do not control monetary policy.

The only real alternative is a long, hard slog. Public-sector debt can be eroded by running surpluses—in other words, higher taxes or lower public spending. The country’s external competitiveness can be improved by holding real wage growth below that of other trading countries. Neither is exactly a vote-winner.

Meanwhile, the cost of guaranteeing bank debts may be huge. In the case of Ireland, the debts have been estimated at 230% of GDP. Iceland has already shown that a banking system may overwhelm the resources of the country that stands behind it.

It is still hard to imagine a euro-zone member defaulting. Even after the Spanish downgrade, the country’s debt is rated AA+, a level most companies would covet. There is a long way to go before a euro-zone country hits junk-bond status.

And whatever the rules say, the EU would surely find a way to rescue a small country within the euro zone, as the potential contagion after a default would be so severe.

Nevertheless, the widening in sovereign-bond spreads in recent months is justifiable. The trend in government finances is dire and although weak countries may be rescued in the end, there will be crises and uncertainty along the way. Even without going bankrupt, countries can torment their creditors.

(When you choose public works projects, be sure to get ones with lasting economic impact.)

From IHT

By Martin Fackler

Friday, February 6, 2009

HAMADA, Japan: The Hamada Marine Bridge soars majestic over this small fishing harbor, so much larger than the squid boats anchored below that it seems out of place.

And it is not just the bridge. Two decades of generous public works spending have showered this city of 61,000 mostly graying residents with a highway, a two-lane bypass, a university, a prison, a children's art museum, the Sun Village Hamada sports center, a bright red welcome center, a ski resort and an aquarium featuring three ring-blowing Beluga whales.

Nor is this remote port in western Japan unusual. Rural areas across the country have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy out of a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging U.S. economy, many economists are taking a fresh look at the Japanese experience. While Japan is not exactly comparable with the United States — especially as a late developer with a history of heavy state investment in infrastructure — economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy.

（见到有人把这句话翻译成：“尽管日本并不能和美国同日而语，特别是作为拥有一段沉重政府基建史的后发国家。但是经济学家觉得，它仍能作为一个发达国家的经济刺激之史，提供给我们一些来之不易的经验教训，让我们能更有胜算地朝着成功迈进。”

这个翻译有问题。个人理解，可以翻译成：

尽管日本并不能与美国完全相提并论，尤其是日本作为后发国家，有一段国家对基础设施实施巨大投资的历史，但经济学家们表示，它（日本的经历）仍然能够就发达经济体实施一揽子（经济）刺激方案的缺陷，以及成功的概率提供重要的经验教训。）

In a nutshell, Japan's experience suggests that infrastructure spending, while a blunt instrument, can help revive a developed economy, say many economists and one very important U.S. official: Treasury Secretary Timothy Geithner, who was a young financial attaché in Japan during the collapse and subsequent doldrums. One lesson Geithner has said he took away from that time is that spending must come in quick, massive doses, and be continued until recovery takes root.

Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending.

"It is not enough just to hire workers to dig holes and then fill them in again," said Toshihiro Ihori, an economics professor at the University of Tokyo. "One lesson from Japan is that public works get the best results when they create something useful for the future."

In total, Japan spent $6.3 trillion on construction-related public investment between 1991 and September of last year, according to the Cabinet Office. The spending peaked in 1995 and remained high until the early 2000s, when it was cut at a time of growing concerns about ballooning budget deficits. More recently, the governing Liberal Democratic Party has increased spending again to revive the economy and the party's own flagging popularity.

In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan's Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.

In the United States, it has also led to calls in Congress, particularly by Republicans, not to repeat the errors of Japan's failed economic stimulus. They argue that it makes more sense to cut taxes, and let people decide how to spend their own money, than for the government to decide how to invest public funds. Japan put more emphasis on increased spending than tax cuts during its slump, but ultimately did reduce consumption taxes to encourage consumer spending as well.

Economists tend to divide into two camps on the question of Japan's infrastructure spending: those, many of them Americans like Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.

Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power.

But some Western economists who have studied Japan's experience say the stimulus accomplished more than it is now given credit for. At a minimum, they argue, it saved the economy from an outright, 1930s-style collapse.

Moreover, they say, any direct comparison of Japan and the United States is inevitably misleading, because Japan has spent so much more over the years on infrastructure. Having neglected its roads, bridges, water treatment plants and more, the United States is bound to generate a greater payback for such spending than would Japan.

Beyond that, proponents of Keynesian-style stimulus spending in the United States say that the Japanese approach failed to accomplish more not because of waste but because it was never undertaken wholeheartedly. They argue that instead of making one big push to pump up the economy with economic shock therapy, Japan spread its spending out over several years, diluting the effects.

After years of heavy spending in the first half of the 1990s, economists say, Japanese leaders grew concerned about growing budget deficits and cut back too soon, snuffing out the recovery in its infancy, much as Roosevelt did to the U.S. economy in 1936. Growth that, by 1996, had reached 3 percent was suffocated by premature spending cuts and tax increases, they say. While spending remained high in the late 1990s, Japan never gave the economy another full-fledged push, these economists say.

They also say that the size of Japan's apparently successful stimulus in the early 1990s suggests that the United States will need to spend far more than the current $820 billion to get results. Between 1991 and 1995, Japan spent some $2.1 trillion on public works, in an economy roughly half as large as that of the United States, according to the Cabinet Office. "Stimulus worked in Japan when it was tried," said David Weinstein, a professor of Japanese economics at Columbia University. "Japan's lesson is that, if anything, the current U.S. stimulus will not be enough."

Most Japanese economists have tended to take a bleaker view of their nation's track record, saying that Japan spent more than enough money, but wasted too much of it on roads to nowhere and other unneeded projects.

Ihori of the University of Tokyo did a survey of public works in the 1990s, concluding that the spending created almost no additional economic growth. Instead of spreading beneficial ripple effects across the economy, he found that the spending actually led to declines in business investment by driving out private investors. He also said job creation was too narrowly focused in the construction industry in rural areas to give much benefit to the overall economy.

He agreed with other critics that the 1990s stimulus failed because too much of it went to roads and bridges, overbuilding this already heavily developed nation. Critics also said decisions on how to spend the money were made behind closed doors by bureaucrats, politicians and the construction industry, and often reflected political considerations more than economic. Ihori said the United States appeared to be striking a better balance by investing in new energy and information-technology infrastructure as well as replacing aging infrastructure.

The Japanese experience also seems to argue for spending heavily to promote social development. A 1998 report by the Japan Institute for Local Government, a nonprofit policy research group, found that every ¥1 trillion, or about $11.2 billion, spent on social services like care for the elderly and monthly pension payments added ¥1.64 trillion in growth. Financing for schools and education delivered an even bigger boost of ¥1.74 trillion, the report found.

But every ¥1 trillion spent on infrastructure projects in the 1990s increased the Japanese gross domestic product, a measure of its overall economic size, by only ¥1.37 trillion, mainly by creating jobs and other improvements like reducing travel times.

Economists said the finding suggested that while infrastructure spending may yield strong results for developing nations, creating jobs in higher-paying knowledge-based services like health care and education can bring larger benefits to advanced economies like Japan, with its aging population.

"In hindsight, Japan should have built public works that address the problems it faces today, like aging, energy and food sources," said Takehiko Hobo, a professor emeritus of public finance at Shimane University in Matsue, the main city of Shimane. "This obsession with building roads is a holdover from an earlier era."

The fruits of that obsession are apparent across Shimane, a rural prefecture about the size of Delaware, where Hamada is located. Each town seems to have its own art museum, domed athletic center and government-built tourist attraction like the Nima Sand Museum, a giant hourglass in a glass pyramid. The prefecture, with 740,000 residents, even has three commercial airports able to handle jets, including the $250 million Hagi-Iwami Airport, which sits eerily empty with just two flights per day.

In Hamada, residents say the city's most visible "hakomono," the Japanese equivalent of "white elephant," was its own bridge to nowhere, the $70 million Marine Bridge, whose 1,006-foot span sat almost completely devoid of traffic on a recent morning. （有人把这句话翻译成：在岛根县的居民说，这座城市最扎眼的hokomono（日语：累赘的意思），就是那座耗资7千万，要走得走1006步才能走完的海洋大桥。晕死。1,006-foot span，是说桥的跨度是1,006英尺。本来还纳闷来着，还真有人数自己走路走多少步啊。）Built in 1999, the bridge links the city to a small, sparsely populated island already connected by a shorter bridge.

"The bridge? It's a dud," said Masahiro Shimada, 70, a retired city official who was fishing near the port. "Maybe we could use it for bungee jumping," he joked.

Koichi Matsuoka, a retired professor of policy at the University of Shimane in Hamada, said useless projects like the Marine Bridge were the reason that years of huge spending had brought few long-term benefits here. While Shimane has had the highest per capita spending on public works in Japan for the last 18 years, thanks to powerful local politicians like the late Prime Minister Noboru Takeshita, its per capita annual income of $26,000 ranked it 40th among Japan's 47 prefectures, he said. （有人把这句话翻译成：“他说，尽管在过去的18年中，岛根县人均享有日本在公共建设工程方面的最高支出额，但是，却由于前首相竹下登之流的强硬派政客们在此地大行其道，以至于它每年26，000美元的人均收入在日本47个行政区排到了第40位。”服了，又晕死一次，太莫名其妙了。L这句话该翻译成：他说，尽管拜已故前首相竹下登等有权势的当地政客所赐，在过去18年中岛根县的人均享有公共建设工程支出额为全日本最高，但其26,000美元的年人均收入在日本47个都道府县中排在第40位。）He said the spending had left Shimane $11 billion in debt, twice the size of the prefectural government's annual budget.

Still, local officials in Hamada warn that their municipal economy will collapse without public works, though they recognize the spending cannot continue forever. They offered their own lesson to U.S. communities in the Obama era: when you choose public works projects, be sure to get ones with lasting economic impact.

Among Hamada's many public works projects, the biggest benefits had come from the prison, the university and the Aquas aquarium, with its popular whales, they said. These had created hundreds of permanent jobs and attracted students and families with children to live in a city where nearly a third of residents were over 65.

"Roads and bridges are attractive, but they create jobs only during construction," said Shunji Nakamura, chief of the city's industrial policy section. "You need projects with good jobs that will last through a bad economy."

 From RGE monitor

Brian Butler | Jan 29, 2009

China’s wealth of reserves is massive, impressive.  Some analysts estimate the value of China’s foreign reserves to be in near $2 trillion (with about a trillion of that in US treasuries).  Yes, China has way more wealth than Bill Gates ….so where is the connection?   Hang on, I’ll get there, but first…lets look at the data from Brad Setser blog:

In 2008, my best estimate  is that China bought $374.6 billion of the $1684.8 billion increase in the outstanding stock of marketable Treasuries not held by the Fed.

China currently has — in my judgment — about $900 billion of Treasuries.

Wow!  That is an incredible amount of money…But its not money that China has…no,actually… its mostly money that is owed to China.   Money being lent from China to the United States.  In this upside-down world of international finance, we actually see money flowing from places like China on a massive scale to countries like the USA… (note that only in recent history is money borrowed by rich countries from developing ones!).

But, having a massive amount of “reserves” (on paper) makes China rich, no?

On paper, yes…But, remember…these reserves (in the form of US treasuries) are like I.O.U.’s from the US to China.   In other words, the US takes the money now, and issues I.O.U’s for future payments, which fill up the Chinese reserves… As a result, this massive “wealth” of foreign reserves is a bit illusionary…because it exists on paper, and not in physical wealth.  (the real wealth of China* lies in its stock of productive capacity and innovative people…. and not in its paper wealth of international reserves)….

There are three main problems with a “wealth” of reserves…

• Much of it is paper wealth…. its like Bill Gates having been the richest man, but having had all of his wealth tied up in MS stock…if he had tried to cash out quickly, it would have driven the stock price down…eliminating much of his paper wealth. China is in a similar situation; having the wealth of reserves tied up in I.O.U’s (debt issued by the US)…if China were to suddenly try to sell their position in US treasuries, it would drive down the price and reduce their value.  So, much like Bill Gates, China would need to sell off its position gradually (or just slow down their pace of acquisition).

• If the US dollar were to depreciate, the amount of “wealth” would simply disappear.

• China cant spend that money internally without risking (a) inflation, and (b) currency appreciation. While inflation isn’t that big of a risk (now), the currency appreciation is. Remember…the only way china can run HUGE current account deficits is if they also simultaneously run capital account surpluses (the Balance of payments must balance). So, that surplus capital must exit the country, or else…if they spend it internally, the current account must shrink (What would be the mechanism by which this would happen?… currency appreciation to eliminate exports).

Can China spend this “wealth” on Fiscal Stimulus?

No, I dont think so.

Its not that they dont want to (I believe the Chinese would love to spend that money to stimulate internal demand and boost production / jobs).  It’s that they can’t (at least not easily, and not all at once).

But, you might wonder…didnt I just read about a massive fiscal stimulus package coming from China?  Yes, you probably did (we highlight this in our wiki).  But, much of $600 billion in fiscal stimulus that China announced in (late) 2008 was already-planned spending .

Foreign analysts that encourage China to spend that stockpile of “money” to stimulate the internal demand (and boost the world economy) are likely to be disappointed.

*The Chinese wealth ultimately lies not with stockpiles of foreign reserves but in developing and expanding their internal market.  Stimulating demand internally and becoming less reliant on export growth is the key to China’s bright future.

（“Beijing is wary of attractive presidents who may replenish the reserves of U.S. leadership and influence in the world.”

个人理解，可能在很多中国人眼里，democracy就是“折腾”吧,所以，美中两国之间“Tension is a structural inevitability”。

一朋友讲过，人家（小奥）毕竟是美国总统，不是中国的领导人。这话要牢记。）

Why China Fears Obama

The danger of an attractive America

By John Lee

From IHT

Monday, February 2, 2009

In contrast to the general rush in most parts of the world to congratulate Barack Obama and hail a new era of American leadership, an initially muted response from Beijing followed by an outburst in the state-run China Daily immediately after the inauguration is significant.

It suggests that the enthusiasm with which Obama was received in Europe will not be replicated in China, at least not in the Communist leadership. On the contrary, the new president may well fan old Chinese fears, pointing to difficult times ahead in the most important bilateral relationship for the world.

The editorial on Jan. 22 in the China Daily, the official English-language newspaper frequently used by Beijing to voice its views to the rest of the world, was extraordinary in its harshness, given the Chinese Communist Party's usual prudence in refraining from public criticism of America.

The article began by criticizing President Bush for taking a "wrecking-ball" to world affairs.

Then, turning to Obama and his vision for America, the paper said "U.S. leaders have never been shy about talking about their country's ambition. For them, it is a divinely granted destiny no matter what other nations think." Obama's "defense of U.S. interests," the article said, "will inevitably clash with those of other nations."

Tough editorials in the China Daily, especially about America, are not issued lightly. In many ways, Chinese rulers and policy experts are obsessed with America. In a study of 100 recent articles by leading academics at the Chinese Academy of Social Sciences (CASS), I found that about four in every five were about the United States - understanding the American system and political values, or how to limit, circumvent, bind or reduce American power and influence. Within these themes, several emerged that help better understand the thinking behind articles such as the one in the China Daily.

One was that Beijing views international politics in broadly neorealist terms - the distribution of power in the world will determine tomorrow's conflicts. In particular, China clearly sees building competition between itself and America as the defining big-picture strategic play.

Beijing believes that tension can be managed, but never resolved, between the established power and the emerging one. Tension is a structural inevitability. Beijing believes that America is currently distracted by its two wars and a weak economy, but that Washington's strategic attention will soon turn eastwards. As one prominent CASS analyst puts it, the "spearhead will soon be pointed at Beijing."

Second, the Chinese experts view America as a unique superpower which relentlessly seeks not only to build and maintain its power, but also to spread its democratic values.

This is of grave concern to the authoritarian Chinese leaders, because they believes that America will have difficulty accepting a greater leadership role for Beijing so long as Communist Party remains exclusively in power. Senator John McCain's "League of Democracies" might never become a formal reality, but Beijing believes that it already exists de facto in U.S. military alliances with Asian countries.

Third, Beijing fears the American democratic process. While the West views democracy as an advantage since it can offer an institutional and bloodless process for renewal, Beijing views it as a source of irrationality and unpredictability. Many in Beijing believe that the democratic process can cause uncomfortable shifts in policy that might disrupt the best laid plans. This brings us to why Beijing fears Barack Obama.

In Beijing's eyes, President Bush followed an ambitious but reckless foreign policy. In the attempt to extend American power, he sacrificed American influence; his broad "war on terror" opened up huge strategic opportunities for China.

As America became distracted by war, China made tremendous gains in Asia - undermining America's relationship with allies and partners in the region while putting itself forward as a uniquely "Asian power."

In contrast, President Obama could present a difficult challenge for Beijing. Like all presidents since World War II, Obama seeks to continue protecting and extending America's leadership role in the world - which Beijing believes to be to its detriment.

But unlike Bush, Beijing believes that Obama better understands the facets of American power and influence - hard power versus soft and "smart" power, coercion versus legitimacy, inducements versus persuasion, and the power of example.

Scholars at CASS have spent considerable effort trying to analyze understand the advantage the United States gains whenever it produces charismatic leaders such as John Kennedy and Ronald Reagan - and now Obama.

In short, Beijing is wary of attractive presidents who may replenish the reserves of U.S. leadership and influence in the world.

Moreover, Obama spoke in his inaugural address about defending freedom against authoritarian "isms," whom he relegated to "the wrong side of history." Once that meant the Soviet Union; this time it was China. This is not the message Beijing wants to hear from a new American president.

John Lee is a visiting fellow at the Center for Independent Studies in Sydney and the author of "Will China Fail?"

Conclusion

Although the Lehman failure demonstrated that the CDS market works well even under severe stress, there are proposals for improvements and reforms. These reforms--including a clearinghouse or an exchange for CDSs and perhaps some additional form of regulation for the CDS market as a whole--are beyond the scope of this Outlook. However, because CDSs and their value are not well understood, there is a serious danger of excessive regulation that will impair the value of CDSs for risk management and credit assessment purposes. As reform proposals take shape, I may revisit this issue in a subsequent Outlook.

Far from creating new or significant risks, CDSs simply move risks that already exist from one place to another. For this reason, they are a major advance in risk management for all financial intermediaries, and restrictions on their use will create more risk in the financial system than it will eliminate. In addition, the vigorous and liquid current market in CDSs provides a market-based reading of the risks of companies that is not available from any other source and that can be of major assistance to regulators, as well as investors and creditors.

Peter J. Wallison is the Arthur F. Burns Fellow in Financial Policy Studies at AEI.Notes1. Robert O'Harrow Jr. and Brady Dennis, "Downgrades and Downfall," Washington Post, December 31, 2008.

2. Ibid.

3. Editorial, "Bear's Market," Wall Street Journal, April 4, 2008.

4. Robert O'Harrow Jr. and Brady Dennis, "Downgrades and Downfall."

5. International Swaps and Derivatives Association, "ISDA Mid-year 2008 Market Survey," news release, September 24, 2008, available at www.isda.org/press/press092508.html (accessed December 30, 2008).

6. An excellent discussion of the role of credit default swaps appears in David Mengle, "Credit Derivatives: An Overview" (paper, 2007 Financial Markets Conference, Federal Reserve Bank of Atlanta, May 15, 2007), available at www.frbatlanta.org/news/conferen/07fmc/07FMC_mengle.pdf (accessed December 30, 2008).

7. Market News International, November 25, 2008.

8. Neel Kashkari (testimony, House Financial Services Committee, December 10, 2008), available at www.treasury.gov/press/releases/hp1322.htm (accessed December 30, 2008).

9. Alex J. Pollock, "How to Improve the Credit Rating Agency Sector" (testimony, Committee on Banking, Housing, and Urban Affairs, U.S. Senate, March 7, 2006), available at www.aei.org/publication24011/.

10. George Soros, "The False Belief at the Heart of the Financial Turmoil," Financial Times, April 3, 2008.

11. Bradley Rogoff and Michael Anderson, "DTCC Data Show Corporate CDS Fears Overblown," Barclays Capital Credit Strategy, November 6, 2008.

12. Depository Trust and Clearing Corporation, "Trade Information Warehouse Data," week ending December 12, 2008, available through www.dtcc.com/products/derivserv/data_table_i.php (accessed December 30, 2008).

13. Bradley Rogoff and Michael Anderson, "DTCC Data Show Corporate CDS Fears Overblown."

14. International Swaps and Derivatives Association, "ISDA Margin Survey 2008," available at www.isda.org/c_and_a/pdf/ISDA-Margin-Survey-2008.pdf (accessed December 30, 2008). See also Michael S. Gibson, "Credit Derivatives and Risk Management" (Finance and Economics Discussion Series 2007-47, Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board of  Governors, Washington, DC, May 22, 2007), available at www.federalreserve.gov/pubs/feds/2007/200747/200747pap.pdf (accessed December 30, 2008).

15. Mark Whitehouse and Serena Ng, "Insurance Deals Spread Pain of U.S. Defaults World-Wide," Wall Street Journal, December 23, 2008.

Peter J. Wallison | Jan 25, 2009

Credit default swaps (CDSs) have been identified in media accounts and by various commentators as sources of risk for the institutions that use them, as potential contributors to systemic risk, and as the underlying reason for the bailouts of Bear Stearns and AIG. These assessments are seriously wide of the mark. They seem to reflect a misunderstanding of how CDSs work and how they contribute to risk management by banks and other intermediaries. In addition, the vigorous market that currently exists for CDSs is a significant source of market-based judgments on the credit conditions of large numbers of companies--information that is not publicly available anywhere else. Although the CDS market can be improved, excessive restrictions on it would create considerably more risk than it would eliminate.

There are so many potential culprits in the current financial crisis that it is difficult to keep them all straight or to assess their relative culpability. Greedy investment banks, incompetent rating agencies, predatory lenders and mortgage brokers--even the entire system of asset securitization--have all been blamed for the current condition of the financial markets. The oddest target, however, is CDSs. Almost every media report and commentary about the collapse of Lehman Brothers in September and the ensuing freeze in the credit markets mentions CDSs as one of the contributing causes, just as similar reports and commentary accompanied the government's decision to rescue Bear Stearns in March and AIG in September. One conventional explanation for the Bear rescue has been that CDSs made the financial markets highly "interconnected." It is in the nature of credit markets to be interconnected, however: that is the way money moves from where it is less useful to where it is most useful, and that is why financial institutions are called "intermediaries." Moreover, there is very little evidence that Bear was bailed out because of its involvement with CDSs--and some good evidence to refute that idea. First, if the government rescued Bear because of CDSs, why did it not also rescue Lehman? If the Treasury Department and the Federal Reserve really believed that Bear had to be rescued because the market was interconnected through CDSs, they would never have allowed Lehman--a much bigger player in CDSs than Bear--to fail. In addition, although Lehman was a major dealer in CDSs--and a borrower on which many CDSs had been written--when it failed there was no discernible effect on its counterparties. Within a month after the Lehman bankruptcy, the swaps in which Lehman was an intermediary dealer were settled bilaterally, and the swaps written on Lehman itself ($72 billion notionally) were settled by the Depository Trust and Clearing Corporation (DTCC). The settlement was completed without incident, with a total cash exchange among all counterparties of $5.2 billion. There is no indication that the Lehman failure caused any systemic risk arising out of its CDS obligations--either as one of the major CDS dealers or as a failed company on which $72 billion in notional CDSs had been written.

Nevertheless, Securities and Exchange Commission (SEC) chairman Christopher Cox was quoted in a recent Washington Post series as telling an SEC roundtable: "The regulatory black hole for credit-default swaps is one of the most significant issues we are confronting in the current credit crisis . . . and requires immediate legislative action. . . . The over-the-counter credit-default swaps market has drawn the world's major financial institutions and others into a tangled web of interconnections where the failure of any one institution might jeopardize the entire financial system." Readers of this Outlook should judge for themselves whether this is even a remotely accurate portrayal of the dangers posed by CDSs.¹

The fact that AIG was rescued almost immediately after Lehman's failure led once again to speculation that AIG had written a lot of CDS protection on Lehman and had to be bailed out for that reason. When the DTCC Lehman settlement was completed, however, AIG had to pay only $6.2 million on its Lehman exposure--a rounding error for this huge company. As outlined in a recent Washington Post series on credit risk and discussed below, AIG's exposure was not due to Lehman's failure but rather the result of the use (or misuse) of a credit model that failed to take account of all the risks the firm was taking.² It is worth mentioning here that faulty credit evaluation on mortgage-backed securities (MBS) and collateralized debt obligations (CDOs) have also been the cause of huge losses to commercial and investment banks. As I argue in this Outlook, there is no substantial difference between making a loan (or buying a portfolio of MBS) and writing protection on any of these assets through a CDS. Faulty credit evaluation in either case will result in losses.

If CDSs did not trigger the rescue of Bear and AIG, what did? The most plausible explanation is that in March, when Bear was about to fail, the international financial markets were very fragile. There was substantial doubt among investors and counterparties about the financial stability and even the solvency of many of the world's major financial institutions. It is likely that the government officials who decided to rescue Bear believed that if a major player like Bear were allowed to fail, there would be a run on other institutions. As Fed chairman Ben Bernanke said at the time, "Under more robust conditions, we might have come to a different decision about Bear Stearns."³ When the markets are in panic mode, every investor and counterparty is on a hair-trigger alert because the first one out the door is likely to be repaid in full while the latecomers will suffer losses. The failure of a large company like Bear in that moblike environment can be responsible for a rush to quality; in a normal market, there would have been a much more muted reaction. For example, when Drexel Burnham failed in 1990, there was nothing like the worldwide shock that ensued after Lehman's collapse, although Drexel was as large a factor in the market at that time as Lehman was before its failure.

After the Lehman bankruptcy, there was a market reaction much like what would have happened if Bear had failed. The markets froze, overnight interbank lending spreads went straight north, and banks stopped lending to one another. In these circumstances, the rescue of AIG was inevitable, although it is likely that the company would have been allowed to fail if the reaction to the Lehman failure had not been so shocking. The Fed's statement on its rescue of AIG pointed to the conditions in the market--not to CDSs or other derivatives--as the reason for its actions: "The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance."⁴  Indeed, the sensitivity of the markets and the government in September is shown by the reaction of the Treasury and the Fed when the Reserve Fund, a money market mutual fund, "broke the buck"--that is, allowed the value of a share to fall below one dollar. The fund had apparently invested heavily in Lehman commercial paper and thus suffered a loss that the manager could not cover. Treasury moved immediately to guarantee the value of money market fund shares, apparently on fear that the Reserve Fund's losses would trigger a run on all money market funds. Needless to say, money market funds are not "interconnected." The Treasury's action in backing money market mutual funds after Lehman's failure was another response to the market's panic.

So, if CDSs are not responsible for the financial crisis or the need to rescue financial companies, why are they so distrusted? Some observers may simply be drawing a causal connection between the current financial crisis and something new in the financial firmament that they do not fully understand. Misleading references to the large "notional amount" of CDSs outstanding have not helped. This Outlook will outline how CDSs work and explain their value both as risk management devices and market-based sources of credit assessments. It will then review the main complaints about CDSs and explain that most of them are grossly overblown or simply wrong. Improvements can certainly be made in the CDS market, but the current war on this valuable financial innovation makes no sense.

How Credit Default Swaps Work

Figure 1 shows a series of simple CDS transactions. Bank B has bought a $10 million bond from company A, which in CDS parlance is known as "the reference entity." B now has exposure to A. If B does not want to keep this risk--perhaps it believes A's prospects are declining, or perhaps B wants to diversify its assets--it has two choices: sell the bond or transfer the credit risk. For a variety of tax and other reasons, B does not want to sell the bond, but it is able to eliminate most or all of the credit risk of A by entering a CDS. A CDS is nothing more than a contract in which one party (the protection seller) agrees to reimburse another party (the protection buyer) against a default on a financial obligation by a third party (the reference entity). In figure 1, the reference entity is A, the protection buyer is B and the protection seller is C. Although figure 1 shows B purchasing protection against its entire loan to A, it is important to note that B also could have purchased protection for a portion of the principal amount of the $10 million bond. The amount of protection that B purchases is called the "notional amount."

The CDS market is a dealer market, so transactions take place through dealers, over the counter rather than on an exchange. Accordingly, in purchasing protection against A's default, B's swap is with C, a dealer--one of many, including the world's leading banks, that operate in this market. The structure of the CDS is simple. C agrees to pay $10 million (or whatever notional amount the parties negotiate) if A defaults, and B agrees to make an annual premium payment (usually paid quarterly) to C. The size of this payment or premium will reflect the risk that C believes it is assuming in protecting B against A's default. If A is a good credit, the premium will be small, and correspondingly the premium would be larger when the market perceives greater credit risk in A. Under the typical CDS contract, B is entitled to request collateral from C in order to assure C's performance. As a dealer, C generally aims to keep a matched book. For every risk it takes on, it typically acquires an offsetting hedge. So C enters a CDS with D, and D posts collateral. The transfer of B's risk to C and then to D (and occasionally from D to E and so on) is often described by many CDS critics as a "daisy chain" of obligations, but this description is misleading. Each transaction between counterparties in figure 1 is a separate transaction, so B can look only to C if A defaults, and C must look to D. B will not usually deal directly with E. However, there are now services, such as those of a firm called Trioptima, that are engaged in "compressing" this string of transactions so that the intermediate obligations are "torn up." This reduces outstandings and counterparty risk.

Does this hypothetical string of transactions create any significant new risks that go beyond the risk created when B made its loan to A? In the transaction outlined in figure 1, each of the parties in the chain has two distinct risks--that its counterparty will be unable to perform its obligation either before or after A defaults. If C becomes bankrupt before A defaults, B will have to find a new protection seller; if C defaults after A defaults, B will lose the protection that it sought from the swap. The same is true for C and D if their respective counterparties default. In the CDS market, in which premiums are negotiated based on current views of the risk of A's default, the premium--also known as the spread--for new protection against A's default could be more costly for B, C, and D than the original premium negotiated. Although this might mean a potential loss to any of these parties, it is likely--if the risk of a default by A has been increasing--that the seller of protection will have posted collateral so that each buyer will be able to reimburse itself for the additional premium cost for a new CDS.

It is important at this point to understand how the collateral process works. Either the buyer or the seller in a CDS transaction may be "in the money" at any point--that is, the CDS spread, which is moving with market judgments, may be rising or falling, depending on the market's judgment of the reference entity's credit. At the moment the CDS transaction was entered, the buyer and seller were even, but if the credit of the reference entity begins to decline, the CDS spread will rise, and at that point the buyer is "in the money"--it is paying a lower premium than the risk would warrant. Depending on the terms of the original agreement, the seller then may have to post collateral--or more collateral. But if the reference entity's credit improves--say, its business prospects are better--then the CDS spread will fall and the seller is in the money. In this case, the buyer may have to put up collateral to ensure that it will continue to make the premium payments.

What happens if A defaults? Assuming that there are no other defaults among the parties in figure 1, there is a settlement among the parties, in which E is the ultimate obligor (conceptually, C has paid B, D has paid C, and E has paid D. But if E defaults, D becomes the ultimate payer, and if D defaults, C ends up holding the bag. Of course, D then would have a claim against E or E's bankrupt estate, and the same for C if D defaults. Critics of CDSs argue that this "daisy chain" is an example of interconnections created by CDSs that might in turn create systemic risk as each member of the string of transactions defaults because of the new liability it must assume. But this analysis is superficial. If CDSs did not exist, B would suffer the loss associated with A's default, and there is no reason to believe that the loss would stop with B. B is undoubtedly indebted to others, and its loss on the loan to A might cause B to default on these obligations, just as E's default might have caused D to default on its obligations to C. In other words, the credit markets are already interconnected. With or without CDSs, the failure of a large enough participant can--at least theoretically--send a cascade of losses through this highly interconnected structure. CDSs simply move the risk of that result from B to C, D, or E, but they do not materially increase the risk created when B made its loan to A. No matter how many defaults occur in the series of transactions presented in figure 1, there is still only one $10 million loss. The only question is who ultimately pays it.

The Role of Credit Default Swaps in the Financial Economy

Financial regulators have few resources that will materially reduce risk-taking. They can insist on more capital, which both provides a cushion against losses and a nest egg that management has an incentive to protect, and they can clamp down on innovation, which can always be a source of uncertainty and therefore risk. But beyond that, they are limited to ensuring that banks, securities firms, and insurance companies--to the extent that they are regulated for safety and soundness--carefully review the risks they take and have the records to show for it. The current credit crunch is testimony to the ineffectiveness of regulation. Despite the most comprehensive oversight of any industry, the banking sector is riddled with bad investments and resulting losses. In fact, by creating moral hazard, it is likely that the regulation of banks has reduced the private-sector scrutiny that banks would have received as part of a fully operating system of market discipline.

In light of the consistent failure of traditional regulation, a sophisticated and intelligent regulatory process should now foster risk-management innovations that have been developed by the private sector, especially the derivative instruments that have greater potential to control risk than government oversight. CDSs are one of these instruments, but not the only one. A simple example of effective risk-shifting is the interest rate swap, which--like the CDS--was developed by financial intermediaries looking for ways to manage risk. The documentation for interest rate swaps, as well as for CDSs, was developed by the International Swaps and Derivatives Association (ISDA). Interest rate swaps have been an important and useful risk-management device in the financial markets for at least twenty-five years. The value of an interest rate swap is that it allows financial intermediaries to match their assets and their liabilities and thus to reduce their interest rate risks. Say that a bank has deposits on which it must pay a market or "floating" rate of interest, but it also holds mortgages on which it receives only a fixed monthly interest payment. This is a typical position for a bank--but a risky one. If interest rates rise, it may be forced to pay more interest to its depositors than it is receiving from the mortgages it holds, and thus would suffer losses. Ideally, it would want to trade the fixed rate it receives on its mortgage portfolio for a floating rate that will more closely match what it has to pay its depositors. That way, it is protected against increases in market rates. An interest swap, in which the bank pays a fixed rate to a counterparty and receives a floating rate in return, is the answer; it matches the bank's interest rate receipts to its payment obligations.

But what kind of entity would want to do such a swap? Consider an insurance company that has fixed obligations to pay out a certain sum monthly on the fixed annuities it has written. Insurance companies try to match this obligation with bonds and notes that are the ultimate source of the funds for meeting its fixed obligations, but these do not necessarily yield a fixed return for periods long enough to fully fund its annuity commitments. Instead, they mature well before its annuity obligations expire, and may--if interest rates decline--yield less than it is required to pay out to annuitants. The insurance company, then, would be able to avoid risk with a swap that is the exact mirror image of what the bank needs. Into this picture steps a swap dealer, which arranges a fixed-for-floating interest rate swap between the bank and insurance company. The notional amount can be set at any number--its purpose in an interest rate swap is simply to provide the principal amount on which the interest will be paid--so the parties agree on $100 million. The bank agrees to pay the insurance company a fixed amount--say, 5 percent--on the notional amount of $100 million, and the insurance company agrees to pay the bank a floating rate of interest on the same notional amount. If interest rates rise to 6 percent, the bank is "in the money" and the insurance company pays the bank the 1 percent difference, and, if they fall to 4 percent, the bank pays the insurance company 1 percent.

The important thing to notice about this transaction is that both the bank and the insurance company are better off--both have reduced their risks. The bank now gets a floating payment that assures it of the funds necessary to pay its depositors no matter how high interest rates rise, and the insurance company is better off because it gets a fixed payment from the bank that allows it to pay its annuitants no matter how far interest rates fall. Both parties have hedged their interest rate risk through use of a derivative. The notional amount of interest rate swaps currently outstanding grew to $464.7 trillion by June 30, 2008.⁵ This is a frighteningly large number, but--as discussed below--its only reality is as the basis on which counterparties are exchanging fixed for floating rates. No one actually owes anyone any portion of this $464.7 trillion. The payment obligations are only interest. The interest rate swap is a classic example of a private-sector mechanism for risk management that could not have been developed or implemented by a regulatory agency. It is also a good way to think about CDSs, which have risk-management characteristics much like interest rate swaps.⁶ Let's assume that a bank holds a loan to a corporate customer that makes oil field equipment. The bank is receiving a stream of payments on the loan with which it is satisfied, but it concludes as a matter of risk management that it has too much credit exposure to the oil business. If oil prices fall, its loans to the industry may be in jeopardy. One of the objectives of risk management is diversification, but even better is holding uncorrelated assets--that is, assets that do not rise or fall in value or marketability at the same time. Still better, from the risk-management standpoint, are assets that are negatively correlated--that rise in value when the others are falling. For example, a bank would like to hold loans to both an auto manufacturer and an oil company; as oil prices rise, the auto manufacturer becomes weaker but the oil company becomes stronger; other things being equal, the bank's risks are balanced.

Using this strategy, the hypothetical bank we are discussing would like to divest some of its oil industry exposure and instead balance its portfolio with exposure to the risk of, say, auto sales. In a world where CDSs are available, this is easily done. The bank enters a swap with an intermediary CDS dealer in which the dealer promises to reimburse the bank if the oil field services company defaults. The dealer must now find a hedge in the form of a company that is willing to sell protection on the oil services company. A logical protection seller might be an insurance company. The insurance company has substantial outstanding loans on commercial real estate. Taking on the risk of an oil service company would provide needed diversification and could be uncorrelated--or even negatively correlated--with the places where the insurance company's commercial real estate is located. Through this transaction, the bank has reduced or eliminated the credit risk of a loan to the oil industry, but the loan remains on its books and it keeps the oil company's stream of interest and principal payments, as well as its commercial relationship with this client. Now the bank enters another CDS, this time with a hedge fund, in which the bank promises to indemnify the fund against losses on a portfolio of loans to auto dealers. For this protection, the hedge fund makes a monthly payment to the bank (for simplicity, we are disregarding the intermediary dealer). After these two transactions, the bank has somewhat diversified and balanced its portfolio by substituting the credit risk of a portfolio of auto loans for an oil industry loan. Because the portfolio of auto loans may be negatively correlated with the oil industry risks, the bank's portfolio is now likely to be more stable. The insurance company has done the same. Once again, a derivative has operated as an effective risk management tool, reducing the credit risk profile of two financial intermediaries.

It is also important to note that the same risk-management purposes can be served by a bank or any other financial intermediary taking on a risk that diversifies its portfolio, even if it has no relation at all to a reference entity. Because the party writing the protection is paid for assuming the credit risk, the CDS functions in much the same way, from a risk management perspective, as an actual loan. This issue is discussed more fully below in the section on whether CDSs represent "gambling" or "betting."

CDSs also offer an increasingly important window into risk-taking that has not previously existed. In this, CDSs can help both investors and regulators. On November 25, for example, a newswire reported: "Credit default swaps protection generally narrowed Tuesday amid improvement in key spread product markets such as the commercial mortgage-backed securities and asset-backed arena."⁷ Similarly, on December 10, the interim assistant treasury secretary for financial stability, Neel Kashkari, told the House Financial Services Committee that "one indicator that points to reduced risk of default among financial institutions is the average credit default swap spread for the eight largest U.S. banks, which has declined more than 200 basis points since before Congress passed the [Emergency Economic Stabilization Act]."⁸

The fact that CDSs are available as an indicator of risk in the financial markets generally, and with respect to particular institutions, is vastly important. Up to now, there has been no generally available, market-based source of credit assessments about financial institutions. Interest rate spreads and stock prices are not as valuable because they are influenced by many factors other than risk-taking and creditworthiness. If properly used, the data on CDS spreads for reference entities can alert regulators to problems at individual banks, securities firms, or insurance companies. Even more important, it can assist investors and creditors in exerting market discipline over financial institutions. In light of the general failure of regulation for controlling risk-taking, the enhancement of market discipline is extremely important. A widening of a reference entity's CDS spread will alert investors that they should investigate risk-taking more fully before advancing funds. Even if CDSs were not important for risk management, the existence of the information generated by the CDS market would alone provide economic justification for allowing this market to operate freely and without restrictions. The importance of this development cannot be overstated. Virtually since their inception, banks have been the repositories of credit information about borrowers. As the securities market grew and public disclosure became more complete, banks lost some of their role as the preferred intermediaries between investors and borrowers; many public companies went to the securities market for credit financing. At the same time, rating agencies began to substitute for credit analysis by some institutional lenders and bond buyers. The growth of CDSs provides for the first time a market-based credit assessment available to all institutional lenders and bond buyers. At a time when the value of rating agencies is being questioned,⁹ the CDS market offers critical new information to use in credit assessment.

Myths about Credit Default Swaps

Despite these significant benefits, criticism of CDSs is widespread. It is not uncommon to find statements by market observers that CDSs have no economic purpose, create enormous risks for the financial economy, create systemic risks, are little more than irresponsible gambling by market participants, and create hidden liabilities that do not appear in financial statements. Almost all of these claims are either grossly exaggerated or wrong.

Claim: The Notional Amount of CDSs Outstanding Represents a Huge Risk for the World's Financial System. One of the most striking elements associated with credit default swaps is the notional amount outstanding at any one time. As a measure of the growth of CDSs, the aggregate notional amount is of some use, but as a measure of the risk in the market, it is meaningless. Nevertheless, critics of CDS use the aggregate notional amount number to suggest that huge risks are being created in some mysterious way. Shortly after Bear Stearns was rescued, George Soros wrote: "There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45 [trillion]. . . . To put it into perspective, this is about equal to half the total US household wealth."¹⁰ This is not putting CDSs "into perspective." Coming from a sophisticated financier, it seems more like a deliberate attempt to mislead. The notional amount of CDSs outstanding--although suitable for scaring people--is not in any sense relevant to the size of the risks associated with CDSs.

Returning again to the hypothetical transaction in figure 1, we can calculate the notional amount that comes out of the reporting of the transaction by the various participants. B reports that it is paying a premium for protection on a notional amount of $10 million (the loan to A), C reports that it has sold protection for this amount, as have D and E and the dealer intermediary between D and E. Thus, the total notional amount arising from this series of transactions is $50 million, or five times the actual potential loss in the event that A defaults. The DTCC recently began publishing data on CDSs from its Trade Information Warehouse, which gathers about 90 percent of all CDS transactions.¹¹ The DTCC's data eliminate the multiple-counting in each swap transaction and report that as of the week ending December 12, what the DTCC calls the "gross notional amount" of CDSs outstanding was $25.6 trillion.¹²

This amount is many times the actual potential loss on all CDSs outstanding at any time because the protection sold must be reduced by the protection bought. The result is called the net notional amount and has been estimated at 10 percent of the gross notional amount in the market.¹³ Accordingly, using the gross notional figure reported by the DTCC, we can estimate that the net notional amount is about $2.5 trillion (a total of $2.75 trillion with the additional 10 percent not reported by DTCC), a sum that is a fraction of the figure Soros used. These are not small numbers, of course, but they are far less than the number usually used to describe the total risk in the CDS market. And even these numbers are only "real" if every reference entity were to default and if sellers' recoveries after these defaults were zero.

Claim: CDSs Are Written by or between Parties That Do Not Understand the Risks They Are Assuming. In one sense, this statement is true. There are always lenders who lose money because they do not understand the risk they are assuming, and there are undoubtedly writers of CDS protection who also do not understand the credit risk to which they are exposed. If the statement is meant to communicate the idea that a CDS risk is different from or more complex than a loan (or the acquisition of a portfolio of MBS), however, it is wrong. First, almost all swaps are negotiated through dealers, who serve as the actual counterparties. Dealers typically carry matched books, which means that they hedge their risks by entering offsetting CDSs. To remain in business, they must be sure of the quality of the counterparties they choose. In figure 1, for example, B buys protection from C, a dealer. C then enters a corresponding swap with D, which sells protection to C to cover C's exposure to B. If D does not have a AAA credit rating (and maybe even if it does), it probably has to post collateral to protect C, and C may have to post collateral to assure B that it is protected. In fact, 63 percent of all CDSs--and 65 percent of the dollar exposure--are collateralized,¹⁴ precisely because the parties that are paying for protection want to make sure it is there when they need it. In addition, recalling the earlier discussion of counterparties moving in and out of the money, a protection buyer and a protection seller may have obligations to post collateral if the spread on a particular reference entity rises or falls. No institution that enters this market does so lightly.

The AIG case is a good illustration of the CDS process and was covered extensively in the Washington Post series cited above. Initially, AIG's counterparties generally agreed that AIG would not be required to post collateral because it was rated AAA, but when it was downgraded by the rating agencies, it was immediately required by its swap agreements to post collateral. In addition, AIG had written a lot of protection on MBS and CDO portfolios, and, as these declined in value, it was again required by its counterparties to post collateral to cover its increased exposure. When AIG could not do so, it was threatened with bankruptcy, and that is when the Fed stepped in with a rescue. The rescue of AIG, as noted above, had nothing to do with Lehman's failure, but it did have a lot to do with AIG's failure to assess the risks of MBS and CDOs. Does this sound familiar? Of course it does--it is the same problem faced by many banks that also failed to assess properly the risk of these assets. Apparently, AIG relied excessively on a credit risk model that did not adequately account for both the sharp decline in the mortgage market or a downgrade of AIG's credit rating.

This points up a fact that gets too little attention in the discussion of CDSs: that the best analogy for these instruments is an ordinary commercial loan. A seller of protection is taking on virtually the same risk exposure as a lender. It is no more mysterious than that. Successful lending requires expertise in assessing credit--the same skill required for writing CDS protection. AIG, like many banks, misjudged the riskiness of a portfolio of MBS and CDOs. That does not mean that CDSs are any riskier than loans; if AIG, instead of selling protection on various portfolios of MBS and CDOs, had bought the portfolios themselves, there would have been very little commentary other than clucking about the company's poor credit judgment. For some reason, the fact that it did substantially the same thing by selling protection on these instruments through CDSs has caused commentators to see the issue as a problem created by the swaps rather than as a simple example of poor credit assessment.

Recently, in order to eliminate the constant calls for more collateral, the Fed purchased the portfolios of MBS and CDOs on which AIG had written protection. An article in the Wall Street Journal then noted that this was a "blessing" for the banks that had bought protection from AIG. Indeed it was; that is why the banks bought the protection. If AIG had not covered this liability, the banks would have taken these losses. This illustrates another central point about CDSs: one institution's loss is another's gain. The risk was already in the market. It was created when some bank or investment bank borrowed the funds necessary for assembling a portfolio of MBS or CDOs. The fact that AIG was the final counterparty and suffered the loss means that someone else did not. Ultimately, there is only one real risk, represented by the original loan or purchase transaction (in the case of an asset like an MBS portfolio). CDSs, to the extent that they are initiated by parties that are actually exposed to a risk, merely transfer that risk, for a price, to someone else.

A recent article in the Wall Street Journal focused on an instrument called a synthetic CDO and noted that many buyers of these instruments suffered losses because of the meltdown in the U.S. mortgage market.¹⁵ Because a CDS is a part of a synthetic CDO, the article once again raised the question of whether protection sellers in the CDS transaction understand the risks they are assuming. However, the writers of the article did not make clear (or failed to understand) that, despite a fancy name and the presence of a CDS, the buyers of these instruments were taking a risk that was essentially identical to investing in a portfolio of loans. In an ordinary CDO, a number of loans are bundled into a pool, and debt instruments are sold to investors backed by the assets in the pool. A CDO, then, is just a generalized term for the same process in which the more familiar MBS are created. The investor in a CDO takes the risk that the instruments in the pool will not lose value or default. In a synthetic CDO, an investor buys a security issued by a special purpose vehicle (SPV) and becomes the seller of protection in a CDS in which the SPV is the protection buyer. The SPV is usually created by a bank that is seeking CDS protection on a portfolio of loans it intends to continue to hold. The SPV uses the cash investment to buy a portfolio of high-quality debt securities. The low yield on the high-quality debt securities is supplemented by the premium on a CDS, and two yields in effect replicate the yield that the investor would have received--and the risk it would have taken--if it had invested in the same portfolio of loans that the bank is holding. Once again, there is no essential difference between investing in the actual loans or investing in the synthetic CDO. The credit risk and the yield are the same.

The Journal story noted that "towns, charities, school districts, pension funds, insurance companies and regional banks" have taken on the risk of these synthetic CDOs and that some have suffered losses as a result of the weakening credit markets. Of course, many (maybe most) have profited from the premiums they have received over time for taking this risk. Two things should be noted at this point. The first is that while synthetic CDOs replicate the risks associated with a portfolio of loans, they are complex investments; there is a question whether they are suitable investments for towns, school districts, and other investors that may not be able properly to evaluate the risks. To the extent that this happened, it would be a violation of the "investor suitability" rules applicable in the United States and any equivalent rules in the countries where these investments were sold. The second point is that the fault in this process was not with the CDSs that were part of the synthetic CDOs, any more than a corporation would be at fault if a bond dealer sold one of its bonds to an investor who could not understand the risks. The role of the CDS is to replicate the risk of owning a portfolio of loans, and the risk they create is not any greater than that.

Writing CDS protection is much the same as making a loan or buying a bond. In order to participate in this market, an institution must have the capability to evaluate credit risk. It is not a market for individuals or even institutions that do not have credit-evaluation skills or access to them. Even institutions with credit-evaluation skills suffer losses on some risks they acquire--as shown by the AIG case--but it is certainly not true that, in general, those institutions that buy and sell CDSs are not aware of the risks they are assuming.

Claim: Transactions between Parties That Have Nothing to Do with the Reference Entity Are Simply Gambling and Have No Independent Value. Because CDSs are much like loans, they can be used to take on the same risk as a loan or a bond. If an institutional investor believes that an issuer will grow stronger over time, it can buy the company's bonds and profit from the strengthening of the issuer's credit position. Alternatively, the investor can sell protection on the same notional amount as the bond--that is, taking on the same exposure without actually buying the bond--and profit in the same way. If the issuer's prospects improve, the CDS rises in value because the premium received is now greater than it would need to be for the lower risk involved. The seller of protection is now "in the money" in the sense that it has an asset that has appreciated in value.

The risk management benefits of CDSs exist independently of whether a lender has any financial interest in a particular reference entity. Thus, the bank that bought protection on its loan to an oil service company could achieve the same risk management purposes--reducing its exposure to the oil industry--by buying protection on an equivalent notional amount of an oil company's outstanding obligations, even though it does not have any direct exposure to the oil company. If the risk is highly correlated with the oil service company's risk, the bank can nearly duplicate the same risk management result. Just as an investor can do this for risk management or hedging purposes, it can also do it as speculation, without having any direct financial interest in the issuer that is the reference entity. Indeed, when a dealer is approached by an institution to buy or sell protection, it is impossible to tell whether the purpose is hedging an existing risk or speculating on the change in the risk profile of the reference entity. Is this simply betting, as some suggest, or does it have a value apart from its value to the two parties involved?

In discussing this subject, it would be useful to avoid the pejorative terms "betting" or "gambling" and use the term "speculation," which more closely approximates what is happening when a party buys or sells protection without any connection to the reference entity involved. Speculation is frequently denounced, while "hedging" is considered good and prudent, yet it is very difficult to tell the difference between the two. Commodity futures have for a long time permitted farmers to protect themselves in the event of a decline in prices when their crop is ready for market. Most people would call this prudent hedging, but what are the investors on the other side of the futures trade doing? In effect, they are selling protection, just like the seller in the CDS transaction. Some observers might call this speculation because the seller of protection to the farmer is speculating (others might call it "gambling" or "betting") that the price will be higher than what he has agreed to pay the farmer. Thus, speculation can have an important role in making markets work.

It may be objected, however, that in hedging or speculation transactions, real things like wheat or loan exposure are involved, while buying or selling CDSs without any connection to the reference entity is different. Consider then puts and calls--options to sell or buy stocks--that are traded regularly on the Chicago Board Options Exchange. These are an accepted part of equity markets and are known as equity derivatives. They can be used for hedging a stock position without selling or buying the stock, or they can be used--without owning the stock--simply to speculate that a stock's price will go up or down. The function of puts and calls is exactly the same as the role played by those who buy or sell CDSs without any connection to a reference entity. The transaction adds to the liquidity and the total information in the market. That is in part why the buying and selling of CDSs provides a continuous, market-based assessment of the credit of a large number of commercial or industrial companies and financial institutions. Some people consider speculation in a security or a commodity to be betting, but economists recognize that this activity provides benefits to a market through added market liquidity and mitigation of bubbles. In the case of CDSs, however, the exogenous benefits of speculation are particularly strong because it provides a market-based credit judgment about the financial position of individual issuers that is not available anywhere else.

Claim: There Is No Way to Know by Looking at a Company's Balance Sheet How Much CDS Exposure It Has Taken On. Exposures to CDS transactions as a protection seller are shown on all balance sheets where that exposure is deemed to be material. The exposure is shown in the aggregate, without listing particular transactions or risks, just as a bank would show its commercial and industrial loans in the aggregate. Normally, parties selling protection have hedged themselves, and it is very unlikely that all, or even most, exposures will result in liability at the same time. So, for the most part, CDS liabilities are carried on balance sheets at somewhere between 1 and 2 percent of their notional amount, reflecting both hedges and the likelihood of losses on a diversified portfolio. Of course, as risks rise or fall, these values are adjusted. The nature of these liabilities is then described in a footnote.

Because CDSs sold or bought by dealers are marked to market every day, it is possible that the risk associated with protecting a counterparty will increase as the financial condition of the reference entity deteriorates. This may require the liability of the protection seller to be written up on its balance sheet, and will almost certainly require more collateral. The opposite is also true. If the reference entity's financial condition markedly improves--perhaps its business prospects are better--the liability on the protection seller's balance sheet will diminish and the collateral requirement could be reduced, eliminated entirely, or moved to the buyer of protection if the seller is now "in the money." This also means that a CDS can move from a liability to an asset on the balance sheet of the buyer or seller, depending on whether the spread on the reference entity has risen (advantage to the buyer) or declined (advantage to the seller) since the CDS was contracted.

Nouriel Roubini | Jan 22, 2009

The Chinese came out today with their 6.8% estimate of Q4 2008 growth. China publishes its quarterly GDP figure on a year over year basis, differently from the U.S. and most other countries that publish their GDP growth figure on a quarter on quarter annualized seasonally adjusted (SAAR) basis.

When growth is slowing down sharply the Chinese way to measure GDP is highly misleading as quarter on quarter growth may be negative while the year over year figure is positive and high because of the momentum of the previous quarters’ positive growth.

Indeed if one were to convert the 6.8% y-o-y figure in the more standard quarter over quarter annualized figure Chinese growth in Q4 would be close to zero if not negative.

Other data confirm that China was in a borderline recession in Q4 and that it may be in an outright recession in Q1: production of electricity plunged 7.9% in y-o-y basis; the Chinese PMI has been below 50 and close to 40 for five months now.

And with manufacturing being about 40% of GDP , manufacturing is certainly in a sharp recession (negative growth) and the overall economy may be close to a recession.

So the 6.8% growth was actually a 0% growth – or possibly negative growth – in Q4; and the Q1 figures look even worse.  So China is in a recession regardless of what the highly massaged official numbers claim.

最近认真学习了中港台三地对“小奥”就职演说的翻译（看了内地新华社，台湾联合报和香港苹果日报的翻译），还有美国国务院国际信息局(IIP)的翻译。感觉每个版本都有瑕疵。个人综合了一下各家所长，整理出了一个译本。抛砖引玉了。

个人理解，翻译这种演说辞，应该尽可能忠于原文，在句式上应尽可能跟原文一致，在用词上应尽可能贴近原文，不能凭自己的揣测诠释，不能随意发挥。

My fellow citizens:

同胞们：

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.

今天我站在这里，为眼前的重责大任感到谦卑，对各位的信任心怀感激，对前辈的牺牲铭记在心。我感谢布什总统为国家做出的贡献，也感谢他在政权过渡期间展示的宽厚和协作。

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 forebears, and true to our founding documents.

迄今四十四位美国人发表过总统（就职）誓言，这些誓词曾在繁荣潮起，在和平的风平浪静之际发表。但是，间或誓词也在乌云密布，狂风骤雨中宣读。在这些（艰困的）时刻，美国能箕裘相继，不仅因为居高位者的才干或远见，也因为我们（美国）人民始终坚信我们先辈的理想，对我们的立国文件忠贞不渝。

So it has been. So it must be with this generation of Americans.

过去如是。因此（我们）这一代美国人也必然如是。

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.

我们正身处危机之中，现在这一点已得到充分认识。我们的国家在战斗，对抗分布广泛的暴力和仇恨网络。我们的经济受到严重的削弱，这是某些人贪婪且不负责任的后果，但也是我们集体失败，未能作出艰难的抉择，为国家进入新纪元做好准备所致。住所失去了，工作被裁了，企业倒闭了。我们的医疗保健费用过于昂贵，我们的学校（教育）让太多人失望；而且每天都有更多证据显示，我们利用能源的方式，在助长我们的对手的威风，又威胁我们的星球。

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.

这些都是危机的指征，得自数据和统计。更不易于衡量，但同样影响深远的，是在全国各地信心都受到侵蚀——一种挥之不去的恐惧，认为美国的衰退无可避免，下一代人必定会眼界变低。今天我向你们说，我们面对的挑战千真万确，挑战很严重也很多，它们不是可以轻易地，或在短时间内能解决的。但是，美国，请牢记这句话——挑战一定会被克服。

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

在这一天，我们聚首，因为我们选择希望，而非恐惧，选择齐心协力，而非冲突对立。

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.

在这一天，我们来此宣告，让斤斤计较和虚伪承诺就此结束，让相互指摘和陈旧教条就此终结，它们窒息我们的政治太久太久了。

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.

我们仍是一个年轻的国家，但用《圣经》的话说，是时候抛弃幼稚了。重申我们永恒精神的时候已经到来，我们要选择创造更好的历史业绩，发扬那种（历史赋予的）宝贵权利，秉承那种代代相传的崇高理想：上帝赋予所有人平等，所有人自由和所有人充分追求幸福的机会。

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 risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

在重申我们国家的伟大之处的同时，我们懂得伟大绝非赐予而来。伟大必须努力赢得。我们的旅程从来没有走捷径，从不退而求其次。这条路一直都不是给那些胆怯的人走的——不是给那些好逸恶劳，或只图名利享乐的人走的。相反，这条路是勇于承担风险者之路，是实干家之路，是创造者之路——这其中有些人名留青史，但更常见的是默默耕耘的男男女女，是他们在这条漫长崎岖的道路上支撑我们，迈向繁荣与自由。

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

为了我们，他们收拾他们微薄的家当，漂洋过海追寻新生活。

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

为了我们，他们在血汗工厂辛勤工作，在西部安顿下来，忍受鞭打，开垦恶土。

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.

为了我们，他们奔赴疆场，英勇捐躯，长眠在康科特(Concord)和葛底斯堡(Gettysburg)，诺曼底(Normandy)和溪山(Khe Sahn，越南地名)。一次又一次，这些男男女女挣扎牺牲，干活至皮开肉绽，只为了我们可以过上更好的生活。他们认为美国为大，大于所有个人的雄心壮志的总和，超越了所有出身、贫富或派别的差异。

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.

这是我们今天继续前进的旅程。我们仍是地球上最繁荣、最强大的国家。我们的劳动者的生产力，并不输于这场危机开始的时候。我们的头脑的创造力不减，我们的产品与服务的受欢迎程度，并不低于上星期、上个月或者上年。我们的能力并未减损。但是，我们墨守陈规，保护狭隘的利益（集团）和推迟作出令人不悦的抉择的时期肯定已经过去。从今天起，我们必须振作起来，拍掉我们身上的尘土，再次开始重塑美国。

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.

无论我们放眼哪里，都有工作有待完成。（现时的）经济形势亟待果敢且快速的行动，我们的确是要行动——不仅是要创造新岗位，更要为（下一轮经济）增长打下新的基础。我们将造桥铺路，架设电网，铺设数字线路，以协助商业发展，也使我们联系紧密。我们将让科学回归其合适的地位，运用科技的奇迹来提高医疗保健品质并降低其开支。我们将利用太阳能、风力和土壤（指地热？生物燃料？个人倾向于后者）为汽车提供燃料，让工厂运作。我们将改革中小学及高等院校，因应新时代的需要。这一切，我们都能做到。这一切，我们都必将做到。

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.

现在，有些人质疑我们野心太大——他们认为我们的体制承载不了太多的大计蓝图。他们的记忆是短暂的。因为他们忘了这个国家已经取得的成就；忘了一旦共同的目标插上理想的翅膀、现实的需要鼓起勇气的风帆，自由的男男女女可以完成何等成就。

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.

怀疑论者没有认识到他们脚下的大地已经移动——长期以来空耗我们精力的陈腐政治争议已经过时。我们今天提出的问题，不是我们的政府是太大还是太小，而是它能否行之有效——它能否帮助家庭找到薪水合理的工作，能否为他们提供负担得起的医疗保健，能否使人们可以体面地退休。哪个方案能提供肯定的答案，我们就打算推进哪个方案。哪个方案的答案是否定的，计划和项目就必须终止。所有我们这些管理公帑的人都必须承担责任——合理支出，摒弃陋习，在阳光下磊落做事——因为惟其如此，我们才能重建政府与人民间至关重要的的信任。

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.

我们眼前的问题亦非市场的力量是正是邪。市场创造财富、拓展自由的能力无可匹敌，但这场危机提醒我们，如果没有严格的监管，市场的发展可能失控——而国家无法长久繁荣，如果它仅仅施惠于富裕者。我们经济的成功始终不仅仅取决于我们的国内生产总值的规模，而且取决于我们的繁荣的覆盖面，取决于我们为所有有意愿（致富）的人提供机会的能力——不是出于慈善，而是因为这是达到我们共同利益的最可靠的途径。

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.

至于我们的共同防御，我们不接受我们的（国家）安全与我们的理想不可两全的荒谬论点。我们的建国诸父，面对我们我们难以想像的险境，（依然）拟具了一部保障法治和人权的宪章，一代代人民的鲜血夯实了这一宪章。今天，（宪章中的）这些理念依然照亮世界，我们断不会为一时之便而放弃这些理念。因此，对于今天正在观看此情此景的其他各国人民和政府──从最繁华的首都到同家父出生的小村落──我希望你们了解：凡追求和平与尊严的未来的国家以及每一位男人、妇女和儿童，美国是你们的朋友。我们已经做好准备再次领导（世界）。

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.

回顾过去，几代人在压倒法西斯主义和共产主义时靠的不仅仅是导弹和坦克，还依靠强固的联盟和持久的信念。他们懂得单凭一己实力我们不足以自保，实力也并不赋予我们随心所欲的权利。相反，他们明白，正是因为使用谨慎，我们的实力才更加强大；我们的安全源自我们的事业的正当性，（我们所树立的）楷模的感召力，以及谦卑和克制所具有的温和特质。

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 hard-earned 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.

我们是这一传统的继承者。我们只要从新以这些原则为指导，我们就可以面对那些需要我们付出甚至更大努力的新威胁——这甚至需要国与国间更大的合作与谅解。我们将开始以负责任的方式将伊拉克还给伊拉克人民，并在阿富汗巩固赢来不易的和平。我们将与多年的朋友和昔日的对手一道努力不懈，削弱核威胁，遏制全球变暖的幽灵。我们不会为我们的生活方式报歉，也不会动摇捍卫它的决心，对于那些企图通过煽动恐怖主义或屠杀无辜者达成目标的人，我们现在就告诉你们：我们的意志更加坚定，无法摧折，你们不可能拖垮我们，我们定将击败你们。

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.

因为我们知道，我们百衲而成的传统是一种优势，而非弱点。我们是一个是由基督徒和穆斯林，犹太教徒和印度教徒——以及非（宗教）信徒组成的国家。我们由取自这个星球上每个角落的各种语言和文化所塑造，而且由于我们曾饮过内战（南北战争）和种族隔离的苦酒，走出了这些黑暗篇章并变得更加强大更加团结，我们不由自主地相信宿怨终究会过去，部族之间的界线很快就会消弭，随着世界变得越来越小，我们共通的人性将会彰显，在迎接和平新纪元的过程中，美国必须发挥自己的作用。

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect.

面对穆斯林世界，我们寻求一条新的前进道路，以共同的利益和相互尊重为基础。

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.

对于世界上那些妄图播植冲突，或者把自己社会的弊端归咎于西方的领导人——须知他们的人民藉以评判你们的的，是你们能建立什么，而非你们毁坏什么。对于那些靠着贪腐欺骗和打压异己而保住权力的人，须知你们站在历史错误的一边，而只要你们愿意放松拳头，我们愿意向你们伸出手。

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.

对于贫穷国家的人民，我们承诺会和你们并肩努力，令你们的农场丰收，让洁净的水川流不息，滋养饥饿的身体，滋润饥渴的心灵。而对那些和我们一样，享受相对丰盛物资的国家，我们要说我们再不能对国界以外的苦痛无动于衷，也再不能不计后果地消耗世界的资源。因为世界已经变了，我们也必须跟着改变。

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.

在我们思考前路要怎样走时，我们以谦虚感激的心想到那些此时此刻正在偏远的沙漠和边远山区巡逻的勇敢的美国人。今天他们有话要对我们说，就像那些长眠在阿灵顿(Arlington)国家公墓之下的英雄们世世代代轻声诉说的一样。

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.

我们尊崇他们，不只因为他们捍卫我们的自由，还因为他们体现着（为国家）服务的精神；他们自愿追寻比自身的价值更伟大的意义（美国国家之伟大）。然后，在此时此刻——这个将具有划时代意义的此刻——必须常驻你我心中的，正是这种精神。

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.

因为即使（美国）政府能有许多作为，也必须有许多作为，这个国家的立国之本最终还是美国人民的信仰和决心。于防洪堤坝崩裂之时收留陌生人的仁慈，（于经济不景气时）宁愿减少自己的工时也不肯看着朋友失业的无私，正是这些支撑我们度过最暗淡的时光。是消防队员冲入浓烟滚滚的楼道（抢救生命）的勇气，也是为人父母者养育孩子的心甘情愿，正是这些最终决定了我们的命运。

Our challenges may be new. The instruments with which we meet them may be new. But those values upon 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.

我们的挑战也许是新的，我们迎接挑战的工具也许是新的，但我们赖以成功的价值观——勤奋工作和诚实，勇气和公平竞争、宽容心和探索精神，忠诚和爱国——却是由来已久。这些价值观是实实在在的。它们是我们整个历史过程中一股无声的进步力量。我们现在需要的就是回归这些真理。我们现在需要（开创）一个新的勇于负责的时代——每一位美国人都需要体认到我们对自己、对我们的国家、对全世界承担着义务，我们不是不情愿地接受这些责任，而是欣然抓紧，坚信没有什么比全力以赴完成艰巨的任务，更能满足我们的精神，更能体现我们的特性。这是公民应尽的义务，应做出的承诺。

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

这是我们自信的源泉——认识到上帝感召我们把握不确定的命运。

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.

这就是我们的自由和我们（坚守）的信条的意义——这是每个种族、每种信仰的男女老少可以同聚在这个宏伟的大草坪上欢庆的原因，也是有人今天能站在这里庄严宣誓的原因，而在不到60年多年前许此地的餐馆或许还可能不接待他父亲这样的人。

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:

因此，让我们铭记这一天，记住我们是谁，记住我们走了多远的路。在美利坚诞生的那一年，在最寒冷的月份里，一小群爱国人士围着一堆篝火余烬在冰封的河边取暖。首都弃守，敌人在挺进，白雪染血。在我们革命的结局最难以估计的时刻，我们的开国之父们下令向人民宣读这段话：

"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]."

 “让我们昭告未来的世界……在这个酷寒的冬季，万物萧苏，只有希望和美德坚忍不拔……这个城市和这个国家，受到共同危难的召唤，挺身而出，奋起迎战。”

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.

美利坚。在我们面临共同的危难之际，在我们这个艰困的冬天，让我们牢记这些不朽的话语。心怀希望和美德，让我们再度冲破冰冷的逆流，承受可能来临的暴风雪。要让我们的子孙后代如此平说：在我们面临考验时，我们拒绝半途而废，我们不掉头，也不踌躇；我们眼睛注视着远方，上帝的恩典降临我们，我们秉承自由这个宝贵的权利，并将其安全地世代相传。

Thank you. God bless you.

谢谢你们。上帝保佑你们。

And God bless the United States of America.

上帝保佑美利坚合众国。

Greetings from RGE Monitor!

Now that Barack Obama has taken the oath and become the 44th President of the United States, he faces great expectations at home and abroad to steer the U.S. and global economy out of the greatest post-war recession and financial crisis, to re-align the U.S. foreign policy stance and global standing on issues like financial sector regulation, climate change, trade talks and nuclear proliferation. He – and his team – enters with large amounts of political capital. Obama's public acknowledgment that the country's economic woes will remain challenging in the near-term and will involve great adjustments, and his choice of a strong economic team are a sign of optimism that the administration will be quick with policy measures. While the domestic economy (especially passing a fiscal stimulus package) will take most of his time in the short-term, the Israel-Gaza offensive indicates foreign policy concerns – especially in the Middle East and South Asia will also demand attention from the beginning of the Obama presidency.


Fiscal Stimulus
Significant growth contraction in Q4 2008 and Q1 2009 along with mounting job losses, declining asset incomes, corporate bankruptcies and tight credit conditions, mean Obama's first priority will be to pass the fiscal stimulus package by February 2009. The payroll tax relief, extension of unemployment insurance and food stamps for low-income households included in the package will cushion vulnerable groups from the recession and boost consumer spending. However, these policies may do little to boost growth in the short-term. With only about US$100bn of around US$500bn in planned infrastructure spending expected to kick in within the first three months, the initiative may not be timely in spite of being potentially effective in boosting the economy during late 2009 and 2010.

While tax cuts will be timely, households facing financial pressure will save the proceeds rather than boost spending just as they did during Q2 2008, limiting effectiveness. Similarly, tax credits for businesses to hire workers and invest in new equipment will be ineffective in stimulating investment since firms forecasting a prolonged slump in domestic and export demand and high credit costs will cut capex plans. However, given that state and local governments support greater spending and jobs than the federal government, grants for the recession- and budget-deficit hit states will be more effective in preventing cut backs in public services, infrastructure projects and jobs, and also partly offset declining tax revenues and slump in debt financing. But given our estimated contraction in private demand of around US$700bn in just 2009 alone, the US$800bn-plus stimulus package distributed over two years (2009-10) might not be enough to offset the contraction in GDP in 2009. Also, the extent of job creation via the stimulus might be limited as infrastructure projects will, at best, absorb workers from real estate construction and low-end manufacturing while services and manufacturing in general will continue to witness hiring freezes due to low demand. Moreover, investment in infrastructure, renewable energy and R&D will simulate the economy and create jobs only in the medium to long run.

Hence, the prolonged slump and a very sluggish economic recovery might actually necessitate a second stimulus package. More importantly, unless the government addresses problems of bank capitalization and mortgage crisis, any fiscal stimulus will be ineffective in steering the economy out of this crisis.

Continued bank bailouts have signaled to the administration that further bank writedowns are imminent and the banking system as a whole might be insolvent. Capital injection on an ad-hoc basis, or even after banks write down bad debt to establish asset values, might only delay a broader solution for toxic assets while making inefficient use of the TARP funds. One possible solution would be the creation of a 'bad bank' that can buy toxic assets from banks to ease pressure on their balance sheets and help stimulate lending to the private sector. An alternative might be to use the remaining TARP funds to extend government insurance to banks' toxic assets. Obama's economic team also has voiced concerns that the TARP funds have been inefficiently used by banks so far in order to absorb losses on their balance sheets, fund acquisitions and pay for compensation rather than fuel credit growth in the economy. The new administration will likely direct the remaining funds towards unclogging credit markets and renewing lending to households and firms by targeting consumers and municipalities - credit cards, mortgages, auto loans, students loans and muni bonds. Total loan losses are expected to hit US$1.6 trillion and additional negative feedbacks on MBSs and other ABSs are imminent, especially as the recession raises default by households and corporates (a detailed RGE Monitor analysis on this is forthcoming for RGE Premium subscribers).

Tight credit conditions and financial headwinds for households will continue to raise foreclosures and mortgage defaults. Increase in the excess home supply now poses the risk of over-correction in home prices thus leading to further bank losses and contraction in consumer spending. As a result, Congressional Democrats and the Obama administration will have to work on modifying the troubled mortgages and refinancing them into longer term low interest loans. But given the limited effectiveness of past government programs, the new government needs to reduce the mortgage principal to fix the problem of homeowners’ insolvency rather than just extending the maturity period or reducing the interest rate. To encourage greater lender participation, the government will have to share the cost of modifying the loans and offer lenders a share in future home appreciation and share any losses from default on the modified loans. While Democrats favor using some of the remaining TARP funds for this purpose, estimates suggest that the cost of such a program might be as much as US$600bn to US$1 trillion, especially as home prices overcorrect downward, more homes fall into negative equity and defaults on the refinanced mortgages continue. To contain fiscal costs, the government should be the senior debt holder in the modified mortgages to benefit from future home appreciation.

Continued bank bailouts, fiscal stimulus packages and refinancing at-risk mortgages will likely push up the fiscal deficit to over US$1.3 trillion in FY2009. While these counter-cyclical spending measures are warranted to address the crisis and Obama might also delay his plan to raise taxes, the U.S. will have to consider fiscal consolidation during the recovery phase. Unless the government reforms the tax system, reduces health care costs and finances Social Security and defense needs, a structural budget deficit will continue to pose risks to the U.S. debt financing needs and the dollar for many years to come.


Trade
Global trade talks might take a backseat in 2009 as the U.S. and other economies remain occupied with domestic counter-cyclical fiscal and monetary policies. However amid slumping exports, more and more governments might impose import restrictions, offer trade distorting fiscal stimulus to domestic firms, prevent stimulus leakages via imports, bail out national champions and favor undervalued currencies. Escalating trade protectionism during the Great Depression actually worsened the global economic crisis. In such a scenario, the U.S. would need to take the lead to renew global trade talks and establish WTO guidelines to prevent countries from pursuing protectionist measures. However, this will be a longer term objective. Meanwhile the discussion on NAFTA is likely to re-emerge in light of the President’s visit to Canada, reportedly his first foreign trip. While policy on trade agreements, the Chinese reminbi and inward-investment by foreign governments might take a backseat in the initial days of the new administration, China’s bias for an undervalued currency to support exports and the need for investments from foreign governments in the face of U.S. bank and corporate bankruptcies might rekindle these issues. Moreover, as imports and exports shrink for deficit and surplus countries respectively, U.S. will lead the world in the painful unwinding of global imbalances.


Energy and Climate Change
Although climate change is a major priority and the new members of Obama’s energy team are focused on increasing energy efficiency and the share of alternative fuels in the U.S. energy mix, coming to consensus on these issues may be difficult – and comprehensive climate change legislation might not come to the fore until 2010. In the short-term, the most significant policies to support alternative fuels may come through other economic packages – the fiscal stimulus, the terms of the support to the auto sector are some examples. President Obama has emphasized that the fiscal stimulus will include support for 'green jobs' - jobs that support alternative energy and help to wean the U.S. from fossil fuels that are increasingly sourced abroad from unstable countries, but these will take time to have effect. However, political momentum globally may build as the next climate change conference approaches at the end of 2009. Steven Chu and other members of Obama’s energy team are expected to push for significant energy policy changes towards renewable and federal climate change legislation, including an economy-wide cap-and-trade program however the severity of the economic recession may make a gas tax unpalatable even if it is matched by offsetting payroll tax cuts.

Despite the fall in demand as global output contracts, there are obstacles in diversifying both the source of energy supplies and the type will be difficult, particularly in the short-term. Not only do the costs of alternative energy remain high, particularly as technologies are still being developed. Government policies might offset this gap. The reduction in oil prices may deter some of the demand for drilling off the U.S. coastline even as it deters investment in alternative technologies. Similarly, environmentally costly fuel from Canada’s oil sands may find U.S. markets less welcoming, even if it spurs investment in carbon sequestration in the long-term. Already the fall in gasoline prices has deterred the purchases of hybrid vehicles, possibly reversing some of the behavioral changes that led to lower petroleum consumption in mid-2008.

Foreign Policy
Despite the administration’s focus on passing a fiscal stimulus and domestic policy issues, President Obama has inherited a complex set of foreign policy issues from President Bush that will occupy him, his Secretary of State Hilary Clinton and their teams. Political and security issues in the Middle East and South Asia are particularly urgent. Obama comes to power with significant political capital and a set of experienced officials determined to increase diplomatic efforts to counter global threats given the limitations of hard power to solve global issues.

The Gaza crisis pushed the Middle East and especially the Israeli-Palestinian conflict to the top of the President Barack Obama's agenda. In particular the focus will be on trying to prevent a precarious ceasefire from contributing to regional instability. The cease-fire in Gaza could present a fresh opportunity for mediating a peace process, but Obama will be faced with a set of challenges nevertheless that may absorb a lot of U.S. political capital in the region. The conflict had deepened a rift between the Palestinian rival political factions – Hamas and Fatah – and the lack of national unity may continue to impede the serious advancement of the Israeli-Palestinian peace process, as will divisions between Arab states. Furthermore, Israel holds parliamentary elections on Feb 10 and the commitment of the Israeli government to the peace process will vary. Finally, brokering a successful Middle East peace process involves a broad regional approach and an effort to address regional players, such as Syria and Iran and involving both tradition power brokers like Egypt, Jordan and Saudi Arabia and newer entrants like Qatar

A set of elections in the Middle East, especially in Israel, Iraq and Iran in the first half of 2009 may provide testing times. The reduction of U.S. troops in Iraq and transfer of power to Iraqi authorities is already well under way but more details are yet to emerge regarding the exit of U.S. troops. While Obama pledged to withdraw troops from Iraq with 16 months of taking office, they might remain for some time. The President has emphasized a new approach to deal with Iran including the possibility of lower-level diplomatic engagement, but the country’s emphasis on nuclear proliferation may be difficult to shake. With the fall in the price of oil, Iran’s abilities to fund its proxies in Iraq, Lebanon and Palestine may be reduced as maintaining domestic support becomes paramount.

Regional security continues to deteriorate in South Asia with the resurgence of the Taliban in Afghanistan, growing hostilities between India and Pakistan, and a weakening alliance with Pakistan against the war on terror. Obama has regularly echoed the need for more troops to be deployed and the Senate has agreed to send additional troops almost doubling American troops on the ground. However, the daunting task of constructing a comprehensive new strategy for a region defined by endemic corruption and the lack of basic amenities remains – and the economic crisis might make it more difficult to convince fellow NATO members to also increase their military presence. By contrast, despite the persistence of North Korea’s nuclear program, East Asia is unlikely to grab as much attention. Economics will likely continue to dominate the U.S. China relationship particularly now that China’s exports are contracting and China, like the U.S. faces a hard landing.

President Obama will seek to strengthen transatlantic ties that have weakened following the Iraq war. Washington will work together with EU closely together to respond to the financial and economic crises, peace and security issues, and to stop and reverse climate change. But convincing NATO allies to increase military presence in Afghanistan may be difficult. U.S.-Russia relations have been strained by NATO’s eastward expansion, war in Georgia, gas politics, Kosovo’s independence to name a few. Despite a warning that Russia might deploy short-range missiles in the Baltic region if Washington proceeded with its missile defense shield in Eastern Europe, Moscow has signaled its willingness to reexamine relations with the U.S. under the new administration. The U.S. and Russia may be able to make common cause regarding the nuclear threat from Iran, helped perhaps by Obama’s ambivalence about the missile defense and ruling out of a speedy NATO membership track for Ukraine and Georgia. Yet neither country will be willing to compromise on its core interests, and a divided Europe may make responding to a poorer, but still determined, Russia more difficult.

译/东东枪

Hello，Chicago!
芝城父老，别来无恙！

If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy, tonight is your answer.
余尝闻世人有疑，不知当今美利坚凡事皆可成就耶？开国先贤之志犹岿然于世耶？民主之伟力不减于昔年耶？凡此诸疑，今夕当焕然冰释矣。

It’s the answer told by lines that stretched around schools and churches in numbers this nation has never seen, by people who waited three hours and four hours, many for the first time in their lives, because they believed that this time must be different, that their voices could be that difference.
诸疑之释，皆蒙美利坚民众之协力–学塾祠庙之外，市井乡野之间，万千父老焦心若焚，苦待竟日，愿献一票之力。此景此情，前所未见！其中，平生未尝涉国事者，数亦甚夥，乃今有此义举，皆因一念不衰–今夫天下，非同既往，愿发吁天之声，必成动地之势。

It’s the answer spoken by young and old, rich and poor, Democrat and Republican, black, white, Hispanic, Asian, Native American, gay, straight, disabled and not disabled. Americans who sent a message to the world that we have never been just a collection of individuals or a collection of red states and blue states. We are, and always will be, the United States of America.
诸疑之释，皆仰吾国万万同胞之齐心–何言贫富老幼之差，党社宗族之异，遑论发肤肌体之别，志趣爱恶之分。吾国既以”合众”为名，吾侪当更无疏离之意，红蓝二党并肩而立，数十邦州挽手相合，无分尔吾，共肇一家也。

It’s the answer that led those who’ve been told for so long by so many to be cynical and fearful and doubtful about what we can achieve to put their hands on the arc of history and bend it once more toward the hope of a better day. It’s been a long time coming, but tonight, because of what we did on this date in this election at this defining moment, change has come to America.
诸疑既释，则冷彻者可得激情，忧惧者可得勇气，犹疑者可得笃定。平生襟抱，虽屡遭辱没，然值此风云之际，鼎新革故，当仁不让，倾力而动乾坤者，吾侪之外，更何人哉！俟望诚久，其志弥坚。幸天地明察，乃有今日，乃有此刻，乃有此一选举——吾邦之大变革，乃自兹而始！

A little bit earlier this evening, I received an extraordinarily gracious call from Sen. McCain. Sen. McCain fought long and hard in this campaign. And he’s fought even longer and harder for the country that he loves. He has endured sacrifices for America that most of us cannot begin to imagine. We are better off for the service rendered by this brave and selfless leader. I congratulate him; I congratulate Gov. Palin for all that they’ve achieved. And I look forward to working with them to renew this nation’s promise in the months ahead.
顷接参议员麦君凯恩电，虽未得晤，幸有一谈，其言谆谆，其意诚诚，鄙人感佩甚矣。选战期内，麦君劳碌几重，奔波几许，皆为国家计。夙夜劬心，诸般求索，非余所能及。其于国于民之惊人牺牲，亦诚非庸庸如吾辈者所可想见。以麦君之胆魄襟怀，能为吾邦所用，实国家之幸，万民之幸也。前途漫漫，国事未定，余所盼切由衷者，唯共麦凯恩君、佩林君，及诸贤士比肩，会吾等之绵力，成吾邦之大业。

I want to thank my partner in this journey, a man who campaigned from his heart, and spoke for the men and women he grew up with on the streets of Scranton and rode with on the train home to Delaware, the vice president-elect of the United States, Joe Biden.
乔君拜登，余所铭感至深者也。竞选之业，艰辛不足与外人道，幸得乔君襄助，乃竟其功。乔君其人，素言恳辞切，意笃情真，盖斯克兰顿乡邻之提命，特拉华州父老之晤教，俱萦怀在心，未尝忘却也。余蒙不弃，叨居总统之位，愿以天下相累，乔君慨然相允，幸何如之！

And I would not be standing here tonight without the unyielding support of my best friend for the last 16 years, the rock of our family, the love of my life, the nation’s next first lady Michelle Obama.
拙荆罗氏，鸿案相庄凡一十六载，既为爱侣，更称挚友，既是吾阖家之基石，又系余毕生之至爱。鄙人尝自忖度，倘无贤妻若此，今朝阔论于斯者，不知何人矣！

Sasha and Malia I love you both more than you can imagine. And you have earned the new puppy that’s coming with us to the new White House.
小女萨沙、玛丽，余素深喜之。余尝言，愿购小犬一头相赠，待阖家乔迁总统府邸之日，相携同进吾宅。今当胜负已出，既有一诺在前，必自践行不欺也。

And while she’s no longer with us, I know my grandmother’s watching, along with the family that made me who I am. I miss them tonight. I know that my debt to them is beyond measure.
外祖母大人虽已仙逝，料必有灵在天，俯察人寰，定颔首开颜矣。吾奥巴马氏列祖列宗，亦必如是。今日今时，鄙人追思之心，乌鸟之情，曷其有极！唯生死陌路，仙凡永隔，虽怀反哺之心，而无答报之门也！

To my sister Maya, my sister Alma, all my other brothers and sisters, thank you so much for all the support that you’ve given me. I am grateful to them.
至若玛雅、艾玛二姊妹并吾家诸同胞，所惠余者，更不胜言，久蒙调护，此当拜谢。

And to my campaign manager, David Plouffe, the unsung hero of this campaign, who built the best - the best political campaign, I think, in the history of the United States of America. To my chief strategist David Axelrod who’s been a partner with me every step of the way. To the best campaign team ever assembled in the history of politics, you made this happen, and I am forever grateful for what you’ve sacrificed to get it done.
大卫·普劳夫君，大卫·阿克塞罗德君，一为鄙人竞选事务之经理，一为鄙人国事韬略之智囊。余尝自喟叹，左右运筹之士，皆亘古未见之贤才。普阿二君，则更此中翘楚。区区不才，有何德能，可得数公鼎力襄助若此？当此功成之际，感荷之心，亦自拳拳。

But above all, I will never forget who this victory truly belongs to. It belongs to you. It belongs to you.
至于鄙人铭之肺腑，寤寐不敢忘怀者，诚诸位也。盖今日鄙人之胜绩，实诸位之胜绩，鄙人之荣光，实诸位之荣光！

I was never the likeliest candidate for this office. We didn’t start with much money or many endorsements. Our campaign was not hatched in the halls of Washington. It began in the backyards of Des Moines and the living rooms of Concord and the front porches of Charleston. It was built by working men and women who dug into what little savings they had to give $5 and $10 and $20 to the cause.
余素朴陋，虽有参选之心，并无必胜之志。谋事之初，银资乏匮，从者寥寥；起事之地，皆蔽寓荒斋，不在高阁；成事之基，无非寻常百姓，升斗之献。

It grew strength from the young people who rejected the myth of their generation’s apathy who left their homes and their families for jobs that offered little pay and less sleep. It drew strength from the not-so-young people who braved the bitter cold and scorching heat to knock on doors of perfect strangers, and from the millions of Americans who volunteered and organized and proved that more than two centuries later a government of the people, by the people, and for the people has not perished from the Earth. This is your victory.
幸得一众热血青年，抛其家，别其室，不辞其苦，不计其酬，矻矻于此，方得今日之胜。”国中青年爱国之心已泯”之谬论，今可休矣！幸有壮志未已之诸前辈，无惧寒暑，行走奔波，劝说民众，乃竟今日之功。今日之胜，诚数百万美利坚民众之胜也。察其意，皆属踊跃为国，观其行，处处谨严有序，足堪告慰二百年前开国之先贤–民有、民治、民享之政体，未尝动摇也！嗟夫！此实诸位之功也！

And I know you didn’t do this just to win an election. And I know you didn’t do it for me.You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime - two wars, a planet in peril, the worst financial crisis in a century.
余知诸君之意非在此一选战，亦非在鄙人一身。盖瞻前路之艰辛，而益知此任不可轻许也。虽今夕欢贺于此，而明朝酒醒，大患仍自当前。两地烽烟熊熊而起，四海之内纷纷而乱，金融业界惶惶而危，皆不容有怠。

Even as we stand here tonight, we know there are brave Americans waking up in the deserts of Iraq and the mountains of Afghanistan to risk their lives for us.There are mothers and fathers who will lie awake after the children fall asleep and wonder how they’ll make the mortgage or pay their doctors’ bills or save enough for their child’s college education. There’s new energy to harness, new jobs to be created, new schools to build, and threats to meet, alliances to repair.
是夜，歌吹饮宴之声不绝于耳，而异邦大漠群山中，吾国大好青年，兀自苦戍边塞，惝恍竟夜，性命尚未得安。吾国千万庶民，为人父母者，兀自惴惴难眠，所忧者，乃房宅所贷，病患之费，抚育之资也。至若吾国能源之耗，百业之兴，庠序之教，攻伐之术，怀远之道，亦皆吾等忡忡挂怀者也。

The road ahead will be long. Our climb will be steep. We may not get there in one year or even in one term. But, America, I have never been more hopeful than I am tonight that we will get there. I promise you, we as a people will get there.
渺渺乎其远，如不可达；危危乎其高，若不可攀。伟业宏图，可一蹴而就耶？余不揣愚钝，愿以四载相期，付诸此业，胜算何如虽不可知，然昂扬必胜之奇志，成就伟业之壮怀，平生未之有也。君子一诺，其重何如，此地今夕，愿斗胆发一狂言——吾辈既在，其事必成！

There will be setbacks and false starts. There are many who won’t agree with every decision or policy I make as president. And we know the government can’t solve every problem. But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And, above all, I will ask you to join in the work of remaking this nation, the only way it’s been done in America for 221 years - block by block, brick by brick, calloused hand by calloused hand.
逶迤坎坷，份内之事。异见争端，料必有之。国中之政府，亦非全知全能者。余所秉承不移者，唯忠信耳。倘有危难于前，必无欺瞒于世。诸君言论臧否，纵与余意相左，必当洗耳以聆。于此之外，更当恳请诸君，同心戮力，共继吾国既肇二百二十一年之大统，汇涓滴之力，而成万世之业。

What began 21 months ago in the depths of winter cannot end on this autumn night. This victory alone is not the change we seek. It is only the chance for us to make that change. And that cannot happen if we go back to the way things were. It can’t happen without you, without a new spirit of service, a new spirit of sacrifice.
前岁冬日，余立志于斯，投身此业，屈指算来，倏然近二载矣。当此秋夜，追思反省，更生惕厉。选战之胜，无非一役之功，吾辈矢志所求者，非在乎此。此役之胜，亦无非革世变时之一大好良机耳。设若止步于斯，垂手而待，或无诸君倾力相援，则壮志丰功，无非泡影，诸般梦想，终归虚妄。

So let us summon a new spirit of patriotism, of responsibility, where each of us resolves to pitch in and work harder and look after not only ourselves but each other. Let us remember that, if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers. In this country, we rise or fall as one nation, as one people.
爱国之心，报国之念，吾人固有之。今吾辈各竭其力，各尽其命，各执己业之外，益当守望相助，而更期普世之荣。当是时也，金融浩劫，四海凶危，鉴之查之，其理自明——寻常商贾既损，金融巨擘焉得独全乎？由是可知，邦域之内，吾辈荣辱休戚，皆相与共矣！

Let’s resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long. Let’s remember that it was a man from this state who first carried the banner of the Republican Party to the White House, a party founded on the values of self-reliance and individual liberty and national unity. Those are values that we all share. And while the Democratic Party has won a great victory tonight, we do so with a measure of humility and determination to heal the divides that have held back our progress.
党争纷纭，锱铢必较，轻狂懵懂，皆腐坏人心惑乱政局之弊也，其来已久，余今愿与诸君协力，共灭除之。昔年曾有此郡先贤，首执共和党之帜，而掌总统府之权。自强独立，自由统一等信念，皆彼党之所倡，亦吾辈之所宗。今岁选战，吾民主党人幸有一胜，然谦恭和合之心未尝少减。

As Lincoln said to a nation far more divided than ours, we are not enemies but friends. Though passion may have strained, it must not break our bonds of affection. And to those Americans whose support I have yet to earn, I may not have won your vote tonight, but I hear your voices. I need your help. And I will be your president, too.
余素信服者，乃山河破碎之际，总统林肯氏之言——“既属同胞，终不为敌。虽弩张剑拔，而血脉未尝断，情义不少减。”固然，仍有四方志士，不为鄙人所动，另有高明之选。虽悭一票之缘，然诸君谠论，余亦声声在耳，字字在心。来日方，大雅诸君，幸垂教焉！余虽忝列总统之位，必不另眼以待也。

And to all those watching tonight from beyond our shores, from parliaments and palaces, to those who are huddled around radios in the forgotten corners of the world, our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand.
寰宇民众，散居四海，虽各安其命，而兴衰安危相系，今吾一邦之重兴既见锋芒，则天下之峥嵘必不远矣！

To those - to those who would tear the world down: We will defeat you. To those who seek peace and security: We support you. And to all those who have wondered if America’s beacon still burns as bright: Tonight we proved once more that the true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals: democracy, liberty, opportunity and unyielding hope.
至若如虺如蛇，与世为敌者，吾邦猛志常在，彼等必取灭亡。而温良恭俭，久慕大同者，吾辈则当倾力以助，鼎力相援。犹疑未定，于吾邦之伟力未之信者，吾侪愿以今日盛况以告之——美利坚之所谓“美”者，非刀兵之强，金银之众，实民主、自由、机遇、梦想之美也！

That’s the true genius of America: that America can change. Our union can be perfected. What we’ve already achieved gives us hope for what we can and must achieve tomorrow.
天自有道，地自有德，恩赋吾邦无上异禀。无他，达时知变而已矣。美利坚隆替不衰，合众国日趋至善。以过往先贤之伟绩，助吾侪今日之雄心，开子孙万世之辉光！

This election had many firsts and many stories that will be told for generations. But one that’s on my mind tonight’s about a woman who cast her ballot in Atlanta. She’s a lot like the millions of others who stood in line to make their voice heard in this election except for one thing: Ann Nixon Cooper is 106 years old.
今岁选战，多开亘古之先，屡传千秋佳话。感我至深者，亚特兰大老妪安•尼克松·库帕也——库氏一票，自与数百万美利坚民众之选票无异，其所以称奇者，在其百岁高龄有奇也。

She was born just a generation past slavery; a time when there were no cars on the road or planes in the sky; when someone like her couldn’t vote for two reasons - because she was a woman and because of the color of her skin.
当其父辈之时，天道不彰，黑人为奴。库氏其生也不逢时，汽车尚不行于道，飞机犹未起于空，库氏既属黑人，又系妇道，票选一事，不得问焉。

And tonight, I think about all that she’s seen throughout her century in America - the heartache and the hope; the struggle and the progress; the times we were told that we can’t, and the people who pressed on with that American creed: Yes we can.
今夕此地，回溯库氏百岁之涯，但见吾邦先贤屡败屡战，且退且进，悲欣交集，甘苦杂陈。幸而正道存焉，壮志存焉，曰：吾辈既在，无所不能。

At a time when women’s voices were silenced and their hopes dismissed, she lived to see them stand up and speak out and reach for the ballot. Yes we can.
万马齐喑，其事堪哀，吾邦女界怒而起，愤而争，苦战不歇，历数十载。幸哉库氏，以百岁之高龄，终得亲见女流自立于世，重获天赋之权–吾辈既在，无所不能！

When there was despair in the dust bowl and depression across the land, she saw a nation conquer fear itself with a New Deal, new jobs, a new sense of common purpose. Yes we can.
当其壮岁，库氏曾见黄埃蔽日，百业萧条。举国悲鸣之际，吾美利坚出旷世之新政，挽狂澜于既倒，扶大厦之将倾，退畏惧之心，扶奋勇之志，终至人各有位，民心乃安——吾辈既在，无所不能！

When the bombs fell on our harbor and tyranny threatened the world, she was there to witness a generation rise to greatness and a democracy was saved. Yes we can.
当吾国良港遭袭，天下桀纣当道，暴政肆虐之时，库氏曾见豪杰群起，民主不亡–吾辈既在，无所不能！

She was there for the buses in Montgomery, the hoses in Birmingham, a bridge in Selma, and a preacher from Atlanta who told a people that “We Shall Overcome.” Yes we can.
峥嵘岁月，民权勃兴，蒙哥马利公车罢辍，伯明翰城黑人群起，塞尔玛城血雨腥风，库氏般般曾历。更尝闻亚特兰大城大贤马丁·路德·金氏振臂登高之呼——“吾等必胜！”诚哉斯言！吾辈既在，无所不能！

A man touched down on the moon, a wall came down in Berlin, a world was connected by our own science and imagination. And this year, in this election, she touched her finger to a screen, and cast her vote, because after 106 years in America, through the best of times and the darkest of hours, she knows how America can change. Yes we can.
俟科学昌明于世，创想通贯一时，既登广寒之阙，又溃柏林之垣。洋洋乎！有百年如是，乃见今岁选战中，库氏之一票。浩浩乎！百有六载交锋更迭，方得美利坚今日之变革——吾辈既在，无所不能！

America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves - if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?
陵谷变迁，俱往矣！追昔抚今，敢不勉哉！再俟百年光阴，倘吾等后辈儿孙，亦有得享高寿如库氏者，复可见何等之世界？吾侪今日之功，他年可得而见之乎？

This is our chance to answer that call. This is our moment. This is our time, to put our people back to work and open doors of opportunity for our kids; to restore prosperity and promote the cause of peace; to reclaim the American dream and reaffirm that fundamental truth, that, out of many, we are one; that while we breathe, we hope. And where we are met with cynicism and doubts and those who tell us that we can’t, we will respond with that timeless creed that sums up the spirit of a people: Yes, we can.
所谓时运天命，莫过于此——当为吾邦万民造安身立命之业，为吾辈儿孙启各展雄才之门，为寰宇各国创太平靖晏之世，为吾等壮志赋千秋不灭之元神。吾邦立国之本，必将光耀于天下——万千同胞，当如一人，一息尚存，壮怀不已！纵有世人疑焉，吾辈亦当以千秋不易之训共答之曰：吾辈既在，无所不能！

Thank you. God bless you. And may God bless the United States of America.
拜谢诸君！愿天佑吾民，天佑吾邦！

[完]

译者注：
1. 本篇中的英文原文系奥巴马（Barack Hussein Obama II）当选美国总统后于2008年11月4日晚在芝加哥发表的获胜演说。
2. 文言译本只是游戏之作，并非严谨的翻译。因此，很多语句、段落有基于原文的发挥、演绎，乃至各种添油加醋。
3. 译文采用浅近的文言体，偶有白话间杂。一些辞句语气有意戏仿民国时军政要人的演说、通电之类。
4. 个别词句有意”歪译”了一下，如”麦君凯恩”、”乔君拜登”等混淆姓、名的称谓。
5. 文中提到的”拙荆罗氏”是指奥巴马之妻Michelle Obama。因Michelle Obama原姓Robinson，故此处译为”罗氏”。

    1.为了排解寂寞你决定上网找人聊聊，这叫创业初期；

　　2.来一看，！MM还真不少，这叫市场潜力大；

　　3.可是GG也不少，这叫竞争激烈；

　　4.于是你决定想个办法让各位MM注意你，这叫定位；

　　5.因此你说你又帅又有钱，这叫前期炒作；

　　6.旁边一男的看不惯，说你其实又丑又穷又色眯眯，这叫恶性竞争；

　　7.你向网管告状，网管把他踢了出去，这叫规范市场。

　　8.一老哥们证明说：“其实你是谢停疯第二”，这叫竟合炒作；

　　9.你问：“这里有美女吗？”，这叫市场调查；

　　10.有２０个人同时回答：“我是美女”，这叫泡沫经济；

　　11.你说：“谁想和我聊天？”，这叫发布广告；

　　12.两美女说见过你，这叫老客户；

　　13.你飞快的记下两个美女的联系方式，这叫客户关系管理；

　　14.你厚着脸皮问两个美女你是不是很帅，这叫代言人公关；

　　15.这两个美女说你的确很帅，这叫联合炒作；

　　16.你继续厚着脸皮让他们介绍几个熟人认识，这叫关系营销；

　　17.然后不再理她们，这叫开拓新市场；

　　18.居然２０个美女都表示要和你聊天，这叫市场垄断；

　　19.要问为什么会有那么多美女找你，那是因为这年头顾客忠诚度低；

　　20.你高兴的说：“这些美女都是我的”，这叫划分势力范围；

　　21.你如果说：“凡北京的美女都是我的”，这叫划分可行的势力范围；

　　22.如果你又说：“恐龙别来找我”，这叫市场细分；

　　23.旁边一男的说：“我才是帅哥”，这叫正面竞争；

　　24.旁边又男的说：“有河南的MM吗？”这叫侧面竞争；

　　25.旁边又一男的说：“谁和我聊我给钱谁”，这叫价格战；

　　26.旁边又一男的说：“我是版主，不许你强占这么多MM”，这叫go-vern-ment行为；

　　27.你说：“那我介绍两个跟你聊”，这叫go-vern-ment公关；

　　28.你说：“谁给我钱我和谁聊”，这叫心理战；

　　29.结果２０个美女都抢着向你表达倾慕之情，这叫卖方市场；

　　30.当然，你还遣散了两个去应付版主，这叫寡头市场；

　　31.可你打字速度太慢，不能同时和２０个人聊天，这叫市场承接力有限；

　　32.你又说：“我看谁顺眼才和谁聊”，这叫精品策略；

　　33.有一美女说：“还认识很多靓女，问你要不要介绍？”这叫销售代理；

　　34.又有一美女说：“发你张我的照片。”这叫电子商务；

　　35.又有一美女说：“谈的开心今晚可以来找我。”这叫发现目标用户；

　　36.你说：“那从此我只和你聊”，这叫大客户战略；

　　37.可是你当然不会只和她聊，这叫成功的大客户战略；

　　38.你说话会引用鲁迅席慕容海子周星星黑格尔罗丹斯皮尔伯格，这叫文化营销；

　　39.你说：“我能歌善舞会写诗”，这叫优势展示；

　　40.你又说：“我好象爱上你了”，这叫客户关怀；

　　41.她说：“呸，我才不信呢”，这叫客户的逆向反映；

　　42.你接着说：“真的，是真的”，这叫IBM；

　　43.或者你说：“不信我去你家把心掏给你”，这叫DELL；

　　44.或者你说：“不信我你还能信谁？”，这叫微软；

　　45.你还可以说：“我会慢慢让你相信的”，这叫通用；

　　46.如果她说：“得了吧”，这叫理性消费者；

　　47.如果她说：“那我暂且信你一会儿吧”，这叫阶段性成果；

　　48.这时你说：“XXXXXXXXXXX（省略2000字）”，这叫市场培育；

　　49.然后你说：“我越来越喜欢你了”，这叫合理诱导；

　　50.然后你又说：“我们见面吧”，这叫进入实质销售阶段；

　　51.她当然会习惯性的拒绝，这叫假性拒绝；

　　52.于是你说：“那你来找我吧”，这叫精通消费者心理学；