Renewing the American Economy

New York, NY | March 27, 2008

I want to thank Mayor Bloomberg for his extraordinary leadership. At a time when Washington is divided in old ideological battles, he shows us what can be achieved when we bring people together to seek pragmatic solutions. Not only has he been a remarkable leader for New York -he has established himself as a major voice in our national debate on issues like renewing our economy, educating our children, and seeking energy independence. Mr. Mayor, I share your determination to bring this country together to finally make progress for the American people.

In a city of landmarks, we meet at Cooper Union, just uptown from Federal Hall, where George Washington took the oath of office as the first President of the United States. With all the history that has passed through the narrow canyons of lower Manhattan, it is worth taking a moment to reflect on the role that the market has played in the development of the American story.

The great task before our Founders that day was putting into practice the ideal that government could simultaneously serve liberty and advance the common good. For Alexander Hamilton, the young Secretary of the Treasury, that task was bound to the vigor of the American economy.

Hamilton had a strong belief in the power of the market. But he balanced that belief with the conviction that human enterprise "may be beneficially stimulated by prudent aids and encouragements on the part of the government." Government, he believed, had an important role to play in advancing our common prosperity. So he nationalized the state Revolutionary War debts, weaving together the economies of the states and creating an American system of credit and capital markets. And he encouraged manufacturing and infrastructure, so products could be moved to market.

Hamilton met fierce opposition from Thomas Jefferson, who worried that this brand of capitalism would favor the interests of the few over the many. Jefferson preferred an agrarian economy because he believed that it would give individual landowners freedom, and that this freedom would nurture our democratic institutions. But despite their differences, there was one thing that Jefferson and Hamilton agreed on - that economic growth depended upon the talent and ingenuity of the American people; that in order to harness that talent, opportunity had to remain open to all; and that through education in particular, every American could climb the ladder of social and economic mobility, and achieve the American Dream.

In the more than two centuries since then, we have struggled to balance the same forces that confronted Hamilton and Jefferson - self-interest and community; markets and democracy; the concentration of wealth and power, and the necessity of transparency and opportunity for each and every citizen. Throughout this saga, Americans have pursued their dreams within a free market that has been the engine of America's progress. It's a market that has created a prosperity that is the envy of the world, and opportunity for generations of Americans. A market that has provided great rewards to the innovators and risk-takers who have made America a beacon for science, and technology, and discovery.

But the American experiment has worked in large part because we have guided the market's invisible hand with a higher principle. Our free market was never meant to be a free license to take whatever you can get, however you can get it. That is why we have put in place rules of the road to make competition fair, and open, and honest. We have done this not to stifle - but rather to advance prosperity and liberty. As I said at NASDAQ last September: the core of our economic success is the fundamental truth that each American does better when all Americans do better; that the well being of American business, its capital markets, and the American people are aligned.

I think all of us here today would acknowledge that we've lost that sense of shared prosperity.

This loss has not happened by accident. It's because of decisions made in boardrooms, on trading floors and in Washington. Under Republican and Democratic Administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both.

Nor is this trend new. The concentrations of economic power - and the failures of our political system to protect the American economy from its worst excesses - have been a staple of our past, most famously in the 1920s, when with success we ended up plunging the country into the Great Depression. That is when government stepped in to create a series of regulatory structures - from the FDIC to the Glass-Steagall Act - to serve as a corrective to protect the American people and American business.

Ironically, it was in reaction to the high taxes and some of the outmoded structures of the New Deal that both individuals and institutions began pushing for changes to this regulatory structure. But instead of sensible reform that rewarded success and freed the creative forces of the market, too often we've excused and even embraced an ethic of greed, corner cutting and inside dealing that has always threatened the long-term stability of our economic system. Too often, we've lost that common stake in each other's prosperity.

Let me be clear: the American economy does not stand still, and neither should the rules that govern it. The evolution of industries often warrants regulatory reform - to foster competition, lower prices, or replace outdated oversight structures. Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading. There were good arguments for changing the rules of the road in the 1990s. Our economy was undergoing a fundamental shift, carried along by the swift currents of technological change and globalization. For the sake of our common prosperity, we needed to adapt to keep markets competitive and fair.

Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one - aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy.

Deregulation of the telecommunications sector, for example, fostered competition but also contributed to massive over-investment. Partial deregulation of the electricity sector enabled market manipulation. Companies like Enron and WorldCom took advantage of the new regulatory environment to push the envelope, pump up earnings, disguise losses and otherwise engage in accounting fraud to make their profits look better - a practice that led investors to question the balance sheet of all companies, and severely damaged public trust in capital markets. This was not the invisible hand at work. Instead, it was the hand of industry lobbyists tilting the playing field in Washington, an accounting industry that had developed powerful conflicts of interest, and a financial sector that fueled over-investment.

A decade later, we have deregulated the financial services sector, and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change because the nature of business has changed. But by the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework.

Since then, we have overseen 21st century innovation - including the aggressive introduction of new and complex financial instruments like hedge funds and non-bank financial companies - with outdated 20th century regulatory tools. New conflicts of interest recalled the worst excesses of the past - like the outrageous news that we learned just yesterday of KPMG allowing a lender to report profits instead of losses, so that both parties could make a quick buck. Not surprisingly, the regulatory environment failed to keep pace. When subprime mortgage lending took a reckless and unsustainable turn, a patchwork of regulators were unable or unwilling to protect the American people.

The policies of the Bush Administration threw the economy further out of balance. Tax cuts without end for the wealthiest Americans. A trillion dollar war in Iraq that didn't need to be fought, paid for with deficit spending and borrowing from foreign creditors like China. A complete disdain for pay-as-you-go budgeting - coupled with a generally scornful attitude towards oversight and enforcement - allowed far too many to put short-term gain ahead of long term consequences. The American economy was bound to suffer a painful correction, and policymakers found themselves with fewer resources to deal with the consequences.

Today, those consequences are clear. I see them in every corner of our great country, as families face foreclosure and rising costs. I seem them in towns across America, where a credit crisis threatens the ability of students to get loans, and states can't finance infrastructure projects. I see them here in Manhattan, where one of our biggest investment banks had to be bailed out, and the Fed opened its discount window to a host of new institutions with unprecedented implications we have yet to appreciate. When all is said and done, losses will be in the many hundreds of billions. What was bad for Main Street was bad for Wall Street. Pain trickled up.

That is why the principle that I spoke about at NASDAQ is even more urgently true today: in our 21st century economy, there is no dividing line between Main Street and Wall Street. The decisions made in New York's high-rises have consequences for Americans across the country. And whether those Americans can make their house payments; whether they keep their jobs; or spend confidently without falling into debt - that has consequences for the entire market. The future cannot be shaped by the best-connected lobbyists with the best record of raising money for campaigns. This thinking is wrong for the financial sector and it's wrong for our country.

I do not believe that government should stand in the way of innovation, or turn back the clock to an older era of regulation. But I do believe that government has a role to play in advancing our common prosperity: by providing stable macroeconomic and financial conditions for sustained growth; by demanding transparency; and by ensuring fair competition in the marketplace.

Our history should give us confidence that we don't have to choose between an oppressive government-run economy and a chaotic and unforgiving capitalism. It tells us we can emerge from great economic upheavals stronger, not weaker. But we can do so only if we restore confidence in our markets. Only if we rebuild trust between investors and lenders. And only if we renew that common interest between Wall Street and Main Street that is the key to our success.

Now, as most experts agree, our economy is in a recession. To renew our economy - and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again - we need to address not only the immediate crisis in the housing market; we also need to create a 21st century regulatory framework, and pursue a bold opportunity agenda for the American people.

Most urgently, we must confront the housing crisis.

After months of inaction, the President spoke here in New York and warned against doing too much. His main proposal - extending tax cuts for the wealthiest Americans - is completely divorced from the reality that people are facing around the country. John McCain recently announced his own plan, and it amounts to little more than watching this crisis happen. While this is consistent with Senator McCain's determination to run for George Bush's third term, it won't help families who are suffering, and it won't help lift our economy out of recession.

Over two million households are at risk of foreclosure and millions more have seen their home values plunge. Many Americans are walking away from their homes, which hurts property values for entire neighborhoods and aggravates the credit crisis. To stabilize the housing market and help bring the foreclosure crisis to an end, I have sponsored Senator Chris Dodd's legislation creating a new FHA Housing Security Program, which will provide meaningful incentives for lenders to buy or refinance existing mortgages. This will allow Americans facing foreclosure to keep their homes at rates they can afford.

Senator McCain argues that government should do nothing to protect borrowers and lenders who've made bad decisions, or taken on excessive risk. On this point, I agree. But the Dodd-Frank package is not a bailout for lenders or investors who gambled recklessly, as they will take losses. It is not a windfall for borrowers, as they will have to share any capital gain. Instead, it offers a responsible and fair way to help bring an end to the foreclosure crisis. It asks both sides to sacrifice, while preventing a long-term collapse that could have enormous ramifications for the most responsible lenders and borrowers, as well as the American people as a whole. That is what Senator McCain ignores.

For homeowners who were victims of fraud, I've also proposed a $10 billion Foreclosure Prevention Fund that would help them sell a home that is beyond their means, or modify their loan to avoid foreclosure or bankruptcy. It's also time to amend our bankruptcy laws, so families aren't forced to stick to the terms of a home loan that was predatory or unfair.

To prevent fraud in the future, I've proposed tough new penalties on fraudulent lenders, and a Home Score system that will allow consumers to find out more about mortgage offers and whether they'll be able to make payments. To help low- and middle-income families, I've proposed a 10 percent mortgage interest tax credit that will allow homeowners who don't itemize their taxes to access incentives for home ownership. And to expand home ownership, we must do more to help communities turn abandoned properties into affordable housing.

The government can't do this alone, nor should it. As I said last September, lenders must get ahead of the curve rather than just reacting to crisis. They should actively look at all borrowers, offer workouts, and reduce the principal on mortgages in trouble. Not only can this prevent the larger losses associated with foreclosure and resale, but it can reduce the extent of government intervention and taxpayer exposure.

Beyond dealing with the immediate housing crisis, it is time for the federal government to revamp the regulatory framework dealing with our financial markets.

Our capital markets have helped us build the strongest economy in the world. They are a source of competitive advantage for our country. But they cannot succeed without the public's trust. The details of regulatory reform should be developed through sound analysis and public debate. But there are several core principles for reform that I will pursue as President.

First, if you can borrow from the government, you should be subject to government oversight and supervision. Secretary Paulson admitted this in his remarks yesterday. The Federal Reserve should have basic supervisory authority over any institution to which it may make credit available as a lender of last resort. When the Fed steps in, it is providing lenders an insurance policy underwritten by the American taxpayer. In return, taxpayers have every right to expect that these institutions are not taking excessive risks. The nature of regulation should depend on the degree and extent of the Fed's exposure. But at the very least, these new regulations should include liquidity and capital requirements.

Second, there needs to be general reform of the requirements to which all regulated financial institutions are subjected. Capital requirements should be strengthened, particularly for complex financial instruments like some of the mortgage securities that led to our current crisis. We must develop and rigorously manage liquidity risk. We must investigate rating agencies and potential conflicts of interest with the people they are rating. And transparency requirements must demand full disclosure by financial institutions to shareholders and counterparties.

As we reform our regulatory system at home, we must work with international arrangements like the Basel Committee on Banking Supervision, the International Accounting Standards Board, and the Financial Stability Forum to address the same problems abroad. The goal must be ensuring that financial institutions around the world are subject to similar rules of the road - both to make the system stable, and to keep our financial institutions competitive.

Third, we need to streamline a framework of overlapping and competing regulatory agencies. Reshuffling bureaucracies should not be an end in itself. But the large, complex institutions that dominate the financial landscape do not fit into categories created decades ago. Different institutions compete in multiple markets - our regulatory system should not pretend otherwise. A streamlined system will provide better oversight, and be less costly for regulated institutions.

Fourth, we need to regulate institutions for what they do, not what they are. Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. It makes no sense for the Fed to tighten mortgage guidelines for banks when two-thirds of subprime mortgages don't originate from banks. This regulatory framework has failed to protect homeowners, and it is now clear that it made no sense for our financial system. When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with.

Fifth, we must remain vigilant and crack down on trading activity that crosses the line to market manipulation. Reports have circulated in recent days that some traders may have intentionally spread rumors that Bear Stearns was in financial distress while making market bets against the company. The SEC should investigate and punish this kind of market manipulation, and report its conclusions to Congress.

Sixth, we need a process that identifies systemic risks to the financial system. Too often, we deal with threats to the financial system that weren't anticipated by regulators. That's why we should create a financial market oversight commission, which would meet regularly and provide advice to the President, Congress, and regulators on the state of our financial markets and the risks that face them. These expert views could help anticipate risks before they erupt into a crisis.

These six principles should guide the legal reforms needed to establish a 21st century regulatory system. But the change we need goes beyond laws and regulation - we need a shift in the cultures of our financial institutions and our regulatory agencies.

Financial institutions must do a better job at managing risks. There is something wrong when boards of directors or senior managers don't understand the implications of the risks assumed by their own institutions. It's time to realign incentives and compensation packages, so that both high level executives and employees better serve the interests of shareholders. And it's time to confront the risks that come with excessive complexity. Even the best government regulation cannot fully substitute for internal risk management.

For supervisory agencies, oversight must keep pace with innovation. As the subprime crisis unfolded, tough questions about new and complex financial instruments were not asked. As a result, the public interest was not protected. We do American business - and the American people - no favors when we turn a blind eye to excessive leverage and dangerous risks.

Finally, the American people must be able to trust that their government is looking out for all of us - not just those who donate to political campaigns. I fought in the Senate for the most extensive ethics reform since Watergate. I have refused contributions from federal lobbyists and PACs. And I have laid out far-reaching plans that I intend to sign into law as President to bring transparency to government, and to end the revolving door between industries and the federal agencies that oversee them.

Once we deal with the immediate crisis in housing and strengthen the regulatory system governing our financial markets, our final task is to restore a sense of opportunity for all Americans.

The bedrock of our economic success is the American Dream. It's a dream shared in big cities and small towns; across races, regions and religions - that if you work hard, you can support a family; that if you get sick, there will be health care you can afford; that you can retire with the dignity and security and respect that you have earned; that your kids can get a good education, and young people can go to college even if they're not rich. That is our common hope across this country. That is the American Dream.

But today, for far too many Americans, this dream is slipping away. Wall Street has been gripped by increasing gloom over the last nine months. But for many American families, the economy has effectively been in recession for the past seven years. We have just come through the first sustained period of economic growth since World War II that was not accompanied by a growth in incomes for typical families. Americans are working harder for less. Costs are rising, and it's not clear that we'll leave a legacy of opportunity to our children and grandchildren.

That's why, throughout this campaign, I've put forward a series of proposals that will foster economic growth from the bottom up, and not just from the top down. That's why the last time I spoke on the economy here in New York, I talked about the need to put the policies of George W. Bush behind us - policies that have essentially said to the American people: "you are on your own"; because we need to pursue policies that once again recognize that we are in this together.

This starts with providing a stimulus that will reach the most vulnerable Americans, including immediate relief to areas hardest hit by the housing crisis, and a significant extension of unemployment insurance for those who are out of work. If we can extend a hand to banks on Wall Street, we can extend a hand to Americans who are struggling.

Beyond these short term measures, as President I will be committed to putting the American Dream on a firmer footing. To reward work and make retirement secure, we'll provide an income tax cut of up to $1000 for a working family, and eliminate income taxes altogether for any retiree making less than $50,000 per year. To make health care affordable for all Americans, we'll cut costs and provide coverage to all who need it. To put more Americans to work, we'll create millions of new Green Jobs and invest in rebuilding our nation's infrastructure. To extend opportunity, we'll invest in our schools and our teachers, and make college affordable for every American. And to ensure that America stays on the cutting edge, we'll expand broadband access, expand funding for basic scientific research, and pass comprehensive immigration reform so that we continue to attract the best and the brightest to our shores.

I know that making these changes won't be easy. I will not pretend that this will come without cost, though I have presented ways we can achieve these changes in a fiscally responsible way. I know that we'll have to overcome our doubts and divisions and the determined opposition of powerful special interests before we can truly advance opportunity and prosperity for all Americans.

But I would not be running for President if I didn't think that this was a defining moment in our history. If we fail to overcome our divisions and continue to let special interest set the agenda, then America will fall behind. Short-term gains will continue to yield long-term costs. Opportunity will slip away on Main Street and prosperity will suffer here on Wall Street. But if we unite this country around a common purpose, if we act on the responsibilities that we have to each other and to our country, then we can launch a new era of opportunity and prosperity.

I know we can do this because Americans have done this before. Time and again, we've recognized that common stake that we have in each other's success. That's how people as different as Hamilton and Jefferson came together to launch the world's greatest experiment in democracy. That's why our economy hasn't just been the world's greatest wealth creator - it's bound America together, it's created jobs, and it's made the dream of opportunity a reality for generations of Americans.

Now it falls to us. We have as our inheritance the greatest economy the world has ever known. We have the responsibility to continue the work that began on that spring day over two centuries ago right here in Manhattan - to renew our common purpose for a new century, and to write the next chapter in the story of America's success. We can do this. And we can begin this work today.

The Cost of War

Charleston, WV | March 20, 2008

Five years ago, the war in Iraq began. And on this fifth anniversary, we honor the brave men and women who are serving this nation in Iraq, Afghanistan, and around the world. We pay tribute to the sacrifices of their families back home. And a grateful nation mourns the loss of our fallen heroes.

I understand that the first serviceman killed in Iraq was a native West Virginian, Marine 1st Lieutenant Shane Childers, who died five years ago tomorrow. And so on this anniversary, my thoughts and prayers go out to Lieutenant Childers' family, and to all who've lost loved ones in Iraq and Afghanistan.

The costs of war are greatest for the troops and those who love them, but we know that war has other costs as well. Yesterday, I addressed some of these other costs in a speech on the strategic consequences of the Iraq war. I spoke about how this war has diverted us from fighting al Qaeda in Afghanistan and Pakistan, and from addressing the other challenges of the 21st Century: violent extremism and nuclear weapons; climate change and poverty; genocide and disease.

And today, I want to talk about another cost of this war - the toll it has taken on our economy. Because at a time when we're on the brink of recession - when neighborhoods have For Sale signs outside every home, and working families are struggling to keep up with rising costs - ordinary Americans are paying a price for this war.

When you're spending over $50 to fill up your car because the price of oil is four times what it was before Iraq, you're paying a price for this war.

When Iraq is costing each household about $100 a month, you're paying a price for this war.

When a National Guard unit is over in Iraq and can't help out during a hurricane in Louisiana or with floods here in West Virginia, our communities are paying a price for this war.

And the price our families and communities are paying reflects the price America is paying. The most conservative estimates say that Iraq has now cost more than half a trillion dollars, more than any other war in our history besides World War II. Some say the true cost is even higher and that by the time it's over, this could be a $3 trillion war.

But what no one disputes is that the cost of this war is far higher than what we were told it would be. We were told this war would cost $50 to $60 billion, and that reconstruction would pay for itself out of Iraqi oil profits. We were told higher estimates were nothing but "baloney." Like so much else about this war, we were not told the truth.

What no one disputes is that the costs of this war have been compounded by its careless and incompetent execution - from the billions that have vanished in Iraq to the billions more in no-bid contracts for reckless contractors like Halliburton.

What no one disputes is that five years into this war, soldiers up at Fort Drum are having to wait more than a month to get their first mental health screening - even though we know that incidences of PTSD skyrocket between the second, third, and fourth tours of duty. We have a sacred trust to our troops and our veterans, and we have to live up to it.

What no one disputes is that President Bush has done what no other President has ever done, and given tax cuts to the rich in a time of war. John McCain once opposed these tax cuts - he rightly called them unfair and fiscally irresponsible. But now he has done an about face and wants to make them permanent, just like he wants a permanent occupation in Iraq. No matter what the costs, no matter what the consequences, John McCain seems determined to carry out a third Bush-term.

That's an outcome America can't afford. Because of the Bush-McCain policies, our debt has ballooned. This is creating problems in our fragile economy. And that kind of debt also places an unfair burden on our children and grandchildren, who will have to repay it.

It also means we're having to pay for this war with loans from China. Having China as our banker isn't good for our economy, it isn't good for our global leadership, and it isn't good for our national security. History teaches us that for a nation to remain a preeminent military power, it must remain a preeminent economic power. That is why it is so important to manage the costs of war wisely.

This is a lesson that the first President Bush understood. The conduct of the Gulf War cost America less than $20 billion - what we pay in two months in Iraq today. That's because that war was prosecuted on solid grounds, and in a responsible way, and with the support of allies, who paid most of the costs. None of this has been the case in the way George W. Bush and John McCain have waged the current Iraq war.

Now, at that debate in Texas several weeks ago, Senator Clinton attacked John McCain for supporting the policies that have led to our enormous war costs. But her point would have been more compelling had she not joined Senator McCain in making the tragically ill-considered decision to vote for the Iraq war in the first place.

The truth is, this is all part of the reason I opposed this war from the start. It's why I said back in 2002 that it could lead to an occupation not just of undetermined length or undetermined consequences, but of undetermined costs. It's why I've said this war should have never been authorized and never been waged.

Now, let me be clear: when I am President, I will spare no expense to ensure that our troops have the equipment and support they need. There is no higher obligation for a Commander-in-Chief. But we also have to understand that the more than $10 billion we're spending each month in Iraq is money we could be investing here at home. Just think about what battles we could be fighting instead of fighting this misguided war.

Instead of fighting this war, we could be fighting the terrorists who attacked us on 9/11 and who are plotting against us in Afghanistan and Pakistan. We could be securing our homeland and stopping the world's most dangerous weapons from falling into terrorist hands.

Instead of fighting this war, we could be fighting for the people of West Virginia. For what folks in this state have been spending on the Iraq war, we could be giving health care to nearly 450,000 of your neighbors, hiring nearly 30,000 new elementary school teachers, and making college more affordable for over 300,000 students.

We could be fighting to put the American dream within reach for every American - by giving tax breaks to working families, offering relief to struggling homeowners, reversing President Bush's cuts to the Manufacturing Extension Partnership, and protecting Social Security today, tomorrow, and forever. That's what we could be doing instead of fighting this war.

Instead of fighting this war, we could be fighting to make universal health care a reality in this country. We could be fighting for the young woman who works the night shift after a full day of college and still can't afford medicine for a sister who's ill. For what we spend in several months in Iraq, we could be providing them with the quality, affordable health care that every American deserves.

Instead of fighting this war, we could be fighting to give every American a quality education. We could be fighting for the young men and women all across this country who dream big dreams but aren't getting the kind of education they need to reach for those dreams. For a fraction of what we're spending each year in Iraq, we could be giving our teachers more pay and more support, rebuilding our crumbling schools, and offering a tax credit to put a college degree within reach for anyone who wants one.

Instead of fighting this war, we could be fighting to rebuild our roads and bridges. I've proposed a fund that would do just that and generate nearly two million new jobs - many in the construction industry that's been hard hit by our housing crisis. And it would cost just six percent of what we spend each year in Iraq.

Instead of fighting this war, we could be freeing ourselves from the tyranny of oil, and saving this planet for our children. We could be investing in renewable sources of energy, and in clean coal technology, and creating up to 5 million new green jobs in the bargain, including new clean coal jobs. And we could be doing it all for the cost of less than a year and a half in Iraq.

These are the investments we could be making, all within the parameters of a more responsible and disciplined budget. This is the future we could be building. And that is why I will bring this war to an end when I'm President of the United States of America.

But we also know that even after this war comes to an end, the costs of this war will not. We'll have to keep our sacred trust with our veterans and fully fund the VA. We'll have to look after our wounded warriors - whether they're suffering from wounds seen or unseen. That must include the signature injuries of the wars in Iraq and Afghanistan - not just PTSD, but Traumatic Brain Injury. We'll have to give veterans the health care and disability benefits they deserve, the support they need, and the respect they've earned. This is an obligation I have fought to uphold on the Senate Veterans' Affairs Committee by joining Jay Rockefeller to expand educational opportunities for our veterans. It's an obligation I will uphold as President, and it's an obligation that will endure long after this war is over.

And our obligation to rebuild our military will endure as well. This war has stretched our military to its limits, wearing down troops and equipment as a result of tour after tour after tour of duty. The Army has said it will need $13 billion a year just to replace and repair all the equipment that's been broken or lost. So in the coming years we won't just have to restore our military to its peak level of readiness, and we won't just have to make sure our National Guard is back to being fully prepared to handle a domestic crisis, we'll also have to ensure that our soldiers are trained and equipped to confront the new threats of the 21 century and that our military can meet any challenge around the world. And that is a responsibility I intend to meet as Commander-in-Chief.

So we know what this war has cost us - in blood and in treasure. But in the words of Robert Kennedy, "past error is no excuse for its own perpetuation." And yet, John McCain refuses to learn from the failures of the Bush years. Instead of offering an exit strategy for Iraq, he's offering us a 100-year occupation. Instead of offering an economic plan that works for working Americans, he's supporting tax cuts for the wealthiest among us who don't need them and aren't asking for them. Senator McCain is embracing the failed policies of the past, but America is ready to embrace the future.

When I am your nominee, the American people will have a real choice in November - between change and more of the same, between giving the Bush policies another four years, or bringing them to an end. And that is the choice the American people deserve.

Somewhere in Baghdad today, a soldier is stepping into his Humvee and heading out on a patrol. That soldier knows the cost of war. He's been bearing it for five years. It's the cost of being kept awake at night by the whistle of falling mortars. It's the cost of a heart that aches for a loved one back home, and a family that's counting the days until the next R&R. It's the cost of losing a friend, who asked for nothing but to serve his country.

How much longer are we going to ask our troops to bear the cost of this war?

How much longer are we going to ask our families and our communities to bear the cost of this war?

When are we going to stop mortgaging our children's future for Washington's mistake?

This election is our chance to reclaim our future - to end the fight in Iraq and take up the fight for good jobs and universal health care. To end the fight in Iraq and take up the fight for a world-class education and retirement security. To end the fight in Iraq and take up the fight for opportunity, and equality, and prosperity here at home.

Those are the battles we need to fight. That is the leadership I want to offer. And that is the future we can build together when I'm President of the United States. Thank you.

The World Beyond Iraq

Fayetteville, NC | March 19, 2008

Just before America's entry into World War I, President Woodrow Wilson addressed Congress: "It is a fearful thing to lead this great peaceful people into war," he said. "...But the right is more precious than peace." Wilson's words captured two awesome responsibilities that test any Commander-in-Chief - to never hesitate to defend America, but to never go to war unless you must. War is sometimes necessary, but it has grave consequences, and the judgment to go to war can never be undone.

Five years ago today, President George W. Bush addressed the nation. Bombs had started to rain down on Baghdad. War was necessary, the President said, because the United States could not, "live at the mercy of an outlaw regime that threatens the peace with weapons of mass murder." Recalling the pain of 9/11, he said the price of inaction in Iraq was to meet the threat with "armies of fire fighters and police and doctors on the streets of our cities."

At the time the President uttered those words, there was no hard evidence that Iraq had those stockpiles of weapons of mass destruction. There was not any evidence that Iraq was responsible for the attacks of September 11, or that Iraq had operational ties to the al Qaeda terrorists who carried them out. By launching a war based on faulty premises and bad intelligence, President Bush failed Wilson's test. So did Congress when it voted to give him the authority to wage war.

Five years have gone by since that fateful decision. This war has now lasted longer than World War I, World War II, or the Civil War. Nearly four thousand Americans have given their lives. Thousands more have been wounded. Even under the best case scenarios, this war will cost American taxpayers well over a trillion dollars. And where are we for all of this sacrifice? We are less safe and less able to shape events abroad. We are divided at home, and our alliances around the world have been strained. The threats of a new century have roiled the waters of peace and stability, and yet America remains anchored in Iraq.

History will catalog the reasons why we waged a war that didn't need to be fought, but two stand out. In 2002, when the fateful decisions about Iraq were made, there was a President for whom ideology overrode pragmatism, and there were too many politicians in Washington who spent too little time reading the intelligence reports, and too much time reading public opinion. The lesson of Iraq is that when we are making decisions about matters as grave as war, we need a policy rooted in reason and facts, not ideology and politics.

Now we are debating who should be our next Commander in Chief. And I am running for President because it's time to turn the page on a failed ideology and a fundamentally flawed political strategy, so that we can make pragmatic judgments to keep our country safe. That's what I did when I stood up and opposed this war from the start, and said that we needed to finish the fight against al Qaeda. And that's what I'll do as President of the United States.

Senator Clinton says that she and Senator McCain have passed a "Commander in Chief test" - not because of the judgments they've made, but because of the years they've spent in Washington. She made a similar argument when she said her vote for war was based on her experience at both ends of Pennsylvania Avenue. But here is the stark reality: there is a security gap in this country - a gap between the rhetoric of those who claim to be tough on national security, and the reality of growing insecurity caused by their decisions. A gap between Washington experience, and the wisdom of Washington's judgments. A gap between the rhetoric of those who tout their support for our troops, and the overburdened state of our military.

It is time to have a debate with John McCain about the future of our national security. And the way to win that debate is not to compete with John McCain over who has more experience in Washington, because that's a contest that he'll win. The way to win a debate with John McCain is not to talk, and act, and vote like him on national security, because then we all lose. The way to win that debate and to keep America safe is to offer a clear contrast, and that's what I will do when I am the nominee of the Democratic Party - because since before this war in Iraq began, I have made different judgments, I have a different vision, and I will offer a clean break from the failed policies and politics of the past.

Nowhere is that break more badly needed than in Iraq.

In the year since President Bush announced the surge - the bloodiest year of the war for America - the level of violence in Iraq has been reduced. Our troops - including so many from Fort Bragg and Pope Air Force Base - have done a brilliant job under difficult circumstances. Yet while we have a General who has used improved tactics to reduce violence, we still have the wrong strategy. As General Petraeus has himself acknowledged, the Iraqis are not achieving the political progress needed to end their civil war. Beyond Iraq, our military is badly overstretched, and we have neither the strategy nor resources to deal with nearly every other national security challenge we face.

This is why the judgment that matters most on Iraq - and on any decision to deploy military force - is the judgment made first. If you believe we are fighting the right war, then the problems we face are purely tactical in nature. That is what Senator McCain wants to discuss - tactics. What he and the Administration have failed to present is an overarching strategy: how the war in Iraq enhances our long-term security, or will in the future. That's why this Administration cannot answer the simple question posed by Senator John Warner in hearings last year: Are we safer because of this war? And that is why Senator McCain can argue - as he did last year - that we couldn't leave Iraq because violence was up, and then argue this year that we can't leave Iraq because violence is down.

When you have no overarching strategy, there is no clear definition of success. Success comes to be defined as the ability to maintain a flawed policy indefinitely. Here is the truth: fighting a war without end will not force the Iraqis to take responsibility for their own future. And fighting in a war without end will not make the American people safer.

So when I am Commander-in-Chief, I will set a new goal on Day One: I will end this war. Not because politics compels it. Not because our troops cannot bear the burden- as heavy as it is. But because it is the right thing to do for our national security, and it will ultimately make us safer.

In order to end this war responsibly, I will immediately begin to remove our troops from Iraq. We can responsibly remove 1 to 2 combat brigades each month. If we start with the number of brigades we have in Iraq today, we can remove all of them 16 months. After this redeployment, we will leave enough troops in Iraq to guard our embassy and diplomats, and a counter-terrorism force to strike al Qaeda if it forms a base that the Iraqis cannot destroy. What I propose is not - and never has been - a precipitous drawdown. It is instead a detailed and prudent plan that will end a war nearly seven years after it started.

My plan to end this war will finally put pressure on Iraq's leaders to take responsibility for their future. Because we've learned that when we tell Iraq's leaders that we'll stay as long as it takes, they take as long as they want. We need to send a different message. We will help Iraq reach a meaningful accord on national reconciliation. We will engage with every country in the region - and the UN - to support the stability and territorial integrity of Iraq. And we will launch a major humanitarian initiative to support Iraq's refugees and people. But Iraqis must take responsibility for their country. It is precisely this kind of approach - an approach that puts the onus on the Iraqis, and that relies on more than just military power - that is needed to stabilize Iraq.

Let me be clear: ending this war is not going to be easy. There will be dangers involved. We will have to make tactical adjustments, listening to our commanders on the ground, to ensure that our interests in a stable Iraq are met, and to make sure that our troops are secure. Senator Clinton has tried to use my position to score political points, suggesting that I am somehow less committed to ending the war. She makes this argument despite the fact that she has taken the same position in the past. So ask yourself: who do you trust to end a war - someone who opposed the war from the beginning, or someone who started opposing it when they started preparing a run for President?

Now we know what we'll hear from those like John McCain who support open-ended war. They will argue that leaving Iraq is surrender. That we are emboldening the enemy. These are the mistaken and misleading arguments we hear from those who have failed to demonstrate how the war in Iraq has made us safer. Just yesterday, we heard Senator McCain confuse Sunni and Shiite, Iran and al Qaeda. Maybe that is why he voted to go to war with a country that had no al Qaeda ties. Maybe that is why he completely fails to understand that the war in Iraq has done more to embolden America's enemies than any strategic choice that we have made in decades.

The war in Iraq has emboldened Iran, which poses the greatest challenge to American interests in the Middle East in a generation, continuing its nuclear program and threatening our ally, Israel. Instead of the new Middle East we were promised, Hamas runs Gaza, Hizbollah flags fly from the rooftops in Sadr City, and Iran is handing out money left and right in southern Lebanon.

The war in Iraq has emboldened North Korea, which built new nuclear weapons and even tested one before the Administration finally went against its own rhetoric, and pursued diplomacy.

The war in Iraq has emboldened the Taliban, which has rebuilt its strength since we took our eye off of Afghanistan.

Above all, the war in Iraq has emboldened al Qaeda, whose recruitment has jumped and whose leadership enjoys a safe-haven in Pakistan - a thousand miles from Iraq.

The central front in the war against terror is not Iraq, and it never was. What more could America's enemies ask for than an endless war where they recruit new followers and try out new tactics on a battlefield so far from their base of operations? That is why my presidency will shift our focus. Rather than fight a war that does not need to be fought, we need to start fighting the battles that need to be won on the central front of the war against al Qaeda in Afghanistan and Pakistan.

This is the area where the 9/11 attacks were planned. This is where Osama bin Laden and his top lieutenants still hide. This is where extremism poses its greatest threat. Yet in both Afghanistan and Pakistan, we have pursued flawed strategies that are too distant from the needs of the people, and too timid in pursuit of our common enemies.

It may not dominate the evening news, but in Afghanistan, last year was the most deadly since 2001. Suicide attacks are up. Casualties are up. Corruption and drug trafficking are rampant. Neither the government nor the legal economy can meet the needs of the Afghan people.

It is not too late to prevail in Afghanistan. But we cannot prevail until we reduce our commitment in Iraq, which will allow us to do what I called for last August - providing at least two additional combat brigades to support our efforts in Afghanistan. This increased commitment in turn can be used to leverage greater assistance - with fewer restrictions - from our NATO allies. It will also allow us to invest more in training Afghan security forces, including more joint NATO operations with the Afghan Army, and a national police training plan that is effectively coordinated and resourced.

A stepped up military commitment must be backed by a long-term investment in the Afghan people. We will start with an additional $1 billion in non military assistance each year - aid that is focused on reaching ordinary Afghans. We need to improve daily life by supporting education, basic infrastructure and human services. We have to counter the opium trade by supporting alternative livelihoods for Afghan farmers. And we must call on more support from friends and allies, and better coordination under a strong international coordinator.

To succeed in Afghanistan, we also need to fundamentally rethink our Pakistan policy. For years, we have supported stability over democracy in Pakistan, and gotten neither. The core leadership of al Qaeda has a safe-haven in Pakistan. The Taliban are able to strike inside Afghanistan and then return to the mountains of the Pakistani border. Throughout Pakistan, domestic unrest has been rising. The full democratic aspirations of the Pakistani people have been too long denied. A child growing up in Pakistan, more often than not, is taught to see America as a source of hate - not hope.

This is why I stood up last summer and said we cannot base our entire Pakistan policy on President Musharraf. Pakistan is our ally, but we do our own security and our ally no favors by supporting its President while we are seen to be ignoring the interests of the people. Our counter-terrorism assistance must be conditioned on Pakistani action to root out the al Qaeda sanctuary. And any U.S. aid not directly needed for the fight against al Qaeda or to invest in the Pakistani people should be conditioned on the full restoration of Pakistan's democracy and rule of law.

The choice is not between Musharraf and Islamic extremists. As the recent legislative elections showed, there is a moderate majority of Pakistanis, and they are the people we need on our side to win the war against al Qaeda. That is why we should dramatically increase our support for the Pakistani people - for education, economic development, and democratic institutions. That child in Pakistan must know that we want a better life for him, that America is on his side, and that his interest in opportunity is our interest as well. That's the promise that America must stand for.

And for his sake and ours, we cannot tolerate a sanctuary for terrorists who threaten America's homeland and Pakistan's stability. If we have actionable intelligence about high-level al Qaeda targets in Pakistan's border region, we must act if Pakistan will not or cannot. Senator Clinton, Senator McCain, and President Bush have all distorted and derided this position, suggesting that I would invade or bomb Pakistan. This is politics, pure and simple. My position, in fact, is the same pragmatic policy that all three of them have belatedly - if tacitly - acknowledged is one we should pursue. Indeed, it was months after I called for this policy that a top al Qaeda leader was taken out in Pakistan by an American aircraft. And remember that the same three individuals who now criticize me for supporting a targeted strike on the terrorists who carried out the 9/11 attacks, are the same three individuals that supported an invasion of Iraq - a country that had nothing to do with 9/11.

It is precisely this kind of political point-scoring that has opened up the security gap in this country. We have a security gap when candidates say they will follow Osama bin Laden to the gates of hell, but refuse to follow him where he actually goes. What we need in our next Commander in Chief is not a stubborn refusal to acknowledge reality or empty rhetoric about 3AM phone calls. What we need is a pragmatic strategy that focuses on fighting our real enemies, rebuilding alliances, and renewing our engagement with the world's people.

In addition to freeing up resources to take the fight to al Qaeda, ending the war in Iraq will allow us to more effectively confront other threats in the world - threats that cannot be conquered with an occupying army or dispatched with a single decision in the middle of the night. What lies in the heart of a child in Pakistan matters as much as the airplanes we sell her government. What's in the head of a scientist from Russia can be as lethal as a plutonium reactor in Yongbyon. What's whispered in refugee camps in Chad can be as dangerous as a dictator's bluster. These are the neglected landscapes of the 21st century, where technology and extremism empower individuals just as they give governments the ability to repress them; where the ancient divides of region and religion wash into the swift currents of globalization.

Without American leadership, these threats will fester. With strong American leadership, we can shape them into opportunities to protect our common security and advance our common humanity - for it has always been the genius of American leadership to find opportunity embedded in adversity; to focus on a source of fear, and confront it with hope.

Here are just five ways in which a shift in strategy away from Iraq will help us address the critical challenges of the 21st century.

First, in addressing global terror and violent extremism, we need the kind of comprehensive counter-terrorism strategy I called for last August. We need to strengthen security partnerships to take out terrorist networks, while investing in education and opportunity. We need to give our national security agencies the tools they need, while restoring the adherence to rule of law that helps us win the battle for hearts and minds. This means closing Guantanamo, restoring habeas corpus, and respecting civil liberties. And we need to support the forces of moderation in the Islamic world, so that alliances of convenience mature into friendships of conviction.

Second, the threat of nuclear proliferation must serve as a call to action. I have worked across the aisle with Richard Lugar and Chuck Hagel in the Senate to secure dangerous weapons and loose nuclear materials. And as President, I will secure all loose nuclear materials around the world in my first term, seek deep cuts in global nuclear arsenals, strengthen the Nuclear Non-Proliferation Treaty, and once more seek a world without nuclear weapons.

Third, the danger of weak and failed states risks spreading poverty and refugees; genocide and disease. Now is the time to meet the goal of cutting extreme poverty in half, in part by doubling our foreign assistance while demanding more from those who receive it. And now is the time to build the capacity of regional partners in conflict prevention, peacekeeping, and the reconstruction of ravaged societies.

Fourth, the catastrophic consequences of the global climate crisis are matched by the promise of collective action. Now is the time for America to lead, because if we take action, others will act as well. Through our own cap and trade system and investments in new sources of energy, we can end our dependence on foreign oil and gas, and free ourselves from the tyranny of oil-rich states from Saudi Arabia to Russia to Venezuela. We can create millions of new jobs here in America. And we can secure our planet for our children and grandchildren.

And fifth, America's sluggish economy risks ceding our economic prominence to a rising China. Competition has always been a catalyst for American innovation, and now should be no different. We must invest in the education of our children, renew our leadership in science, and advance trade that is not just free, but fair for our workers. We must ensure that America is the economic engine in the 21st century just as we were in the 20th.

I have no illusions that any of this will be easy. But I do know that we can only begin to make these changes when we end the mindset that focuses on Iraq and ignores the rest of the world.

I also know that meeting these new threats will require a President who deploys the power of tough, principled diplomacy. It is time to present a country like Iran with a clear choice. If it abandons its nuclear program, support for terror, and threats to Israel, then Iran can rejoin the community of nations - with all the benefits that entails. If not, Iran will face deeper isolation and steeper sanctions. When we engage directly, we will be in a stronger position to rally real international support for increased pressure. We will also engender more goodwill from the Iranian people. And make no mistake - if and when we ever have to use military force against any country, we must exert the power of American diplomacy first.

Once again, Senator Clinton, Senator McCain, and President Bush have made the same arguments against my position on diplomacy, as if reading from the same political playbook. They say I'll be penciling the world's dictators on to my social calendar. But just as they are misrepresenting my position, they are mistaken in standing up for a policy of not talking that is not working. What I've said is that we cannot seize opportunities to resolve our problems unless we create them. That is what Kennedy did with Khrushchev; what Nixon did with Mao; what Reagan did with Gorbachev. And that is what I will do as President of the United States.

What I have talked about today is a new strategy, a new set of priorities for pursuing our interests in the 21st century. And as President, I will provide the tools required to implement this strategy. When President Truman put the policy of containment in place, he also invested in and organized our government to carry it out -creating the National Security Council and the CIA, and founding NATO. Now, we must upgrade our tools of power to fit a new strategy.

That starts with enhancing the finest military in the history of the world. As Commander in Chief, I will begin by giving a military overstretched by Iraq the support it needs. It is time to reduce the strain on our troops by completing the effort to increase our ground forces by 65,000 soldiers and 27,000 Marines, while ensuring the quality of our troops. In an age marked by technology, it is the people of our military - our Soldiers, Sailors, Airmen, Marines, and Coast Guardsmen - who bear the responsibility for complex missions. That is why we need to ensure adequate training and time home between deployments. That is why we need to expand our Special Forces. And that is why we must increase investments in capabilities like civil affairs and training foreign militaries.

But we cannot place the burden of a new national security strategy on our military alone. We must integrate our diplomatic, information, economic and military power. That is why, as soon as I take office, I will call for a National Strategy and Security Review, to help determine a 21st Century inter-agency structure to integrate the elements of our national power.

In addition, I will invest in our civilian capacity to operate alongside our troops in post-conflict zones and on humanitarian and stabilization missions. Instead of shuttering consulates in tough corners of the world, it's time to grow our Foreign Service and to expand USAID. Instead of giving up on the determination of young people to serve, it's time to double the size of our Peace Corps. Instead of letting people learn about America from enemy propaganda, it's time to recruit, train, and send out into the world an America's Voice Corps.

And while we strengthen our own capacity, we must strengthen the capability of the international community. We honor NATO's sacrifice in Afghanistan, but we must strive to make it a larger and more nimble alliance. We must work with powers like Russia and China, but we must also speak up for human rights and democracy - and we can start now by speaking out for the human rights and religious freedom of the people of Tibet. And while we are frustrated by the UN, we must invest in its capability to keep the peace, resolve disputes, monitor disarmament, and support good governance around the world - and that depends on a more engaged United States.

We are at a defining moment in our history.

We can choose the path of unending war and unilateral action, and sap our strength and standing. We can choose the path of disengagement, and cede our leadership. Or, we can meet fear and danger head-on with hope and strength; with common purpose as a united America; and with common cause with old allies and new partners.

What we've seen these last few years is what happens when the rigid ideology and dysfunctional politics of Washington is projected abroad. An ideology that does not fit the shape of the times cannot shape events in foreign countries. A politics that is based on fear and division does not allow us to call on the world to hope, and keeps us from coming together as one people, as one nation, to write the next great chapter in the American story.

We also know that there is another face of America that we have seen these last five years. From down the road at Fort Bragg, our soldiers have gone abroad with a greater sense of common purpose than their leaders in Washington. They have learned the lessons of the 21st century's wars. And they have shown a sense of service and selflessness that represents the very best of the American character.

This must be the election when we stand up and say that we will serve them as well as they have served us. This must be the election when America comes together behind a common purpose on behalf of our security and our values. That is what we do as Americans. It's how we founded a republic based on freedom, and faced down fascism. It's how we defended democracy through a Cold War, and shined a light of hope bright enough to be seen in the darkest corners of the world.

When America leads with principle and pragmatism, hope can triumph over fear. It is time, once again, for America to lead.

"A More Perfect Union" speech by Barack Obama

Philadelphia, PA | March 18, 2008

"We the people, in order to form a more perfect union."

Two hundred and twenty one years ago, in a hall that still stands across the street, a group of men gathered and, with these simple words, launched America's improbable experiment in democracy. Farmers and scholars; statesmen and patriots who had traveled across an ocean to escape tyranny and persecution finally made real their declaration of independence at a Philadelphia convention that lasted through the spring of 1787.

The document they produced was eventually signed but ultimately unfinished. It was stained by this nation's original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least twenty more years, and to leave any final resolution to future generations.

Of course, the answer to the slavery question was already embedded within our Constitution - a Constitution that had at is very core the ideal of equal citizenship under the law; a Constitution that promised its people liberty, and justice, and a union that could be and should be perfected over time.

And yet words on a parchment would not be enough to deliver slaves from bondage, or provide men and women of every color and creed their full rights and obligations as citizens of the United States. What would be needed were Americans in successive generations who were willing to do their part - through protests and struggle, on the streets and in the courts, through a civil war and civil disobedience and always at great risk - to narrow that gap between the promise of our ideals and the reality of their time.

This was one of the tasks we set forth at the beginning of this campaign - to continue the long march of those who came before us, a march for a more just, more equal, more free, more caring and more prosperous America. I chose to run for the presidency at this moment in history because I believe deeply that we cannot solve the challenges of our time unless we solve them together - unless we perfect our union by understanding that we may have different stories, but we hold common hopes; that we may not look the same and we may not have come from the same place, but we all want to move in the same direction - towards a better future for our children and our grandchildren.

This belief comes from my unyielding faith in the decency and generosity of the American people. But it also comes from my own American story.

I am the son of a black man from Kenya and a white woman from Kansas. I was raised with the help of a white grandfather who survived a Depression to serve in Patton's Army during World War II and a white grandmother who worked on a bomber assembly line at Fort Leavenworth while he was overseas. I've gone to some of the best schools in America and lived in one of the world's poorest nations. I am married to a black American who carries within her the blood of slaves and slaveowners - an inheritance we pass on to our two precious daughters. I have brothers, sisters, nieces, nephews, uncles and cousins, of every race and every hue, scattered across three continents, and for as long as I live, I will never forget that in no other country on Earth is my story even possible.

It's a story that hasn't made me the most conventional candidate. But it is a story that has seared into my genetic makeup the idea that this nation is more than the sum of its parts - that out of many, we are truly one.

Throughout the first year of this campaign, against all predictions to the contrary, we saw how hungry the American people were for this message of unity. Despite the temptation to view my candidacy through a purely racial lens, we won commanding victories in states with some of the whitest populations in the country. In South Carolina, where the Confederate Flag still flies, we built a powerful coalition of African Americans and white Americans.

This is not to say that race has not been an issue in the campaign. At various stages in the campaign, some commentators have deemed me either "too black" or "not black enough." We saw racial tensions bubble to the surface during the week before the South Carolina primary. The press has scoured every exit poll for the latest evidence of racial polarization, not just in terms of white and black, but black and brown as well.

And yet, it has only been in the last couple of weeks that the discussion of race in this campaign has taken a particularly divisive turn.

On one end of the spectrum, we've heard the implication that my candidacy is somehow an exercise in affirmative action; that it's based solely on the desire of wide-eyed liberals to purchase racial reconciliation on the cheap. On the other end, we've heard my former pastor, Reverend Jeremiah Wright, use incendiary language to express views that have the potential not only to widen the racial divide, but views that denigrate both the greatness and the goodness of our nation; that rightly offend white and black alike.

I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy. For some, nagging questions remain. Did I know him to be an occasionally fierce critic of American domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in church? Yes. Did I strongly disagree with many of his political views? Absolutely - just as I'm sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed.

But the remarks that have caused this recent firestorm weren't simply controversial. They weren't simply a religious leader's effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country - a view that sees white racism as endemic, and that elevates what is wrong with America above all that we know is right with America; a view that sees the conflicts in the Middle East as rooted primarily in the actions of stalwart allies like Israel, instead of emanating from the perverse and hateful ideologies of radical Islam.

As such, Reverend Wright's comments were not only wrong but divisive, divisive at a time when we need unity; racially charged at a time when we need to come together to solve a set of monumental problems - two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change; problems that are neither black or white or Latino or Asian, but rather problems that confront us all.

Given my background, my politics, and my professed values and ideals, there will no doubt be those for whom my statements of condemnation are not enough. Why associate myself with Reverend Wright in the first place, they may ask? Why not join another church? And I confess that if all that I knew of Reverend Wright were the snippets of those sermons that have run in an endless loop on the television and You Tube, or if Trinity United Church of Christ conformed to the caricatures being peddled by some commentators, there is no doubt that I would react in much the same way

But the truth is, that isn't all that I know of the man. The man I met more than twenty years ago is a man who helped introduce me to my Christian faith, a man who spoke to me about our obligations to love one another; to care for the sick and lift up the poor. He is a man who served his country as a U.S. Marine; who has studied and lectured at some of the finest universities and seminaries in the country, and who for over thirty years led a church that serves the community by doing God's work here on Earth - by housing the homeless, ministering to the needy, providing day care services and scholarships and prison ministries, and reaching out to those suffering from HIV/AIDS.

In my first book, Dreams From My Father, I described the experience of my first service at Trinity:

"People began to shout, to rise from their seats and clap and cry out, a forceful wind carrying the reverend's voice up into the rafters....And in that single note - hope! - I heard something else; at the foot of that cross, inside the thousands of churches across the city, I imagined the stories of ordinary black people merging with the stories of David and Goliath, Moses and Pharaoh, the Christians in the lion's den, Ezekiel's field of dry bones. Those stories - of survival, and freedom, and hope - became our story, my story; the blood that had spilled was our blood, the tears our tears; until this black church, on this bright day, seemed once more a vessel carrying the story of a people into future generations and into a larger world. Our trials and triumphs became at once unique and universal, black and more than black; in chronicling our journey, the stories and songs gave us a means to reclaim memories that we didn't need to feel shame about...memories that all people might study and cherish - and with which we could start to rebuild."

That has been my experience at Trinity. Like other predominantly black churches across the country, Trinity embodies the black community in its entirety - the doctor and the welfare mom, the model student and the former gang-banger. Like other black churches, Trinity's services are full of raucous laughter and sometimes bawdy humor. They are full of dancing, clapping, screaming and shouting that may seem jarring to the untrained ear. The church contains in full the kindness and cruelty, the fierce intelligence and the shocking ignorance, the struggles and successes, the love and yes, the bitterness and bias that make up the black experience in America.

And this helps explain, perhaps, my relationship with Reverend Wright. As imperfect as he may be, he has been like family to me. He strengthened my faith, officiated my wedding, and baptized my children. Not once in my conversations with him have I heard him talk about any ethnic group in derogatory terms, or treat whites with whom he interacted with anything but courtesy and respect. He contains within him the contradictions - the good and the bad - of the community that he has served diligently for so many years.

I can no more disown him than I can disown the black community. I can no more disown him than I can my white grandmother - a woman who helped raise me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything in this world, but a woman who once confessed her fear of black men who passed by her on the street, and who on more than one occasion has uttered racial or ethnic stereotypes that made me cringe.

These people are a part of me. And they are a part of America, this country that I love.

Some will see this as an attempt to justify or excuse comments that are simply inexcusable. I can assure you it is not. I suppose the politically safe thing would be to move on from this episode and just hope that it fades into the woodwork. We can dismiss Reverend Wright as a crank or a demagogue, just as some have dismissed Geraldine Ferraro, in the aftermath of her recent statements, as harboring some deep-seated racial bias.

But race is an issue that I believe this nation cannot afford to ignore right now. We would be making the same mistake that Reverend Wright made in his offending sermons about America - to simplify and stereotype and amplify the negative to the point that it distorts reality.

The fact is that the comments that have been made and the issues that have surfaced over the last few weeks reflect the complexities of race in this country that we've never really worked through - a part of our union that we have yet to perfect. And if we walk away now, if we simply retreat into our respective corners, we will never be able to come together and solve challenges like health care, or education, or the need to find good jobs for every American.

Understanding this reality requires a reminder of how we arrived at this point. As William Faulkner once wrote, "The past isn't dead and buried. In fact, it isn't even past." We do not need to recite here the history of racial injustice in this country. But we do need to remind ourselves that so many of the disparities that exist in the African-American community today can be directly traced to inequalities passed on from an earlier generation that suffered under the brutal legacy of slavery and Jim Crow.

Segregated schools were, and are, inferior schools; we still haven't fixed them, fifty years after Brown v. Board of Education, and the inferior education they provided, then and now, helps explain the pervasive achievement gap between today's black and white students.

Legalized discrimination - where blacks were prevented, often through violence, from owning property, or loans were not granted to African-American business owners, or black homeowners could not access FHA mortgages, or blacks were excluded from unions, or the police force, or fire departments - meant that black families could not amass any meaningful wealth to bequeath to future generations. That history helps explain the wealth and income gap between black and white, and the concentrated pockets of poverty that persists in so many of today's urban and rural communities.

A lack of economic opportunity among black men, and the shame and frustration that came from not being able to provide for one's family, contributed to the erosion of black families - a problem that welfare policies for many years may have worsened. And the lack of basic services in so many urban black neighborhoods - parks for kids to play in, police walking the beat, regular garbage pick-up and building code enforcement - all helped create a cycle of violence, blight and neglect that continue to haunt us.

This is the reality in which Reverend Wright and other African-Americans of his generation grew up. They came of age in the late fifties and early sixties, a time when segregation was still the law of the land and opportunity was systematically constricted. What's remarkable is not how many failed in the face of discrimination, but rather how many men and women overcame the odds; how many were able to make a way out of no way for those like me who would come after them.

But for all those who scratched and clawed their way to get a piece of the American Dream, there were many who didn't make it - those who were ultimately defeated, in one way or another, by discrimination. That legacy of defeat was passed on to future generations - those young men and increasingly young women who we see standing on street corners or languishing in our prisons, without hope or prospects for the future. Even for those blacks who did make it, questions of race, and racism, continue to define their worldview in fundamental ways. For the men and women of Reverend Wright's generation, the memories of humiliation and doubt and fear have not gone away; nor has the anger and the bitterness of those years. That anger may not get expressed in public, in front of white co-workers or white friends. But it does find voice in the barbershop or around the kitchen table. At times, that anger is exploited by politicians, to gin up votes along racial lines, or to make up for a politician's own failings.

And occasionally it finds voice in the church on Sunday morning, in the pulpit and in the pews. The fact that so many people are surprised to hear that anger in some of Reverend Wright's sermons simply reminds us of the old truism that the most segregated hour in American life occurs on Sunday morning. That anger is not always productive; indeed, all too often it distracts attention from solving real problems; it keeps us from squarely facing our own complicity in our condition, and prevents the African-American community from forging the alliances it needs to bring about real change. But the anger is real; it is powerful; and to simply wish it away, to condemn it without understanding its roots, only serves to widen the chasm of misunderstanding that exists between the races.

In fact, a similar anger exists within segments of the white community. Most working- and middle-class white Americans don't feel that they have been particularly privileged by their race. Their experience is the immigrant experience - as far as they're concerned, no one's handed them anything, they've built it from scratch. They've worked hard all their lives, many times only to see their jobs shipped overseas or their pension dumped after a lifetime of labor. They are anxious about their futures, and feel their dreams slipping away; in an era of stagnant wages and global competition, opportunity comes to be seen as a zero sum game, in which your dreams come at my expense. So when they are told to bus their children to a school across town; when they hear that an African American is getting an advantage in landing a good job or a spot in a good college because of an injustice that they themselves never committed; when they're told that their fears about crime in urban neighborhoods are somehow prejudiced, resentment builds over time.

Like the anger within the black community, these resentments aren't always expressed in polite company. But they have helped shape the political landscape for at least a generation. Anger over welfare and affirmative action helped forge the Reagan Coalition. Politicians routinely exploited fears of crime for their own electoral ends. Talk show hosts and conservative commentators built entire careers unmasking bogus claims of racism while dismissing legitimate discussions of racial injustice and inequality as mere political correctness or reverse racism.

Just as black anger often proved counterproductive, so have these white resentments distracted attention from the real culprits of the middle class squeeze - a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favor the few over the many. And yet, to wish away the resentments of white Americans, to label them as misguided or even racist, without recognizing they are grounded in legitimate concerns - this too widens the racial divide, and blocks the path to understanding.

This is where we are right now. It's a racial stalemate we've been stuck in for years. Contrary to the claims of some of my critics, black and white, I have never been so naïve as to believe that we can get beyond our racial divisions in a single election cycle, or with a single candidacy - particularly a candidacy as imperfect as my own.

But I have asserted a firm conviction - a conviction rooted in my faith in God and my faith in the American people - that working together we can move beyond some of our old racial wounds, and that in fact we have no choice if we are to continue on the path of a more perfect union.

For the African-American community, that path means embracing the burdens of our past without becoming victims of our past. It means continuing to insist on a full measure of justice in every aspect of American life. But it also means binding our particular grievances - for better health care, and better schools, and better jobs - to the larger aspirations of all Americans -- the white woman struggling to break the glass ceiling, the white man whose been laid off, the immigrant trying to feed his family. And it means taking full responsibility for own lives - by demanding more from our fathers, and spending more time with our children, and reading to them, and teaching them that while they may face challenges and discrimination in their own lives, they must never succumb to despair or cynicism; they must always believe that they can write their own destiny.

Ironically, this quintessentially American - and yes, conservative - notion of self-help found frequent expression in Reverend Wright's sermons. But what my former pastor too often failed to understand is that embarking on a program of self-help also requires a belief that society can change.

The profound mistake of Reverend Wright's sermons is not that he spoke about racism in our society. It's that he spoke as if our society was static; as if no progress has been made; as if this country - a country that has made it possible for one of his own members to run for the highest office in the land and build a coalition of white and black; Latino and Asian, rich and poor, young and old -- is still irrevocably bound to a tragic past. But what we know -- what we have seen - is that America can change. That is true genius of this nation. What we have already achieved gives us hope - the audacity to hope - for what we can and must achieve tomorrow.

In the white community, the path to a more perfect union means acknowledging that what ails the African-American community does not just exist in the minds of black people; that the legacy of discrimination - and current incidents of discrimination, while less overt than in the past - are real and must be addressed. Not just with words, but with deeds - by investing in our schools and our communities; by enforcing our civil rights laws and ensuring fairness in our criminal justice system; by providing this generation with ladders of opportunity that were unavailable for previous generations. It requires all Americans to realize that your dreams do not have to come at the expense of my dreams; that investing in the health, welfare, and education of black and brown and white children will ultimately help all of America prosper.

In the end, then, what is called for is nothing more, and nothing less, than what all the world's great religions demand - that we do unto others as we would have them do unto us. Let us be our brother's keeper, Scripture tells us. Let us be our sister's keeper. Let us find that common stake we all have in one another, and let our politics reflect that spirit as well.

For we have a choice in this country. We can accept a politics that breeds division, and conflict, and cynicism. We can tackle race only as spectacle - as we did in the OJ trial - or in the wake of tragedy, as we did in the aftermath of Katrina - or as fodder for the nightly news. We can play Reverend Wright's sermons on every channel, every day and talk about them from now until the election, and make the only question in this campaign whether or not the American people think that I somehow believe or sympathize with his most offensive words. We can pounce on some gaffe by a Hillary supporter as evidence that she's playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies.

We can do that.

But if we do, I can tell you that in the next election, we'll be talking about some other distraction. And then another one. And then another one. And nothing will change.

That is one option. Or, at this moment, in this election, we can come together and say, "Not this time." This time we want to talk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic children and Native American children. This time we want to reject the cynicism that tells us that these kids can't learn; that those kids who don't look like us are somebody else's problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st century economy. Not this time.

This time we want to talk about how the lines in the Emergency Room are filled with whites and blacks and Hispanics who do not have health care; who don't have the power on their own to overcome the special interests in Washington, but who can take them on if we do it together.

This time we want to talk about the shuttered mills that once provided a decent life for men and women of every race, and the homes for sale that once belonged to Americans from every religion, every region, every walk of life. This time we want to talk about the fact that the real problem is not that someone who doesn't look like you might take your job; it's that the corporation you work for will ship it overseas for nothing more than a profit.

This time we want to talk about the men and women of every color and creed who serve together, and fight together, and bleed together under the same proud flag. We want to talk about how to bring them home from a war that never should've been authorized and never should've been waged, and we want to talk about how we'll show our patriotism by caring for them, and their families, and giving them the benefits they have earned.

I would not be running for President if I didn't believe with all my heart that this is what the vast majority of Americans want for this country. This union may never be perfect, but generation after generation has shown that it can always be perfected. And today, whenever I find myself feeling doubtful or cynical about this possibility, what gives me the most hope is the next generation - the young people whose attitudes and beliefs and openness to change have already made history in this election.

There is one story in particularly that I'd like to leave you with today - a story I told when I had the great honor of speaking on Dr. King's birthday at his home church, Ebenezer Baptist, in Atlanta.

There is a young, twenty-three year old white woman named Ashley Baia who organized for our campaign in Florence, South Carolina. She had been working to organize a mostly African-American community since the beginning of this campaign, and one day she was at a roundtable discussion where everyone went around telling their story and why they were there.

And Ashley said that when she was nine years old, her mother got cancer. And because she had to miss days of work, she was let go and lost her health care. They had to file for bankruptcy, and that's when Ashley decided that she had to do something to help her mom.

She knew that food was one of their most expensive costs, and so Ashley convinced her mother that what she really liked and really wanted to eat more than anything else was mustard and relish sandwiches. Because that was the cheapest way to eat.

She did this for a year until her mom got better, and she told everyone at the roundtable that the reason she joined our campaign was so that she could help the millions of other children in the country who want and need to help their parents too.

Now Ashley might have made a different choice. Perhaps somebody told her along the way that the source of her mother's problems were blacks who were on welfare and too lazy to work, or Hispanics who were coming into the country illegally. But she didn't. She sought out allies in her fight against injustice.

Anyway, Ashley finishes her story and then goes around the room and asks everyone else why they're supporting the campaign. They all have different stories and reasons. Many bring up a specific issue. And finally they come to this elderly black man who's been sitting there quietly the entire time. And Ashley asks him why he's there. And he does not bring up a specific issue. He does not say health care or the economy. He does not say education or the war. He does not say that he was there because of Barack Obama. He simply says to everyone in the room, "I am here because of Ashley."

"I'm here because of Ashley." By itself, that single moment of recognition between that young white girl and that old black man is not enough. It is not enough to give health care to the sick, or jobs to the jobless, or education to our children.

But it is where we start. It is where our union grows stronger. And as so many generations have come to realize over the course of the two-hundred and twenty one years since a band of patriots signed that document in Philadelphia, that is where the perfection begins.

Endorsement by US Admirals and Generals

Chicago, IL | March 12, 2008

It is my privilege to be joined by some of the distinguished generals and admirals supporting my campaign. They have defended the American people and stood up for American values with honor and distinction. Between them they have served nine Commanders-in-Chief, and I look forward to continuing to draw on their counsel throughout my campaign and beyond.

As as a candidate for the presidency, I know that I am running to be Commander-in-Chief – to safeguard this nation's security, and to keep our sacred trust with the men and women who serve. There is no responsibility that I take more seriously.

This is something that I've talked about throughout this campaign. Because I believe that any candidate for President must present the American people with a clear vision of how we will lead. There are real differences between the candidates, and important issues to debate – from ending the war in Iraq, to combating terrorism, to devising new strategies and new capabilities to confront 21st century threats.

But recently, we've seen a different kind of approach. Instead of a serious, substantive debate, we've heard vague allusions to a "Commander-in-Chief threshold" that seems to be about nothing more than the number of years you've spent in Washington.

This is exactly what's wrong with the national security debate in Washington.

After years of a divisive politics that uses national security as a wedge to drive us apart, how much longer do we have to wait to bring this country together to confront our common enemies?

After years of being told that Democrats have to talk, act and vote like John McCain to pass some Commander-in-Chief test, how many times do we have to learn that tough talk is not a substitute for sound judgment?

After years of a war in Iraq that should've never been authorized, how many more politicians will appeal to the American peoples' fears instead of their hopes?

This moment – in this election – is our chance to put an end to a divisive politics that has done nothing to keep America safe, or to serve our men and women in uniform as well as they are serving us. Because the real Commander-in-Chief threshold doesn't have to do with years tallied up in Washington, it has to do with the judgment and vision that you will bring to the Oval Office.

On the most important national security question since the Cold War, I am the only candidate who opposed the war in Iraq from the beginning. This judgment was not about speeches, it was about whether or not the United States of America would go to war in Iraq. Because we did, we took our eye off al Qaeda; we have lost thousands of lives and spent hundreds of billions of dollars; our military is overstretched; and our security and standing has been set back. So don't tell me that the decision to go to war was just a speech, because it was far more than that to the men and women who have served – and continue to serve heroically in Iraq.

When I spoke out against the war, I said that I was not opposed to all wars. In fact, one of the central reasons why I opposed going to war in Iraq is that we had yet to finish the fight against al Qaeda and the Taliban. That remains true today. That is why I have consistently called for an increased commitment to Afghanistan, and why I called last August for at least two additional combat brigades to support our mission there. And that is why I will end the war in Iraq when I am President, and focus on finishing the job in Afghanistan.

I will never hesitate to defend this country and our critical interests. That is why I am the only candidate who has made it clear that we cannot tolerate any safe-haven for terrorists who threaten America. But we must also use all elements of national power to combat the threats of the 21st century, and that means deploying the power of American diplomacy before we deploy our troops. That is why we must be willing to talk to the leaders of all nations – friend and foe.

The threats we face are increasingly unconventional, and they call for new approaches. I have worked on the Senate Foreign Relations Committee to combat the challenges of the 21st Century – securing loose weapons and nuclear materials from terrorists; working to stop ethnic killing and genocide in Africa; and investing in our ability to combat epidemic diseases like avian flu that can be deadly at home and sew instability abroad.

And one theme that I hear in talking to military officers – whether generals and admirals, or the mid-level officers who will lead tomorrow's military – is that we need new capabilities to respond to this century's new threats.

We must maintain our overwhelming conventional advantage – and I will. We also need to increase the size of our ground forces by 65,000 soldiers and 27,000 marines to relieve the strain on our troops, and to increase our capacity to put boots on the ground. We need to invest in capabilities like civil affairs, foreign languages, and training foreign militaries, so that we can confront nimble enemies. We need to give our civilian agencies the ability to operate alongside our military in post-conflict zones and on humanitarian missions. And we must inspire a new generation of Americans to serve their country, in the military and in a civilian capacity.

And let me be very clear: when I am Commander-in-Chief, I will seek out, listen to, and respect the views of military commanders. Under this Administration, too often we have seen civilian control turned into an expectation that the uniformed military will be punished if they tell the President what he needs to know, rather than what he wants to hear. When I am President, the buck will stop with me, but we will restore trust and open dialogue between the military and civilian leadership.

Finally, it is the sacred obligation of any Commander in Chief to give the men and women who have served the care and support they have earned. That is what I have tried to do on the Senate Veterans Affairs Committee – working to improve care and benefits for wounded warriors and their families, and to enhance screening and treatment for PTSD and Traumatic Brain Injury, the signature wounds of the wars in Iraq and Afghanistan.

As President, I will ask myself every day whether I am serving our troops and veterans as well as they have served America. That means only sending them into harm's way when we absolutely must; providing them with a clear mission and the equipment they need to do the job; standing by them when they come home; and helping them live their dreams after they leave the service.

Like the men who have joined me on this stage today, my story is only possible in America. It is the story of my grandfather, who marched in Patton's Army; and my father, who crossed the globe to be a part of the dream that my grandfather defended. An America that secures its people, and stands as a light of hope for the world.

That is the America that I will defend as Commander-in-Chief, drawing on the counsel of military commanders and the courage and conviction of the American people. An America where we meet the challenges of the 21st century with sound judgment, clear plans, and a common purpose.