Gunter David and his parents fled Germany, their native country, as soon as Adolph  Hitler rose to power. They settled in Tel Aviv, in what was then Palestine, where Gunter grew up. He subsequently moved to the U.S., where he worked on major newspapers for 25 years. The Evening Bulletin of Philadelphia nominated him for the Pulitzer Prize. He has returned to Israel numerous times, as a newsman and to visit family and friends, and covered the Yom Kippur War in 1973. His second career was as a family therapist and addiction counselor. Dalia, his wife of 57 years, is also from Israel.

Gunter David and his parents fled Germany, their native country, as soon as Adolph  Hitler rose to power. They settled in Tel Aviv, in what was then Palestine, where Gunter grew up. He subsequently moved to the U.S., where he worked on major newspapers for 25 years. The Evening Bulletin of Philadelphia nominated him for the Pulitzer Prize. He has returned to Israel numerous times, as a newsman and to visit family and friends, and covered the Yom Kippur War in 1973. His second career was as a family therapist and addiction counselor. Dalia, his wife of 57 years, is also from Israel.

To read more work by Gunter David, Click Here.

THE LONG ROAD TO THE PROMISED LAND

Where are Israel’s Borders?

BY Gunter David

The ’67 borders. Everybody is talking about them. But they are never explained. They came to the fore when President Obama said in a speech the other day that peace between Israel and the Palestinians should be based on the ’67 borders. Israel’s Prime Minister Benjamin Netanyahu, who had been meeting with the president, told his host it was out of the question. He declared them “indefensible.”

What are the ’67 borders? The year is misleading. They actually are closer to the borders that came into being after the cease-fire in 1949, at the end of Israel’s Independence War. On November 30, 1947, the United Nations approved the partition of Palestine between Arabs and Jews. Until then, Palestine had been under British rule or mandate as prescribed by the League of Nations, the predecessor of the UN.

The partition plan was rejected by the Palestinian Arabs, who subsequently attacked the Jews. The latter welcomed the plan as their return to their Biblical homeland. Leadership of the Jewish community in Palestine accepted the partition even though it gave them a minimal territory.

On May 15, 1948, with the withdrawal of the last British troops from Palestine, David Ben Gurion, leader of the Yishuv, the Jewish community, declared the founding of the state of Israel. Surrounding Arab states promptly attacked the new country, but when a cease fire was declared in 1949, Israel had become considerably larger than when the war began. Most importantly, Israel included a good part of Jerusalem, which became its capital. According to the partition, the city was to be under international control.

As for the Palestinian Arabs, they never had a chance to found a country of their own. What today are called the Left Bank and the Gaza Strip were the remainder of Palestine when the war had ended. The ruler of Trans Jordan annexed the West Bank of the Jordan River, and declared himself king of the expanded country of Jordan. Egypt annexed the Gaza Strip.

In 1967, advance Israeli intelligence warned its government of impending war by the Arab countries. Israel promptly struck first. The result was the Six Day War, in which Israel took the rest of Palestine, all of the Sinai Desert, and a section of Syria.

Israel also reclaimed the eastern part of Jerusalem, including the Western Wall – the remainder of the Holy Temple built by King Herod – from which Israelis had been barred during Jordanian rule. Once it had been called the Wailing Wall, where Jews prayed, then stuck little slips of papers, messages to God, between its stones. But on a day in June, 1967, thousands and thousands of Israelis flowed into the Old City, back to their holy places and to the Wall, where they once more sent messages to heaven.

In time, Israel and Egypt made peace. Israel withdrew from Sinai, as well as from a section of the Golan Heights which it had taken from Syria. It also made peace with Jordan. Over time, some 300,000 Israelis have settled in the West Bank. The Palestinians consider the settlements an invasion of their territory. In past negotiations there had been talk of swapping land, with Israel giving up some of the settlements, or trading areas of Israel populated by Arabs for the Palestinian land settled by Israelis.

But going back to the quasi 1949 borders?

Indefensible.

Gunter David and his parents fled Germany, their native country, as soon as Adolph  Hitler rose to power. They settled in Tel Aviv, in what was then Palestine, where Gunter grew up. He subsequently moved to the U.S., where he worked on major newspapers for 25 years. The Evening Bulletin of Philadelphia nominated him for the Pulitzer Prize. He has returned to Israel numerous times, as a newsman and to visit family and friends, and covered the Yom Kippur War in 1973. His second career was as a family therapist and addiction counselor. Dalia, his wife of 57 years, is also from Israel. His fictional accounts of his family’s life in Berlin and resettlement in Palestine appear in the pages of Wild River Revew.

The Old Publishing Value Chain Got Twisted a Bit Last Week

by Mike Shatzkin

Although the value chain in trade publishing for the last century has, for the most part, kept retailers between publishers and consumers and kept publishers between retailers and authors, that has never been 100% true. Doubleday covered the whole value chain in the 1950s, when it not only owned the Doubleday Book Shops and the Literary Guild book clubs, it also owned printing plants. In the early 1960s, the Crowell-Collier Publishing Company bought (and eventually renamed itself) Macmillan (and that’s the old Macmillan that became part of Simon & Schuster in the 1980s, not the new Macmillan which was what the renamed Holtzbrinck group became a few years ago) and they also bought the Brentano’s bookstore chain.

I sold books to both Brentano’s and Doubleday in the 1970s and I don’t recall it ever being an issue that they had publisher ownership. Of course, that was before trade publishing consolidated into anything remotely resembling a Big Six.

After those two chains were sold in the 1980s (and I’m going to admit that I forget whether Walden which became Borders or Dalton which became Barnes & Noble bought each of them), in a period of two decades when publishers and book retailers grew enormously, the neatness of the division between the publisher’s role and the retailer’s was mostly respected. A number of retailers — notably B&N and Borders, but suppliers to the mass merchants as well — bought bargain books directly from packagers during that period, but joint ownership of significant publishing and retailing capabilities was, temporarily, suspended.

But Barnes & Noble was particularly aggressive at direct sourcing of book content and around the turn of the century announced the goal that 10% of their volume should come from directly-sourced product. To further that objective, in late 2002, B&N outbid several other companies (including at least one very large publisher) for the independent niche publisher, Sterling. Immediately, Borders stopped buying Sterling books and Barnes & Noble started stocking a lot more of them than they had in the past.

Meanwhile, the Internet was forcing everybody to rethink the paradigm. Even before the Kindle was launched in November, 2007, Amazon was encouraging authors to “publish” with them directly. All they could offer was the connection to the vast majority of online consumers — no print runs, no presence in any brick stores — but this could still be attractive and productive for some authors. My friend and client, David Houle, a futurist who blogs at Evolution Shift, published his “Shift Age” book with Amazon before Kindle and has sold thousands of copies, many of them at his own speeches. He’s very happy earning about $7 on every sale of a $17 book. No publisher was going to offer him as much as a third of that per copy.

As online sales grew, and then were further fueled by ebook sales starting in late 2007, it became increasingly obvious to many that publishers would have to start selling direct themselves. Some did. Harlequin has done so for years. F+W Media, one of the most aggressive publishers employing a vertical community strategy, announced a year ago that they would use Ingram to sell their books as well as those of their competitors to their direct audiences. Macmillan announced a similar plan for science fiction through Tor.com, although that idea has apparently never been implemented.

Part of what has discouraged the big publishers from selling direct is the threat of retaliation by Amazon and Barnes & Noble, both of which are much happier if the customer contact for big books is through them, thank you very much. Since both companies really exercise direct influence on many consumers, big publishers are inclined to respect their concerns.

To a certain extent.

And then we had the events of last week.

Amazon, which had previously established imprints for author-direct publishing and for translations of foreign works and had created a relationship with Houghton Harcourt to address their prior inability to get brick store distribution for books they owned, announced a new romance imprint called Montlake Romances. (Personally, I thought it was a bit strange that they announced it with just one book coming this Fall, rather than 10 books coming next week!) That put them squarely into the publishing business in a new way, and one could only imagine that the mystery shoe and thriller shoe and sci-fi shoe will be soon to drop.

In the same vein, Barnes & Noble has a program called Pub It! to enable authors to by-pass publishers and earn bigger royalties. They also still own Sterling, which gives them in-house the distribution capabilities that Amazon had to team with Houghton Harcourt to get. And with Sterling they also have the entire infrastructure in place to deal with authors and their care and feeding which could constitute competitive advantage when the gloves come off chasing brand-name authors.

So both of the giant retailers are looking more and more like publishers.

But it turns out the publishers were cooking something up too. On Friday, we learned about a new business called Bookish, which will be the “new digital destination for readers.” In its announcement release, Bookishpromises to use content and software tools to promote discussion and discovery around books and to answer the reader’s question: “what book should I read next?”

What was most eye-catching about Bookish was its backing by three of the Big Six: Hachette, Penguin, and Simon & Schuster, who have apparently been planning this move for quite some time.

What was downplayed, but perhaps most significant, is that Bookish is trying to straddle the same fence that Google, and, to a lesser extent, Kobo are: being an ally of existing retailers while selling direct to consumers itself.

It really is impossible to speculate intelligently about Bookish’s potential for success. What they’re suggesting they’ll do is reminiscent of Copia and Goodreads and Library Thing, and none of them have yet replaced the marketing power of the brick store, a fact which is front and center in the minds of the trade publishers who depend on that merchandising.

But it will certainly accomplish one thing: giving the big publishers a direct path to the consumer. The hunch here is that if any one of these three big publishers had gone aggressively into direct sales, they would have risked serious retaliation from both of their two biggest customers: Amazon and Barnes & Noble. But it will be hard for them to retaliate against three publishers who, among them, deliver about half the biggest commercial books in the marketplace.

Let’s remember a year ago January when Amazon briefly sought to block agency terms for ebooks by removing buy buttons from Macmillan books when they briefly thought they could stop the plan from being implemented. As quickly as it became clear that the five publishers determined to implement agency would not be deterred from doing so, Amazon retreated. (In fact, they graciously joined Macmillan in compensating authors who might have lost sales during the brief period the buy buttons were inactive.)

And that brings up another important point about Bookish: what it says about the common interests among fierce adversaries, which the trade publishers certainly are. The times call for collaboration among competitors in trade publishing. It is a little bit nuts that several of them are building competing romance, mystery, and science-fiction “communities”, which only leaves the field wide open for a third party to be the biggest aggregator in each of the verticals and also allows much smaller competitors to look comparable on the web. But collaboration models have to withstand anti-trust concerns. Presumably three of the biggest publishers jointly investing in this web venture will.

Whether or not the Bookish team can invent the general book marketing future, or, through competition, spur Amazon and BN.com to be more creative about online merchandising, remains to be seen. But this past week certainly gave us further indications that the publishing value chain is being drastically reshaped and that the neat roles we’ve been used to for 100 years have less and less applicability to publishing’s future.

I chuckle when I think about a very smart person from a major house who was telling me just about a year ago, right after agency was implemented, “whew, now I think things can settle down for a while.” Actually, “things” are just getting moved over to the fast track so they can really change. Montlake and Bookish within a day of each other; Barry Eisler (who’s speaking at our “eBooks Go Global” show at BEA on May 25) and Amanda Hocking going in opposite directions within a week or so of each other a couple of months ago; these are significant events but they’re also signs of accelerating change.

Bookmark It: 

by Gunter David

Gunter David and his parents fled Germany, their native country, as soon as Adolph  Hitler rose to power. They settled in Tel Aviv, in what was then Palestine, where Gunter grew up. He subsequently moved to the U.S., where he worked on major newspapers for 25 years. The Evening Bulletin of Philadelphia nominated him for the Pulitzer Prize. He has returned to Israel numerous times, as a newsman and to visit family and friends, and covered the Yom Kippur War in 1973. His second career was as a family therapist and addiction counselor. Dalia, his wife of 57 years, is also from Israel.

by Vibhas Tattu

“When I despair, I remember that all through history the ways of truth and love have always won. There have been tyrants, and murderers, and for a time they can seem invincible, but in the end they always fall. Think of it—always”. – Mahatma Gandhi.

The regime changes that are sweeping the Arab world are an excellent example of the principle of ‘ahimsa’ or non-violence at work. The ahimsa is at work not just in the hearts and minds of the protesters in Cairo or Tunisia, but also in the hearts and minds of Hosni Mubarak and his military commanders in Tahrir Square, who did not order attacks on the protesters. Ahimsa is at work in the hearts and minds of the two Libyan fighter pilots who defected their Mirage jets to Malta, refusing to bomb the protesters in Benghazi, as they had been ordered to. It is at work in the hearts and minds of the Libyan ambassadors to India and UK who quit in protest against the violence deployed to quell the uprising in Tripoli.

Ahimsa is not an esoteric or idealistic concept espoused by a ‘half naked Indian fakir’ but a force that has wrought the down fall of many oppressive regimes and even empires like the British Empire, the apartheid regime in South Africa, the communist rule in the Soviet Union, and now the latest wave of non-violent uprisings sweeping the Arab world. Ahimsa is not just a Hindu or Buddhist tenet alone – it is a universal principle that can shape bloodless revolutions while also being a code of ethics. What is to be celebrated here is not so much that dictators are being ousted as the fact that it’s being done with non-violent means. Celebrations are in order not simply for the down fall of oppressors, but the emergence of decency and human rights.

There is jubilation on the streets of Cairo and Tunis and the sentiment will soon be echoed in Benghazi and Tripoli and perhaps Manama (Bahrain). There are rumblings in Yemen, Morocco, flutters in Saudi Arabia. The ripples of this movement with its epicenter at Cairo have travelled as far as Beijing. News of the ‘Jasmine Revolution’ in China is trickling out. Who knows how far it will go?

But I suspect the euphoria will be short-lived and will soon be replaced by the bitter economic realities, poverty and economic inequity, that fuelled the popular uprisings in the first place. Just as history is a witness to the power of ahimsa, it is also a witness that revolutions always bring hard ships in their wake. As long as there is dictator or a totalitarian regime in place, you can always abdicate your responsibilities and blame the regime for your problems. Once that is removed you have to face the next level of reality – that now you are in charge and must make things happen. Or to quote the Mahatma again: “You must be the change that you wish to see in the world”

Whatever governments emerge in Egypt and Tunisia and Libya, they will have to face very real and very serious socio-economic problems deeply rooted in their countries. To provide safety and food and jobs to the common man is not an easy task. Indeed this is a continuous task that nations with a long history of political freedom and democratic governance, continue to struggle with every day. It may take decades of hard work before the Arab world will achieve the goals and expectations unleashed through this movement. But at least the path is being cleared and the hard work can now begin in right earnest.

Vibhas Tattu hails from India and is a manufacturing engineer by profession. He has worked in India, USA and now in the United Arab Emirates. Vibhas is interested in Shakespeare, Indian music, poetry (English, Hindi and Marathi) and a new found love of writing.

Tattu has a bachelor’s degree in Production Engineering from the University of Bombay and Master’s degree in Industrial Engineering and Operations Research from the University of California at Berkeley, where he was a Fellow.

He writes the View from Dubai column for Wild River Review.

Dollar in Dire Straits?

by Vibhas Tattu

The Federal Reserve in Washington has sailed into the blue. As widely expected by many across the world, Fed Chairman Bernake announced a massive tranche of $ 600 billion dollar “bond purchases” ostensibly to boost the flagging US economy and create jobs. This exercise has many politically correct and euphemistic names and economic theories to support it. “Quantitative Easing” is the phrase being used in world media to describe this affair. Since the first installment of the QE was already done by the Fed in 2008 / 2009 to the tune of $ 1700 billion, this second round is being referred to as “QE2”. The QE2 is being hailed as the kiss that will breathe new life into the US economy. In practical terms what the Fed Reserve has actually done is simply create, literally out of thin air, a bank balance of $ 600 billion in its own current account. The economists call this as debt financing. When my current account bank balance goes up it is usually after I have worked quite hard for a month and my employers send my salary from their account to mine as a compensation for my work. In other words, I have EARNED the credit and now I can spend it. This is by and large the mechanism by which ALL individuals or organizations throughout the world create wealth and operate their finances (at least all legal ones) . Governments don’t always work that way. They are above it all, like God, and can create things out of thin air. God said “Let There Be Light” and there was light. On Wednesday morning, Bernake & Co said “ Let There Be Money” and lo presto $ 600 billion dollars became available for the dubious “bond purchases”.

It is well to dwell a bit on this event which is raising so much expectation within the US and causing so much consternation in the emerging economies like China, India and Brazil.

Let’s review the facts. Despite astronomical and unprecedented financial injections into the US economy (QE1 = $ 1700 billion), the US unemployment rate remains at its highest since 1984. Consumer spending in the US is at its lowest in many years. The economy, it is feared, will be “deflationary” or shrink. This QE2 injection is expected to reverse this deflation by making money available cheaply to banks for lending and in turn to boost consumer spending. But who said banks don’t have money to lend? All the top banks in the US have returned to profit and are flush with funds. The likes of Bank of America, Goldman Sachs and Merrill Lynch turned in multibillion dollar profits for 2009 and multimillion dollar bonuses for their top exces. Even the black sheep of the banking community, Citibank, has shed all its fat and has returned to a modest profit. There are just no borrowers. It’s just that consumers and businesses don’t want to spend right now. So what will be the effect of this QE2 money? By most accounts, the huge infusion will cause the dollar to depreciate significantly and hence make US goods and services more competitive in the world market (now you know why China’s Commerce ministry is very upset with the QE2 - it makes their life difficult). Part of it will be invested within the US economy and generate fresh revenue streams and jobs. All this makes the QE2 sound like a wonderful thing for the American public, doesn’t it?

In fact what is most likely to happen is not so goody goody. A lot of the foreign reserves held by China ($ 1200 billion), India ($ 260 billion) and the rest of the world are in US Dollar currency. What the QE2 will do is reduce the value of these reserves (due to a depreciated dollar). This is unpalatable and will result in these emerging economies moving away from the dollar in the long run and cause a further erosion in the dollar value. The fact is that the US is no longer a net producer but rather a net consumer on the world scene. It is a fundamental truth of economics that unless your production of wealth keeps pace with your consumption of wealth, within reasonable limits, you are likely to end up as a sub-prime risk; and we all know how sub primes end up don’t we? By QE2 the US is increasing its long term chances of ending up as a sub-prime risk for itself and the world. Even in the short term the QE2 could well have very negative results. US funds are already flowing in large measure to foreign shores and it is feared by many that at least part of the QE2 funds will find their way to China and India and not be invested in the US at all. It is not very difficult to believe that the recent surge in market valuations in India are partly because the markets have already factored in the availability of the cheap QE2 money. At the Government level this sudden money flow could trigger what is being called as a “currency war” which threatens to escalate tensions between nations. Also the extent of the fund flows outside the US will restrict job creation within the US. So is the QE2 good at all? Probably not.

In the long run, a nation’s economy must be largely, if not wholly, self sufficient. The operative word being “self”. The reason America rose to prominence in the 20^th century was due to its innovations as well as its domestic consumption. The reason why China and India are rising to prominence in the 21^st century are also due to their own domestic innovations and consumption. As such if the US is facing hardships, it should look within to spur growth, and not try to spend its way out of it by debt financing. Already the fiscal deficit of the US is a matter of concern the world over. Continued US government excesses in the form of QE2 will dethrone the dollar from its position as the currency of choice. QE2, in the long run, will only hasten the exit of the dollar from the world stage. Austerity measures like the ones UK’s Government is taking are what are needed to save to US economy and the world economy at large.

The Fed’s desire to appear to take bold and concrete steps to stave off economic woes is laudable but sometimes no action is the best action. At the risk of sounding brutal, I would like to turn Marie Antoinette’s famous coinage on its head and say to Bernake & Co “If they don’t have cake, let them eat bread instead”. A little austerity never hurt anyone.

Vibhas Tattu hails from India and is a manufacturing engineer by profession. He has worked in India, USA and now in the United Arab Emirates. Vibhas is interested in Shakespeare, Indian music, poetry (English, Hindi and Marathi) and a new found love of writing.

Tattu has a bachelor’s degree in Production Engineering from the University of Bombay and Master’s degree in Industrial Engineering and Operations Research from the University of California at Berkeley, where he was a Fellow.

EMAIL: vibhas1@gmail.com

“We’ve got to work to knock down the barriers…” George W. Bush, October 15, 2002

It started with a full moon, the smell of the salty Pacific surf, and a candlelight dinner with a handsome man I’d dated forty years past. We toasted each other with glasses of Merlot, talked about past lives and our shared middle class youth in the Midwest, and how we ended up on different coasts: he in South Carolina, and me in California. The evening reminded me of many nights I’ve spent in Istanbul cafes with friends and lovers, where conversation flows easily from life to politics, to food, in a swirl of ideas that makes my head spin for days.
Somewhere between and wine and the Scampi, I lost myself in the romantic moment and diverted the conversation to the upcoming election and politics. I was just about to tell him about my newly found idea of figuring out which of the lesser candidates to vote for such as judges and supervisors, as well as confusing and contradicting Local and State Proposition. Here is my solution: Google the websites of the opposition and choose the candidate and propositions they are against.
Our conversation, however, never got this far. It didn’t get past my visible shock when my southern Republican friend asked me why I wouldn’t vote for Delaware Republican Senate candidate Christina O-Donnell; or his physical discomfort when I referred to being a Progressive.
Okay…I admit that this last comment was only to push the envelope. Politically, I’m actually disappointed with all parties, and wonder where we, as Americans, as people who care about democracy, have gotten so divergent. Is this the kind of conversation that the D.C. power couple, Democrat James Carvelle and Republican Mary Matalin, have every night over dinner?
While I finished the wine, he checked his watch. “We all want the same things,” I said, throwing out an olive branch. “But I have friends who are losing their homes.” I should have left well enough alone, but the wine was having an effect. “I still blame Bush for getting us into this economic mess. I remember thinking that when he said in a speech some years ago, that he ‘wanted every American to own their own home,’ what he really meant was that he wanted them to own a mortgage.
I was on a roll. I overheard the couple next seated next to us mention Obama, the Tea Party, and the Midterm elections. It was contagious. If we had been in an Istanbul café, we would have ordered another bottle of wine and even the waiter would be shouting opinions with us. But this was America, San Diego to be more specific. Then, my friend challenged me. “Show me that speech, I’d like to see it.”
The balmy evening ended, at best, with us agreeing to disagree. And with a nervous hug instead of a kiss.
When I returned home, It me took about two minutes to locate the speech on a VDare.com blog by Steve Sailer. It was so much more than I’d remembered:
President George W. Bush addresses the White House Conference on Increasing Minority Homeownership at The George Washington University Tuesday, Oct. 15, 2002

THE PRESIDENT: …. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That’s what we want. This is — an ownership society is a compassionate society.

More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That’s a homeownership gap. It’s a — it’s a gap that we’ve got to work together to close for the good of our country, for the sake of a more hopeful future.

We’ve got to work to knock down the barriers that have created a homeownership gap.

I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. (Applause.) … And it’s going to require a strong commitment from those of you involved in the housing industry. …
I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they’re on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.)

We’ve got the Horton family from Little Rock, Arkansas, here today. … They were helped by HUD, they were helped by Freddie Mac. …

Finally, Kim Berry from New York is here. She’s a single mom. You’re not going to believe this, but her son is 18 years old. (Laughter.) She barely looked like she was 18 to me. And being a single mom is the hardest job in America. And the idea of this fine American working hard to provide for her child, at the same time working hard to realize her dream, which is owning a home on Long Island, is really a special tribute to the character of this particular person and to the character of a lot of Americans. So we’re honored to have you here, Kim, and thanks for being such a good mom and a fine American. (Applause.)

I told Mel Martinez I was serious about this initiative… And the good news is, Mel Martinez believes it and means it, as well. He’s doing a fine job of running HUD, and I’m glad he has joined my Cabinet. (Applause.)

And I picked a pretty spunky deputy, as well, Alphonso Jackson — my fellow Texan. (Applause.) I call him A.J. …

I see Rosario Marin, who’s the Treasurer of the United States. Rosario used to be a mayor. Thank you for coming, Madam Mayor. (Applause.) She understands how important housing is. …

All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I’m concerned. It’s part of a free society. And ownership of a home helps bring stability to neighborhoods. You own your home in a neighborhood, you have more interest in how your neighborhood feels, looks, whether it’s safe or not. It brings pride to people, it’s a part of an asset-based to society. It helps people build up their own individual portfolio, provides an opportunity, if need be, for a mom or a dad to leave something to their child. It’s a part of — it’s of being a — it’s a part of — an important part of America.

Homeownership is also an important part of our economic vitality. If — when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America; …

Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it’s good for the pocketbook of the country, as well.

To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, down payments. A lot of folks can’t make a down payment. They may be qualified. They may desire to buy a home, but they don’t have the money to make a down payment. I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can’t cross. And one way to address that is to have the federal government participate.

And so we’ve called upon Congress to set up what’s called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. If a down payment is a problem, there’s a way we can address that. And when Congress funds the program, this should help 200,000 new families over the next five years become first-time home buyers.

Secondly, affordable housing is a problem in many neighborhoods, particularly inner-city neighborhoods. … I’m doing is proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce. (Applause.)

Over the next five years the initiative will provide home builders and therefore home buyers with — home builders with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. …

And we’ve got to set priorities. And one of the key priorities is going to be inner-city America. …

Another obstacle to minority homeownership is the lack of information. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.)

Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there’s a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I’m not sure I can possibly understand that. Why do I want to buy a home? There’s an educational process that needs to go on, not only to explain the contract, explain obligation, but also to explain financing options, to help people understand the complexities of a homeownership market, and also at the same time to protect people from unscrupulous lenders, people who would take advantage of a good-hearted soul who is trying to realize their dream.

Homeownership education is critical. And so today, I’m pleased to announce that through Mel’s office, we’re going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.)

And, of course, one of the larger obstacles to minority homeownership is financing, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with, maybe our fellow Americans are, and that’s what they call a Section 8 housing program, that provides billions of dollars in vouchers to help low-income Americans with their rent. It encourages leasing. We think it’s important that we use those vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they’re into their new home. It is a — it is a way to help us meet this dream of 5.5 million additional families owning their home.

I’m also going to encourage the lending industry to develop a mortgage market so that this script, these vouchers, can regularly be used as a source of payment to provide more capital to lenders, who can then help more families move from rental housing into houses of their own. …

Last June, I issued a challenge to everyone involved in the housing industry to help increase the number of minority families to be home owners. And what I’m talking about, I’m talking about your bankers and your brokers and developers, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying. Twenty-two public and private partners have signed up to help meet our national goal. Partners in the mortgage finance industry are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.

Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set.

Freddie Mae — Fannie Mae and Freddie Mac — I see the heads who are here; I want to thank you all for coming — (laughter) — have committed to provide more money for lenders. They’ve committed to help meet the shortage of capital available for minority home buyers.

Fannie Mae recently announced a $50 million program to develop 600 homes for the Cherokee Nation in Oklahoma. Franklin [Raines], I appreciate that commitment. They also announced $12.7 million investment in a condominium project in Harlem. It’s the beginnings of a series of initiatives to help meet the goal of 5.5 million families. Franklin told me at the meeting where we kicked this office, he said, I promise you we will help, and he has, like many others in this room have done.

Freddie Mac recently began 25 initiatives around the country to dismantle barriers and create greater opportunities for homeownership. One of the programs is designed to help deserving families who have bad credit histories to qualify for homeownership loans. …

There’s all kinds of ways that we can work together to meet the goal. Corporate America has a responsibility to work to make America a compassionate place. Corporate America has responded. As an example — only one of many examples — the good folks at Sears and Roebuck have responded by making a five-year, $100 million commitment to making homeownership and home maintenance possible for millions of Americans. …

The non-profit groups are bringing homeownership to some of our most troubled communities. …

The other thing Kirbyjon told me, which I really appreciate, is you don’t have to have a lousy home for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives.

And so is Luis Cortes, who represents Nueva Esperanza in Philadelphia. I went to see Luis in the inner-city Philadelphia. … But he also understood that a homeownership program is incredibly important to revitalize this neighborhood that a lot of folks had already quit on. …

Again, I want to tell you, this is an initiative — as Mel will tell you, it’s an initiative that we take very seriously. … Thank you for coming. May God bless your vision. May God bless America. (Applause.)