The United States and Pakistan reached tacit agreement in September on a don't-ask-don't-tell policy that allows unmanned Predator aircraft to attack suspected terrorist targets in rugged western Pakistan, according to senior officials in both countries. In recent months, the U.S. drones have fired missiles at Pakistani soil at an average rate of once every four or five days.

The officials described the deal as one in which the U.S. government refuses to publicly acknowledge the attacks while Pakistan's government continues to complain noisily about the politically sensitive strikes.

The arrangement coincided with a suspension of ground assaults into Pakistan by helicopter-borne U.S. commandos. Pakistani President Asif Ali Zardari said in an interview last week that he was aware of no ground attacks since one on Sept. 3 that his government vigorously protested.

Officials described the attacks, using new technology and improved intelligence, as a significant improvement in the fight against Pakistan-based al-Qaeda and Taliban forces. Officials confirmed the deaths of at least three senior al-Qaeda figures in strikes last month.


Zardari said that he receives "no prior notice" of the airstrikes and that he disapproves of them. But he said he gives the Americans "the benefit of the doubt" that their intention is to target the Afghan side of the ill-defined, mountainous border of Pakistan's Federally Administered Tribal Areas (FATA), even if that is not where the missiles land.

Civilian deaths remain a problem, Zardari said. "If the damage is women and children, then the sensitivity of its effect increases," he said. The U.S. "point of view," he said, is that the attacks are "good for everybody. Our point of view is that it is not good for our position of winning the hearts and minds of people."

A senior Pakistani official said that although the attacks contribute to widespread public anger in Pakistan, anti-Americanism there is closely associated with President Bush. Citing a potentially more favorable popular view of President-elect Barack Obama, he said that "maybe with a new administration, public opinion will be more pro-American and we can start acknowledging" more cooperation.

The official, one of several who discussed the sensitive military and intelligence relationship only on the condition of anonymity, said the U.S-Pakistani understanding over the airstrikes is "the smart middle way for the moment." Contrasting Zardari with his predecessor, retired Gen. Pervez Musharraf, the official said Musharraf "gave lip service but not effective support" to the Americans. "This government is delivering but not taking the credit."

From December to August, when Musharraf stepped down, there were six U.S. Predator attacks in Pakistan. Since then, there have been at least 19. The most recent occurred early Friday, when local officials and witnesses said at least 11 people, including six foreign fighters, were killed. The attack, in North Waziristan, one of the seven FATA regions, demolished a compound owned by Amir Gul, a Taliban commander said to have ties to al-Qaeda.

Pakistan's self-praise is not entirely echoed by U.S. officials, who remain suspicious of ties between Pakistan's intelligence service and FATA-based extremists. But the Bush administration has muted its criticism of Pakistan. In a speech to the Atlantic Council last week, CIA Director Michael V. Hayden effusively praised Pakistan's recent military operations, including "tough fighting against hardened militants" in the northern FATA region of Bajaur.

"Throughout the FATA," Hayden said, "al-Qaeda and its allies are feeling less secure today than they did two, three or six months ago. It has become difficult for them to ignore significant losses in their ranks." Hayden acknowledged, however, that al-Qaeda remains a "determined, adaptive enemy," operating from a "safe haven" in the tribal areas.

Along with the stepped-up Predator attacks, Bush administration strategy includes showering Pakistan's new leaders with close, personal attention. Zardari met with Bush during the U.N. General Assembly in September, and senior military and intelligence officials have exchanged near-constant visits over the past few months.




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Iraqi Prime Minister Nouri al-Maliki speaks to the news media in al-Zawra park in Baghdad, Iraq on Saturday, Nov. 15, 2008. The provincial council of Baghdad organized a celebration Saturday on the occasion of Baghdad Day. (AP Photo/Khalid Mohammed)



Iraqi Prime Minister Nouri al-Maliki speaks to the news media in al-Zawra park in Baghdad, Iraq on Saturday, Nov. 15, 2008. The provincial council of Baghdad organized a celebration Saturday on the occasion of Baghdad Day. (AP Photo/Khalid Mohammed) (Khalid Mohammed - AP)

BAGHDAD, Nov. 16 -- After months of painstaking negotiations between Baghdad and Washington, the Iraqi Cabinet on Sunday approved a bilateral agreement allowing U.S. troops to remain in this country for three more years.

The accord still needs approval by Iraq's parliament, but the Cabinet vote indicated that most major Iraqi parties supported it. The Iraqi government spokesman portrayed the pact as closing the book on the occupation that began with the U.S.-led 2003 invasion.

"The total withdrawal will be completed by Dec. 31, 2011. This is not governed by circumstances on the ground," the spokesman, Ali al-Dabbagh, told Iraqi reporters, pointedly rejecting the more conditional language that the U.S. government had earlier sought in the accord.

American officials have pointed out that there is nothing stopping the next Iraqi government from asking some U.S. troops to stay on. The Iraqi military is years away from being able to defend the country from external attack, according to both U.S. and Iraqi officials.

Still, there is no doubt that the accord, if passed by parliament, will sharply reduce the U.S. military's power in Iraq. American soldiers will be required to seek warrants from Iraqi courts to execute arrests, and to hand over suspects to Iraqi authorities. U.S. troops will have to leave their combat outposts in Iraqi cities by mid-2009, withdrawing to bases.

The U.S. government has lobbied hard for the status-of-forces agreement, which would replace a United Nations mandate authorizing the U.S. presence that expires on Dec. 31. Without some legal umbrella, the 150,000 U.S. forces would have to end their operations in Iraq in a few weeks' time, military officials said.

"We welcome the Cabinet's approval of the agreement today," the U.S. Embassy said in a statement read by a spokeswoman. "This is an important and positive step."

The Iraqi spokesman noted his government could cancel the agreement if its own forces became capable of controlling security at an earlier point.

"That matches the vision of U.S. President-elect Barack Obama," Dabbagh said, referring to the Democrat's plan to withdraw American combat troops within 16 months. "The Iraqi side would not mind [withdrawal] when the readiness of its forces is achieved."

While the Cabinet vote indicated that Prime Minister Nouri al-Maliki had rounded up the support of most of Iraq's major parties, final passage of the accord is not guaranteed, politicians said.

One issue is timing: The notoriously slow-moving Iraqi parliament is scheduled to adjourn on Nov. 25 for a three-week break to allow lawmakers to make the hajj pilgrimage.

"We have a limited window of time," warned Hoshyar Zebari, the foreign minister.


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U.S. Consumers Dropping Shopping

Carl Gutierrez, 11.14.08, 01:45 PM EST

Bernanke holds out rate-cut hopes as government reports October retail sales dive.

How low can you go Ben Bernanke? The Federal Reserve chairman, speaking in Germany on Friday, left open the door to new interest rate cuts as U.S. retail sales data offered a desultory view of the American economy.

On Friday, the U.S. Commerce Department reported a 2.8% drop in October retail sales, more severe than Wall Street's already dour 2.1% predicted drop. When the problem-plagued auto industry was excluded, retail sales still fell by 2.2%, nearly twice the 1.2% analysts had expected.

Separately, the U.S. Labor Department said the October import price index fell 4.7% month over month, a few ticks more than the 4.4% drop expected by Wall Street, for the biggest one-month drop since 1988. Year over year, the import price index gained 6.7%, short of the 8.2% expected by analysts.

While waning inflation is generally considered a good thing, it can also be taken as a new sign of economic weakness. Benefiting from both aspects, government bond prices rose, with the yield on the benchmark 10-year U.S. Treasury note sliding to 3.72%, from 3.82% late Thursday. Equities suffered from the dour economic data. (See "Street Starts Off On Wrong Food.")

Amid the gloom, there was one bright note. The Reuters/University of Michigan consumer sentiment index made a surprise jump to 57.9, from 57.6 in October. Still, the index is near the 28-year low of the 56.4 reading given in 1980.

"The good news is there was a bit of an uptick in consumer sentiment, but frankly I think it's going to be a pretty lousy fourth quarter," Wyss said. "Hopefully things aren't going to be down 2.8% every month, but things aren't going to turn around in a hurry."

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WASHINGTON -

House Speaker Nancy Pelosi called for "emergency and limited financial assistance" for the battered auto industry on Tuesday and urged the outgoing Bush administration to join lawmakers in reaching a quick compromise.

Four days after dismal financial reports from General Motors Corp. (nyse: GM - news - people ) and Ford Motor Co. (nyse: F - news - people ), Pelosi backed legislation to make the automakers eligible for help under the $700 billion bailout measure that cleared Congress in October.

In a written statement, the California Democrat said the aid was needed "in order to prevent the failure of one or more of the major American automobile manufacturers, which would have a devastating impact on our economy, particularly on the men and women who work in that industry."

"Congress and the Bush administration must take immediate action," she added. Administration officials have concluded that the bailout bill that passed earlier does not permit loans to the auto industry, but lawmakers are expected to return to the Capitol for a brief postelection session beginning next week.

Senate Majority Leader Harry Reid, D-Nev., also supports help for the industry, and he issued a statement saying Democrats were "determined to pass legislation that will save the jobs of millions" as part of a postelection session.

"This will only get done if President Bush and Senate Republicans work with us in a bipartisan fashion, and I am confident they will do what is right for our economy," he said.

The plight of the industry has drawn attention from the White House and the incoming Obama administration in recent days, as well as among lawmakers.

Last week, President-elect Obama prodded the Bush administration to do more to help the industry, and on Monday, aides said he raised the issue with President Bush in an Oval Office conversation meant to underscore a smooth transition of power.

Officials familiar with the conversation said the president replied he was open to the idea.

Before adjourning for the elections, Congress passed legislation providing for $25 billion in government-backed loans to the automakers to prod them to retool their factories to make more efficient vehicles.

Since then, executives from GM, Ford and Chrysler LLC and officials in the United Autoworkers union have called for more than that to avert a possible collapse of one of the nation's most basic industries, including a $25 billion loan to help keep the companies afloat and $25 billion more to help cover future health care payments for about 780,000 retirees and their dependents.

GM and Ford reported last week that they spent down their cash reserves by a combined $14.6 billion in the past three months. Ford said it would slash more than 2,000 white collar jobs.

Pelosi's statement did not specify how large an aid package she prefers.

Instead, she said she had asked Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, to draft legislation.

A companion effort is under way in the Senate.

The Senate is scheduled to meet next week in a postelection session, but until Pelosi issued her statement, it was not clear the House would follow suit.

The House already has passed legislation to provide additional unemployment insurance benefits for some of the growing ranks of the nation's jobless, as well as a separate measure to stimulate the economy.

That meant the Senate could have passed either or both bills and sent them to the White House for Bush's signature without further action by the House.

Pelosi's announcement changed that, and raised the possibility of a postelection session that covers more areas.

The Bush administration, for example, has said that enactment of a free trade agreement with Colombia is its top priority in Congress.

Many Democrats oppose the proposed agreement as written. But it is unclear what, if any, compromise might be possible that would allow auto assistance and a trade agreement to be the last major measures signed into law by the outgoing president.

In her statement, Pelosi said any assistance to the industry should include limits on executive compensation, rigorous government review authority and other taxpayer protections.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

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A DHL delivery truck drives outside a DHL facility in Franklin Park, Ill. Tim Boyle/Getty Images

Package delivery company DHL may have conquered the world, but it admitted on Nov. 10 that it couldn't conquer the U.S. The unit of Germany's Deutsche Post (DPWGN.DE) announced it will stop making express deliveries within the U.S., close all of its 18 main distribution hubs there, and lay off all but a few thousand of its remaining 13,000 U.S. workers.

Although DHL will continue to make deliveries to and from the U.S. and other countries, its withdrawal from the domestic express business is another setback for a blue chip German company in the world's biggest market. Last year carmaker Daimler (DAI) sold its stake in Chrysler after it was unable to turn around the No. 3 American automaker.

DHL has lost nearly $10 billion in the U.S. in the five years since it purchased Airborne Express in an attempt to challenge FedEx (FDX) and United Parcel Service (UPS). Despite its dominance in the rest of the world, DHL was never able to take enough share from the two major carriers in their home market. The company's decision to largely withdraw from the U.S. will push parent Deutsche Post to an estimated $1 billion loss for the full year as it books writedowns totaling $3.9 million to cover severance payments to workers and other restructuring.

Focus on International Express Deliveries

DHL's failure is also an early illustration of how the meltdown on Wall Street and the larger economic downturn are likely to cull weaker players in many businesses. "Crises favor the market leaders," Deutsche Post CEO Frank Appel told reporters at the company's headquarters in Bonn. Worldwide, he expects that principle to work in the company's favor. "We will come out of this crisis stronger," he said.

Deutsche Post execs insisted the company will continue to provide good service to DHL customers sending packages from the U.S. to international destinations and vice versa. The company intends to focus what remains of its express network on metropolitan areas, which account for 90% of international traffic.

DHL revealed a proposal last summer to use UPS to provide domestic air express service for its customers (BusinessWeek.com, 6/11/08). But the plan quickly became politicized over fears that it would result in huge job losses in Ohio (BusinessWeek.com, 7/31/08) if DHL closed its Wilmington cargo hub there. The UPS relationship is still being negotiated, and a company spokesperson said on Nov. 10 that no decision has been made to shut the Wilmington hub as part of DHL's restructuring. By most estimates, though, if the UPS deal goes through, as many as 8,000 DHL workers there could lose their jobs by the end of January.

The company also will continue to use subcontractors, including the U.S. Postal Service to deliver to areas it doesn't cover. DHL's profitable freight and supply chain-services businesses in the U.S., which employ about 25,000 people, won't be affected by the cuts.

"Risk Everywhere"

Appel acknowledged that the massive cuts in the express division—15,000 jobs including previous layoffs—will generate bad publicity. Although Deutsche Post generated most of its $17.7 billion in third-quarter sales outside the U.S., about half of the company's top express customers are based in America and about half of all express shipments pass through there. The decision to stop supplying domestic express service provides an obvious opening for FedEx and UPS to try to steal some of those customers.

But Deutsche Post execs, facing early signs of a downturn in profit worldwide, decided to slash the U.S. business before the sales further deteriorated. In the third quarter of 2008, which Deutsche Post also reported on Nov. 10, operating profit at the parent company slipped 8.5% before one-time items, to $550 million. "We are entering unprecedented economic times. We see risk everywhere," said John Mullen, CEO of DHL Express. "We think it's critical to take action now."

DHL has faced massive criticism for the way it managed the U.S. business. Readers responding to an earlier report on BusinessWeek.com (11/6/08), many of them identifying themselves as DHL employees or customers, savagely attacked what they said was lackadaisical service and top-heavy or even incompetent management. Mullen said that while some aspects of the business could have been better executed, "It's hard to see what could have been done that would have led to a different result."




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Deutsche Post AG is poised to announce thousands of job cuts at its DHL Express operations in the United States, possibly as early as Monday, a person familiar with the decision told The Associated Press.

The person said on condition of anonymity Sunday that the Bonn-based express mail and logistics company was poised to announce that the cutbacks at its DHL operations in the United States would affect between 12,000 and 13,000 jobs. The person was not authorized to speak to the media.

The cuts are part of a wider plan to curtail operations in the U.S., including ground deliveries, and would likely affect drivers, shipping clerks and warehouse workers. The express unit employs some 18,000 workers.

The expected move will not signal Deutsche Post's exit from the U.S., where it faces strident competition from UPS Inc. and FedEx Corp.

The person told the AP that the company's U.S. logistics unit, which employs some 25,000 people, would not be affected and some staff at DHL would remain.

"We're not exiting the U.S. entirely," the person said.

Deutsche Post itself did not comment Sunday.

Deutsche Post said earlier this year that competition, rising fuel prices and other factors have put its U.S. DHL operations on track to lose 1.3 billion euros ($1.6 billion) by the end of the year.

In May, Deutsche Post's chief executive Frank Appel announced a radical restructuring of the U.S. operations, which have posted recurrent losses. At the time, Appel said the company's U.S. freight flights were to be taken over by rival UPS Inc.

On Friday, the U.S. unions that represent some DHL employees and pilots that currently provide air service for some of DHL's shipments said they had not been informed of any forthcoming changes. But DHL scheduled a conference call with reporters for Monday afternoon to discuss news that was to be announced earlier in the day and answer questions about DHL's U.S. Express business.

DHL spokesman Jonathan Baker declined to provide details Friday on what will be announced Monday. As to the talks with UPS, he said, "We are continuing to talk with UPS. The talks are constructive. We expect to finalize our negotiations by year-end."

A person familiar with UPS' talks with DHL said Friday that if DHL makes significant cuts to its ground operations in the U.S., it wouldn't necessarily affect UPS and DHL reaching a deal since the talks solely involve air delivery of packages, not ground delivery.

The person spoke on condition of anonymity because of the sensitive nature of the talks.

UPS and DHL proposed a collaboration in May in which UPS would carry some air packages for DHL. The deal, if completed, could last up to 10 years and infuse up to $1 billion in annual revenue for UPS.

UPS has said the contract will mostly involve the transport of DHL packages between airports in North America -- not the pickup or delivery of DHL packages to customers. UPS has said the deal is similar to its existing agreement with the U.S. Postal Service.

Thousands of jobs could be lost at an air cargo facility in Wilmington, Ohio, if the agreement between DHL and UPS is consummated.

Deutsche Post slashed its earnings forecasts for both 2008 and 2009 late last month, saying it expects pretax profit to fall 8 percent in the third quarter "as the global economic environment deteriorated markedly."

Deutsche Post is scheduled to release its third-quarter results on Monday, followed by its nine-month figures on Tuesday, according to its Web site.

The source told AP that discussions with UPS on the business were ongoing, but because of the expected job cuts, the talks would find themselves conducted on a new basis. Deutsche Post, in the interim, is expected to move its remaining freight in the U.S. via road and highway transit, while it could close some of its operations in many cities altogether, the source said.

It was unknown how many jobs of contracting companies working with DHL in the U.S. could be affected.

The source said that some U.S. DHL employees would remain working with American companies' shipments to and from Europe and Asia.

Shares of Deutsche Post were up 5.7 percent to close at 9.36 euros ($11.90) on Friday in Frankfurt.

------

AP Business Writers George Frey in Frankfurt, Germany, Harry R. Weber in Atlanta and Samantha Bomkamp in New York contributed to this report.

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World markets pushed higher Tuesday as America went to the polls and a leading U.S. investment bank told its clients in Europe to buy stocks after the savaging they have taken in the last few weeks.

The Dow Jones index of leading U.S. shares was 203.66 points or 2.2 percent, higher at 9,523.49 even though analysts generally do not believe that one candidate will boost the beaten down market more than the other.

Britain's FTSE 100 index was 116.49 points, or 2.6 percent, higher at 4,559.77, while Germany's DAX was up 133.68 points, or 2.7 percent, at 5,160.52. France's CAC-40 was 92.30 points, or 2.6 percent, higher at 3,620.27.

Most Asian stock indexes were more or less flat, apart from Japan's Nikkei, which surged 537.62 points, or 6.3 percent, at 9,114.60 as the market played catch-up after being closed Monday, when most of Asia rose.

The U.S. presidential election is dominating sentiment in U.S. markets during Tuesday having been an afterthought for much of the last few weeks during the financial crisis.

Opinion polls on the eve of the vote showed that Democratic candidate Senator Barack Obama was leading Republican rival Senator John McCain, and that the Democrats could be on course to take a firmer grip on Congress.

"This election may have attracted a lot of attention in the media, but appears to have the lowest impact on financial markets of any election for many decades, doubtless a recognition that whoever is president, he will inherit a $1 trillion budget deficit and a banking system that has all but failed," said Marc Ostwald, an analyst at Monument Securities.

"Welcome to your worst nightmare, Mr. President," he added.

Also helping European stocks was a note from Morgan Stanley recommending European investors to buy stocks and has reversed its "full house sell signal" of June 2007 to a "full house buy signal". It had been one of the first major investment banks to look for the stock market exit door last year.

European shares have also been boosted by the ongoing decline in interbank lending rates ahead of expected interest rate reductions Thursday from the European Central Bank and the Bank of England.

Both banks are expected to follow the U.S. Federal Reserve's lead and cut interest rates by at least half a percentage point, though there's growing talk that the Bank of England may reduce interest rates by as much as a full percentage point for the first time since four cuts of that size in 1992-3 when Britain's economy was last mired in recession.

Jeremy Batstone-Carr, head of research at Charles Stanley, said Britain's FTSE in particular is rallying as it "gears up for a big cut" by the Bank of England, but added that it will likely peter out soon after the decision as the focus returns on fundamental economic data.

"We are heading into a deep recession and widespread earnings disappointment," he said.

Earlier, Australia's financial stocks improved after the Reserve Bank of Australia slashed rates for the third time in as many months, reducing its cash rate by a larger than anticipated 0.75 percentage points to 5.25 percent. That helped the S&P/ASX 200 index pare earlier losses to close largely flat.

Hong Kong's Hang Seng Index added 0.3 percent to 14,384.34 after fluctuating through the day, with bank shares up as lending conditions eased further.

South Korea's Kospi rose 2.2 percent, while benchmarks in Singapore and Shanghai fell.

In mainland China, the market dropped for a third day, led by mining and metals stocks. The benchmark Shanghai Composite Index slipped 0.8 percent to 1,706.7. Losers included China Shenhua Energy Ltd., the country's biggest coal producer, and Kailuan Clean Coal Ltd.

Oil prices rose, with light, sweet crude for December delivery declining $3.01 to $66.92 a barrel in European trade on the New York Mercantile Exchange.

The dollar rose 0.4 percent to 99.51 yen, but the euro was 1.9 percent higher at $1.2878.

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http://images.businessweek.com/story/08/370/1030_mz_porter.jpg

Gianpaolo Pagni

With the U.S. election just days away, it has never been
more important to consider what the next President must do to keep America competitive. In this time of crisis, Washington has focused on the immediate and the short term. Lost are the more basic questions we really need to worry about: What is the fundamental competitive position of the U.S. in the global economy? And what must we do to remain strong when other nations are making rapid progress?

The stark truth is that the U.S. has no long-term economic strategy—no coherent set of policies to ensure competitiveness over the long haul. Strategy embodies clear priorities, based on understanding the strengths we need to preserve and the weaknesses that threaten our prosperity the most. Strategy addresses what to do, but also what not to do. In dealing with a crisis, experience teaches us that steps to address the immediate problem must support a long-term strategy. Yet it is far from clear that we are taking the steps most important to America's long-term economic prosperity.

America's political system, especially as it has evolved in recent times, almost guarantees an absence of strategic thinking at the federal level. Government leaders react to current events piecemeal, rather than developing a strategy that unfolds over years. Congress and the Executive Branch are organized around discrete policy areas, not around the overall goal of improving competitiveness. Neither candidate has put forward anything close to a strategy; rather, each has presented a set of disconnected policy proposals with political appeal. Both parties contribute to the problem by approaching the economy with long-held ideologies and policy positions, many of which no longer fit with today's reality.

Now is the moment when the U.S. needs to break this cycle. The American economy has performed remarkably well, but our continued competitiveness has become fragile. Over the last two decades the U.S. has accounted for an incredible one-third of world economic growth. As the financial crisis hit, the rest of the American economy remained quite competitive, with many companies performing strongly in international markets. U.S. productivity growth has continued to be faster than in most other advanced economies, and exports have been the growth driver in the overall economy.

THE AGE OF ANXIETY

Yet our success has come with deep insecurities for many Americans, even before the crisis. The emergence of China and India as global players has sparked deep fears for U.S. jobs and wages, despite unemployment rates that have been low by historical standards. While the U.S. economy has been a stronger net job creator than most advanced countries, the high level of job churn (restructuring destroys about 30 million jobs per year) makes many Americans fear for their future, their pensions, and their health care. While the standard of living has risen over the last several decades for all income groups, especially when properly adjusted for family size, and while the U.S. remains the land where lower-income citizens have the best chance of moving up the economic ladder, inequality has risen. This has caused many Americans to question globalization.

To reconcile these conflicting perspectives, it's necessary to assess where America really stands. The U.S. has prospered because it has enjoyed a set of unique competitive strengths. First, the U.S. has an unparalleled environment for entrepreneurship and starting new companies.

Second, U.S. entrepreneurship has been fed by a science, technology, and innovation machine that remains by far the best in the world. While other countries increase their spending on research and development, the U.S. remains uniquely good at coaxing innovation out of its research and translating those innovations into commercial products. In 2007, American inventors registered about 80,000 patents in the U.S. patent system, where virtually all important technologies developed in any nation are patented. That's more than the rest of the world combined.





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John Hoxie signs a guest book before the dinner for patients of local military hospitals and "graduates."



John Hoxie signs a guest book before the dinner for patients of local military hospitals and "graduates." (Photos By Gerald Martineau -- The Washington Post)

The elegant dining room fell silent as the toastmaster called for a salute. Young men and women paused at their tables, some missing limbs and eyes, some in wheelchairs, some with canes and scars. A pair of crutches leaned against the wall beside a portrait of Abraham Lincoln.

In the low light, glasses were raised: To the American military, the host said quietly, "particularly those who served in harm's way." The room erupted in a cheer.

It was a timeless moment Friday night at Washington's Capitol Hill Club and might have been a scene from a century ago -- a salute to battered survivors of war.

Yet with the Iraq conflict still simmering and the one in Afghanistan heating up, the weekly Friday night dinner for patients at Walter Reed Army Medical Center was also an anniversary and reunion.

It has been five years since the charitable dinners began as a way to get wounded soldiers, sailors and Marines out of their rooms at Walter Reed and the National Naval Medical Center for an evening in the city, said Hal Koster, head of the Aleethia Foundation, which funds the events.

To mark the anniversary, Koster invited recovered patients who had been at the earlier dinners -- "graduates," they called themselves -- to come back and meet some of the more recently wounded.

The wounded "never forget what happened to them," said Koster, a Vietnam veteran who originally held the dinners at his former restaurant, Fran O'Brien's Stadium Steak House. "They relish the opportunity to talk to some of the newly injured guys. . . . It helps the old guys, and it helps the new guys. . . . They're brothers."

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It was easy to pick out the newly wounded from the older veterans Friday. Many of the former looked pale and appeared weary as the night went on. One, Staff Sgt. Andre Cilliers, 24, who had been shot in the side in Afghanistan in August, had a portable wound-draining machine with him.

And there was a swagger about the older veterans as they embraced and joked and posed for group pictures.

Also attending were Secretary of the Army Pete Geren, former deputy defense secretary Paul D. Wolfowitz and "Doonesbury" cartoonist Garry Trudeau, who has championed the wounded in his comic strip.

The event began at 6:30 in the stately club, two blocks south of the Capitol, as the "old-timers" arrived with spouses and relatives.

Garth Stewart, 26, who lost part of his left leg to a land mine in Iraq and spent several weeks at Walter Reed in 2003, was there from Columbia University, where he is a senior, studying history.

Stewart, who left the Army in 2004, said the war in Iraq has already migrated to the realm of video games, as have past wars. "Maybe it's good that it recedes," he said. "I hope that it does."

He said he had been determined to get out of the hospital as fast as possible, to prove to himself that he was the same man he was before. "What I always say . . . is get out of here, and go home," he said. "Get out in the real world. You'll heal faster."

Joe Bowser, 48, who lost his lower right leg in a rocket attack in 2004 in Balad, Iraq, spent more than two years recovering at Walter Reed. He now works for the secretary of the Army and takes Pentagon brass for visits to the hospital.

When patients see the Army officials, "all they see is a suit," he said. "When I go in there and I tell them, 'Hey, I'm the class of '04. I spent two and a half years here. I'm a below-the-knee amputee,' their eyes get wide, and they start listening."

Also there was Andrew Kinard, 25, of Spartanburg, S.C., a Marine lieutenant and congressional fellow who lost both legs to a makeshift bomb in western Iraq two years ago. He said the dinner was "a wonderful opportunity to sort of get a snapshot of where I came from" and where he would be going. He said he had been out of hospital only a few months.

At 6:35, a bus from Walter Reed arrived, and the wounded filed in amid the glare of TV lights.

Cilliers, who grew up in South Africa and was wounded Aug. 9, said he was attending his second dinner.

"This is only the second time I've been out," he said. "It's pretty much been my only opportunity to get out of the hospital so far. . . . I get to go out and sit down somewhere else other than my room."

As he spoke, his left arm was in a sling and a tube ran from his injured side to a portable canister carried by a nurse. "It's a wound-vac, still sucking fluid out of me," he said. "It's one bullet hole that caused a whole lot of damage." He said he has a piece of the bullet in a bottle.

Cilliers said it helps to see other soldiers further along in their recovery. "It gives me some idea of what to expect," he said.

By 10:30, the toasts and speeches were over, and the Walter Reed bus waited outside under a moon obscured by drifting clouds. As one man with a cane and facial scars waited inside for the elevator, he said: "I'm tired, man. I'm going to call it a night."




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Pam Van Hylckama Vlieg says her grandfather tried to steal chickens after being laid off from coal mining.

Pam Van Hylckama Vlieg says her grandfather tried to steal chickens after being laid off from coal mining.



Memories of salvaging and stealing to avoid going hungry are part of the legacy of the Great Depression. Some iReporters say they can't help but look at the current economy and feel the past holds lessons for the present.

Donna LeBlanc of Waxia, Louisiana, says she carries no credit to this day as a result of the frugality and self-reliance instilled in her by her family. Her husband keeps the couple's credit card and maintains a zero balance.

The Great Depression meant scary times for many households as a period of economic downturn spread throughout the world. Historians trace its start to the "Black Tuesday" stock crash on October 29, 1929, and argue that the resulting global desperation set the stage for World War II.

LeBlanc said her grandparents were fortunate that they didn't have investments and could grow -- or catch -- their own food during the Depression years.

Her grandfather Lester was a "Cajun cowboy" often seen wearing a cowboy hat, and her grandmother Ida was a resourceful woman who spent much of the 1930s working as a store clerk. LeBlanc, always told never to keep credit card debt, heard frightful stories from Ida. iReport.com: See a photo of the happy couple together after all these years

"She remembered vividly the barrels of flour, the bolts of cloth and the hunger in the faces of people as they begged for store credit," LeBlanc said. "The store must have been at least marginally successful, because my grandmother was able to purchase, a piece at a time, a complete six-person setting of Gorham Chantilly silverware for her trousseau, linens and even a Lane cedar chest to house her treasures."

The couple would catch wild hogs, feed them corn for a year and eat them once the wild taste was out of the scavenging animals. They also took advantage of available squirrel meat, a common food in the South at that time.

"It was a uniquely disgusting thing ... to see my grandfather take a stewed, skinned squirrel's head, smack the skull's dome with a heavy silver tablespoon, and dine on the brains," LeBlanc said.

Years after the Depression, LeBlanc's grandparents were well off once again. Ida became a packrat and couldn't help saving what she could. When the family opened up the old cedar chest after she died, they found a decades-old treasure trove of sewing materials and other keepsakes. iReport.com: "My dad used to cry when he spoke of that Great Depression"

The Great Depression turned many Americans into packrats who couldn't bear to part with anything of potential value. They couldn't always afford to buy what they needed.

Pam van Hylckama Vlieg of Williamsburg, Virginia, says her grandfather, Glen Surber, resorted to stealing food at times because he had hit rock-bottom.

Surber left the family behind in Saltville, Virginia, so he could head out to West Virginia's coal mines. After he got laid off, he found himself trying to steal chickens from a nearby farmer to feed his hungry family. He hid behind a tree to wait for nightfall, but his plan was stymied when he found another person lurking in the shadows.

"Both men took off running and then they realized they each thought the other was the farmer, but they were both there to steal a chicken," van Hylckama Vlieg said. "Needless to say, that was another night of water bread." iReport.com: Can you imagine having to steal to eat?

Digging into her memories, van Hylckama Vlieg says her grandfather eventually found a work program after the New Deal and was able to rebuild his life.

She is confident we haven't hit another Depression and that we've learned enough lessons from the past to avoid letting things get as bad as they were before.

"Poppy always said the world turns and everything that has happened would happen again. I am sure if he were still with us today he would be warning us to start a garden and buy some chickens."

Saving is a habitual behavior for those who have lived through the Great Depression, says Anjanette Sanchez of Globe, Arizona. Her grandmother, Vera Vasquez, had a difficult time with the Great Depression and seemed to be scarred by it long after.

"She spoke of the time with great disgust in her voice as if it was the most awful time of her life," Sanchez said. "She mostly spoke of being hungry and having to wear old boots that didn't fit." iReport.com: Read about those times when nothing could be wasted

Vasquez continued to save her things and always kept her freezer packed with food -- like frozen cactus to eat with her scrambled eggs -- because she'd lived through harsh times. There was never room for ice cubes.

"I guess to her, food was more valuable than ice," Sanchez said. "Her motto at the table was to eat as much as you want, but not to waste the food. Take all you want, but eat all you take."

Sanchez now passes on the same ideas to her children and reminds them not to be wasteful. iReport.com: Do you have a story about the Great Depression? Share it with us

Other iReporters had plenty to say, and shared their stories about the lessons they have learned and applied from the Great Depression:

Kimberly Kolaski of Richmond, Virginia, says her family's claim to fame is her great granduncle Paul Satko's remarkable attempt to travel to Alaska in a wooden ark to find land and a better life. He spent a couple of weeks making the treacherous trip on board the boat, termed the Ark of Juneau.

"He was on a mission and he was going to do it no matter what," Kolaski says. She's heard numerous stories about the hardships Satko endured, including being stopped while driving his unusual payload to Seattle, Washington, where the ark was to be launched.

The story is inspirational for the family and provides a sobering lesson about economic security for Kolaski. iReport.com: Find out more about the ark and Satko's travels

"I've learned to put my money away and don't touch it," she says.

Sheila Elrod of Atlanta, Georgia, says many secrets to success have been passed along through the years in her family.

"My grandfather, born in 1898, was an established small businessman by 1929, owning and managing a gas station and grill patronized by the mill workers. As his children and grandchildren grew into adulthood, he reminded us of some guiding principles that he learned during the depression."

Elrod says her grandmother worked inside the nearby mill because people of the time believed that one must "work hard, regardless of your status."

"Oddly enough, she and her sisters were ladies that were taught all the graces of being ladies," Elrod said. "However, here's an example that even ladies didn't shy away from hard work during that time. iReport.com: See a family photo and the mill where Elrod's grandmother worked

Elrod said her grandfather had to be careful to whom he gave credit and learned many smart business secrets along the way. He passed them along to Elrod:

  1. Always do the right thing.
  2. Take care of the customer.
  3. Pay attention to details.
  4. Know the people with whom you are doing business.
  5. NEVER borrow money without a clear plan for how you will pay it back.

Richard Holland of Phoenix, Arizona, says his grandfather packed up a Ford Model T in search of a better life. The family ended up taking shelter in a barn while Orville Holland continued onward to find work.

"In those days, telephones were few and far between across the Great Plains, and months elapsed with no word or money from my grandfather. The coming winter was a serious concern as they considered the threat of living in the unheated barn." iReport.com: Read the story of what it's like to have a family living in a barn

"As fall approached, the story continues that my grandfather returned in a borrowed car. He had walked, hitchhiked and ridden the rails until he secured a job, saving every penny to finally rent a place for his family."

Gayla Uslu of Conyers, Georgia, says she never understood why her grandmother was so big on saving plastic bowls and other packaging until now.

"She grew up in the depression and also lived in a rural area, far from the soup and bread lines in the urban areas. It wasn't just a matter of getting food, it has to be stored and kept long-term as well." iReport.com: Read about the moneysaving tips Uslu has learned

Uslu finds much to learn from her grandmother and catches herself doing the same things that mystified her before.

"Today, I find myself really thinking twice before I throw uneaten food away. Leftovers aren't such a bad idea anymore, and I find myself holding on to a few of those plastic containers myself."



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