BELOW THE LINE – II

Now that the weather has improved, I’ve been taking Aubren out for walks in his stroller.   Some days we go to the park, other days I will go to different stores that are within walking distance.  Meijer, Target, and Aldi are 15 or 20 minutes away.

Today, we went to the post office and then to Aldi.  Aldi is a German-owned grocery chain which operates in many countries – I’ve seen them in my home-town in England, across Germany, around the US and elsewhere.  They claim to save people up to 50% on their grocery bill.  They offer “no frills” – they do not bag your groceries and they do not pay anybody to periodically go outside and round up shopping carts.  At Aldi, you have to use a quarter to free a cart from a chain and then use it.  When you return it, you can get your 25 cents back.  I’ve seen this at other stores – in England, Asda (Walmart) charges one pound, which is roughly six quarters.

Aldi attracts a lot of poorer people, people who have to be careful with their money.   Many customers use food stamps (which are not literally stamps – it’s now a credit card provided by the government for people, which is topped up each month).  There are also more affluent customers, judging by their clothes and the vehicles they pull up in.  Maybe they choose to economize on food while splurging on the other two items.

During the seven years we’ve lived in this neighborhood, I’ve noticed their business boom.  The Wall St Journal a couple of years ago said they were the fastest growing chain in the US.  They keep their prices down by not selling brand names, but guarantee their products are as good as any brand.

Today, for the first time, I met an elderly gentleman who pointed out that my grandson’s shoe had come off.  I thanked him and picked the shoe up.  He then noticed I did not have a shopping cart (trolley), the reason being that I could not push a cart and a stroller.  But he assumed it was because I didn’t have 25 cents.

He also told me that he hangs around a lot offering to return carts just to get the 25cents.

I told him that, at the park, I often see people carrying black trash bags collecting discarded cans, for which they can get ten cents each.  He commented on how times are hard and getting harder.  For many people, this is true.

Yet at the same time, we are being told the economy is improving.  Even locally this is the case.  Lansing is the fastest growing area in Michigan when it comes to high tech jobs; the sixth fastest in the United States.  Other areas of the economy are also improving.

It would appear that while some people are doing well, others are struggling more than ever before.

The minimum wage remains at $7.25 an hour.  After taxes, that means somebody working forty hours takes home about $250 a week.  If the minimum wage had kept up with inflation, it would now be $16.50 per hour, over twice as much.  I saw a number of “Situation Vacant” ads this morning, all offering work at about $10 per hour.

If anything, wages will go down further.  The proposed amnesty for undocumented workers could add 11 million, mostly unskilled people to the labor pool thereby driving wages down further.  Also, in spite of high unemployment, the numbers of immigrants allowed into the country each year has not changed.

The unemployment figure continues to be inaccurate.  I know a number of people who are unemployed but not classed as such because they do not qualify for unemployment benefit.

So how do people manage?  The biggest single answer to that question must be “food stamps.”  Over 47 million are now on food stamps, a government program that gives free food to poor people.  What will happen if the US government has to cut back on the program?

The people I know who are on food stamps also receive free medical care under a government program called Medicaid, not to be confused with Medicare which is for people over 65.  Medicaid is for the poor.  In Michigan, it is reserved for those below the poverty line, currently $15,132 per year per couple.  A family of four that earns less than twice that is below the poverty line and will also qualify.

It’s not just jobs that are needed – it’s good jobs that pay well.  These are in short supply.  There is no sign of a return of good paying jobs in any significant number.  This bodes ill for the future of the American economy and Americans.

Quotable Quotes . . .

“A conservative is a liberal who got mugged.”

“If you’re not a socialist at 20, you’ve got no heart; if you’re still a socialist at 30, you’ve got no head.”

– Sir Winston Churchill

 

WHY THE TSARNAEVS HATED US SO

“The Mouse that Roared” is an old black and white movie made in England in 1959.    The late Peter Sellers played a number of roles in the film, which is a real classic.

It tells the story of an impoverished fictional country called the Duchy of Grand Fenwick, somewhere in Europe, ruled over by the Grand Duchess and with a prime minister, both played by Sellers.

The Grand Dukedom is broke and somebody proposes the country declare war on the United States because the US always lavishes vast amounts of money on its defeated enemies.  The unforeseen problem is that the US doesn’t even notice the declaration of war!

The United States and its allies are in a similar position today – with no awareness of the fact that much of the world considers itself at war with us.  We’re too busy having fun to take any notice!

North Korea is a classic example of a nation in a constant state of war, with the US and South Korea.  Every time the power goes off in Pyongyang, people think it’s because of some dastardly act by Uncle Sam, who is trying to take over the world.

This misperception is not confined to the paranoid dictatorship of North Korea.  When I was in Ghana shortly after 9/11 I saw pictures of Osama bin Laden for sale at the side of the road.  I asked a former Muslim why and his response was that “people think that America is trying to take over the world and that Osama bin Laden will stop them!”   Ghana is only 14% Muslim.

Across the Islamic world, people believe the “Christian” West is at war with Islam.  Leaving aside the issue of whether the West is Christian or not, let’s take some time to see where this common misperception leaves us.

Because we refuse to recognize this fact, we agonize over how two young men who we so kindly took in, can possibly turn against us.  How many hours of TV time have been devoted to discussion of why they turned against us?  There’s a naïve incredulity on the part of television commentators who cannot come to terms with the fact that so many people hate us, particularly those who adhere to the tenets of Islam.

After all, America has been taking in immigrants for four centuries and no immigrants have turned against us before.

They overlook the fact that there were few Muslims in the US prior to changes in the immigration law in 1965.  That’s one reason why this is a new phenomenon.

Well, not so new – 9/11 was also perpetrated by Muslim immigrants.  And the Tsarnaevs are not the first second-generation terrorists – Nidal Malik Hasan was a second-generation Muslim immigrant from Jordan.  He’s the man who killed thirteen at Fort Hood on November 5^th, 2009.  In July 2005 second generation British Muslims blew up trains and a bus in London.  Like the nineteen terrorists on September 11^th and Hasan, they came from affluent backgrounds.   Poverty was not a factor.

And it’s not just Muslims.  Seung-Hui Cho was an immigrant from South Korea.  He killed 32 at Virginia Tech six years ago.

When the US allowed these people into the country and generously gave them the same opportunities as other Americans, why did they violently turn against their fellow Americans?

America is a free country.  It’s also a very permissive country where anything goes when it comes to morality.  For people brought up with a strict moral code (Muslims, for example), it must be very difficult to reconcile their religion with what they see around them.  Is it any wonder that some turn to stricter interpretations of Islam out of contempt for the immorality and licentiousness they witness?  They naturally feel contempt for the people around them who do not share their moral code.  This explains some of the comments made by the older Tsarnaev brother on Twitter.

Cho, the South Korean immigrant, was different.  He was not Muslim.  He had previously been diagnosed with a severe anxiety disorder.  Could this be related to his coming to America?

America is a very fast-paced, stressful nation.  It’s not easy moving here from anywhere else.  I know this from personal experience.  We moved here in 1990 from Africa, from the slowest and most relaxed part of the world.  We felt like we suddenly got on a treadmill that was out of control.  Our children were starting their teenage years and seemed to be going everywhere for school activities and get-togethers with friends, giving the sense the family was falling apart.  The Tsarnaev’s mother made a similar observation about life in the US.

My family adjusted.  But, clearly, not all do.  And, I would think, Muslims have a greater problem than others.  After all, Islam means “submission” which is the exact opposite of freedom!

None of this excuses what any of these people did.  The taking of innocent lives can never be justified.

But, it’s not surprising these two young men reacted the way they did.  The real surprise is that more haven’t done so.  Maybe they will in the years to come.

HIGHER PAY FOR MSU FACULTY

A few days ago I posted a blog about student loans and the bubble that will soon burst.   In the article, I showed how government backed student loans have been a major factor in the high cost of education.

Today’s Lansing State Journal’s front page reports on a development at Michigan State University, which is only a few miles away from our home.  “MSU top faculty see higher pay raises” is the headline of the article, written by Matthew Miller.

The article reports that four Cincinnati researchers were lured to MSU in 2009 and 2010.  Their starting salaries then were between $175,000 and $210,000.   As their salaries have been determined to be on the low side, they are now going to receive substantial raises.  One justification for this is that they have brought in more than $8 million in grants.

A table accompanying the article shows that MSU typically pays professors $131,200 per annum, while Associate professors receive $90,900 and Assistant professors have to make do on a mere $71,000.

I have no doubt that these salaries are justified in order to attract top people from other institutions of higher learning that pay more.

It is also no wonder that so many university professors are liberal and support big government.  After all, they have done very well out of government.  They likely assume that if the government controlled everything, we would all be better off.

But these salaries contribute to the student loan bubble.  Last week, it was announced that neighboring former Lansing Community College students are defaulting on their loans at a rate of 17.2%.  A few days later, MSU increases the pay of some of its top employees.

Do we see the connection here?  Rising costs are simply passed on to students.   Students can pay because they can borrow excessively from government.  Most students, being young and inexperienced, don’t realize there will come a day when they have to pay it all back.  Almost impossible in the present job market, unless, of course, they end up employed by a government-funded university!

It’s time for a level playing field.  Only true free enterprise will give us that.

Abolish government backed student loans and demand for education will drop.  That will bring the price of education down to a realistic level.  Simple “supply and demand” will always work – it’s a law of economics, sometimes distorted by governments to try to get votes.

FROM THE WORLD’S PRESS . . .

“Islam is growing in militancy and intolerance, evolving again into a fighting faith, and spreading not only through proselytizing, but violence.

“How to justify the charge of intolerance?

“The Taliban blew up the Bamiyan Buddhas.  The Sufi shrines of Timbuktu were blown up by Ansar Dine.  In Saudi Arabia, Iran and Afghanistan, Christian converts face the death sentence.

“In Nigeria, the Boko Haram attacks churches and kills Christians, as in Ethiopia and the Sudan, where the south seceded over the persecution.

“Egyptian Copts are under siege. Assyrian and Chaldean Christians in Iraq have seen churches pillaged, priests murdered. In Indonesia, churches are being shut on the demand of Islamists. Sharia law is being demanded by militants across the Middle East, as Christianity is exterminated in its cradle.”

(“How America can deal with militant Islam”, by Patrick J. Buchanan.  The American Conservative.  26th April)

FROM THE WORLD’S PRESS . . .

“How much confidence should Americans have in their government for keeping us safe when two young men can wreak havoc, shutting down a major city?

“One thing the US government should decide is whether or not to allow people into America from countries where radical Islam and ‘jihad” are taught.

“More must also be done to curtail the admission of radical imams and the construction of mosques and Islamic schools where hatred of America, Jews and Christians is preached and taught.”

(“Terror needs action,” Cal Thomas, Lansing State Journal, 26th April).

FROM THE WORLD’S PRESS . . .

“Many Americans often ask me the same question: What about the Muslim family next door who are really nice people?

“To this question my answer has always been:  Some of the nicest people I know are Muslims, but that must never blind us from understanding the risk we are taking when we allow the building of hundreds of mosques financed by Saudi Arabia and allow millions of Muslims to migrate into America at a time of a fierce war against Islamic terrorist groups and nations.

“The existence of nice and educated Muslims should also never blind us from seeing the deep problems with the ideology of Islam and its jihadist goals that are enshrined deep in the psyche of Muslims.

“Yes, our problem is with the Muslim jihadists, but so-called “moderate” Muslims have often been silent enablers and defenders. Terrorists could never be as powerful as they are without the support and prayers of Islamic nations, governments and people.”

“Islam is the only religion on earth where the followers are required to kill Allah’s enemies and do revenge in his name. The Quran also says that vengeance and retaliation has been prescribed for Muslims.”

 

(“Muslims should rise up and reject terrorism,”by Nonie Darwish, Investor’s Business Daily, April 22nd)

FROM THE WORLD’S PRESS . . .

“The mind goes numb. Spanish unemployment jumped by yet another 237,000 people in the first quarter to 6.2 million, or 27.2pc.

“This is equivalent to roughly 8.3 million in Britain, or 39 million in the United States. The country is losing 3,581 jobs a day. There are 1.9m households where no member of the family has a job.”

“The national rate of unemployed youth is 57.2pc, rising to 70pc in the Canaries.

“This is in spite of mass emigration by Spanish youth. El Pais reports that 260,000 young people aged between 16 and 30 left the country last year.”

(“The great Spanish nation can end its crucifixion at will by leaving EMU”, Ambrose Evans-Pritchard, Daily Telegraph (UK) 25th April)

STUDENT LOAN DEFAULTS ON RISE

Assuming that Lansing, Michigan, is typical of national trends, there’s a crisis brewing when it comes to student loans.

Lansing is the home of Lansing Community College.  East Lansing, a city that borders Lansing, is home to Michigan State University, so higher education is a big factor in the local economy.  Not too far away is Ann Arbor, home of the University of Michigan.  Both universities are Big Ten universities here in the US.

These institutions of higher learning hardly suffered after the financial collapse in 2008.   A friend once described Ann Arbor as “a reality free zone.”  But reality has a habit of eventually catching up on people, institutions and countries.  They can’t avoid trouble forever.

“Student loan defaults on rise at LCC” ran a headline in today’s Lansing State Journal (April 26^th).  “The recession years brought a boom in enrollment to Lansing Community College and a boom in borrowing.”  IOW, they did not suffer like the rest of us.

Continuing:  “In 2007-08, the year before the markets collapsed, LCC students took out just under $29 million in federal student loans.  Three years later, that number topped $68 million.  More borrowers were borrowing more money.”

Ironically, the reason why more borrowers borrowed more money was the recession itself.  People lost their jobs and went back to school for further training.  (That, of course, has led to a great deal of disappointment as, upon graduation, the jobs aren’t there, leaving many to feel higher education is not worth it.  That could be a further problem for colleges and universities in the future.)

Anyway, “of the 3,779 former LCC students who began repaying their student loans between October 1, 2009 and September 30^th of the following year, 653 of them went into default over the next two years.  That’s 17.2 % . . .”

A few weeks ago, it was announced that student loan debt had reached over $1 trillion.   The President promised to do something about it, which, likely, will simply result in government taking over some of that debt, adding to the country’s financial woes.

What’s needed is a deeper look at this problem.

A television news program this week showed that thousands of Americans are now moving to Canada for higher education as the cost is roughly a quarter of what American institutions charged.  That’s a staggering difference.  While the rest of the country had to economize after the financial crash, academic institutions continued to raise their prices for tuition, room and board, as if nothing had happened.

Is it possible that student loans in the US have actually enabled higher education to keep charging more, knowing that the kids can always borrow the money from Uncle Sam?   Never mind the kids, after they get a degree, they will be earning good money and will happily pay it all back!

However, that’s not happening any more.

Millions of young people can’t find a well paid job, can’t afford to buy their own place so they go back to Mom and Dad, can’t afford to marry and start a family, hence the falling birthrate.  Post-WWII expectations are no longer guaranteed.

Student loans are only part of the problem.  But they are a large part of it.

What’s surprising is that the local rate of defaults is only 17.2%.

At some point this bubble is going to burst and the consequences could be worse than when the housing bubble burst in 2006.

EUROPEAN CRISIS CONTINUES TO ERODE PUBLIC TRUST

Riots in Madrid against austerity measures

The news today that the United Kingdom managed to avoid a triple dip recession during the first quarter of the year comes as a boost to morale, even though the growth rate, at 0.3%, is pathetic.  0.4% less and everybody would be lamenting the triple dip.  (Question:  are stats reliable enough to measure growth that accurately?)

The UK isn’t the only country in the European Union struggling economically.  There is even greater suffering across the water in the Eurozone countries, those European nations that use the euro as their common currency.

Spain’s unemployment rate has risen again to 27.2%, over six million people; while the rate for those 25 and under is a staggering 57%.  At the same time, the French unemployment rate has just grown for the 23rd month in a row.

It’s not surprising that the public is losing confidence in the European Union, which is failing to deliver on its promises.  There is little or no confidence in the austerity measures that some countries have introduced. An article in Wednesday’s Guardian (UK) highlights the problems:

“Public confidence in the European Union has fallen to historically low levels in the six biggest EU countries, raising fundamental questions about its democratic legitimacy more than three years into the union’s worst ever crisis, new data shows.

“After financial, currency and debt crises, wrenching budget and spending cuts, rich nations’ bailouts of the poor, and surrenders of sovereign powers over policymaking to international technocrats, Euroscepticism is soaring to a degree that is likely to feed populist anti-EU politics and frustrate European leaders’ efforts to arrest the collapse in support for their project.

“Figures from Eurobarometer, the EU’s polling organisation, analysed by the European Council on Foreign Relations (ECFR), a thinktank, show a vertiginous decline in trust in the EU in countries such as Spain, Germany and Italy that are historically very pro-European.

“The six countries surveyed – Germany, France, Britain, Italy, Spain, and Poland – are the EU’s biggest, jointly making up more than two out of three EU citizens or around 350 million of the EU’s 500 million population.

“The findings, published exclusively in the Guardian in Britain and in collaboration with other leading newspapers in the other five countries, represent a nightmare for Europe’s leaders, whether in the wealthy north or in the bailout-battered south, suggesting a much bigger crisis of political and democratic legitimacy.”  (“Crisis for Europe as trust hits record low”, Ian Traynor, Europe editor of the Guardian, 24 April).

Things do not look good for the European Union, a 27-nation democratic club that has helped Europe avoid conflict for over 50 years. Will the EU survive? Or will it fall apart?  If the latter, what will replace it?

It’s important to remember that, while there are similarities between Europe and the US, there are also some major differences. Chiefly, that whereas the United States has been a unitary nation, a federal republic, without a serious blip for almost 150 years, since the end of the Civil War, European countries have seen a great deal of turmoil in that time period.

150 years ago, most of the nations that currently comprise the European Union, were monarchies, or ruled over by imperial monarchies like Austria or Russia. During the last 15 decades, they have experienced social upheaval, wars, and revolutions in a way that America hasn’t. The United Kingdom is an exception, being stable for over three centuries.

The point here is that we should not necessarily expect democracy as we know it to continue on the continent of Europe. Can Spain really withstand 27.2 % unemployment?  Many Spaniards must remember the dictatorship of General Franco, which only ended I n 1975.  There must be nostalgia amongst some for a return to the conditions that then existed, prior to the EU.  This will also be the case in Portugal and Greece, where fascist dictatorships ended about the same time.

The peoples of the former communist countries of eastern Europe will also be looking back nostalgically to the time of full employment, under communism.  Of course, they never really had full employment, but every citizen had a responsibility given them by the state, even if it was only sweeping the streets.

Change does not have to be the result of economic problems.  There is a sense among many Europeans that politicians have imposed a racially mixed society upon them against their will. There is also disillusionment with radical changes in society like gay marriage (see quote below this article).  There is little or no trust in government or its institutions.

European history teaches us that violent upheaval can suddenly come, overthrowing a regime overnight.  France in July 1789, Russia in February 1917 are the two most notable examples. But, remember, in 1848 virtually the whole continent experienced revolution as uprisings toppled almost every government, or forced radical change upon their leaders. In 1989 something similar happened in the East, when communist regimes fell like dominoes.

Let us not be naïve in assuming that now these countries have democracy, they will stay that way.  When democracies fail to provide basic needs, like employment and housing, people will look for alternatives.  At such a time, any demagogue or rabble-rouser can promise paradise and they will believe it.

In Russia, a 300-year-old dynasty was overthrown as a result of a shortage of bread and the riot that resulted from it.  Twenty, forty or sixty years of democracy can suddenly change.  Everybody knows enough history to be aware that Europe hasn’t always been democratic – it can easily be non-democratic again!

_____________________________________________________

“Paris:  Revolutions are often sparked by an unexpected shock to an already weakened regime. As commentators in France remark not only on the crisis engulfing François Hollande’s government but also on the apparent death-rattle of the country’s entire political system, it could be that his flagship policy of legalising gay marriage — or rather, the gigantic public reaction against it, unique in Europe — will be the last straw that breaks the Fifth -Republic’s back.”

(“Why France’s gay marriage debate has started to look like a revolution,” John Laughland, The Spectator (UK), 27th April).