Chapel Hill Political Review March 2008
http://studentorgs.unc.edu/thehill
Volume VII, Issue III
Economic storm 2008 U.S. forecast looks grim
Bringing diplomacy back to the outback
New party in the governor’s mansion?
From the Editor To our readers: We’re in the midst of the most contentious primary season in recent memory—even May-flower North Carolina may get to play a role in selecting the ’08 nominees. Voters across the country are being waylaid by pollsters and asked to name the defining issue of this unprecedented presidential contest. Iraq, immigration and insurance all take a back seat to the economy. Even though we toss around terms like subprime mortgages, recession and negative job growth, let’s face it, most of us can’t claim a working knowledge of the current economic climate, much less the long-range forecast. We just know enough to be worried. Leave it to The Hill’s team of economic meteorologists to break down the complicated mysteries of eco-
nomic patterns into a simple—but none too reassuring—report (p. 12). Just how’s it looking out there now? How did it get that way? What does it mean for us college students? A warning to our May graduates: Bundle up for a hiring freeze. Contrast this bleak domestic picture with our friends down under. The Aussies have been enjoying years of steady job growth, and their new PM seems to have the magic diplomatic touch (p. 18). Also check out our new columnists from the left and right as they size up the presidential competition (p.20). Guest contributor Caroline Schneider has this month’s Last Word on the image of America our Christian missionaries convey to the world (p.22). As always, we welcome your feedback at http://studentorgs.unc.edu/ thehill. Thanks for reading. Enjoy! Leah Szarek is a senior majoring in journalism and political science.
Send us your comments We’re proud to share our work with you, and we invite you to share your thoughts with us. Send us a letter or email - no more than 250 words, please. Include your name, year and major.
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The Hill
Chapel Hill Political Review Our Mission: The Hill is a medium for analysis of state, national and international politics. This publication is meant to serve as the middle ground (and a battleground) for political thought on campus where people can present their beliefs and test their ideas. A high premium is placed on having a publication that is not affiliated with any party or organization, but rather is openly nonpartisan on the whole. Hence, the purpose of The Hill is to provide the university community with a presentation of both neutral and balanced analysis of political ideas, events and trends. This means that, on the one hand, the publication will feature articles that are politically moderate in-depth analyses of politics and political ideas. These articles might be analytical, descriptive claims that draw conclusions about the political landscape. On the other, The Hill will feature various articles that take political stances on issues.
2 The Hill
The Hill Staff EDITOR Leah Szarek MANAGING EDITOR Juliann Neher WRITERS Melissa Brzycki Andre Durham Hunter Gray Ellis Caroline Guerra Michael Parker Ben Piven Will Schultz Yash Shah Alex Smith Clayton Thomas COLUMNISTS William Griffin J. Pattishall ASSOCIATE EDITORS Melissa Brzycki Alex Smith COPY EDITORS Beatrice Allen Nicole Watts HEAD OF DESIGN Jessica Lin ART & DESIGN Diane Esson Rachel Moltz Caity Pelliccia Ru Yuan HEAD OF CIRCULATION Andre Durham TREASURER Hunter Gray Ellis FACULTY ADVISER Ferrel Guillory
The publication was paid for, at least in part, by Student Activities Fees at a cost of approximately $.50 per copy.
Contents Features 8 10 11
March 2008
Volume VII, Issue III
Gubernatorial games Republicans push for an end to 16 years of Democratic leadership One Laptop per Child Program to end global education gap hits speed bump A newer, greener China Can Beijing clean up in time for the Olympics?
Cover 12 15
cover art by Rachel Moltz
Fiscal forecast: stormy Behind the subprime mortgage crisis Facing the college crunch Economic downturn puts a chill in the air for recent grads and more . . .
International 18
Aussie finesse A return to diplomacy down under
Diane Esson
Left/Right 20
And the gloves come off Our columnists critique the competition
In Every Issue
v Notes from The Hill v The Last Word: Christian imperialism March 2008 3
Notes from the Hill Political Agenda
Diane Esson
March 2008 S 2 9 16 23 30
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3 4 5 6 7 10 11 12 13 14 17 18 19 20 21 24 25 26 27 28 31
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Global Security Lecture • Wed., March 5 7:45 - 9 p.m. • Fed Ex Global Education Center • Speaker is former U.S. National Security Adviser Zhigniew Brzezinski (‘77-’81)
Walk-Out Against the War • Wed., March 19 at 12:30 p.m. • Gather in the Pit for rally and march
Notes from 4 The Hill
The Hill
Sponsored by: Students for a Democratic Society (SDS) and the UNC March 19th Coalition Against the War The Hill does not endorse any of the above events unless otherwise noted. Want your event included on The Hill’s political agenda? E-mail event details to: thehillpr@unc.edu.
Notes from the Hill Supreme Deciders
Big break for crack convicts On Dec. 10, the Supreme Court ruled 7-2 in favor of a man convicted of possession of crack cocaine. The case hinged on whether judges may sentence criminals to less than the federally recommended jail times for drug offenses. The Court affirmed a former decision in Booker v. United States, in which they decided that federal sentencing guidelines are only advisory. The Court, with Justices Thomas and Alito dissenting, ruled that Derrick Kimbrough’s sentence of 15 years jail time was not too lenient, even though federal guidelines mandated 20 years. Also, the Court called the 100
Political Review
Diane Esson
to one ratio of possession of powder cocaine versus crack cocaine excessive. The ratio, in effect, meant that one would have to possess 500 grams of powder cocaine, or more than one pound, to receive the same sentence as someone arrested with just five grams of crack cocaine. The decision has impacted
federal drug sentencing nationwide. In response to the decision, the United States Sentencing Commission has eased recommended federal prison sentences. The commission has agreed to review 19,500 appeals, all by crack cocaine offenders looking to lessen their sentences. The White House has spoken out against the Supreme Court’s decision, with Attorney General Michael Mukasey voicing his disapproval. So far, though, the president’s opposition has not affected the sentencing commission. —Michael Parker
Under the robes
The new nonfiction book “The Nine” presents a fascinating picture of the Supreme Court for a politically minded person, even if one’s knowledge of the court derives mainly from its rare appearances in pop culture, such as John Grisham’s thriller “The Pelican Brief.” Unlike Grisham, however, Jeffrey Toobin needs no invented murder scenarios to enliven his story. The court’s recent history provides fascinating material with stories to spare. Toobin paints a detailed portrait of the rarely seen lives and workings of the modern Supreme Court justices. His knowledgeable, unpretentious language draws in even a reader completely unfamiliar with the judicial branch. He frames the
book by the partisan struggles which inevitably affect its makeup and legacy. Toobin explains recent momentous cases, taking the reader step-by-step through both the broader implications and more specific impacts on the justices themselves. The central issue remains the political leanings of the court. Toobin describes decadeslong efforts by the Republican Party to sufficiently control the government in order to nominate sympathetic judges. Accordingly, both nominations and the ideological evolution of justices dominate much of the work. Throughout the book, Toobin contends that the main focus of conservative efforts is the reversal of Roe v. Wade and federal
reproductive rights. Some of Toobin’s account is biased, at times unattractively so. For example, Toobin writes with palpable scorn about all the decisions and actions of the justices that led to Bush’s victory in the 2000 election. He reserves his harshest criticism for Sandra Day O’Connor, who, featured favorably throughout most of the book, especially disappointed Toobin in Bush v. Gore. Toobin features O’Connor prominently in the book, and if any justice could be called the protagonist, it would be her. Despite his personal judgments, the author presents a well-researched, incredibly readable account of a little-known American institution. — Melissa Brzycki March 2008 5
Notes from the Hill On the Docket
Delegate dance
Red state zaps electric chair
In one of the nation’s most conservative states, the death penalty was dealt a substantial blow when Nebraska’s Supreme Court ruled that electrocution violated the state’s constitution. With electrocution the state’s sole method of capital punishment, the move essentially put a halt on the death penalty. Republican Gov. Dave Heineman criticized the 6-1 decision as “judicial activism.” First used in New York in 1890, the electric chair was once the primary method of execution in the U.S. In the 1980s, however, a series of botched executions gave lethal injection the edge. The most recent electric chair execution in the U.S. was in 2007, the latest of nearly 150 such executions since the death penalty was reinstated in 1976. Prior to the ruling, Nebraska was the only state whose sole method of capital punishment was the electric chair, though some states reserve it as an option. The case involved Raymond Mata, Jr., who was sentenced to death in 1999 for the first degree murder of Adam Gomez, the 3-year-old son of Mata’s exgirlfriend. Mata is one of nine inRaymond Mata, Jr. is one of nine inmates currently on death row in Nebraska.
6 The Hill
Go Figure
•2,025 delegates needed for Democratic nomination •16 primaries left Candidates from both parties have 14 state primaries to win over the next 4 months. •1,191 delegates needed for Republican nomination Diane Esson
mates currently on death row in Nebraska. In its ruling, the court said that electrocution was outdated, “more befitting the laboratory of Baron Frankenstein than the death chamber.” However, the court actually upheld Mata’s sentence, ruling the method of Mata’s execution unconstitutional, not his execution itself. Heineman, who said he was “appalled” by the ruling, is expected to ask the legislature to approve another means of execution for the state. For the time being, the ruling most likely represents the end of electrocution in the U.S.—Clayton Thomas
•15 primaries left
With 2,464 of the Democratic delegates pledged and no clear front-runner, the remaining 16 Democratic primaries will play an important role this year. Sens. Hillary Clinton of New York and Barack Obama of Illinois are racing to obtain the required 2,025 delegates to become the Democratic contender in November. On the Republican side, the magic number is 1,191, and Sen. John McCain of Arizona has a considerable lead over Gov. Mike Huckabee of Arkansas going into the final 15 primary contests. Candidates of both parties have to enamor 14 states and 2 U.S. territories over the course of the next 4 months, including North Carolina on May 6. South Dakota and New Mexico will hold the final Republican primaries on June 3 and Puerto Rico will hold the Democratic finale on June 7. —Andre Durham This article is based on primary results as of mid February. Visit http://studentorgs.unc.edu /thehill for updates.
Notes from the Hill Up to Date
Pakistan revisited
In our November issue, The Hill predicted that Pakistan’s Pervez Musharraf “may keep Pakistan stable.” It is doubtful any leader could keep Pakistan steady in light of recent events. Pakistan’s first difficulty came when Musharraf faced re-election. A bloc led by the Pakistan People’s Party threatened to walk out of parliament to prevent his re-election. In spite of the boycott, Musharraf won an easy victory in early October. However, Pakistan’s Supreme Court refused to ratify the results. Musharraf retaliated by declaring a state of emergency and replacing several Supreme Court justices with his own appointees. The new court quickly declared Musharraf the victor.
1 Silvio Berlusconi
Italy’s ex-prime minister looks like he might become Italy’s ex-ex-prime minister. Welcome back, Silvio!
Another crisis struck Pakistan on Dec. 27, when former Prime Minister Benazir Bhutto was assassinated at a rally in Rawalpindi. The nation was plunged into chaos. Bhutto’s supporters blamed the government, while Musharraf insisted that alQaeda was responsible. In the wake of the murder, Musharraf pushed Pakistan’s legislative elections back to Feb. 18. Bhutto’s PPP will now be led by her son, Bilawal Bhutto Zardari. Reverberations from Bhutto’s death have yet to die down, while the nation is still menaced by Islamic extremists in its Northwest Frontier Province. —Will Schultz
Hill-O-Meter By Will Schultz
2 Barack Obama
“The Audacity of Hope” trumped the Couple from Hope in South Carolina, but Super Tuesday was a close one. The Big O got back the Big Mo, sweeping the Potomac primaries.
Who’s on top of the heap right now? Who has fallen far? We track the up-and-comers and the down-and-outs.
3 John Howard
Is Bush fatigue contagious? Howard, Australia’s Dubyafriendly prime minister, got the boot after 11 years in office.
4 Fred Thompson
Turns out that the fire in his belly was just indigestion. See you in the reruns, District Attorney Arthur Branch.
Diane Esson
March 2008 7
State
Gubernatorial a e s m g
T
By Clayton Thomas
his year, many North Carolinians will wit- construction. After 1876, Democrats established in ness something they haven’t seen in a long the South an impenetrable partisan bastion. As an time: a wide open gubernatorial race. example, no Southern state, with the exceptions of Tennessee and North Carolina, elected a RepubliTHE CANDIDATES can as governor until the 1960s, and even then only Sixteen years of Democratic rule is being chal- sparingly. But with the Democratic Party’s support lenged by four Republicans: Attorney Bill Graham, of civil rights in the 1950s, the Democratic hold former State Supreme Court Justice Bob Orr, state on the South began to deteriorate and was further Sen. Fred Smith of Clayton and Charlotte Mayor weakened by its own increasingly liberal presidenPat McCrory. Three Democrats, Lt. Gov. Beverly tial candidates and the GOP’s infamous “Southern Perdue, State Treasurer Richard Moore and retired Strategy.” Now, the South is a Republican strongAir Force Colonel Dennis Nielsen, are vying for the hold. chance to continue Democratic dominance. Polling and fundraising figures indicate Demo- PURPLE STATE crats have an early advantage, but the direction of North Carolina has, for the most part, played the the race is unclear. Popular incumbent Democrat part of a solidly Republican Southern state, electing Mike Easley is barred from running for a third con- George Bush by large margins in 2000 and 2004 secutive term, giving Republicans the opportunity and sending conservative icon Jesse Helms to the to return to One East Edenton Street in Raleigh for U.S. Senate five times from 1972 on. But the story the first time since 1993. of North Carolina’s governors presents a more balanced, and perhaps more accurate, view of the state’s HISTORICAL CONTEXT political leanings. Since 1980, North Carolina has Statewide politics in North Carolina has fol- voted strongly Republican in presidential races. Yet lowed the path of most Southern states since Re- in 1980, North Carolina also re-elected Democratic 8 The Hill
State Gov. Jim Hunt. Hunt ran again in 1992 (barred by North Carolina law from running after two consecutive terms), and won two more terms. In 2000, the state elected another Democrat, Mike Easley, who is currently in office. A RACE TO WATCH The state’s long tradition of Democratic governors certainly gives Democrats an advantage in 2008. The main Democrats vying to succeed Easley are his lieutenant governor, Beverly Perdue, and State Treasurer Richard Moore. They differ little on the issues and, for the most part, are moderate Democrats in the tradition of Hunt and Easley. Charlotte Observer political writer Jim Morrill, in a phone interview with The Hill, described Moore as a “really strong candidate” who has used his position as State Treasurer to build a name for
himself, especially on Wall Street. Still, Observer columnist Jack Betts said this is “Perdue’s race to lose,” given her greater name recognition across the state. The Republican race is harder to read. For example, Fred Smith, the Republican with the most money, has little more than a tenth of Perdue’s total, with $700,000, and he doesn’t even lead polls of Republican voters. The candidate who does is Pat McCrory, mayor of Charlotte currently serving his seventh term, the longest tenure in the city’s history. Politicians from Charlotte, the state’s largest city, have a notoriously poor track record in state politics; all of the past four mayors who attempted to win statewide failed. However, Betts indicated that the changing nature of the Republican electorate, which has grown due to an influx of Northeasterners, indicates that a big city mayor like
McCrory might have a greater shot at victory than some of his predecessors. McCrory is the leading Republican, but he trails both Perdue and Moore by four and five point margins respectively as of early February. Though Betts warned McCrory’s “awfully thin skin” might damage his chances, he is a popular politician, and the “hotly contested” race between Moore and Perdue seems to be growing increasingly aggressive and negative. Furthermore, a “lop-sided presidential race,” in Morrill’s words, with a strong Republican or weak Democrat, could tip the scales further in favor of the GOP. Though the contours of this race are not yet fleshed out, North Carolina’s gubernatorial race will surely be one of the most closely watched across the country. Clayton Thomas is a first-year student majoring in history.
March 2008 9
Technology
No child left ...laptop-less Glitches plague program to provide laptops to kids in developing countries
Diane Esson
By Hunter Ellis
A
program to provide lowcost laptops to children in the developing world may be in jeopardy. One of the major contributing companies, Intel, resigned effective early January after refusing to abandon its simultaneous efforts to start a similar program. The One Laptop per Child program (OLPC) says its mission is to provide the nearly two billion children growing up in developing nations an opportunity to become adequately educated. According to the organization’s Web site, one out of every three children does not complete the fifth grade.
ers, feature a full desktop operating system and a smaller screen than typically found on laptop computers. OLPC insists that Intel’s split will not have any effect on the organization’s overall mission to supply laptops. Other partners include AMD, eBay, Google, Chi Lin, Brightstar and Quanta Computer, with each partner investing at least $2 million. DISTRIBUTION WOES But the project has met with further criticism due to the nearly doubling of the originally projected $100 unit cost to around $180 a unit coupled with the group’s inability to meet the demand of the “Give One Get One” program, which ran from mid-November to the end of December. Approximately 83,000 donors participated in the program, paying $400 for the chance to receive a XO-1 and donate a second unit to a child in the developing world. At least 10 percent of these donors have yet to receive their XO-1, months after donating. The problem was the result of shipment and order fulfillment issues, drawing some to question whether the group can handle the large distribution.
ROCKY PARTNERSHIP The program had a brief, rocky relationship with Intel since last year. “The only thing [Intel was] interested in was helping them make marketing statements about how Intel’s approach to learning was different from OLPC’s approach to learning. They weren’t interested in how we can learn together and make something better for kids,” OLPC President Walter Bender said in an article featured on PCWorld.com. Intel’s Classmate PC will directly compete against OLPC’s XO-1 laptop computer. Both of DOMESTIC POSSIBILITIES these devices, which are better OLPC has had success in Uruknown as ultraportable comput- guay, the first country to purchase 10 The Hill
a full order of laptops. Other countries, including Peru, Rwanda, Afghanistan, Cambodia and Mongolia, were part of the Give One Get One pilot program. Despite worldwide complications, the program may expand to provide laptops to special needs populations in the United States. Unofficial OLPC News.com administrator Wayan Vota recently donated his XO-1 to Leslie Thacker, a special education teacher in Fayetteville, Ark. “Computers can be an important resource, but only if these students stop seeing them as televisions with keyboards and start learning how to actively make their computers create what they want them to create,” Thacker said in an interview with The Hill. “The XO-1, I hope, will be an important step in that process. At the very least, it’s been fun.” CLOSING THE GAP The program continues to work toward its ultimate goal of educating the world despite the setbacks. The ultimate survival of the OLPC may depend on partnership with human aide groups that can provide the integral human interaction necessary to guide students toward a higher education. Hunter Ellis is a junior journalism and Asian studies major.
Technology
A newer, greener China? Beijing works to cut through the smog and show the world a “Green Olympics” By Michael Parker Which country is the largest CO2 emitter in the world? A 2006 study by the Netherlands Environmental Assessment Agency showed that China passed the U.S. for the honor. During its rapid industrialization, China has depended on burning coal for energy, which has led to deterioration in air quality and public health throughout the country. Some 500 million people lack safe drinking water. The World Health Organization estimates that 750,000 people die prematurely every year from respiratory problems. Only one percent of China’s 500 million city dwellers breathe clean air. According to The Globalist, seven out of the 10 most polluted cities in the world are in China. UNC junior Matt Snyder, who studied abroad in China last semester, found Shanghai particularly smoggy. “Imagine a city where you can’t tell what time of the day it is,” he said. “You rarely see the sun.” GOVERNMENT RESPONDS With an environmental crisis that could derail rapid economic growth and the Summer Olympics in Beijing only six months away, China’s government has taken an active role in cleaning up China. The State Environmental Protection Agency, SEPA, targets offenders and has raised environmental standards
nationwide. New buildings must be built following strict energyefficient guidelines. SEPA has also prevented a few highly polluted cities from starting any new developments. The efforts are expected to pay off for the Olympics this summer. In its bid for the games, China promised a “green Olympics,” and air quality has improved in the city every year since 2001. The Council on Foreign Relations notes that 100 factories have been relocated outside of the city, and more than 300,000 taxis and buses have been replaced with lower emission vehicles. During the Olympics, certain businesses will be shut down and many residents will be offered vacations to help lower emissions.
thirds of the city’s air is considered good quality. Most see the government’s clean-up efforts as merely a public relations stunt. CITIZENS’ ROLE Realizing their government’s shortfalls in enforcing new environmental policy, citizen watchdog groups have exploded throughout China. The Washington Monthly reports that more than 3,000 groups exist nationwide. The government has realized the importance of these groups, often depending on them for enforcement at the local level. SEPA also depends on the groups to provide citizens with information about China’s problems and energy saving techniques. These groups also receive funding and manpower from abroad. Despite these measures, China is a long way from being green. In order to maintain a clean environment, its economy must be refocused toward newer, greener technologies. As long as coal is the nation’s primary energy source, environmental problems will exist. This summer, when a pristine Beijing is on display for the world, do not be fooled. China still has a long way to go before the environmental crisis is ended.
SHORTCOMINGS SEPA has few real means of enforcement, as most companies are willing to pay low fines to avoid installing expensive ecofriendly technologies. China’s complex bureaucracy also hampers enforcement. SEPA depends on local environmental enforcement officials who report to local governments and often lack proper equipment and funds for inspections of facilities. Corruption is also a problem, as some officials accept bribes or fabricate Michael Parker is a sophomore majorstatistics. Even in Beijing, where ing in political science and history. a serious clean-up effort has been underway for years, only twoMarch 2008 11
Cover
MON
TUE
WED
Stocks down
Housing bubble burst
Job market slow
Fiscal forecast: By Alex Smith
R
ecently the economy has been the buzzword in political circles, newsrooms and households across America and all over the world. The long-anticipated fear of a downturn is becoming a reality. Stock markets are tumbling, job growth has slowed and the dollar is on the decline. Certainly it would be useful to demystify the economics behind the downturn. But, interest-
12 The Hill
ingly enough, the problems that are developing are largely political in nature. THE SUBPRIME CRISIS The current economic slump has its roots in what is called the subprime mortgage industry. In the U.S., many households with bad credit were sold mortgages for their homes by creditors in this industry.
These loans came with high interest rates because of the risk associated with lending to people with problematic credit histories. There are several factors that led to the success of the subprime mortgage industry. First of all, house prices for general homeowners were booming because low interest rates enabled prospective homeowners to take out attractive mortgages. Secondly, the
Cover
THU
FRI
SAT
Banks scared
Dollar weaker than ever
Just stay in bed Jessica Lin
stormy weather subprime lenders were aided by new techniques in measuring the risks associated with the homeowners and new methods of obtaining the credit from other, more established financial institutions. Previously, the risks of loaning to people with bad credit history were murky, so banks refused to lend to those people. In a speech given at the Federal Reserve Bank in Chicago, Federal
Reserve Board Chairman Ben Bernanke remarked that many subprime lenders likely had “looser standards� in keeping track of the risk associated with the homeowners. When house prices began to slip, the homeowners with high risk became even less attractive customers because their low house prices signified even higher risk. Further exacerbating the problem, many failed in the payment of
their mortgages. This led to failure in the subprime industry, which caused a chain reaction of losses throughout the financial world. Those more-established financial institutions that lent to the subprime lenders were hit hard. According to the Financial Times, Bear Sterns recorded a loss of $850 million in the fourth quarter of 2007, its first loss ever.
March 2008 13
Cover The financial losses have scared off investors, and consequently interest rates are rising because there is less funding for investment. On top of the high interest rates, housing construction has collapsed and consumer spending is slowing because of falling house prices; consumers view falling house prices as a loss of wealth, and therefore cut back on spending habits. In January, the Bureau of Labor Statistics reported that the U.S. economy experienced a small decline of 17,000 jobs available for non-farm workers on a payroll, the first such decline in four years. MEET THE FED All economic downturns come with uncertainty, but this one is particularly unsettling because it contains many unfamiliar political and financial factors. For one thing, the United States is still becoming acquainted with its new chairman of the Federal Reserve, Ben Bernanke. It appears that Bernanke is developing a loose policy toward controlling the financial markets; in other words, he has been willing to slash interest rates to spur investment and ultimately spending. Although some investors welcome interest rate cuts, others interpret them as a reflection of the Fed’s anxiety. In fact, some economists fear that the Fed’s grip over the financial markets and wider economy is slipping. According to a recent article in the Economist, part of this fear stems from the fact that the housing boom was encouraged in the first place by low interest rates engineered by the Fed. UNC economics professor Richard Froyen told The Hill that many of these fears are just speculation. He said that the Fed’s real power in the markets has always been simple— control the interest rate to either keep down inflation or steady consump-
14 The Hill
tion so the economy does not go into recession. Froyen also explained that Greenspan created a climate of small, incremental interest rate cuts, whereas Bernanke seems to have no qualms about cutting the rates by full percentage points. Investors will eventually get used to Bernanke’s style. CONGRESS ACTS The U.S. House also recently passed an economic stimulus package initiated by President Bush that will pump approximately $168 billion back into the economy. The package is designed to neutralize any negative effects of a decline in consumer spending caused by the housing bust. Certainly, a decline in consumer spending would have the greatest impact in producing a recession, as businesses would have to cut back on their production and ultimately cut jobs. $120 billion in tax rebate checks will go directly to households with income under certain levels. The U.S. House quickly passed the bill with no major opposition. Upon reaching the Senate, however, the package was beefed up with amendments added by Democrats earmarking portions to special groups such as disabled veterans and the elderly. Some Republicans, perhaps walking into a trap, voted down discussion of the amendments and stalled the passage of the bill. The Senate finally passed the $168 billion passage on Feb. 8. As it seems right now, a sharp cut in interest rates coupled with a sizable government rebate should give the economy just the boost it needs to get back on the path to growth. Many economists are convinced the downturn will be shallow. THE ‘08 FACTOR It is, of course, election season, and
it is already apparent that the health of the economy will be the most important issue in the election, trumping even the war in Iraq. Much of the debate will involve meeting the demands of Americans with low to moderate incomes. The Bureau of Labor Statistics reported that the job loss reflected lost construction and manufacturing jobs, which had been declining throughout 2007. These jobs are filled primarily by lower and middle class workers, and politicians on all sides have been promising relief to this enormous group of voters. Former presidential candidate and Massachusetts Gov. Mitt Romney campaigned intensely in Michigan to revive the automobile industry; Sen. Hillary Clinton announced her own economic stimulus package in January, offering $70 billion to families with mortgage difficulties and lost jobs. $40 billion of that would have gone to “working and middle class families,” Clinton told MSNBC. Of course, the downturn may end up affecting all income groups—not only are low and middle income workers being laid off, but high income earners who invest a lot of their wealth are incurring big losses from the financial turmoil. Adding the other dimensions of high energy prices, illegal immigration and the funding of the national debt by China and Middle Eastern nations, the political debate this year over the economy could become very intense and unpredictable. Alex Smith is a sophomore majoring in economics.
Cover Diane Esson
Facing the
By Caroline Guerra The predictions are increasingly dismal. Citing such alarming problems as the subprime mortgage crisis, many economists proclaim that the economy is headed for a recession. Indeed, according to a Jan. 24, 2008 article in The Economist, earlier, brighter expectations about the United States economy “were always over-optimistic.” If the pessimists prove correct and the economy does experience prolonged negative growth, college-age students could be facing a bleak future. One particularly distressing aspect of a recession would be a lack of jobs. Because the economy is not expanding, recessions cause increased competition over a dwindling amount of employment positions. This, in turn, leads more students to choose graduate school instead of entering the workforce with a bachelor’s degree. According to a New York Times article published during a similar economic tightening in early 2002, the lack of jobs caused the number of admission applicants for graduate programs
College Crunch such as journalism and business schools to increase by as much as one hundred percent. UNC economics professor Ralph Byrns remembers that at the time, “job offers [students] had been given just went away,” encouraging most of them to continue their education instead of settling for a worse entry-level job than they had expected. This trend has a few important implications. First of all, as Byrns explains, the increase in students going to graduate school causes the national unemployment rate to be deceivingly low. Many people may want to work but cannot find jobs—thus, they are unemployed—but entering graduate school leaves their fruitless job searches unaccounted for in statistics. They are seen as students, not as unemployed adults. An influx of students into graduate school now would also cause a glut of graduate students looking for jobs a few years down the road. The stiff competition found in the job market has a “delayed effect” on these students,
placing all but the very best applicants into lower job positions than those otherwise offered to graduate degree-holding adults, Byrns said. Therefore, regardless of whether a person is stuck at a lower job right out of his undergraduate years or faces tough competition after graduate school, he will more than likely have to spend years working up to what normally would have been a reasonable starting point. There have been several economic changes in the past couple decades, for example, the bursting of the dot-com bubble in the late 1990s. However, a recession in the near future would probably be the first crunch to have clear effects on today’s college crowd. Students must be prepared for amplified competition in entering the work world and must be able to make an informed decision about when that entry should occur. Caroline Guerra is a first-year student majoring in political science.
March 2008 15
Cover
The rain in Spain U.S. slowdown has international implications By Yash Shah
A
s presidential candidates sell their stimulus platforms as the cure to U.S. economic woes, voters should be wary of judging the viability of each position in terms of how it would improve the domestic economy. Any stimulus policy must also account for the effects of U.S. economic performance on global markets. The relationship between the domestic and international economy consists of three main factors: exchange rates, trade and investment. Exchange rates identify the value of one currency against another, but, more importantly, they determine the direction of trade and capital flows. For instance, if the Chinese yuan is low against the dollar, then Chinese goods appear cheaper than American goods to the U.S. consumer and Chinese investment projects yield a more profitable return than American ventures. Trade is dependent on the consumption preferences of domestic consumers. If consumption declines in a given year because households prefer saving their money, then imports tend to fall sharply. At the same time, interest rates plunge because the supply of loanable funds in banks increases. As a 16 The Hill
Any stimulus policy must also account for the effects of U.S. economic performance on global markets. result, foreign direct investment decreases because lenders receive less interest on their deposits. In general, slowdowns in the U.S. economy, particularly recessions, tend to create isolationist conditions since imports and foreign investment fall. The current U.S. outlook, rooted in a housing crisis caused by subprime mortgages, has produced these projected effects. The Federal Reserve Bank cut
interest rates in late January, reducing demand for the dollar because foreign investors gain less for depositing money in U.S. banks. Since the interest rate cut, the dollar has fallen an average of 0.6 percent against all other currencies. Therefore, U.S. consumers find it more expensive to buy foreign goods. In consequence, the amount of imports has fallen over the past few weeks.
Cover Since the summer of 2007, European and Asian exporters have suffered from the decline in U.S. imports. According to the U.S. Department of Commerce, the U.S. trade debt is approaching $800 billion, or seven percent of the GDP. Exporters, like South Korea, Japan and Germany, are dependent on the U.S. trade deficit to continue their existing production and employment levels. U.S. economic problems have trickled throughout the global economy. This spillover effect handicaps U.S. recovery from a slowdown in growth. “After the Fed interest cuts, U.S. projects fell in priority as a destination for capital flows,” Shripal Shah, an Indian investor with Citigroup,explained.“Private investment groups are quick to remove their money when the expectations of a profitable return no longer exist.” Furthermore, as dependent economies suffer from a fall in U.S. imports, they no longer become possible markets for U.S. goods or future investors in the U.S. economy. These negative effects on the international economy further hinder the chances of a quick recovery. When assessing what Congress or each candidate will do to stimulate U.S. economic growth, it is important to consider how these policies will affect exchange rates, trade and investment. International markets can be useful in assisting U.S. economic growth, but domestic policy must be adjusted to accommodate for foreign consumers and investors. Yash Shah is a first-year public policy major.
The contenders weigh in on economic policy By Yash Shah Hillary Clinton: The New York sena-
tor plans to establish a $30 billion housing fund for state and local governments to counter foreclosures. She would institute a 90-day moratorium on subprime foreclosures and freeze interest rate on mortgages for five years. Her plan includes $25 billion for families facing rising energy bills and $10 billion for unemployment insurance to working families.
She voted for the recent economic stimulus plan.
Barack Obama: The senator from Il-
linois plans to pump $75 billion into the economy via emergency tax cuts and direct government spending. His plan includes $250 checks to workers, homeowners, senior citizens and the unemployed. He would develop a $1000 tax credit for working families and $500 rebate per person, which would be funded by the repeal of Bush’s tax cuts for the top one percent.
John McCain: The senator from Ari-
zona plans to lower the corporate tax rate to 25 percent from 35 percent. He voted against the Bush tax cuts but now intends to make them permanent and add a $60 billion per year cut. He would eliminate taxes on interest income, capital gains and inheritance.
Mike Huckabee: The Arkansas gover-
nor would make Bush’s tax cuts permanent and cut corporate taxes significantly. He plans to eliminate income and payroll taxes and replace them with a flat retail tax on all goods and services, known as a “Fair Tax.” He would balance the budget by reducing government spending.
He voted for the recent economic stimulus plan.
?
He abstained from the vote on the recent stimulus plan.
X
He opposes the recent stimulus plan.
March 2008 17
International
Aussie finesse
There’s a new prime minister down under, and he’s doing things his own, more diplomatic way By Ben Piven
O
n Dec. 3, 2007, Labor Party leader Kevin Rudd was sworn in as Australia’s newest prime minister, marking the end of John Howard’s nearly 12-year term. Many welcomed Rudd’s victory as a swift departure from Howard’s administration, which most notably drew fire for its support of the U.S.-led Iraq war. Rudd seems to be making good on his promises to inject “new leadership” into the office. The first few days of his term saw the former Australian diplomat ratify the Kyoto Protocols and set a timetable to withdraw troops from Iraq. He also promised increased cooperation with multilateral institutions like the United Nations and renewed engagement with Asia. But to what extent does Rudd represent a fundamental shift in Australian foreign policy? While it may still be too early to tell, signs point to the former diplomat sticking to his promise of a more “internationalist” official line in Canberra.
Spoken like a true diplomat, Rudd said that the AustraliaU.S. relationship will remain “rock solid,” but that Australia will reserve its right to act independently. Referring directly to the ANZUS military alliance under which Australia, New Zealand and the U.S. cooperate on defense issues, Rudd is likely targeting both the U.S. and China with this artful rhetoric. He is at once seeking to allay Chinese fears that Australia would invoke ANZUS in the event of a conflict between China and Taiwan, and to reassure Washington that Australia might seek to cooperate on security issues with China. Rudd’s muted past criticism of China’s human rights record and rejection of a potential U.S.-Japan-Austr alia-India security agreement demonstrate understanding of China’s strategic security concerns and indicates a more constructive form of engagement with Beijing than his predecessor or Bush. Recent high-level bilateral talks with the Chinese and Japanese underscore Rudd’s commitment to pursuing increased integration DELICATE DIPLOMACY Much of Rudd’s appeal lies with Australia’s Asian neighbors. in his endorsement of a more This clever strategic shift comes independent Australian foreign at the eve of a possible recession policy, a break from the close descending upon American Howard-Bush relationship. markets. Rudd is shown to 18 The Hill
pursue a more internationalist line, whether through symbolic gesture or real policy, than his predecessor. THE GREEN LINE On Kyoto, Rudd’s ratification was hailed by many as a repudiation of Howard’s intransigence on climate change. However the move was largely symbolic, as Australia had already achieved the emissions limits Kyoto mandates. It remains to be seen where Rudd’s loyalties would lie were he forced to decide between jobs – Australia is currently enjoying a decade and a half of continuing growth – or the environment. Rudd’s mid-campaign tack might shine a bit of light on the inner workings of his political mind. According to a Nov. 24, 2007 Time Magazine report, when the issue of a Kyoto successor treaty arose, Rudd “abruptly took the Howard position” and said that if he were elected, he would not ratify a second Kyoto treaty “unless it required China and India to limit their emissions.” ARMED AND READY In respect to military affairs, Paul Hart, Australian National University political scientist, said in an e-mail to The Hill that “Rudd will most likely try to
International Diane Esson
have his cake and eat it.” Rudd will probably “maintain the close alliance with the U.S. whilst taking some distance from any future U.S. administration’s … debatable foreign policy adventures,” Hart said. While Rudd was elected on a promise to withdraw all Australian troops from Iraq as soon as possible, a Nov. 27, 2007 New York Times article reported that at least 300 Australian troops will
remain there in support capacities after the mid-2008 deadline. Rudd also supports sending more troops to Afghanistan, signaling Australia’s continuing support for the War on Terror.
relations with the Chinese and kept the U.S. alliance strong – no simple feat. While many analysts don’t anticipate any real change in the status quo for Aussie foreign policy, it will be interesting to see how Rudd uses the leverage these powerful relationships provide to further national interests as his term progresses.
KEEPING THE BALANCE While it’s clear that Rudd hasn’t had to make many tough decisions thus far, his diplomatic style has made a real difference. He has Ben Piven is a senior majoring in simultaneously forged stronger international studies.
March 2008 19
Column
from the Left
T
Back to the Frying J. Pattishall
wo days before Super Tuesday, Mitt Romney attempted to place a death-sentence on John McCain’s candidacy. The charge: a criminal political similarity to Hillary Clinton. The two candidates’ platforms, he said, are virtually “indistinguishable.” While McCain is known for being unorthodox when it suits his conscience, Romney clearly had something else in mind. McCain, he said, has taken “a very sharp left turn” on a number of issues. Romney seemed to think that the specter of liberalism would run his opponent into the ground, and save what he calls “the house that Ronald Reagan built.” And there seems to be some truth to his allegation: though far from leftwing, and only “liberal” on some issues, McCain represents a moderate, even-handed approach to many political issues that party ideologues, from Romney to Ann Coulter, treat with disdain. For this reason, progressives should breathe a sigh of relief at the likely candidacy of McCain. One of the most striking of these issues is waterboarding. Deceitfully referred to as an “enhanced interrogation method” by those too timid to admit to the world what they are doing (Bush, et al.), this method of torture, among others, has been a popular tool of CIA operatives in the War on Terror. McCain, having actually been tortured by the Viet Minh as a prisoner of war during the Vietnam War, has sponsored legislation to ensure that no one in U.S. custody is tortured. This issue is neither left nor right, but strictly humanitarian, and it is indicative of a political approach that, of all the Republican candidates, seems unique to McCain. The Arizona senator also finds himself out of step with his party on the issue of campaignfinance reform. His bout with Bush over South Carolina in 2000, riddled with a racially charged whisper campaign against him and his family, clearly attuned McCain to dirty politics. And it’s an open secret that politics gets dirtier the more it gets entangled with moneyed and corporate inter20 The Hill
Pan
ests. Neither is McCain a whole-hearted supporter of Bush’s tax-cut scheme. Despite the fact that this plan hasn’t done much other than help deplete the federal budget, Romney supports it with gusto and has used the issue to demonstrate McCain’s deviancy. McCain also received a telling endorsement from Rudy Giuliani. Though he had his own problems, Giuliani was the most socially liberal of all the candidates in a Republican party increasingly to the right of the moral pulse of the nation. Then there’s always Ann Coulter’s anti-endorsement of McCain, in case of a Clinton-McCain match-up (a good mark on McCain’s record and a great reason for progressives to drop Clinton before it’s too late). As a “liberal” scapegoat among the Republicans, John McCain is in a unique position to demonstrate how out of touch his party’s other frontrunners are with American popular sentiment. Andrew Perrin, Associate Professor of Sociology at UNC-Chapel Hill, attributes his success to the fact that he was “the alternative to what has turned out to be a very unsuccessful Republican president.” George W. Bush’s political failures, he claims, also damaged the “odd coalition cobbled together by Ronald Reagan: big-business fiscal conservatives, religious authoritarians and military interests.” Bush’s failures can be used as a political thermometer, as well. The nation has had its fill over the past eight years of neo-conservatives (Romney and his Reaganesque rhetoric) and the Christian right (Bible-thumping Mike Huckabee). To transition from Bush to one of these two candidates would be jumping out of the frying pan and into the fire, economically in the case of Romney, and socially in the case of Huckabee. In the end, McCain is the least of all Republican evils, a thing progressives would do well to recognize. J. Pattishall is a first-year student majoring in English and philosophy.
And Democrats
Wonder Why They Lose…
I
Column
from the right
William Griffin
finally understand why Democrats so ardently support gun control. It’s because nearly every primary season they shoot themselves square in the foot. In 2004, they nominated a boring, Massachusetts liberal and, unsurprisingly, lost. In 2000, they nominated a man who makes the Massachusetts liberal look like Dane Cook and, unsurprisingly, lost. Now, with Hillary Clinton battling Barack Obama in the delegate count for their party’s nomination, Democrats seem primed to reject the best rhetorician in American politics since John F. Kennedy so that they can nominate a candidate half of America personally despises. It is simply unfathomable to me. Maybe it is because as a Republican I have an innate knack for choosing a candidate that people actually like. Perhaps because I so vehemently disagree with both of them, the minuscule differences on policy do not affect what seems to be an obvious choice. Or could it be that with President Bush’s dismal approval ratings, 33 percent according to a recent Washington Post-ABC News poll, the Democrats think they have the general election in the bag? If Obama and Clinton were running against Bush, it would be no contest, but in all likelihood they are going to campaign against John McCain, a man who most of America admires. According to the same poll, the election is far from won, with both Democrats trailing McCain in head-to-head match-ups among registered voters (Clinton by five percent, Obama by one). The Democratic candidate must either beat McCain among moderates or, like Bush did in 2004, energize their base more than their opponent does. Not only does Clinton do McCain’s job of mobilizing Republicans for him, but how do Democrats expect Hillary to win moderates when so many of those voters vehemently disdain her? Obama does not have this problem. When he
gives a speech, even conservatives are periodically forced to slap themselves and remember that he disagrees with them on every major issue. As Katie Rose Guest Pryal, a UNC-Chapel Hill English lecturer specializing in rhetoric, deftly points out, Obama reminds Americans not only of Kennedy, but also of Dr. King. And, though Hillary continually harps on about change, Obama’s words make sure the change is about what we can do for the country, not what the country can do for us. This strikes a chord, and though he has done nothing to reach out to moderate Republicans, he sure sounds as if he wants to. As for rousing the liberal base, how enamored can the dovish left be with Clinton, a senator who voted both to authorize force in Iraq and declare Iran’s Revolutionary Guard a terrorist organization? Obama voted for neither of those bills, and the fact that he was not present to vote in opposition to either measure is a much smaller mark against him. As the general election nears, the candidates inevitably move to the center to court moderates, and this involves more hawkish tones. During this trying time for liberals, doves will have Obama’s steadfast opposition to the war to console themselves. All these questions should be going through the minds of every Democrat who wishes to see Republicans out of the White House and back in the opposition. Personally, however, if Clinton does get the nod, I plan to crack open a bottle of champagne, celebrating the fact that my man Sen. McCain will have just avoided one more pothole on his bumpy road to the White House. William Griffin is a sophomore majoring in political science.
March 2008 21
The Last Word
Christian imperialism Missionaries export the religious face of America Global perceptions of America are tangibly affected by a growing number of Christian missionaries from the United States—and even from Chapel Hill. Some are directly involved in church activities, while others devote themselves to educational, medical and relief efforts. Because of this hands-on work, missionaries often convey America’s image and values to foreigners far more than diplomats or business executives. How these missionaries evangelize raises questions about their influence and impact, as well as questions of politics and ethics. By exploring this issue, I do not mean to undertake an allencompassing analysis but rather to share two particular examples that shed light on the spectrum of American missionary work. Spreading “radical Biblicism” is what an American missionary couple was committed to do when
they moved to Pakistan eight years ago, according to their New Jersey pastor, Rev. Albert Martin. A recent New York Times Magazine article reported that Arif and Kathleen Khan advocated fundamentalist Christianity and a literal reading of Scripture at their small church outside of Islamabad. Through a widely broadcast radio program, Arif also preached against “nominalists”—those who were Christian in name only because they follow Pakistani culture rather than Biblical teaching. In August 2007, the Kahns were murdered. One of the three suspects was a radical Islamic gunman, and the other two were a husband and wife who knew the Kahns from their church in Islamabad. The Times reported that the Pakistani couple had accused Arif of scolding the husband for marrying a “nominalist,” intimi-
Ru Sha
22 The Hill
dating the couple and sexually assaulting the wife. Martin, on the other hand, said that Arif served as By Caroline Schneider the couple’s marital counselor and that “in counseling, their sins were exposed.” Martin conjectured that the couple, “hating the light that came through Arif ’s ministry,” decided to exact revenge. Although the motive remains inconclusive, the story certainly exposes deep conflict in political-religious relations in a predominantly Islamic country. In this case, it appears that religious extremism begot religious extremism and the result was a tragedy. Many of us at Chapel Hill, however, know of other kinds of missionary work that, because it is not militant, is well-received. Many Carolina students have participated in “mission trips” with their churches each year, providing service work to communities in developing countries. Two of those Carolina students, now alumni, decided to answer a call to become medical missionaries in predominantly Christian Rwanda. Caleb and Louise King (’82 and ’88, respectively) moved to Shyira, Rwanda, with their four young children in 2003. Shyira, in the northwest region of Rwanda
The Last Word near the border with the Congo, suffered like the rest of the country in the 1994 genocide and the wars that followed. Its hospital was destroyed and about 200,000 people went without a doctor in the area for 10 years. When the Kings arrived, they completely rehabilitated the hospital, which now includes a general ward, maternity ward, malnutrition center, HIV clinic, operating room and HIV education classes. Their medical missionary work, funded in large part by American and UK churches,
they have to this ravaged Rwandan community that is struggling to repair its many wounds. As a practicing Christian, I also understand that the Kings’ faith is the driving force behind their work. But even in this case of constructive and beneficial medical missionary work, some ethical questions come to the fore. During morning rounds to check on patients’ progress, the Kings pray with each patient. Although the prayers are certainly well-meant, most of the hospital patients cann o t u n derstand t h e Kings since they pray in English. Essentially, the Kings pray over the patient, not with him or her. The patient is a passive recipient. For patients badly in need of medical care, questions of civil liberty and religious freedom are not likely to be their primary concern. Nonetheless, this practice raises questions. How were the patients understanding this prayer? Did they see it as a magical incantation? Did they welcome these prayers or silently object to them? However, none of the patients is required to be Christian or is directly pressured to become Christian. The Kings seek to inspire their patients and the Shyira community by example. Ali said she believes the Kings are “brilliant clinicians who care deeply for their patients,” but she
Can religious work abroad be a double-edged sword? has received widespread recognition, both from the local population and by the Rwandan government. UNC-CH maintains its connection with the Kings and has sent several students to volunteer with them in the last several years, including Ali Tharrington, a senior biology major. Ali describes the Kings’ efforts as “truly tangible.” “People have lived who would not otherwise have made it,” she said in an interview. “[The Kings] have uplifted an entire community, and not just in terms of patient care.” Like Ali, I also volunteered for one summer in Shyira, where I worked mainly in the maternity ward. I deeply admire the Kings and the extraordinary dedication
The Last Word on
The Hill
also sees areas in which they could adapt the goals of their work. “The Kings start with their own beliefs and fit those beliefs into daily life instead of taking Rwandan daily life and adapting their beliefs to it,” she says. They provide essential medical care, but, at least for now, they are committed for the long term, rather than trying to phase themselves out by allowing local doctors to begin to manage the hospital. Ali learned about a different approach during an internship she had with the Clinton Foundation in Rwanda, which advocates President Bill Clinton’s vision for a shared responsibility for global interdependence. She believes their approach to development work is something that missionaries could learn from. The Clinton Foundation, she said, is an organization that “sees the local people as just as capable of leadership, but without the opportunities. [The Foundation] works with the intent to phase themselves out of the developing area.” The Kings’ work in Shyira, even though it raises some questions, is nevertheless an excellent example of the positive image that American missionaries are giving in a developing, but still battered, country. Their faith has led them to weather considerable hardship to provide critically needed medical care. But as the example of the militant missionaries in Pakistan suggests, not all missionaries have the kind of positive impact the Kings are having in Rwanda.
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