Issue 7 - Debt

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DEBT

The Horace Mann Review | Issue 7

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FROM THE EDITOR

Review The Horace Mann

A Journal of Opinion on Current Events, Politics, Social Issues, and Relevant Affairs

Deependra Mookim Editor-in-Chief

Andrew Demas Danielle Ellison Executive Editor

Aaron Goldman Daniel Grafstein Justin Katiraei Victor Ladd Philip Lin nowtheendbegins

Drowning in Debt Analyzing the Politics and Economics of Current Debt Conditions

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ens of thousands of protesters congregated in Madison, Wisconsin to protest Governor Scott Walker’s budget, a bill that attempts to put the state’s fiscal house in order by cutting benefits to public employees and curtailing their collective bargaining rights. The demonstrations in Wisconsin are characterized by dynamics that are present in many other American states as well as foreign nations. But this tumult is symptomatic of a greater concern: the fact that rising debt levels leave us with only tough choices.

The facts about unsustainable debt burdens around the world are alarming. And although debt can seem like an impersonal topic at times, recent events in America and abroad have proven the contrary. Addressing our debt woes will require politically and Cover by Daphne Taranto

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economically difficult steps, and the consequences of these actions will be felt at the individual level. The world’s debt troubles are no longer simply about detached budget deficits or debtto-GDP ratios. Debt is now personal.

Reducing our debt will require collaboration and leadership on a scale that has yet to be seen in our political environment. While pessimism is certainly convenient and justified, there remains good reason for optimism.

Our future is still in our hands, because possible courses of action remain that could solve, or at least assuage, our debt dilemma. We have difficult choices to make, but they are choices nonetheless.

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Dorin Azerad Jordan Berman Alexander Daniel Emily Feldstein Harrison Manin

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Andre Manuel Mathieu Rolfo Zoe Rubin Rebecca Segall Katherine Wyatt

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Jasmine Mariano Senior Columnist

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Deependra Mookim Editor-in-Chief Volume XX

The Horace Mann Review is a member of the Columbia Scholastic Press Association, the American Scholastic Press Association, and the National Scholastic Press Association. Opinions expressed in articles or illustrations are not necessarily those of the Editorial Board or of the Horace Mann School. Please contact The Review for information at thereview@horacemann.org.

The Horace Mann Review | Vol. XX

TABLE OF CONTENTS

Domestic Our Troubling Times Proprietary Schools: Peculiar Institutions

Max Bernstein

Gun Control Lowering the Drinking Age - Pros Lowering the Drinking Age - Cons Confront Global Warming

Ben Greene

Treshauxn Dennis-Brown

4 6

Alex Posner

8 10 11 12

When Democracy Fails

Spencer Cohen

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Global Acts of Kindness Russia Rising Karzai’s Kabul Crackdown in China Special Features: Protest in the Middle East

Julia Pretsfelder

Spencer Cohen

16 17 18 20 22

The Era of the Euro is Over

Ben Davidoff

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The Third World Debt Crisis

Gideon Teitel

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Debtor Nation

Nathan Raab

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Debt to China

Vivianna Lin

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Government Debt and Trade Deficits

Philip Perl

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China’s Domination of Rare Earth Metals

Jacob Gladysz-Marowski

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The Steve Jobs Effect Special Features: America’s Federal Budget

Harold Chen

36 39

Jacob Frackman Kyle Ezring

International Jacob Gladysz-Marowski Stephen Paduano Henry Luo

Features

Economics Mohit Mookim

Science and Tech.

Multitasking Kills Houston, We Have a Problem

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Philip Perl Ashley Gerber

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Domestic

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Our Troubling Times by max bernstein

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ranklin Delano Roosevelt’s most famous quotation has to be the following from his first inaugural address, “The only thing we have to fear is fear itself…” At this turbulent time, with China preparing to dethrone the US as the world’s superpower, with our soldiers at war abroad, our economy still beginning a long recovery process from the recession, and a truly astonishing and perpetually skyrocketing national debt, America is facing real fear. But what makes FDR’s quote so relevant? FDR makes the point in his speech, that we can either face fear, unite against it, and conquer it, or we can let it take us apart and watch as we crumble.

Today, unfortunately, we are allowing fear to take us apart. Political rhetoric has

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reached a point of complete absurdity in this country; from both the left and right, politicians and commentators have made accusations and claims, that are not only false, but serve only to create mass fear and hysteria. The foundations of our democracy rely on informed citizens making the right decisions. We must have realistic, level-headed, and diplomatic leaders in office, and ignorant hysterical people tend to elect ignorant hysterical representatives. People that believe anybody in the American government is a Nazi, socialist, communist, terrorist, or is worthy of death, are people who are entirely misinformed. Even in the wake of tragedy, namely the shooting in Tucson, the media and many members of government could not hesitate to create a politi-

cal controversy. The irony here is obvious.

These commentators and government officials are using rhetoric to discuss the negative consequences of— you guessed it— rhetoric. There is a fundamental disconnect between their actions and words.

In general, this rhetoric in our society is creating a very troubling disparity between the publics understanding of what is happening, and what is actually happening.

The fact of the matter is, the Tucson shooting could have had absolutely nothing to do with politics. We have no idea whatsoever why this deranged man, Jared Lee Loughner, did what he did. And the discussion of the shooting in regards to politics, should end right there. Unless of course people would like to talk about The Horace Mann Review | Vol. XX

Domestic clearly relevant issues, like gun control, in which case, at least there is some basis for the conversation. Misleading and misinforming the American people is wrong, at the most fundamental level.

And the terrible thing is, you do not have to search very hard to find it: type Glenn Beck, Bill O’Reiley, or Keith Olbermann and ‘lies’ into Google and see what it spits out. Forget about the shooting for a moment, and focus on the issue, which the shooting called our attention to. The way our government is being run, the way our media is being used at the moment are both entirely out of line. And irrelevant of whether or not they incited the violence that took place in Arizona, it is wrong for it to continue. For example, whether or not former-Governor Palin’s use of crosshairs to identify districts which she was targeting for right-wing control was

the same realm as the Holocaust and the Second World War, is simply horrifying and frankly incredibly insensitive to the people who directly experienced, in some way, either of those events.

What we are watching is two sides of the aisle, both in our actual government, and their representatives in the national media, rip each other apart for power.

Both sides are promoting fear, uncertainty and hatred through lies. They are creating a hostile environment in which democracy, and America cannot and will not thrive. If their actions continue, our future will become more and more uncertain. The government will continue to fail, across the board, to do what it has to do for the people. The two people least responsible for the government’s ineffectiveness over the last, roughly 6-8 years, are surprisingly the two presidents,

women who should be blamed for government inefficiency and wide-spread hatred and terror. Whether the shootings in Tucson were caused by political rhetoric or not really does not matter, because if it continues, you can be sure that something horrible, like this shooting will happen again, except this time it will definitely be related to fear and hatred caused by the deception and conning of all these political pawns. I fear American fear. Fear in America is ripping us apart.

It is destroying our country and ruining our message of great progress, great freedom, and great achievement. And yes, these are certainly troubling times; life is hard for many people, and yes, people have a right to be scared, but people also have a right to know the truth, the entire, unedited, not opinionated truth.

FDR came into office and made his

What we are watching is two sides of the aisle, both in our actual government, and their representatives in the national media, rip each other apart for power. Both sides are promoting fear, uncertainty and hatred through lies. They are creating a hostile environment in which democracy, and America cannot and will not thrive. intended to promote acts of violence liked the one that occurred is entirely irrelevant. What matters is that she used crosshairs, a quite blatantly violent symbol, to identify political rivals. Is that really the most appropriate way to go about this? Is that not indicating to people that some level of violence may be okay? And when people on the left start accusing their counterparts on the right of causing this atrocity, on the basis of no evidence at all, is that really reasonable at all? Are they not just as guilty of misleading the American people for their own gain by calling innocent people promoters of serious violence? That is a majorly offensive and dangerous accusation. Democrats made it without even a slight regard for the consequences of what they were saying. It is no less excusable for Republicans to claim that President Barack Obama is a socialist, or a Nazi. While the first accusation is simply unfounded, the second is not only untrue, but also wildly offensive and is said purely to cause fear. To claim our President’s desire to increase the social safety net, and to give more people healthcare, whether you agree with his methods or not, is tantamount or even in The Horace Mann Review | Issue 7

Barack Obama and George W. Bush. Neither of those men has really done anything to inject so much fear and hatred into the mix, they have both been targets of a huge amount of both. President Obama obviously takes his share of flack from the Glenn Becks and Bill O’Reileys of the world, while President Bush got his from people like Michael Moore, who perpetuated myths, conspiracy theories just to undermine the president. I firmly belive that both presidents tried to implement what they thought was right, and nothing more. Whether you agree, or agreed, with either of them on any issue is not important; we can disagree without hate; we can discuss without screaming, and inform without lying. The foot soldiers in both parties, the ‘talking heads’ on MSNBC and FOX News, many members of congress and state-officials, and protestors who hold up signs with the President’s face and a Hitler mustache, which actually applies to both Presidents Bush and Obama— these are the people responsible for the fear in our country.

These are the reasons the US will continue to struggle to stay on top and will ultimately fall behind. These are the men and

speech at a time which kids our age cannot pretend to understand the magnitude of. He was in between the two biggest wars our world ever experienced, and he was tasked to lead us out of the biggest financial crisis our world ever experienced. It was in that singularly terrifying moment that Roosevelt had the courage to stand up and lead, and to go toe-to-toe with the great problem of fear. And Americans followed him; the people of this great country were simply great. Our country, broken and pained as it was, came together, and in a patriotic, courageous, and bold united effort, they helped shape the world. Now, when our leaders are the very roots of the problems we face, the orchestrators of the fear and the targets of our anger, it is time for the American people to unite together. It’s our time to shape our world. Let’s stop incessant divisive speech and action, and let’s start working together to keep country great. Let’s not let these voices that lie and deceive take our country from troubling times, to terrible times.

HMR

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Domestic by treshauxn dennis-brown

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ane Doe, a low-income student who achieved Cs and Ds in high school, had dubbed herself as one of the non-ambitious few not going to college. This all changed when she saw a brochure, promising universal acceptance and a degree in less than a year. Three years later, a glum and disenfranchised Jane left her “dream� school-thousands of dollars in debt. Increasingly a growing epidemic, for-profit schools are beginning to creep into the undergraduate and graduate studies arena.

This translates into a terrible predicament to low income students and/or minorities as they are repeatedly drawn in to the glossy college brochures of smiling students and the promise of an advanced business degree in one year. The idea of a for-profit college has been around for decades, but has only recently begun to mushroom into an underworld of questionable education. The enrollment in proprietary schools, as they are called, ballooned from 365,000 students in 2005 to 1.8 million in 2009. Earlier this decade, there were fewer than 50 for-profit schools in the Untied States; today there

Proprie tar y Sc hools: Peculia r In

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stitutio ns

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Domestic are more than 200. While the notion of an advanced degree in minimal time is appealing, the nontraditional pathway towards a college diploma without stepping foot in a classroom should be the path less traveled because actual education is undermined.

The bottom line is that for-profit schools are neither as proficient nor efficient towards getting you that degree as they claim. Countless students have attempted education at colleges such as TCI, Berkeley College (for-profit school consisting of eight campuses in New Jersey, New York City, and White Plains), and Monroe College and have simply dropped out, a fact which is made manifest through poor graduation statistics such as TCI’s 54% (only 11% complete their Associate’s Degree in two years).

Cross reference that with the graduation statistics of a reputable college such as Brown University’s 95 percent. If the Ivy League is a far cry, then UC Berkeley’s 44% for fourth year, 75% for fifth year, and 82% for sixth year graduation rates should hammer my point further. Crown College in Washington State lost its accreditation in 2007 because not enough of its graduates were finding jobs in their field of study. The accreditation of a college is its credit or recognition, especially with respect to an educational institution that maintains suitable standards.

In short, a for-profit college like Crown College in Washington, due to its appalling educational statistics, is no longer regarded as a credible institution to pursue higher education. However, to fully comprehend the ineffectiveness of a for-profit curriculum, one has to take a look at the curriculum itself.

Many for-profit colleges, upon an applicant’s acceptance will advise them to pay for and attend basic classes. The classes entail crash courses in basic writing and math, classes most likely non-credit bearing which don’t count anything towards one’s degree. The prospect of a noncredit class is not unique to a for-profit school, as one might guess, but a proprietary school provides a more exaggerated model that does in fact turn the prospect into a problem. Non-credit classes are so populous in profit schools because they are designed to keep the student paying the largest amount of money possible, The Horace Mann Review | Issue 7

while not bringing them any closer to his or her degree. When a student can spend up to a year taking pointless classes, and earn minimal credits towards graduation, it is loathsome to find out that these few credits most likely will not be transferred to a different college should the student finally have enough. By the time a student would have transferred from a for profit school, he or she could be thousands of dollars in debt. These non credit classes do cost money and maintain the potential to eat and digest one’s financial aid. Naturally, when facing this pit of financial insecurity, students will turn to federal student loans as proprietary schools account for 24 percent of all federal loans.

With all these questionable practices, the government is sure to take a stand on proprietary schools. The United States Government Accountability Office (GAO) took it upon itself to investigate the marketing practices of for-profit colleges around the country. After sending four undercover agents to perform the aforementioned duty, the audit concluded that all of the schools had engaged in questionable marketing practices, which entailed misleading applicants about graduation rates and presenting unrealistic job opportunities available after graduation. Congress also is intending to help put a stop to the manipulation of helpless and/or clueless student. One piece of legislation that is hoped to pass is a rule that would strip programs of financial aid if more than 65 percent of their students fail to pay back their loans and if graduates get buried in debt. This act should be implemented as it provides the groundwork for the eradication of manipulative schools and education in its worst forms. Losing the aid would cripple many schools, and of course, the proprietary school.

Taking into account things that work and do not, it is necessary for the practices of schools all over the country to be regulated. The entire purpose of this article being to address the faults with some schools’ practices, these said schools should not be allowed to run rampant, as they have done in the past. The installation of mandatory graduations rates of say, 65 percent is necessary. Little adjustments like these will force all schools across the country to adjust their curricula and practices in order to meet regulated

requirements. The result ensures better environment for all potential students in this country to develop their skills and reach their dreams, a credible degree in the field of their choice.

Take a look at our Horace Mann School. While our school is the subject of many clichés considering it the apex of many high school educational institutions, in many respects it is. A lump sum of 30,000 plus dollars goes to the benefits we often overlook at Horace Mann. Hundreds of thousands of dollars in technology, a 96 percent teaching staff holding advanced degrees (masters and above), and a 12:1 student to teacher ratio. Horace Mann is s school where the money invested is rerouted into every thing necessary for the fullest education of its students.

Despite all the negativity and controversy surrounding for-profit schools, by no means is it to be taken that all are evil and awash with mal-intent. The School of Visual Arts in Manhattan is one of these.

75% of SVA students graduate in four years as opposed to the 30 percent average of all proprietary schools. Perhaps the greatest factor in its success is that SVA only offers a limited amount of Bachelor’s and Master’s degrees in the fine arts. And of course, it isn’t scanning for the demographic of students looking for expedited degree programs.

In conclusion, it is mandatory for this country to find a way to repair its educational system. Students are attracted to these schools for one of two reasons; they have limited funds, or limited time. These students seek the easy way out or the only way out. To attempt to take the easy way out is simply illustrative of laziness. In this way, all the blame can not be delegated to the school, but to the unaware student who doesn’t do his or her research.

On the other hand, limited funds are no excuse to apply to these questionable institutions. Many states, our beautiful and illustrious state of New York, offer their own great and affordable school systems.

Queens College is considered one, if not the best value college in the country and is ranked #8. Congress needs to unify and take a stand against proprietary schools, because only then can the exploitation and manipulation of ambitious minds be stopped. HMR

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Domestic

Gun Control The Debate in light of the Tucson Shooting by ben greene

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n January 8, 2011, Jared Lee Loughner attempted to assassinate Congresswoman Gabrielle Giffords, in a tragic shooting that left 19 people shot, 6 of them dead, in turn thrusting the nation into a predicament. Under the looming shadows of the recent Arizona shooting, the pressing issue of gun control resurfaces in light of an eager public urge to debate the laws and regulations around this issue. The notion of controlling entire public access to the acquisition of guns is a desirable idea, but an idealistic one to say the least. The FBI believes that there are over 200 million privately owned guns in the US, and this number keeps rising. So with that in mind, is it really in the government’s best source of time to evade tragic shootings like the one in Arizona by focusing the entire time through carrying out tactics of gun control? Unfortunately, the power of the government goes only so far in prohibiting mental patients and other potential attackers from purchasing firearms. Attempts to regulate gun control and restrict access to guns are ideals that we should bear in mind; however this is

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a process that needs to occur gradually.

Today, people can walk into a Wal-Mart and are surrounded by a wide assortment of guns. The key to solving this increasingly pressing issue is to strike a balance between regulating the sale and access to guns, while also monitoring people that have displayed previous threats and warnings. Let us not forget the words and the need to preserve the works of our founding fathers. The second amendment clearly states the right of the people to keep and bear arms. If you take away this right entirely, you not only trigger the possible backlash of Americans, but you ignore the actions of our founding fathers; in their quest to find a free, safe country for the better of the people. The Tuscan shooting of congresswoman, Gabrielle Giffords and other citizens, reveals the dire necessity to address this issue right now, before the next one takes place.

The NRA believes that there is no need to further regulate the sale of guns, and that by doing so, the government would be wasting time. In addition, the NRA as well as its supporters claim that by taking away one’s right to guns is a violation of the Second Amendment and

moreover acts an actual disadvantage if someone’s life is actually in danger. In reality, one of the main problems of gun regulation is the unwillingness to cooperate displayed by the different representatives of each contrasting viewpoint.

These fierce politicians must put behind their personal viewpoints, and realize the urgent call of this recurring problem: the urgent call of the victims of gunshot wounds; the urgent call of the families of lost ones; and most of all, the urgent call of the free, American society.

The way to acknowledge these viewpoints is to agree on a satisfying balance between the two spectrums. Now, many would say that the topic of gun control is black and white, one extreme or the other, but I would argue that it doesn’t have to be that way. What if we increased tighter regulations on access to gun control, while still not restricting the acquisition of hunting rifles, which some people rely on for food? What if we took assault rifles of the market, as these deadly rifles prove to be the assassins in these mass murder? In 1994, Clinton led the Federal Assault Weapons Ban, which prohibited the use of assault weapons of ordinary The Horace Mann Review | Vol. XX

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citizens. Advocates of Clinton and Gore claim that during this historic ban, the US had the lowest gun and crime rates in the generation. What if the government meticulously monitored mentally, unstable people or attackers with previous history of shooting rampages? What if the government increased strict controls on previous convicts of gun possession, that almost make it impossible to acquire potentially destructive firearms? Implanting and instating organizations that track previous attackers, or people who have displayed mental instability would be one

step in the right direction, as well as actually restricting the access of people to acquire potentially fatal firearms.

With the recent tragic attack in Tucson, Arizona, we need to understand that gun control is neither a solution nor a problem. Politicians must cope with knowing that until a comprehensive agreement is completed, this issue will continue to reemerge with even more need than the time before. Each day we wait, a life we lose. Gun regulation must be carried out while keeping in mind that to rid the entire nation of guns is not a

pragmatic idea, and that certain people will get around gun restrictions. We have seen in recent history- when alcohol was banned with Prohibition in the 1920’s- that people, instead of complying with the new laws, created speakeasies or illegal bars to drink. Guns and alcohol are two different things, and serve two different purposes, but the idea that is that if we totally restrict the sale of guns, firearms will be sold illegally. The significance of the Second Amendment cannot be forgotten when discussing this topic or else we avoid the works of the liberators of this country. Also, the government can’t even keep illegal and hidden sales of guns on record, posing even more problems. However, if we take away dangerous assault rifles and prohibit access of guns to potential attackers, we can slowly wear down the threats of these mass attacks.

Gun control remains a pressing issue that must be dealt with decisively, and with the cooperation of American people.

Too many lives are lost every day due to spurts of gun violence that leave families shell-shocked. Small steps must gradually reduce fear in the eyes of American citizens, as a trend of these horrific events seem to reappear as all the chaos from the previous one dies down. First Virginia Tech, next the University of Alabama in Huntsville, and now Tucson. It is time to do something about it. HMR

The key to solving this increasingly pressing issue is to strike a balance between regulating the sale and access to guns, while also monitoring people that have displayed previous threats and warnings.

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Pro athletes

LOWERING THE PROS by jacob frackman

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he current drinking age of 21 should be reduced. Firstly, it is fundamentally inequitable to permit adults to vote, to serve on juries, to marry, and to give their lives for their country as soldiers at an age when they cannot legally buy a beer. Moreover, America’s drinking age is a vestige of Prohibition, the 1920’s law that put the US at odds with the prevailing norms in most other countries. While there is, admittedly, some evidence, which suggests that setting the drinking age to twenty-one might reduce some alcohol related fatalities in young adults, that same argument would apply equally to prohibiting adults from drinking as well. As a society, however, the US rejected that approach after it failed eighty years ago. In addition, a strong intuitive argument can be made that the prohibition presently instituted, which bars young adults from legally drinking, fosters a sense of disregard and disrespect for the law. They will go to illegal means to acquire alcohol. The long-term pernicious effect of this type of psychology outweighs the potential benefit of curbing drinking.

Many young adults will drink under age. Furthermore, it is not difficult for young adults to get a hold of alcohol due to fake ID’s, older siblings, and various other connections. We cannot be ignorant. Keeping the drinking age at 21 sim-

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ply puts an unnecessary taboo on drinking. Instead, the drinking age should be lowered, and more of an effort should be made to further educate young adults about alcohol consumption and the consequences of abuse. Other ways to discourage drinking include taxes to make alcohol expensive and restrictions on advertising. Keeping the drinking age at twenty-one, however, is not one of them.

The US’ drinking age is higher than that of a vast majority of other countries.

Globally, one of the more popular drinking ages is eighteen. It would make sense for the US to also lower its drinking age to 18 because that is the age when one is considered an adult. Various important rights are granted to 18-year-old adults including, but not limited to, the right to vote, the ability to get married, and the liberty to serve in the military. It simply does not make sense to legally consider a person an adult with important responsibilities but not allow them to buy alcoholic beverages.

Keeping the drinking age at 21 simply is a type of prohibition on alcohol consumption. When absolute Prohibition was the law around 80 years ago, people still acquired and consumed alcohol. As a result, prohibition failed. A similar situation persists today, as bevies of young adults under the age of 21 drink illegally. If they are going to consume alcohol whether the drinking age is 21, why

not lower it?

Finally, the negative psychological effects of having a blatant disregard for the law, a result of underage drinking, makes lowering the drinking age a logical decision. By lowering the drinking age, fewer young adults will buy and consume alcohol illegally. Therefore, young adults will be less likely to develop the habit of disobeying the law, a tendency that can continue into their adult lives. HMR

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Domestic Con men Bonnie and Clyde

DRINKING AGE CONS by kyle ezring

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he U.S. drinking age should not be lowered from 21 to 18.

The higher age saves lives and protects the health and well being of young people—facts agreed to by Mothers Against Drunk Driving (MADD), the American Medical Association, the National Transportation Safety Board, the National Safety Council, the International Association Chiefs of Police, the Governors Highway Safety Association, the US SurgeonGeneral, and the US Transportation Secretary. Contentions, which support lowering the drinking age, often are not supported by evidence and frequently are grounded in illogical, contradictory, or self-interested arguments.

Keeping the drinking age at 21 will save lives. Since the states raised the drinking age to 21 in compliance with a 1984 federal law that threatened to cut highway funding, MADD, among others, reports that, the percentage of fatal car accidents decreased by 13% for people between the ages of 18 and 20. The National Highway Safety Administration estimates that the higher drinking age halved the number of deaths from drunk driving accidents. In 2006, even with the higher drinking age instituted, 19 percent of teens between the ages of 16 and 20 who died in car crashes were themselves intoxicated. Therefore, lowering the drinking age would be irre-

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sponsible.

Keeping the drinking age at 21 will not only prevent traffic deaths, but it will also improve the health of the American population. Center for Disease Control studies demonstrate that, the earlier a person starts drinking, the worse the long-term effects. Teenagers’ brains are in the developmental process and alcohol negatively affects and even stunts their growth. Just as pregnant women are warned that drinking could have a negative impact on their developing baby, drinking is detrimental for teenagers as well. The National Institute on Alcohol Abuse and Alcoholism has found that a person who starts drinking alcohol before 15 has a 40 percent chance of becoming an alcoholic. Studies also show that teen drinkers have a higher rate of academic failure than their abstinent counterparts. Hence, the higher age has been instituted to limit teenagers’ access to alcohol and thereby protect their physical and mental hygiene.

Proponents of a lower drinking age make invalid claims that either lack supporting evidence or falter due to a dearth of logic. These proponents, whose ranks consist of the chancellors and presidents of many major universities in the Amethyst Initiative, argue primarily that lowering the drinking age would decrease teen binge drinking (the consumption of 5 or more alcoholic beverages in a short

period of time). But, in fact, no evidence substantiates this claim. Indeed, government studies have found that, in Europe, where the average drinking age is between 14 and 16, teens binge drink at about the same rate as those in the US. Proponents of the lower age also claim that the current laws are not followed and, in this light, are pointless. The percentage of underage people who drink has decreased since the drinking age was raised to 21, says Chuck Hurley, a top MADD official. Another common argument in favor of lowering the drinking age is that, at 18, a person is intelligent enough to vote and serve in the army, so therefore, they should be able to drink. Simultaneously, however, people also say that the elevated drinking age should be lowered because it encourages 18-year-olds to binge drink and behave irresponsibly.

Undoubtedly, the drinking age was raised for safety and scientific reasons .

The laws regarding voting and serving in the military are arbitrary, similar to the arbitrary ages set by the Constitution for Presidents and Congressmen. If teens drink now, what evidence or even inkling of logic is there to support that they will ever stop? HMR

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When Will They Learn?

Confront Global Warming! by alexander posner

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here are two political movements in this country whose actions make my blood boil: tea party conservatives who seek to severely undermine the role of government by slashing federal funding and skeptics of global warming who substitute politics for science. Together, these two movements threaten US leadership in the world at a moment when our role is more important than ever.

On the campaign trail leading up to the 2008 election, Barack Obama pledged a more direct federal response to curbing the effects of climate change. This was a dramatic departure from the approach taken by the Bush administration. After his election, President Obama wasted no time in proposing a comprehensive

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climate and energy reform bill that the House of Representatives adopted within his first 5 months in office. Unfortunately, the Senate failed to adopt this measure, which was defeated by a Republican filibuster.

Over the last 50 years, the federal government has adopted a series of laws and federal agencies designed to promote an environmental agenda. These actions have been supported by a bipartisan coalition, beginning with the Clean Air Act, which was passed by Congress and signed into law by President Lyndon Johnson in late 1963. Above all else, this legislation called upon the Environmental Protection Agency (EPA) to identify and regulate air pollutants that “produce an adverse effect on public health or wel-

fare.” Under the Clean Air Act, an air pollutant is defined as, “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air,” and greenhouse gases would fall directly under the EPA’s jurisdiction.

In 2007, in a landmark case, Massachusetts v. Environmental Protection Agency, the United States Supreme Court ordered the EPA to make a definitive decision on the effects of greenhouse gases.

If any harm to public health were found to exist, according to the law, the EPA would be forced to regulate such gases.

Unsurprisingly, EPA scientists were virtually unanimous in their decision

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that greenhouse gases are detrimental to public health and welfare. Once President Obama took office, he pledged that he would work with Congress to develop a comprehensive response to climate change. However, the 111th Congress failed to act on climate change, so the Obama Administration has now decided to move forward with an Executive branch driven approach to regulating greenhouse gases.

On February 19, the Republicancontrolled House of Representatives voted to block the EPA from regulating the emissions of any power plants and refineries. In addition, the Republicans slashed billions of dollars from EPA’s FY 2012 budget. Congressional Republicans have justified these measures in two ways. First, they argue that the science surrounding the existence and causes of global warming is unclear and is still very much in contention. As John Boehner put it, “The idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide. Every cow in the world, when they do what they do…you have even more carbon dioxide.”

The true comedy starts with John Boehner’s approach to science. As of 2011, the evidence supporting man-made climate change is overwhelming. While some segments of the US media continue to portray the issue of climate change as having two legitimate points of view, there are almost no credible scientists who share Speaker Boehner’s perspective. The reality is that the increase in global temperatures has been contemporaneous with the Industrial Revolution.

As increased amounts of CO2 have been released into our atmosphere, temperatures have risen. As a result, droughts are becoming more frequent, ecosystems are being devastated, and hurricanes are becoming more powerful and destructive. Simultaneously, the arctic ice is rapidly disappearing and the North Pole may have its first ice-free summer by 2040.

Ocean levels are rising and costal cities and towns are increasingly at risk. According to a 2005 study from the World The Horace Mann Review | Issue 7

Health Organization, climate change is already responsible for 150,000 deaths globally every single year. By 2030, the number of climate-related deaths is expected to double. These statistics are not hypothetical. These are the facts.

Skeptics, in the Congress and elsewhere, cite the increase in snowfalls during the past few winters as evidence of global cooling rather than global warming. As political commentator Bill Maher so eloquently put it, “That is like saying the sun may not be real because last night it got dark.” The truth is that global warming causes environmental fluctuations on a regional-by-regional basis.

These environment extremes are what scientists have warned us to expect as a result of global warning.

John Boehner exhaling CO2.

Unfortunately, the American public’s views on this issue have been influenced by the distortions and disinformation in the media and from political leaders.

Within the past four years, belief that climate change is real has dropped among conservatives by 22%. A recent Gallup poll found that only 30% of Republicans believe the effects of global warming are already occurring. Too many elected officials are not looking out for the good of society, but, rather, for special interests.

Simply put, corporate influence in politics and government is undermining our democracy.

Conservative critics of President Obama’s approach to global warming also argue that CO2 regulations will stifle economic growth and thus subvert the stability of the American workforce, especially in time of economic distress.

This also is wrong and misleading. In the long term, our current energy policies are unsustainable. We are relying on temporary resources that only deliver economic stimulus in the short term. It is in this time of economic restructuring and growth that we have the greatest opportunity and need to adapt to meet the demands of tomorrow. If not now, then when? The statistical evidence also disproves the Republican contention about jobs. According to the non-partisan US Office of Management and Budget, for the past 40 years the Clean Air Act has yielded a very positive return on development.

For every one dollar spent on compliance, the EPA has generated four to eight dollars of economic benefit. A report by the University of Massachusetts Political Economy Research Institute found that the new EPA regulations would create 300,000 jobs in the next 5 years. In addition, a recent Harvard study found that GDP grew by 1.5 percent as a direct result of the Clean Air Act’s protections.

The Republican inaction on the issue of climate change is shortsighted and wrong. Their unwillingness to work towards meaningful compromise undermines our national interest and our future. This is too important a topic to be mired in political parties or partisan ideology. When the European Union, China, and Japan have all passed measures controlling greenhouse gas emissions, this becomes a matter of common sense. As the second largest producer of CO2 on the planet, and the highest producer on a per capita basis, we are threatening the stability of our world. We cannot let our future generations down. We have a responsibility to act now! HMR

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International

International

When Democracy Fails by spencer cohen

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ince 2003, 4,439 young Americans have died to implement and strengthen democracy in Iraq. A dictator was ousted, and a civil war erupted, resulting in massive casualties. Wars have been fought to grant and gain democracy, due to the strong conviction that it promises peace and prosperity as is achieved in Western nations. But I ask a single question: do these modern democracies that promise so much grant inherent rights to the people?

Democracy, according to the Merriam Webster dictionary, is “government by the people; especially: rule of the majority.” This is the very essence of democracy that has been morphed and manipulated with the times into a form known as a democratic-republic. A democratic-republic combines the best form of governments in history: the ancient Greek democracy of citizens with a voice, and the Roman hierarchy of a Republic.

It has come to mean, in theory, an elected government, bound by a Constitution to grant such inherent rights as freedom of speech and right to trial.

Nicholas Kristof of the New York

Times once stated, “Democracy is the worst form of government except for all the others.” When democracy is enacted correctly and fairly this statement is true. But this is rarely the case. In many nations, democracy is simply a façade. It is used to cloak the total power of the government over the people.

In India—the world’s largest democracy—oppression is rampant, with freedom of speech inhibited in many instances. The people of the Middle Eastern nations of Tunisia, Yemen, Bahrain, and Egypt are in the making of a revolution against their technically democratically empowered and justified governments who have, in many instances, stripped these citizens of their rights. Democracy, more often then not, fails.

In Egypt, President Hosni Mubarak maintained power for 30 years. The World Fact Book defines Egypt as a “republic,” and the United States as a “Constitutionbased federal Republic;” they are both considered democratic-republics. This is the label and system in place in theory, as there are presidential elections in the

Corruption watchdog organization Transparency International’s 2005 report on India concluded that “One-third of all citizens think that corruption is ‘an obvious fact.’ ’’ 14

According to BBC, former Egyptian President Hosni Mubarak’s National Democratic Party won over 80% of the seats in the 2010 Parliamentary elections. Opposition parties, Egyptian rights groups, the US and the EU have expressed concern over the election’s legitimacy in the wake of many charges of fraud and bribery.

form of a referendum, a Parliament, and a Constitution. However, there has not been a fair presidential election for 30 years. This is not a “government by the people, for the people.” It is a government strangling the people and their rights with an overpowering grip. Elections occur, but they are rigged by President Mubarak and plagued by corruption. The country had been placed in an official state of emergency, which allowed President Mubarak to maintain an oppressive police state.

Furthermore, in these “democratic” nations of the Middle East, currently in a state of revolution, citizens are protesting.

They are exposing the loss of rights hidden behind the façade of democracy. The Tunisian revolution, sparking this chain of revolt in the Middle East, began with unjust treatment towards one man by the State—a nominal “republic.” This man is Mohammad Bouazizi, who set himself alight after having his cart of vegetables and fruit unjustifiably taken away by the government and then being beaten by the police after protest. These state actions, such as this instance of oppression, are the types of unjust actions justified by the government’s power and even empowered by democracy.

India, a country with a government described as a “federal republic,” by The World Fact Book, has many positive atThe Horace Mann Review | Vol. XX

International tributes in its democracy, but many futile and discerning tendencies. On paper, with the Right to Information Act, it would seem the people have the basic right of democracy: free speech.

This act allows all citizens who inquire about governmental information to be granted it. In practice, however, this is not the case; corrupt big-business silence activists who inquire about reports that may lead to exposition about corruption.

humanrightsindia

The government and businesses are tainting and destroying the inherent right of freedom speech and information so necessary to constitute democracy. As Lydia Polgreen of the New York Times states, “India may be the world’s largest democracy, but it remains dogged by the twin legacies of feudalism and colonialism, which have often meant the citizens are treated like subjects. Officials who are meant to serve them often

Freedom of Speech? While India’s Right to Information Act seemingly guarantees the right to report corruption, it has led to the silencing of many government and big business critics.

act more like feudal lords than representatives of the people.”

India is an old, and in theory, developed democracy, which has seen 60 years of testing. If a matured democracy like India is vulnerable to corruption and violations of human rights, what chance does democracy have in countries plagued by terrorist organizations, such as Iraq and Afghanistan? On paper, India seems to be a perfected nation protecting inherent rights, such as the free speech given by the Right to Information Act. But implementation drastically fails.

This democracy is what young American and coalition troops are fighting for in Iraq and Afghanistan; to preserve this façade of liberty and justice for all, while the people’s voices are just as weak as before American and coalition occupation.

I am not ranting against the protection of America through war; I am a patriot who believes that America has a strong democracy that must be protected. I am arguing against the mission of spreading democracy when Iraq and Afghanistan are too weak to maintain it. If democracy has been proven to flourish in these nations, then let’s fight for it, but the track record proves otherwise. HMR

Afghani and Iraqi Democracies?

• Investigations into the U.S.’s $150 billion program in Iraq have resulted in 35 indictments and 27 convictions for fraud • Iraqi and Afghani voters were victims to bomb and rocket attacks on 2010 election day • While Afghani President Hamid Karzai commended the 2010 election balloting, voters made 3,000 complaints of fraud and bribery to the Election Complaints Commission • Afghanistan’s Media Law does not allow anyone to publicly say or write anything against “state interests” • In the past year, the Iraqi government has sued 60 writers and organizations for publicly criticizing the government The Horace Mann Review | Issue 7

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International

Global Acts of Kindness by julia pretsfelder

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month ago my mother showed me a story about a Somalian woman named Dr. Hawa Abdi.

At the age of 12, in the wake of her mother’s death, Abdi devoted her life to the pursuit of medicine and healthcare for all. In a country where women are frequently oppressed, Abdi

anesthesia machines, and broke windows. Their five-day attack of the hospital resulted in the death of 24 malnourished children. After the attack, Abdi demanded accountability for the violent actions by encouraging the soldiers to write a letter of apology. Her bravery and leadership in a male dominated world is truly inspiring.

In a recent “I have learned how lucky I am to have had the Service Learnopportunity of my education; it has been so fuling Team meetfilling to help kids with their writing and reading ing, we learned and to watch them thrive in the classroom.” about the life of Jane Addams, has made significant advances in women’s who was a pioneer of the settlement rights. Not only has Abdi become Soma- house movement. These community cenlia’s first female doctor, but she has also ters typically offered children’s initiates, has created a refugee camp and hospital food programs, literacy classes, job traincomplex for over 100,000 people. ing, and legal services to new immigrants In May 2010, militants from one of In my further research on Addams, I Somalia’s most violent Islamist groups found many similarities between her brutally attacked her refugee camp with and Abdi. For example, they both used guns. The soldiers, mostly adolescent their family’s wealth to improve lives of boys, tore up hospital records, smashed less privileged people. Both experienced severe health problems: Abdi a benign tumor and Addams spinal tuberculosis.

They were inspired to devote their lives to serving the greater good. These similarities have influenced their lives, and the two have utilized their good fortune to change the world they live in.

In the shadow of the accomplishments of these two great women, anything we achieve may seem insignificant in comparison. The life of a Swedish school teacher has taught me that even a seemingly insignificant act can have a big impact. The documentary “A Small Act” traces the life of Hilde Back, who paid a Kenyan student’s secondary school fees for several years. Although it was a small price for Back to pay, her assistance Jane Addams,

founder of Hull House

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in Chris Mburu’s education enabled him obtain a higher education. After going to university and graduate school in the United States, and he became a United Nations Human Rights official. In recognition of her extraordinary support, Mburu created a foundation in her name to help new generations of students. Hilde’s devotion to the well-being of others, like that of Addams and Abdi, shows us the power of altruism to impact the lives of others all over the world. HMR

“I used to think and dream that one day I, myself, could save lives so no other mother would die helpless.”

-Dr. Hawa Abdi

http://www.kismaayood.com

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International

Russia Rising

zastavki

by jacob gladysz-morawski

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eginning in 1500, Russia has begun to expand from its Eastern-European heartland outwards in all directions. Since then, Russia’s empire has gone through several incarnations, unhindered by the rise of new regimes. During the Soviet era Moscow had absolute control over its satellite states, dictating all aspects of policy. It was only with the fall of communism in Russia in 1991 that the old Soviet Union was split up into many smaller independent republics surrounding Russia. Recently, however, Russia has started to regain complete control over its surrounding areas, so that it might be recover its former size and power. Russia has in numerous cases drawn upon its military strength and control over natural resources to manipulate the political situations in these ex-Soviet Republics.

Russia’s status as an energy superpower gives it significant leverage over many countries. Russia is the European Union’s largest single supplier of oil and natural gas, supplying as much as 100% of gas consumption in Finland, the Baltics, and parts of the Balkans. Multiple times, Russia has used the same ploy to subvert and intimidate its neighbors; namely by tampering with their natural gas supplies as Russia has the largest natural gas reservoirs in the world. In 2007, the Russian government-owned energy giant, Gazprom, claimed debts of $456 million dollars owed by the Belarusian government to Gazprom. When Belarus refused to pay, claiming that the price hikes that prompted the debt were unfair, Russia cut gas going through Belarus by 45%. Russia claims it was Belarus’s refusal to pay for the exorbitant price hike that prompted The Horace Mann Review | Issue 7

Russia’s actions. Yet another possible explanation is that Belarus was attempting to strengthen ties with the west, even to the point of applying for NATO membership, which no doubt worried Russia.

A similar gas-related issue occurred in 2009 in Ukraine, resulting in a complete shutdown of pipelines running through Ukraine for thirteen days.

Before these two disputes, Russia had also had similar arguments in the last decade with Moldova, Georgia, Belarus, and Ukraine. However, these were not the only countries hurt by Russia’s resource tampering; other affected nations included states to which ex-Soviet states supply natural gases, ranging from France to Turkey. Overall, these conflicts illustrate Russia’s significant grip over its neighbors and its power to subvert the independence of its former satellite states by cutting off their main sources of income. As German Minister of Finance, Michael Glos, put it, “one-side dependencies must not be allowed to develop”.

Russia’s clinging to power is further demonstrated by its failure to ratify the Energy Charter Treaty, an attempt to reform energy transport.

“By exerting military and financial pressure on its former satellite states, Russia is attempting to reclaim the political power it enjoyed under the Soviet Union .”

While energy manipulation may seem an indirect way to subvert a nation’s independence, Russia has taken far more direct assertions of its power against its

neighbors. In 2008, Russian forces invaded South Ossetia and Abkhazia, two separatist regions of Georgia. The Georgian government claimed it was acting out of defense against a Russian invasion.

Russia claimed it was acting in defense of ethnic Russians in the regions. However, Russia’s noble façade belies its intentions to keep a straying former satellite state (Georgia was strengthening its ties with the United States) in line. Russian-based hacking (similar to the crippling cyber attacks on the government of Estonia, another former Soviet Republic in 2007) of Azerbaijani, Georgian, Ossetian, and Russian organizations’ websites accompanied the Russian invasion of Georgia.

Although it may be difficult to determine which side is correct, the response of the international community was overwhelming. To date only four countries: Nauru, Nicaragua, Venezuela, and Russia have recognized the republics of Abkhazia and South Ossetia.

Although the Russian government denies it, all of these instances were attempts by Russia to reinstate its former glory. By exerting military and financial pressure on its former satellite states, Russia is attempting to reclaim the political power it enjoyed under the Soviet Union.

In response, British Foreign Minister David Milliband has called this offensive “reckless and wrong” and United States President George W. Bush said of Russia’s actions, “Bullying and intimidation are not acceptable ways to conduct foreign policy in the 21st century.” Certainly if Russia wants to prove its good faith, it must stop its acts of strong-arming and attempts to subvert the independence of its weaker neighbor states. HMR

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International

Karzai’s Kabul

by stephen paduano

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The Horace Mann Review | Vol. XX

rolafghanistan.esteri.it

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t has been nearly ten long years since the first American troops landed in Afghanistan’s southeastern province of Pachir to combat the unfamiliar and hostile Taliban militants hiding in the mountains of Tora Bora. Despite $400 billion spent on the war effort, approximately 1,500 American lives lost, and the current 94,000 American boots on the ground in the troubled country, a problem has arisen out of the United States’ reach. After the United States toppled the Taliban in November of 2001, a new, American-influenced government was created under President Hamid Karzai, a Pashtun tribal leader. After a

International

rnw.nl

depressingly unsuccessful four years in elitist concept that calls on Americans to office was to suspend the only body that office, Karzai set out for reelection, lead- intervene in foreign conflicts, regardless ideally would have the ability to check his ing to a string of controversial affairs that of their relevance to American interests. power—Parliament. With this institution have plagued Afghan politics and de- American Exceptionalism was what led gone from Afghan politics, Karzai is not a velopment for nearly two years. During the United States to very avoidable con- democratic leader, rather a dictator. a race polluted with low voter turnout, flicts such as the Vietnam, and more reAfghanistan’s recent elections and lack of security, and most frighteningly cently, the Iraq War. Since World War II, Karzai’s domestic policies have finally electoral fraud allegedly sponsored by the United States has called on this belief reached the attention of the idle internaKarzai himself, the unpopular incum- in its own higher authority to overrule tional community. Although the issue of bent emerged victorious as his opponent, the laws of whatever lands it chooses to human rights in the trouble nation has Abdullah Abdullah, unexpectedly with- invade, in order to redirect the country in been discussed in the United Nations, drew. the direction of what Americans believe no action has been taken, with the ex Following Karzai’s return to of- to be prosperity. ception of a strongly worded resolution fice, he suspended the Afghan parliaThe complete and utter failure of condemning Karzai’s violations of interment, a move reminiscent of the over- American foreign policy in Afghanistan, national law. The situation in Afghanithrown Taliban government. For the past following an extraordinarily quick and stan, as previously stated, out of the great forty years, the Afreach of the United ghan people have States. Further inbeen subject to volvement in the foreign invasions, troubled nation occupations, and would not only rogue, tyrannical be extraordinarily government such costly, but also unas the Taliban. wise and unhelpful.

After the initial The future of Afmonth of battle ghanistan lies in the between American will of the people. and Taliban forces, As the United States the United States works to defend the set up what it beAfghan people and lieved, and continthe world at large ues to believe, is an from the terrorists infallible system of who have for so governance—delong been a threat mocracy. President to democracy and Bush and his addevelopment, the visers determined people of Afghanithat democracy stan must lead their would be Afghanicountry in a new An Afghan woman, in a white burqa, casts her vote during the August 2009 stan’s savior. Yet, direction. If the peopresidential election. Despite widespread allegations of electoral fraud, incumwhat the Bush ad- bent President Hamid Karzai was re-elected. ple of Afghanistan ministration failed some how enjoy the to realize was that democracy is not the successful military takeover, became clear status quo, then so be it. However it must government of the world and, like any when Hamid Karzai forced his way into a be the people who determine the way in government forced on a people, it would second term. The United States stuck to which Afghanistan will be run once the be unsuccessful. Successful governments its belief that he was the man to lead Af- Americans leave. Although a revoluare governments chosen by the people, ghanistan with American principles. Yet, tion is not necessary, reform is crucial. such as in the case of the United States, Karzai’s government is shockingly similar The ailing representative democracy that the United Kingdom, and France. In all to the Taliban government that preceded they have now may be the future, but the three instances, democracy was chosen. him. Ignoring the minor political differ- country will not be able to progress withHowever, this has not always been the ences, the only major difference is that out the checks and balances that would case. The United States’ belief that de- Karzai enjoys the United States’ blind prevent a leader, such as Hamid Karzai, mocracy, its own form of government, support. Owing to Americans’ detri- from suspending the Parliament. Until will always be successful, is flawed. The mental belief of our own superiority, the such action occurs, Afghanistan will redoctrine that Bush followed when he de- United States has allowed Karzai to wield main the war-torn nation it has been for ployed troops to Afghanistan and Iraq is far too great a power for such an unstable years, with no hope of stability and no known as “American Exceptionalism”, an country. His first move after returning to hope of evolution. HMR The Horace Mann Review | Issue 7

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International thedailybeast

dailycaller

expatflats

Crackdown by henry luo

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hina is in many ways one of the most powerful countries in the world. It had became the second biggest world economy after passing Japan. In education, China also has the top international testing scores, ranking number one in reading, math, and science. China has made prodigious growth but it still faces many issues in its human rights policy. It remains notorious for the strict rules and regulations that persecute 1.3 billion citizens.

In China, the freedoms of speech and of the press are virtually non-existent.

Google, Facebook, Twitter, and Youtube have been suppressed by the Chinese government, using software dubbed as the Great Firewall. Various blogs, websites, and materials online that have been deemed “damaging” to China have been censored. For example in January 2010, conflicts began with Google. Google declared it would shut down its website in China if the site continued to be censored.

However, China refused and Google closed its website. Problems continued

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as Google tried to direct Chinese users to an uncensored server. Eventually Google agreed to remained censored for the sake of keeping China’s business. While the dispute is just one of the more large scale conflicts that has occurred, it is just one example of China’s existing human rights problems. The Ministry of Industry and Information Technology (MIIT) is responsible for the censorship of websites and search terms deemed too controversial by the government. The MITT uses filters to find keywords and then block those results to prevent Chinese citizens from learning more. Keywords include Tiananmen--the site of the massacre of students protesting the government in 1989--and Falun Gong, a religious group persecuted by the government. China’s explanation for all this is that the country’s security and citizens need to be protected from detrimental materials.

Another component of human rights is political freedom. China suppresses its peoples’ expression of politics extremely rigorously. In 1989 in Tiananmen Square, Chinese demonstrators and students protested for a more democratic government. However the Chinese govern-

The Horace Mann Review | Vol. XX

International likeawhisper.wordpress

allvoices

flickr

in China ment met those students with tanks and the People’s Liberation Army resorted to violence. Students were killed until eventually Tiananmen Square was free of protestors. Many estimate the possible death toll to be from eight hundred to four thousand, but the number is uncertain due to the government’s success in trying to hide the total damage done.

More recently, China has come under fire from the international community over its treatment of Liu Xiabo, the winner of the 2010 Nobel Peace Prize and a famed political dissident pursuing human rights reform in China. Xiaobo has been jailed numerous times by the Chinese government under various charges.

The most recent jailing occurred because Xiaobo helped write Charter 08, a document which demanded policy changes regarding Chinese rights and freedom.

However Xiaobo was jailed as a political prisoner and his wife was put under house arrest. For his protest, Xiabo has been awarded the Nobel Peace Prize and also captured the attention of the nations across the world, which demand his release. In response, China censored all news of Xiabo’s receiving the award, de-

The Horace Mann Review | Issue 7

tained other activists, and put still others under house arrest. Political freedom in China is far from success.

The situation in China is truly a problem. China is a major country with a solid economy, but it still has problems ensuring some most basic privileges. Countries around the world need to take an active interest and a bigger role. With China’s restrictions and laws, it is impossible for the citizens to bring about change. Also while it will be difficult, China must relax its laws that don’t allow any criticism whatsoever against the government. The system is clearly flawed. To correct it, the U.S. and various other countries have pressured China to end its stringent policies. Hu Jintao, President of the People’s Republic of China, was questioned on his human rights policy by President Obama during a recent state visit to the United States. Hu admitted that reform was necessary. For a country like China, which has been adamant in persisting that there are no issues within its borders, to confess that growth is still possible is in itself a sign that China can begin amend its human rights problems. HMR

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Special Features

Protest in the

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Introduction

Tunisia

The Middle East has been plagued with internal strife and disorder, but a new phenomenon is occurring: revolution. Beginning with the Dignity Revolution in Tunisia over poor political and fiscal policies including freedom of speech and food inflation, riots have spread throughout many Middle Eastern democracies, including Yemen, Jordan, Sudan, Egypt, and Libya. Governments have been reformed and refined, decade-long dictators have been and are being forced out, with more to surely follow. This has been seen before in the 1989 Velvet Revolution when Czechoslovakia sprang, in effect, eight revolutions of nations in the Warsaw Pact, commonly known as the Soviet Bloc.

The three revolutions discussed here are indicative in both cause and outcome of the general consensus of over 11 revolutions occurring in the Middle East. These three are Tunisia, the revolution that started this all, Egypt, a heavily- publicized revolution, and Libya, the nation embroiled in a civil war.

This is a period that will be remembered in history, a period in which true democracy may finally sweep the Middle East.

The flames rose up in the street as a street vendor set himself alight. This was an all too familiar image to many Americans who witnessed the 1963 self-induced burning of Thich Quang Duc, a Buddhist Monk, for peace in Saigon. This one man, Mohammad Bouazizi, who started these momentous revolutions, resorted to this horrid action after having faced repression and unjust actions from the government. His cart of vegetables and fruit was unjustifiably taken away and then, after brief protest, he was beaten.

In this nation with 13% unemployment, and a dictator in power since 1987, a revolution was bound to occur. After protests started, around January 4, 2011, security forces, aligned with the de-facto power, killed many protestors. Using social media networks such as Facebook and Twitter, the protestors, mostly unemployed youth upset with greed in the ruling family strung together a massive revolt. The regime fell ten days later on January 14, when President Zine el-Abidine Ben Ali fled the country.

The Horace Mann Review | Vol. XX

Special Features

Middle East by spencer cohen

Libya

The revolution in Egypt, heavily broadcasted in the United States, represented a moment where a globalized and densely populated power had a forceful regime change.

Egypt, so crucial to Americans, as it sanctified peace in the Middle East with Israel and is one of the most trusted allies of the United States in the region, faced 18 days of protest that led to the ousting of 20 year President Hosni Mubarak.

He has maintained power for this long period of time due to declaring Emergency Law, which, as stated by the New York Times “allows police to arrest people without charge, detain prisoners indefinitely, limit freedom of expression and assembly, and maintain a special security court.” Viewing these countless other revolutions, the Egyptians seized their chance, and revolted.

Gathering in Tahrir Square, the protestors battled pro Mubarak forces, who attacked with weapons, weathered constant lack of basic necessities, and kept fighting strong.

On the 18th day, during a prayer ceremony, Mubarak announced he was stepping down.

Chants of “Egypt is free!” rang through the air.

Col. Muammar el-Qaddafi has maintained power of Libya with an iron fist for over 50 years. He has committed constant violations of human rights, and he expresses an imperialistic mentality. As in the other revolutions, the people finally took to the streets organizing protests through both Facebook and Twitter. On February 16, 2011, several protestors organized outside a governmental building located in Benghazi, with rocks, gasoline bombs, and other makeshift weapons to protest for the release of a human rights advocate in Tripoli, the capital of Libya. The impetus for rioting then expanded to a call for ousting Qaddafi, one that had violent undertones.

The protestors burned down government and police buildings, and they faced conflict with mercenaries hired by Qaddafi. The protestors have called on, if not pleaded, for the United States government to intervene, but the U.S. so far has taken limited direct action to support protests in the Middle East.

The Horace Mann Review | Issue 7

newstatesman

Egypt

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Features

Features The Era of the Euro Is Over

by ben davidoff

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n recent years, member states of the European Union, such as Ireland, Spain, Portugal, and Greece, have fallen into a severe debt crisis.

An underlying but important cause was the fact that these countries were all EU states. Because they did not have their own currencies, but instead used the Euro as required by their European Union membership, they were unable to combat debt individually. If the already fragile European Union doesn’t disband the Euro, or at least not make it necessary for new states to adopt the Euro, the Union will break apart.

Initially the Euro seemed like a godsend. It allowed for easier trade across member states and it allowed people to move from one state to another without having to exchange currencies, which

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was beneficial because it prevented worries about fluctuating interest and exchange rates. It was adopted as a way to financially connect Europe and create a bond that would be unbreakable. After World War II, this union was necessary to keep Europe from disintegrating back into war. When the Euro was first introduced, the amount of criticism was minimal; however, critics suggested that it would be difficult to seamlessly adapt a unified currency because eventually weaker states would bring down the stronger ones. Furthermore, since states could not control the inflation rates of their own currency, they could quickly fall into debt. In hindsight, those critics were correct.

Since the inception of the Euro, Ireland and Spain particularly enjoyed

economic booms, due to the easy trade that the European Union instilled.

However Ireland is now mired in bankruptcy and Spain is struggling with a 20% unemployment rate and extreme deflation. Though other countries are struggling with debt in the EU, Spain especially is having problems due to its dependence on the housing market. If they had their own currency, it would be much easier for them to combat this debt. For example, you could devalue your currency to make your exports more competitive and fight off debt. You could also inflate your currency, which means that the monetary value of today’s debt will not be equal to the debt say 100 years from now. I am not arguing against the European Union itself; I think that if Ireland, Greece, Portugal, The Horace Mann Review | Vol. XX

Features If the already fragile European Union doesn’t disband the Euro, or at least not make it necessary for new states to adopt the Euro, the Union will break apart.

they would be even bigger trouble.

They would not have been able to obtain large bailouts from fellow EU states.

The EU provides great things, free trade, easy movement between nations and most importantly peace. It is a necessary form of protection required following two devastating world wars, fought mainly in Europe, from ever happening again. I am however, arguing against the use of the Euro ipso facto for EU members, if not for all states, then at least for weaker ones.

The ability to have your own currency allows you to devalue it as you wish and to create specific economic policies around it. Essentially, it gives you the ability to defend yourself against bankruptcy, something that those four countries could not do due to their use of the Euro.

Part of the reason, again, for this collapse was the popping of the housing bubble, similar to the one in the United States. Approximately 14% of the workforce in both Ireland and Spain prior to the global recession worked in construction.

Additionally, due to the high unemployment rates the cost of social benefits went up.

Furthermore, revenue lowered and costs went up, so therefore debt ballooned. In Ireland, the banks’ debts were assumed by their government, which then caused questions about the government’s solvency.

Overall, the Euro is not necessarily to blame for the financial meltdown, but for the lackluster recoveries within weaker EU member states. If the Union wants to keep inducting weaker states, those weaker states will have to keep their own currencies. The phrase “a chain is only as strong as its weakest link” comes to mind.

Disbanding the Euro would mainly have ill affects on economic trading. It will become cumbersome to have to exchange Francs to Marks for every economic exchange between France and Germany, for example.

This will slow down trade, and possibly hurt the free trade available currently in the EU The Horace Mann Review | Issue 7

and shrink the effective ‘home markets’ of the countries that need an expanded one the most. These important steps are crucial for the continued effectiveness and solvency of the European Union.

There are two options to combat the slowing of free trade. One option is to allow stronger countries like Germany maintain the Euro, while reverting weaker countries back to their original tender. Another option is for countries to simply exchange their currency. This may be less efficient, but it would allow for those countries to control their own currency with

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euro pros

their own economic policies, instead of having to adhere to policies that are beneficial to the majority of the member states, but not theirs. Such a policy may limit growth, but it will temper economic recessions and prevent their devolution into depressions.

It is clear from this latest financial fiasco that the European Union must strongly rethink their absolute stance on the Euro and proceed with a step that puts the economic solvency of the members above the pride of the Union. HMR

euro cons

the use of a single currency throughout Europe safeguards countries from the risk of fluctuating currencies when exporting to other nations in the EU

weaker states lose the ability to control their currency in times of economic crisis through inflation

unified Europe financially and helped solidify the European Union

weaker states lose the ability to control their currency in times of economic crisis

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Features

The Third World Debt Crisis: A Primer by gideon teitel

What exactly is the Third World debt crisis and why is it happening?

By the end of the ‘70s, numerous oil exporting countries had a surplus of funds which were deposited into Western banks. These banks subsequently loaned this money to Third World countries to aid them in development. However, multiple underlying issues (an increase in world interest rates, a global recession, and low commodity values) led to an alarming increase in debt, leaving several countries lagging behind in their expenses. The increase in debt in these countries has increased at a cataclysmic rate since the ‘80s. However, there are various methods to alleviate this debt; cancelling the debt, rescheduling it, or even a middle ground.

Halting the growth of this debt continues to be important since the legacy of colonialism plagues many Third World countries to this day as many are burdened with a debt to their former colonial occupiers. South Africa for example had to pay $46,000,000,000 for the apartheid, $28 billion of which bordering states loaned because of apartheid damage and hostility. This alarming debt was more than three times the amount Germany paid after WWII. Their creditors were apathetic towards floundering South Africa as their people were dying every day of starvation. What is most unjust is that Germany was given a chance to rebuild, as much of their debt was cancelled by the British compared to South Africa, whose creditors would not even offer the same opportunity.

What is stimulating the growth of this debt? The loans to Third World countries must be paid back in hard, stable currency. Third World countries have soft fluctuating currencies and when

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its value lowers, their effective debt levels debt was 250% more than their exports. increases, forcing them to use more of Through debt swaps UNICEF’s Debt their own currency to pay off the debt. for Child Relief Organization was able The worth of commodities can decrease, to sponsor child programs with the lessening a country’s exports and money Third World countries owed, effectively increasing debt. Latin America while banks received tax deductions. for instance, has a debt that continues This clever plan allowed struggling to exceed its production from exports. countries to produce thriving Third world countries also make the grave mistake of Terminating the current debt won’t solve refinancing loans, (paying off previous loans with new the crisis in the future; a fundamental loans). Not only does this change would need to be made in our illogical method result in financial system. a never ending debt spiral, but the firm criteria from organizations who loan the money require budget cuts to be made in generations while banks were content. healthcare, education and food subsidies. Another proposal would be to cancel While these organizations insure that these debts since developing countries these loans are paid back, the country’s have already repaid their loans multiple society suffers from a crumbling times over through interest payments. infrastructure. Both sides are at fault for Furthermore, Third World countries this predicament; developed countries paid $165,000,000,000 even though they for loaning Third World countries more received only $53,000,000,000 in aid, money than they could ever hope to loans, and investments that were given to repay, and the developing countries them by developed countries. At the end themselves for initially spending beyond of the day, what exactly do Third World their means. Third World countries have countries owe the developed world? also suffered greatly from extraordinary Hope also lies ahead as commodity values debt, which is when corrupt governments have skyrocketed over the past year, greatly use the loans to oppress their people stimulating Third World economies, or even for their personal purposes. such as Angola and the Democratic Realistically, these debts will never be Republic of Congo whose oil reserves paid back as billions of dollars were became substantially more valuable. lost in the black hole of corruption. However, terminating the current debt won’t solve the crisis in the future; a How can the world stop the fundamental change would need to be bleeding? If the debts were rescheduled, made in our financial system, which is countries would have a healthy amount centered on debt and interest payments, of time to repay the loan. Zimbabwe was ensuring the domination of the rich and given this opportunity through the Highly powerful. For now, we can only focus on Indebted Poor Countries rescheduling “patching the hole” as people in Third plan, alleviating their situation as their World countries continue to suffer. HMR

The Horace Mann Review | Vol. XX

Features

Debtor Nation Regulation

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by nathan raab

hen a runner trips and falls on an icy road, we don’t blame the runner for falling and ignore the ice.

When someone with a bullet in his leg can’t stop taking pain medications, we don’t blame the medication and ignore the bullet. Then how come, when Washington consistently spends beyond its means, we blame the politician and ignore the rules of the political process that incentivize debt and punish thrift?

We shouldn’t. It’s time to realize how large a role relatively arcane regulations of accounting and procedure play in Congressional budgeting: things like “Current The Horace Mann Review | Issue 7

Services Baseline Spending” and “Direct Spending” make it incredibly difficult to make any real cuts in spending and lead to ballooning deficits. Meanwhile, rules designed to keep spending down, like mandatory Congressional Budget Office analysis and Pay-Go procedures, have failed miserably. Understanding these problems is crucial to understanding the solutions to come.

After that, Congress can make three major reforms. Number one in priority—as well as the easiest politically to push through—is to abandon the rules which increase spending and give teeth to those which push it down. Next, both in importance and political difficulty, should be legislation to make the default

Deficit

position in any budget “no new spending,” through tools like cost-shifting and new pay-go rules. Finally, Congress should force Representatives and Senators to closely examine possible spending increases, using more detailed CBO estimates and longer debates to do so. Until this happens, the nation will remain mired in debt.

One of the first problems that budgetcutters confront is something called Current Services Baseline Spending, which, in a nutshell, automatically pumps money into federal programs while making it look like everything is staying the same.

The process works as follows: in 2010, the RQVX Administration (a subdivision of the Department of Made-Up Programs)

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“

Features

Congress needs to make three major reforms: abandon the rules it down, create legislation to make the default position in any Senators to closely examine possible spending increases. Until

is allocated a million dollars. Congressional staffers working in back offices without windows then add to those million dollars an adjustment for inflation, and then an adjustment to reflect an increase in wages for RQVX workers, and then another adjustment to reflect an increase in prices in the RQVX field, etcetera. Soon, the RQVX Administration has gotten much more expensive: external forces have driven the cost of providing RQVX services up significantly. But does the budget reflect this? No. Instead, under the Current Services Baseline, all of those adjustments count towards a new “baseline,” the default place where the budget process starts. Deciding that maybe RQVX is not worth the extra money is not reducing an increase in spending, rather, it is a spending cut—a fact that RQVX advocates will gleefully seize upon and shout from the rooftops as evidence of their opponent’s budgetcutting mania, lack of masculinity, and goodness knows what else. The default in Congress is a spending increase, not a stable level of spending or a spending cut.

Similar problems arise with what is known as “mandatory spending” or “entitlement spending,” which Congress describes as “annual spending that is required by law” and not part of the regu-

lar budget process; it includes big-ticket items like Medicare or Social Security but also littler-known gems like the U.S. Helium Fund (keeping politicians full of hot air) or the U.S. Wool and Mohair Price Supports Program (don’t ask). Congress doesn’t touch this spending—it grows without prompting, like an infected pimple. As a result, mandatory spending doesn’t just grow; it grows without connection to reality. Whether the government runs a deficit or a surplus, Mohair supports become larger and larger. Politicians thus are not faced with a three-part choice of cutting defense spending, cutting mohair supports, or adding to the deficit. They can only cut non-mandatory things, such as defense, or take out loans. The Mohair, unless specifically cut, just gets longer and longer and longer.

This is what causes spending to grow.

What about the checks and balances— things like Pay-Go and the CBO—that are supposed to keep it from growing?

Unfortunately, they don’t work. PayGo, which requires senators and representatives to keep their proposals from adding to the deficit, is too easy to surmount: as a parliamentary rule of Congress, and not an actual statute, it can be abandoned without real consequences.

Creative budgeting further weakens the process, as well as the practice of Con-

gressional Budget Office review, as complex accounting procedures like “forward appropriations” and “budget-shifting” mask the true cost of programs.

These are the basic problems that need to be fixed immediately. It doesn’t take a rocket scientist to figure out that Current Services Baseline Spending makes it easier to spend than to save—so eliminate it. Budgeting processes can instead start from the actual previous budget, or, even better, from zero. It is more efficient to determine what a program needs, dollar-by-dollar starting from nothing, than it is to assume constant growth or, at the very least, no shrinkage and throw money at the issue until it goes away. Careful and methodical budgeting, the antithesis of CSBS, can go a long way.

Mandatory spending is a little more complex, but still fixable. Lawmakers don’t have to shut down mandatory problems—that is an entirely different debate—but they should at least make them live in the real world, where money in has to bear at least a tangential relationship to money out. Towards that end, Congress can eliminate the “mandatory” part of mandatory spending. Each year, it should allocate whatever needs to be allocated to Social Security, Medicare, and yes, the Helium Fund as part of the general budget; if the rest of America cannot

Democrats

lintonevents

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• Economy is too complicated for individuals to navigate alone • Federal government should define the tax burden necessary to meet its obligations • Business should be guided by government officials • Support labor unions The Horace Mann Review | Vol. XX

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”

which increase spending and give teeth to those which push budget “no new spending,” and force Representatives and this happens, the nation will remain mired in debt. make ends meet, there is no reason why the sacred cows of government should not have to feel the pinch. Congressmen should have to bear the responsibility every year for giving away taxpayer money, instead of passing the buck to the brave soul who tries to stop the fire-sale. If Congress makes it clear that the United States Government is in fact spending money voluntarily on these programs taking out loans and sticking American children with the bill, to pay for these programs, it will make more sense to the American people to cut spending. It will keep entitlements tethered to the America everyone else lives in.

And there is also a way to fix paygo and CBO analysis. President Obama took a brave step recently by signing the Pay-As-You-Go Act of 2010, which enacted parts of PAYGO rules as statute; Congress can do more by expanding PAYGO further, forcing widespread cuts in government programs if Washington consistently fails to spend within its means. The CBO can meanwhile refuse to tolerate budget tricks and cheap ways of hiding spending, calling the spending as it sees it and not hiding behind walls of technical jargon. Working together, PAYGO and CBO can function as they were designed: to actually keep spending down.

Those are defensive measures. Next on the table should be real changes in House and Senate procedure to change the default position of the federal government from “spend as much as possible” to “no new spending,” or at least “less new spending.” A good start is the Reduce Unnecessary Spending Act of 2011, sponsored by a bipartisan group of senators, which will allow the President to go line by line through appropriations bills and send back to Congress pork barrel spending, unnecessary projects, and expensive, wasteful spending. Congress can also start partnering with states to provide government services—like Medicare and Social Security—so that local governments share their incentive to reduce spending with the federal government. A new committee dedicated solely to reducing spending and the deficit will also bring down the level of pro-spending fervor. Watchful eyes and vigilance in accounting, which such a committee could provide, go a long way.

Lastly comes the need for further deliberation when talking about spending.

Reconciliation—the manner by which budget measures come before the Senate to avoid filibuster—is a fantastic tool, but it has been lately abused; its use should be limited to measures that actually reduce debt, forcing the Senate to talk over new

spending. In a similar vein, the House should mandate similar rules for nonemergency spending bills, and require a waiting period of at least a week between the introduction of a new spending bill and a vote on it. Points of order, the somewhat byzantine procedural mechanisms by which a legislative body slows down discourse, provide even more weapons against spending: the House and Senate rules should be amended to provide plenty of them against new spending as to make sure everything is done honestly, equitably, and by-the-book. The filibuster itself is also a great tool for deliberation and Senators should not be afraid to use it, or its cousins, the hold, read bills, discuss them, do the math, and figure out how much the U.S. government is truly costing America.

The road out of debt is long and bumpy and America will face a series of difficult decisions as the time to repay the loans draws nigh. Procedural changes will not make those decisions easier. They can, however, make it easier to make the right decision—to reduce spending when spending is not needed.

The nudge is a powerful tool. Now, with the debt so large, we need all the tools we can get. HMR

Republicans

bafractals

• Free enterprise brings economic growth and innovations • Cut government spending and eliminate government waste • Individuals should control both their own and their government’s pocketbook • People should authorize all tax increases Information from www.svgop.com

The Horace Mann Review | Issue 7

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Features

Debt to China

Why cooperation is the answer to our desperate situation. by vivianna lin

T

he United States is slowly making its way through an economic recession, but the hard times are nowhere near over. After years of federal spending and bailouts, our nation has dug itself into a deep trench with $14 trillion of debt.

Given the severe economic recession and high unemployment rate, adding to the debt would only exacerbate the US’s bad situation. The precarious relationship between the United States and China must be kept in painstaking balance for American recovery to have a chance.

The predominant foreign country holding American debt is China.

Because of this, a special kind of relationship has emerged over the past decade between China and the United States; America gives China access to one of the most lucrative consumer markets in the world, and China invests its trade surpluses into United States Treasury debt. The ties

mercy and can abandon American debt whenever it wants; however, this notion is a fallacy. China needs a place to invest heavily, and the United States is one of the few places with such a large debt market. China essentially relies on the dollar to keep its own Yuan so low, and since its investments in American debt are kept in

dollars, they are relatively stable. China’s central bank purchases dollars by storing its earnings in one the largest liquid markets in the world, without having to convert between currencies. With the United States lapping up all of China’s consumer

for consumer items declined, quickly causing thousand of companies to go out of business. Thus, it is evident that the economic relationship between these two nations goes both ways.

On the other hand, the United States cannot find an easy way to break away from its growing financial dependence on China. Holding so much debt and being in the midst of a recession, America cannot do anything but allow China to continue pegging its currency on the American dollar. Currently, China owns over $2.8 trillion of American dollar-denominated foreign exchange reserves.

China obviously holds a great deal of sway in its relationship with the United States.

As stated by Secretary of State Clinton: if China fails, the United States also fails. When Obama approved of a 35% tariff on tire imports to protect American manufacturers, China immediately retaliated with a tariff on American chickens. China has also been diversifying its holdings to other

China is like America’s landlord; the problem is not whether China will sell American bonds, but whether it will continue buying. between the two world powers are starting to affect even our daily lives. You’ve probably noticed that all of our products now come from China. You probably also know that the United States is currently in an economic recession, that its debt is nowhere near getting paid off, and that China holds some of its debt.

Many people believe that China holds the United States completely at its

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products, China is not in much of a position to “dump” all the American assets it saved up, as doing this would severely increase the prices of all their products and cause China’s economy to suffer heavily.

20% of China’s exports are shipped to the United States alone. In 2008, when the recession hit the United States hard, Americans began to save money. China was hit with a severe backlash and the demand

currencies, meaning that the growing superpower already realizes its dependence on the United States. Perhaps one day, China will no longer depend on the United States alone, and then, where will we turn to? What other country currently has enough money to buy off a large portion of our debt? Many American lawmakers claim we should be cracking down on China’s artificially low currenThe Horace Mann Review | Vol. XX

Features acclaim images

President Obama meets with Chinese President, Hu Jintao. cy, as it is fueling the United States trade deficit. However, we must tread carefully around China and do everything to keep our relationship amicable. China is like America’s landlord; the problem is not whether China will sell American bonds, but whether it will continue buying. Being the foremost of the United States’ foreign bond holders, who would America turn to if China’s interest waned?

Clearly, the relationship between China and the United States is mutualistic. Neither could survive without the other; both are at each other’s mercy. If this balance were to be somehow tipped, both countries would fall together. We have a long way to go before this can ever be achieved; the recent visit of President Hu Jintao at Washington had a positive attitude, but many issues still remain unresolved. I maintain that even though the United States does have some control in the relationship, China is still America’s creditor. It gains more and more power The Horace Mann Review | Issue 7

as it buys more bonds, has the potential to devastate the American economy. The United States needs to start weaning itself off China. But in this dire situation, we must admit that America is near helpless—China owns too many bonds for other foreign-debt holders to even come close, and the United States has nowhere else to turn. On the other hand, China is also bound to the United States just as tightly with us as the main importers of their products. Both countries have made poor decisions in getting themselves into such risky situations. That is no longer a question. But at this stage, neither has is in the position to break away, and so, compromises must be made. The United States and China need to find new methods of reducing currency and economic strains by taking steps that will benefit both sides. We must start by first alleviating the tensions between these two world powers, as that will be the start to a more favorable relationship. I believe that a

major factor in less than amicable relations between the United States and China is America’s over-involvement in Chinese domestic affairs. The United States and China are two separate entities, and each works with its own values and policies. Of course, we Americans who believe strongly in human rights and liberty may object to China’s censorship, among other offenses, but the United States has bigger problems to handle. China may have committed some human rights violations, but at least it is faring relatively well through this recession. Perhaps if the United States stopped being so critical of this developing nation, then the two could turn their attention to achieving greater goals. The world depends on cooperation between China and America, for they can achieve great things if the balance is maintained and they work together. HMR

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Features

The Dubious Link Between Government Debt and Trade Deficits

freemantle reports

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by philip perl

he popular view about trade deficits and government debt is that they are somehow related.

Some people believe that budget deficits cause trade deficits, while others are convinced that trade deficits cause budget deficits. In reality, economists are not in agreement as to how or to what extent trade deficits and government debt are related.

We know that a trade deficit occurs when the value of a nation’s imports exceeds the value of what it exports. It represents an outflow of domestic currency to foreign markets. A budget deficit is the excess of government spending over tax revenue in one year, indicating how much the government needs to borrow.

In short, a trade deficit indicates all the money a government may spend in one year on net exports, while government debt indicates all the money a government owes to its own citizens and to the

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citizens of foreign countries.

Economists use the national accounting identity to relate the budget and trade deficits with investment and savings. Manipulating the identity, they show that there is a positive relationship between budget (T-G) and trade (X-M) deficits:

(T – G) = (I – S) + (X – M) In this equation, T represents government revenue, G is government spending, I is gross private domestic investment, S is gross private savings, X is exports, and M is imports. Assuming savings are kept constant, an increase in the budget deficit will either reduce investment, increase trade deficit or do combination of both.

Although this identity does not identify the direction of the relationship between domestic and foreign account balances, it suggests that there are four possible

scenarios for the causal relationship. The first is that budget deficits cause trade deficits. The second is that trade deficits cause budget deficits. The third possible relationship is that the two deficits are independent and unrelated and the fourth is that there is a two-way causal relationship between the two deficits.

Economic theory suggests that trade deficits are caused by budget deficits and the link between the two is due to the interest rate and its impact on the value of the currency. Specifically, it claims that an increase in the budget deficit would increase the aggregate demand for output, as well as the domestic interest rate. A rise in the interest rate would attract an inflow of foreign capital, increasing the value of the domestic currency, which in turn would make exports more expensive and imports less expensive, causing net exports or the trade deficit to deteriorate.

If economic theory suggests that The Horace Mann Review | Vol. XX

Features budget deficits cause trade deficits then why is it that in the 1950s, the United States had a trade surplus despite its rising budget deficit and today it is suffering from the twin deficits? The budget deficit and the trade surplus of the 1950s were attributed to the Marshall Plan, an economic aid program, which not only increased US government spending a great deal to help rebuild Europe and Japan after WWII, but also helped increase US exports to new markets. While there are many causes of the twin deficits today, conservatives blame the budget deficit on irresponsible government spending and the trade deficit on the artificially low value of the Chinese Yuan relative to the US Dollar. Their solution for the budget deficit and thus government debt is to cut government spending on programs such as education, foreign aid, Medicaid, Medicare and even Social Security. Their solution to the trade deficit, meanwhile, is to appreciate the value of the Chinese Yuan.

In reality, neither cuts in government spending nor appreciation of the Yuan would rescue us from the two deficits. The implication by conservatives is that cuts in the above mentioned social programs would be enough to create a lastingly lower the budget deficit. In reality, government cuts in these programs

would not sufficiently cut the budget deficit, especially since the debt over the past decade is attributed mainly to the wars in Iraq and Afghanistan, the Bush tax cuts, and the financial crisis and recession. The idea that the Chinese Yuan would rise and thus correct our foreign trade deficit if the Chinese government allowed the Yuan to trade freely cannot be accepted as fact. The freely determined value of the Yuan may instead cause the dollar to appreciate further as the Chinese exchange their currency for the dollar to invest in America’s capital markets, worsening the trade deficit further as our exports become more expensive and our imports less expensive than before.

Testing the relationship statistically, economists have found mixed results.

Focusing on the budget and trade deficits of the United States, Professors of Economics Nazma Latif-Zaman and Maria N. DaCosta found not only that the two deficits are related but also that high budget deficits cause high trade deficits.

Economists Holescher and Evans found that there is no relationship between interest rates and budget deficits, and therefore no link between budget and trade deficits. Professors of Economics, Nozar Hashemzadeh and Loretta Wilson show that twin deficits are prevalent in countries with low levels of savings, such as

the United States, while twin surpluses tend to be present in countries like Japan, which have high levels of investment and saving. According to Martin Feldstein of Harvard University, trade imbalances are caused by consumer spending habits rather than by government spending policies. Feldstein argues that Germany tends to run a budget surplus because it produces more than what it spends, while Americans continuously spend more than what they produce and thus, the United State s runs chronic trade deficits which it finances by paying a high interest rate to foreign lenders.

These findings suggest that the relationship between government debt and trade deficits is complicated and not always very clear, but that it is unique and likely to change over time and across countries. Therefore, isolating the causes of the two deficits to some factors while ignoring other factors will not only lead to false reasoning but also to incorrect conclusion about the relationship between the two deficits and government debt. Politicians need to put aside their desire to find an ‘easy fix’ to the economic crisis, and stop pretending that there is a clear link between trade deficits and government debt; there isn’t. HMR

calculated risk blog

The Horace Mann Review | Issue 7

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Economics

Economics

China’s Domination the first post.uk.info

of Rare Earth Metals by jacob gladysz-morawski

I

t is a generally accepted concept that a nation that controls an important commodity has significant leverage over other nations. Just as leviathans such as Russia, Saudi Arabia, and Iran control world oil and natural gas production, China controls 95% – 100% of the world’s rare earth metal production depending on the element. Rare earth metals are not rare because they are in low abundance but rather because so little is known of them by the public. It is this enigmatic quality that allowed the Chinese government, which in the 1960’s predicted the metals to be the fuel of the 21st century, to monopolize the production of Rare Earth Metals. Moreover, China’s cheap labor and disregard for the myriad of environmental consequences of rare earth metals allowed it to take production of the commodity over.

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Rare earth metals (those numbered 57-71) are used in high-tech research magnets and electronics. They are found in super-conductors, hybrid cars, and mobile phones among other devices. Considering our increasing reliance on electronics in the digital age, the control of the production of these elements is no doubt a powerful leverage tool. While United States based companies used to produce 40% of rare earth metals including the world’s largest single producer, the Mountain Pass Mine in California, its market share is now nearly zero. With global demand at 134,000 tons in 2009 and production at 124,000 in the same year, China has been reaching into its dwindling supply of rare earth metals to keep up with ever increasing demand, predicted to reach 180,000 tons in 2012.

Absolute control of production is just what China has, The Horace Mann Review | Vol. XX

Economics

and it has not shied away from using this asset as a tool to assert its clout on an international scale.

In September 2010 a conflict in Japan regarding a Chinese trawler detained for colliding with a Japanese patrol boat in disputed nautical borders gave China a prime opportunity to show off its clout in the region. It slashed already tightened exports to Japan, and ever since, Japan’s hightech economy has suffered from the lack of access to these elements, so much so that Toyota and many other Japanese manufacturers are currently expending a large part of their budgets

“In order to avoid reli-

The Facts on Rare Earth Metals

ance on this commodity companies must end their obsession with the bottom line and instead look out for the greater good.” in making hybrid car batteries that do not use these elements. While demand for the metals has grown three-fold in the past decade China has widened it embargo on rare earth metals. China has slashed export quotas by 72% for the second half of 2011. This is only partially because of China’s desire for leverage; China’s own burgeoning high-tech economy, its rising middle class’s demand for electronic products, as well as its dwindling reserves contribute to China’s withholding of its supply of rare earth metals to the west.

As the world reaches peak rare earth metals, when current production capacity is reached, the United States along with other industrialized economies must increase their production while simultaneously decreasing dependence on rare earth metals. This is by no means an impossible goal; although China produces 95%-100% of rare earth metals it only has 37% of the worlds proven reserves. In order to avoid reliance on this commodity companies must end their obsession with the bottom line and instead look out for the greater good. If they don’t, western nations will be faced with the same crisis as Japan: Whether to stand back and let another country manipulate them or to take the necessary steps to rare earth metal self dependence. HMR

The Horace Mann Review | Issue 7

The periodic table shown above circles the elements included in the term “rare earth metals.” The chart below shows the trends in the rare earth metal industry and puts China’s production of metals in context with the rest of the world’s production.

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Economics

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HM Review Vol. XX The Horace Mann Review | Vol. XX

Economics

The

Steve J bs Effect

S

teve Jobs, the C.E.O. of Apple Inc., is the game changer of the technology industry. An incredibly valuable member of the Apple community; what does Steve Jobs mean to his company? Jobs leads Apple, a company worth over $300 billion, on a journey of not technological evolution, rather revolution. Additionally, he was the savior of the company a decade ago, and is defining the core competence of it. As long as he is fit and healthy, he will continue to do so.

by harold chen The Horace Mann Review | Issue 7

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Economics

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is not any different.

However devastathe stories of the revolutionary consumer electronics, Macining it may seem right tosh in 1984, iPods in 2001, the iPhone in 2007, and the iPad in now to the industry, 2010, have been told frequently. Jobs’ works are “reinventions,” the weakening of as he put it when introducing the iPhone. Now, however, Jobs’ Apple promotes comgenius is endangered—he has had pancreatic cancer since 2004, and panies like Microsoft has since battled the consequences of his liver transplant. On January and Google in the 17, 2011, Jobs left Apple for the second time in barely 2 years , without long run. But are they a specified return date. This “endangerment” comes largely from some capable of starting statistics compiled in 2009 by the federal government, which states that, another era and of “among patients who receive liver transplants, 20.7 percent die in the putting the economy first three years, on average.” on their backs? Are they true innovators or just some successThis is not just some average Joe giants like Google and Microsoft have ful copycats? Could this climate possibly temporarily leaving his company, for narrowed Apple’s lead and even surgive small companies opportunities and the reasons named before; this is the passed the company by some measures. create the next Steve Jobs? most revolutionary CEO leaving the This is no time for Apple to slow down While all these questions are most ground-breaking company in the -- in fact, its future largely depends on likely to remain unanswered for a while, business. There are going to be conse- these few years: it’s either going to domithere is no doubt that 2011 is a crucial quences—both immediate and long- nate the market or reach its bottleneck year for the technology industry. With term. Apple has announced that Timo- and wither. the absence of Steve Jobs, we as consumthy D. Cook, the chief operating officer Furthermore, while folks at Google ers and investors are going to see what (COO), will take over the company in and Microsoft are going to have a laugh Apple’s like without Jobs, and more imJobs’ absence. Although Cook has been out of this, you are wrong if you think portantly, how the economy is going to working at Apple as COO since January Jobs’ absence is going to affect Apple handle a “Jobsless” Apple. Let’s step back 2007, and knows exactly how to run a alone. for a minute, why is Steve Job so imporcompany like Apple, Steve Jobs is simply The absence of Jobs is not only tant to us in the first place? Is he really irreplaceable. According to Michael Us- going to have an impact on Apple, but irreplaceable? What kind of people does eem, a professor at the Wharton School also the market as a whole. As a matter this already saturated and overwhelmed of Business at the University of Pennsyl- of fact, shares of Apple immediately fell world need? Well, vania, “Steve Jobs may be the most vital on foreign exchanges on the 17th, deC.E.O. of our era.” As the world leader in creasing 7.6 percent in Frankfurt. Finantechnology, Apple has probably planned cial markets in the US were closed on a year, if not a few years ahead of sched- Monday in observance of Martin Luther ule, but is that enough for Apple to with- King’s birthday, but that did not keep stand this crisis? It all depends on how investors’ fears away, resulting in a large Apple goes about revolutionizing the drop from $340.65 on the 18th to its botworld of technology. In other words, is tom on the 21st at $326.72. “It is natural it just Steve Jobs who has this vision or that investors will expect the worst,” said is it actually someone else? Or perhaps Charles Wolf, an analyst with Needham a group of people? Steve Jobs is taking & Company. The Dow Jones Industrial a leave at a very critical time for Ap- Average however, rose from $11837.9297 ple; the company has outflanked most to $11871.9398 in the same duration. of its rivals in the technology industry This is not a coincidence; looking back with iPhone and iPad, which have been at the history of Apple, its stock price “blockbuster” hits with consumers, and rose and fell with Jobs’ health, this time

you tell me.

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The Horace Mann Review | Vol. XX

Special Features

The Budget

of the UNITED STATES OF AMERICA

Our Budget Now (in billions)

Total Budget

$878.9

$738.7

$3.69 trillion

Health and Medicare

National Defense

Social Security

$588.2

$250.7

Veterans Benefits

Everything Else

Net Interest

$374 billion

Income Security

$738.5

$122.0

Our Problems Later (projected spending in President Obama’s budget) Spending on Social Security is expected to pass

one trillion dollars in 2017

The cost of running Medicare will be higher in 10 years time

69%

Net interest on federal debt will surpass education, transportation, energy, and all other non-defense discretionary spending The Horace Mann Review | Issue 7

by 2014 39

Science & Tech.

Science & Tech

Multitasking Kills

Digitaltrends

by philip perl

T

hanks to cars and cell phones, Americans have evolved into a commuting and a multitasking society. Because we spend so much of our time driving, cars have become an extension of our homes, work places and even our identities. If we are not at home, work or school, we are most likely in the comfort of our cars, talking or texting on our cell phones while driving.

Even though people have become

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effective at doing multiple tasks simultaneously, there are limitations. Clearly, drivers who multitask are endangering not only their lives but also others’ lives. Recent research shows the danger of being on the cell phone while driving. According to psychologist Steve Yantis from the Johns Hopkins University, “when we turn our ‘listening knobs’ up, we inadvertently turn our ‘visual knobs’ down.” In other words, the choice to listen intently comes at

the expense of our ability to see clearly.

To decrease the risk of having road and highway collisions, many states have banned the use of cell phones while driving. However, it is not clear how these bans will work despite their wide popularity. Many drivers believe that there are times when they just have to engage in both activities. Banning cell phones while driving will stop some but not all drivers from using them, making it only a partial solution The Horace Mann Review | Vol. XX

Science & Tech. to a huge and serious problem. Some drivers will still choose to multitask, regardless of the law.

in a positive or negative way. For example, many public schools have made enormous investments in laptop com-

“bad” multitaskers?” We could develop our public transportation system so that it is equally capable and effective

Multitasking becomes a problem when its costs to the individual and to society outweighs its benefits.

Since everyone is constantly multitasking, it appears that we are naturally built for it. Although we may be designed to juggle simple tasks, Professor Yantis argues that we are not designed to juggle complex ones for a prolonged period of time. However, since we are obviously the same, we clearly differ in our abilities to multitask. Multitasking is not a problem for people who are good at it, whether they perform simple and unimportant tasks or complex and important tasks. Multitasking becomes a problem when its costs to the individual and to society outweighs it benefits. If people knew their limitations and acted accordingly, then only people who are capable of executing several tasks productively without adverse effects to themselves or society would multitask. But since people are often irrational and unaware of their own abilities, they often engage in simultaneous tasks that they cannot execute well and prove to be costly for everyone.

Researchers in cognitive science also argue that while older people multitask because they are bored, younger people multitask because they are continuously attracted to new information and technology.

Although new technology continues to change the way we access information and learn, it should not be used as an excuse for all multitasking behavior. New technology is just a tool like any other. And like everything else in life, we can use this new technology The Horace Mann Review | Issue 7

puters because they can provide students with an alternative way to access information, learn and do school work.

Unfortunately this investment does not guarantee that all students would necessarily access more information, learn more, or do better school work.

Furthermore, there are plenty of people who are not tech savvy yet multitask. They often rely on low-tech, comfortable devices or items. Since everyone multitasks differently, technology is not always the “mother” of all multitasking behavior. In fact, multitasking varies across individuals depending on their unique skills as well the tools they need to perform their specific tasks.

Given the now essential nature of cars and cell phones, we must ask, “How can we freely use both at the same time without having to sacrifice one for the other or worry about road collisions and traffic violations caused by

as our communication system and so that everyone can use their cell phones while going to work, shopping or visiting their friends without driving a car. This policy could make our streets safer from divers on cell phones and, in the process, improve our local economies and decrease our carbon footprint. It would not, however, guarantee that “bad” multitaskers would choose public transportation over their own cars to commute. Unless people change their perception of multitasking in general, multitasking issues associated with the use of cell phones while driving are here to stay whether we like it or not, even whether it is legal or not.

HMR

Freddynice

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Science & Tech.

Houston, We Have a Problem How NASA’s budget cuts hurt everyone.

by ashley gerber

G

iven the current state of the United States’ economy and its astronomical deficit, Congress has been forced to make budget cuts. President Obama recently proposed to cut the National Aeronautics and Space Administration’s (NASA’s) already reduced budget. At the moment, President Obama’s proposal appears to be a good idea; it would reduce the United States’ budget. You may be thinking, “NASA doesn’t affect me, why not reduce NASA funding?” While the proposal might seem like a good idea now, in the long run it will be more detrimental than beneficial. The proposal, in fact, poses two significant issues: 1. While the proposal does cut the federal budget, there is not guarantee that the saved money would be used in a more beneficial matter. In fact, the money could very well be “invested” in some unnecessary project, wasting the money. We must ask, “Where would the money go?”

2. NASA influences and greatly contributes to the U.S. NASA is accountable for many of the technological advances we have today.

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That being said, for those of you who believe NASA funding is an unnecessary expense, let’s imagine that all of NASA’s funding were completely stopped. The saved money could technically help reduce the deficit; in actuality, though, the money would minimally affect the multiple-trillion-dollar deficit. Furthermore, NASA has created many job opportunities in its various departments and in companies that manufacture resulting spin-off applications of NASA technology. Why eliminate even more jobs in an already shaky economy?

Additionally, NASA has influenced, much of the technology we use today.

Every year NASA publishes Spinoff, a document containing over 200 pages filled with an assortment of research and technology that “benefit society.” NASA’s Spinoff Brochure highlights important research and summarizes commercial technologies outlined in Spinoff and Space Shuttle Spinoff, a document containing contributions specifically from the Space Shuttle.

The Spinoff documents have contributed greatly to society. The important technological devices include artificial hearts, nanomaterials that have transformed hair-styling tools, and cra-

nial pressure monitors that use signalprocessing methods. NASA research has also produced innovations such as the Blended Winglets used on Boeing Planes. Winglet technology allows planes to consume less fuel, and so Boeing has saved billions of dollars. NASA has also enhanced military technology.

It created technology to detect chemicals when exploring distant planets; additionally, though, the device can be used by the military and other sectors of public safety to detect explosives.

These exemplify the way in which NASA technology has contributed to our society. Their research ahs affected industries spanning from health and medicine to consumer goods. Yet with inadequate funding these innovations would not be possible. Politicians should not sacrifice long-term benefits for shortterm goals, such as cutting this year’s federal budget.

NASA’s current level of funding should not be altered because NASA is beneficial and plays a large role in our society. NASA’s funding is not solely spent on space exploration, but it is also spent on research and technology that benefit the quality and standards of life we have in the United States of America. HMR

The Horace Mann Review | Vol. XX

Science & Tech.

What we owe to NASA...

apod.nasa

A lot of our technology stems from advances made

by NASA. If you wear ultraviolet-blocking sunglasses, you should thank NASA. If you eat preserved food, you should thank NASA. If you use aerogels to insulate your shoes, you should thank NASA. Pictured here are even more examples of technology that we owe to NASA..

Top right: Pathogen sensor.

Middle left: Artificial heart.

Middle right: Hair straightener with nanomaterials.

Bottom: Winglets, the upturned tips of the plane’s wings. earlywarninginc

medgadget

hugedeals

airlinerblog

The Horace Mann Review | Issue 7

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