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The New Spanish Housing Crisis

by Ferran Masip-Valls
Contributing Writer

Suppose you purchased a home on a loan in 2005 with an estimated value of $500,000. Fast forward to May 2013 and the home has been devalued to a measly $100,000. Yet, your monthly mortgage payments reflect the initial value of the home and you are no longer able to afford them due to unemployment. Eventually, you must approach the bank and hand over the keys of your apartment, accepting that you are now just another unemployed and homeless Spaniard, amongst hundreds of thousands. Sounds all too familiar for those in similar predicaments living throughout the Western world. According to the current Spanish banking system, after giving back the goods you mortgaged for the loan, you still must pay the remaining sum. For all the previous homeowners, this means the remainder of the “original” value back to the bank—plus interest. This is the all too common scene in Spain: unemployed, homeless, and owing hundreds of thousands to a bank that also owns your apartment.

A key factor in understanding the current housing crisis in Spain is to understand its history. This bubble, that began in 1985, became known as the “Spanish Miracle”: a process that placed a post-dictatorship country with a third world economy into the top ten economies in Europe over a few short years. However, with the bubble-burst in 2008, it became painfully clear that most of the “Spanish Miracle” was just smoke.

When the collapse of an economy is directly related to a basic need, there are always direct consequences for the general population. At the end of 2012, the Land Registry Information Service announced that an eviction happened every 15 minutes throughout Spain, which is outright alarming for a country with less than 50 million inhabitants. According to the National Institute of Statistics of Spain, the Spanish now boast 3.4 million empty houses, 13.7% of the total housing available.

Even after the damaging effects of the mortgage crisis, the Spanish banks continued to provide loans. One must understand that they too had their own assessment and taxation companies that allowed the banks to establish the prices for homes. In short, the banks were encouraging individuals to buy and invest beyond their means. Money has stopped flowing, unemployment has reached astronomic levels (27% in the overall population with 57% of youth unemployed) and the general Spanish population is struggling to pay the unrealistic mortgages. Common sense (and European law) states that when one cannot pay one’s mortgage, one must give the apartment or home that one bought to the bank that issued the loan. The debt is then paid. Nevertheless, in Spain, the banks thought differently.

This irregularity is attributed to the set-up of Spain’s political, legal, and economical forces having the same faces. CEOs and other figures inside the corporate and banking system were politicians beforehand, and vice versa. The same happens within the legal system. This leads to a lot of “friendships”: which in practical terms mean an astonishingly high level of corruption and impunity to certain individuals and private companies. All the while, one out of five Spaniards live below the poverty line.

April 13 occupation in Sabadell, Spain.

In response, a gathering of common people who want to take action against those unfair evictions and current circumstances came about: “Plataforma de Afectados por la Hipoteca” – “Platform of those Affected by the Mortgage” (PAH). It is neither politicized nor centralized and it does not have legal status or clear leadership. Separate groups in various cities have been able to gather more than 1.5 million signatures to change the mortgage laws to make evicted people debt-free after eviction. This is a group of dedicated people who advocate for rationally using the estimated 3.44 million empty homes and apartments, now owned by banks, as social rents. Further, the PAH engage in “escarche”: going to a prominent politician’s house who is related with the origin of this problem and putting protest stickers on his door while holding a small demonstration.

The absurdity of it all becomes strikingly clear when observing the People’s Party, who have held the majority in government since the crisis began, and their reactions to such “escarche” movements. This April, Maria Dolores de Cospedal, Secretary of the People’s Party, made accusations such as “escarche is pure Nazism,” “the People’s Party voters would rather go hungry before stopping to pay their mortgages.” Other People’s Party members have gone to the extent of relating the PAH to terrorist groups.

In the streets of Spain, evictions occur every day; however, so do social movements. For example, on April 13, the PAH occupied a brand new, but vacant, 40-apartment building in the city of Sabadell owned by Caixa Penedes (a Spanish bank). The PAH opened its doors to homeless families after employing a selection process to grant homes to those most in need. Shortly after opening its doors, the police arrived and the peaceful occupation came to a screeching halt through an irregular procedure. Initially, one of the PAH’s lawyers was there to provide representation and act as a mediator to smooth the process should the police arrive, and did so when it happened. Everything seemed to proceed as planned. The surprise arrived the following day when two of the PAH’s members learned that they were facing criminal charges. The police also charged the lawyer, a third party, with disobedience and resistance to the authority. The lawyer is now facing trial, with the police seeking to place her behind bars for six months to one year. In defense of the lawyer, stand the PAH members as well as other “formal” organizations such as the Lawyers Guild and the City Council of Sabadell. Housing is currently a pressing issue in Spain—with the unaffordable mortgages and high unemployment, one must question when this social crisis will transform into a mass revolt. On the other hand… Hey! It’s cheaper to buy a house now! So invest, invest, and invest! I’ll lend you the money, because, well, I’m telling you, it has to work, it’s perfect, and it can’t fail!

Then, one wonders, why people in Spain are not happy.

Ferran Masip-Valls is currently living and working in his native Spain. He is a part of the unemployed under 30 crowd, even after having worked on four continents and completed five university degrees. He most recently completed a MA from Teachers College – Columbia University.

Photos by Elia Gran.

May 6, 2013 1 comment

Asia Security Security and Conflict Technology The International Economy Uncategorized

The Wise Words of Sun Tzu: The Rise of China and the Changing World Order

written by thegeneration

by Akbar Khan
Contributing Writer

In the words of Sun Tzu, the ancient Chinese military tactician, “The supreme art of war is to subdue the enemy without fighting.” To some, this may seem an unattainable naivety, and yet for 800 years, the Zhou dynasty adopted Sun Tzu’s advice, resulting in its reputation as the longest-lasting imperial reign in Chinese history. In contrast, conflict in the West has embodied a different meaning, one that involves direct military engagement. But to Sun Tzu, conflict was just as much about perception, domestic unity, and indirect engagement as it was about actual warfare. In fact, what Sun Tzu was proposing was that the greatest victory is not the one that comes from physical battle–but the one achieved without military confrontation.

Beginning in the mid-19th century, the “Century of Humiliation” refers to an era of British and Japanese subjugation of China. In the mid-20th century, Mao Zedong ushered in a new period of communist revolution. These two time frames represent an era of foreign domination and poor economic development in China. However, the contemporary era has witnessed the re-emergence of Chinese leadership in East Asia. Some even speculate that the Chinese economy will soon rival the American economy, after more than two decades of United States international economic dominance while others dismiss China’s recent emergence as a short-lived phenomenon. Let’s take a closer look.

As the U.S. has become pre-occupied with fiscal hardship and overseas engagements, China has been rapidly, yet steadily, honing in on American economic prowess. Over the last two decades, China’s annual GDP growth has hovered around 10%. With an abundance of cheap labor, European and American companies have developed supply chains in China to reap the benefits of low production costs, transforming the country into the global manufacturing hub. Even high-end brand names like Armani employ Chinese manufacturing. Cliché as it is, “Made in China” is increasingly stamping itself on American consumer products.

Some economists have predicted that China’s growth rate is unsustainable. They suggest that China’s capital endowments will yield diminishing returns, and, as a result, China’s impressive growth will drop considerably. However, this is not expected to significantly slow Chinese growth for at least another decade. In fact, the International Monetary Fund predicts that in terms of purchasing power parity (PPP), China’s GDP will surpass America’s in 2016. PPP is measure that uses currency exchange rates to adjust for differences in prices between rich and poor countries. Even if Chinese growth slows from present rates, America’s economic advantage over China is shrinking.

Not convinced on China’s prospects? There’s more.

The Chinese government, in a rather brilliant maneuver, has created export quotas on its rare earth metals, which is surprising considering China wholly dominates the market. One may wonder why Chinese leaders have pursued this policy. By limiting its own output of rare earth materials, China is creating incentives for foreign businesses to relocate to China in order to get around the quota.

Still not convinced?

In 2006, the Pentagon confirmed that China successfully tested a ground-to-space laser to block U.S. satellite imagery. Reports on exactly which satellite was targeted are difficult to discover, perhaps because the event is not something the American media are eager to reveal. In a report by Defense News, the National Reconnaissance Office Director, Donald Kerr, admitted that China had the technological capability to affect U.S. satellites. This revelation demonstrates the increasing technological capacity of China but the incident signals a more profound implication–China has stepped on America’s toes without repercussions.

China is increasingly doing as it pleases: trading weapons for oil to Iran, violating environmental restrictions, trading with North Korea, and keeping foreign imports out of its borders. Were China a weaker nation, the U.S. would be able to put much more pressure on China to cooperate. However, as a result of the extensive U.S. trade deficit, China owns over a trillion dollars of American debt. This gives China leverage over the U.S. economy in being a creditor to the United States.

China has shown it has the potential, the ingenuity, the technology, and the swagger–a seemingly complete package. But, the one serious disadvantage for China with respect to the U.S. comes down to raw, material capability. According to the World Bank, America consistently spends above $600 billion on its defense budget while China spends over $100 billion. The U.S. GDP is approximately $14 trillion; China’s GDP is about half of the U.S. GDP.

Yet, consulting the timeless advice of our old friend Sun Tzu in his military guidebook The Art of War, we come to realize that material assets are not everything. Rather, strategic, non-violent tactics are the most effective method for combating opponents. In a world with strong international peace agencies, increasing globalization and an implicit fear of nuclear holocaust, direct military engagement between major powers is unlikely; this means that China may be able to rival America without ever having to fire a single bullet. Now that is a victory Sun Tzu would be proud of.

Fact and Figures from the World Bank, The Economist, and Bloomberg Business.

Akbar Khan is a third-year Political Science student with a minor in Global Studies. He is an intern at the Burkle Center for International Relations.

April 29, 2013 0 comment

Asia Featured The International Economy Uncategorized Women's Rights

China’s Housing Market: It’s More Than Just a Bubble

written by thegeneration

By Tina Kim
Editor

Often hailed as the economic spotlight of the world, China has enjoyed its robust growth in manufacturing, waves of foreign investments, and increasing economic power. In recent months the media have been covering stories indicating a looming housing bubble threatening to stagnate the growth of China’s economy. Reports have highlighted China’s high housing prices, millions of vacant apartments, and tax measures from the government to contain the housing bubble. One of the most striking examples has been “ghost cities,” entire developments of luxury apartments and high-end shopping malls completely empty of residents. Meanwhile, housing prices have supposedly skyrocketed while real estate development has stalled—allowing construction, steel and cement production, and furniture and interior manufacturing to come to a halt. Will China’s rapid urbanization and growth finally come to an end?

UCLA Professor of Urban Planning Paavo Monkkonen says a housing bubble is not the right way to frame China’s current housing market. Although high housing prices may be the case for large cities such as Shanghai or Beijing, there are lower prices in areas where there is not as much economic activity. Similar to the U.S. and elsewhere, the high prices are relative to the location: the closer to the hub of the city, the more expensive, and the farther away, the cheaper. Rather than high housing prices, limited investment opportunities and income inequality are greater explanations for unaffordable housing.

China is generally a “savings” oriented nation and has one of the highest savings rates in the world. According to Forbes, this fact may reflect the cultural preference for sons; “about half of the increase in the savings rate of the last 25 years can be attributed to the rise in the sex ratio imbalance.” One hundred and twenty-two boys are born for every 100 girls today, which means one of five Chinese men will not marry. As a result, men have tried to become more “competitive” bachelors by increasing their savings and owning an apartment.

However, there is constant insecurity from the cost of health care, education, and age-old pensions that may change in the future despite these savings. The natural reaction would be to invest one’s earnings. But for an individual in China’s middle and working class, there are very limited options. The government sets interest rates for banks, which yield very little return. As a result, individuals have turned to buying second or third apartments in order to secure their future. However, as more people began investing in real estate, prices have risen. In response, the Chinese government issued a 20% capital gains tax on sales of second homes in Shanghai (and later throughout the country) to discourage real estate investment and dampen fears of a housing bubble.

Interestingly, many couples have gone as far as divorcing to circumvent the tax. While remaining divorced on paper, couples would live as a married couple to buy a second home. But this does not fully explain why individuals would invest in developments of ghost cities, where there are no tenants or returns on investment, or pay for infrastructure like a new subway or terminal, where there are no people.

Monkkonen, who has taught at the University of Hong Kong, explains that ten years ago, this same phenomenon occurred. Local Chinese governments in the past built massive terminals, roads, high-speed railways and other infrastructure at the edges of cities. For a few years, these areas would remain empty, but ten years later, people would eventually occupy to a point where the government needed to build more.

People from rural areas moving to cities have primarily fueled this expansion. At the end of 2011, 691 million people were living in urban areas and about 657 million were still left in the rural areas. With a large supply of rural migrants, the expanding infrastructure and ghost cities are literally developments years ahead of their time, waiting for these people to fill the streets and sustain economic growth. However, at some point, China will run out of rural migrants moving to cities.

“So far everything has been about growth,” Monkkonen explains. “But eventually the expansion is going to stop and the whole way that cities get money is going to disappear or get very limited. They have to learn new ways to get money or else there’s going to be a huge disaster.”

The new property taxes, therefore, may be a transition for local governments to obtain new sources of revenue other than through expanding cities. Moreover, a new wave of tax reforms may also indicate a greater and ubiquitous problem in China’s economy: income inequality.

The gap between rural farmers and the rural elite has contributed greatly to this income gap. According to the New York Times, half of China’s 1.3 billion people live on incomes “less than a third of those in cities,” but “many outside analysts say [income inequality] has actually gotten worse, making China among the world’s most unequal societies.” New tax reforms and taxes are thus attempting to bring greater access to social programs to the poor and elderly. China’s new rural pension has added over 240 million people since 2009 and in 2011 over 55% of adults had pensions. However, China’s funding for pensions and the overall welfare system has been drastically underfunded. In some rural areas, pensions are as low as 55 yuan (about $8.75) per month.

“Welfare spending has been inadequate, amounting to about half the level of comparable middle-income countries,” as stated in the Wall Street Journal. In addition, there are more than 200 million migrant workers in cities who are systematically blocked from obtaining social services and jobs (despite cities’ high dependence on rural migration). This system, called Hukou, continues to divide income levels between the rural and urban people. Moreover, as rural migration continues and urban populations expand, the issue of affordable housing has become an increasing problem.

In Beijing, 2 million people of its 20 million population live in apartment-style bomb shelters underground. These are informal markets, with landlords and advertisement in websites for people attempting to find affordable housing in the city. The 2 million individuals are drivers, waiters, students (estimated at 30%), and people of lower income. A new policy in Beijing has ordered the eventual eviction of these residents, sometimes referred to as the “rat population,” according to Professor of Urban Planning at MIT Annette Kim’s research in Beijing.

China has taken measures to address income inequality; however, social programs have been significantly underfunded and the rural migrants in cities have been marginalized from social programs and services. Moreover, a more fundamental method to address inequality would be to invest and improve the livelihood of the younger generation. Due to China’s one-child policy, there is a greater burden for only children to someday financially support and look after their elderly parents. According to Brookings, “In 2010, there were 116 million people aged 20 to 24 and by 2020, the number will fall by 20% to 94 million;” however, the number of the elderly, which is already greater than the youth population, is projected to increase to 240 million by 2020.

Greater access to affordable housing, more investment opportunities, and social programs for lower income and the elderly must occur to secure China’s future middle and working classes and maintain China’s growth. Sensational policies such as building glamorous infrastructure, tackling corruption scandals, and containing the “housing bubble” may be helpful to a degree. However, for China—and any other country for that matter—its future economic power lies within the productivity of the younger generation, not in its buildings. China’s youth is the country’s greatest asset and will be the country’s greatest impediment if its government fails to recognize them its most sustainable investment.

Facts and figures from Forbes, Wall Street Journal, New York Times, The Economist, Bloomberg, CBS News, a personal interview with UCLA Professor of Urban Planning Paavo Monkkonen, and a guest lecture by MIT Professor of Urban Planning Annette Kim.

April 18, 2013 8 comments

Europe Featured Security Security and Conflict Uncategorized Women's Rights

Thatcher’s gone

written by thegeneration

by Brad Rowe
Editor

Thatcher is gone.

Margaret Thatcher, former Prime Minister of Great Britain died April 8, 2013 at the age of 87. She was a controversial leader who had a major impact on not only her own country but on the course of international events as well.

Thatcher was a neoliberal, along with Reagan and German Chancellor Helmut Kohl. These “free marketeers” privatized businesses, cut taxes, broke unions and demonstrated military might. Because of her no-nonsense leadership style, a Soviet journalist dubbed her the “Iron Lady.”

What may be her most lasting legacy was her abiding campaign against communism. Her time in office perfectly coincided with the fall of the Soviet sphere of authority over the world. Her relationship with the U.S. was famous, and, as President Barack Obama stated, “She helped restore the confidence and pride that has always been the hallmark of Britain at its best.”

Even her long time adversary, former Soviet leader Mikhail Gorbachev credited her with helping to end the Cold War, noting that “relations were complicated sometimes, not always fair, but serious and responsible on both parts…We managed to achieve mutual understanding after all.” He also told Interfax news agency, “Thatcher was a politician whose words carried great weight,” calling her death “sad news”.

Many questioned whether she was justified in sending her navy halfway around the world to reclaim the Falkland Islands from the Argentinians who had invaded. For that bold move, she is revered as a hero to the English and Falklanders alike.

Thatcher-Falklands-Hulton Archive : Getty Images

British Troops enter the Falklands -Hulton Archive – Getty Images

This is not the case in Argentina. They remember her as a war criminal who ordered an Argentinian ship to be sunk during that conflict. That day, 323 lives were lost. In all, over 600 Argentineans would pass during this conflict.

The silver lining to Argentina’s humiliating loss of the Falklands was that the military junta dictatorship in power was discredited and soon fell from power. This brought about a split from decades of state terrorism against leftists and socialists and signaled the return to democratic rule in Argentina.

United States President Ronald Reagan, Thatcher’s strongest ally, had backed a peace plan that called for Britain to step back from controlling the Falklands. Thatcher hated this and let him know it. She could not stand the way Washington coddled the authoritarian regime in Buenos Aires. She was unwavering. Even during one of her less popular times she famously said, “the lady does not turn.”

She was Britain’s first female Prime Minister who became known for sweeping away social supports that have yet to return. She was a brash trailblazer that shattered glass ceilings for generations of UK women to come.

Thatcher-Workers-Central Press via Getty Images

Thatcher meets with workers early in political career – Central Press via Getty Images

Many of the mining labor organizers in northern England were reported to be “raising a drink” to toast her passing – remembrance of Thatcher shutting down unprofitable mines and crushing the unions during the Miners Strike of 1984-85.

Thatcher was also famously known for being the grocer’s daughter who became a conservative icon. Few can argue that she did not have a huge impact on Britain and on the world. In keeping with her simple ways, her funeral on April 17 will not be a full-state affair, and the service will be followed by a private cremation.

Even this procession will not be without controversy, though. In protest, opponents have planned to turn their backs en masse as procession passes by. Ironically, one could imagine the feisty Thatcher would have approved of this kind of unapologetic demonstration of free speech.

April 14, 2013 0 comment

Security and Conflict Society and Culture Uncategorized Women's Rights

The Roots of the Growing Incidences of Rape in India

written by thegeneration

Image Credit: Associated Press

By Trisha Parikh

India is the world’s largest democracy, with 1.2 billion people—approximately 48% are women. One of the most powerful politicians in India is a woman as well: Sonia Gandhi, the President of the Indian National Congress. Contrary to cultural expectations and external perceptions, a number of women have held positions of considerable power in the Indian government and community. Indira Gandhi was Prime Minister of India for four terms. Yet, even though many women in India have evaded the expectations of a historically male-dominated society, women in India do not share the same-equal status as men. While Indian laws do not discriminate based on gender, mainstream society believes and acts differently–and this prevailing mentality has made women in India increasingly vulnerable to sexual assault and harm.

The recent cases of brutal rape in India highlight the conflict that many Indian women and women all around the world continuously encounter. In December 2012, a 23-year-old female student was violently raped in New Delhi. In early January 2013, Indian police documented two more cases of rape—one in the state of Punjab and another in the state of Bihar. While these cases have been widespread in the media, the media fail to account for the numerous undocumented, unreported cases of rape that occur in India. Last year, there were 24,000 cases of rape reported in India, a number that has increased by 25% from the last six years. An article in the Washington Monthly suggests that this number reported seems to be abnormally low, “when you take into account that just under 85,000 rapes were reported in the United States in 2010. So India, with about four times the population of the U.S., has fewer than a third as many rapes reported.” Under this assumption, it would be safe to assume that the number of actual rapes occurring far surpasses 85,000.

Although the number of reported rape cases has increased in the last decade, there is little advancement in protection for women—particularly by the judicial system. In 2011, the National Crime Records Bureau calculated that out of the approximately 15,000 rape cases that made it to court, only 26.4% of them were convicted. This means that the majority of the criminals are acquitted or not even tried for their crimes, which has two implications: first, many criminals are not being held responsible for their actions and second, if sex criminals are not convicted and punished, there is no form of deterrence for future crimes.

The general perception in society is that as a country develops and grows economically, it becomes more modern and progressive. However, as India grows and emerges as one of the top developing countries in the world, as it educates and employs a greater percentage of women, the perception of women and protection for women’s rights remain relatively unchanged. India’s President, Pranab Mukherjee, stated that “the brutal rape and murder of a young woman, a woman who was a symbol of all that new India strives to be, has left our hearts empty and our minds in turmoil…when we brutalize a woman, we wound the soul of our civilization.” These cases have highlighted the gender equality gap that still exists in Indian society, even with modernization of society and passage of progressive laws.

Why does this gender gap exist? Seema Sirohi from Indian Council on Global Relations suggests that ” the patriarchal system is one [reason], a lack of policing is another, and general treatment of women is not equal to men, even though it may be so under the law.” In addition, despite how conservatively a woman dresses “you are still open season for men.” This statement echoes the response many politicians, police, and citizens have to the violent rape and death of the young woman and protests that followed it. Police not only use violent means to silence the peaceful student protests around the country, but many politicians demonstrated their insensitivity to the issue of rape and the status of women in the country. To quote a few:

The Indian President’s son, Abhijit Mukherjee, called women protestors “dented and painted,” in reference to their outfits and makeup, and stated that they go “from discos to demonstrations.”

In reference to the Chief Minister Mamata Banerjee’s announcement that rape victims would be offered compensation, a male Communist leader— in an effort to question her decision— asked: “What is your fee? If you are raped, what will be your fee?”

While these quotes demonstrate the mentality of the political elite in India, these attitudes still prevail amongst the general population. How can women in India expect reform if the people responsible for making the reforms, and the public in general, does not understand the grave nature of sexual crimes against women? Many politicians have taken a stance against the violence and vowed to push for stricter punishments and reforms that will improve safety for women. Yet, women are viewed as objects rather than as equals. Furthermore, corruption within the government often leads to many issues being ignored and overlooked, including punishments for crimes. While there is no easy solution to the issue of women and their image in India, deliverance of justice and societal attitudes towards women must be reformed.

As we have seen in many other countries, it has taken women decades to close the socioeconomic male-female gender gap. But legislative reform begins with social reform. There needs to be a change in the mentality that both men and women have about a woman’s role in society. On one end of the spectrum, girls and women in India must continue to raise awareness of their struggles and protest in a traditionally male-dominated society. Both men and women must also fight for protection and equal status. At the other end, the female politicians in the government have to take an active and strong stance against crimes against women. In the face of brutal opposition from more regressive politicians, they must prioritize this issue, which affects almost half the Indian population and make compromises in their personal political agendas. If attitudes towards women at the higher levels of government change, it can have a trickledown effect. A change in the attitude towards women in combination with a social movement has great potential to bring change.

The young woman’s brutal rape and death stand as a representation what victims of rape endure—through the social and political system that is currently in place. Any hope of reform, protection, and safety will require the collective efforts of all people in the Indian society, primarily by changing the mentality of the population as well as a reformed and less corrupt system of justice that does not bend the law for criminals.

Figures obtained from Al Jazeera, the New York Times, the Times of India, World Bank, and Wall Street Journal.

Image credit: Associated Press

Trisha Parikh is a fourth year Economics and Political Science double major. She is a co-editor at the Generation.

February 4, 2013 5 comments

Security and Conflict The International Economy UCLA and the World Uncategorized

Europe in Crisis: Bolt from the Blue?

written by thegeneration

by Brad Rowe

I had the pleasure of attending a UCLA Center for European and Eurasian Studies (CEES) book talk with author Ivan Berend of the UCLA History Department. He invited discussant Stefan Biedermann, Deputy Consul General of Germany in Los Angeles to join him.

Berend’s book Europe in Crisis: Bolt from the Blue? described the history of the present financial crisis in Europe. He offers some policy and economic prescriptions to help the European Union emerge from the crisis with strength, peace and dignity.

HISTORY

Berend starts by referencing a Joseph E. Stiglitz quote which states that the financial crisis was “made in the U.S.” Berend disagrees. He argues that despite the prevailing wisdom that says the crisis was borne of Wall Street, indeed ten of the eleven European Union countries caused their own crisis.

Specifically, Mr. Berend feels that, in the lead up to 2008: Iceland had relied on a system of irresponsible banking, Greece was engaged in chronic irresponsible government spending, and Ireland was feverishly caught up in reckless consumer spending. Britain, Spain, Portugal, Hungary, Latvia and Romania he argues were similarly adrift.

He backs his statement regarding Greece by citing their national retirement ages, in some cases as young as 48 years. A perhaps telling public spending gaffe during the 2004 Olympics allowed a $2.5 billion construction budget balloon to over $10 billion. When put into context with the widespread abject poverty so many Greeks are living in today, this opulence seems absurd.

GLOBAL CONNECTIVITY AND ARROGANCE

Connecting the European financial crisis to the global one, Berend gives the Lehman Brothers collapse and ensuing Wall Street panic credit for freezing international liquidity flows. This triggered a financial collapse, which in turn triggered the recession where the “real economy”–like industry, agriculture and the service sector–faltered.

An oddity among the twelve nations was Poland, which escaped the global crisis unscathed. This was not the case for most European countries, which ended up with a 14% reduction in Gross Domestic Product (GDP). Since the beginning of the recession, six countries were bailed out. Complete repayment seems unlikely as these sovereign are currently only able to pay the interest on these loans.

So, what happened? First, globalization spread everywhere with its international interlinked finances. Secondly, neoliberal economics happened. Proponents of this economic ideology had declared victory over Keynesian economics and claimed there would be no more economic cycles.

As Ben Bernanke had called it, this was the “Age of Great Moderation.” Robert Lucas, a Nobel Laureate from the Chicago School of Economics, had trumpeted the trust of markets and skepticism about government. Fredrich Hejek said “Stock regulation and intervention is bad, it is a straight jacket on business. It is the road to serfdom.”

Berend clarifies that European economic shifts exacerbated the problem. There was a 27% drop in industrial employment. In fact, finance, insurance, and real estate (or F.I.R.E.) were bigger sectors of employment than manufacturing and had grown six times faster than industry, agriculture and services.

The other contributing culprit to the financial collapse was the destruction of enforced regulation. With waves of neoliberalism in America, England and Germany, regulation had been essentially eliminated from the 1980s onwards. Champions of deregulation were Reagan, Thatcher, and Chancellor Kohl.

Hedge funds became gambling institutions that won regardless of whether investors won or lost. Consequently, fund managers became eager to attract risky high yield investments. At the European Union’s (EU) very inception, Berend refers to the Euro currency and economy as a “birth defect” in that there was monetary unification without fiscal union. This was a problem because every country was totally different, each with its own fiscal traditions, taxation, and government policy. Greece and Italy had massive non-taxable informal “black economies”. Systemic tax evasion defined Greece and Italy as well during this period. Berend says this was not so for the core countries of the EU like Germany and France.

PRESCRIPTIONS

Berend suggests that the solution to the crisis is to reintroduce regulation and supra-national control. He envisions a “European System of Financial Supervision” for early warning.

Furthermore, he feels austerity measures integrated with growth policies should be a part of bringing Europe back to financial health. To reign in the peripheral countries like Greece and Italy, Berend prescribes a limit to credit extensions. He goes on to say that any level of credit will be maxed out and spent regardless of ability to pay the loans back.

For the long-term, Berend suggested that quasi fiscal unification could be healthy. His suggestion calls for a movement toward federalization with all budget policy being centrally guided.

Finally, Berend calls on the Euro zone to set up a two-tier union in which some more fiscally solid countries join the “fast track” and others participate at a level commensurate to their stability.

FORECAST

Berend’s forecast warns of a continuing crisis this upcoming year. He thinks Greece and Portugal could possibly default on their debts and depart from the EU. Additionally, he signaled that Eurosceptic Britain and Nationalist Hungary may deliberately leave the union. Berend calls Britain the “inside outsider.” They have maintained that the EU capital of Brussels “…cannot dictate to us. We want to be independent.”　

GERMAN REDEFINITION

To all of this: Stefan Biedermann, Deputy Consul General of Germany in Los Angeles, departed from Berend’s analysis by saying the European Union is not financial. “It is a vision beyond war, rage and violence…it is built on a rock of friendship between Germany and France.”

He stated that war between those two historical adversaries today is unthinkable and warned against today’s youth taking for granted the peace and stability that the EU provides. He says “they don’t realize the thin ice we are moving on.”

Biedermann predicts that the EU will emerge stronger out of this crisis. He hopes that the experiment of bringing a continent together in peace will work. The “United States of Europe” is his vision for peace in the future.

Brad Rowe is a second year Masters In Public Policy candidate at UCLA focusing in Education, Crime and International Affairs. Rowe is also a Rosenfield Fellow working on Educational Policy and Programs for the United Way of Greater Los Angeles.

January 24, 2013 0 comment

Africa Security and Conflict Uncategorized

Luis Moreno-Ocampo

written by James Walker

Students of International Relations are often asked to look at the evolutionary changes taking place in the global system. Challenges to the traditional Westphalian order, in particular in regards to notions of national sovereignty, are often presented as indicative of the “Era of Globalization.” Many of these challenges are connected to the rise of supranational institutions. The ongoing tragedy taking place in Darfur or the popular revolutions of the Arab Spring are two examples of the increasing visibility of regional events onto the global agenda. These shifts demonstrate a movement towards not only greater visibility, but also a call for greater accountability.

The development of the modern Human Rights agenda, the enacting of the “Responsibility to Protect” (R2P) as a signature doctrine of international society, and the creation of the International Criminal Court (ICC) as a standing tribunal to sit in judgment over the worst crimes against humanity, all indicate the significance of accountability. Like all ideals, it requires both the dedicated efforts of civil society and of the individual.

Luis Moreno-Ocampo is a long-term veteran in the fight for global justice. As an Argentinian lawyer, he was instrumental in prosecuting the leaders of the country’s Military Junta for their horrific human rights abuses during the 1970s and 80s. After a successful private practice that specialized in human rights cases, Mr. Moreno-Ocampo was tapped to take on the politically charged and highly sensitive role of Chief Prosecutor for the newly inaugurated International Criminal Court. He served in that capacity throughout the first decade of the court’s existence, instigating several high profile prosecutions, and ultimately securing the court’s first completed trial and conviction in 2012: Thomas Lubanga, a Congalese warlord, who was sentenced to 14 years for the crime of conscripting child soldiers.

As Chief Prosecutor, Mr. Moreno-Ocampo was subject to some harsh criticism. The nature and impartiality of the court, along with the very concept of international justice, has been questioned by numerous players on the global stage. The United States has refused to ratify the Rome Statute that governs the ICC, as have a number of other sovereign states. Some have questioned why the ICC has so far only issued charges against African leaders, indicating that the court may represent Western rather than global notions of justice. Mr. Moreno-Ocampo has acted as a kind of lightening rod for the court in this regard. As a visible and outspoken proponent of international justice, he has also been placed at the heart of the debate over whether human rights abusers should be given amnesty in order to secure peace. For Mr. Moreno-Ocampo, the choice is a false one – in his opinion, there can be no peace without justice.

In November of 2012, Mr. Moreno-Ocampo was in Los Angeles to receive an award from Jewish World Watch, in recognition of his “determination to forge sustainable peace in conflict and post conflict situations through the pursuit of justice.” Generation editors Brad Rowe and James Walker were fortunate enough to have a private interview with Mr. Moreno-Ocampo, and to ask him a number of questions concerning the nature of his work, the effect the ICC has had on the global stage, and his vision for the future of global justice. This interview offers a fascinating glimpse into the philosophy of one of the leading proponents of human rights in the world today.

Photo credit: The London Evening Post Editorial Team

Photo credit: Clarín: September 19, 1985. Copyright of this photography registered in Argentina has expired

January 25, 2013 0 comment

Africa Middle East Security and Conflict Society and Culture Uncategorized

Understanding the American Image in the Middle East: A Conversation with Political Activists from North Africa and the Middle East

written by thegeneration

By: Tina Kim, Trisha Parikh, & Sara Pilgreen

As news reports poured in everyday, detailing the fighting between Syrian rebel forces, the Israel and Palestine conflict, and the bloodshed, it all came to a screeching reality on November 5^th. We had the privilege of interviewing 16 representatives of North African and Middle Eastern countries who were part of an international visitor leadership program sponsored by the U.S. Department of State. This was an eye-opening experience. As we listened to what the young political leaders and activists had to say, we were captivated. The room was filled with disagreements, a mixture of perspectives, and a palpable underlying energy. Rarely are representatives from these various countries together in one room, in a feeling of shared empathy.

Americans have long heard their leaders refer to the Middle East with rhetoric such as “bring our troops home” and the “war on terrorism.” Through these representations in the media, many Americans single out the Iraq and Afghanistan Wars and the September 11 attacks when thinking about the Middle East. Rarely do we evaluate the immense diversity and differential stances individual countries in the Middle East have with the United States and with each other. We listen to reports of what one leader said to another, or what foreign policy stance the U.S. will take, or the death toll of a revolution or war. But how often do we hear about how an event affects the people of these countries, what history they have with one another, and what that event will mean for them and their future?

This interview allowed us to realize the encapsulated and largely monolithic view we have of the Middle East. Contrary to the image of the Middle East that is plagued by violence and destruction, the 16 delegates focused on diplomacy, conflict settlements, peaceful processes, and methods of democracy to employ in the future. It also became apparent that the Arab world had been closely following U.S. politics and accurately understood Americans’ ignorance of the complexity of their region. As one Palestinian representative noted, “(The) greatest deception for Palestinians, generally Arabs, but at least for Palestinians is to know that foreign policy is not important inside America for elections. Because back home the U.S. is very present at all levels, whether it is at the internal politics or the regional politics.”

During the interview, we asked the representatives whether the outcome of the U.S. presidential election would make a difference in their country. The answers to this question alone surprised us, and they revealed insider perceptions regarding U.S. bipartisanship and leadership styles.

The Palestinian representative articulated the popular perception that party affiliation (Republican or Democrat) did not make a difference in foreign policy. Rather it was more about the “person and President Obama, when he came 4 years ago, [and] placed the bar very high” with his speech in Cairo. The representative also noted that many Palestinians have expressed “frustration now, coming out of that,” due to unaddressed promises and disappointed hopes.

In contrast, an Algerian representative stated that on a personal level, he wanted President Obama to win re-election because Algeria’s relationship with the U.S. “was based on combating terrorism and promoting human rights. President Obama is a symbol of how the United States went from slavery to having a black president.” The underlying preference in Algeria was for President Obama to be re-elected; however, for reasons that many Americans probably never consider, including Obama’s African heritage. They also considered his promises of peace and diplomacy as important factors.

The Moroccan participant expressed his view quite differently, stating that the country had “an excellent historical relationship with the United States of America, with both parties—Republicans and Democrats. Morocco was the first country in the world to accept the United States as a country when it was first established.” It was unexpected and surprising to hear a representative base the country’s relationship with the U.S. on a historical fact unknown to many Americans. Our ignorance of such important information then poses a question: how many other facts and issues – that we are unaware of – are presently impacting our relationships with other countries?

Listening to the delegation, we were struck by the diversity of lenses employed by these different countries in their assessment of the United States. The unique cultures, varying issues, and different political systems with fluctuating degrees of freedoms could not be summed up by the simple term the “Arab world,” a term so liberally used by the western media. The unique history and cultural environments caused individual countries in Middle East to react and participate differently in response to the Arab Spring and other recent events. Therefore, when a country such as ours intervenes in internal affairs of Middle Eastern countries, have we stressed the need for differentiated U.S. policy approached in the region and the repercussions of not doing so? What would the image we project in these countries and how would our relations with them change? For instance, the United States has historically supported civilian protests for greater democracy. However, even though these countries with protests and revolutions may gain greater freedom, the representatives highlighted that this was not the case for some of the neighboring countries.

A Lebanese representative stated that, “There was a lot of security and political pressure and oppression and those people that the U.S. supported (came) into power…Before these revolutions, we had political and security oppression but now after we have political, security, and also religious oppression.” Another representative from Saudi Arabia also highlighted an unforeseen development that, “oppression has become more severe and armed than before. People are using weapons. Maybe they are afraid that the revolution in Bahrain will happen in Saudi Arabia.” The oppression even extends to individuals who are taken in “custody because of their opinions, not political opinions, their regular opinions.”

Moreover, what is even more striking is the lack of U.S. response to the oppression. How can a country that prides itself on expanding individual freedoms possibly permit an ally such as Saudi Arabia to suppress the freedom of its citizens? If the U.S. promotes freedom and peace within its own borders, it should use foreign policy as a tool to employ these ideals beyond its borders as well.

While it became clear that the “one size fits all” view does not describe the Arab world, the interview also helped us understand the role U.S. foreign policy plays in creating the “American” image in the Middle East. The American media, scholarly articles, and public opinion polls have all established that the U.S. is not gaining popular support in the region. Yet, listening to the representatives shed light on how our foreign policy has created this negative trend, forced us to view our foreign policy priorities in a new perspective. While U.S. policies have ranged from providing humanitarian aid to engaging in full-scale war, the people of the Arab world, not surprisingly, are most affected by the indirect costs that war has imposed on them. These costs range from the increase violent political oppression to decreases in freedom of speech.

The impact is that these unanticipated costs hinder the facilitation of conflict settlements and dialogue among the people of these countries, resulting in a negative portrayal of America. Even though our intentions are good, they are often lost in the damage and destruction that can be a byproduct of U.S. foreign policy. Civilians experience both emotional and physical pain, livelihoods are destroyed, and the American image is reduced to that of a destroyer or occupier. It comes as no surprise that when discussing the policies of the American president, there was a clear preference for the diplomacy of Obama over the war-oriented policies employed under the Bush Administration as well as Romney’s proposed foreign policy.

What struck us as interesting was that the representatives were very comfortable with assigning a black and white ideological distinction between the two candidates. As politically conscious individuals living in the U.S., we perhaps do not see our policies in such a dichotomous manner. As a delegate from Morocco pointed out, Obama’s diplomacy is “very calm and reassuring to the people in that region and it also calls for having dialogue.” Diplomacy is not only a more important and tactical action, but it also resonates well across the region and this would strengthen U.S.-Arab relations. Thus, it is vital to remember that a nuanced assessment, by Americans, of policies employed overseas can give us great insight into how the U.S. image is constructed in the Arab world.

The Palestinian delegate shared this sentiment in his discussion of U.S. policy towards Israel and Palestine. He remarked that Obama’s “present[ing] himself as promoting dialogue over war” is a driving force in the Palestinian people’s support for Obama. He strongly believed that “if you want to see a peaceful political process between Palestinians and Israelis…it would be [in] our interest if President Obama gets re-elected.” Once again, there is obvious support for a leader associated with “peace” and a “peace settlement” processes.

When understanding how diplomacy and war in the Arab world shape the image of America, the U.S. should keep the following in mind: the Moroccan representative pointed out that under the presidencies of “George Bush Jr. and George Bush Senior…they tried to resolve many of the problems around the world with the language of war and not the language of peace.” This one statement resonated in the room, among the representatives and among the three of us. Although it is easier said than done, what the U.S. government needs to do in order to ensure the success of American foreign policy is to actively pursue peace. “The language of peace” will allow the American government and population to win the “hearts and minds” of the Arab people, and to achieve its greater goals in the region. With Obama’s reelection, the President now has another chance to utilize “the language of peace” through changes in U.S. foreign policy. As these policies continue to affect the Arab people’s lives, they will remember Obama’s promises and watch for developments that can restore relations between our two worlds. However, until American policymakers adopt this stand and actively uphold their promises, it is unlikely that the U.S. can succeed in its campaigns to win the support of the Arab population or improve the “American” image around the world.

On a more personal level, discussing these questions with the delegation gave us a more nuanced understanding of countries in the North African and Middle East region. Just as the participants had a different experience upon interacting with Americans during their trip to the U.S., during which they realized that their views of Americans were incorrect, our prior views of political activists in the Arab world changed. This firsthand experience provided us with a set of views that are often buried in the media, but speak more truth on how each individual is affected by and deserves to be differentiated in U.S. foreign policy. It was an insightful conversation that has already affected the way we understand and interpret the Arab world in various contexts—in the media, in politics, and in the classroom.

Tina Kim, Trisha Parikh, and Sara Pilgreen are co-editors and writers for The Generation.

December 3, 2012 0 comment

Africa Middle East Security and Conflict Society and Culture Terrorism Uncategorized

Terrorist Coup Threatens to Destroy Mali

written by thegeneration

By Christine Smith
Co-Editor

Recently, Al Qaeda-affiliated militants have created political chaos in the previously stable West African country of Mali by successfully gaining control of the country through a coup. The United Nations passed a resolution roughly one month ago on October 12th stating that the militants renounce power in Mali within 45 days. Little positive progress, however, has been made. Several international actors, including the United States, France, and Algeria, have been in discussion about the growing necessity for international action. While losing the country to Al Qaeda-linked militants is an obvious security threat both to surrounding countries and to the entire international community, the militants’ presence is significantly impacting Mali’s economy and culture as well.

In an effort to replace Mali’s Africanized version of Islam with the traditional version that is more commonly seen throughout the Middle East, the Islamic militants have decided to ban all forms of secular music and all things “un-Islamic” in the northern part of the country. As a result, the militants in the region have dealt a major blow to Mali’s music and tourism industries. This seemingly minor incident has in reality caused major repercussions throughout the country.

A country that has a rich history of music that includes the singer Salif Keita, the late guitarist Ali Farka Toure, and the legendary kora player Toumani Diabete, Mali has created a vibrant tourism industry out of the legendary music the country produces. Further, Mali has made its mark in the international community as one of the premier music destinations on the planet. Western artists, including U2’s Bono and the British band Blur’s Damon Albarn, have flocked to Mali to collaborate with Malian musicians and immerse themselves in Mali’s rich music scene.

Banning secular music in northern Mali, therefore, has amounted to a significant economic setback to the region. Because of the ban, northern Malian music has been forced underground or out of the country and into neighboring states, resulting in the largest income-producing industry in Mali being eliminated. Malian music, in fact, accounted for two to four percent of the country’s gross domestic product (GDP) in 2000 and is believed to have an even greater impact on Mali’s current GDP. An even bigger economic consequence of banning secular music, however, is the impact it will have on the developing economy. As the country has demonstrated in recent years, the impact of culture on economic development in Mali is huge. Music and other profitable aspects of Malian culture have created more jobs and economic markets both for the state and for its citizens, which consequently has helped grow the national economy. Removing music from Mali’s economy is therefore shaping up to be a huge financial blow to one of the ten poorest nations in the world.

Without secular music, Malians have also lost their ability to publicly express their dissatisfaction with the current political situation. The loss of the traditional way of vocalizing political disapproval, albeit in an indirect manner through their secular music, however, reaches beyond politics. By banning secular music, the Islamic militants have created a cultural war against Malians and their identities. After all, it can only benefit the militants to attack and forcefully remove a culture they view as “un-Islamic.” Consequently, Malians are currently living in silence or facing arrest and possible death if they choose to voice political objections.

A continuation of the militants’ policies will certainly lead to a drastically different Mali than the one that has existed up until the March coup. Not only will the country’s culture significantly change and its economy weaken, but Malians will also continue to lack their pre-coup right to express their opinions and act as the democracy that they have been since 1992. It is essential that the international community follows through on its desire to remove the Islamic militants from Mali. Doing so will both benefit Malians and protect their rights and culture as well as benefit the international community and its security.

Facts obtained from The New York Times, The Guardian, The Jerusalem Post, and The Independent.

Christine Smith recently received her B.A. in Political Science and two minors in African Studies and Anthropology from Boston University. She is currently an editor for The Generation as well as a first year M.A. in African Studies student at UCLA with a focus on human rights issues in East Africa.

November 25, 2012 4 comments

Security and Conflict The International Economy Uncategorized

Spain’s Invisible State of Social Turmoil

written by thegeneration

October 15, 2011 in Barcelona, Spain. Photo by Ferran Masip-Valls.

by Ferran Masip–Valls
Contributing Writer

Welcome to Spain, home of siestas, fiesta, sangria and paella; please enjoy our nice weather and good food. Why not? Walking throughout the streets of Madrid they appear as lively places full of people and energy. It is awfully surprising how non-obvious the current situation is. Demonstrations, strikes, and riots have been happening every week somewhere within the country, and have been for quite some time. The current state of disbelief, of no hope in our democracy, these are punctual things, a punctual and self-contained discomfort, and one that an outsider may never notice. One could say that it all started with the 2011 Spanish protests of Spain’s economic crisis, also known as the 15M movement.

Throughout 2011, it became obvious that we were living in some sort of police state. If we understand a police state as a place where the law is used to the extent that it becomes repressive – control through fear of the forces of the law – that it limits the freedoms inherited from the transition to the democracy, then that was the state of 2011.

One must come to the understanding that demonstrations in Spain are followed by hundreds of thousands of protesters, by millions in some cities. With only 45 million inhabitants, reaching a million in any city’s demonstration is not a small achievement. The average age in a given demonstration falls around 40 years of age, including families with children or elders. In other words, the demonstrators are not some random punks but are representative of the average population who are simply saying, “We’ve had enough.” Enough.

And by enough, some people refer to the fallacy, the open insult to democracy. The right-wing “People’s Party,” now in the government, is literally doing the opposite of what its agenda campaigned on and promised (protecting or lowering taxes, preserving social aid, etc. during elections – what people voted for. One could take the current state of affairs, fact check each point of what was promised and what has happened, and it literally comes out as the opposite.

By enough, some others refer to the statistics. As Sabino Cuadra, a member of the Congress stated during one of its sessions, between 1994 and 2007, or the “high development” years in Spain, real salaries rose by only 1.9% (without considering inflation), the average pension rose by only 16.3% and unemployment benefits decreased by 16%. Meanwhile, the gross benefit of major companies rose to 50%, shares and other activities rose to 129% and real estate property to 175%. Therefore, the real growth wasn’t applied to the average population. And that money left the country, which takes us to the next point.

By enough, still others may refer to taxes and financial cuts. Spain is the leader in Europe in tax evasion, doubling the average. According to the Association of Technicians of the Spanish Treasury Department, big companies and wealthy families have taken advantage of these loopholes making up 72% of tax evasion, while 80% of tax inspection disproportionately focuses on workers, small companies, and freelancers. The austerity plans affect the general population, elderly, public health, education, VAT, funds for research and small business, all while new laws are being made to protect big wealth.

Enough of it. Enough of the more than 20% unemployment (50% of unemployment for youth), of having a bizarre mockery of what politics and democracy should be, of being ashamed of how it is all being dealt with, of being the average citizen paying for massive bank bankruptcies and massive private investments. The average citizens of Spain have had enough.

Can the big and wealthy continue to wonder why Spain is on the streets? Can the government continue its misrepresentations?

But now, the police state has disappeared. We have reached a point that dates back to September 25th in Madrid, where a subtle change was too obvious to be ignored. Several hundreds of thousands (once again, families and elders joined together) surrounded the Congress with beautiful and neat signs. “No” was the only message, some even with a “Not Like That” as a slogan. Clean and clear.

After 9:30pm, officially 1,800 anti-riots took place (and civilian videos show how hundreds of others were infiltrated between the demonstrators), with their armored vans and rubber bullets, and started shooting—in the streets, inside cafes and bars, in corners. Apart from the exponential increase of police violence, what changed this time was that after everything was “dispersed,” the police kept going for hours. As an example, the images of how they arrived hours after to Atocha (the biggest station in Madrid), which is nearly a mile away, are horrific. The police started randomly shooting rubber bullets and beating pedestrians and passengers as they randomly arrested citizens, all the while breaking journalists’ cameras. Situations like these relate more to a militarized state. The Government does not need to use the law to expand fear – they use force.

A friend of mine told me “I will keep going, it’s my right to demonstrate. Before, I was scared to end up in jail, to wake up in prison for some months… Now sometimes I literally fear for my life.”

But still, welcome to Spain. Enjoy our nice fiestas, sangrias and paellas – because you won’t see the rest; the sweet and sour mixture between desperation and anger is not obvious enough yet, in the day by day, on the streets.

October 26, 2012 1 comment

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