The Islamic Brigades II.

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In 2007, more than twenty men—most from the large Somali immigrant community in Minneapolis–went to join Al Shabab, the Somali Islamist militia. Federal authorities launched an investigation. They ended up prosecuting eight men as facilitators and recruiters.

In recent years, eight young men from the Norwegian town of Frederikstad have gone to Syria. Norwegian authorities have investigated the role of an Islamist group called Prophet’s Umma for its role in recruiting jihadis and facilitating their movement toward the battlefront.

Investigating the recruiters and facilitators is important to the fight against radical Islamism. So, too, is trying to understand why some people are open to recruitment. There aren’t any good answers here so far. Mostly, there are just some anecdotes about human beings. Can we learn anything from looking at them?

Two friends from the same neighborhood in Minneapolis; high-school drops outs; in minor trouble with the law; converts to Islam; and soldiers of jihad.[1]

Troy Kastigar (1981-2009) went from being a funny, energetic, boundary-testing kid to smoking weed, drinking, and failing his high-school classes.[2] He dropped out of high school, later got a G.E.D., and worked fitfully between bouts of unemployment. He went back to school to become an X-Ray tech, but he was told that it would be difficult for him to get a job in the field because of his criminal record. His friend, Doug McCain, also dropped out of high school, then had some run-ins with the law over drugs, moving violations, and theft.

In about 2004, both men converted to Islam. There is a large Somali community in Minneapolis, so Islam presented itself more prominently there than in many other American cities. After a while, they moved beyond Islam to Islamism. In November 2008, Kastigar went to Kenya. He said he was going to study the Koran. In fact, he soon crossed the border to join Al Shabab. He was killed fighting with the group in September 2009. In 2009, Doug McCain moved to San Diego. He had family out there, he worked in restaurants, and he took some classes at a community college. In 2014 he went to Syria. In August 2014 he was killed fighting with ISIS.

At least one other man from the same social circle also traveled to Syria. Abdirahmaan Muhumed, worked at the airport from November 2001 to May 2011. At different times he worked at refueling planes and on cleaning crews. Acquaintances had seen him as a more secular than a religious man. He worked out a lot and played basketball. Then he started to become exercised over the fighting in Gaza and in Libya. Muslim people suffering under assault from Western powers. Muslim or not, Muhumed drank—and to excess—on some occasions. Drinking just enflamed him all the more on the issues. He went to Syria and died in the same fight as did Doug McCain.

The little town of Frederickstad, Norway, is south of Oslo. It is a more diverse place than one might expect of a small town. The Muslim community is largely made up of Somali refugees, but there also are immigrants from Algeria, Pakistan, Kurdistan, and Chechnya.[3]

The Chaib family came from Algeria to Frederickstad. Their son Abdullah (1989-2012) grew into a popular figure in his school and neighborhood. His ability at soccer enhanced a general “cool guy” demeanor.   At some point and by some means, Abdullah Chaib became committed to jihad. A then-radical Norwegian Muslim who visited Frederikstad recalled Chaib as “a real fanatic…[who] talked about jihad all the time.” In November 2012 Abdullah Chaib went to Syria. In December 2012 he died fighting there.

Chaib’s death in battle set an example for some other boys in the town. Among them was Adu Edelbijev. His parents came to Norway from Chechnya in 2002. He attended the same school as Chaib and, like Chaib, was a good athlete. He didn’t feel estranged from Norway, but his hopes to join the army were foiled by bad eyesight. He began to take religion seriously. By 2013 he had begun to prepare to go to Syria. He left in August 2013. In November 2014, he died while fighting with ISIS near Kobani.

Rebecca Sanchez Hammer was a Filipina who came to Norway and married a Norwegian who later died. They had a son, Torlief Sanchez Hammer. A group of goofy dopers used Torlief Hammer’s basement as a place to bake their heads. For several years, the police regularly broke up their parties and confiscated their drugs and pipes.

When, before he left for Syria, Adu Edelbijev lectured Torlief Hammer about his bad habits, the boy listened. Hammer converted to Islam, took the new first name Abdul, and suddenly stopped using drugs. His run-ins with the police ended, but his satisfaction with life did not improve. “”I have no friends, no job, nothing,” he told his mother. This did not cause him to reject Islam however. It only deepened his commitment. In December 2013, the young man took the road to Syria.

The parents of Samiullah Khan (1991- ) came from Pakistan to Norway, but did not prosper. His father murdered someone, did a stretch in prison, then accidentally killed someone else while driving drunk. This background left Khan feeling marked and excluded by native Norwegians and Pakistani immigrants. He went to fight in Syria, was wounded, returned to Norway, and was arrested for belonging to a terrorist organization.

It is easy to write off these people as failures who made foolish—and fatal–decisions. But is it possible that there foolish and fatal decision reflected an aspiration for a more satisfying life than what the larger societies in which they lived could offer?

A friend of Kastigar and McLean argued that “They just wanted to be a part of something. They were just trying to find something that just accepted them for who they were.” A friend of Abdirahman said that “He always wanted to be a freedom fighter, he always wanted to be a hero,” recalled a friend.

“None of them ever even mentioned religion when we knew them,” recalled one policeman speaking about the group around Torlief Hammer. “The only thing they had in common is that they did not function in society. But they wanted to be able to do something, to be good at something.” Torlief Hammer told his mother that “he wanted to fix himself after too much disco, too many girlfriends and too much smoking.”

In March 1940, George Orwell published a review of Adolf Hitler’s Mein Kampf. In it, Orwell argued that Hitler “has grasped the falsity of the hedonistic attitude to life. Nearly all western thought since the last war, certainly all “progressive” thought, has assumed tacitly that human beings desire nothing beyond ease, security and avoidance of pain. In such a view of life there is no room, for instance, for patriotism and the military virtues. The Socialist who finds his children playing with soldiers is usually upset, but he is never able to think of a substitute for the tin soldiers; tin pacifists somehow won’t do. Hitler, because in his own joyless mind he feels it with exceptional strength, knows that human beings don’t only want comfort, safety, short working-hours, hygiene, birth-control and, in general, common sense; they also, at least intermittently, want struggle and self-sacrifice, not to mention drums, flags and loyalty-parades. However they may be as economic theories, Fascism and Nazism are psychologically far sounder than any hedonistic conception of life.”[4]

As the United States lugubriously embarks on the election campaign of 2016, will any of the candidates offer voters “struggle and self-sacrifice”? Or will they promise “ease, security and avoidance of pain”? That is an easy question to answer. But what if there are a lot of people who would never consider radical Islam, yet still feel some longing for something more ennobling than the next entitlement or the next tax cut?

[1] Jack Healy, “For Jihad Recruits, a Pipeline From Minnesota to Militancy,” NYT, 7 September 2014.

[2] I wondered if these were signs of Depression. His mother describes him as having had a “sadness and a darkness” move into his life.

[3] Andrew Higgins, “A Norway Town And Its Pipeline to Jihad in Syria,” NYT, 5 April 2015.

[4] http://genius.com/George-orwell-review-of-mein-kampf-annotated

Libya Again.

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Libya was always something of a make-believe country. It really consists of tribes. Colonel Muammar al-Qaddafi employed guile and violence to rule the country for over forty years.[1] In Spring 2011 there were uprisings against the established powers in Tunisia, Egypt, and Syria.[2] The Obama administration imagined that a new “Springtime of the Peoples” had arrived. In Summer 2011, that “Arab Spring” reached Libya. The Libyan tyrant Qaddafi fought back and a blood-bath loomed. To forestall this (and an immense flight of refugees across the Mediterranean toward neighboring Italy[3]), in Fall 2011 an American-led coalition of NATO air forces bombed out of existence Qaddafi’s military forces. The rebels triumphed. Had there been any American–or British, or French, or even Italian–troops on the ground, they would have been welcomed with bouquets of flowers. However, there weren’t any foreign troops on the ground.

Instead, the Western powers wagered on a “national” government that represented no one. “We’re under no illusions,” said President Obama at the time. “Libya will travel a long and winding road to democracy.”[4] (In short, cue the “Wicked Witch of the East” in a burka.) Instead, the rebels were left to themselves to make the best of it. They made the worst of it. Regional and tribal militias proliferated, arming themselves from the huge stockpile of weapons that the Qaddafi regime had accumulated. In the West, “Libya Dawn” rallied the Islamists. Their gunmen seized control of the capital city, Tripoli.[5] In the East, “Dignity” rallied the anti-Islamists, many of them former supporters of the Qaddafi regime. Then the factions made contact with (or were pre-emptively contacted by) outside powers. Saudi Arabia and Egypt sought out “moderates.” Turkey and Qatar sought out “Islamists or “immoderates.” Some of them began to contact Al Qaeda or ISIS.[6] Currently, the country seems headed toward partition. Meanwhile, the gunmen demanded and got stipends from the government.[7] There is a nominal government, acceptable to the bureaucracies of the West, which has proposed a new constitution. The gun-men don’t seem too interested.

Increasingly, the struggle is about money. On the one hand, Libya has rich oil reserves.. the two sides have fought for control of the oil fields and of the oil ports. On the other hand, since the collapse of the regime, perhaps as many as a million Arab and African migrants to Europe have piled up in the coastal cities. They await the opportunity to embark and will pay whatever they can to buy passage.

President Obama recently has said that the intervening powers “underestimated” how much further resources would have to be committed to stabilizing Libya.[8] And how.

[1] “The collapse of Libya,” The Week, 1 May 2015.

[2] What lay at the root of this unrest? Stalled economic development. One serious consequence of this appeared in mass youth unemployment. Without an income, however, young people cannot get their own apartment and get married. Hence, sad to say, Cpl. Ray Person has a point. https://www.youtube.com/watch?v=WKZ1DlcmHMI

[3] In English Comp this is referred to as “irony.”

[4] See: https://www.youtube.com/watch?v=Xqu9qhBHWNs The President is a child of the Seventies.

[5] See: https://www.youtube.com/watch?v=LJeA4fpXwM0

[6] The Islamists have taken to butchering foreign Christians who fall into their clutches. Since we are in a secular age, no one gives a rip about something that would have pitched William Gladstone over the edge.

[7] To be clear, I’m not saying that this is the solution to the problems facing graduate students at Ivy League universities.

[8] Similarly, his economists have said that they “underestimated” how much stimulus would be needed to get the country out of the Great Recession. That underestimation involved ignoring Paul Krugman and other economists who said that the stimulus needed to be twice as big and loaded into the first year, not spread over two years.

The owl and the pussycat 2.

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After Libya collapsed, power passed to the hands of various militia groups.[1] Politics soon merged with crime. Italian criminal organizations—the Mafia—struck a deal with many of the militia commanders to move people from Libya to Italy. Some 31 percent are refugees from the civil war in Syria. Some are refugees from Iraq, either from the earlier fighting following the American invasion or from the more recent disaster following the rise of ISIS. Most are “economic refugees” from the failed or failing states of Sahelian Africa. In 2014, about 170,000 illegal immigrants paid an estimated $170 million to reach Europe from Libya.

Responsibility for dealing with this problem fell first to the Italians. After 300 migrants drowned near the island of Lampedusa in October 2013, the Italian Navy and Coast Guard launched Operation “Mare Nostrum.”  Italian vessels collected about 140,000 migrants during 2014. The death toll fell from 300 in October 2013 to 56 in April 2014.

While this might be regarded as a remarkable humanitarian achievement, not everyone was best pleased. “Mare Nostrum” (“Our Sea”) cost almost $10 million a month at a time when Italy was trying to fend off recession and imposing a degree of budget austerity. Operation “Mare Nostrum” started to look like Operation “Tasse Nostrum” (“Our Taxes”). Northern Europeans weren’t happy with Italy serving as an open door for illegal immigrants. The Navy landed the immigrants in mainland Italy. Most of them then continued their search for better lives by heading for Northern Europe.[2] Britain argued that “Mare Nostrum” created a kind of insurance policy for the migrants: the boats might not be sea-worthy, but the captains could always hunt up a rescue ship soon after leaving port. Once they were “rescued,” the migrants were put ashore in a country that maintained no serious watch over their further movements. Inevitably, they flooded North. These arguments resonated with other EU countries. When the Italian government asked the European Union for financial assistance, the EU called on the Italians to stop giving the immigrants a free lift. “Mare Nostrum” ended with the return of winter weather to the Mediterranean.

In place of “Mare Nostrum,” the EU both strengthened its controls on land border and launched “Operation Triton.” “Triton” restricted the rescue zone of naval patrols to within 30 miles of the Italian coast. “Make it more dangerous. That’ll stop them.”   It didn’t.

By early 2015, perhaps as many as a million potential immigrants were waiting in Libya to cross the Mediterranean to Italy. In economic terms, Demand vastly outstrips Supply. There are critical shortages of vessels, crews, and competent captains. Older and smaller vessels are used, crewed by men working beyond their skill-level, and packed to the gun-whales with passengers. A ticket on one of these death traps has risen from $1,000 in 2014 to $2,000 today.

Over-loaded and under-ballasted vessels are top heavy. Even passenger movements can lead to a capsizing, but so can heavy seas or a collision with another vessel or taking on water. In the first four months of 2015, an estimated 1,750 people drowned from the sinking of boats carrying illegal immigrants from North Africa to Europe.

The appalling death-toll caused an up-roar and a belated response from the EU. Two realities present themselves. First, while an aging Europe needs immigrants, the cultural resistance to increased diversity is very strong. Second, the core problem here is the failure of many African states to provide security and prosperity to their citizens. Even taking the risks of crossing the Sahara, then crossing the Mediterranean seems preferable.

[1] “Europe’s migrant crisis,” The Week, 8 May 2015, p. 11.

[2] A further 45,000 reached Europe by other routes.

Some American Public Opinion in Spring 2015.

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Standardized testing has been all the rage among educational reformers for more than a decade.[1] Only 20 percent of Americans think that it has done more good than harm to the students or the schools; 49 percent think that it has done more harm than good; and 31 percent “don’t know.” However, “don’t know” isn’t one of the options on a standardized test. Would it count as a correct answer if it was an option?

Americans frequently “don’t know” where they stand on public issues, but that isn’t the case with gay marriage. Today 61 percent favor allowing gays and lesbians to marry.[2] Opposition to gay marriage rallies 35 percent. That leaves just 4 percent who don’t know.

Reading the statistics above can obscure, rather than clarify, where Americans stand on the issue. Liberal media and public figures heaped abuse on Indiana’s “religious freedom” law on the grounds that it permitted discrimination against gays. Polls revealed that 49 percent of Americans agreed with the law’s critics. However, 47 percent believed that wedding-related businesses should be able to refuse their services to gay couples. Naturally, the vast majority of the dissenters were Republicans (68 percent), but a third of Democrats (33 percent) also supported business’ “right to choose.”[3]

Support for capital punishment has been slipping in America in recent decades. In 1988, 78 percent favored the death penalty for murder. In 2015, 56 percent support the death penalty for murder. Slightly more of the nation, 60 percent, supports imposing the death penalty on Dzhokar Tsarnaev, the surviving Boston Marathon bomber.[4] However, opposition to the death penalty is stronger among some groups than among other groups. Thus California juries are more willing to assign someone the death penalty than are California judges to allow the penalty to be carried out. Currently, there are 751 people on death row in California, but there have been no executions in almost ten years.[5] In a remarkable demonstration of core values, in early April 2015, 62 percent of Boston voters favored sentencing Dzhokar Tsarnaev to life in prison, rather than to death, if/when he was convicted for his part in the Boston Marathon bombing.[6]

The following is no new thing, but it has come to the attention of white America as a reasonable possibility. While 61 percent of all Americans express “great” or “fair” confidence in their local police, the number plummets to 36 percent among African-Americans.[7] That means that 39 percent don’t feel “great” or “fair” confidence in their local police. Who are these people? They can’t all be members of the ACLU. Since African-Americans make up about 11 percent of the population, that would suggest that 7-8 percent of the American population (the two-thirds of the 11 percent who are African-American) lack “great” or “fair” confidence in their local police. If 39 percent of Americans over-all lack “great” or “fair” confidence in their local police, then 31-32 percent of Caucasian, Asian, and Hispanic Americans also lack “great” or “fair” confidence in their local police. The crisis of confidence in local police reaches far beyond high school students rioting in Baltimore when they should be in study hall.

[1] “Poll Watch,” The Week, 3 April 2015, p. 15.

[2] “Poll Watch,” The Week, 8 May 2015, p. 17. Of course the phrasing of the statement allows for the comic possibility that many Americans think that gay men want to marry lesbians. “Marriage means one man and one woman.”   So that would be—you know—OK.

[3] “Poll Watch,” The Week, 17 April 2015, p. 17.

[4] “Poll Watch,” The Week, 1 May 2015, p. 17.

[5] The Week, 10 April 2015, p. 14.

[6] “Poll Watch,” The Week, 3 April 2015, p. 15.

[7] “Poll Watch,” The Week, 8 May 2015, p. 17.

Incarceration and decarceration.

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In the 1970s crime sharply increased in the United States. In the 1980s there came an epidemic of “crack” cocaine use. Americans legislatures and courts responded by “getting tough on crime.” Sentences for all sorts of crimes were increased and about half the states adopted “three strikes and you’re out” laws that could put people in prison for a very long time for a series of comparatively minor crimes.[1]

In 1980, there were 320,000 people in local, county, state, and federal lock-ups. Today there are about 2.4 million in prisons. (About 40 percent of them are African-American.) As a result, while Americans represent only five percent of the world’s population, Americans represent twenty-five percent of the world’s imprisoned population. (See: “The Senator from San Quentin,” October 2014.)

In theory, the “War on Drugs” isn’t responsible for most of the prisoners. Only 17 percent of the prisoners are there for purely drug crimes.[2] However, the “War on Drugs” led to a “War for the Corners” in many American cities. The “War for the Corners” then had other violent effects. One came in the up-arming of many neighborhoods where the drug trade is carried out. A second came in multiplying personal feuds and quarrels. If you put those latter two together, violence and danger increased. If you step-to a man today, you’re likely to get more than a broken nose. Try explaining to a hospital that you walked into a door in the dark when they’re digging 9-mm rounds out of you.

At the same time, all sorts of violence increased to alarming levels from the 1970s to the 1990s. Drug-related violence hardly accounted for all of this. I don’t yet have an explanation for this spike in violence. However, half of the prison population is made up of burglars, armed robbers, rapists, and other violent or career criminals. Moreover, the majority (60 percent) of people released from prison are back inside within three years for parole violation or new crimes. This suggests that there are a lot of habitually violent people among the rest of us in America. (See: “Legacies of the Violent Decades,” January 2015.)

Prisoners cost a lot of money. The monthly average in California prisons is $2,600 per prisoner. The total cost for American taxpayers is $80 billion a year. Inevitably, the public has begun to demand a cut in the cost of government in this area as in other areas. States and the Federal government are beginning to respond.

People—me, for example–like to heap ridicule on Rick Perry, the former governor of Texas and a one-time clown in the Republican presidential primary. However, Perry also got the state legislature to devote $241 million to paying for drug treatment alternatives to prison and expanded probation programs. The Texas prison population has decreased by three percent since 2010, while the crime rate has dropped by 18 percent. This suggests that it matters who you release or spare from prison. This is but one of a number of experiments in trying to reduce the size of the prison population. A bipartisan Smart Sentencing Act is making its way through Congress to cut the mandatory minimum sentences imposed by federal courts.

If someone wants to look for the dark cloud around this silver lining, they could consider a previous reform movement. Once upon a time, lots of mentally ill people were warehoused in awful state mental hospitals. Liberals pushed for out-patient care. Conservatives saw a way to cut spending. We got de-institutionalization and street-people living over heating grates.

[1] “Opening the prison door,” The Week, 24 April 2015, p. 11.

[2] Thus, a recent decision by the U.S. Sentencing Commission to release non-violent drug offenders in federal custody will reduce the prison population by 46,000 people or about 2 percent.

Doomed Nigeria?

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If you think about it, Nigeria is an artificial state. European statesmen drew the boundaries between British territory and French territory in the late 19th Century. In the mid-20th Century those colonial-era territories became independent within the boundaries drawn by later European statesmen. In Nigeria, there is oil in the south; there are dessicated grasslands in the north. The northern part of the country is poorer, the southern part of the country is richer (well, less poor). The north is predominantly Muslim, the south is predominantly Christian.[1] How could one forge a single “nation” out of such disparate materials?

Broadly speaking, they did not succeed at this task. Most post-colonial countries in West Africa are plagued by economic stagnation, bad government, and corruption. Citizens are disaffected, to put it mildly.

In 2010, Goodluckwiththat Jonathan, drawing the bulk of his votes from the south of the country, won election as president of Nigeria. Since then, per-capita income among Nigeria’s 170 million people has risen from $4,740 a year to $5,360 a year. That’s about a 12 percent rise. So, people should be dancing in the street. However, that rise in national income did not flow on anything approaching an equal basis. For one thing, the money tended to stick in the southern regions that produced oil. Hence, northern Nigeria profited but little. Incomes in the south are now twice those of the north.

This disparity may have helped fuel the Boko Haram insurgency. Boko Haram recruits around the tattered edges of Nigerian society, among poor people, among young people, and among poor young people with no prospect of landing a job. In 2009 and 2010, Boko Haram attacked a dozen places; in 2011, twice that; in 2012, more than 60 attacks; in 2013, more than 50 attacks; and in the first quarter of 2014, about forty attacks. In April 2014, Boko Haram kidnapped 200 school girls from the town of Chibok in northeastern Nigeria.

The Nigerian government is riddled with corruption. Graft and the abuse of authority are endemic. It runs up and down through every level of society. In 2014 the head of Nigeria’s central bank announced the $21 billion in oil revenues had disappeared from the bank. President Jonathan fired him. Every interaction between a government official and a citizen involves a pay-off. It’s impossible to get through the airport without paying-off some official.[2]

What to do to encourage prosperity in the north? Northern Nigerians believe that President Jonathan’s government has starved them of their share of the national income. Spokesmen for people there urge infrastructure spending. The north lacks reliable electrical power and has a deficient road network. So, over the years the bonds between northern and southern Nigeria have frayed.

The insurgency threatens to spill over into neighboring countries like Cameroon, Chad, Niger, and Benin. All of the neighboring countries are what amount to French protectorates. Hence, the French are insistent that Boko Haram be crushed. Radical Islamism has already troubled the French at home and abroad. The “Charlie Hebdo” massacre demonstrates the danger from home-grown Islamists, while the insurgency in Mali can be construed to constitute and Islamist threat in the territories of the old French empire.

Is Nigeria doomed to disintegrate, like the post-colonial states of the Middle East?

[1] Maia de la Baume and Alissa J. Rubin, “West African Nations Set Aside Their Old Suspicions to Combat Boko Haram,” NYT, 18 May 2014; Heidi Vogt and Patrick McGroarty, “Nigeria’s Divisions to Test Nation’s New Leader,” WSJ, 6 April 2015.

[2] See: “Dogs of War” https://www.youtube.com/watch?v=HZbg5AdlO70

The owl and the pussycat.

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Bounded by the Atlantic and Pacific Oceans, Americans are obsessed by their “un-secured” Southern border, a land frontier. Other people perceive the oceans as pathways as much as obstacles. During 2014, 350,000 people took to the sea in an effort to migrate illegally.[1]

In 2014, more than 80,000 people from the “Horn of Africa” have crossed the Gulf of Aden. Often, their first land-fall is Yemen, hardly an improvement on Somalia or Ethiopia. Their more distant goals are the oil-states of the Gulf. The largest numbers of those who reached Southern Europe by sea came from Syria and—mind-bogglingly—Eritrea.

This year more than 50,000 have descended the Bay of Bengal from Bangladesh and Myanmar to Malaysia and the little chicken-leg of Thailand that runs down the Malaysian Peninsula.[2] Many of these migrants are Rohinyas (Muslims living in northwestern Myanmar). The Buddhist military government has long persecuted the Rohinyas. Over the years, many of the Rohinyas sought refuge by taking passage to Muslim Malaysia. Often, the migrants fell prey to gangs of traffickers who sold them into near-slavery. In the last few years the trafficking gangs have extended their reach into Bangladesh.

Gangs in Myanmar and, now Bangladesh, shanghai people and take them to Thailand and Malaysia. They are crammed into little fishing boats and lightered to larger ships in the Bay of Bengal. The ships bear them south to Thailand, where they are unloaded and moved to camps in the jungle. Then the gangs start to economically exploit their captives. First, the gangs extort a standard fee from the families of those they have kidnapped, just to let them go on living. If the family can pay the ransom, then the traffickers move the captives into Malaysia. Here they work for low wages on plantations, or construction jobs, or sweat-shops. News accounts don’t say what happens to those whose families cannot pay the ransom.

The human stories are both illuminating and heart-breaking.[3] Amadou Jallow was a 22 year-old Gambian college graduate with a teaching certificate and a job in a high-school. The pay was lousy compared to what rumor said he could make in Europe. One day in 2002, without telling his father, he borrowed part of the family savings from his mother as a grub-stake, mounted his bicycle, and set off for Senegal. From Senegal he hoped to catch a boat to the Canary Islands. Two years later he finally caught his boat, although it was from Guinea-Bissau.

The boat was over-loaded (131 people set out) and badly supplied with food and water (there were supplies for six days, but the voyage took eleven days). The bodies of those who died during the night were thrown over-board when dawn broke. The hell-ship finally reached the Canary Islands. The passengers spent six weeks in a detention center, then were flown to Spain. Jallow was delighted: “I thought I was going to be a millionaire.”

It hasn’t turned out the way he expected. He made about 600 euros a year as a teacher. Now he averages about 2,000 euros working in restaurants or in farm fields. This is a pittance given the much higher cost of living in Europe compared to Gambia. He sent about 4,000 euros home to his family, but stopped doing that when work became hard to get. Now he lives in a squalid camp in a forest with other African immigrants.

The Africans keep up the charade that first drew them to Europe. They feel humiliated by their own stupidity and embarrassed by having used the modest savings of their families to finance these fool’s errands. They send home photographs of themselves smiling and standing next to expensive cars as if they were the owners. They never tell anyone the truth when they call home. More and more Africans are drawn to make the difficult, often dangerous journey to Europe. Twenty-five thousand of them have reached the Italian island of Lampedusa in recent years.

[1] Somini Sengupta, “More Refugees Take to the Sea, U.N. Reports,” NYT, 11 December 2014.

[2] Syed Zain Al-Mahmood, “Traffickers Take Aim at Bangladeshis,” WSJ, 29 October 2014.

[3] Suzanne Daley, “Chasing Riches From Africa to Europe and Finding Only Squalor,” NYT, 26 May 2011.

Annals of the Great Recession VIII.

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When we say “investors” we naturally think of Thurston Howell III from “Gilligan’s Island.” Nothing could be further from the truth in contemporary America. Now “investors” means banks, insurance companies, hedge funds, and pension funds. Many of these investors are, in turn, owned by mutual funds. These investors had a lot of money to throw around and they wanted safe investments.[1] The banks addressed this dual problem by creating Collateralized Debt Obligations (CDO). Essentially, a CDO is a super-bond that groups together many smaller loans. So, a CDO is a big financial instrument appropriate for a big investor. At the same time, the CDO addressed the safety problem by bundling the few loans anticipated to default with the many that were expected to not default. These CDOs proved to be wildly popular with investors: $550 billion worth of CDOs were issued in 2006 alone.

For a combination of reasons, the risky, or “sub-prime,” share of mortgages greatly expanded. Rather than trying to rein-in the “sub-prime” risk, lenders relied on safety features of the CDO (many presumably sound mortgages bundled together with a handful of presumably bad mortgages). Furthermore, other companies sold insurance for the derivatives, so they seemed very safe. The market in these “financial derivatives” just exploded. Less noticed, many of the loans were also adjustable rate mortgages (ARMs) which allowed the lender to increase the interest rate charged the borrower if interest rates in general began to rise.

Then, in the second half of the 2000s the whole process went into reverse.[2] The Federal Reserve Bank raised the Federal Funds Rate from 1 percent in Summer 2004 to 5.25 percent in 2006, then left it there until Summer 2007.[3] Interest rates began to rise and housing prices began to drop. The adjustable rate mortgages followed the track of interest rates in general, squeezing many marginal home owners to the point where they could not service the mortgage at all. Defaults suddenly began to mount, leading to foreclosures, leading to a glut of homes on an already falling market, leading to a further decline in the value of all homes.

The trouble here finally appeared in the opacity of the CDOs. Once the defaults started to mount, it proved impossible to tell with any certainty how solid any one CDO was. It might be made up of mostly good loans with a few dogs mixed in. It might be a veritable animal rescue society with a few good loans mixed in. As Peter Peterson put it, “you’ve got ten bottles of water and one of them is poisoned; which one do you drink?” There was no way to tell, so people did the safe thing by distrusting all of them.

As the number of worthless mortgages inside the “bundles” of mortgages bought by investors rose sharply, the value of the securities plunged. Banks that had bought these securities as part of their capital, suddenly found their balance sheets showing huge losses. Worse still, the companies which had sold insurance on the derivatives found that they had misunderstood the degree of risk of default and did not have the resources necessary to cover their own losses. Banks started refusing to lend to other banks out of a fear that the loans would not be repaid. Suddenly, the whole financial system seemed to be on the verge of collapse.

The United States had been through this once before, in the early stages of the Great Depression of the Thirties. Inadequate government action then had led to more than a decade of hardship, misery, and political upheaval. This time would be different. Sort of.

[1] “The ‘toxic debt’ tsunami,” The Week, 20 March 2009, p. 13.

[2] “Wall Street’s hidden time bombs,” The Week, 10 October 2008, p. 11.

[3] http://fpc.state.gov/documents/organization/112465.pdf

Annals of the Great Recession VII.

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All business decisions are bets on an unknowable future.[1] Faced with uncertainty about the future and the risk that some bets will go bad, businessmen have long sought to build in certainty through contracts and off-set possible losses through hedging. Commodities futures—promises to deliver a set amount and a set price at some future point—have been contracted for and traded for a long time. Commodities futures guarantee sellers a buyer and an income, while guaranteeing purchasers a product at a fixed price.

If uncertainty is one fixture of business, so is innovation. In the 1990s lenders developed a new form of betting on the future. Housing prices had risen steadily in the United States since the 1970s. Believing that housing prices were on a long-term or even permanent upward track, some lenders perceived mortgages issued today as a promise of secure returns tomorrow. Large numbers of newly-issued mortgages were bundled together into securities which were then sold to investors seeking the promise of above-market rates of return. In all lending there is the danger that the borrower cannot or will not repay the loan. The theory appears to have been that a few bad mortgages in any one bundle would not impair the value of all the other sound mortgages in the security.

Democrats wanted to bring these new financial instruments and markets under federal regulation in the same way that the Securities and Exchange Commission over-sees the stock market. Republicans defeated this effort. Indeed, Senator Phil Gramm pushed through a law which exempted such “financial derivatives” from federal regulation. Potentially, the derivative market had become the Wild West. On the other hand, it was a pretty small market in the later 1990s. What’s the worst that could happen?

The “dot.com boom” was one of the hall-marks of the late 1990s.[2] It turned out to be a bubble and the bubble popped in 2001. Then the 9/11 attacks administered a second shock to the system. Rather than put the United States through a financial crisis and recession, the Federal Reserve Bank pumped a lot of money into the economy and cut the short-term interest rate from 6.5 percent to 1 percent. Banks borrowed money cheaply, then re-lent it to others at a somewhat higher rate of interest. Pretty soon all the reasonable loans had been made, but there was still a lot of money to lend. What to do?

Make unreasonable loans, that’s what. Mathematical risk models for these loans, based on an extremely shallow historical record, predicted only a few defaults and constantly rising house prices. The usual standards for making a loan to someone were diluted. This allowed banks to lend to people and for purposes that normally would not have been acceptable. Some of it went to home loans that were labeled “sub-prime”; some of it went for auto loans, credit card debt, student loans, and commercial mortgages. In short, it financed a lot of consumption by ordinary Americans that otherwise would not have been possible.

So, the banks and non-bank financial institutions (mortgage originators) made all these loans. What to do with them? One answer would be “sit on them and collect the interest and principle until the loan is repaid, then make another loan.” Another answer would be “sell the loans (i.e. the right to be repaid by the original borrower) to investors looking for a steady income stream.” Mostly the banks chose the latter course. Selling the loans brought in cash immediately and earned fees for the banks. It transferred the assets to the “investors.”

[1] “Wall Street’s hidden time bombs,” The Week, 10 October 2008, p. 11.

[2] “The ‘toxic debt’ tsunami,” The Week, 20 March 2009, p. 13.

American Women Playing Basketball in Europe.

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In November 2014, Bria Hartley and Kayla McBride were newcomers at the start of their first season of European basketball. By March 2015, the season was winding-down for Diana Taurasi. Their experiences illustrate the spread of American sports abroad that matches the growth of soccer in the United States; the challenges and rewards of living in a different country; and the different approaches to civic life in Europe and America.

Most American sports teams are run on a business basis. Many European towns regard successful teams as a source of civic pride that more than offsets any monetary cost. European women’s teams generally benefit from sponsorship by local governments or subsidies from soccer clubs. As a result, there are teams all over the place.[1] In Russia the “oligarchs” who rose up after the collapse of Communism and were brought to heel by Vladimir Putin pour in money without regard to the market pay-off. Instead, it’s a form of public relations. Company teams give a sense of pride to the employees. The companies view the teams as “socially-oriented projects.” To raise the level of play and to provide models for the local girls striving to excel, the teams bring in American players. In Europe, the pay is about double what players can earn in the Women’s National Basketball Association (WNBA). In Russia, it can be vastly higher. Over the last decade, hundreds of American women basketball players have gone to Europe during the American off-season.

After playing a season in the WNBA, in Fall 2014 Bria Hartley and Kayla McBride went to play for a team in Sopron, Hungary. Their early experiences surprised them, not always in a good way. Communications were a problem: the landlady at Hartley’s first apartment spoke little English (and Hartley’s Hungarian was—understandably—not all she might have wished it to be); there was a feeble Wi-Fi connection. European wiring systems aren’t always up to the standards of urban America: McBride feared she had blown up her Xbox on one occasion (sparks flying). European appliances, like refrigerators, are small and Europeans shop every day or every other day. There’s nowhere to go in Sopron between practices. By American standards, there are no tourist attractions; just a bunch of Medieval, Renaissance, and Baroque architecture. By American standards, there is no place to shop; no malls, just local markets.[2] Although Vienna is less than fifty mile away and the team gave the women cars, neither one knew how to drive a manual transmission and the street signs are in Hungarian and German. At nighttime, the city can seem a little like the set of a horror movie: no streetlights, an inconstant hallway light.[3]

Even the team itself is difficult to penetrate. American women players very often find apartments in the same complex, but the Europeans scatter around town. Many of the local players have some English. So, on the court in practice, English is the “lingua franca.” However, off the court, Hungarian is easier for the majority. So, they’re lonely.

They seize on the familiar: a WiFi café where they can e-mail home; a Tesco (the European version of Walmart); brands with American names like Heinz, even if it isn’t exactly ketchup that comes out of the bottle.[4] They call home a lot, they go home during the holiday break, and their families plan to visit.

Diana Taurasi’s situation is both very different and similar. She has been playing off-season basketball in Russia for seven years.[5] She now plays for the Ural Mining and Metallurgical Company’s Yekaterinburg team. The money is vastly better than what she can make in the WNBA, even playing for the championship Phoenix Mercury. The Mercury pays her a tad over $100,000 a year; Yekaterinburg pays almost $1.5 million.[6] Taurasi has a far more luxurious life and more supportive environment than do Hartley and McBride. She has her own translator, her own driver, and a free apartment in a very desirable district. Also, Taurasi’s team has been together longer and has older players, so it hangs together much better than does the team on which Hartley and McBride play. They go out for dinner and drinks, catch a drag show, go to the skeet range. Finally, by experience, Taurasi was more suited to adapt. She is the child of Argentine immigrants to the United States.

Still, playing in Russia presents all sorts of contradictions to Taurasi that don’t appear for McBride and Hartley. Yekaterinburg has a Hyatt with a luxury spa and rows of demoralizing Soviet-era workers’ tenements; it has oligarchs with private jets and pre-game tailgaters cooking chickens that they slaughtered that morning; championship games can draw 4,000 more-or-less sober miners. Shabtai von Kalmanovic, a KGB officer-turned-businessman who recruited Taurasi to play for his Moscow Spartak in 2006, got shot to bits in 2009. The killer has never been found. That murder taught Taurasi something about Russia. She remarked after the assassination of Boris Nemtsov, “They’re never going to find [the killer], and if they do, they’ll pin it on some guy from Chechnya.” The worsening of Russo-American relations has made many Russians (80 percent in one poll) anti-American. Even among the team’s fans, Taurasi can feel it building up.

In short, it’s a lot like study abroad or working abroad. Sue Bird, a WNBA player with a decade of experience in Russia, advises: “just relax because it’s really not that bad. Once you get comfortable and find your way, you’re good to go.”

[1] Seth Berkman, “Overseas, Lost in Transition,” NYT, 11 November 2014.

[2] There are, however, a great many low-cost dentists. This makes Sopron a Mecca for the chewing-impaired.

[3] Really, all that was needed was the goalie for a hockey team to be living in the same building.

[4] See: “Pulp Fiction” (1994, dir. Quentin Tarantino).

[5] Charly Wilder, “Where the Money Is,” NYT, 18 March 2015.

[6] So, when her Russian coach asked her to sit out one American season to ease the wear and tear on her 32 year-old body from playing year-around, she agreed.