But now rising wages in China and a resurgent US auto industry are breathing new life into the maquilas in Tijuana. One of the most booming of border businesses is the aerospace industry.

“People’s perception about what cross-border manufacturing, what maquiladoras are like, is still based upon what was happening in the 70s and maybe the 1980s,” said Kenn Morris, president of Crossborder Group, a San Diego-based market research firm.

Morris said the aerospace industry along Mexico’s north-western border is nothing like the stereotype of overcrowded, low-skilled factories.

“The fact is that a lot of the factories,” he said, listing medical devices, aerospace, and electronics, “they’re building in such a way these days, and they’re managed in such a way, that they can be put anywhere on the planet. But they’re coming to Mexico.”

In the past five to 10 years, more than 50 aerospace and defense companies have started operations in Baja California, according to Mexico’s trade ministry. Most of them are American, and they produce everything from electronic components to steel bolts for commercial and military aircraft.

These companies employ more than 10,000 high-tech workers, many of them engineers, technicians and software developers. The companies choose this region for its proximity to the US and to western ports catering to Asian markets.

But the main reason they come here is simple: the cost of even highly skilled labor is roughly half of what it is in the United States. In San Diego, a senior aerospace engineer makes on average $90,000. In Tijuana, an engineer with similar skills earns $35,000 to $45,000.

Cobham, which produces defense systems, made the move to Tijuana in 1997. Inside its factory, workers dressed in royal blue coveralls sit in groups, looking into microscopes, holding tiny tweezers.

“Over here we do the tuning and testing of the product,” said Javier Urquizo, a plant manager at Cobham. But Urquizo can’t tell me exactly what the product is. That’s classified information.

“So after we finalize the assembly, we need to tweak around some components to get the electrical responses required on the different frequencies,” he said.

The company has to apply for special licenses from the State Department to build those components here in Mexico — that’s to make sure the raw materials and parts and the technology don’t get into the wrong hands.

Teresa Jesus Rio Ramos, a production supervisor here, said that aerospace and defense companies offer the most stable, best paid jobs of all the Tijuana maquilas. She makes around $1,800 a month.

“I think our company is pretty financially stable,” she said, “I don’t have to worry from month to month whether I’ll have a job or not. But that’s not true for all maquilas in Tijuana; people get fired and rehired elsewhere all the time.”

When asked whether she’d prefer working on the other side of the border, where she could potentially double her salary, Rio Ramos shook her head.

I’ve gotten a lot of professional training here in Tijuana, she said. I’m not interested in changing the course of my story.

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The text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

Marco Werman: Spaniards are not the only ones spending this holiday season, in spite of an economic crisis — so are many Americans. It’s no surprise that people who still have jobs and disposable income can be enticed to spend their money this time of year, but this has not been any ordinary year. The Eurozone crisis, repeated calls for austerity in Europe, slow job growth in the US, even the Chinese economy has started to slow down. Dan Ariely is a Professor of Behavioral Economics at Duke University. Dan, how does an economic climate like the one we’re in right now affect the way that people spend their hard-earned cash?

Dan Ariely: So I think we need to separate short-term effects and long terms effects on behavior. And when the financial crisis started in 2008 people basically stopped spending any money, but as this crisis is going longer and longer, this initially fear is just hard to hold onto. So let’s first of all think about what happened initially, and I think the best model to describe our initial reaction to the crisis is what’s called learned helplessness. Imagine you have a dog that there’s a bell, and after each ring of the bell there’s an electrical shock. And there’s another dog that doesn’t hear the bell and just gets an electrical shock from time to time. The first dog basically learned how to react to the shocks and he’s perfectly happy; you know, not as happy as he without the shocks, but he’s perfectly fine. The second dog gets depressed, they lay down in the cage, they have all kinds of things. And they’re finding is that the moment we don’t understand the relationship between cause and effect, we get depressed. We think the world is unpredictable and we just curl up and stop behaving in any possible way. And I think that was the initial reaction to the stock market. We kind of lost hope and people stopped spending. And if you look at 2008 that was actually what happened. Now the question is how long can people sustain this sense of fear? And I think what we’re seeing now is kind of a rebound reaction in the opposite direction, where people are just not thinking about the dyer economic situation we’re actually in, just because we have no more energy to think about it.

Werman: So do you call this rational behavior or irrational behavior?

Ariely: Oh, I think it’s very irrational.

Werman: Irrational.

Ariely: I think the reality is things are not really looking up, particularly not looking up in Europe, but at the same time how long can you keep being depressed? One of the theories for shopping is that by shopping we actually exert some control on the world around us.

Werman: And does it take away the depression?

Ariely: It takes away some of the feeling of lack of control. Think about shopping as kind of a magical thing you can do. You go to a store and you see something else that’s somebody else’s. And you give them a little plastic card and all of the sudden it’s yours. You’ve just kind of created a huge change in ownership in the world based on an action that you as a shopper created. And one of the theories that this is a sense of gaining control back, which by the way is very healthy psychologically, but not so healthy financially.

Werman: Dan, when you study the psychology of spending behavior do you find that it varies according to the season? I’m wondering if the shock of 2008 has now receded or whether people just feel you know, it’s the time of the season, we’ve gotta give gifts.

Ariely: So there’s definitely a question of the time of the year, but this doesn’t explain what’s happened with 2008. Because in 2008 the gift season was much, much slower. So I think two things are happening — there is a seasonality, but there is also an inability to continue feeling depressed since 2008. Now one of the things people find is what is called shopping momentum. And there’s a couple of nice papers about this showing that once you start spending it’s easy to spend on the next gift, and the next gift and the next purchase. And this is one of the things about holiday season. There’s another interesting version of this, which is called depletion. And depletion is the idea that we face a lot of temptation, ranging from writing nasty emails to our bosses, to buying things, to checking Facebook, to eating donuts, all these keep on tempting us. And with shopping of course, you go to a mall and every window is tempting in some way or another. And the reason depletion has shown that as we resist temptation more and more, our ability to resist temptation goes down, and down and down. And therefore, if you see just one store and are tempted just a little bit, you might be able to resist it. But if you see the same store after resisting temptation for the last 45 minutes it might be harder to resist temptation. So from that effect you could think about the holiday season as the season for temptation. We’re just being tempted all over by all kinds of deals and proposals and offers, and as those offers keep on coming, and coming and coming, our ability to resist temptation goes down, and down and down until at some point we just fail and succumb to temptation.

Werman: Dan Ariely, Professor of Behavioral Economics at Duke University, thank you very much.

Ariely: My pleasure, take care.

Werman: Are you spending despite all the economic gloom? What tempts you to open your wallet these days? Share your story at theworld.org.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

Are you spending despite all the economic gloom?

What tempts you to open your wallet these days?

Share your story below in the comments.

“I’m starting with the Lehman Brothers, which is starting pretty high and in the end the melody is very down,” says Kreidler. “And then the Bank of America…”

Kreidler netted more than a half million hits for his video of stock charts translated to music. He took the precipitous fall of bank share prices like Lehman Brothers, turned them into melodies, and then posted a video of the charts and the music together online.

“And I always changing the arrangement. Now I think it is a waltz,” he says and hums. “And it’s the Microsoft values.”

Kreidler included Microsoft in his stock chart music video because it designed the program he used to create these songs.

The program’s called Songsmith. It’s for kids, which explains the cartoonish sound. To make the songs, Kreidler started off with the stock charts of banks and other companies. He also included unemployment data and US national debt.

“I took these charts and they are pretty similar to musical notation. In musical notation you have the pitch and the time in a diagram, and with stock exchange values you also have a diagram with the time on the one axis and on the other axis it’s the value. And so you can transcribe these values into pitch information, and so into melodies.”

Then he fed those melodies into Songsmith which created a jazzy soundtrack of the financial crisis: Songsmith makes even the Dow’s slump in 2009 sound upbeat.

“For me I was interested in the contradiction that is generating an aesthetic effect or a funny effect for sure,” says Kreidler. “Why not being funny? But it is definitely serious behind.”

Kreidler says the music shows the disconnect between the exuberance of financial excess and the consequences of that risk taking. The idea that every jazzy note translates to money lost, or houses foreclosed says something about how all of the data flying by us can sometimes lose its impact. What does a million or billion dollar loss actually mean?

“I think that’s really a strong field of possibilities for the arts to make things visible, to make things audible, to make things perceptible.”

When the video came out a few years ago, it provoked a big response online. People left comments on YouTube like “fantastic, brilliant, the financial crisis never sounded so amusing.” But Kreidler says many musicians and artists had a different take.

“Well, in the arts world it was really a controversy because people said it’s not art,” he laughs.

Kreidler’s used to this kind of criticism. He’s a classically trained composer but he prefers to use commercial technology to experiment.

“I was always fascinated by the means and possibilities that the computer offers and especially in music it is really great nowadays what is possible there.”

He demonstrates his latest project. It makes use of another Microsoft application: Kinect. Kinect works with Xbox 360 to register your movements when you’re playing video games. Kreidler hacked the system and turned those movements into sound.

Not the kind of tunes you’d put on to relax, but the music does present data in a new way.

Now companies are approaching Kreidler to talk about translating data into sound. For some it’s putting their share prices to music for corporate events, for others it’s using sound to help recognize patterns in data – from stock charts to diagrams of brain waves.

Kreidler says there is plenty to draw on these days, from the news and in life.

“Since 9/11 we have the clash of cultures, we have the digital revolution, and we have now the financial crisis which is changing the world. It’s a disaster but on the other hand, for me as an artist, it’s material.”

And with the euro crisis, US job losses and Wall Street protests, there ‘s no shortage of material.

The grim news comes just after Standard and Poors announced that it was downgrading Italy’s credit rating. Meanwhile, the Greek government continues, amid protests, to try to find a way to keep from going bankrupt within the month.

The move to downgrade Italy’s credit-worthiness did not come as a total surprise. After all, the country has Europe’s second-largest debt level.

Italy has tried to address its problems recently by passing harsh, and unpopular, austerity measures. Those measures are designed to tackle the country’s deficit. On the growth side, however, Italy has not been quite as successful.

Giorgio La Malfa, former Minister of European Affairs for Italy, says that the problem is political, and that it rests with his old boss, Prime Minister Silvio Berlusconi.

“The Berlusconi government obviously lacks credibility both internally and externally,” says La Malfa. “Therefore, Italy would need would be to make a clean break with this situation. What we would need would be to have a government, a new government without Mr Berlusconi as Prime Minister.”

For his part, Berlusconi says that the credit downgrade “didn’t reflect reality,” and he promised still further measures designed to kick-start economic growth.

But the move by Standard and Poors has quickly put one word back on people’s lips here in Europe — “contagion.”

“The timing is bad because the Greek situation has not been solved,” says Marc Lansonneur, an analyst with Société Générale Private Banking.

“You’re just adding gasoline onto the fire, and that means the markets are going to be more volatile, and investors are going to have negative sentiments.”

Greek protesters (Flickr Image: Tom Tsiros)

The Greek government is still trying to convince the European Union, the European Central Bank, and the IMF that it deserves the next round of bail-out money. Greece says it needs that money — more than 10 billion dollars worth — or it will be out of cash by the middle of next month.

In the past week, it has proposed raising property taxes. That move was met with protests.

Now, the Greek government is considering slashing public sector pay and pensions, again. That was met with more protests today in Athens, where civil servants burned tax papers.

“We just said to the government, that it is enough with all these measures,” says Vassilis Xenakis of the Greek Confederation of Civil Servants in Athens.

“We paid already by cutting our wages. We paid already by increasing our taxes. We worked very hard to become a member of the Eurozone, and of course we’ll try to stay in the Eurozone. But if they continue in this direction, you will see the situation get worse and worse.”

EU, IMF and European Central Bank officials are still saying, publicly, that Greece can avoid defaulting on its loans.

Banks from across Europe are carrying that Greek debt. And that means a default could spell more economic turmoil, more contagion.

“There’s no reason that this has to be a complete disaster for Europe, if governments face reality and their banks in some kind of shape for the market reaction likely to ensue should Greece default,” says Paul Blustein, a former Washington Post journalist who is currently working on a book about the global financial crisis.

“But, find me the European politician who is eagerly awaiting the chance to stand up in front of the voters and say we have to put more money into the banks, and I’ll show you a two-headed zebra.”

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The text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

Lisa Mullins: The human cost of the economic crisis in Europe is clear enough.  Bankruptcy and unemployment, homelessness, mental illness and suicide are all on the rise.  The Greek health ministry reports that suicides were up 40% in the first half of this year compared to the same period last year.  One case is profiled in today’s Wall Street Journal.  Marcus Walker wrote the piece about a businessman from the island of Crete.

Marcus Walker: Vaggelis Petrakis was a typical Cretan in some ways.  He grew up in the poverty of postwar Crete in a very humble olive growing community in the mountains of the islands.  Didn’t have much of an education, but soon as he could he moved to town and worked hard and built up his own business over many years. He traded in fruit and vegetables.  Bought them from farmers on the island and sold them to supermarkets and above all, to hotels who were part of a booming tourist trade.  And he sold local produce such as watermelon, aubergine, eggplant as you’d say, and oranges.  And his warehouse was full of such good fresh Cretan produce during the good years.

Mullins: When did things start going bad for him?

Walker: Things really went downhill at around the time of the Greek debt crisis started, which was in late 2009.  And it was precipitated by the fact that the Greek state was running out of money and the Greek banks which owned the Greek government bonds were taking heavy losses on those bonds.  And so as a result, Greek banks stopped lending to Greek businesses and the whole country fell into recession through the bursting of this credit bubble, and affected everybody — the hotel trade, the retail trade and wholesalers such as Petrakis.

Mullins: So he had kind of a creative solution.  What did he do?

Walker: Yeah, yeah, well, many Greek people took part in this very strange, informal lending system using post-dated checks.  And how it worked was basically you would write your supplier — if you were a hotel you would write your food supplier say — a post-dated check that couldn’t be cashed for say, six months. And then the supplier, in this case, the grocer, Mr. Petrakis, would take this check to a bank because he needed cash now.  The bank would buy the check, but at a discount, which meant Petrakis could get money now, but less than he ought to have for his food that he was supplying.

Mullins: So what happened then?

Walker: Well, in his increasing desperation he took part in a clearly illegal scheme.  He bought a forged check from an apparently corrupt accountant who he knew.  The check was made out in the name of an Athenian company with whom he had no dealings.  And he took it to the bank and tried to sell this check to the bank in the normal way. The bank spotted the fake and told the police, and he was arrested.  This really seemed to have broken his morale entirely, and he felt his reputation had been ruined by trying this illegal scheme, which was a last ditch effort it seems to keep himself above water.

Mullins: All right, to stay afloat and he was also mislead by people he thought were friends.

Walker: That’s right, many of the business relationships he build up over many, many years, including even relatives, it turned out that when the economy went downhill the whole social and human climate became raw and brutal.  People stopped paying him and told him that was his problem.  He seems to have taken this very badly and people he thought were friends, he fell out with and had arguments with.  And this made him increasingly depressed.

Mullins: So what ultimately happened?

Walker: Eventually he after one loud argument with a supplier who claimed that Petrakis owed him money, he got in his car and drove off, and his family called the police and reported a missing person.  But the police seemed to have done very little.  His family searched for him all night long and in the small hours of the next morning, his wife heard his dog whimpering in an olive grove next to a plot of land that the family owned.  And there she found her husband, Mr. Petrakis, who had shot himself in his head with his hunting rifle.  And he was still alive when she found him, but he died soon after.

Mullins: Mr. Petrakis fits the profile in many ways despite his individual story of other people who have committed suicide in Greece.  Tell us about your conversations with people who work at a telephone helpline in Greece.

Walker: Yes, there’s a NGO called Klimaka, in Athens, that runs a national suicide helpline.  And psychologists who work there told me that they’re taking more and more calls from people who are thinking about suicide.  And of course, there are many different kinds of cases and many cases involve many factors, including mental illness, but they say that the growth is coming from people who have severe financial problems.  That is where the growth in the number of calls is coming from. And this is something that they haven’t really seen before, but the economy is crashing so badly it is causing people to despair because their financial and economic ruin.

Mullins: Marcus Walker is the Europe business correspondent for The Wall Street Journal.  His story on Vaggelis Petrakis appears in today’s edition of The Wall Street Journal.  Thank you very much.

Walker: Thank you.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

Secretary of Defense Robert Gates has set a goal of saving $150 billion from the Pentagon budget over the next five years. $35 billion of those proposed savings would come from the US Navy.

The Navy said it will meet its budget mostly by trimming personnel. That makes sense to the Navy brass, said Steven Biddle at the Council on Foreign Relations.

“The Navy sees its identity as being, understandably enough, in sailing ships, so if by eliminating some staff organizations that they don’t think they need, they can get more ships out on the ocean doing what the Navy is there to do,” Biddle said. “They’re in favor of that.”

But does the US Navy need more ships on the seas? It’s already far and away the biggest navy in the world.

For example, take the aircraft carrier. The Navy has 11 carriers; that’s half of the world’s total.

The Navy deploys three aircraft carriers at all times. And it’s not just the carriers. More than 60 fighter jets ride along with each one.

So does a squadron of about a dozen ships to protect the carrier. This flotilla can send shudders of fear into any nation.

Some argue, however, that these aircraft carriers, and the jets and ships that deploy with them, are relics of the cold war. Steven Biddle says that argument is a familiar one.

“There were a lot of people in the cold war who thought aircraft carriers were a relic,” Biddle said. “I mean the whole debate over: Is the aircraft carrier obsolete, it has been around a long, long time. What makes them so controversial is that they are huge concentrations of capability in one point, which makes them potentially vulnerable and it also makes them tremendously expensive.”

The US has plans to build three replacement aircraft carriers at a cost of more than $5 billion each.

“Why do we need 11 carrier battle groups when nobody in the rest of the world has more than one?” asked Lawrence Korb, a former assistant secretary of defense under President Reagan and now senior fellow with The Center for American Progress.

Korb doesn’t propose scrapping aircraft carriers. He just wants to scale back their numbers. He said aircraft carriers were instrumental in the wars in Korea and Vietnam, but that was a long time ago.

“It is a completely different era, and we’re not going to fight large conventional battles anymore. The wave of the future is going to be to use unmanned aircraft and special forces that deal with threats like we see in Yemen. And if you look at the situations in Iraq and Afghanistan, the Navy has played a very, very minor role, particularly in Afghanistan, which is completely landlocked,” said Korb.

Korb added that enemy missiles can now reach US aircraft carriers, which are, after all, slow-moving targets.

Northrup Grumman is building the first of the new aircraft carriers. The company has a special unit that studies the future of war, and helps invent new weaponry. The group is working on 21st century technologies like lasers and cyber warfare.

The unit prepares and predicts. But former unit director Bob Hoffa says it’s difficult to know what ship, plane, or weapon will work best in the future.

“It’s very hard to look out much further than five to 10 years,” said Hoffa. “I just played in a war game here over the last few days, and the scenario was 2030 and trying to stretch your imagination to 20 years is extraordinarily difficult to do.”

This leaves Secretary Gates in a tough position. The military has to maximize its ability to fight and minimize its expenses. There are a lot of different opinions about how to do that.

In the end though, Congress gets to decide the military budget. And all good lawmakers know that if a ship or weapon is built in their district, well then, of course, that ship or weapon is the one the Navy simply cannot do without.

By Laura Lynch

This Christmas will be a tough one for many people living in Ireland. The economic crisis there isn’t helping to lift what is a gloomy holiday season. It’s even more challenging in Limerick, the city that featured in Frank McCourt’s memoir “Angela’s Ashes”.

The poverty, unemployment and deprivation portrayed in the book are still features of daily life in the suburb of Moyross. And that’s exactly why a group of men from New York have moved in. Not just any men though – they are Franciscan friars from the Bronx.

People riding in an open air carriage pulled by a horse might be considered quaint if it wasn’t an indication of the troubles that beset the suburb of Moyross. Horses are sometimes used for transport, but they are often abandoned and left to wander through the gritty neighbourhood or a nearby field.

That is also where the drug deals go down.

Burnt out and boarded up houses are easy to find and so is poverty. It is just the kind of place the Franciscan friars of the Renewal were looking for.

“And we were shown this area Moyross and it seemed like a perfect place: there were burnt out houses there was graffiti on walls there dogs and horses wandering around aimlessly sometimes kids wandering around,” said Brother Shawn O’Connor. “So I said this is a good place for us to be.”

O’Connor and four other monks opened their friary here in 2007 by converting three abandoned houses into a simple residence and chapel. Shortly before they moved in, they got a reminder of how tough the neighbourhood was.

Two children were nearly burned to death when three teenagers firebombed the car they were sitting in. But O’Connor and the others saw a need and over the last three years they have worked hard to get to know the community.

Out on the street, O’Connor is trying to use the offer of cookies and chocolate to get a group of boys to talk about the meaning of Christmas — with mixed results.

“Tell me one thing about Christmas” O’Connor said.
“Uh, you get stuff from Santa,” one boy replies.

O’Connor presses on, asking them what they need to do before they can have a cookie. “Say please and thank you,” says another. After more coaxing, O’Connor gets the answer he was looking for as the troupe began to pray.

The boys, small and freckle-faced, sound like well rehearsed angels. But just steps away are a reminder of that appearances can be deceptive.

The friary’s statue of the Virgin Mary is missing her hands. One of the other boys living near here cut them off a few months back.

“Many of the young people here just have no real proper guidance that’s one thing we found,” admits O’Connor. “They’re very wild. They’re great and they’re wonderful kids but they don’t have any discipline, they don’t have any sense of right or wrong.”

The monks persist with the kids, not shying away from a bit of soccer, or football or some good old fashioned roughhousing. They do it all wearing their grey hooded robes and beards and shaved heads.

Brother Cyril, born Jason Grandell 30 years ago, said he got a bit of a shock when he moved here from New York eight months ago.

“They had horses walking around the front yard, all the dogs barking at night versus the car alarms going off and the police sirens in the Bronx,” he said.

Brother Cyril became a monk four and a half years ago after tiring of life as a ski bum.

“Breckenridge, Colorado there was 54 bars and a population of three thousand people,” he said. “I don’t know if it was so much hedonistic as what debauchery would be but it was a good time. I could never go back and do that lifestyle again.”

The monks come from mixed backgrounds — one performed in a punk band, another was a Marine. And Brother Thomas Joseph was a self-described frat boy. He has been in Moyross for a year and a half.

“I was kind of shocked to see what was there it was I didn’t expect this place in Ireland,” Joseph said. “I thought the Irish were the happy go lucky people who had nice little thatch roof cottages and then you see the things happening with some of the youth and they were struggling.”

The monks have built a community garden and a youth center. They’ve endured the teasing, the jokes and the rocks that were sometimes thrown through the windows. Joseph likens it to the kind of college hazing he remembers from his frat boy days.

“Anytime there is a new brother too, the young people test him. You have to go through somewhat of a crucible and rightly so because you have to earn the peoples’ love and respect.”

That may be especially true in Catholic Ireland. But amidst tales of scandal and sexual abuse by priests, the friars are finding both popularity and celebrity.

In 2008, they appeared on a national late night talk show that also featured U2. The monk’s American street cred seemed to charm the audience. The host asked them to describe their vows. Poverty, chastity and obedience, came the reply. Then one friar offered another version.

“Or like we say in the Bronx, no money, no honey and a boss,” and another, the former rap artist, gave his own slant, “no bling bling, no sweet thing and I gotta serve my king.”

These days, Moyross residents like Lorraine Fitzgerald seem comfortable with the monks in their midst, but she admits she couldn’t take them seriously at first.

“I was laughing I have to say it, I was roaring laughing,” Fitzgerald said. “It’s strange looking at men coming in with long dresses and big beards you know, but I mean they are great sports they are.”

17-year-old Nicole said she’s grateful for their presence too. Young people her age are dropping out and drinking, she said, but the monks share their own experiences in order to warn her of the pitfalls.

“You know like it’s not good but you just try your best to stay away from it,” said Nicole. “That’s what the brothers do. They teach us stuff like all that stuff is bad.”

Earlier this year, the monks organized a rap contest in the neighbourhood. It’s the kind of small gesture that the monks believe gives people in Moyross a sense of pride and hope for the future. It is still a troubled place and the economic troubles will not make life here any easier in the coming years.

The monks of Moyross say they are staying put and keeping the faith.
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(Photo: Laura Lynch)

By Laura Lynch

This is a defining moment in the long history of Britain’s welfare state.

Benefit payments account for almost a third of the one thousand one hundred and fifteen billion dollars the government spends a year.

Kevin Hudson from Mansfield is a father of four who’s been out of work for six months. He gets unemployment benefits. He says he’s looking for a job, but the current system makes it hard for him to get ahead.

“I’ve asked to go into college courses,” he says, but “they said that if I go into a college course over sixteen hours that they’ll stop my benefits.”

The coalition government argues the system is both unaffordable and socially harmful, creating an unemployed underclass trapped by state handouts.

Ian Duncan Smith, the minister responsible for welfare, says the government will make sure that work always pays more than a welfare check.

“And by reducing complexity we will reduce the opportunities for fraud and error which currently cost the taxpayer around five billion pounds a year.”

Under the measures outlined today, unemployed people would lose their benefits for up to three years if they repeatedly turn down job offers.

Although there’s broad support for the welfare reforms in principle, the opposition Labour Party’s spokesman on welfare Douglas Alexander, is questioning whether there will be enough jobs. “Without work, these changes won’t work,” he says, “because if you’re going to move people from welfare into work, there needs to be jobs for people to take up. Today we’ve got five claimants chasing every single vacancy in the British job market so if you get these changes wrong you could end up with a higher welfare bill, not a lower welfare bill.”

What’s at stake here is an attempt to change British society and its attitude toward work and welfare.

Other changes announced in recent days are offering similar shake-ups to the kinds of benefits people here have come to expect.

Just yesterday, student protesters clashed with police in London during demonstrations against plans to increase tuition fees in England.

Tens of thousands of people took part in the largely peaceful march. But some broke past police lines at Conservative party headquarters, breaking windows and throwing objects from the roof.

Some politicians here are saying they expect more protests in the weeks and months to come as further cuts take hold.

Public opinion polls suggest most voters accept the idea of reducing Britain’s deficit.

It may become a much tougher sell as the idea becomes a life-changing reality.

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Tea Party protest at Capitol Hill (Photo: asterix611/Flickr)

Jason Margolis on The World:
• China, jobs, and the midterm election
• An Arizona law for Ohio
• The midterm campaign trail in Ohio

Congressional candidate Ann Kuster, Democrat, in New Hampshire talks with voters about one of her top campaign platforms: stopping the outsourcing of local jobs to China. (Photo: Jason Margolis)

Jason Margolis on The World:
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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

JEB SHARP: I’m Jeb Sharp and this is The World, a co-production of the BBC World Service, PRI and WGBH Boston. There may be nervous chatter about a “double-dip recession,” but Europe’s largest economy doesn’t seem to be paying attention. Germany posted strong growth for its second quarter, from April to June. The World’s Jason Margolis tells us about the good economic news in Germany and what it means here in the US.

JASON MARGOLIS:  It’s been an impressive turnaround for Germany. Last year its economy shrank by nearly 5%. Today, Germany posted its fastest pace of growth in two decades. Germany’s economic minister, Rainer Bruederle, said the new figures show that Berlin could continue to rein in its budget, and post positive growth.

GERMAN SPEAKING

MARGOLIS: Bruederle said Germany is out of the economic crisis. He said Germany did this by increasing its exports. Norbert Walter, a former chief economist at Deutsche Bank, argues that Germany’s export growth is not just good for Germany.

NORBERT WALTER: We are part of the European fabric. The Dutch economy, the Belgian economy, the Austrian economy will flourish if the German economy is doing well because no German car leaves the country without an axle that comes from Belgium.

MARGOLIS: As for what Germany’s growth means for the US, here’s economist Desmond Lachman at the American Enterprise Institute in Washington.

DESMOND LACHMAN: It’s certainly good news that if Europe is growing strongly that improves the prospects for the United States to export abroad.

MARGOLIS: American exports to Germany have increased in recent months. But so has the US trade deficit with Germany. Germany exports things to the US like cars, chemicals and beer. Lachman and many others criticize countries like Germany, and China, for powering their economies through exports without doing enough to encourage domestic consumption. In the case of Germany, Lachman faults the government’s current fiscal programs.

LACHMAN: There’s no need for them to be moving towards budget balance, which is what the longer term objective of Germany is. Germany has now got a constitutional amendment, which requires them to balance their budget on a structural basis by around about 2015. That to me seems irresponsible.

MARGOLIS: Economist JD Foster at the Heritage Foundation disagrees with such criticisms of Germany. He says Germany and China are not the same. China gives itself an artificial advantage by manipulating its exchange rate. Foster says that’s not what Germany is doing.

JD FOSTER:  Germany is operating within an exchange rate set by a group, the Euro. Germany as a country chooses to save a lot and invest a lot. And that allows them to export a lot.

MARGOLIS: While Foster welcomes today’s news from Germany, he, and others, warn that it’s just one quarter of strong economic growth. Foster says remember, the European economy is still rife with problems.

FOSTER: Europe papered over its problems with Greece and that will last for a while until the paper runs out and Greece has to finally face up to its unsustainable, fundamental economic circumstances which are going to bedevil Europe for quite some time.

MARGOLIS: And in a tightly woven global economy, what bedevils Europe can also bedevil the United States. For The World, I’m Jason Margolis.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

HADDEN: When Iceland’s banks collapsed and its currency, the Krona, lost half its value, Icelanders were hit hard. Many homeowners had mortgages pegged to foreign currencies, such as the US dollar or the Japanese yen.

"Your bank doesn't care about you," reads this Icelandic fridge hanging.

One Reykjavik resident, who didn’t want to give his name, says his yen-based mortgage has more than doubled with the Krona’s depreciation. Sitting in his kitchen on a snowy morning, he says the financial pressure destroyed his marriage.

ANONYMOUS MAN: All the stress. You can just imagine all the sleepless nights over this. We are separated now. I’m not going to put that entirely on this but it certainly didn’t help. It’s just the stress of the whole thing. It is really hard to…you can’t plan for anything. The whole family life just goes to pieces.

HADDEN: Iceland’s bank collapse didn’t just hurt Icelanders. One online bank, called Icesave, went under with billions of dollars worth of deposits belonging to British and Dutch account holders. The British and Dutch governments covered their citizens’ losses. Then the governments demanded that Iceland pay up. Negotiations have been on again-off again. John McFall chairs the UK parliament’s Treasury Committee. On Friday he said Iceland risks isolation if it doesn’t cover Icesave’s debts.

JOHN MCFALL: I think Iceland has got to ask itself a question: Does it want to participate in the global economy or do they want to find themselves in a deep, deep mire?

HADDEN: For many Icelanders, the answer is clear: a nation of about 317,000 people simply cannot pay back billions in lost deposits. The Reykjavik homeowner says it would drive the faltering country under.

ANONYMOUS MAN: I am against the state taking on private debt. When a private company, bank or whatever makes a mistake the stakeholders in the company are the ones that should take the fall or the cost of that. And that’s it.

HADDEN: Icelanders vote on the issue in a public referendum next weekend. Polls suggest they will reject any plan to pay back their European neighbors. That might make Icelanders feel better in the short term, says economist Thorolver Matthiasson. But Iceland now wants to join some of those same neighbors in the European Union. Matthiasson says the UK and Holland could use the Icesave issue to block Iceland’s EU bid, and that could hurt Iceland down the line.

THOROLVER MATHIASSON: We would not have investment coming our way. We would not be included when decisions are taken regarding the markets. Our firms would start to have problems exporting to the EU.

HADDEN: Iceland didn’t always want to join the EU. For years its currency was strong. Unemployment held steady at about one percent. But all that has changed, says Bogi Andersson. Andersson is the former head of Iceland’s state broadcaster. He says even though the Euro has weakened in recent weeks, that’s nothing compared to the Krona’s slide.

BOGI ANDERSSON: I think I can safely say that the krona is smallest independent currency in the world. And in this world of modern finance it is seen as inviable. Far too small, too vulnerable. So people want a stable currency. It would be far easier to make business plans, to plan for the future, within a stable currency environment, which is almost impossible in Iceland today.

HADDEN: But EU negotiations will take time…a couple of years, at least. In the meantime, unemployment here now stands at 10 percent. Young people are starting to emigrate, although not all have given up hope.

Oern Haroldsson isn't waiting for his country to get its economic house in order.

Reykjavik now has two ‘start-up cooperatives.’ They’re places where young people with ideas and energy can set up shop for free. One coop is called The Ministry of Ideas. It’s a nondescript building on the waterfront that combines a café, meeting hall, performance and office space. About a dozen start-ups are already working here. One guy is trying to market an inflatable stretcher. Another company is launching games for iPhones involving mind control. Mind Games founder Oern Haroldson says this space is the positive side of the crisis.

OERN HAROLDSON: This is an excellent place to start. We are a very young start up. And here we have the facilities needed. Desks, internet. But more important is connection to other saround us. Share ideas, etc. very helpful. And actually our team has grown based on being here, actually.

HADDEN: Haroldson says an entrepeneurial spirit is what Iceland most needs now, no matter how the Icesave controversy is resolved.

For The World I’m Gerry Hadden, Reykjavik, Iceland.

• BBC coverage
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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN: So here’s a good plot for a movie.  Four disgruntled senior citizens kidnap and hold hostage their financial advisor after losing a bundle in the U.S. property market.  Great screen play idea, but once again, life beats Hollywood to the punch because this is for real.  Two elderly married couples in Germany are accused of the crimes.  Annette Kuglar is a reporter at Bavarian Radio. She’s in Munich.  So Annette, who are these alleged senior citizen kidnappers?

ANNETTE KUGLAR: They were two couples that both live in the very south of Germany in upper Bavaria close to the Alps.  They’re all aged between 64 and 74.  All of them were, I would say, financially more or less well settled.  One man worked as a medical doctor, the other formerly owned a construction company in Bavaria.  And now they’re accused of hostage taking and grievous bodily harm.

WERMAN: When did this happen?

KUGLAR: It happened in June 2009 when two of the seniors traveled to Speyer where the financial advisor Minta Unwa lives and forced him into his flat, tying him up, putting celotape over his mouth and forcing him into a large box in which they carried him back to upper Bavaria.  There they locked him into the basement of their house and well did something like a trial on him, sitting around him and asking him questions.  What happened with our money?  And forced him to give it back to them.  He had to send a fax to his financial advisors and on this fax he managed to hide a secret message which more or less said call the Police.  Police is a word with a double meaning in German.  So the financial advisor on the other side of the fax realized, okay there must be a problem and then called the Police and then story took a more or less bizarre end.  The Police arrived at the basement and had to blow up part of the door to liberate the prisoner.

WERMAN: That’s an incredible story.  Were these two retired couples holding this financial advisor at gun point or anything?  How did they manage to force him to do all this?

KUGLAR: They tied him up actually.  They never threatened him with a gun or anything.  There was obviously physical violence, there were two broken ribs, so at the moment, the trial is on again for the seniors.  They say no we never used any violence, but obviously there were injuries, there were hurts, there was blood, so they weren’t very gentle with him.  I can go that far.

WERMAN: Why did they do this?  It seems like he lost some money on their behalf, but how much did they lose and just, they must have been really angry.

KUGLAR: It is an amount of 2.4 million we’re speaking about at the moment, which they invested in real estate properties.

WERMAN: Two point four million Euros, that’s a little over three and a half million dollars. Why did they do this?

KUGLAR: I think it’s a mixture out of greed, but then also frustration.  They saved a lot of money, they worked hard for their money, invested it hopefully wisely, and then just lose it by the fault of another person.  And the trial going on at the moment against those four seniors, they even sound like, it’s not our fault, we are the victims and he is the guilty person.  It’s almost like a twist in their heads that they feel treated so unjust by the situation which is also part of the financial situation in Germany and all the world at the moment.  People lose things without having done anything.  You can feel the frustration very strongly at the trial going on in Bavaria at the moment.

WERMAN: And where is public sympathy falling?  Is it falling for this financial advisor or do people sincerely feel bad for these senior citizens?

KUGLAR: I think it’s very much in the middle.  It’s really that people feel bad, they know you must not do self-administered justice against anybody, obviously you must not lock him in and threaten him.  But then again, they also feel like maybe a small spark of truth in that, of understanding that somebody gets so frustrated of losing so much of his life, of what he built up, that there’s also maybe a little spark of sympathy in all of that.

WERMAN: Nobody kidnapped Bernard Madoff here in the United States, although I’m sure there were a few people who would have liked to, but has the media in Germany cast this financial advisor as their own Bernard Madoff or is that too strong?

KUGLAR: Everybody knows and from the trial going on it’s also become clear that this financial advisor isn’t a choirboy.  There are several investigations going on against him and he will probably, maybe get his own trial in the future.  But at the moment the media tries to be fair and says well, it’s not right what he has done, and it is terrible that those financial disasters keep going on on large and small scale levels, but then again, well you must not do self-administered justice and not do harm against anybody.

WERMAN: Annette Kuglar reporter with Bavarian Radio.  She spoke to us from Munich.  Thanks so much for your time.

KUGLAR: You’re very welcome.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.

• Jason’s story on how America’s wars are reported locally in Mississippi
• Global economy podcast

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This text below is a phonetic transcript of a radio story broadcast by PRI’s THE WORLD. It has been created on deadline by a contractor for PRI. The transcript is included here to facilitate internet searches for audio content. Please report any transcribing errors to theworld@pri.org. This transcript may not be in its final form, and it may be updated. Please be aware that the authoritative record of material distributed by PRI’s THE WORLD is the program audio.

MARCO WERMAN: I’m Marco Werman. This is The World. U.S. exports took a big hit during the Recession. Things got really bad during the first three months of this year. Exports were down in 49 states. Only one state bucked that trend as the world’s Jason Margolis found out.

JASON MARGOLIS: I was in North Dakota recently working on some stories about international trade. While there, I sat down with Heather Rank.

HEATHER RANK: And you can keep these.  This thing is really interesting.

MARGOLIS: Rank is a self-professed statistics geek and a Trade Specialist with the U.S. Department of Commerce. She was looking at export data from the U.S. Census for the three months of 2009 when she accidentally uncovered this gem.

RANK: And exports are down in every U.S. state except for one state, Mississippi.

MARGOLIS: That’s right. Mississippi, the state often depicted as economically troubled. The state with the highest poverty rate in the country managed to out-do every other state when it came to exports. In the first quarter of this year, Mississippi exports were up 9%. That was more than 30% better than the national average. So just what was Mississippi’s secret? To find out, I called Heather Rank’s colleague in Jackson, Mississippi.

CAROL MOORE: Hi my name is Carol Moore. I am the Director the Mississippi Export Assistant Center, which is a part of the U.S. Department of Commerce.

MARGOLIS: Carol, do you think there were any products that were pushing exports higher in Mississippi during the first three months, any specific exports?

MOORE: Yes, that would be energy products, vehicles, machinery, as well as poultry.

MARGOLIS: But Moore’s data couldn’t definitely tell her which one of those products may have accounted for the export spike or why, for that matter, Mississippi exports were surging while world trade was collapsing.

MOORE: I think that if you come down and I could take you to talk to some of our partners, it would give you a better, you know …  Let me see, understanding into why we had that increase.

MARGOLIS: So I went first to Mississippi’s State Capitol, Jackson where I met Gray Swope.  He’s Executive Director of the Mississippi Development Authority.  I asked Swope the same question, “Why did Mississippi succeed with exports when all others failed.”

GRAY SWOPE: I think that it reflects that Mississippi has kind of an international mindset. And our focus since 2004 has been how do we integrate trade, international companies including foreign direct investment?  How do we integrate those into our economy?

MARGOLIS: I pressed Swope for specifics. He didn’t offer any. At my next stop Brian Watkins said it’s tough to pinpoint what called that spike in Mississippi exports.

BRIAN WATKINS: You know, I’m virtually certain there’s going to be a lot. I don’t know but I’ll be happy to help.

MARGOLIS: Watkins teaches International Business 150 miles northwest of the capitol at Mississippi State University, but Watkins couldn’t say for sure what’s driving the State’s exports. He did say it should be fairly easy to figure out because Mississippi’s exports are relatively small.

WATKINS: The statistics can be skewed by one or two, you know, big contracts, particularly in a consolidate industry, which it would appear that we were beginning to have in a couple of agricultural areas here in Mississippi.

MARGOLIS: One sure fire way to find out which exports were up was to go to the place where exports leave the state, 280 miles due south on the Gulf of Mexico.  At the Port of Pascagoula men driving forklifts loaded utility poles bound for the Dominican Republic.  Rows and rows of container boards were stacked waiting to be shipped to places like Ecuador and Chile. A massive freezer was packed with frozen chicken headed for Russia.

MARK MC ANDREWS: My name is Mark Mc Andrews. I’m the Port Director in Pascagoula, Mississippi.

MARGOLIS: Mc Andrews surveyed all the exports and pointed at the chicken freezer. He said, “You want to know what’s driving Mississippi’s exports? There’s your answer.”

MC ANDREWS: Poultry exports are up about 21% over last year.

MARGOLIS: Do you have any sense why or do you just do the shipment?

MC ANDREWS: I really don’t. As a port, you’re not really in a position to create demand for your own services and facilities only to react to them.

MARGOLIS: To try and find out why chicken exports are surging, I got back in the car and headed 130 miles back up north to the small Town of Laurel, Mississippi.

JOE SANDERSON: My name is Joe Sanderson, Jr. and I’m Chairman and Chief Executive Officer of Sanderson Farms.

MARGOLIS: Sanderson Farms is the fourth largest poultry company in the United States.

SANDERSON: We process about a little over eight million birds per week.

MARGOLIS: About 1.2 million of those birds are shipped overseas. That can move export statistics in a small state like Mississippi. Sanderson said the end of last year was one of the low points in his company’s 62-year history. Americans weren’t going out to eat and his foreign buyers had no cash.

SANDERSON: The world credit crisis, actually exports collapsed and there were no exports, or a very minute amount of exports particularly to Eastern Europe and Russia.

MARGOLIS: But then, things started to turn around early this year when the wheels of international finance started working again. Credit markets unfroze and pent-up demand for frozen Mississippi chickens surged in Eastern Europe. So, riddle solved. Russians eating Mississippi chicken drove the state to export success.

WATKINS: The question arises as to how do you fit all of this together.

MARGOLIS: Again, Brian Watkins at Mississippi State. He says there are two possible interpretations. First, the surge in exports was a one-time thing, a statistical aberration. The second possibility is that those statistics show the beginning of a long-term trend, which Watkins says would be invaluable to state policymakers.

WATKINS: You may well conclude that it’s appropriate to play to your strengths. So if Mississippi is experiencing growth in a particular segment let’s say poultry, and there are policy decisions that can be made, there are things that can be taken by state development agencies to encourage industry, you may well want to pursue that.

MARGOLIS: Of course, Watkins says there are environmental concerns and questions over how many good jobs the poultry industry creates. That’s for Mississippi policymakers in Jackson to debate. But beyond chicken, Gray Swope with the States’ Development Authority said Mississippi’s recent export success does underscore the need to help local companies get their products overseas.

SWOPE: In Mississippi we’ve seen these … I call them assets. You know, they’re God-given assets in that, you know, deep water that’s on the southern end of our state or the Mississippi River or the Tintom [PH] Waterway, but it’s in how you take those assets and you use those to create economic wealth and jobs. And I think that we’ve done a good job in our state at looking at how do we take these resources of logistics and transportation and launch our products abroad?

MARGOLIS: That’s something that requires constant work, resources and money.  According to the latest export data broken down by state, Mississippi has fallen to the middle of the pack. But that unexpected spike in exports during the first three months of the year has some Mississippians thinking big about their state’s economic potential. For The World, I’m Jason Margolis, Jackson, Mississippi.

Copyright ©2009 PRI’s THE WORLD. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to PRI’s THE WORLD. This transcript may not be reproduced, in whole or in part, without prior written permission. For further information, please email The World’s Permissions Coordinator at theworld@pri.org.