Americans think of rural American heartland as a lovely pastoral backdrop, but these days some marginally employed white families in places like Yamhill seem to be replicating the pathologies that have devastated many African-American families over the last generation or two. One scourge has been drug abuse. In rural America, it’s not heroin but methamphetamine; it has shattered lives in Yamhill and left many with criminal records that make it harder to find good jobs. With parents in jail, kids are raised on the fly.
I fear we’re facing a crisis in which a chunk of working-class America risks being calcified into an underclass, marked by drugs, despair, family decline, high incarceration rates and a diminishing role of jobs and education as escalators of upward mobility. So let’s get real. A crisis is developing in the white working class, a byproduct of growing income inequality in America. The pathologies are achingly real. But the solution isn’t finger-wagging, or averting our eyes — but opportunity.
2 US states negotiate $26bn deal with homowners (The New York Times) Government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses. Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure.
The agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.
3 China’s imports, exports fall (BBC) China's exports fell in January, the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy. Exports fell 0.5% from a year earlier amid sluggish global demand. Shipments were also hurt as factories were shut during the Lunar New Year. Meanwhile, imports dipped 15.3% raising fears about slowing domestic demand.
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone. They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth. "The collapse of imports begs particular attention," said Ren Xianfeng of IHS Global in Beijing. "A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest."
4 Shock loss for Tata Steel (BBC) Tata Steel, the largest producer in India, unexpectedly reported a loss for the last three months of 2011, hit by weak demand. The company saw a net loss of 6.03bn rupees ($122m) in the third quarter. That compares with a net profit of 10bn rupees a year earlier. Higher prices for raw materials as well as falling demand and prices in Europe contributed to the decline, Tata said. The company operates two thirds of its capacity in Europe, where the debt crisis is hitting demand.
The head of Tata's European operations said he did not expect demand to pick up this year. Analysts said Tata Steel was being squeezed from both sides. "There hasn't been a demand uptick that was expected, so prices have come down," said Ravindra Deshpande from Elara Securities in Mumbai. "At the same time, none of their production costs are lower, so margins are under pressure."
5 Gadget-challenged parents (The Guardian) Once parents relied on their children to help them set the video recorder. But in the age of apps, iPods and 3D portable games consoles, the digital divide may have got a little wider. One in six –16% – of parents admitted buying their children a device or gadget that they did not fully understand how to use, according to a survey.
The online survey by ParentPort featured 1,800 respondents from the UK's two largest online parenting communities, Mumsnet and Netmums. ParentPort said it revealed the "challenges and pressures parents face when it comes to keeping the media their children see age-appropriate". More than four-fifths – 82% – of parents said they closely supervised what films and television programmes their children watch, and 77% said they always or usually know what websites their children visit.But parents were also concerned about their children being given smartphones and laptops as gifts which would give them unsupervised access to the internet, and inappropriate 18-rated video games.
6 End of the line for Kodak cameras (The Guardian) Kodak, the company that pioneered home photograph, is to give up making cameras after more than 110 years. The company, whose little yellow film boxes could once be found throughout the world, said on Thursday it plans to “phase out its dedicated capture device business”, which includes all digital cameras, video cameras and digital photo frames.
It comes less than a month after Kodak Eastman filed for bankruptcy protection in the US as it finally succumbed to a digital revolution that left its products obsolete . Kodak said it hopes pulling out of cameras will save the company, which has $6.8bn of debts, more than $100m a year. It will stop all production of capture devices within the first half of 2012. Exiting the business is expected to cost Kodak $30m. The company has already closed 13 factories and cut 47,000 jobs. It ceased manufacturing its famous Kodachrome film in 2009. The definitive end of the "Kodak moment" comes more than 130 years after a "not especially gifted" high school dropout, George Eastman, founded the company that dominated photography for most of the 20th century.
7 Likelihood of a class revolution in Pakistan (Dawn) A thought came to mind as I stepped out of a shoe store. I had just spent more money on a pair of shoes than a large portion of Pakistanis have to survive on for a month. Some of these people we know well. They cook for us, they drive us around, they clean our homes and take care of our every whim. These are the very same people who suffer the most from the skyrocketing inflation and the rise in food prices, but who also see the lifestyles of the people they serve improving.
It’s a thought that’s been bugging me constantly since I returned to Pakistan. I’ve found it hard to come to terms with the extent of inflation in the country and the explosive gap between the rich and poor. If the Arab Spring has taught us anything, it’s that people always have a breaking point at which they say “enough is enough.” Those who don’t pay attention to history are destined to repeat it. The irony will be that if our country allows this go on — if ‘we’ let this go on — we’ll be culpable in our own demise, and we will have deserved it.
8 Fast-paced childhood (The Khaleej Times) Sometimes, we see something in our children to reflect the past. We often associated their future with their education. Perhaps we put too much emphasis on schools and overlook the more important things. We now know that the earliest memories linger on to haunt us later in life. Schooldays is one of them. We remember our parents fighting, frequently moving houses, changing schools, the relations we had with friends and siblings. These memories make us wonder what we are now and influence us into making many bad decisions.
There are no second chances in your childhood because somebody else made decisions for you. However, we can use our past knowledge to make growing up a more memorable experience for our children. Don’t make any mistake about it, they will one day look for those memories, like you did, to expose your weaknesses as a parent. All we have to remember is that every decision you make now will influence the course of your children’s life.
I was walking back home, still deep in thought, when a car sped past me. It swerved, skidded, hit a pavement and did a U-turn to accelerate towards me again. I glimpsed a youth having dangerous fun in his father’s expensive car. I am not sure if he was past his sixteenth birthday. He probably was but kids like him get a taste of the fast life very early these days. Whether his father knew about it or the teenager stole the car key, does not make a difference. I also see nine-year old kids walking around with mobile telephones presented to them as birthday gifts. I am not sure how to react to this type of upbringing and I sincerely hope their parents do not regret it.
9 Investors turn shy on India (The Wall Street Journal) A pick-up in foreign direct investment in India last year doesn't show the whole picture. Actually, the numbers mask deep problems. FDI likely touched $30 billion in 2011, nearing the record highs of 2009. But the data are skewed by a few blockbuster deals. The two biggest deals alone – BP’s investment in Reliance Industries' oil and gas blocks, and Vodafone’s purchase of a bigger stake in its Indian unit – add up to $14.46 billion, according to Dealogic data. Just five investments represent more than two-thirds of the total. In fiscal 2010, the top five were less than a quarter of all FDI.
In fact, many investors are skeptical about India in the near term. Compared to other emerging markets, India lags when it comes to FDI. In the first three quarters of 2011, FDI inflows were less than half of Brazil's share and one-sixth of China's, according to the Organization for Economic Cooperation and Development.
Corruption is a big factor, of course. A $7 billion telecommunications-sector scandal has dragged on for years. A court last week canceled 122 second-generation wireless licenses in connection with the fiasco. That was seen as a strong, anticorruption ruling, but it also left some foreign businesses in a difficult spot. Foreign-domestic joint ventures held 61 of the licenses now scrapped. Norway's Telenor, which has invested $1.5 billion for a 67.3% stake in Unitech Wireless, says it might consider exiting India altogether after its 22 licenses were among those canceled. Indian red tape is a stereotype, but it is a real deterrent too. Meanwhile, planned reform to regulation that blocks investment in sectors like multi-brand retailing and aviation has been under discussion for years. So far, positive change has been limited.
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