Month / July 2014

by Frank Maduri

The Conflict In Ukraine and Malaysian Air Tragedy

The conflict in Ukraine and the tragedy involving a Malaysian Airlines jet which was shot down allegedly by a Russian separatists’ surface to air missile was devastating news to me yesterday. I normally do not write about foreign policy or wars, especially not on Frank’s Forum, but I felt compelled by the events of the past few days to do so.

 

The conflict in Ukraine is a complicated situation where different factions of the population have different ideas about how they see the future of their country evolving. I think they could solve this matter with many other types of methods besides war and bloodshed, but that is not how that situation played out.

 

The White House has been advocating for diplomatic resolutions to this conflict for several months, and just issued some further sanctions on the Russian government to motivate them to end their support of the separatist group in Ukraine. It took the disaster of the Malaysian Air jet crash to get President Vladimir Putin to call for a ceasefire in Ukraine today. Therefore, if there is any good to come out of an international tragedy with 300 innocent lives lost on a commercial aircraft, it was the “wake up call” it provided to the Russians to hopefully end this conflict peacefully.

 

The debate in the mainstream media yesterday was trying to find who is to blame for the Malaysian air tragedy. Was it the Ukrainian forces that shot down the plane by mistake? Did the pro-Russian separatist forces mistakenly think it was a supply plane and shoot it down? Was it the fault of the airline because the FAA had sent warnings to avoid flying over that part of the Crimean region because of the ongoing war and the high risk factor, yet their flight plan went straight through the region?

 

The answer in my mind is that all those factions are responsible for the tragic deaths of innocent lives on a commercial flight yesterday. In fact, we are all responsible for what has happened because this type of violence and hatred should not be acceptable in this world.

 

Middle East Chaos

 

The decision by Israel to begin a ground forces offensive against Hamas is the same type of situation. That area of the world has been a mess for a long time, and it is very sad. So many innocent people have lost their lives in the back and forth, tit-for-tat style of attacks that have been ongoing in that part of the world for decades.

 

It is made even more complicated by the fact that neither side trusts each other, and then takes actions which only reinforce that overall lack of trust. The example that comes to my mind is the Israeli forces finding Hamas troops trying to sneak over the borders in a tunnel during what was supposed to be a truce between these rival sides. Now how can Israel trust that Hamas will halt attacks and agree to terms of a peaceful resolution to this conflict? I do not think they can trust Hamas, and the spiral into more violence, brutality, and destruction will most certainly continue.

 

Then there is the horrible situation with Syria and the I.S.I.S. group of terrorists and the instability within Iraq, which you will all notice has taken a backseat in the mainstream news cycle since the Israel – Hamas situation heated up, and the horrible tragedy in Ukraine yesterday. But remember when the big story was the collapse of Iraq to a terrorist faction of extremists? Well that is still going on.

 

I sent out a “tweet” on the social media site, Twitter, recently that received a great deal of attention and “re-tweets”. It was my harrowing thought of the week: I saw a report that this I.S.I.S. terror group and their elusive leader, Abu Bakr al-Baghdadi, released an “annual report” to prove that they were more ruthless than the other terrorist groups. That is proof positive that we have major problems within our society.

 

Then I looked into it further and learned that I.S.I.S. was so brutal in their activities in Syria that even Al-Qaeda cut ties with them. This is a major problem for the stability and peace in that region and for the world. Yet now it is buried to the third or fourth story on the news, and it is unclear what the U.S. and the West are going to do to deal with that ruthless group. I do agree with the White House assessment that the best way forward is to build partnerships in the region in order to effectively deal with that situation in the long term. But what are we doing? What steps are being taken? How are we going to destabilize I.S.I.S.?

 

Respect

 

In the end analysis, all of these events of the past few weeks and months come down to a fundamental loss of respect and love for each other. A friend of mine commented on social media that essentially the world is suffering from the lack of common decency for others that people are unkind to one another.

 

The reliance on warfare to solve problems and disputes is a self-fulfilling situation where violence just leads to more violence and nothing really gets resolved. The “dogs of war” do not address the fundamental issues of what is plaguing the human society on an international level. The struggle between those with a great deal of wealth and resources and those who have little to none of either.

 

I saw on Twitter a few weeks ago a picture of a billboard someone took from somewhere here in America which had a dark color background and had a message in bright letters that read:

“You know that whole ‘Love one another’ thing…I meant that – God”

 

We have lost sight of the Great Commandment to love one another. We need to get it back and to find peaceful resolutions instead of violence, war, and the disrespect for life being shown every night on the evening news.

 

I will now close with a poem I wrote recently which sums up this situation:

 

“Piling Up”

 

The excuses are piling up

It’s not our business to get involved

The anger is piling up

By people all over the world

The death toll is piling up

In Syria, the C.A.R., South Sudan

The rage is piling up

Over the injustice of tyranny

The sadness is piling up

Over the hopelessness we all feel

The dead bodies are piling up

Every time I turn on the news

The numbers keep piling up

Of girls kidnapped in Nigeria

The frustration is piling up

As the U.S., the West does nothing

The evil is piling up

Everywhere it seems these days

My prayers are piling up

That peace will prevail, justice will reign

My hope is piling up

That the Lord will intercede for goodness

My confidence is piling up

Because I know He can heal all things

 

 

Copyright 2014 – Frank J. Maduri – All rights reserved. No republication without written permission from the author.

 

by Frank Maduri

Minimum Wage Debate: A Six Month Review – Follow Up

The debate surrounding the minimum wage increase has been extraordinarily divisive among the American general public. I have covered this issue from a variety of aspects, particularly surrounding the referendum vote affirming a minimum wage increase in my home state of New Jersey in January.

 

Now, six months later, I will again follow up on this contentious subject and as I have done in the past, I will analyze the data available to measure the impact on the job market in those states which increased wages.

 

The Data: Six Months Later

 

The report from the Center for Economic & Policy Research is very promising. There were no job losses in most states which raised the minimum wage, and if you do not recall from my earlier coverage, 13 states raised that wage for the workers in their respective states.

 

In fact, all but 1 state of the 13 states saw job growth within the first 5 months of the passage of the minimum wage increase. The states that raised the minimum wage had better job growth than those that did not raise the minimum wage.

 

Furthermore, the top 10 states for job growth feature 4 states which raised the minimum wage: Florida, Washington, Oregon, and Colorado. This data is exciting for the proponents of the minimum wage increase and will help their cause to gain traction on the national level.

 

Conversely, the data in this report will be largely damaging to those factions which continue to oppose the increase in the minimum wage from being approved in other states or on the federal level.

 

However, the detractors will most probably point out that the economy needs to fill higher paying jobs at a much more prevalent rate in order to fully bounce back. This statement would be rather accurate given the current state of the economy.

 

The factions who strongly defend the minimum wage increase would argue that the economy and job growth usually always starts from the bottom and progresses up the salary chain. Therefore, the gains made in the minimum wage jobs, they would argue, are an indication of future job growth of higher paying positions. These factions would use the data from this report to illustrate a trend in overall job growth in the 13 states with raised minimum wages which have also seen stronger job growth across the salary spectrum.

 

The Garden State Blues

 

My home state, New Jersey, has the worst job growth of the states that raised the minimum wage and is the worst state overall for job performance with a decline in net hiring of .56%, according to the Center for Economic & Policy Research.

 

The national labor force participation rate is declining, and New Jersey has been impacted by that unfortunate pattern in the labor market as well. The labor force participation rate is the amount of people who live in a particular state who are within the legal working age and that are gainfully employed.

 

The labor force participation rate in New Jersey was 63% in January 2014, the lowest rate since June 1983, during that horrible recession. In New Jersey and across the nation the share of people in their prime earning years that are employed is declining.

 

New Jersey is suffering for multiple reasons, the taxes on businesses coupled with the high standard of living have caused companies to either leave the state or hire less people. The cutbacks in hiring are due to the fact that the labor force here needs higher wages in order to meet the cost of living. It creates a vicious cycle.

 

In another report I reviewed, a study of major metropolitan areas and their respective job growth versus population size, I found that both New York City and Philadelphia finished in the bottom for job growth given that measurement. New Jersey relies on both of those cities to employ large amounts of their residents, which is obvious when you look at the bedroom communities that have sprouted up in New Jersey near those two major cities in the past.

 

That metric, the labor force participation rate, has everyone, including the White House, concerned about the job market in the near term. A member of the White House staff confirmed that they have to do more to assist businesses to enable them to create more jobs that are higher paying to improve the participation rate.

 

Stigma

 

I poured through several reports and data, but the biggest issue with the labor force participation rate is the stigma involved in society over the perception of those who are long term unemployed.

 

The studies I reviewed displayed a growing misconception by hiring managers and large and small corporations that the members of the labor force who have been unemployed for a long period of time cannot adequately fulfill the duties of the respective job which is currently open.

 

Several labor market analysts and those within the federal government who analyze job market trends disagree with this assessment, and acknowledge that the American economy still has a huge issue with long term unemployed people who are in their prime earning years. That figure stands currently at 35%, so for all the news that the job market is improving, that statistic is particularly alarming and damaging to our economy.

 

The debate within these circles and within the federal and state governments will shift in the coming months into a new focus: how to reverse that mindset and reverse the downward trend in the stagnant hiring of the long term unemployed. Many options are being discussed including potentially incentivizing the process for companies that do hire those individuals who have been out of work for a prolonged period of time.

 

Outlook

 

This report on the minimum wage increase certainly casts some light on the Congressional Budget Office (CBO) report which I think was too quick to “jump the gun” on the effects of the minimum wage on job growth. That report, in summary, basically maintains that minimum wage increases would have little to no positive impact on the creation of jobs.

 

The outlook for the proponents of the cause to get the federal government to raise the minimum wage is, in my opinion, strengthened by the data in the report from the Center for Economic & Policy Research. The groups in favor of this measure have a petition launched on the White House website if you would like to lend your support to this cause.

 

The growth of jobs overall is obviously the much larger issue here, and it will be interesting to see how the government and the business community will address the labor force participation issue in the future. It is becoming increasingly clear that something has to be done to employ more people in the prime of their respective careers, the overall improvement of our economy depends upon it.

 

(Statistics, rankings, and some background information courtesy of the Congressional Budget Office, Office of Management & Budget, Center for Economic & Policy Research, The Fiscal Times, and Forbes.com )

 

 

 

 

 

 

 

by Frank Maduri

Critical Condition: Lake Mead At Drought Level – Follow Up

In a follow up to an earlier story I wrote on this issue, the news out West is rather daunting: Lake Mead is at the lowest water level since the Hoover Dam was finished and the Colorado River reservoir was established back in the 1930s.

 

This vital reservoir which provides water to about 40 million people in its service area, is according to the AP, currently 39 percent full and 1,082 feet above sea level. These figures are alarming, they are even lower than the data recorded in November 2010 during that terrible drought, which I covered in my earlier piece on this issue. Lake Mead is at the lowest point since 1937.

 

In contrast, Lake Powell is 52% full and through the process known as control management, which I detailed in my original article, the two lakes can have water shifted from one to the other to balance out any deficiencies in the water level. The U.S. Bureau of Reclamation is considering utilizing both control management and conservation protocols in order to address the plummeting water level in Lake Mead.

 

Multi-faceted Cause for Concern

 

The current state of Lake Mead leaves a multi-faceted cause for concern at this point because not only is Lake Mead a popular recreational area and attached to the Hoover Dam which is a huge tourist attraction; the lake is also the main source of water supply for Las Vegas and the millions of visitors that resort city attracts each year.

 

I detailed in my earlier piece that Las Vegas already has multiple conservation methods in place and is very environmentally conscious with their reuse of water and other natural resources. Any type of water supply delivery cuts would have a significant impact on Las Vegas and both the residential population as well as the tourism industry which is the backbone of the entire state of Nevada’s economy.

 

The U.S. Bureau of Reclamation asserts that through the control management and other conservation methods they plan to employ, they should be able to stave off any water delivery cuts for a full year. The summer of 2015 though could be a very different scenario, and if these drought conditions continue, then delivery cuts to the water supply will have a detrimental impact on the Las Vegas area during the crucial summer vacation travel period.

 

In addition, a water supply cut during the summer months where the hottest temperatures will be experienced in the Lake Mead service area will create massive public health concerns.

 

Keeping Watch

 

The government entities involved will continue to monitor the water levels in Lake Mead and the other Colorado River based reservoirs to insure water supply deliveries are not altered in the coming weeks and months.

 

However, this drought raises concerns again over the demographic shifts in population growth to the American West, and whether the infrastructure can adequately sustain the new burdens placed on those systems.

 

This situation also raises more questions about climate change and the impact that it has had on the supply of water to the Colorado River, which then supplies Lake Mead and Lake Powell.

 

The unfortunate conclusion here is that this drought raises more questions that we do not have answers for at this point. It also points to the need for a longer term solution as these factors which drive the potential for water supply interruption are not going away any time soon.

 

(Statistics and some background information courtesy of AP )