Paul Joseph Watson, Prison Planet.com June 20, 2010
There can now be no doubt whatsoever that the BP oil spill was purposefully contrived, either through deliberate negligence or outright sabotage, and is now being used to further the Obama administration’s political agenda. Criminal investigations into the government and BP’s role in the disaster need to be launched by state authorities in Florida, Louisiana and Mississippi immediately, while local authorities also need to call emergency legislative sessions in order to take over emergency response efforts from the feds before the crisis gets much worse.
While BP CEO Tony Hayward is busy watching yacht races, Barack Obama, who took two vacations immediately after the oil spill, spends his time playing golf. If this disaster is on a par 9/11 as Obama claims then why is he fiddling while Rome burns? Every effort to find a solution to this crisis while cleaning up the mess has been lackluster and half-hearted. The federal government’s hyped rhetoric about how bad the consequences of this spill will be has not been matched with the appropriate action to combat the problem.
In hindsight, it’s becoming clear that the government has deliberately botched the response and prevented local authorities from doing their jobs, just as FEMA deliberately sabotaged the state response to Hurricane Katrina in order to make the crisis worse and create the pretext for a police state response, gun confiscation and ultimately more federal power.
“(Louisiana) Governor Bobby Jindal had ordered the state’s fleet of 16 vacuum barges to clean up oil in the Louisiana marshes. On Wednesday, the U.S. Coast Guard intercepted the barges and ordered them to stop the cleanup. Ostensibly, the Coast Guard wanted to “inspect” the barges — but then it didn’t inspect them. It just ordered them back to dock and then did nothing,” reports Fort Liberty.
Just as happened with Katrina, BP in alliance with the feds have erected an ‘information blockade’ around the oil spill. Reporters have been harassed, threatened with arrest and prevented from accessing the affected areas. Oil spill clean up workers have been gagged from talking about their experiences. Foreign ships have been prevented from helping in the clean up process. Every effort has been made to stop the truth about the oil spill from being uncovered – almost everything we learn about the situation comes directly from BP or the federal government. This strictly enforced cover-up shows that authorities are more concerned about protecting their information lock down than actually cleaning up the spill.
This is part of what the Pentagon calls “psychological information warfare” and it is intended to deceive and confuse the enemy (the American people) so that they don’t uncover the truth.
The Jones Act, which forbids foreign ships from operating between U.S. ports, can be waived in in cases of national emergencies or in cases of strategic interest. Belgian company DEME contends that it has the specialist vessels to fix the oil leak within two to four months, technology the U.S. does not have. By taking bids on a contract to fix the oil leak from international companies, Obama could have the problem solved within a matter of weeks, but he immediately refused the help of “thirteen entities that had offered the U.S. oil spill assistance within about two weeks of the Horizon rig explosion.” This is another clear example of the government’s motivation to allow the crisis to drag on indefinitely until they can use it to ram through their environmental agenda, which we shall cover shortly.
Every indication points to the oil spill having been deliberately caused, either by negligence or sabotage, by a combination of BP executives and those who hold the reigns of power in the Obama administration. This goes beyond Obama himself, who is merely there to read the teleprompter and employ his fine acting skills in selling the agenda that the globalists hope to enforce on the back of this contrived crisis.
On May 27, the New York Times reported on how just days before the explosion, BP chose to use a salt-water solution to seal the cement around the casing pipe which was known to be a far riskier option that the stronger heavy drilling fluid.
The choice of using a weaker salt-water solution, in light of the safety concerns surrounding the oil well in the weeks and months before the explosion, prompted heated arguments between a BP official and crew members employed by Transocean, the rig’s owner, on the morning of the blast, according to Douglas H. Brown, the chief mechanic for the Deepwater Horizon.
“Workers from the rig and company officials have said that hours before the explosion, gases were leaking through the cement, which had been set in place by the oil services contractor, Halliburton. Investigators have said these leaks were the likely cause of the explosion,” reported the Times.
Halliburton’s role in improperly sealing the well with a riskier option, and the consternation this caused amongst workers on the rig, is shocking given the fact that just 11 days before the Deepwater Horizon rig exploded, Halliburton, the world’s second largest oilfield services corporation, surprised some by acquiring Boots & Coots, a relatively small but vastly experienced oil well control company, for the sum of $240 million dollars.
Halliburton is profiting from the oil spill it helped cause because Boots & Coots is now “under contract to BP – to help stop the Gulf oil spill,” reports the Christian Science Monitor.
“Could Halliburton have known that an oil disaster was on the horizon, and planned in advance to profit from it? News reports indicate they could have,” reports Raw Story.
“The New York Times reported in May that BP was concerned about the rig’s well casing — which Halliburton worked on — as early as June of 2009. The Times also reported that a Halliburton employee warned BP three weeks before the explosion that BP’s use of cement for the well casing was “against [Halliburton's] best practices.”
Given that it was in the process of acquiring a company that would receive millions of dollars in oil spill clean up contracts, was Halliburton’s overriding motivation to properly fix the well or to ensure it remained unstable?
BP itself was aware of cracks appearing in the Macondo well as far back as February, right around the time Goldman Sachs and BP Chairman Tony Hayward were busy dumping their stocks in the company on the eve of the explosion that led to the oil spill, according to information uncovered by congressional investigators.
The Mining and Mineral Services agency released documents to Bloomberg indicating that BP “was trying to seal cracks in the well about 40 miles (64 kilometers) off the Louisiana coast,” according to the report.
The fissures, which BP began to attempt to fix on February 13, could have played a role in the disaster, though this is a question still being explored by investigators. Improperly sealed, the cracks cause explosive natural gas to rush up the shaft.
“The company attempted a “cement squeeze,” which involves pumping cement to seal the fissures, according to a well activity report. Over the following week the company made repeated attempts to plug cracks that were draining expensive drilling fluid, known as “mud,” into the surrounding rocks,” states the report.
As we previously highlighted, eyewitness evidence indicates that Deepwater Horizon managers knew that the BP oil rig had major problems before its explosion on April 20. A crew member who rescued burning workers on the rig told Houston attorney Tony Buzbee of a conversation between Deepwater Horizon installation manager Jimmy Harrell and someone in Houston. According to the witness, Harrell was screaming, “Are you fucking happy? Are you fucking happy? The rig’s on fire! I told you this was gonna happen.”
The fact that BP managers were aware of problems with the rig and were seemingly unconcerned about fixing them, in addition to Halliburton’s clear financial motivation in improperly sealing the cap, only lends more weight to the already startling indications of some having foreknowledge of the disaster.
On page 37 of British Petroleum’s own investigative report into the oil spill, it is stated that the Hydraulic Control System on equipment designed to automatically seal the well in an emergency was modified without BP’s knowledge sometime before the explosion.
Highly suspicious stock and share trades by people connected to BP before the explosion indicate some extent of foreknowledge.
Goldman Sachs dumped 44% of its shares in BP Oil during the first quarter of 2010 – shares that subsequently lost 36 percent of their value, equating to $96 million. The current chairman of Goldman Sachs is Bilderberg luminary Peter Sutherland, who is also the former chairman of British Petroleum.
So we have clear evidence of foreknowledge, allied with brazen financial motivation on behalf of several directly connected parties to sabotage the oil well, or in the very least ensure that negligent safety procedures increased the likelihood of an explosion, allied with the fact that the well was indeed improperly sealed by these same parties, much to the anger of the people working on the rig.
But the motivation for allowing the well to blow and prolonging the crisis isn’t merely financial, it’s political too. The motto for the people who pull the strings inside the Obama administration, people like Rahm Emanuel and Hillary Clinton is to ‘never let a good crisis go to waste’ – and Obama himself has certainly taken that to heart over the course of the last two months.
Indeed, BP has been a faithful supporter of John Kerry’s climate legislation because the company has “explicitly backed” a “higher gas tax.” If Obama is able to exploit the oil spill to ram through his cap and trade program, BP stands to profit to the tune of billions. Allowing the crisis to worsen in pursuit of this goal is mutually beneficial to both the Obama administration and British Petroleum.
Obama’s “Agenda is to exaggerate the significance of the oil spill crisis to massive proportions, for two reasons,” writes the Telegraph’s Gerald Warner. “The first is that, the more Americans can be persuaded to regard the accident as a monumental, historic disaster, the less his patent impotence in the face of it will appear blameworthy. His second reason is that, in accordance with the Emanuel doctrine (never let a good crisis go to waste), he sees this as an opportunity to breathe new life into his moribund Cap-and-Trade climate change legislation.”
Obama has now indicated that he will push for cap and trade to be added to a weaker energy bill after the mid-term elections in November. Every week that the oil spill crisis drags on, Obama’s political capital for the purpose of pushing a carbon tax increases in the name of ‘reducing dependence on oil.’ The government has every interest in seeing the crisis worsen, not merely to justify cap and trade but also to mothball plans for new exploratory oil drilling in the Arctic, something to which the administration had never wanted to fully commit. As a result of the oil spill, which every action of the federal government has made worse, that drilling has now been postponed.
Another benefit of the oil spill is that it serves as a convenient distraction and a cover for a number of other stories, primarily the gearing up for a military attack on Iran, which now seems likely as we learn that more than twelve U.S. and Israeli warships, including an aircraft carrier, passed through the Suez Canal on Friday and are headed for the Red Sea.
Given the multitude of alarming examples of foreknowledge, motivation for sabotage, and clear evidence of deliberate malfeasance and negligence, state authorities in Florida, Louisiana and Mississippi need to immediately launch a mammoth criminal investigation into the role of BP, Halliburton and the federal government in causing the oil spill disaster, as well as their continuing cover-up of the true nature of the crisis, in addition to their efforts to block local authorities as well as foreign companies from helping to both stop the oil leak and clean up the devastation it has caused.
By Alex Jones & Aaron Dykes, Infowars.com June 21, 2010
Following the rise of sufficient indicators that BP knew about the conditions of its Gulf oil assets prior to the April 20 leak & explosion– and may have allowed the incident to occur, Alex Jones has called for criminal investigations of key figures at BP, inside the White House administration and elsewhere.
These telling transactions at the highest levels of business, politics and finance coincidence very meaningfully with the multiple accounts from inside BP, the oil platforms in the Gulf, and the related lawyers that demonstrate a willful negligence towards the conditions of the oil assets which would later explode and spill.
Thus, Alex Jones is urging activists and concerned citizens everywhere to take a proactive approach to dealing with the looming consequences of the massive oil leak that started 62 long days ago. He suggests calling on Governors and State Legislators in the Gulf Region to assert 10th Amendment rights– refute the Federal Government’s inaction, and institute measures to resolve the situation as best as can be. Victims of the crisis should used the courts to challenge roadblocks and seek retribution for negligent action on the part of both BP and the Obama Administration. The pined-over $20 billion secured ‘personally’ by Obama from BP is no assurance of justice to come, and the oil that has leaked and is still flowing amounts to less than 2-3 percent of the total reserve, so waiting only do harm.
Alex also alerts awakened people everywhere to the renewed efforts from the “Global Warming & Climate Change” Disaster camp. President Obama and certain allies are adamant about raming through Carbon Taxes and other Climate Change measures via stealth measures, and using the crisis of the BP Oil Spill to justify such fascist “green” policies– when the Obama Administration’s bewildered response (much like the Bush Administration’s delayed response at Katrina) exacerbated the scale and depth of the crisis BP may have let happen. It’s another case of White House Chief of Staff Rahm Emanuel’s maxim to “never let a serious crisis go to waste.” Indeed.
He would get up about five a.m., go to the barn and feed the animals, milk the cows and process the milk to the cans for truck delivery to the local dairy. He would then join the family for prayer and breakfast. Depending on the season, he would work in the fields, preparing the fields for planting (late winter), planting the crops in the Spring or harvesting the crops in late Summer or Fall. He usually works from sunup to sunset in the fields for planting and harvesting with a break for lunch. In the evening, the cows would need to be milked again.
She would also get up about five a.m., help with the milking, prepare breakfast, and if laundry day (usually on Monday) get the gasoline motor started on her wringer washing machine do the laundry, hanging them out on the line to dry. She would work in the kitchen garden, preparing it for planting (with help from her husband), or harvesting vegetables for meals. If there are children, she would also get them ready for school, including packing lunch boxes, etc. Daytime household duties would be done, i.e., ironing, washing dishes by hand, baking, and cooking lunch and dinner. Depending on the season, she would can fruit and vegetables, making jams and jellies, etc. She will also sew clothes for herself, her husband and their children.
Both work schedules will vary according to the season and weather.
Of course, on Sundays, the family attends church in their District or in a neighboring District. They rise early, feed the animals and milk the cows, prepare lunch and leave for church about 7:30 a.m. They typically spend the day visiting with either church members or their nearby family members. They return home late afternoon to tend to the animals.
On Sunday and several times during the week, they may visit in the evening with neighbors or family members.
Anyone can live in an Amish community by simply moving to where the Amish live in a specific area. If a person wants to join the Amish church, the person must move to an Amish community, live there for a length of time (which could be years), accepting the Amish and the Amish accepting you (it is really a mutual issue), being willing to live within the rules of the Church (Ordnung). To become a member of the Amish church requires a genuine religious commitment which is much more than just moving to an Amish community and living the Plain lifestyle of not using electricity, cars, telephones, etc.
... I suddenly realized that going green to save our economy is not a radical new idea—it’s traditional and retro.
Take the Amish. As a growing but still marginal segment of the rural population, they make their own clothes, grow their own food, live off the grid, and drive horse and buggies instead of cars. While most of us are never going to achieve a carbon footprint as low as theirs, we can adopt a few of their habits to help ourselves, the environment, and our economy.
Buy Fresh, Buy Local
I once asked an Amish friend of mine why the Amish drive horse and buggies. I expected him to give me the usual answer—that it had to do with their religious beliefs, to remain separate from the world by eschewing modern technology. He surprised me by saying:
“If we drove out of town to shop, our local merchants would be out of a job.”
While none of us are about to give up our cars, we can support our local restaurants, merchants and farms. In a tough economy, your dollars spent at the corner market, the one-of-a-kind restaurant, and the local bookstore help prevent a chain reaction of small business failures, home foreclosures, and falling property values. In a town of 10,000 people, it’s estimated that a dollar spent locally will circulate a dozen times. Buying local also makes green sense because it cuts down on carbon emissions. And venues such as farmer’s markets bring fresher food at better value straight to the customer while supporting local farmers.
Live Within Your Means
I remember reading an article in the Des Moines Register at the height of the 1980s farm crisis. Small farms across the state were failing, mostly due to large debt-loads when farmers bought expensive new machinery and land at peak prices just before commodity prices fell. The article pointed out that the Amish, who did not incur debt and thus could weather economic downturns better, weren’t at risk of losing their farms.
It’s never too late to adopt a more realistic budget. A new fashion term cropping up is “frugalista,” someone who makes a statement by finding bargains and getting creative with the sewing machine. Even in today’s stagnant housing market, innovative new arrangements like house swaps are allowing people to unload homes that are too big to afford or to move up to a larger home to accommodate a growing family.
Take Joy in Simple Pleasures
Before I started visiting the Amish, I thought they must be a grave and dour people, judging from their dark, 1600s-era clothing and prim bonnets. What I found was a people who love to laugh, to tease, and to party even when they’re working. Whenever there’s a tough job to do—whether it’s putting up 50 quarts of tomatoes or putting up a new barn—they invite their friends over for a “frolic” that involves massive amounts of food and good old fashioned fun.
And because they have less artificial types of entertainment at their disposal, the Amish have developed their human social skills to a high art. When they talk to you, they are truly present, free of interruptions by telephone, TV or radio.
The Amish enjoy simple pleasures—potluck meals, taking a walk in the woods, playing volleyball, baseball and other nonviolent sports, and family table games that involve a large dose of loud, raucous laughter.
No matter what your budget, you can take joy in simple yet fulfilling pastimes like starting a garden, preparing home-cooked meals for your family, or hiking in a nearby forest. Riding your bike for Saturday errands can burn calories, reduce your gas budget, and lead to new discoveries as you slow down and actually see the architecture and landscaping that were once a blur in your rearview mirror
Recently my husband, Tom, and I downsized to one car. It does require a little juggling when the weather is rainy, but Tom is enjoying a new form of exercise: walking to and from work. He says his daily walks have become favorite times of the day, and he wonders why he spent so many years driving. He also loves not having the extra car to service, which saves us both money and time.
“We’re just one car away from being Amish,” Tom likes to joke. “But no black hats yet.”
Simple pleasures not only save the environment, they save your health and your pocketbook. And like the Amish, who knows, you might find that living simply is simply more fun.
The Lifetime movie, "Amish Grace," based on the 2006 murder tragedy in Nickel Mines, PA, portrayed the surprising spirit of forgiveness of the Amish families involved.
Anonymous, Scribd.com March 31, 2010
As I type this, my eyes are still a little puffy and wet after watching the immensely painful Lifetime movie, “Amish Grace,” which premiered on Sunday evening, March 28, 2010. There's nothing as devastating as losing a child, especially due to human evil, as was experienced by the Amish families portrayed in this movie based on the 2006 shooting tragedy in Nickel Mines, PA.
As in real life, immediately after the shooting deaths of their daughters, the Amish families in the community expressed their forgiveness of the murderer who had committed suicide at the scene of his crime.
In the movie, an Amish elder tells the man's widow that this forgiveness is proscribed by God in Matthew 6:14:
“For if ye forgive men their trespasses, your heavenly Father will also forgive you.”
This quotation from our Lord Jesus Christ during his earthly ministry to Israel goes on to say in v. 15:
“But if ye forgive not men their trespasses, neither will your Father forgive your trespasses.”
The fact that the Amish, as is widely known, live by the precepts that God gave exclusively to his chosen nation of Israel at a time in her prophetic calendar in which she was under the final installment of curses for her disobedience (Lev. 26), is evidence that the Amish mistakenly believe this situation is still going on, although that program was temporarily set aside by God and a new offer of salvation apart from the law and the curses of Israel is now being made to individuals who believe the gospel of grace given exclusively to Paul by the risen Lord Jesus Christ for us.
The Amish “faith” is one in which its members feel it necessary to obey the commandments that the Lord Jesus Christ gave to Israel, even though he said:
“I am not sent but unto the lost sheep of the house of Israel.” (Matt. 15:24).
Unless the Amish keep themselves a separate and peculiar people that follow in the footsteps of the earthly Jesus as he instructed his covenant people in what they must do in order to prove their worthiness of their promised earthly kingdom, they believe they have no right to call themselves saved. In their zeal to please God by their performance, many go so far as to eschew nearly all modern conveniences, such as electricity and owning motor vehicles. This they must do in addition to trusting that God sent a Sviour, the Lord Jesus Christ, to die for sin.
In the made-for-TV movie, a news reporter asked this elder how his congregation could forgive the shooter even though he had shown no remorse for his actions. The elder replies:
“Forgiveness comes from an open heart. It comes without conditions—or it doesn't come at all.”
For those of us who recognize that we are living in the dispensation of the grace of God in which he offers salvation as a free gift with no strings attached to any who will simply trust that his Son has done it all for us by offering for our sin his shed blood on the cross, and rising again from the grave, the elder's description of forgiveness perfectly reflects the attitude of God toward the world of sinners today. (2 Cor. 5:19). Curious when you think about it. This elder's description of “Amish grace” is far more gracious than his religious idea of God's grace! Does he think the Amish are more gracious than God?
It's my prayer, and I know that it's yours as well, that Amish people—and unsaved people everywhere—will see the truth of the mystery revealed to Paul for all of us today, which is based entirely on the fact that:
“By grace are ye saved through faith; and that not of yourselves; it is the gift of God; not of works, lest any man should boast.” (Eph. 2: 8, 9).
Amish schooling may end at 8th grade, but education continues
Amish America
Amish are well-known for their approach to schooling. Most Amish children attend school in one- or two-room private schools, and end their formal education at the eighth grade. Some observers criticize the Amish approach to education, seeing it as a means of restricting the individual.
Amish, however, root their belief in limited formal education in both religious and practical reasons. Amish education continues beyond the 8th grade in various formal and informal venues.
Amish stop school at the eighth grade for two main reasons:
Practicality - Amish trades are agricultural or craftsmanship-oriented; Amish emphasize apprenticeship and hands-on learning
Religious Objections - Amish feel higher education can promote ideas counter to Christian values
Amish feel an eighth-grade education is practical
Why do Amish feel an eight-grade education is sufficient? There are a number of reasons, one of the most important of which is practicality. As Amish society emphasizes agriculture as well as craftsmanship-oriented and manual trades, Amish feel that formal school learning can only provide limited value.
Amish education is oriented around factual knowledge and usefulness. The education on offer at Amish schools can vary, but Amish children typically get a solid grounding in the “three R’s”, as well as some history, geography, German language training, and limited science.
Amish have traditionally seen eight grades as sufficient for an agricultural lifestyle
The Amish generally see little value for themselves in abstract subjects taught in many high schools and institutions of higher learning. Though they recognize that they and the world as a whole need to services of the doctors, bankers, and other professionals colleges and universities produce, they do not see a need within their own culture for such learning, one reason that Amish do not attend high school.
Religious objections to high school
In addition to practical objections to schooling beyond grade eight, Amish also have some religious objections. Theories such as evolution are objectionable to the Amish, who take a literal view of the Bible and the Creation story. Though outright religious education is not offered in Amish schools (religious teaching is typically left as a matter for the church and home), Amish also appreciate the fact that prayer and religious songs are allowed in their parochial schools.
The Amish schoolhouse
The Amish schoolhouse is typically a one-room classroom, sometimes with a basement or with a second room, in some cases divided by a curtain. The teacher is almost always an Amish female. Occasionally Amish males teach, or Mennonites in some areas such as Lancaster County, or rarely, non-Amish (“English”) teachers.
Simple Amish schoolhouse in Ashland County, Ohio. The small structure on the right is an outhouse
The teacher typically handles all eight grades, or sometimes a school may be divided in two, with one class for grades 1-4 and a second for grades 5-8. The teacher may may have an assistant to help her. She typically has an eighth grade education herself, with some supplementary courses in some cases. She is selected for showing good moral character, Christian values, and for having an interest in teaching.
The Amish schoolhouse is typically built on donated land, and contains enough ground for a softball field, as well as (in some cases) playground equipment, and also separate boys’ and girls’ outhouses. Amish families maintain and pay for the school house. A school board, typically 3 Amish males, helps to make decisions such as hiring and salaries for teachers. Parents often visit the school, and each school has a guest book for visitors to sign.
The Amish school day is divided into periods covering the various subjects, and includes lunch and a few recess periods for playing softball. The teacher will typically check homework at the beginning of a lesson, and other students will work diligently at their desks, with older students sometimes helping the younger ones.
Some Amish do send their children to public schools, for various reasons. This is more common in communities such as Holmes County, Ohio, or in northern Indiana. A few Amish homeschool their children. Yet the vast majority of Amish in North America send their children to the local one-room schoolhouse, a right which they gained after long years of conflict with the state.
Conflict over schooling
Amish long resisted modernizing trends in American education before gaining the right to limit their children’s formal education. Objections to a high school education perceived as abstract and unnecessary to an Amish life (detailed above) led Amish to resist state mandates that required education beyond eighth grade.
Beginning in the first half of the 20th century, Amish resisted the trend toward school consolidation, which essentially shut down the small often one room rural schools that once dotted the American landscape, in favor of larger, more distant schools. The fear was that a more centralized, distant school would be more removed both physically and ideologically from both rural and Amish values.
Some Amish schools are more progressive, in terms of design, technology used, and curriculum. Holmes County, Ohio
Conflict over this issue emerged as early as the 1930s in Pennsylvania. Later, conflicts over forced schooling occurred in other states such as Iowa and Kansas. Eventually, the issue made its way to the Supreme Court of the United States, which in its landmark decision Wisconsin vs. Yoder (1972) granted the Amish and other religious minorities the right to remove their children from schooling after eighth grade for religious reasons.
Education continues after eighth grade
Despite the emphasis on ending formal schooling at an early age, Amish education continues after the eighth grade. Amish focus on numerous means of informal learning, such as reading, as well as apprenticeships and mentorships. Amish youth often learn craftsmanship and business skills by watching older relatives and doing things themselves. This hands-on approach has helped the Amish be successful in business as well as an effective means of passing on agricultural skills as well.
Some Amish, especially businesspeople, may take supplemental courses, such as correspondence classes, or may attend seminars or classes to pick up a particular skill (for example, accounting). The emphasis is on practicality and usefulness. Amish do not see education as evil or dangerous per se. Similar to their approach to technology, they make use of what is necessary of education, and leave behind that which they deem unnecessary or potentially harmful.
Though Amish may end formal education at the eighth grade, that certainly does not mean the end of the road for learning. Numerous Amish retain a hunger for learning after ending formal schooling, and self-taught historians and “Amish academics” attest to the multiple avenues for education in Amish society.
Settlements established in seven new states since 1992
The Associated Press October 20, 2001
The Amish are expanding their presence in states far beyond Pennsylvania Dutch country as they search for affordable farmland to accommodate a population that has nearly doubled in the past 16 years, a new study found.
Also known as Anabaptists, the Amish are Christians who reject most modern conveniences and rely on horse-drawn carriages. They dress in plain, old fashioned clothing and strive for modesty and self-reliance.
Pennsylvania, Ohio and Indiana continue to be the geographic center for the Amish, accounting for about two-thirds of the faith's population. They also accounted for more than half of the total population gain.
States such as Missouri, Kentucky and Minnesota have seen increases in their Amish populations of more than 130 percent. The Amish now number an estimated 227,000 nationwide, up from 123,000 in 1992, according to researchers from Elizabethtown College's Young Center for Anabaptist and Pietist Studies.
Over the same period, Amish settlements have been established in seven new states, putting them in at least 28 states from coast to coast. The new states are: Arkansas, Colorado, Maine, Mississippi, Nebraska, Washington and West Virginia.
"When we think they might be dying out or merely surviving, they are actually thriving," said Elizabethtown professor Don Kraybill, a leading expert on the Amish who shared his research from an upcoming book with The Associated Press.
Large families, some conversions
Amish couples typically have five or more children. With more than four out of every five deciding in young adulthood to remain within the church, their population has grown steadily. More than half the population is under 21.
A small amount of the increase is also due to conversions to the faith.
The Amish are attracted to areas with relatively cheap farms, a rural lifestyle and nonfarming jobs such as construction or cabinet making that fit their values and allow them to remain independent. In some cases, they have migrated to resolve leadership problems or escape church-related disputes.
The Amish began arriving in Pennsyvlania's Lancaster County around 1730. Along with English, they speak a German dialect called Pennsylvania Dutch or Pennsylvania German.
In Intercourse, a town just east of Lancaster popular with tourists, Amish goat farmer Lester Stoltzfus said a number of families had moved recently to other states in search of affordable farmland.
"It's fine with me if people move out," Stoltzfus, 37, said from his farm along a country lane hemmed in by cornfields. "There are too many people living here anyway."
Old conflicts revived
As they move into new areas, some of the conflicts that occurred years earlier in established Amish settlements are playing out again, often involving issues such as building codes or waste treatment.
In Mayfield, Ken., an area into which a few hundred Amish have moved in recent years, seven men are fighting charges they operated horse-drawn buggies without the flashing lights and orange safety triangles that state law requires.
"They are moving into new states and settling or establishing new settlements in communities where local officials aren't acquainted with them. That creates some misunderstanding on zoning issues or other unique factors in Amish practice," Kraybill said.
At the same time, some businesses have been glad to accommodate the Amish. In Mayfield, hardware store owner Dan Falder said his business is one of several to install hitching posts where the Amish can tie up their horses.
Now when Falder looks across the parking lot, he sees horse manure.
"That's new within the last few years," he said.
But eight states with at least 1,000 Amish residents had higher rates of growth, led by Kentucky, which saw its population jump 200 percent, from 2,835 to 8,505, the study found.
The number of Amish "districts" — congregations that usually consist of two or three dozen families — has increased by 84 percent in the past 16 years, from 929 to 1,711.
The arrival of the Amish can raise land prices, and their self-reliance translates into a relatively low burden on public services.
Dennis Hubbard, a government official in Sheldon Township, Wis., said the newcomers seldom appear in the court system, require long-term care or attend public schools.
"As they live their lives, they really do not become very involved with government," said Hubbard, whose state has seen its Amish population climb 117 percent since 1992.
At least 350 Amish families migrated into Missouri, New York or Wisconsin between 2002 and 2007. Over the same period, about 520 families moved out of Ohio and some 470 left Pennsylvania.
Group migration
"One family doesn't go — there is a group of them that goes, like two or three or four," said Fannie Erb-Miller, national editor of The Budget, a weekly newspaper serving the Amish that is based in Sugarcreek, Ohio.
Once a settlement has six families and at least one minister, they qualify to send The Budget dispatches about their activities, often with an invitation for others to join them.
"They can continue to let people know: We're here, come visit us, how the land is, the orchards do great or whatever," Erb-Miller said.
Kraybill said only families who use horse-drawn buggies and call themselves Amish were considered Amish for purposes of his research.
Researchers combed Amish publications and mined other sources to determine where new settlements were being established and to count the total number of districts.
They used a figure of 135 people per church district to calculate population estimates, but the study cautions that its method could result in numbers that are too high for newer settlements and too low in long-established Amish communities.
In Ontario, Canada, the only Amish community outside the United States also is growing. It consists of about 4,500 people, up from 2,300 in 1992.
The Amish have noticed their changing demographics. The population boom is posing practical challenges for a people who, for example, often pay non-Amish "taxis" — private vehicles — to take them on longer trips.
"An Amish woman said, 'We joke among ourselves, if we keep growing at this rate, soon half the world will be Amish and the other half will be taxi drivers,'" Kraybill said.
...Americans have had an enduring fascination with the Amish, and lately they seem to be popping up everywhere. A recent article in the Huffington Post, for instance, reported on new research showing something of a population boom among the Amish, accompanied by a small but notable migration West to establish communities on less expensive real estate.
Right on the heels of that, USA Today updated a Wall Street Journal story from last fall by way of covering the new crop of “bonnet rippers”—“Amish inspirational” romance novels that highlight a version of the simple practices and conservative faith (minus much of the radical pacifism that might be distasteful to the prime audience of conservative evangelicals who tend to favor the books) that characterizes life among Plain Folk in the American imagination. What’s up with our renewed interest?
Pimping the Amish
Fortunately, while I was mulling over all this, friends from back East with a vacation cabin in rural northwestern Pennsylvania (an area apparently now teeming with growing Amish families) happened to be in town.
The Amish of my friends’ acquaintance are off-the-beaten-path Plain People, relatively unsullied by the tourist trade of post-Witness Lancaster, PA, and central Ohio, that induced five Amish twentysomethings to fritter away a perfectly good Rumspringa (the period of “running around” allowed Amish after they turn age 16 and before they formally choose to join the church) on the short-lived reality TV show Amish in the City. Neither are their kids the sullen, often violent, beer-swilling tweakers profiled in Lucy Walker’s disturbing documentary Devil’s Playground. They’re all just Adam and Steve’s neighbors—Amos-and-Hannah-from-the-block sorts who are happy to swap recipes for shoofly pie with the “bachelors” down the road. Go figure.
Now, it turns out that if you actually know Amish people (not just see them around town in their buggies or encounter them in the course of tourist commerce, but truly know their names and things about their daily lives on the basis of regular conversation), you will be very popular at a dinner party in Northern California. The mere mention of “Amish-raised, grass-fed organic beef” was enough to provoke spontaneous planning to raise venture capital for an online outlet for Amish goods and services. By the dessert course we were deep into a discussion of tongue-and-groove joinery that was no less pornographic than the staging of the discreet removal of a woman’s white cotton prayer cap in a Beverly Lewis novel. This simplicity—the warm, handcrafted loveliness of an Amish quilt; the rich, golden sheen of the yolk from an egg laid just this morning; the sweet, yeasted smell of bread cooling on a farmhouse windowsill—we all wanted more of this. Lots more.
Simple Isn’t Easy
Rest assured, however, none of us had much interest in the life from which these mere artifacts of simplicity emerged. This is, of course, the problem with the Amish; even for the Amish. Popular media such as the Walker documentary, the reality show (from which only one of the five participating Amish youth returned to their communities), several TV news magazine reports, and a more recent book by Tom Shachtman have highlighted the delights and perils of Rumspringa for youth who chafe at the restrictiveness of the Amish way of life.
These “Amish Kids Gone Wild” spectacles of course always have a sensationalist ring, however much they document very real issues in Amish communities with things like drug and alcohol abuse—pretty much the same issues with which other parents and communities wrestle these days. We experience, I suppose, a certain socio-spiritual schadenfreude when we see the Amish failing so dramatically both at accepting the strictures of their own traditions and assimilating to the cultural riches, new technologies in particular, over which we ourselves are so often conflicted.
It turns out that, at least in more conservative “Old Order” Amish communities, most of kids come out of Rumspringa prepared to be baptized into the faith. Still, the Ordnung (the unwritten “grammar of order,” as Amish scholar Donald B. Kraybill describes it, through which every aspect of daily life in an Amish community is organized) has to be a heavy yoke to bear. The blessings of strong family ties, wholesome work, and generosity in forgiveness and reconciliation with the repentant notwithstanding, I know I couldn’t get my round-faced self far beyond the mandate that women part their hair in the middle. Don’t even get me started on the drab uniform closed in the front with straight pins and the unflinching obedience to fathers, older brothers, husbands, and bishops required of women.
Beyond the limits of my personal vanity and what I hope are more robust principles, the Gelassenheit, or “yielding of the self” to both divine and earthly authority that is at the center of Amish simplicity is worlds apart from the commitment to “life made easier” offered by Real Simple magazine or imagined by my enterprising dinner companions. We all want our lives to be easier and less frazzled, but we don’t really want them to be simple. We want dollops of simplicity, rather, over long weekends in the autumn mountains of Vermont or gazing into an infinite wonder of ocean and sky. We’ll take our simplicity “to go,” that is. “Easy” is where we’d prefer to stay for the long haul.
Suburban Amish in the ’Hood
Of course there are exceptions. My neighbors down the street, the Gallaghers, for example, seem about as “Amish” as anyone in Silicon Valley might have the capacity to be. Neighborhood farmers with a passel of kids, the Gallaghers have turned over most of their front yard to seasonal vegetables. Just past the blackberries climbing a trellis that takes up the side of the house, the backyard sports a coop and pen for five egg-laying chickens (one for each kid).
The Gallaghers are hardly technology-spurning Luddites. But, not unlike the Amish, they tend to consider more carefully than most of the rest of us how to integrate technology and other conveniences into their lives. Thus, Tim hasn’t yet come upon a good reason to have an email account, and it might take Eileen a day or two to relay him a message via that medium. So, if you need to talk to him right now, you’re going to have to haul yourself down the street.
The neighborhood is used to the Gallagher’s neo-Amish vibe. Nonetheless, when Tim and the youngest Gallagher rolled around the block in a rickshaw, it got my attention. Down the block I moseyed, where I learned the Gallaghers have committed to getting their kids to and from school a mile-and-a-half away without using the family minivan. Since not all of the kids are old enough to ride bikes, Tim did what any high-tech, suburban plain person a mere fifty miles from Berkeley would do: he scoured Craigslist for a rickshaw.
The rickshaw in question is a 1950s model manufactured in Britain for the Indian bicycle taxi trade and imported to Berkeley for display in an antique shop before it was purchased for private use. As far as I could tell, it doesn’t come with an “easy button.” Even after spending buckets of elbow grease cleaning it up, repairing the chain, and replacing sundry potentially eye-gouging bolts, the Gallaghers’ one-speed rickshaw with bicycle escort will turn a quick drive to school into a forty-five minute roundtrip commute. All for love of the earth? Not entirely. Eileen Gallagher, a pediatrician, is quick to point out the fitness benefits of the daily ride to school, but that’s hardly the whole of it.
“You know, they’ll be talking to each other the whole way,” she says.
“Efficiency isn’t everything. The kids and Tim will have that time together every day. They’ll see their friends and neighbors on the way. They’ll say, ‘hi.’ They’ll check in. Those interactions, even if they’re not about anything really important, are everything.”
Sweet, I thought, but, cripes, don’t you see each other every other blessed minute of the day? Clearly, the demands of simplicity go much further than winnowing down of our stuff or hopping off the grid for the weekend. We apparently actually have to deal with each other. A lot. I don’t know how that plays into the Gallaghers’ faith life, but I do know that kind of conversation and relationship is, ironically, often not the stuff of mainline religious practice.
The Complexity of Simple Connections
Mainline religious life for most Western Christians, Jews, and Buddhists is at best a once-a-week affair. The norm is much less than that, with more than sixty percent of Americans with an identified religious affiliation attending services less than once a month, according to recent Pew data. More than a quarter opts out of face-to-face engagement pretty much entirely. So, it stands to reason that a cultural milieu defined by a 24/7 religiosity and interpersonal engagement would be as uncomfortable for many of us in terms of actual practice as it is captivating as an exotic spiritual diversion. Hence our alternating fascination with and disdain for the religious practices of observant Orthodox and Hasidic Jews, Mormons, Muslims, and other groups for which religious commitment grounds basic aspects of life.
I’ve begun to think that this is part of what makes so many people so nervous about the relationship between new digital media and religion. The “always on” quality of digital life can have a kind of Amish or monastic vibe about it for the religiously inclined, what with those Virtual Abbey monks constantly seeding our Facebook and Twitter pages with calls to prayer. Add to that digital micro-news from people from church popping up outside of a sterile passing of the peace and a quick howdy-do at coffee hour. Being socially and spiritually present to one another, even 140 characters at a time, is a demand to which many are not accustomed.
We imagine the Amish (and maybe the Gallaghers) living outside this hive of connectedness, but the reality is that their lives demand a level of interpersonal connection that is not entirely unlike that maintained by our teenagers as they text and tweet and post to their extended communities of friends and “friends.” Thus we hold out groups like the Amish as representing a lost ideal of American communitarian culture while often ignoring the opportunities for and impact of a much wider connection to others that is available on a global basis today.
Forms of Solidarity yet to be Invented
One does wonder, though, if our increasingly close digital and physical proximity to others of all sorts is wearing down the boundaries between us without entirely eroding our differences; if it is possible that we are moving out of an easy domesticating or exoticizing of the Other toward a more robust form of what Jacques Derrida called “cosmopolitanism”— the idea that people can form community on the basis of a shared commitment to hospitality, rather than boundary-setting hostility, toward those who are different. He tracks its development from the Greek Stoics through Pauline Christianity as a critique of the sectarianism of the ancient religious milieu, taking a cue from Paul’s letter to the Ephesians (2:19-20):
“Consequently, you are no longer foreigners and aliens, but fellow citizens with God's people and members of God’s household, built on the foundation of the apostles and prophets…”
This ethical or spiritual cosmopolitanism calls us, Derrida insists, to be “allied to each other according to forms of solidarity yet to be invented.”
This variety of cosmopolitanism is not something to which the Amish themselves do not seem to be opposed, having come to America as religious refugees of a sort, after enduring decades of persecution as Anabaptists and separating from what they saw as more culturally-accommodating Mennonite groups. The testimonies of Anabaptist martyrs preserved in the 1158-page tome, The Bloody Theatre; or Martyr’s Mirror of the Defenseless Christians, first published in 1660 in Germany, remains popular reading in Amish homes. Their separateness surely draws as much from this “dangerous memory” as from doctrinal mandates. Indeed, when they immigrated to Pennsylvania in the 1730s, their buggies, hats, and simple garb hardly stood out.
“But where you hear of a poor, simple, cast-off little flock, which is despised and rejected by the world, join them,” wrote the Anabaptist martyr Anna of Rotterdam in a letter to her son before her execution in 1539.
Few of us are up for that, grass-fed beef and artisan cheese notwithstanding. But maybe the significance of our fascination with groups like the Amish today, or at least of the opportunity presented by it, is not so much in our romanticizing, commodifying, or otherwise objectifying of these Others, but rather in the nature of our real or imagined encounters with them in themselves. Perhaps it’s not just that we’re looking for something we think we’ve lost, for an easy hit of a simplicity that probably never existed. Maybe we’re practicing a new mode of engagement that the apparent simplicity of Amish life allows us—and perhaps them—to more safely envision.
Elizabeth Drescher, PhD, is a religion writer and scholar of Christian spiritualities who teaches at Santa Clara University. Her book Tweet if U ♥ Jesus: Leadership, Communications, and Community for the Digital Reformation will be released in Fall 2010. Her Web site is elizabethdrescher.net.
Recently a handful of articles have discussed the rise of subprime debt in higher education. Broadly speaking a college educated American has lower unemployment, higher earnings, and a better potential for financial success.
Like the housing market, the emotional notion that everyone should own a home allowed the predatory banking industry with government support to funnel out mortgages to people with no ability to pay it back. The consequences are still rippling throughout the current economy.
Today the higher education market is seeing all the traits of a bubble and certain parts of the industry dominate the toxic loan market. Many of the for profit schools are more adept at tapping into Federal funds and marketing and pump out degrees with learning outcomes a step above a paper mill. They have no student learning outcomes attached to their funding source so they have no federal mandate to report how successful their students are in getting careers after graduation.
If we look at the rise of education costs and housing from 1993 to the present, we can see an exact trend with housing:
Source: Census
It should come as no surprise that over this timeframe, the cost of college and housing have risen at nearly the same pace. Why? Part of this comes from the massive amount of debt used to finance these markets.
With housing for the large part of the last decade people were able to purchase homes with nothing down. Qualifications for loans were diluted so anyone with the mere desire to buy did. A fleet of commission hungry brokers and companies made sure they gave loans to everyone even if they had no ability to repay it back.
When you disconnect success from the lender to the borrower you will find that predatory lending will take place.The student loan market has been the major reason why college costs have inflated at bubble like trends:
Source: New York Times
Over the last 30 years the cost of college has soared by approximately 500 percent. This has outpaced medical care costs and the median family income by a sizeable portion. The outrage should be directed at Wall Street and the government for inflating the market.
You will hear these people argue that costs are rising because operational costs demand prices to go up but this is simply nonsense. Even studies that look at increases in federal grants and loans show that institutions will basically raise their tuition to meet the change in financial aid:
“(Chronicle) The finding tends to support what is known as the “Bennett hypothesis” — the notion, first popularized in the 1980s by the U.S. secretary of education at the time, William J. Bennett, that colleges and universities tend to absorb most federal student aid by increasing their tuition revenue.
The new paper, by Larry D. Singell Jr. and Joe A. Stone, both professors of economics at Oregon, employs a much larger data set than most previous tests of the Bennett hypothesis. Mr. Singell and Mr. Stone examined data from 1,554 four-year colleges and universities from 1988 to 1996. They drew on institutional data collected by the National Science Foundation and by the U.S. Department of Education.
Mr. Singell and Mr. Stone found that public colleges’ tuition for in-state students did not rise in tandem with Pell Grant levels. But private colleges’ tuition, and public colleges’ out-of-state tuition, increased by roughly $800 for every $1,000 increase in Pell recipients’ average grants.
Much of that additional tuition burden, the scholars suggest, is borne by students whose family income is relatively high. The Pell Grant program generally succeeds at expanding lower-income students’ access to college and at allowing lower-income students to attend more expensive institutions than they otherwise would, according to the paper.”
So the market simply adapts to suck up this added easy money like a debt hungry vacuum.You can see how flawed this policy is with the Pell Grant program. The Pell Grant like most programs started off with good intentions. It was designed to help low income families finance the cost of college. A National Postsecondary Study found that in 2000 families making less than $41,000 accounted for 90 percent of Pell Grant recipients. Now this in itself isn’t a problem if students come out with solid educational outcomes.But what is happening is a perverse scamming of the system by the for profit machine of education. This is the true subprime market of education.
They argue that everyone should have an opportunity to have an education no matter the cost (sounds familiar to the everyone should own a home argument). Of course these so-called equal opportunists don’t work for free and charge massively higher rates than local public state schools (you can see the massive profits of these for profits as they trade on the stock exchanges). And here is where you see the problem arise. For profit schools cover 6 percent of students but eat up 20 percent of the Federal Pell Grant money. University of Phoenix is number one here pulling in $656 million in revenues from Pell Grants. This is taxpayer money going to an institution that does not have to show educational learning or career placement outcomes. How many of their graduates are working in the field that they studied for? What is their career placement data?
Of course these for profit institutions are fighting tooth and nail to stop any legislation that will tie funding to educational outcomes because it will expose them for the subprime education market that they are exploiting.
Then on the other side you have massive amounts of loans subsidized by the government for other students. Story after story is now coming out about students coming out with $50,000, $75,000, and over $100,000 in student loan debt from private schools and students are unable to find jobs. The tired argument is that a student signed on the dotted line and got an education. But that doesn’t address the bigger issue of college tuition inflation. Of course the hand of Wall Street is deeply involved here as well:
Recognize a few names? You should. These are the same players in the toxic mortgage lending market that received trillions in taxpayer bailouts for their horrible loans in real estate. Of course they don’t care about originating standards or putting undue stress here because they know the government is on the hook here as well.So now, what we see is this inflation bleeding over into the public school system:
Source: OC Register
Here is an interesting chart. The University of California is one of the biggest public higher education systems in the world with a solid reputation. Back in 1990 the cost to attend the UC was under $2,000 per year. At that time, the median household income was making $33,000 in California. So the cost was 6% of total median annual household income. Today, the median household income is $57,000 and the cost is over $10,000 per year. It now eats up 17% of the annual household gross income. In other words, the increase in tuition is far outstripping any gains in family income. Clearly people are finding other ways to pay and school are finding other ways to make money.
So why is this all happening? Because the government is operating under the advice of the banking system. Wherever Wall Street has had its hand in the last few decades bubbles just seem to spring up, (i.e., housing, higher education, tech boom etc) because it enslaves the population to debt while not actually paying attention to longer-term fundamentals. The reason college costs keep going up is because people can get government backed grants and loans without any outcome showing the ability to payback. Institutions simply raise fees to match this added funding.
Just look at the housing market once the easy money is pulled back. Prices fall. This will happen in higher education as well if we stop spending money needlessly.Why not use that money to add classes at local community colleges?
And those that currently capitalize are the for profit schools that market heavily to poor populations, enroll students, saddle them with debt, and have no need to show their long-term outcomes. This is subprime part two and the American people will be on the hook again while the predatory leeches get away with another bailout.
When will people see that anything the banking industry touches turns into a method for bleeding it dry?
The number of bachelors degrees given out by for-profit colleges skyrocketed by 418 percent since 2000, according to data from the National Center for Education Statistics.
Of the 4.4 million students who enrolled in college between 2000 and 2009, 27 percent of them enrolled in private for-profit institutions. The decade before that, only 7 percent of new undergrads enrolled in for-profit schools. The industry's success is partly due to its unorthodox focus on advertising and recruitment.
For-profit schools such as the University of Phoenix and ITT Technical Institute have drawn criticism from education wonks and lawmakers for aggressive recruitment tactics targeting low-income students. Detractors note that many for-profit schools hire recruiters working on commission to tap into people's "pain" and feelings of inadequacy.
Many for-profit colleges get as much as 80 percent of their total revenue from their students' federal loans--and a good deal of that money goes right back into the schools' advertising campaigns.
While for-profit students only account for about 12 percent of all college students, they take up a quarter of all federal grants and represent 43 percent of all defaults,according to data from the federal Department of Education. The industry is currently fighting a bevy of new restrictions from the Department of Education, and argues that its default rate is high simply because its schools serve more low-income students. Officials at for-profit universities also point out that many community colleges--which typically cater to a lower-income student population--are overcrowded, and that for-profits provide an alternative.
But the Department of Education study calls into question whether for-profit schools are worth their relatively high price. For-profit schools are more expensive than public schools, yet spend far less per student than those institutions on average. From 2000 to 2009, for-profits devoted 24 percent of their total expenses to instruction, while nonprofit public schools spent 28 percent and nonprofit private schools spent 33 percent on instruction.
Overall, for-profit institutions spend less money per full-time student, as you can see in the chart below:
Yet for full-time students, four-year for-profit schools charge more in tuition and fees than public schools:
A larger share of for-profit undergrads take out loans to pay for school, compared to their peers at other schools. More than 80 percent of students at for-profit four-year colleges have a student loan, compared to 49 percent of all undergraduates. And many of those students won't have a degree to show for their debt.Over six years, only 22 percent of students at for-profit institutions graduate with a degree, compared to 65 percent at private non-profits and 55 percent at public schools, according to the study. (Two-year for-profit programs out-performed two-year public schools in graduation rates, however.)
A little bank on the Kansas prairie made hundreds of millions of dollars in bad loans over the last few years and big profits for itself while playing a key role in pushing the nation’s student loan system to the brink of a crisis. Operating in a converted grocery store, the tiny Bank of Horton came to rival Citicorp as a student lender admittedly exploiting a federal program for needy students.Horton has issued nearly $1 billion in loans over the past five years even as its loan default rate grew to 40 percent, according to interviews and documents obtained by Newsday.
Despite that rate of default, almost four times the national average, the bank made big money from loans made to trade school students. There were virtually no risks to the bank, but there were consequences for the federal government, which picks up the tab for almost all defaulted loans.
Located in a region of rolling prairie that produce corn, sorghum and soybeans, the bank dominates the town of 2,000 where the only other big building is the Bureau of Indian Affairs, where residents flock to the Kickapoo Indian reservation to buy cheap gas and no liquor is sold by the glass.
At its peak, the Bank of Horton processed about 2,000 loans a day from as far away as Long Island and Florida, employees said, and sold them quickly for a fast profit. The bank used high-rate certificates of deposits to lure money so it could make the loans. It hired local women to handle the paperwork and paid wages so low that many were eligible for welfare.
All along the way, federal regulations allowed the bank to operate and even prosper without the kind of control that could ensure that the system would not be exploited. Even when a regional Department of Education auditor found the bank did almost all of its business in student loans — contrary to federal regulations — the bank got his bosses back in Washington to bend the rules.
While officials in the General Accounting Office have long warned of student loan problems, it was only in May that the Bank of Horton was reined in –the Federal Deposit Insurance Corp. told the bank to change its practices. Horton, which posted losses this year after a tide of defaults nationwide dried up the resale market for its loans, has even had to lay off a couple of dozen workers.
Most of Horton’s loans were insured by the Higher Education Assistance Foundation, which last month told the Department of Education that it does not have enough funds to cover its obligations for more than $1 billion in bad loans, triggering a scramble to bail it out.
The troubles of HEAF, which was the largest loan guarantor, shook the financial markets and the student loan industry last month.Never before had a guarantor said it couldn’t meet its obligations to holders of the loans.
Federal education officials say another half dozen of the more than 50 guaranteeing agencies are in a fiscal danger zone. And if they follow HEAF’s pattern, students could find it much harder get loans for school.
While the Bank of Horton is not the only cause of the troubles in the student loan business, it provides an unusual look at how lenders have contributed to the growing student loan debacle, a small-scale version of the savings-and-loan crisis.The cost of defaults to taxpayers has been rising and this year will exceed $2 billion.
“The Bank of Horton is a spectacular example of the whole student-loan problem — it made a lot of risky loans,” said Gary Beanblossom, an analyst in the Education Department’s student loan division. “I always associated Horton with HEAF.”
Horton officials see themselves as simply carrying out a government mandate. In their view, Washington said to make educational financing available to everyone, absorbed much of the risk and the bank merely obliged.
“If you see a niche in a government program run out of Washington, D.C., and you exploit that niche in an honest way, you’re doing what Congress intended you to do,” said Craig MacPherson, a director of Horton. “The fact that the Bank of Horton exploited that niche is partly to Horton’s credit.”
Horton’s chairman, majority shareholder and, until last month, its president, Vance B. Norris, said the bank served as a key-player in an effort to educate the underprivileged.
“Everyone can’t go to Harvard,” Norris said, noting that “three kids out of five can pay back the loans” made by Horton. The other two represent what he called “the social tradeoff.”
“If the public doesn’t want to bear the cost (of the loan program) they’ll pay the costs with more people on the welfare rolls,” Norris said.
Student loans are intended to help people who wouldn’t ordinarily be considered good credit risks by offering guarantees, subsidies and various payments to lenders and insurers.Banks make the loans, which are administered and insured by middlemen agencies such as HEAF. The government subsidizes the interest and makes interest payments while the students are in college. Everything works well as long as students make their loan payments, which start soon after graduation... But if the student defaults, the federal government is ultimately liable.
In recent hearings before a Senate subcommittee, Education Secretary Lauro Cavazos said the loan problem is due to poor oversight by agencies that accredit trade schools.
“We’re going to have to work a lot harder to see that this problem doesn’t happen again,” Cavazos said.
Trade schools operated for profit, where students learn to cut hair, tend bar or fix appliances, have long drawn the scrutiny of government regulators because of high default rates and questionable recruiting practices. In 1987, the last year for which figures were available, the Education Department said the default rate at for-profit trade schools was 33 percent, while it was only 7 percent for public four-year colleges. Sherwood Johnson, director of student financial aid at SUNY-Stony Brook, said that even after they finish and get jobs, trade school students often cannot afford to repay the loans.
HEAF Chairman Richard Hawk acknowledges that the risky trade school loans in which HEAF specialized were the cause of his company’s problems. While declining to discuss details of HEAF’s relationship with Horton Hawk said,
“I’m not trying to suggest that the Bank of Horton or any other lender to vocational schools was not a problem. It was. But if you only have one, it wouldn’t be a problem.”
While neither HEAF nor Horton will divulge the extent of their business dealings, bank officials said that HEAF used to be the guarantor for all their loans, at least until the late 1980s, when the relationship began to sour. Based on the bank’s default rate on its almost $1 billion in loans issued, Horton’s bad loans could have totaled up to $400 million, much of which would have ended up with HEAF.
Trade school loans were a new line of business for the Bank of Horton, which was founded in 1887 and specialized for much of its history in the agriculture loans that fueled the commerce of northeast Kansas.
The Norris family had long owned the bank when Vance Norris took control in 1977. But it wasn’t until 1985 that the bank began going after student loans in a big way. It was then that his wife’s brother, Tony Pizzuti, a former insurance salesman from Philadelphia who became a high-ranking bank official, said he noticed the profits possible in student loans. The bank started a huge growth spurt that saw its assets go from $20 million in 1987 to $275 million at the end of last year.
The student loan business quickly made Horton one of the most profitable banks in the country in its rate of return. At its height, the bank was showing almost 50 percent return on equity. By March 1989, the return for that quarter had dropped to 23.81 percent, which still put it near the top. In a testament to its success, the bank’s headquarters has an impressive interior complete with dark wood paneling, brass rails, and hunting prints.
It was all made possible by mastering the details of the Great Society program begun under President Lyndon Johnson in 1965.
Because the program was too cumbersome to run from Washington, Congress authorized middlemen, such as HEAF, to administer the program and guarantee the loans to the banks.
Students contact the financial aid office at their school, which certifies that they are enrolled, not in default on a previous student loan and have income below a certain level. The school will provide a list of lenders it does business with, and Horton aggressively marketed itself to the trade schools across the country.
The bank issues the loan with backing from one of the guarantor agencies. Included in the loan are an insurance fee that goes to the guaranteeing agencies and helps make up costs in case of default.
The government generally makes the interest payments until the student graduates. Then the bank, or an outfit to which the bank has sold the loan, tries to collect from the graduate. If prescribed collection efforts fall, the holder of the loan turns to the guarantor for reimbursement, and the guarantor duns the Department of Education.
On most loans, known as Stafford loans, the government provides a guarantee and subsidizes the difference between the 8 or 10 percent the student pays and the market rate.Others, known as supplemental loans for students, or SLS, are guaranteed, but not subsidized.
Almost all the 50-plus guarantee agencies are state-sponsored and operate within those boundaries. But HEAF, one of a few private guarantee firms, went nationwide, depending on high volume to generate money. So did Horton. HEAF used to have a large business in New York and after dropping out briefly a couple of years ago, had started a comeback in the state. Most lending in New York is now guaranteed by the state’s Higher Education Service Corp.
The Bank of Horton’s move into student loans coincided with the growth of HEAF, headquartered two hours away in Overland Park, Kan. The relationship between the two became close because HEAF is the designated guarantee agency in which means it had to accept loans made by Horton.
In the early 1980s, HEAF was revolutionizing the student loan business by reducing the turnaround time on loan approvals from two months to two weeks. HEAF eventually would become the nation’s largest guarantor, concentrating its business in high-risk trade school loans. In June, 1988, such loans accounted for 59 percent of its business, according to Hawk.
Horton also used quick turnaround time to market its loans. Promoting itself at everything from trade school conventions to the Kansas state Fair, Horton became a leading lender to for-profit trade schools as far away as New York, including the now-closed Ultissima Beauty School that operated on Long Island and in New York City.
In 1988 alone, the Bank of Horton originated a phenomenal $398 million in all categories of guaranteed student loans, second only to Citibank with $571 million, according to the DOE’s Beanblossom. Last year, after the balloon had started to deflate, Horton slipped to fourth place, with $263 million, behind Citibank and Bank of America and in a virtual tie with Chase Manhattan.
Horton’s default rate was staggering, however; it led the nation in 1987-89 with $66.8 million in defaults in the one category of student loans — supplemental loans for students –studied by the General Accounting Office.
The only risk for lenders involves collection procedures. The Department of Education can refuse to cover a bad loan if the lender doesn’t follow a series of steps to try to collect on loans that go bad. Because of high defaults on trade school loans, the steps can cost the lender time and money. Horton sidestepped this risk by selling the loans as soon as it made them.
“Many banks did not want to get involved with trade schools,” said John J. Conard, a former HEAP official who left four years ago. “But the Bank of Horton didn’t really care if it was a trade school. They would take all comers. They didn’t too much care if the loans went into default or not.”
Horton chairman Norris said that it isn’t his job to pass judgment on the creditworthiness of borrowers.He said the Department of Education makes the lending choices by deciding which schools can participate in the student loan program.
Horton made big profits by selling the loans. If Horton lent $2,500 to a would-be truck driver, it quickly sold the loan to the Student Loan Marketing Association (Sallie Mae) or some other buyer for a 1 percent fee. Despite high default rates, there was little risk to the buyer because the federal government guaranteed them.
The $25 fee doesn’t sound like much until one considers how many loans Horton made. Then the numbers become staggering. At its peak, Horton made as many as 2,000 loans a day. High-cost money garnered from high-interest deposits — a practice frowned on by the FDIC — was used as the pool of capital from which to make the loans.
To improve his bank’s processing time, Norris hired hundreds of people, almost all of them women, for only pennies above minimum wage. Twenty-two people worked at the bank in 1985; that figure had grown to 260 by last December.
But Horton made so many student loans that it found itself in conflict with a law limiting banks to having no more than half of their business in student loans.
“We had been aware of the 50 percent rule,” Norris said last week. “It became more and more disturbing.”
The Department of Education had done nothing about Horton’s gross imbalance until its inspector general’s office started to look into the situation in early 1988. The auditors found, not surprisingly, that Horton was in violation of the 50 percent rule.
In search of relief, Norris turned to his congressman, Democrat Jim Slattery. Slattery helped Horton secure a hearing at DOE, Slattery and Norris said. Election records show Slattery got contributions of $500 each from Norris and Pizzuti, though the congressman dismissed any connection.
The result was a special agreement dated March 24, 1988, and signed by Dewey Newman, then deputy assistant secretary, that helped Bank of Horton get around the 50 percent rule.
“It got a clean bill of health from the DOE inspector general when I was helping them,” Slattery said.
A report signed by Rodney Small, then director of the DOE’s inspector general regional office in Kansas City, Mo., stated that the Bank of Horton was in full compliance with laws and DOE’s rules and regulations.
Reached at his home in Kansas City, Kan., Small, who has since retired, said, “the program people back in Washington” gave the bank “some sort of waiver or special dispensation” on the 50 percent rule.
Another government auditor familiar with the Horton situation but who didn’t want his name used said it was unusual for DOE to make such an agreement and he had never “come across anything like that.”
Rodger Murphy, a DOE spokesman, noting the waiver took place before the current administration took over, said the department had no further information on it.
Practically all the upper-level officials at the Department of Education who were there then have left by now. So has Saul Moskowitz, former chief counsel for the loan program, identified by Norris and Small as a key person in resolving the dispute.
Moskowitz downplayed the agreement, saying the law allowed leeway in interpretation of the 50 percent rule.
The agreement allowed the Bank of Horton to buy up servicing contracts on home mortgages, but not the mortgages themselves, and to count the full value of the mortgages as assets to offset its student-loan portfolio. Loan servicing is the handling of mortgage paperwork for a fee.
Moskowitz left DOE to become a partner in the Washington law firm of Clohan and Dean, which represents the Consumer Banker Association, a trade and lobbying group for banks in the student-loan business. Newman, who approved the agreement, has also left DOE but could not be located for comment.
Meanwhile, HEAF was having its own problems. As more and more loans go bad, HEAF has to repay the banks and get reimbursed by the federal government. But because of federal rules that penalize agencies with high default rates, it lately has been getting only 80 cents on the dollar. HEAF has had to drain its own reserves for several years to make up the difference. Despite insurance charged students and fees paid by the government, HEAF posted a deficit of $44 million last fiscal year and is losing a similar amount this year.
The relationship between HEAF and Horton began to sour as well...
