Counseling Kevin

Apple, Meet Orange

An acquaintance recently disagreed with me about the forced deportation of illegal Mexican immigrants from the U.S. to Mexico, as is being advocated by many of the opponents of immigration reform proposals that would permit residents from Latin America who are in this country illegally to remain here. In response to my argument that the practical difficulties of attempting such a mass deportation alone (leaving aside the moral and economic issues raised) make it a non-starter in discussing realistic solutions to the problem, he pointed out that during the 1930s, this country forced out and "repatriated" to Mexico many "illegals", often in mass numbers. If we did it once, we could do it again.

Although not featured prominently (in fact, seldom discussed at all) in the average U.S. schoolchild's textbook on American history, the repatriation of Mexican residents of the united States during the 1930s was certainly an exercise in mass deportation. According to the University of Texas' The Handbook of Texas Online, 400,000 to 500,000 Mexican citizens and their American-born children were forced out of the United States between 1929 and 1939, more than half of them from Texas. Mexicans also voluntarily left when laws for massive public works projects that were created to provide work for those  suffering the effects of the Great Depression barred or severely limited the employment of Mexicans.  A USA Today article contains much more detail on the program and how it was carried out. 

The attempt to compare the 1930s to the present fails on several grounds. First, Mexico welcomed the returning workers, cooperated with the United States in their return, and actually promoted their "repatriation" from Texas by reducing import tariffs on the repatriates' belongings and offered free transportation from the Texas-Mexican border to the Mexican interior. Mexican counsels in this country led fund raising drives and provided information and expertise to assist repatriates.

The current Mexican government not only would not promote such repatriation, it would be expected to actively oppose it. While it would be expected that the Mexican government would attempt to alleviate suffering, it would not cooperate with the United States in making it easier for the American government to justify or effectuate the repatriation. Illegal immigration takes the heat off the Mexican labor market, which does not create enough jobs to support its population. Moreover, remittances from Mexicans in the United States to Mexico props up the Mexican economy. Certainly, illegal Mexican residents of the United States would not be encouraged to "return home" by the Mexican government.

The sheer size of the effort would make it much more difficult today than it was in the 1930s. 500,000 over a decade (or even four years, 1929-1932, when the deportation peaked) versus 11 million to 12 million over a shorter period of time is not comparable. While today's means of transportation may be more advanced, attempting to locate, detain, manage and transfer that many people would require an immense effort. As John McCain (no fan of illegal immigration, and representing a state, Arizona, whose voters are fed up with illegal immigration's effects on the state) asked, "Where do we get the buses and who pays for them?"

The American economy was devastated during the Great Depression, and Mexicans were repatriated because there weren't sufficient jobs for American citizens. Toady, the American economy is booming, and American employers claim that that they need Mexican and other Latin American workers to do jobs that American citizens won't perform. Others argue that employers are merely exploiting immigrant laborers by paying them wages much lower than they would have to pay  legal residents for the same jobs. Whichever view is correct, the Latin American workers, illegal or legal, are coveted by American employers, who will not favor the forced deportation.

There's another important distinction between the deportations of the 1930s and a mass deportation today.

Efforts to implement the deportation campaign resulted in widespread violation of civil and human rights, including illegally imprisoning immigrants, deporting United States-born children, not permitting returnees to dispose of their property or to collect their wages, deporting many not legally subject to deportation because of their length of Texas residence, separating families, and deporting the infirm.

Perhaps such widespread violations of civil rights could make it under the radar in the 1930s, even though most Mexican residents who were deported were legal residents of the United States (because at that time, legal residency had been easy to obtain). Today's mass media and political and legal climate would make such wholesale violations of rights extremely difficult. Attorneys have come barreling out of the largest American law firms to represent detainees at Guantanamo Bay and to help them exercise constitutional rights that, as non-US citizens, most Americans (including many US Supreme Court justices) weren't aware they possessed. Can you seriously imagine that a full array of legal impediments to the execution of a mass deportation plan would not tie that effort up in litigation and public hoopla for years?

For all of the foregoing reasons, I don't think that the comparison between the 1930s "repatriation" campaign and a current deportation campaign is apt. Because we did it once then doesn't mean that we could (much less should) do it today.

I agree that we ought to deal with illegal immigration. I agree that we ought to secure our borders. I agree that people who break laws, including employers, should suffer penalties that will deter them and others from breaking the law. I simply don't think that "round 'em up and kick 'em out" is a practical approach.

Trampled By Lemmings

From Bloomberg.com:

Dow Jones & Co. said its computers were responsible for the sudden drop in the Dow Jones Industrial Average about an hour before the close of trading today because they failed to keep up with stock trades. The New York Stock Exchange and Nasdaq Stock Market Inc. also reported problems.                

The Dow average plummeted 178 points in a single minute just before 3 p.m. New York time. That's when New York-based Dow Jones switched to a another data server, which instantly calculated the effect of trades done earlier in the day Dow Jones spokeswoman Sybille Reitz said.         

      

"The extraordinary heavy trading volume caused a delay in our Dow Jones Industrial Average data," Reitz said. "As we identified the problem we switched over to a backup system and the result was a rapid catch up in the public value for the Dow."         

      

Stocks lurched lower after the sudden drop, driving the Dow average down as much as 546.2 points, or 4.3 percent, and leading the market to its biggest single-day rout since the Sept. 11 terrorist attacks. The malfunction in the oldest, most established benchmark for U.S. stock prices shows how a technical fault can worsen a market decline.

Sure, there's the computer glitch. Then, there's also this:

When Hollywood madam Jody "Babydol" Gibson was busted eight years ago, word that police had seized her list of celebrity clients stirred intense curiosity in Hollywood — and not a little worry.

The much-anticipated disclosure of famous names never occurred, however. The evidence presented to the jury that convicted Gibson in 2000 of operating an international prostitution ring included phone books and other records in which, prosecutors said, she listed her customers. But authorities blacked out the names in publicly available court records.

Now, their identities are entering the public domain.

In "Secrets of a Hollywood SuperMadam," an autobiography due in bookstores Thursday, Gibson names two dozen celebrities she says patronized her call-girl service.

Coincidence? C'mon! Those two dozen Left Coasters were merely "the tip of the iceberg" (which, if memory serves, is also the name of a call-girl technique using cracked ice and a warm weimaraner). The sound of Wall Street "Johns" cashing out before the pre-nups can be tested echoed throughout "The Street" today. "Buy and Hold," my tukus.

Then again, as a good friend observed, it might just have been another lemming stampede. "The Street" is a herd that tends to spook in unison, sometimes right off of a cliff.

Ah, screw it; I didn't want to retire anyway.
          

Figures Don't Lie, But Liars Figure

George W. Bush, "Conservative".

Though the U.S. government will remain deeply in the red next year, the federal budget deficit should dip to $354 billion, the White House said Monday, a decline from the current year's projected record $423 billion shortfall.

In its budget proposal for fiscal 2007, which starts in October, the White House calls for $2.77 trillion in spending and $2.42 trillion in receipts.

Despite the expected record 2006 deficit and continued red ink through 2011, the White House said the near-term fiscal trend is positive, with the budget gap expected to fall to $205 billion in 2011, or 1.2% of gross domestic product. The fiscal 2007 deficit projection would be 2.6% of GDP.

[...]

"While this increase in the deficit is unwelcome, a deficit at this level is still well within the historical range," the Office of Management and Budget said in its overview of the budget. At 3.2% of GDP, OMB said the 2006 deficit is smaller than the budget gaps in 11 of the past 25 years.

The White House has repeatedly expressed its commitment to fiscal discipline, underlining President George W. Bush's goal of halving deficit by 2009 by chopping non-essential government programs and reducing the growth of non-security discretionary spending.

Bush isn't talking about reducing the national debt. He's talking about reducing the rate of growth of each annual deficit. The national debt will continue to grow!As of January 7, 2006, that debt is $8.1 trillion.

Here's the bottom line:

  All of the administration's tax proposals would add $1.67 trillion to the deficit over 10 years.

The news for the longer term is even worse.

"In contrast to the trend of declining deficits in the near term, the longer-term fiscal outlook is more troubling," OMB said. "Without action to reform the nation's large entitlement programs - particularly Social Security and Medicare - deficits, tax rates, or both, will increase to unprecedented levels and threaten future economic growth and standards of living."

"No plausible amount of cuts to discretionary spending programs or tax increases can help us avert this major fiscal challenge."

So much for the party that pats itself on the back for its fiscal conservatism. Don't look to the Democrats for help. As demonstrated by their thwarting of any serious discussion of social security reform, their solution is to continue entitlements unabated and to raise taxes, especially on the "top brackets." We saw how well that worked in Europe.

Nobody in D.C. has the guts to tackle fiscal problems until they become absolute crises. By then, the pain of a solution will be substantial.

Our children and grandchildren are going to have a hell of a debt to pay. Let's hope that they don't take their anger out on any of us who are still alive at the time these chickens come home to roost.

Harrop This!

When left-wingers like columnist  Froma Harrop start calling for a cut-back on the home mortgage interest deduction, you know it's a bad idea. Harrop tries to bill herself as a champion of the "swing voter," but her door always seems to swing to the left.

One of the ideas being floated by the "independent panel of experts" appointed by President Bush to examine tax reform is to limit the size of a mortgage that will be entitled to an interest deduction for federal income tax purposes, to the maximum mortgage amounts that are insured by the Federal Housing Administration. That limit currently "tops out" at $313,000 in high priced areas. The FHA national average limit is $244,000, and, according to Harrop, the average American homeowner's mortgage is $155,000. Thus, according Harrop:

this lower limit would not change the calculus for most of us peasants. However, the cap would pinch some nerves in trophy house territory. The real-estate industry would not like that at all. The bigger the mortgage people can afford, the more they can pay for a house, and the more real-estate brokers and developers rake in.

That's right, Froma, it's all about class warfare and "stickin' it to the Man." Know what? Most Americans with ambition (an essentially American trait) want to be able -- or at the very least, for their kids to be able -- to "move on up." They dream of doing better financially. Maybe this isn't considered a goal worthy of being pursued by those of you Bobos in Providence, you ex-New York Times editors who've "done graduate work at Brown." However, for many of the rest of the peasants for whom you claim to speak, rising from "peasant" to "the Man" status is still on the radar scope. Ill-considered laws that make that harder to accomplish may not cause the "peasants" to turn cartwheels.

And, God forbid, that real estate brokers and housing developers should make money ("raking it in" according to Harrop). I suppose it would be fine with her if it was the government, not private parties, that built and brokered housing. Public housing is certainly the model that most of us want to see spread far and wide, isn't it?

But that's not all that's wrong with the deduction, according to Harrop.

An unhealthy economic incentive, the deduction is also expensive. It cost the Treasury $63 billion last year in needed revenues. The entire budget of the U.S. Department of Housing and Urban Development was $35 billion.

What do those two figures have to do with another? That's right: NOTHING! $63 billion? From a deduction specifically designed as a matter of national policy to encourage home ownership? And you think that's "unhealthy and expensive"? As compared to the $217 billion in annual pork barrel waste identified by this public advocay group? As John Stossel puts it, "Give Me A Break!"

First eliminate the waste and corruption, then start talking about serious tax reform, like a flat rate tax or a value added tax system. Then we'll start talking about limiting a cherished tax break like the home mortgage interest deduction.

After 5 years of the Bush Administration, it's more and more obvious that this pack of "compassionate conservatives" is neither compassionate nor conservative. Bush talks about encouraging home ownership, then considers limiting the home mortgage interest deduction, one of the few "tax shelters" available to middle and upper-middle class Americans. Perhaps he's just "floating a trial balloon" at this point, but with this crew, nothing surprises me. Anyone concerned about the issue needs to stay on top of it. You can trust the Bush Administration as far as you can throw Karl Rove.

George, meet Froma. Froma meet George. You two have a lot in common.

The Law of Supply and Demand

An amazing coincide: gas prices rise, demand falls, gas prices fall. Who would have guessed? Interesting observations by University of San Diego Economics Professor James Hamilton, as well as by his commenters. Nothing is ever quite what it seems in the "science" of economics. (Hat tip: Houston's Clear Thinkers).

Hamilton's post has supply and demand curves, which should steam up the glasses of a frequent commenter and math whiz.