Trump’s “Shithole Countries” Remark

January 17, 2018

I’ve been torn about whether or not to comment on this controversy since, by its nature, the topic violates my own site rules about the use of profanity.  Since it has now become so central to the debate over immigration, however, it’s impossible for me to ignore, since immigration is one of a few topics that lies at the core of my campaign against destructive population growth.

Let’s back up a bit and examine what it was that elicited such an angry response from Trump.  In exchange for generously offering to not just change the temporary status of DACA immigrants (“deferred action childhood arrivals” – kids brought here by illegal aliens) to permanent status, but to even grant them a path to citizenship, Trump insisted on three additional things:

  • an end to “chain migration,” the visa program that allows immigrants to apply for visas for family members, who then are eligible to bring in more family members – creating an endless and exponentially expanding flow of immigration,
  • an end to the “diversity visa lottery” program, which brings in another 50,000 immigrants per year from countries who are “under-represented” in the general U.S. population,
  • funding for the border wall, currently estimated at $18 billion.

These are reasonable immigration reforms that most Americans agree with.  He had said that he was willing to sign any bill that met these criteria.

So here’s the bill that senators Dick Durbin (D) and Lindsey Graham (R) brought to him:

  • DACA immigrants would be barred from the chain migration process.  The 690,000 DACA “kids” would not be able to apply for re-entry for their parents.  Otherwise, chain migration continues as usual for other immigrants, probably numbering somewhere around 25-30 million.
  • The “diversity visa lottery” program would end, but the 50,000 immigrants would be reallocated to other visa programs.
  • Only about 10% of the border wall funding was included, plus a little more funding for other “non-wall” border security.
  • Extending “temporary protected status” to 437,000 immigrants from El Salvador, Honduras, Haiti, Nicaragua, Sudan, Somalia and Yemen.

In other words, Durbin and Graham tried to play Trump for a fool, offering him a bill that did absolutely nothing to rein in our out-of-control immigration, if anything making it worse.  It’s no wonder that he was incensed enough to lapse into the use of a vulgarity in a “behind the doors” meeting.  Most people would in that situation.

Durbin saw an opportunity to stir up hysteria, characterizing Trump’s remark as “racist.”  It was nothing of the sort.  While there is no formal definition of the word “shithole,” it’s clearly a vulgar term used to describe a foul place, not a person or people.  In terms of poverty, political corruption, violence, extremism, a failure to meet basic human needs and a denial of human rights, these are foul places.  Places like El Salvador, Honduras, Nicaragua, Sudan, Somalia, Yemen and others (unfortunately disproportionately represented by Africa) are, in fact, “shitholes.”  That’s not meant to demean the people of those countries, but their unfortunate circumstances.  If a country is so bad that no one – not even its own citizens – wants to live there, then it is a shithole.

Trump then reportedly went on to ask, “why don’t we bring in more people from places like Norway?”  (Trump had just visited with the prime minister of Norway and, reportedly, was highly impressed.)  It’s this contrasting of Norway with the aforementioned places that may have hinted at racism, a suspicion that has dogged Trump beginning with this comments about Mexican immigrants early in his campaign.  Is Trump a racist?  I don’t know.  What I do know for sure is that Trump is a “money-ist.”  He’s been all about money his whole life.  So while African countries are black and Norway is snow-white, it’s also true that African countries generally rank right at the bottom in terms of GDP (gross domestic product) per capita while Norway ranks at the very top – well above the U.S.  So was he really expressing a preference for wealthy, merit-based based immigrants or a preference for white immigrants over black immigrants?  He has said all along that he wants a more merit-based immigration system.  (By the way, just as an aside, Norway is one of many countries that does not have birthright citizenship, unlike the U.S.  Just being born there doesn’t make you a citizen.  Birthright citizenship is something else I’d like to see Trump address.)

Since the hysteria erupted over the “shithole” epithet, Lindsey Graham has characterized it as a “shithole show,” and has blamed Trump and his staff.  Baloney.  Graham and Durbin are to blame for pushing him over the edge when they tried to sucker him and play him for a fool.  They tried to play the American people for fools, like they always do.  They believe that if you polish a turd shiny enough to make it look like an apple, the American people will swallow anything.  The American people elected Trump to put an end to this crap.

Now they’re trying to back Trump into a corner, threatening a government shutdown if he doesn’t agree to this immigration sham.  I hope he doesn’t.  It’s time to stand firm and force a real change in our out-of-control immigration policy.  Let the government shut down.  If Congress doesn’t want to reform immigration in exchange for Trump’s generous offer to give the DACA kids a path to citizenship, then they don’t really care about the DACA kids.

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December Jobs Report Weaker than It Looks

January 12, 2018

https://www.bls.gov/news.release/empsit.nr0.htm

The headline number from the December employment report (link above) was a bit disappointing.  The economy added only 148,000 jobs vs. expectations for approximately 191,000 and vs. 252,000 added in November – especially disappointing considering that this was the peak of the retail shopping season.  Unemployment held steady at 4.1%.  (But not really.)

Look into the details and the report is even weaker.  The employment level, a figure taken from the household survey (vs. the establishment survey, which is where the 148,000 jobs figure comes from) rose by only 103,000.  But that’s not the worst part.  Employment and job creation numbers are meaningless without the context of population.  December is the month when the Census Bureau updates its estimate of population (during non-census years).  This time around it boosted the population by 549,000 (to just under 327 million people) vs. a normal monthly increase of about 170,000.  Of course, the population didn’t jump by that much in December.  It just means that the Census Bureau discovered that it has been underestimating population growth during 2017.  That means that growth in the labor force has been underestimated for the purposes of calculating unemployment.  If the actual size of the labor force was used in the calculation, instead of estimating it based on how many people were looking for work, unemployment actually rose in December by 0.1% to 7.2%, the third consecutive increase in that number.  And per capita employment has fallen for the third consecutive month.  Check the chart:  Per Capita Employment.  And the number of unemployed Americans rose for the third consecutive month to over 12 million.  Here’s the chart:  Unemployed Americans.

Enthusiasm over the Trump administration’s policies will only carry the economy so far.  Without the kind of meaningful trade policy reform that Trump promised during his campaign, it’s going to stall out.  This data may be an indication that that’s beginning to happen.


Another Month, Another Record Trade Deficit

January 6, 2018

Yesterday the U.S. Bureau of Economic Analysis released the international trade data for the month of November:

https://www.bea.gov/newsreleases/international/trade/2018/pdf/trad1117.pdf

The overall deficit rose to $50.5 billion, the worst reading since January of 2012, but not quite a record, thanks to steady, dramatic improvement in the balance of trade in petroleum products which, at one time, used to be the driving force behind the trade deficit.  But no more.  What drives the deficit now is manufactured products, and the deficit in that category hit a new record in November of $65.1 billion, topping the previous record of $64.7 billion set only one month earlier.  Check out this chart:  Manf’d Goods Balance of Trade.  Exports of manufactured goods rose to their highest level since December of 2014, but that rise was swamped by a jump in imports to a new record of $176.8 billion.  Here’s a chart of imports and exports that also shows the goal that Obama had set in January of 2010 to double exports within five years:  Manf’d exports vs. goal.  It never happened.  It never will.

Scrapping existing trade deals and returning to the use of tariffs to restore a balance of trade, bringing manufacturing back to the U.S., was the centerpiece of Trump’s promise to “Make America Great Again.”  So far, all we’ve gotten is the same dithering on trade that we’ve gotten from previous administrations for decades.  This trade data shows that instead of becoming great again – at least in the manufacturing sector of the economy – America is getting worse.  This isn’t what Americans voted for a year ago.

 


Family immigration plunged in 2017

January 5, 2018

https://www.reuters.com/article/us-trump-effect-immigration/fewer-family-visas-approved-as-trump-toughens-vetting-of-immigrants-reuters-review-idUSKBN1ET15I

The above-linked article appeared on Reuters yesterday, reporting that in 2017, family-based immigration dropped dramatically.  But it’s not as though few visas are being approved.  The charts embedded in the article also paint a picture of just how out-of-control immigration had gotten since 2000.  Virtually all U.S. population growth is due to immigration, both legal and illegal, and family-based immigration accounts for at least half of that growth.  In 2015, over one million family, fiance and “other relative” visas were approved.  But in 2017:

  1. Family visas fell to 541,000 vs. 755,000 in 2015, a drop of 28%.
  2. “Other relative” visas fell to 62,000 in 2017 vs. 254,000 in 2015, a drop of 76%.
  3. Fiance visas fell to 33,000 in 2017 vs. 54,000 in 2015, a drop of 39%.

In addition, the Trump administration is seeking even more drastic cuts as a condition for allowing DACA immigrants (children brought here illegally by their parents) to remain permanently in the U.S.

And, based upon monthly border arrest data, illegal immigration declined in 2017 by about 40% – roughly equivalent to 400,000 people.

Add all this up and U.S. immigration in 2017 was cut almost in half, by over one million people.

It’s also important to note that, contrary to the dire predictions of economic decline by immigration advocates who claim that immigration is critical to providing needed skills and entrepreneurship, the decline in immigration in 2017 has been accompanied by a surging economy.

Trump should be applauded for doing a fantastic job of following through on his campaign promise to rein in out-of-control immigration.


2018 Predictions Posted

January 3, 2018

I just posted my annual predictions for 2018.  Check them out:  https://petemurphy.wordpress.com/more-good-stuff/predictions/2018-predictions/.

 


Economy adds 228,000 jobs in November, unemployment holds at 17-year-low rate of 4.1%, but wages are stagnant. Why?

December 9, 2017

Yesterday morning the Labor Department announced that the economy added another 228,000 jobs in November and the unemployment rate held steady at 4.1% – the lowest rate in 17 years.  Yet, wages remain stagnant.  Everyone – economists, the Federal Reserve, business analysts – everyone, seems totally baffled by this phenomenon.  Why isn’t this supposedly strong demand for labor beginning to drive up wages as employers compete for workers?

The answer is that the unemployment rate isn’t really 4.1%.  It’s 7.1%.  The Labor Department would like you to forget that the rapid drop in unemployment following the “Great Recession” in 2008 was fueled in large part by its “mysteriously vanishing labor force” trick, claiming that vast swaths of workers were simply dropping out of the labor force, so they were no longer included in the unemployment calculation.  Take a look at the following chart.  It’s a little confusing, so I’ll explain.

Labor Backlog

Look first at the blue and orange lines.  The blue line tracks the actual growth in the labor force due to growth in the overall population.  The orange line tracks the labor force growth as reported by the Labor Department.  Note that in all but three of the past ten years did the Labor Department’s reported growth in the labor force exceed the actual growth.  It usually significantly under-reports that growth.  The result is a growing “backlog” of unreported workers, represented by the yellow line on the chart.  That backlog peaked at 6.4 million workers in 2014 and fell to 5.1 million in 2016 but, so far this year, has actually begun to rise again, hitting 5.2 million workers in November.

Now, look at the green line, which is the growth in the employment level.  If that growth matches the growth in the labor force, then unemployment will hold steady.  If it exceeds that growth, then unemployment will fall.  Compared to the blue line – the real growth in the labor force – it has consistently exceeded that blue line by a small amount each year, beginning in 2011 – the start of the recovery from the “Great Recession.”  But if you compare the green line to the orange line – the fake growth in the labor force reported by the Labor Department – it has beaten that growth by a significant amount every year beginning in 2010.  The result of that growth in the employment level relative to the fake growth in the labor force is the Labor Department’s reported unemployment rate, represented by the purple line.  Note that it has fallen precipitously to its current bogus level of 4.1%.

That’s why wages are stagnant, because there is a huge, unreported backlog of labor force which eagerly snatches up any extra jobs that are created each month.  The labor force is still pretty grossly out of balance with the demand for labor.  Until that backlog of workers is employed, wages will remain stagnant.

Just to drive home the point about how phony the official unemployment rate is, take a look at these next two charts:

Per Capita Employment

Unemployed Americans

The first chart tracks the employment level relative to the total population.  It’s analogous to what the Labor Department reports as the “participation rate.”  As yo can see, it’s been very slowly recovering from the 2008 recession, but still hasn’t gotten back to its pre-recession level in 2007.  (You can see that, even then, it was already plummeting.  I can’t tell you what it was before that since I didn’t begin tracking it until then.)  In November of 2007, per capita employment was at 48.4% and the unemployment rate was 4.7%.  Last month, per capita employment was at 47.2%, but the unemployment rate was 4.1%.  How in the world could unemployment have fallen at the same time that per capita employment fell?  Sounds pretty bogus, doesn’t it?

The second chart above shows a similar phenomenon.  It tracks the number of unemployed, assuming that the labor force grew along with the population.  In November of 2007 there were 7.2 million unemployed workers.  Last month there were 11.8 million.  And yet the unemployment rate fell?  Baloney.

While some see nothing but good news in yesterday’s employment report, I see some warning signs.

  • The employment level grew by only 57,000, far less than the reported growth of 228,ooo jobs.
  • Per capita employment fell slightly for the 2nd month in a row.
  • An honest accounting of unemployment (one that’s honest about growth in the labor force) finds that unemployment rose for the 2nd month in a row to almost 7.2% after reaching a low of 6.8% in September.  That’s a notable jump.

So now you know why wages are stagnant.  The demand for labor hasn’t caught up to the backlog of unreported growth in the labor market.


Trade Deficit in Manufactured Goods At Record High

December 7, 2017

The trade deficit in manufactured products* rose to a record high of $64.6 billion in October, surpassing the previous record of $63.3 billion set in March of 2015.  Take a look at this chart of our monthly deficit in manufactured goods:  Manf’d Goods Balance of Trade. Exports of manufactured goods haven’t risen since September of 2011 (in spite of Obama’s laughable proclamation in 2010 that we would double exports in five years).  In the meantime, imports have soared by almost $30 billion.  It’s a dubious distinction for President Trump who, during his inaugural address in January, spoke of “…rusted-out factories scattered like tombstones across the landscape of our nation…” and proclaimed that “This American carnage stops right here and right now.”

To be fair, Trump didn’t mean that it would happen on the spot.  His administration has been taking steps to address our trade problem, trying to renegotiate NAFTA (the North American Free Trade Agreement with Mexico and Canada), imposing tariffs on some products and, most recently, blocking China from rising to “market economy” status with the World Trade Organization.  Aside from the work on NAFTA, which may conclude soon with the U.S. walking away from that ill-conceived agreement, the rest amounts to little more than the token steps taken by previous administrations.  The net result is that the plight of the manufacturing sector of our economy grows steadily worse.

Enough is enough.  It’s time to walk away from both NAFTA and the World Trade Organization and begin implementing tariffs.  Any tariffs would be better than our current trade policy, but smart tariffs that address the real cause of our trade deficit – attempting to trade freely with badly overpopulated nations characterized by bloated labor forces and anemic markets – would be much more effective.  As an example, it was reported yesterday that Canada, angered by their treatment in the NAFTA negotiations, has canceled an order for Boeing-made fighter planes.  Why are we treating Canada this way?  Sure, we have a trade deficit with Canada, but it’s due entirely to oil.  In 2016, our biggest trade surplus in manufactured goods, by far, was with Canada – $44 billion, more than double any other country.  Canada is our best trading partner.  Why anger them?  Why not tell Canada that our beef is with Mexico, with whom we had a trade deficit in manufactured goods of almost $68 billion in 2016 – our third worst behind China and Japan – and that they’ll get just as good a deal from the U.S. without NAFTA?  Slap the tariffs on Mexico, not Canada.

We could completely wipe out our trade deficit in manufactured goods by applying tariffs to only ten countries – China, Japan, Mexico, Germany, Ireland, Vietnam, South Korea, Italy, India and Malaysia.  These ten countries, all more densely populated than the U.S. (all but Ireland are many times more densely populated), account for all of our trade deficit in manufactured goods.  While we have defiicts with others, they are much smaller and are offset by surpluses with the rest of the world.  The point is, we don’t have to anger the entire world with tariffs – just ten out of the more than 220 countries in the world.  So let’s be smart about how we do it, but the time has come, Mr. President.  Stop delaying the inevitable.  Do what you know needs to be done.

* The trade deficit in manufactured products is calculated by subtracting services, trade in petroleum products, and trade in foods, feeds and beverages from total trade, as reported by the Bureau of Economic Analysis in its monthly reporting of international trade.