Yet One More Reason To Rid Ourselves of Illegal Aliens

http://abcnews.go.com/Travel/story?id=5697052&page=1

This article chronicles one more way in which illegal aliens are a drag on our resources.  Our government is expending valuable resources evacuating them from the New Orleans area.  In other words, American citizens must make room for them on the evacuation busses.  Now I don’t know about you, but I’d be furious if I had to wait in line while I watched illegal aliens board the busses ahead of me. 

I can see why ICE may suspend enforcement activities in order to stay out of the way of evacuation personnel, but I hope they resume enforcement when the busses start ferrying folks back home after the storm is over.  The whole idea is to make the U.S. as unpleasant as possible for criminals who choose to ignore our laws and sap our resources at the expense of our own citizens.

Economy Deteriorates Further in July

http://www.usatoday.com/money/economy/2008-08-29-income-spending_N.htm

July served up more evidence of the damage being done to our economy by rising overpopulation and by free trade with overpopulated nations. The “economic stimulus” package has come and gone and, predictably, we’re now right back in the same, sinking boat.

Personal income fell 0.7% in July, the sharpest decline since a 2.3% plunge in August 2005, when Hurricane Katrina hit, the Commerce Department said Friday. Analysts were expecting income to hold steady.

Not this analyst. Not anyone who understands that unemployment will worsen as our population density rises and as we continue to import the effects of overpopulation.

“With the tax refund effect on spending now more or less over, we think the worst is yet to come for consumers,” said Ian Shepherdson, an economist with High Frequency Economics.

The government issued $13.7 billion stimulus checks to U.S. households last month — about half of the amount sent out in June. By the end of July, $90 billion had been delivered as part of the effort to put an extra $107 billion in consumers’ hands this year.

The article also serves up some good news:

The Institute for Supply Management-Chicago business barometer surged to 57.9 in August from 50.8 in July. Economists had forecast the index at 50.0, straddling the line between expansion and contraction.

Separately, the National Association of Purchasing Management-New York said its index of current business conditions rose to 45.3 in August from 38.5 in July.”

But I’m afraid this won’t last. With the economic stimulus payouts behind us, the economy will resume its slump. So too will exports, as the recession begins to spread to other parts of the world.

The reports showed business managers continued to face stiff production costs.

While fast-rising food and energy prices have taken a big toll on U.S. consumers and businesses, a big drop in the price of oil since a record high reached last month could soon offer a wave of relief.

Anyone counting on falling oil prices to salvage our economy will be in for a rude awakening. The temporary pull-back in oil prices is part of the same cycle we see over and over. Prices set new records until consumer sentiment falls to unacceptable levels. Then, prices pull back a little and give the consumer some “soak time,” allowing them to become accustomed to the new level of prices as “normal.” Soon the climb will resume. The next wave of concern may not happen until gas reaches $5 per gallon.

It’s going to be fascinating to watch how the government responds when the recession resumes. Is another “economic stimulus” on the way? Will the Fed find some creative way to flood the economy with more debt, perhaps finding some clever way to make a loosening of lending standards appear to be just the opposite? What assets will the government sell next to foreign investors? Here’s one that wouldn’t surprise me: a sell-off of federal lands, perhaps ultimately our national parks. Seriously. Our foreign benefactors are getting fed up with being stuck with worthless paper. They’ll soon begin demanding tangible assets. Imagine Yellowstone National Park being operated by China. How long would it be before they began logging the park and loading the timber onto ships bound for China? I know this sounds crazy, but this country is getting desperate to raise cash. And as we sell off more and more, the buyers get an ever-stronger voice in the decisions made by the government. Soon, they’ll be virtually dictating federal policy-making.

The only escape from this scenario is immediate action to eliminate our trade deficit. Will the next president have the wisdom to do it or the guts to weather the storm of global outrage that would ensue? We’ll soon find out.

McCain’s Choice of Sarah Palin

http://mudflats.wordpress.com/2008/08/29/what-is-mccain-thinking-one-alaskans-perspective/

I’d like to weigh in with some preliminary thoughts about McCain’s VP pick, governor Sarah Palin of Alaska.  But, first of all, I’ve included a link above to a blog written by an Alaskan that contains some good information about Mrs. Palin.  The blogger seems to be biased toward the Democrats but it’s still interesting to hear his/her perspective.  It details an ongoing “scandal” that she’s embroiled in.  When I read the details of the “scandal” I had to laugh.  It pales in comparison to what’s happening here in southeast Michigan.  If that’s the worst someone can come up with on Palin, don’t bother me with it.

With that said, here’s how I see it.  I evaluate McCain’s choice on three issues:

1. If she had to take over from McCain, what would her position be on population management, especially immigration?  It’s impossible to know at this point.  I doubt that the subject comes up much in Alaska politics.  But, being the governor of the least densely populated state in the nation, she’s probably clueless about the challenges presented by overpopulation and legal and illegal immigration.  A good indication is the fact that she doesn’t believe in global warming, a huge strike against her.  Even McCain has accepted that we need to act on this issue.  Why would he pick someone so out-of-touch on one of the most critical issues of our time, one that is exacerbated every day by further rampant population growth? 
2. If she had to take over from McCain, what would be her position on trade and the trade deficit?  Again, it seems impossible to know.  I imagine that, for an Alaskan, the subject of the economy boils down to three things:  oil, oil and oil.  In that regard, I give her high marks for raising taxes on the oil companies to generate revenue for her state and to balance her budget, much to their chagrin.  Score one for fiscal responsibility and toughness.  But her husband is an oil company employee.  That will raise serious conflict of interest questions in any energy policy matters.  Also, I don’t like the fact that she favors drilling in ANWR.  I’ve come out in support of offshore drilling, but drilling in ANWR is where I draw the line.  The environmental risks are too great.  But, back to the original question, there’s no evidence yet to suggest what her attitudes are toward our trade deficit. 
3. In general, is she ready to take over the presidency?  Some are saying that, even though she’s only been a governor for two years, she already has more “executive” experience that either Obama or Biden.  While technically true, I suppose, it’s ludicrous to suggest that such experience would prove more valuable than experience gained in the Senate.  Looking back at recent previous presidents, most had gubernatorial experiences.  Some were highly successful:  Reagan and Clinton (though I think Clinton was simply in the right place at the right time, at the dawn of the explosion in PC, internet and cell phone technology).  Some were abysmal failures:  Carter and George W. Bush.  So what makes a successful president vs. a failure?  I think it comes down primarily to intelligence, judgment, leadership and core values. 

So what does McCain’s choice say about him in this regard?  First of all, Palin was chosen for political reasons first, giving lower priority to what would be the best interest of the nation if something were to happen to McCain.  I don’t see her as ready to take the reins of the presidency and the free world.  This choice was obviously made in a play for disaffected Hillary voters and to shore up McCain’s shaky standing with the right wing of the party, especially pro-lifers and guns rights advocates.  But if McCain really wanted to attract the female vote, especially disaffected Hillary voters, why not choose another woman who’s more qualified, like Kay Bailey Hutchinson, the senator from Texas?  I think this play will backfire, insulting Hillary supporters with the thinking that they’ll vote for anything wearing a skirt (or a pantsuit).  If it’s pro-lifers and gun rights advocates he’s after, there are plenty of choices much more qualified to lead the nation.  And what will happen when Palin is stood up next to Biden in a debate? 

This just seems like a really weird pick and calls into question McCain’s judgment, one of the key character traits that should be factored into our choice for president.  I am reminded of Ross Perot’s choice of admiral what’s-his-name (the name escapes me) as his running mate.  It completely destroyed whatever credibility Perot had.  The admiral’s performance in the VP debate was one of the most embarrassing moments in modern political history.  Perhaps Palin will prove me wrong.  Perhaps she has the makings of an incredible leader.  But that’s not a risk I’d be willing to take.

Obama’s Acceptance Speech

Just a few quick observations about Obama’s speech last night:

1. Great speech.  Forceful delivery.  Very steely appearance.
2. Very centrist, at points almost right-leaning, especially when he made a strong point about cutting taxes and spending.
3. Only one direct mention of the trade deficit, but lots of discussion about the damage done by shipping jobs overseas.  I suppose the words “trade deficit” don’t resonate with a lot of people, but talk about the loss of jobs does, and rightfully so.  So I give him high marks for this.
4. Very little mention of immigration.  He briefly voiced support for it in one phrase, but then just as quickly and forcefully expressed anger at those employers who give American jobs to illegals.  I found this encouraging, offering hope that he’ll continue to be tough on enforcement and perhaps even signaling a turn toward tougher enforcement – toward coming down hard on employers, something the Bush administration never did.
5. Although he spoke at some length about moving toward renewable energy, there was no mention whatsoever of addressing carbon emissions and global warming.  I found this kind of curious, since it’s going to be one of the toughest issues he’ll face.  Maybe that was the problem.  It’s a tough issue, a “downer” that was just as well left out of the speech.

I’m looking forward to hearing McCain’s VP pick, and hearing the Republican speeches, to see how they contrast.  Could McCain swing me away from Obama?  Sure.  But here’s what he’d have to say:  “I will eliminate the trade deficit.  I will bring our manufacturing jobs back home.”  If he said those words, I’d be behind him 100%.  But I don’t think that’s going to happen.  We’ll see.

More later.

Presidential Campaign

 A lot has happened in the presidential campaign this week and I’d like to take a moment to comment.

First of all, I was pleasantly surprised by Obama’s selection of Biden as his running mate.  Biden would have been my pick, too.  I just like the guy.  Some criticize him for some of his gaffs, but I find his openness and honesty to be refreshing.  He’s extremely knowledgeable and tough.  He’s much closer to the average working stiff than to corporate executives.  Some criticize him for being involved in the revamp of bankruptcy laws to the benefit of credit card companies.  Frankly, I think that law was a good thing.  Anything that imposes more discipline and responsibility on the handling of debt is a good thing.  Ben Bernanke could use some lessons in that.  In my opinion, Obama has passed his first real test of judgment – the selection of a VP – with flying colors.  I knew all along that he would never pick Hillary – primarily because of her husband.  If he had, Bill would have been constantly upstaging him.  Following every Obama decision, reporters would have run to Bill and asked if that’s what he’d have done.  Sure, they’ll still do that, but without being linked to the White House, no one will care what he thinks.  By the way, Biden hit one out of the park with that speech last night.  And, if I was the Republican VP candidate, I wouldn’t look forward to debating Biden.  He’s really a pro in the point-counterpoint formats.  I look for a really incredible speech by Obama tonight. 

And I must say that I’m impressed with the McCain campaign’s tenacity in going after Obama with their ads.  He clearly has a well-run campaign and is ceding nothing to Obama.  But I think his economic message is out-of-step with the times and I think that he’ll wilt in the debates.  One thing I’ve noticed is that McCain is constantly reading from notes during his stump speeches while Obama never does, seemingly speaking from the heart instead.  To me, this displays a better grasp of the issues and an intellectual lightness of the feet that will serve him well in the debates. 

Hey, regardless of who wins, we’ll clearly have a much better president that we’ve had for the past eight years.  At least we’ll have someone who can construct complete sentences and deliver a speech without an arrogant smirk on his face. 

Monday’s Record Immigration Raid in Laurel, MS

http://www.reuters.com/article/domesticNews/idUSN2635579820080827?sp=true

I’m still trying to get caught up on things since returning home from the lake on Monday night.  Apparently, since my wife were on the road all day Monday, news of this record immigration raid escaped my attention until I saw a follow-up article on Tuesday.  It seems that ICE agents raided Howard Industries in Laurel, MS on Monday, rounding up 595 illegal aliens, a record haul for a workplace enforcement raid in the U.S.!  Howard Industries manufactures electrical equipment, like transformers. 

A big “thank you” and congratulations go out to Immigration and Customs Enforcement!  These raids are having some real impact.  Studies have shown a decline in the number of illegal immigrants in the U.S.  Fewer are arriving and more are leaving.  ICE, new rules requiring employers to check applicants and the bad economy are making it more difficult and unprofitable to be an illegal in the U.S.  Keep up the pressure, ICE!!

In the past, supporters of illegal immigrants have tried to justify their support by claiming that we need these workers to do the jobs that Americans don’t want.  I suppose now they’ll claim that Americans don’t want to do these high-paying manufacturing jobs building transformers any more!  It just highlights what a crock that whole argument is. 

Also, I find it interesting that this raid flew under the news radar so quickly.  In the past, such a raid has been followed for days by articles written by bleeding hearts wringing their hands over the fates of the affected families.  The following is the only such article I’ve seen:

http://www.time.com/time/nation/article/0,8599,1836596,00.html?xid=feed-rss-netzero

The significance of this is that the bleeding heart stories have worn thin.  No one cares any more.  Everyone is just happy to see these criminals being apprehended and deported.  The “get tough” approach is being more widely accepted.  I think this is very good news!

Although the above article takes the bleeding heart approach, it does report on some interesting details of the raid that didn’t show up in the initial report.  Here’s my favorite:

One worker caught in Monday’s sweep at the plant said fellow workers applauded as immigrants were taken into custody. Federal officials said a tip from a union member prompted them to start investigating several years ago.

And the article closes with this:

Gov. Haley Barbour recently signed a law requiring Mississippi employers to use a U.S. Homeland Security system to check new workers’ immigration status.

Under the law, a company found guilty of employing illegal immigrants could lose public contracts for three years and the right to do business in Mississippi for a year.

The law also makes it a felony for an illegal immigrant to accept a job in Mississippi. A message was left with the district attorney’s office after hours seeking comment on whether he would use the law to bring state charges against Howard Industries or the workers.

Someone needs to make an example of one of these crooked, anti-American corporations sometime, somewhere.  Once that happens, it’ll quickly become very tough for an illegal to find a job anywhere and we’ll finally be rid of this menace. 

 

 

FDIC Bankrupt

http://www.reuters.com/article/newsOne/idUSBNG28670420080827

Last month, following the collapse of Indymac Bank, I wrote a post about the FDIC and how it’s slowly being phased out by inflation, but also observed that the FDIC itself was threatened with bankruptcy.  (See FDIC – The Agency That Insures Your Bank Account – Being Phased Out.)  Well, folks, it’s here.  It’s now clear that the FDIC has nowhere near the funds required to take over the rash of bank failures that’s coming.  So the Federal Reserve, itself bankrupt, is now faced with yet another huge bail-out.  The Fed will crank up the bond printing machines and essentially borrow the money from our foreign creditors.  The only good news in all of this is that these foreign creditors will be the ones ultimately stuck with worthless debt – poetic justice for the global parasites who fed on our economy under the guise of “free trade,” sucking the manufacturing jobs, money and life blood out of our economy. 

Oh, and by the way, the FDIC has plans to dramatically increase the fees it charges banks to participate in its insurance program.  Coming soon to your bank account:  something called an “FDIC surcharge.”  Bank on it.  Once again, Americans will be indirectly footing the bill for our goofball trade policies.

Top Economists Bewildered by Economy

http://www.reuters.com/article/ousiv/idUSN2342286520080823

This article appeared a couple of days ago, as my wife and I were packing up to leave our retreat in the north woods, so I was too busy to comment at the time, but this was too good to pass up.  The gist of this article is that the Federal Reserve and other top economists from around the world were meeting at a plush mountain resort to contemplate just what the heck has gone wrong with the economy.  They are postively bewildered at their impotence in stopping the downward spiral of economy.  They’re like a group of teenage boys, plotting how to impress their girls with a good time, without a dollar between them.  Lots of great ideas for impressive dates, but no dough to pull it off. 

What struck me most about this article is how it gets to the heart of the question I asked on the back cover of Five Short Blasts.  (Clicking the link will take you to a page where you can view the back cover.) 

Why are Americans’ incomes and net worths mired in a three-decades-long decline?  Why are jobs with decent pay and benefits becoming so scarce?  Why are affordable health insurance and a financially-secure retirement fading from the “American Dream?”  Why, in spite of thousands of economists guiding our nation’s economic policies, is our national debt skyrocketing?  Is it possible that the economists are missing something?

So here they are, all of the top economists gathered in one spot, and absolutely clueless about what is happening and why their macroeconomic models are failing.  How much more clear could it be that economists are, in fact, missing something extremely important?  Why do we tolerate such abysmal failure from this one field?  This kind of performance in any other field, be it the medical field, the high tech industry, or whatever, would result in heads rolling. 

Ben Bernanke seems to be highly respected by fellow economists, but I find the man to be absolutely rigid and unimaginative.  He is a wind-up globalization cheerleader.  Wind him up and set him on the floor and he will run in circles and incessantly babble words and phrases like “globalization,” “open markets,” “recapitalization,” “currency valuation,” “soveign wealth funds” and so on, a bearded version of the Chatty Kathy doll that chanted “mama” and “feed me.” 

Our next president would be well advised to toss these unthinking, robotic disciples of 18th century economic trade theorists back into the toy box and replace them with people who know their way around a balance sheet and can recognize budget deficits and trade deficits for what they are – a huge drag on the economy.  We could get better economic advice from anyone at AccountTemps. 

Following this article, it was reported that Bernanke was advocating some sort of super-regulator role at our major financial institutions – regulators who had a pulse on the broader economy and not just a myopic vision of what was happening in their little piece of the economy.  This is just rich, Bernanke proposing regulators to do for financial institutions what he doesn’t have the common sense to do himself – impose some fiscal discipline.  Not once has he ever been heard to utter a peep of concern about our trade deficit.  If red ink on the national balance sheet doesn’t matter, why should it matter to banks or brokerage houses?

Here’s some key quotes from the article:

“A year ago there was a real sense of uncertainty and confusion. People were perplexed by the turmoil that had come on quite suddenly. I would say the mood this year is one of greater clarity…let’s call it a bit more somber,” said Lipsky, the IMF’s first deputy managing director.

Yeah, that’s great progress.  Somber resignation replaces uncertainty and confusion. 

Fed officials say that it will take a prolonged period for the harm done to confidence by the collapse in the U.S. housing market to wash through the system. Bernanke acknowledged that there would no quick fix.

In other words, they don’t have a clue.

Kennedy: “The work begins anew! The dream lives on!”

Anyone who saw Ted Kennedy address the DNC last night had to be impressed with the guy’s tenacity and fighting spirit.  Clearly, this is a guy who loves his work and politics as much as he loves life itself. 

But I was struck by how out-of-place his remarks seem in today’s world.  This kind of pep talk rhetoric resonated decades ago but I couldn’t help but envision young viewers sitting there and hearing talk of “the dream” and wondering “what dream?  What is this guy talking about?”  Or, upon hearing that the “work begins anew,” wondering “work towards what?”  Those of us who have been around a while know that he’s referring to the America that we remember, the nation that was once the world’s preeminent industrial power, the wealthiest and most admired nation on earth.  That’s certainly not what young people see when they look around today.

Kennedy also spoke of “reaching our destination.”  This phrase especially struck me because it highlights the single biggest failure of our nation’s leadership – a vision and a plan for getting there.  What is our “destination” Ted?  Is it a grossly overpopulated nation, like China or India?  Because that’s where our immigration policy and lack of population management is taking us.  Is it a bankrupt nation that has been sold off finance our debt?  Because that’s where our trade policy is taking us.  And all the while, you and your colleagues in the Senate and House have dithered with treating the symptoms of these problems while they steadily eat away at our nation’s economy and our quality of life. 

It’s time for a new generation of politicians – ones with a real vision of a destination and a plan for how to get there.  Whether they’re democrats or republicans or independents, I don’t care.  But this nation is desperate for some real leadership.

The Up-Side to High Oil Prices: It’s a Downer for Globalization

http://www.usatoday.com/money/industries/manufacturing/2008-08-11-cargo-costs-oil_N.htm

This article appeared a few days ago, but thought it was worth a look.  It’s the first analysis I’ve seen of the effects of high oil prices on trade.  I raised this issue a while back when I posted “U.S. Imposes Tariff on Chinese Hangers“, and questioned this very thing – whether it makes sense to consume millions of barrels of oil to ship products around the world that can be made right here at home.  It seems that if we want to cut oil consumption, this is some really low-hanging fruit!

I found the following excerpts particularly revealing:

“Globalization is reversible,” says Jeff Rubin, an analyst at CIBC World Markets in Toronto.

Well, maybe. No one predicts a wholesale return of manufacturing jobs to the United States. And there are other forces at work, including a weak dollar, which boosts exporters. But today’s oil prices act like a tariff on global commerce, discouraging long-distance shipment of some components and finished goods, Rubin says. Shipping a standard 40-foot container from Shanghai to the U.S. East Coast in May cost about $8,000, vs. $3,000 eight years ago, when oil was around $20 a barrel.

If long-term trends push oil prices near $200, as some analysts expect, sending that shipping container halfway around the world would cost a staggering $15,000.

First of all, of course globalization is reversible.  If the U.S. ever admits that it was a mistake to abandon its highly successful tariff policy in favor of an untested and fatally flawed free trade theory, then the reimposition of tariffs would reverse the adverse effects of globalization so quickly that factory managers in overpopulated nations around the world would be closing the doors and wondering what the heck happened!

Secondly, isn’t the second paragraph above a tacit admission that tariffs would breathe new life into America’s economy?  If so, then what are we waiting for?  Let’s impose them now and collect the tariff money ourselves instead of letting the oil exporters collect them!

So perhaps there’s an upside to high oil prices.  Maybe they will do for the American economy what our political and economic leaders don’t seem to have the courage or brains to do themselves!