May Trade Deficit Falls; Good News Ends There

July 11, 2009

http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

The above link will take you to the U.S. Bureau of Economic Analysis release of the May, 2009 foreign trade data.

In May, the U.S. trade deficit declined from -$28.8 billion in April to -$26.0 billion.  That’s the good news.  Any decline in the U.S. trade deficit, for whatever reason, is good news.  It slows the rate at which the U.S. has to sell off assets to finance the trade deficit. 

But that’s where the good news ends.  The decline in imports is due to the recession, not to any shift in preference for American-made products.  People are simply buying less because they have less to spend and fear that conditions in the economy are getting worse.  Consider that the annual sales rate for vehicles remains stuck at about 9 million per year, vs. pre-recession levels of 17 million per year.  That means about 4 million fewer imported cars per year, accounting for a decline in imports of about $8 billion per month. 

But it was a rise in exports that drew most of the focus on this report, with some claiming it was a hopeful sign for U.S. manufacturers.  The people saying that obviously didn’t look at this report in depth.  Most of the gain in exports was in the category of “industrial supplies and materials.”  Sounds good, until you realize that most of the gain in that category was petroleum exports – an anomaly.   If the increase in exports in May was a hopeful sign for U.S. manufacturing, then why did the manufacturing sector shed another 136,000 jobs in June? 

Others point to the falling dollar as reason for hope for a rebound in U.S. manufacturing.  Yes, it may help a little, but very little, because the trade deficit in manufactured products is driven by population disparities between the U.S. and some of our trading partners, and not by currency valuations.

As an example, consider the Japanese yen which, over the last few decades, has risen by over 300% vs. the dollar.  But instead of falling, our trade deficit with Japan has soared during that time.  More recently, the Chinese yuan has appreciated over 20% vs. the dollar, but the results have been the same – our trade deficit with China has only worsened. 

Even more recently, the dollar has dropped even further against the Japanese yen.  But has anyone seen any increase in prices for Japanese products?  Of course not!  In fact, Toyota recently cut the price for its Prius model.  Nations dependent on exports to sustain their bloated labor forces aren’t going to let currency valuations erode their U.S. market share.  They understand that the price of taking a loss on exported products is far less than the social cost of sky-high unemployment.  If only U.S. leaders had a similar appreciation. 

Nothing has changed to fundamentally alter the forces driving the U.S. trade deficit.  Either the U.S. economy will remain in recession, holding down the trade deficit (but not reducing it further), or we will experience a defict spending-fed recovery of sorts which will surely send the trade deficit soaring once again.  But employment in the U.S. will never really recover unless the U.S. takes positive action – either imposing tariffs on imports or getting our trade partners to agree to import quotas – to bring manufacturing jobs back to the U.S.


Pope Endorses Totalitarian World Government

July 8, 2009

http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html

http://www.usatoday.com/news/religion/2009-07-07-pope-encyclical_N.htm

On July 7th, the Vatican released Pope Benedict’s third encyclical – his teaching on social and economic policy – throughout most of which he bemoans the negative consequences of globalization and then, stunningly, concludes that what’s needed to correct these ills is not less but more, endorsing a one-world government with real power of enforcement. 

I’ve provided two links above.  The first will take you to the actual encyclical on the Vatican web site.  I admit that I haven’t read it word for word, but haved scanned it in its entirety and have thoroughly read certain sections.  The second link is a USAToday article reporting on and summarizing the contents of the encyclical.  I found that the article does a pretty good job of summarizing the conclusions of the encyclical.  (Kudos to the author for persevering through a document that would put to sleep all but the most enthusiastic of theologians, and perhaps a few economists looking for a good laugh!)

The following is the article’s summary of the key conclusions:

•Labor must be safeguarded after years of rampant market forces leaving citizens powerless in the face of “new and old risks” and without effective trade union protections. 

•Elimination of world hunger is essential for “safeguarding the peace and stability of the planet,” and the problem is not resources but their inequitable distribution. 

•”Demographic control” through an “anti-birth mentality” that promotes abortion and birth control “cannot lead to morally sound development.” He blasts those who support abortion “as if it were a form of cultural progress.” 

•The environment is “God’s gift to everyone” and we have a “grave duty to hand the earth on to future generations” in good condition, says Benedict. He laments, “how many natural resources are squandered by wars!” 

•”Financiers must rediscover” ethics and not use “sophisticated instruments” to “betray the interests of savers.” 

•Consumers, must “realize that purchasing is always a moral — and not simple economic — act.” In this context, the ecological crisis is seen as a crisis in human ecology. 

As a Catholic, let me begin by stating that the Pope’s heart is in the right place.  As all of us should be, he’s dismayed by the persistence of hunger and poverty that world leaders had promised would have been wiped out by now through globalization.  But he would better serve the global community by sticking with the teachings of Christ to love one another, than to engage in the tortured logic on display in this cyclical by which those teachings are translated into specifics on modern day political, social and economic practices.  Even at a time when His own people were oppressed and persecuted by the Roman Empire, Christ was careful to avoid forays into politics, replying to the most direct question on the subject with “render unto Caesar that which is Caesar’s, and unto God that which is God’s.”  The Pope would be wise to follow that example. 

The following quote from the encyclical seems to underpin the Pope’s justifications for his conclusions:

The idea of a world without development indicates a lack of trust in man and in God. It is therefore a serious mistake to undervalue human capacity to exercise control over the deviations of development or to overlook the fact that man is constitutionally oriented towards “being more”. Idealizing technical progress, or contemplating the utopia of a return to humanity’s original natural state, are two contrasting ways of detaching progress from its moral evaluation and hence from our responsibility.

This is the crux of the problem with the Pope’s thinking.  First, he’s completely bought into the axiom of economists that man is ingenious enough to overcome any obstacle to further growth, perhaps simply because it supports his own belief that man has no right to meddle with God’s Will when it comes to procreation (not allowing for the possibility that God’s Will may not be what he thinks it is).  Secondly, he has supreme faith that God will magically provide for an infinitely growing population, as though he knows for certain that God wants it to grow indefinitely  just because He gave us that procreative capacity.  He never stops to consider that perhaps God blessed us with that capacity to survive the high death rate that plagued our early evolution, but also blessed us with the intellectual ability to recognize the harmful effects of overpopulation and to rein in that procreative capacity when it was no longer needed.  Nor does the Pope consider that warnings of overpopulation may, in fact, be God’s way of dealing with the very problems of hunger and poverty that so concern him.  I am reminded of the joke about a man surrounded by rising flood waters.  He rejects the sherriff’s offer for a ride to safety, replying that “God will take care of me.”  As the waters rise, he says the same thing to a man in a boat and, later, as the waters rise higher, to a man with a helicopter, offering to lift him from his roof.  After finally drowning in the still-rising flood, the man asks God why He allowed him to drown.  “What more could I do?” replied God.  “I sent a car, a boat and a helicopter!” 

So, supported by the illogical conclusion of economists that, just because food shortages didn’t quickly limit population growth in the 1800s as Malthus predicted, then no limits to population growth are possible, the Pope at once supports never-ending population growth as humanity’s destiny of “being more” while also decrying hunger, poverty and environmental degradation.  He seems utterly incapable of grasping the obvious link.

The Pope notes the natural tendency of globalization to marginalize workers and then suggests that they simply be granted more power with the right to organize labor unions.  As Popes have done for decades, he blames hunger on problems of distribution, never once considering that perhaps growing a population to the point where it’s dependent on complicated chains of distribution might be a problem.  Businesses should put aside concerns for profit in favor of the common good.  Consumers should temper their desire for products, ignoring what happens to per capita employment when per capita consumption is limited. 

The level of naivete’ on display here is astonishing for a man of his years and experience.  Faith in God is a wonderful thing but, if I recall correctly, the Bible also tells us that God helps those who help themselves.  When the problem of overpopulation is so painfully obvious, will God be more pleased with us if we take action in a way that seems moral and responsible or will he be more pleased if we sit back and do nothing other than to express our faith that God will take care of us, kind of like the servant in the parable who buried his master’s talents instead of taking some inititative? 

But the Pope goes beyond naivete into the realm of dangerous and irresponsible when he suggests that a benevolent, one-world government (with “teeth,” which, if he thought about it, means a military to enforce this government’s proclamations) is what’s needed to share the wealth or spread poverty evenly, depending on your perspective.  He seems to forget that Christianity’s only experience with a totalitarian one-world government, the Roman Empire, didn’t work out so well for Christians, though the people of Rome were entertained and the lions were well-fed.

Like our own government with its several branches, dividing the world into nations provides a system of checks and balances.  When one nation tries to run rough-shod over others, there have been opposing forces to intervene, painfully but, so far, effectively.  A one-world government would have no checks and balances and to believe that it would function for the common good with no corrupting influences favoring the well-heeled and connected is absolutely preposterous. 

Thankfully, no one will really pay any attention to this encyclical, just as most Catholics have turned a deaf ear to the Pope’s condemnation of contraception.  World leaders will greet it with faces practiced in the art of expressing understanding and appreciation, while stifling the natural urge to roll their eyes.  But the tragedy is that the Pope could do so much to prevent further poverty and hunger by championing the cause of a sustainable population.  Instead we’re stuck with Middle Ages thinking.  I’m embarrassed that this is the best leadership that the Catholic Church seems able to produce.


Of Relativity and Lady Liberty

July 6, 2009

In 1905, Albert Einstein introduced to the world his theory of relativity, postulating that the laws of physics must hold true regardless of the observer’s frame of reference.  While this may have seemed simplistic or even self-evident to people like you and me, firmly rooted in our slow-moving, earth-bound existence, it was truly profound for physicists who think in terms of space and stars and the speed of light.  Its logical consequences led to mind-blowing discoveries of relationships between time and speed, space and matter and rewrote the laws of physics, beginning with the most fundamental.  Thanks to Einstein, it’s now understood that the apple Isaac Newton observed falling from the tree was driven not by a force of gravity, but by the curvature of space.  Once decoupled from the tree’s branch, and lacking any other influencing forces (like a strong wind), it fell toward the earth because that’s the only direction in which the curvature of space would allow it to go. 

This past 4th of July weekend, the news programs all carried stories of the reopening to the public of the stairway to the crown of the Statue of Liberty.  But for seemingly obvious, practical reasons, the tiny spiral staircase forced officials to limit access to only thirty people per hour.  At first I was struck by the irony of it – that this monument to our heritage of immigration and the belief that we can grow our population without end – should itself impose a limit on the number of its visitors.  Thirty people per hour.  That’s it.  No more are welcome. 

Then it hit me:  if the laws of physics must hold true regardless of an observer’s frame of reference, then shouldn’t that also be true for the field of economics?  Shouldn’t its laws apply to an observer inside Lady Liberty just as much as they would to an observer of something larger, like the United States as a whole?  Of course they should.  The laws of economics do not transcend the laws of physics.

For example, consider the law of supply and demand, one of the most fundamental precepts of economics.  It still holds true inside Lady Liberty.  If I were a vendor of bottles of water in the crown of the statue at the top of that staircase, I could command a higher price if all I had left was a single bottle of cold water than if I had a large supply of 100 bottles. 

So what about economists’ claim that overpopulation can never be a problem because man is ingenious enough to overcome any obstacle to further growth?  Let’s apply that to Lady Liberty.  Why should we place any limit at all on the number of people inside the statue?  It’s because in that relatively tiny frame of reference, it’s patently obvious that it’s impossible to accommodate more than a relatively small number of people.  Just as the sheet metal of a Volkswagen limited the number of college students that could be stuffed inside when such games were in vogue back in the ’60s, the copper skin of Lady Liberty limits the number of visitors that can be stuffed inside. 

Thus, if relativity is applied to the field of economics, then the claim that population growth can never become a problem fails at the most basic level.  Why?  Because it’s not really a “law” of economics.  It’s a dodge that economists adopted in response to the seeming failure of Malthus’ theory that shortages of food would limit population growth.  Either unable or unwilling to further evolve Malthus’ theory about overpopulation, economists simply cupped their hands over their ears, like the “hear no evil” monkey, and vowed never to consider overpopulation again.  They adopted the “growth is good; growth is no problem” mantra and repeated it over and over until they actually began to believe it.

Then how can economists get away with making this claim?  It’s because when people consider the subject of population, the frame of reference that automatically comes to mind is so large as to be nearly infinite for all practical purposes:  the entire country of the United States, for example – an area of over three million square miles.  It’s difficult to comprehend the boundaries of such a vast expanse ever being a practical limit to the number of people that can be contained within.  And because it’s difficult to comprehend it ever being a problem, no one is willing to consider any of the consequences of a growing population.  Beyond resources and strain on the environment, is there anything else that may tend to limit the size of the population before we become a sea-to-shining-sea, quarter mile deep mass of human flesh?  What happens as we crowd together into smaller spaces?  Will our per capita consumption begin to decline?  What does this mean for per capita employment?  Could it be that poverty will prove to be the ultimate barrier to excessive growth? 

As in physics, presumed “laws” of economics that don’t stand up to scrutiny in one frame of reference are failures for every frame of reference.  And the longer we cling to such “laws,” the more unlikely progress toward valid economic models becomes.


Public Enemies

July 4, 2009

No, this isn’t a post about U.S. Trade Representatives, past and present, although this would be a great title for such a post.  Instead, I thought I’d have a little fun and go completely off-topic. 

My wife and I took in the “Public Enemies” movie today (starring Johnny Depp).  It’s a movie we’ve looked forward to for a year, since we learned of its filming.  You see, my grandfather, a cop in South Bend in the 1930s, engaged in a gun battle with the Dillinger gang, including Baby Face Nelson and Howard Van Meter, when they came to town to rob the bank.  The other source of our interest in the movie is that, during our visits to our cabin in the north woods of Wisconsin, we occasionally have dinner at the Little Bohemia lodge in Manitowish where a key sequence of the movie, the FBI raid on the Dillinger gang at Little Bohemia, was filmed.  (It was there that we learned of the movie a year ago.) 

It was a great movie, though it does take some liberties with actual history.  In the movie, only Dillinger escapes the raid at Little Bohemia, with Baby Face Nelson killed and Howard Van Meter mortally wounded.  The fact is that Dillinger’s entire gang escaped the raid scot-free, fleeing out the back and along the lake shore while the Feds continued to riddle the front of the building with bullets.  (The movie accurately depicts Nelson then flagging down a G-man’s car on the highway and shooting the agent.  But Nelson then escaped in the car instead of being killed by other agents.)  The bungling of this raid, with the loss of innocent civilian lives, almost cost J. Edgar Hoover his job. 

It was after the raid on Little Bohemia that the bank job in South Bend took place, with the whole Dillinger gang taking part.  My grandfather had the drop on the gang as they exited the bank but discovered only then that his partner had handed him a sawed-off shotgun instead of the rifle he’d asked for.  With bystanders in the background, he couldn’t risk the shot, but blasted away at the car during the getaway.  (The car was later found, peppered with buckshot.)  My mother’s cousin, also a cop, was shot dead by Van Meter as they exited the bank.  In fact, the bank robbery scene in the movie that takes place just before the Little Bohemia raid in actuality may very well have depicted the South Bend robbery, out-of-sequence with actual events.

As depicted in the movie, Dillinger relished his image as a sort of Robin Hood hero figure.  (Remember, this was during the Great Depression and banks weren’t exactly admired institutions in those days.  Sounds familiar, huh?)  In the beginning, the bank robberies rarely involved the firing of a shot.  However, as time wore on and the gangster ranks were depleted, Dillinger was forced to accept Baby Face Nelson into his gang.  Nelson was truly a psychopath who loved shooting and killing, so dangerous that Al Capone had only recently expelled him from his gang.  It was then that the Dillinger gang bank holdups began to turn extremely violent. 

The Little Bohemia lodge remains much as it did in the 1930s.  In fact, the north wing of the building still has the windows, riddled with bullets from the actual gun battle, preserved between sheets of plexiglass.  One wall of the restaurant that separates two dining rooms is still riddled with bullet holes.  There is a small display of Dillinger gang artifacts, left behind when they fled the FBI raid. 

The armory of the ship I served aboard in the Navy (the armory was my division’s responsibility) included in its arsenal a .45 cal. Thompson machine gun with a 100-round drum magazine, just like the “Tommy guns” used by Dillinger’s gang.  Seems like I could have been more creative and come up with some reason for needing to test fire it.  I always regret that I never did.

Anyway, it was a good flick and it was fun for me to see these stories I’d heard since I was a kid come to life.  See it if you get the chance.


Unemployment: A Lagging Indicator or the Crux of the Problem?

July 4, 2009

http://www.usatoday.com/money/economy/2009-07-02-unemployment-june_N.htm

There’s been a lot of talk in the media in the last few months about “green shoots” and the beginning of an economic recovery.  Banks have stabilized (at least from outward appearances, thanks to a thin veneer of money applied by the Federal Reserve), housing sales and home price declines are slowing, as are declines in retail spending and auto sales.  Happy days are here again!  The slow rate of decline in the economy is being accepted as the new norm.  Corporations’ profits have stabilized, thanks to cost-cutting and job eliminations.  In fact, Wall Street was ready to celebrate job losses of “only” 350,000 in June as evidence that the economy was on a roll, and investors looked forward to a nice rally.  After all, unemployment is just a lagging indicator, they say.  It’s nothing to worry about.  It’ll get better once consumers start binging again. 

Then, along comes the Labor Department on Thursday, tossing a turd into their punch bowl with the June unemployment report.  Another 467,000 jobs lost in June and another step closer to double-digit unemployment (as measured by U-3*), much worse than expected and much worse than the May figure.  Suddenly, and just for a day, everyone is reminded that the consumers we count on to drive the economy derive their spending power from their dual role as laborers and that, without income, all the talk of an economic recovery is just so much wishful thinking. 

It all comes down to basic economics – not the pretend economics in vogue with economists today – where we can pretend that population growth can be used as an engine for economic growth forever without cancerous consequences, where we can pretend that workers who lose their jobs to trade deficits can be retrained for magical new jobs in imaginary, yet-to-emerge fields – but real economics based upon the acknowledgement that consumers and laborers are one and the same, and that their purchasing power emanates from a healthy demand for labor that is at least in balance with the supply. 

Pretend economics is the product of economists who turn a blind eye to population growth, cross their fingers and, with unjustified optimism, proclaim that man is ingenious enough to overcome any obstacle to never-ending growth.  Real economics, on the other hand, is the product of people who stop to consider the full range of potential consequences of population growth – not just the finiteness of resources and potential environmental impact, but more subtle things like the effects of crowding more people into a finite space – what happens to per capita consumption and employment, and what happens when we try to trade freely with nations that are badly overpopulated.

Get this through your heads, pretend economists:  a slowing rate of decline isn’t the same thing as recovery.  It doesn’t even mean the bottom is in sight.  All it means is that we’re still in decline.  Foreclosures are still rising; home prices are still falling and will continue to fall until the median home is affordable by people earning the median income.  The problem is that the median income continues to decline as we continue to freely trade away our jobs to badly overpopulated nations and as we continue to exacerbate the situation at home with our own worsening overpopulation.  Unemployment is still rising and will continue to rise until it reaches a level consistent with the effective population density we’ve assumed by trading freely with nations five, ten and twenty times more densely populated than our own. 

With our national debt now reaching a level that even the most sanguine of economists sees as dangerous, the time is rapidly approaching when we can no longer paper over the consequences of our trade deficit with federal deficit spending.  It’s time to act.  It’s time for our president t0 take meaningful action  – meaning tariffs on manufactured products from overpopulated nations – to restore a balance of trade.  Of course they’ll react angrily, but it’s not as though they haven’t had warnings for decades that this trade imbalance can’t be sustained forever.  They’ve had ample opportunity to make good on promises to boost their economies and their imports of American products.  We can wait no longer. 

———————————————–

* The official unemployment rate, U-3, rose by only 0.1% to 9.5% and the more comprehensive figure, U-6, now getting much more attention in the media, rose only 0.1% to 16.5%.  But the unemployment rate is a flaky figure, based on surveys instead of hard employment data, that may rise less than the job loss figures indicate in one month, only to be followed by a bigger-than-indicated rise the next month.  Since the labor force is approximately 150 million people, and since it grows by about 150,000 per month (due to population growth), then a flat employment report should actually yield a rise in unemployment of 0.1%, meaning that a loss of about 450,000 jobs should yield a rise in unemployment of 0.4%.  What I’m saying is that the U-3 unemployment rate is probably closer to 9.8% and, if job losses continue at the current rate, expect a big jump next month to take it over 10%.  It’s also worth noting that even the U-6 figure doesn’t measure the full extent of unemployment, since those on disability are excluded, even if they are looking for work, and the homeless are obviously not included since they can’t even be surveyed.  Include these categories and we’re approaching 20% unemployment.


Obama Decries Trade Provision in Cap and Trade Bill

July 2, 2009

http://www.reuters.com/article/GCA-BarackObama/idUSTRE55S02P20090629

On Sunday, following passage of his “cap and trade” legislation by the House of Representatives on Friday, President Obama denounced a provision in the bill intended to prevent U.S. manufacturers from being put at a competitive disadvantage. 

President Barack Obama on Sunday called a House-passed climate change bill “an extraordinary first step,” but spoke out against a provision that would impose trade penalties on countries that fail to cut greenhouse gas emissions.”At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals,” Obama said in an Oval Office interview reported by The New York Times, the Los Angeles Times and The Washington Post.

“I think there may be other ways of doing it than with a tariff approach,” Obama said.

Oh, really, Mr. President?  And what would that be?  Since the signing of the Global Agreement on Tariffs and Trade in 1947, what measures other than tariffs have proven effective in restoring a balance of trade?   Complaining about unfair trade practices?  Complaining about currency valuations?  Cajoling others to buy more American-made products?  Scolding corporations for outsourcing?  What has all of this talk done for us?  Since our last trade surplus in 1975, they’ve gotten us a cumulative $9.2 trillion trade deficit, have bankrupted the country, saddled our children with a debt they’ll never be able to repay and have turned the wealthiest nation on earth, once its preeminent industrial power, into a skid row bum, literally begging the Chinese to keep loaning us money. 

I supported and voted for President Obama, largely because of his promises to fix our broken trade policies – amending NAFTA (the North American Free Trade Agreement) for example.  No one wants him to succeed more than I.  But, since his election, he has done nothing but disavow the protectionist measures that offer the only hope of restoring a balance of trade and financial stability.  His faith in his ability to be a good statesman and talk his way out of a trade deficit is naive.  And his complete lack of response to tariffs imposed by Mexico and blatant dumping by Japan and others goes beyond timidity, bordering on cowardice. 

His insistence upon letting other nations have their way with the U.S. market without putting up even the slightest defense is highly disappointing.  Even in the face of global economic collapse, brought on by global trade imbalances, he is unwilling to act.  Obama won a lot of votes with his promises to fix this trade situation and he’s letting all of us down.


Obama Administration Cracks Down on Paper Work, Not Illegals

July 2, 2009

http://www.usatoday.com/money/workplace/2009-07-01-immigration-crackdown_N.htm

The Obama administration has launched a sham crackdown on illegal immigration, obviously designed to create the illusion of securing the border ahead of a push in Congress for “comprehensive immigration reform” – a euphemism for granting legal status to twelve million aliens in the country illegally. 

The Obama administration launched investigations of hundreds of businesses around the country Wednesday as part of its strategy to focus immigration enforcement on the employers who hire illegal workers. Immigration and Customs Enforcement has begun notifying businesses of plans to audit their I-9 forms — employment eligibility documents that employers fill out for every worker — the agency told members of Congress in an e-mail Wednesday.

How will this work?  Evidence is provided by a separate story of one of these “I-9 paper work audits” conducted at American Apparel’s manufacturing operations in Los Angeles: 

http://www.usatoday.com/money/industries/manufacturing/2009-07-01-american-apparel_N.htm

American Apparel(APP), no stranger to controversial headlines, said Wednesday that the government has found that 1,800 of its employees are either illegally working in the U.S. or potentially illegal to work. Those employees comprise about one-third of the clothier’s Los Angeles manufacturing operation.

The disclosure came as a result of an investigation by U.S. Immigration and Customs Enforcement. Of the 1,800 workers identified, 1,600 were deemed to be unauthorized to work while Immigration had been unable to verify the status of the remaining 200. The company said it was not found to have willingly hired illegal workers.

If the workers are unable to provide proof of eligibility, they will be forced to leave the company, American Apparel said in a statement. The company said the departures aren’t expected to hurt its financial results and noted it has a surplus of inventory and production capacity.

KeyBanc Capital Markets analyst Edward Yruma said the immigration notice “thankfully led to no mass arrest or deportation of employees.”

No arrests.  No deportations.  No fines for the employers.  The illegals even get a second chance to provide proof of eligibility.  If they can’t, no doubt they’ll be rehired under some other identity, perhaps yours or mine.  Why not?  There’s absolutely zero risk of any meaningful enforcement action.

For all of Bush’s faults, one policy he was getting right was border security and immigration enforcement – conducting many high profile raids of employers, prosecuting company officials and deporting illegals.  Obama has put a stop to all of it, opting for a sham program to create an illusion of being tough.  I have news for him:  no one is going to fall for it.  In fact, the program may very well back-fire on him, with the I-9 audit results supporting opponents of amnesty and immigration “reform,”  providing proof of just how ubiquitous the problem of illegal immigration (and all of the problems associated with it) has become. 

There are two issues absolutely critical  to the long-term future of this country:  restoring a balance of trade and stabilizing (even reducing) our population, and there is nothing more fundamental to addressing the latter than halting illegal immigration and deporting illegals.  On both of these issues, the Obama administration is failing miserably.