Geithner Takes Confusing, Capitulatory Message to Beijing

http://www.reuters.com/article/idUSTRE64N0BA20100524?type=politicsNews

Treasury Secretary Tim Geithner, in Beijing today for a “Strategic and Economic Dialogue” with his Chinese counterparts, delivered a message that was both capitulatory, in that it drops any insistance on de-pegging the yuan from the dollar, and at the same time confusing – simultaneously urging China to develop its domestic economy while chastising them for favoring domestic producers. 

In prepared remarks for delivery at an opening ceremony for the two-day Strategic and Economic Dialogue, Geithner indirectly urged China to ease up on its “indigenous innovation” policies aimed at giving Chinese companies a larger share of new cutting-edge technologies developed in China.

… “As we reform the U.S. economy to promote savings and investment, China is reforming its growth model to promote domestic demand and consumption,” Geithner said.

How does a country “ease up on indigenous innovation” and simultaneously “promote domestic demand and consumption?”  Forgive the use of a crude abbreviation, but the Chinese must be left wondering, “WTF?”  Is it any wonder that our trade results are such a mess when this is the kind of message we send?

The only message that came through loud and clear is that China has a green light from the Obama administration to do as it pleases in trade with the U.S.  Yuan appreciation is now off the table.  Cooperation on Iran and North Korea is on the table and “freer trade” is the only chip the U.S. has to play if it wants to secure China’s cooperation on those issues.  At least that’s the way the Obama administration sees it. 

Since the end of World War II, the U.S. has consistently used American manufacturing jobs as a bargaining chip for securing international cooperation.  What has it gotten us?  A weakened economy, reduced clout with other nations and endless lectures about how to manage our economy from countries empowered by our trade policy largesse.

* * * * *

P.S.:  By the way, what exactly is the Obama administration doing to “reform the U.S. economy to promote savings and investment?”  Everything they have done so far has been aimed at restarting the debt machine and restoring consumer confidence to get Americans spending again.  Wouldn’t rising incomes promote a higher rate of savings?  It’s no coincidence that high income earners save far more than those with low incomes.  Wouldn’t it make sense to restore a balance of trade, bring millions of manufacturing jobs back home, reduce unemployment and thus start driving up incomes again if we want to “promote savings and investment?” 

Calderon Should Mind His Own Business, Obama Should Take Care of Ours

http://www.usatoday.com/news/washington/2010-05-19-mexico_N.htm

Mexican President Felipe Calderon had the unmitigated gall to use an official visit as an opportunity to criticize Arizona’s law to address illegal immigration, a problem for which his and his predecessors’ bumbling and ineptitude in managing the Mexican economy is mostly to blame. 

Mexican President Felipe Calderón on Wednesday criticized Arizona’s tough new immigration law as “discriminatory,” a rebuke of a domestic policy rare for a foreign leader to deliver on U.S. soil. Calderón’s criticism was echoed by President Obama during a joint Rose Garden news conference held hours before Calderón was honored at a state dinner.

And, once again, Obama just stood there and took it, just like he did in an earlier visit to Mexico when Calderon chastised him for even thinking about renegotiating NAFTA (the North American Free Trade Agreement) and then, to punctuate the point, slapped big tariffs on American imports.  Not a peep of protest from Obama.  Even worse, he took Calderon’s side.

 Arizona’s law “has the potential of being applied in a discriminatory fashion,” Obama said. “The judgments that are going to be made in applying this law are troublesome.”

… Obama didn’t seem put off. He hailed Calderón as a “true partner” on issues from the war against drugs to creating jobs on both sides of the U.S.-Mexican border.

 Calderon championed the “rights” of the Mexican people to come to the U.S. for economic opportunity.  Perhaps Mr. Calderon should mind his own business and focus on improving economic opportunities for his citizens in Mexico.  And perhaps he should implement a population management policy to rein in the explosive population growth in a land that is already badly overpopulated.  Oh, wait, I forgot – he already has such a policy:  exporting people.

When it comes to Obama, I suppose things could be worse.  He could be pushing Congress to enact “immigration reform,” a euphemism for amnesty and an open border.  Were it not for the fact that the American people are furious about illegal immigration, he’d probably try.  He’s smart enough to know that he’d be wasting his and Congress’ time.  No such legislation is going to be enacted.  Not now and not in the forseeable future.

What’s sad is that the President, contrary to the image portrayed during the election of someone who understands and was willing to tackle the problems that confront this country, he just doesn’t seem to get the problems caused by worsening overpopulation in the U.S., and the role of both legal and illegal immigration in exacerbating those problems.  At a time when we have 18 million unemployed workers (50% more than the total of illegal immigrants in the U.S.), shouldn’t it be obvious to anyone that we don’t need to be importing an additional one million laborers every year?  At a time when we are dependent on foreign sources for 70% of our oil, isn’t it obvious that we don’t need to be importing a million more oil consumers every year?  When the challenge of cutting carbon emissions by 80% is already nearly impossible, how much common sense does it take to know that we shouldn’t be importing an additional one million carbon emitters every year? 

As someone who believed the calls for “hope” and “change” and voted for Obama, I’m terribly disappointed.  We’re once again saddled with a another in a long line of care-taker presidents, satisfied with tinkering at the margins while the bigger, underlying problems go unaddressed.  Health care reform that doesn’t address the biggest issue with affordability:  incomes that haven’t kept pace with inflation.  Wall Street regulatory reform that doesn’t address the global trade imbalances that fuel the excesses.  Jobs programs that leave workers high and dry once again when the deficit spending can’t be sustained.  Criticizing states who tackle immigration enforcement when he’s unwilling to exercise his executive powers to address the problem. 

Mind your own damned business, Calderon.  And start taking care of ours, Obama.

Tuesday’s Primary Results: A Step in The Right Direction or More Aimless Wandering?

http://www.reuters.com/article/idUSTRE64H0P120100519

If there is one clear message in Tuesday’s primary elections, it’s that voters are in a “throw the bums out” mood, regardless of whether you’re a Democratic or Republican incumbent.  While conservatives have their “Tea Party” movement, progressives are no happier.  The common denominator is unemployment and, to a lesser extent, concern about deficit spending.  Nothing makes people angrier, conservatives and progressives, than being without a job or the fear of losing your job.  And deficit spending has never come under such scrutiny as it has since the near-default of Greece and the collapse of the Euro triggered by the bail-out of that country. 

While “throwing the bums out” might be a good first step, is it a step in a new direction or just another step down the path of aimless wandering that we’ve been following for decades?  What exactly will our new representatives do differently from their predecessors? 

A good case in point is Rand Paul, easy winner in Kentucky over the candidate hand-picked by long-time senator Mitch McConnell, and son of libertarian congressman and former presidential candidate Ron Paul.  While being interviewed on Good Morning America this morning, Rand Paul emphasized the need to rein in deficit spending and advocated a balanced budget amendment.  But exactly how he would balance the budget wasn’t clear.   The only way to do it would be through cutting social security and medicare, while simulateneously raising taxes dramatically.  Good luck with that.  Your legislative career will be far shorter than your predecessor’s.  There’s a third way to balance the budget, but more on that later.

While a balanced budget amendment sounds appealing to a lot of people, they don’t understand the connection between the budget deficit and the trade deficit.  All of our trade dollars have to come back to the U.S. in the form of some kind of investment.  In the ’90s it was the stock market, fueling a bubble that burst in March of 2000, wiping out trillions of Americans’ wealth.  After that, trade dollars went into the purchase of mortgage-backed securities, fueling an enormous real estate bubble.  That bubble burst in the fall of 2008, nearly collapsing the entire global economy. 

Now, only one financial sponge is left to soak up all those trade dollars – U.S. treasuries.  Foreign lenders like China, Japan and Germany buy U.S. debt, which is issued to fund programs like the stimulus plan in an attempt to off-set the negative consequences of the trade deficit – like unemployment.  Take away deficit spending and there is nothing left – no place for trade dollars to come home to roost.  The only alternative would be to re-start the inflation of one of the earlier bubbles – the stock market or real estate.  It’d probably feel good for a while but will eventually come crashing down again, sooner rather than later, and with even more devastating consequences. 

You might think that, without an outlet for their trade dollars, nations like China, Japan and Germany will simply be forced to export less and our trade deficit will melt away.  You’d be wrong.  As fiscal austerity is forced upon more and more countries by the credit markets, exporting nations will become even more dependent on exports.  They’ll find a bubble to inflate in America, regardless of the consequences.  Unemployment will grow worse and our economy will be further destabilized. 

The Obama administration understands the role of global trade imbalances in the financial crisis of the past two years but so far has proven unwilling to do anything about it, other than to plead with exporting nations to voluntarily reduce exports and boost imports.  The results have been predictable. 

The third method of restoring fiscal balance that I spoke of earlier begins with restoring a balance of trade through a measured application of tariffs on imports.  Suppose that an average tariff of 30% were imposed on imports, currently running at about $2 trillion per year.  And imagine that imports fell to $1.5 trillion as a result.  The revenue collected would still be $450 billion per year.  And though consumers would see higher prices for those imports, they’d also see an explosion in hiring in manufacturing, driving wages higher and off-setting the higher prices for imports.  So add to the $450 billion of tariff revenue the additional revenue collected from income taxes on more and higher incomes and the reduction in spending on programs like unemployment insurance, and now you’re making a huge dent in the federal budget deficit before you’ve even cut one dollar of spending and before you’ve raised anyone’s income tax rates.   

But without an understanding of the role of population density disparities in driving global trade imbalances, I’m afraid that this new generation of lawmakers will simply veer our economy aimlessly once again, driven by a faith in economic principles that are based on flawed assumptions.  Cutting spending and raising taxes in this environment will prove just as toxic to new legislators as it did for the old ones, and American workers will be hung out to dry with no safety net to catch them. 

It’s time to face the fact that something is very fundamentally wrong with our economy.  It’s not just a matter of spending too much, regulating Wall Street too little (or too much), or collecting too much (or too little) taxes.  We can’t have an economy based on health care, with all of us getting sick and paying each other to nurse each other back to health.  We can’t have an economy based on selling hamburgers and pizzas, or based on various get-rich-quick Ponzi schemes.  It’s time to get back to the basics of making the stuff we consume and trading our excess for those things we can’t get here.  It’s going to take some real back-bone and leadership to walk away from global organizations like the World Trade Organization, the International Monetary Fund and the World Bank, organizations that have been designed to perpetuate global economic imbalances.  Will our new legislators be up to the task?  I doubt it, but the old ones have proven themselves unwilling and or incapable.  It’s time to give someone new a try.

Trade Deficit Worsens Again in March

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

The government released the March trade figures yesterday (link provided above) and the good news for the Obama administration is that exports jumped, enough to put the U.S. back on track for his goal of doubling exports in five years.  The bad news is that imports jumped even more, resulting in the trade deficit growing by another $1.0 billion.  Here’s a chart of exports and imports vs. Obama’s goal.

Obamas Goal to Double Exports

Of course, Obama’s real goal, by doubling exports, is to restore a balance of trade, eliminating the trade deficit.  By that measure, we’re not doing very well.  Here’s a chart:

Balance of Trade

Returning to the issue of exports, even that news is a bit tainted when you look more closely.  Of the $4.6 billion boost in exports, $0.9 billion was oil and other petroleum products (as if we need to be exporting oil), $0.7 billion was gold and other precious metals, and $0.1 billion was corn.  None of which adds much in the way of jobs.

The big jump in imports was lead by oil, but included almost every other category as well.

At the current rate of increase, instead of eliminating the trade deficit in five years, we’re on track for it to explode to $100 billion per month – or $1.2 trillion per year.  It was global trade imbalances that lead to the global financial collapse last year, and nothing has changed to avoid a repeat in years to come.  Every month another $40 billion is drained from our economy, and another $40 billion comes back to the U.S. looking for a bubble to inflate.  Right now it’s a bubble in U.S. treasuries which, when it bursts, will send interest rates through the roof.

But few Americans care about asset bubbles.  What they do care about is jobs and nothing robs our economy of jobs like the trade deficit, which currently accounts for six million lost manufacturing jobs directly and millions of other jobs involved in supporting manufacturing operations.

Obama’s plan to export our way out of our trade deficit in five years is failing.  As the global financial crisis fades from view, the trade deficit is slowly returning to the status quo in which rising exports are swamped by a rising tide of imports.  Will it take a second global economic collapse (or a third?) to jolt him into meaningful action on trade policy?  I wonder if even that would do it.

Bernanke to Graduates: Be Happy

http://www.usatoday.com/money/workplace/2010-05-08-bernanke-graduation-speech_N.htm

Federal Reserve Chairman Ben Bernanke told graduates at the University of South Carolina on Saturday to worry less about making money and focus instead on being happy.  This might seem like good advice if it came from a psychologist, but we should all be wary when our economic leaders start talking this way.  It may signal a shift in U.S. economic policy.

“Happiness” is the latest half-baked idea being served up by the field of economics.  In neoclassical economics, the focus was on macroeconomic growth.  Put in labor and capital, and out comes all of the stuff that satisfies our endless wants and needs.  Keep increasing the inputs and the output can be grown toward infinity.  Per capita consumption was taken for granted.  It would always be there to sop up the output.

Beginning sometime in the 2nd half of the 20th century, economists began to awaken to the fact that, though our well of wants and needs may be bottomless, the well of natural resources (or “natural capital,” as they are known to economists) is not.  Theories of “sustainability” were born, in which manufactured capital could be substituted for natural capital, thus avoiding collapses in the finite supplies of resources.  Per capita consumption could be maintained, but shifted in a way that would assure sustainability.

More recently has come the realization that maintaining current levels of per capita consumption while sustaining our stocks of resources is a pipe dream.  So what is the field of economics, devoted to increasing the welfare of mankind, to do?  Redefine welfare.  Economics now eschews per capita consumption as a measure of wealth or welfare in favor of a new measure – “happiness.”  Economists have taken note of studies that show that, beyond some minimal level of income – about $15,000 per capita – little additional happiness is provided by growing incomes.  Once our needs and a few basic wants are met, further pursuit of wealth in an attempt to satisfy more and more wants becomes counter-productive.  The conclusion is that we can all be happier with much less.  Health care, job security, old age security – these are the things that really make people happy, economists have concluded, and these are where economists and policy-makers need to focus their efforts.

There’s just one problem.  In this happy new world of low per capita consumption, economists haven’t explained what we’ll all do for a living.  Per capita consumption and per capita employment are intertwined.  As one goes, so goes the other.  Subtract from the output in the old equations of neoclassical economics, and the labor input will be left standing naked with nothing to do.  Nor do the advocates of this new “happiness” economics explain the source of revenues that governments will require to enhance health care and old age security. 

In addition to defining what makes us happy, the same happiness studies also reveal what makes us unhappy.  Far and away, the biggest killer of happiness is unemployment.  The field of economics has now traded one paradox for another – replacing infinite growth in a finite world with decoupling per capita consumption and per capita employment.  Per capita consumption has now transitioned from being taken for granted under the neoclassical theories of growth to being the bogeyman of economics. 

The problem, of course, is that economics has turned its scorn upon per capita consumption when the real problem is total consumption.  But the latter would require an admission that population growth is the real problem, something that economists, still curled in a fetal position from the beating they endured upon the seeming failure of Malthus’ theory of overpopulation, are still unwilling to do. 

Because this all sounds so unbelievable, you may think that I’m making this stuff up.  I’m not.  Check out the following article.  Go to section 3, “consumption, happiness and sustainable welfare,” beginning on page 216, for a good summary of the new focus on happiness. 

Toward a new welfare economics for sustainability

What’s really scary is that this stuff will soon begin creeping into U.S. economic policy.  Falling incomes will soon be rationalized as something beneficial to your “happiness.”

April Unemployment Falls to 11.2%

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

The Bureau of Labor Statistics (BLS) reported this morning that the economy added 290,000 jobs in April and that unemployment rose to 9.9%.  (See the above link to the BLS report.)

However, following the onset of the Great Recession, the government steadily removed workers from the work force, “banking” them in an unemployment la-la land, with the explanation that they simply dropped out of the labor force.   More recently, in the last four months, they’ve begun the process of adding them back in.  By doing so, the BLS effectively put a lid on unemployment at 10%.  This is why Treasury Secretary Tim Geithner has been saying that unemployment will remain unacceptably high for a long time.  Even though the economy may be adding jobs now, they have a lot of “banked” workers that they need to re-add to the calculation, not to mention the 150,000 new workers that population growth adds every month.

Unlike the government, I’ve been tracking unemployment by holding the labor force at a steady percentage of the population.  Using that method, unemployment peaked at 12.0% in December, and has since fallen steadily to 11.2% in April.  Had the government done the same thing, analysts would now be celebrating a nice 0.3% drop in unemployment in April, instead of fretting over a 0.2% rise. 

The gains in employment are real.  Of the 290,000 gain, only 66,000 were census workers who will be terminated in June.  While the gains may be real, the bigger question is whether they can last.  Much has been due to a spike in consumer confidence, thanks to the government stimulus punch bowl.  But that’s now largely over.  The housing tax credit ended a week ago and most analysts fear that a lot of home sales have been pulled forward, making the housing picture bleak for the future.  And the Fed ended its purchases of mortgages in March, which had held mortgage rates artificially low.  In addition, a lot of the growth in manufacturing has been a matter of rebuilding inventories.  That can’t go on forever. 

Anyway, here’s a breakdown of the job growth in April, beginning with the gains:

• Professional and building services – 80,000
• Census workers – 66,000
• Leisure and hospitality – 45,000
• Manufacturing – 44,000
• Health care – 20,000
• Construction – 14,000
• Mining – 7,000

No change:

• Wholesale trade
• Retail trade
• Information services
• Financial services

Employment declined in the following:

• Transportation & warehousing – (20,000)

Here’s my calculation of unemployment, followed by charts of the data:

Unemployment Calculation

Unemployment Chart

Unemployed Americans

Labor Force & Employment Level

As I said last month, this rosy picture will continue for at least another couple of months.  What’s scary is that, when you look at the unemployment chart above, you see that the government’s numbers and my numbers are slowly converging at an unemployment rate of around 10%.  That means that very high unemployment is going to be with us for a long time to come. 

Another worrisome sign is that the Obama administration is pinning much of its hopes on big increases in exports.  So far it’s not happening and, as conditions worsen in Europe, where our exports had actually increased slightly in the past year, our trade balance is likely to worsen.  One bright spot for manufacturing has been the slight shift in preference of consumers for American cars vs. imports.  It’s a trend that needs to be nurtured with a little backbone in our trade policy, but there’s no sign of that happening. 

In summary, though this employment report has a lot of good news, there’s plenty of reason for concern that it’s not going to last.

Was That a Trumpet I Heard?

Though the oil spill in the gulf is a little off-topic for me (this blog focuses not on resource issues associated with population growth, but its role in driving unemployment), I couldn’t resist sharing a thought. 

As I watched news coverage a couple of nights ago, I was struck by the aerial views of the huge slick that showed a sea that appeared to be streaked with red.  It reminded me of something from the Book of Revelation in the Bible.  Here’s the passage:

When the second angel blew his trumpet, something like a large burning mountain was hurled into the sea.  A third of the sea turned to blood, a third of the creatures  living in the sea died and a third of the ships were wrecked.  (Revelation 8: verse 8.)

Biblical scholars caution us that Revelation is not to be taken literally – that it was written as an admonition for the Christians of the first century to stand firm against the persecutions of Rome, drawing heavily upon symbolism from the Old Testament.  Biblical scholars cannot say for certain whether the author, “John,” is the apostle John.  Neither can they say for sure that it isn’t a a literal description of visions revealed to John.  If it is, it’s easy to see how someone of that day, if shown news footage of what’s happening in the gulf, might describe the exploding, burning oil rig that eventually collapsed into the sea as “something like a large burning mountain was hurled into the sea.”  And someone of that day may interpret red streaks in the sea as blood.  The slick is expanding daily and could easily cover a third of the gulf if not stopped soon.  No doubt, lots of “creatures living in the sea” will be killed by this.  A third of the ships wrecked?  Not yet, anyway. 

It’s always interesting to hear someone try to relate a current event to something in the Book of Revelation.  Usually, it’s a stretch of the imagination to make such a connection.  But in this case, it seems an eerily accurate description.  Maybe it is a description of a burning oil rig and subsequent oil spill – if not this one, then perhaps another in the future.  Or maybe it’s nothing of the sort.  No one could ever say for sure.  But it’s interesting – even fun (in a morbid sort of way) – to speculate.  So, at the risk of being labeled a nut case and ruining my credibility on this blog, I just thought it’d be an interesting thought to share.  Make of it what you will.

Picking Apart the Case for Illegal Immigration

http://blogs.reuters.com/great-debate/2010/04/30/in-praise-of-latin-american-immigrants/?cp=3#comment-30225

The above-linked op-ed piece, “In Praise of Latin American Immigrants” by Bernd Debusmann, appeared on the Reuters web site this weekend.  Debusmann attempts to make the case that Americans should be grateful for Latin American immigrants, whether legal or otherwise, for their role in boosting the economy and supposedly making the rest of us richer.  His point is not that Hispanics are in some way superior to other immigrants, but that population growth, regardless of the source of supply of immigrants, is beneficial.  His case is based on fundamentally flawed economics.  Let’s pick it apart:

Thanks largely to immigration from Latin America (both legal and illegal) and the higher birth rates of Latin immigrants, the population of the U.S. has kept growing, a demographic trend that sets it apart from the rest of the industrialized world, where numbers are shrinking. That threatens economic growth and in the case of Russia (U.N. projections see a decline from 143 million now to 112 million by 2050) undermines Moscow’s claim to Great Power status.

Apparently, it has escaped Debusmann’s attention that the U.S. now finds itself in decline in relation to much of the rest of the developed world, or doesn’t recognize the potential role of continued population growth in driving that decline.  And, while a shrinking population may threaten macroeconomic growth, a growing number of economists now question the relevance of such measures as determinants of individual well-being.  And he clearly doesn’t understand the relationship between population density and per capita consumption and its role in driving unemployment and poverty. 

A country’s population starts shrinking when fertility falls below the “replacement rate” of 2.1. births over the lifetime of a woman.

False.  While a fertility of 2.1 may be the “replacement rate” (the rate at which each generation replaces itself with another of the same size), that rate only assures further population growth when each generation lives longer than the one it replaces.  As long as life expectancy continues to grow at current rates, a fertility rate of 1.8 is necessary to achieve a stable population. 

Their (Hispanics’) spending is expected to exceed $1 trillion by next year despite the recession.

If Debusmann’s point here is that Hispanics are making a positive contribution to economic growth, his argument just back-fired.  Since Hispanics represent 15% of the population and $1 trillion is only 7% of GDP, then the Hispanic population is a net drag on the economy.  By contributing twice as much to the labor force as they contribute to consumption, they are throwing the labor supply-demand equation out of balance, putting downward pressure on wages.  My point is not to disparage Hispanics, but to illustrate that the very population growth Debusmann is championing here has actually hurt the micro economies of Americans.  While this population growth was disproportionately among Hispanics, the results would have been the same regardless of the race or national origin of the immigrants. 

A point worth noting but rarely mentioned in the often overheated debate about immigration: illegal immigrants in effect subsidize social security payments to Americans over 62.

This is because people working with false papers have their social security taxes withheld from wages but are not entitled to receive benefits. The sums involved are substantial — the Social Security administration has an “earnings suspense file” of payments under names that do not match social security numbers. The file has been growing by around $7 billion a year which goes to pay benefits to legal workers.

Does Debusmann realize how trivial $7 billion is relative to the social security trust fund or relative to the more-than-offsetting burden on other social services like welfare, health care, the education system, etc.? 

So is the argument that the federal government has done so little to secure the U.S.-Mexican border that states need to take things into their own hands? The number of Border Patrol agents along the 2,000-mile frontier has doubled in the past five years, to 20,000.

Do the math.  Divide 20,000 into four shifts.  That’s 5,000 at any one time.  Figure that 1,000 of those are staff personnel working out of offices.  That leaves 4,000 agents guarding a 2,000 mile border – one every four miles.  Far more are needed, along with more impenetrable barrier fencing.

A MESS THAT NEEDS FIXING
Under the law, the toughest of its kind in the country, state and local police are required to “determine the immigration status” of anyone “where reasonable suspicion exists that the person is an alien who is illegally present in the United States.” Failure to carry identification documents at all times would be grounds for arrest. Critics say “reasonable suspicion” opens the door to racial profiling.

Of course it does, just as laws passed since 9/11 open the door to racial profiling of middle-easterners.  That doesn’t mean we shouldn’t attempt to enforce them.  It just means that we need to be alert to the potential for abuse and deal with it accordingly. 

Despite the acrimonious debate sparked by the Arizona law — which faces legal challenges and might never take effect — there is common ground on the issue between a good number of politicians on both sides of the aisle: the present system is a mess that needs fixing.

Wait a minute.  Hasn’t the whole point of this op-ed piece been that this “mess” has been a big boon to the American economy?  If so, why fix it?  Why not let it become a bigger mess? 

… the late Senator Edward Kennedy, the Democrats’ most vocal champion of immigration reform, asked its opponents what they were planning to do with the millions already in the country. “Send them back …? Develop a kind of Gestapo here to seek out these people that are in the shadows?” Critics of the Arizona bill think that prediction has come true.

Of course, send them back!  No nation has ever questioned the right of any nation to deport people who have entered illegally.  This law hasn’t changed that.  Nor does it establish a “Gestapo.”  It merely gives police the right to determine whether a person is in this country legally in situations where they have reasonable cause to suspect that they’re not. 

Here’s an example.  When my family was living in the Houston area, my sons were caught up in a multi-vehicle accident, caused when a very old Oldsmobile, loaded with Hispanic people, flew through a red light on a highway at about 60 mph.  The car struck another that had entered the intersection, throwing it into other cars, including my sons’.  When I arrived on the scene, I spoke with police who told me they had determined that the driver spoke no English, had no license and the car had no brakes.  When I asked the officer if these people were illegals, I was dumbfounded when he replied, “We don’t know, we’re not allowed to ask that question.”  I thought the officer was pulling my leg or shirking his duty.  Only later did I find out that he was right.

Another example:  at about that same point in time in Houston, an 18-wheeler took a curve too fast and capsized, landing on a car that contained a family with small kids.  The whole family burned to death, screaming while the flames held rescuers at bay.  In the investigation that followed, it was determined that the driver of the rig was an illegal immigrant.  I realized that I was lucky that the accident my sons were involved in wasn’t worse. 

The first example is exactly the kind of situation that gives police “reasonable suspicion” that the people involved were illegal, and both examples are exactly the kind of problems that the Arizona law is intended to address. 

Much of the immigration argument has glossed over the fact that for decades both the authorities and employers turned a blind eye to illegal immigration because the country has been deeply dependent on cheap labor — in effect one of America’s ways of competing with the low-paid workers of the Third World.

Now he’s appealing to the need to compete with the third world.  No doubt he would be arguing against the abolition of slavery on the same grounds if that practice still existed. 

Next, former president Bill Clinton is quoted:

The real reason for anti-immigrant sentiment, he (Bill Clinton) said, was the fact that the economic downturn in the last few years disproportionally fell on white males without college degrees, such as factory workers. “But they’ll get more jobs if the economy grows. Their taxes will be lower if we’ve got more taxpayers. The pressures on Social Security … will be less if we have more people contributing to the system.

First of all, check your facts, Bill:  unemployment is far higher among minorities, including Hispanics, than it is among white males.  Stop trying to turn this into a racial clash when it is not.  Secondly, isn’t it more likely that taxes will be higher and the demand on social security will be greater as the result of a greater demand for services?  Are we to believe that the more densely populated a nation becomes, the less government is required in order to maintain an orderly society?

“So I don’t think there’s any alternative but for us to increase immigration,” he said, adding that bringing in more immigrants must be part of the overall strategy.

God help us.  This is an example of the kind of intellect that we regularly elect to steer this country off a cliff.  Perhaps Clinton should relocate to Bangladesh, the most densely populated nation on earth, and try to convince them that the reason for their suffering is that they don’t have enough people. 

Nor is there any shortage of columnists who can make a living by appealing to those who can’t think beyond a one-step train of logic.

I’ve said over and over before, but it bears repeating again:  the debate about immigration cries out for a bigger context – a population policy.  If we deem it in our best interest to grow our population to the likes of China or India, or to a population density like that of Bangladesh, then let’s throw the borders open and let everyone in.  If, on the other hand, we see a need for stabilizing our population at a sustainable level, then we’d better get moving fast on halting illegal immigration and cutting legal immigration to the point where it matches the rate of emigration, or we don’t stand a chance.