But after years of strong increases, the amount of migrant money flowing to Mexico has stagnated. From 2000 to 2006, remittances grew to nearly $24 billion a year from $6.6 billion, rising more than 20 percent some years. In 2007, the increase so far has been less than 2 percent.
That quadrupling speaks volumes about Clinton and Bush Administration laxness toward illegal immigration.
Tougher border and interior enforcement of immigration laws has helped stop the remittance growth. But the downturn in the housing market has thrown a lot of illegals out of work too.
Migrants and migration experts say a flagging American economy and an enforcement campaign against illegal workers in the United States have persuaded some migrants not to try to cross the border illegally to look for work. Others have decided to return to Mexico. And many of those who are staying in the United States are sending less money home.
Remittances seem like a good way to measure immigration law enforcement. If the influx of illegals reverses we should see a big downturn in remittances. The fact that remittances have only stopped growing means that the immigration law enforcement improvements haven't gone far enough.
U.S. light crude for December delivery jumped $4.15 to settle at a new record of $94.53 a barrel on the New York Mercantile Exchange, topping Monday's record close of $93.80 a barrel. Prices rose as high as $94.74 in intraday trade, surpassing crude's all-time record trading high of $93.80 a barrel, also set Monday.
This price surge isn't bringing huge amounts of production to market. This price surge has built up over a larger number of years than the Iranian revolution price surge. The lasting nature of this surge argues for deeper fundamentals at work this time around. The higher prices haven't caused big spigots to get turned on or easy exploration to fill the gap.
The 3.9 percent annual growth rate compared with 3.8 percent in the second quarter and 0.6 percent in the first quarter. The report from the Commerce Department is a preliminary estimate of gross domestic product in July through September, a volatile period that included the bleakest moments of the summer’s subprime mortgage collapse.
"As such, there is likely to be some doubt in the minds of one or two Fed officials regarding whether they should be cutting rate later today - especially with higher food and energy costs expected to push headline CPI above 4% in the next couple of months. Nonetheless, with the outlook for 2008 deteriorating a 25bp cut remains the most likely scenario," said James Knightley, economist at ING Financial Markets.
High general inflation would force interest rate rises and probably push the US economy into a recession. That would reduce oil demand in the United States. But China's demand might not slacken and oil prices might even rise during a US recession.
The world oil production plateau combined with surging demand are driving prices higher and higher. Will the production plateau continue through 2008? Maybe there's a big lag time between price surge and huge production increase. But every year that goes by with higher oil prices makes that less likely. If we get through 2008 without a big production increase then this is it. The world has peaked.
What I want to know: As oil prices rise how fast will the economy adopt methods to do oil demand destruction that do not reduce economic growth by much? Can we find lots of ways to grow without increased oil consumption?
Some argue that the price of oil has been run up by speculators. Khebab looks at patterns in the oil market and finds this argument unconvincing. My own take: A sustained overpricing of oil should cause a build up of reserves as the price goes above the price needed to make supply meet demand. But reserves haven't been going up. At best the speculation argument could account for a small portion of the current price.
Washington - US troop losses in Iraq have plummeted in the past few months to levels not seen since early 2006 – an encouraging sign, say analysts and defense officials, that the US strategy is working, at least for now.
The Pentagon reported 23 service members killed in combat this month as of Tuesday, noting that insurgent and other attacks have plunged in violence-prone places like Baghdad. As recently as May, as the Pentagon completed its "surge" of about 30,000 additional US forces and began military operations in more dangerous areas of Iraq, US combat deaths were five times as high, with 120 killed. This month, by contrast, the casualty rate is on par with that of March 2006, when 27 service members were killed. Since the beginning of the war, only a few months have seen fewer fatalities than this month, including February 2004, arguably the predawn of the insurgency in Iraq, when 12 US service members were killed.
A reason for excitement? Well, at some point in 2008 the US military is going to need to lower US troop levels because the US military isn't big enough to sustain the current level of deployment. When US troop levels get back down to 100,000 will the insurgents just come back out of temporary retirement and start shooting up the place again? Could be.
The fundamental conflict between the 3 major ethnic groups in Iraq remains. The Sunnis still do not want to submit to rule by the Shias and the Sunnis want a share of the oil revenue. At the same time, the Kurds effectively have achieved autonomy. If the Shia areas ever become calm will the Shias then turn their attention to bringing the Kurds under control of the Shia-dominated Baghdad government?
What I wonder: Has the violence gone down due to consolidation of power within each of the 3 major ethnic groups? Is there less fighting within each ethnic group? That certainly seems to be the case with the Sunnis. Also, is the ethnic cleansing advancing far enough that fewer Sunnis and Shias are within range of the opposing ethnic group? Are we seeing the result of effective partition and then consolidation of power within each ethnic enclave? If that is the case then we aren't exactly witnessing victory of liberal democracy.
At the current existing-home sales rate of 5.04 million units a year, it would take a full 10.5 months to sell the 4.4 million existing homes now on the market, according to data released by the National Association of Realtors (NAR) on Oct. 24. The supply of existing single-family homes was at 10.2 months in September—the highest since February, 1988. Compare that with the height of the housing boom in January, 2005, when it reached a record low 3.6 months.
This supply of houses is going to continue to put downward pressure on prices. How long will it take for sellers to reduce their prices low enough to clear the existing stock of unsold houses? Some sellers will decide to wait out the downturn and just hold on. Others will be forced by circumstances to sell. Adjustable rate mortgage interest increases will push more homes into default next year. So in some markets waiting to sell might turn into a bad idea.
The continued rise in oil prices is also reducing the money available for housing. Most obviously, additional money spent on gasoline is money not available to spend on housing. But also the rise in gasoline prices reduces optimism and makes people more reluctant to make major purchases.
Many analysts have pointed to easy lending as a contributor to the housing boom, but the Atlanta Fed paper may be the first to quantify its effect in a rigorous way. Using math-heavy macroeconomic analysis, the authors conclude that the availability of new mortgage options accounted for 56% to 70% of the decade-long increase in the U.S. homeownership rate, while demographic changes accounted for only 16% to 31%. Although the paper cites lowered downpayment requirements as the biggest factor in raising ownership, co-author Carlos Garriga of the St. Louis Fed says a forthcoming paper will attribute more of the effect to "teaser" loans with low introductory payments that appeal to young and lower-income buyers.
I'm more worried about the rising price of oil than by the housing glut. The housing market will eventually correct. But oil's high cost could be a lasting change in the energy market.
They find that even when there are no outward signs of injury from the blast, cells deep within the brain can be altered, their metabolism changed, causing them to die, says Geoff Ling, an advance-research scientist with the Pentagon.
The new findings are the result of blast experiments in recent years on animals, followed by microscopic examination of brain tissue. The findings could mean that the number of brain-injured soldiers and Marines — many of whom appear unhurt after exposure to a blast — may be far greater than reported, says Ibolja Cernak, a scientist with the Johns Hopkins University Applied Physics Laboratory.
This cellular death leads to symptoms that may not surface for months or years, Cernak says. The symptoms can include memory deficit, headaches, vertigo, anxiety and apathy or lethargy. "These soldiers could have hidden injuries with long-term consequences," he says.
The Improvised Explosive Devices (IEDs) blasts might be injuring the brains of between 10% and 20% of soldiers who serve in Iraq.
When the war in Iraq began, clinicians treating the wounded began noticing similar symptoms. Some screenings at military bases showed that 10% to 20% of returning troops may have suffered such head wounds.
"We've had patients who have been in a blast, who we tested. They looked OK. And they came back later, and they were not OK," says Maria Mouratidis, head of brain injury treatment at the National Naval Medical Center in Bethesda, Md.
The effects of the blasts appear to cause neural damage that accumulates over time.
Medical experts say some wounded vets suffer from undiagnosed brain injuries caused by these highly concussive explosions. An estimated 150,000 soldiers fighting in Iraq and Afghanistan have returned home and even gone back to the battlefield with an unrecognized brain injury, according to the Brain Injury Association of America.
This is a huge cost. The Iraq was is not making us more secure. We get no benefit for this cost. The war was a mistake and its continuation is a far bigger mistake.
Iraq and Afghanistan war veterans suffering traumatic brain injury, grave wounds or serious illnesses often wait longer for outpatient appointments than the 30-day VA standard, according to an Observer analysis of two internal VA reports.
The analysis of 283,000 recent outpatient appointments showed that the VA scheduled 93 percent within 30 days, a key measure of the agency's ability to meet demand. That left 20,500 waiting longer.
Dr. Martin F. Stein, a 71 year old retired colonel and kidney specialist has been going on 3 month rotations to the Landstuhl Regional Army Medical Center in Germany every other year since 1985. Not exactly the profile of an anti-military guy, right? Well, Dr. Stein says the Bush Administration is trying to hide from the public the extent of US military injuries.
But one thing that has become increasingly clear to Stein as the Iraq conflict continues year after year is that the U.S. government is keeping its wounded soldiers behind curtains as much as possible. The American public has been protected from visual reminders that soldiers are dying and that those who live are left with shattered lives, facing an uncertain future.
"During previous trips, I was free to roam with my camera," says Stein. "During my latest trip, from January to March of this year, that ended. I took out my camera, and guards were on top of me."
He found, too, that his e-mail home was being censored.
"All references to wounded soldiers were being deleted," says Stein.
Your government tries to deceive you.
Even those cost of living adjustments won't be enough to keep me whole, though, because inflation rises faster for the elderly than it does for the rest of the population. The Labor Department's Bureau of Labor Statistics has been computing the consumer price index-E (for elderly) with figures going back to December 1982. What they show is that through September 2007, the CPI-E had increased by 124.9 percent compared with a 108.1 percent increase in the CPI-W (for working).
The reason is that the elderly spend more of their income on the component of the CPI that is going up fastest -- medical care. According to the CPI-E, as of the end of 2006, the elderly spent more than twice as much of their income on medical costs as wage earners. And compared to a 29.7 percent increase in the cost of all items in the CPI-E for the 10 years ending in December 2006, the cost of medical care went up by 47.8 percent. The one category that has gone down in price over the past 10 years is apparel, which the elderly buy relatively less of than workers, which means they benefit less from that decline in prices.
When planning for retirement you really need to look at your own likely inflation profile. If you live in an area with rapidly rising housing prices you might get hit by rising property taxes. Though on the bright side your house will become worth more. Also, if you live in a cold rural area you'll be harder hit by rising oil prices for transportation (you'll drive further than an urban dweller) and heating (both heating oil and natural gas prices will rise).
When you are ready to retire think about moving to a place where you will suffer less inflation. For example, heating fuel price inflation can be reduced in a number of ways. Move to a warmer climate or a well insulated house or a house with large wooded lot which can supply fuel to a large wood burning stove. Also, choose an area of the country which has lower medical costs. A more densely populated area and a house near stores can reduce transportation costs.
Major League Baseball teams in Florida, Texas and Washington benefit from having no state income taxes because they are able to get free agents to accept offers of lower salaries, according to the authors of "Baseball Salaries and State Income Taxes: The 'Home Field Advantage' of Income Taxes on Free Agent Salaries."
Unlike the pre-tax salaries reported in the media, MLB players compare after-tax salaries when considering offers, according to the authors. The study found that differences in state income taxes and local taxes in U.S. cities with MLB teams ranges up to about 10 percent.
"The basic implication of this tax difference is a competitive edge for teams in low-tax areas because they have lower team expenses in signing free agents to contracts that pay the same after-tax wage to players," according to the study.
So when a state raises its state income tax some businesses end up paying higher salaries and therefore the businesses and not just the employees pay for the higher state income taxes.
The teams in states with higher state income taxes end up having to up their offers to free agents to compensate for the costs of state income taxes.
"We find that individuals choosing to play in cities with income taxes must be paid higher pre-tax salaries by an amount that ranges from $150,00 to $300,000," the study found.
For example, a trade involving several players during the winter of 2002-03 involving Florida, Colorado and Atlanta almost fell through in its final stages when Charles Johnson refused to void a no-trade clause in his contract unless he received an additional $1 million to move from Florida to Colorado, the study said.
Players on Canadian teams pay even higher taxes than players in California.
Five of the 30 Major League Baseball teams have no state or local income taxes: Florida, Tampa Bay, Houston, Texas and Seattle. The states with the highest marginal tax rates paid by players were California at 9.30 percent, Minnesota at 7.85 percent and Ohio at 7.50. Rates for the two Canadian teams, Toronto and then-Montreal, were even higher.
All else equal, higher earning people should migrate to lower state income tax states.
What I wonder: Do any Silicon Valley venture capital start-up winners move to no-income-tax states after their companies go public so they can sell their stock without paying California state income tax?
What I also wonder: Do some American very high earners get their corporations to open offices in low tax states so they can work remotely from main offices and earn their big bucks? Do some even go and live abroad for this purpose?
The fleet of big jets operated by nine major domestic airlines has aged steadily since 2002, according to Airline Monitor, an aviation research firm. The average age was 10.6 years at the end of 2002, and it has risen each year, hitting 12.2 years at the end of 2006. Domestic airlines largely stopped ordering new planes after Sept. 11, 2001, shrinking their fleets to adjust to a drop in demand. Travel has rebounded strongly, but airlines are, for the most part, years away from taking delivery on large numbers of new planes. A big reason is that Boeing and Airbus have committed most of their airliner production capacity in coming years to carriers outside the United States.
Indeed, only 43 of the 710 Boeing 787s on order have been identified as going to domestic airlines; 25 to Continental Airlines and 18 to Northwest. And none of the 165 giant Airbus A380s on order are destined for United States carriers. In essence a new generation of jetliners — bigger, more comfortable, more fuel efficient — is largely bypassing domestic airlines and their customers.
On one hand the newer airplanes are a lot more fuel efficient. Plus, the cost of oil keeps going up. On the other hand, the old airplanes have lower capital costs. I'm surprised that the airlines calculate the older airplanes are cheaper given the increased fuel efficiency of the Boeing 787 Dreamliner. If the price of oil keeps going up their decision might become a pretty big mistake. On the other hand, another doubling of oil prices will idle a lot of airplanes.
These older planes are dirtier, noisier, and get delayed more often by mechanical problems. Are you like me and find that flying has become an ordeal? One reason (though not the only one) is old airplanes.
Writing in his New York Times Economic Scene column, economist Tyler Cowen says the use of private contractor to accomplish military objectives isn't automatically bad.
It is easy to rail against contractors for holding money above loyalty to country; Halliburton, for instance, has been a target of this criticism. But money isn’t the real issue. Few Americans would join the armed services without pay, and most American weapons are made by the private sector for profit.
Furthermore, privateers, private ships licensed to carry out warfare, helped win the American Revolution and the War of 1812. In World War II, the Flying Tigers, American fighter pilots hired by the government of Chiang Kai-shek, helped defeat the Japanese. Today, many of our allies receive payment, either implicitly or explicitly, to support American efforts. War is, among other things, an economic undertaking, so the profit motive in military affairs isn’t always bad or ignoble.
However, Tyler thinks the use of contractors is a sign of government weakness.
The recent comeback of private contracting suggests that central governments have become weaker again, at least relative to the tasks they are undertaking. Alexander Tabarrok, my colleague (and sometimes co-author) at George Mason University, where he is also a professor of economics, traced the history of private contractors in a study, “The Rise, Fall, and Rise Again of Privateers” (The Independent Review, spring 2007, www.independent.org/publications/tir/article.asp?issueID=49&articleID=631). He showed that public navies and armies began to displace private contractors in the 19th century, as governments became more powerful and better funded.
Today, America no longer has a draft, its military bureaucracy can be inflexible and the public wishes to be insulated from the direct impact of war.
In a way the use of contractors reduces the accountability of government. If George W. Bush had to use only uniformed US military personnel in Iraq then he'd have to implement a draft. But a draft would be so politically unpopular that he might be forced to scale back the US military effort in Iraq or to pull out entirely. Bush is in a weak position and therefore he uses contractors. So it makes sense on a certain level for opponents of the war to oppose the use of contractors.
Security guards, however, are often "mercenaries." A general or top Iraqi official for instance might be guarded by Blackwater employees. The critics have not shown that Blackwater employees misbehave at a higher rate than do U.S. soldiers, so the comparative case against Blackwater -- as opposed to the more general case against the war -- is mostly shrill rhetoric. It is possible to pay Blackwater employees bonuses for good performance rather than just give medals, plus they are on a higher pay scale in the first place. Nonetheless my judgment call is that issues of perception and accountability are important enough in contemporary Iraq that we should be using contractors less in these capacities (as the column indicated), but the temptation to use them is based on more than just sheer political abuse.
Contractors lower the cost of good operations, contractors lower the operational (but not social) cost of bad operations, contractors magnify the costs of mistaken Executive preferences, and contractors can raise new problems of monitoring. If you don't think the first item on this list is at work, there is good reason to cut back on contractors in Iraq.
It is worth noting that soldiers from some other countries that are serving in Iraq are in a sense contractors to the US government. A glance at the list of Multinational Forces In Iraq shows odd entries such as El Salvador, Mongolia, and Kazakhstan. Their presence represents political deals with the United States where they sent forces in exchange for favors or influence or aid. We pay for those forces even if the payments don't come in the form of contracts with private companies.
Audacious Epigone reports on the ethnic cleansing of blacks from areas of Los Angeles by Hispanic gangs.
Perhaps La Raza and the NAACP should see this as a priority, more urgent than the fabricated 'hate crimes' of various MinuteMen chapters:A south Los Angeles Latino street gang targeted African-American gang rivals and other blacks in a campaign of neighborhood "cleansing," federal prosecutors say. Alleged leaders and foot soldiers in the Hispanic gang Florencia 13, also called F13, are being arraigned this week on charges stemming from a pair of federal indictments that allege that the gang kept a tight grip on its turf by shooting members of a rival gang—and sometimes random black civilians. The "most disturbing aspect" of the federal charges was that "innocent citizens … ended up being shot simply because of the color of their skin," U.S. Attorney Thomas O'Brien told reporters in announcing the indictments.Thought tribalism had died out in the West? Like tuberculosis, it's returning. Half of all Los Angelenos are Hispanic, and their numbers are growing. Only 11% are black. It's a losing proposition for the old Crips and Bloods (I've heard from multiple people that the two rival gangs are uniting in some cities, but I've not seen anything definitive. If anyone has, please make it known in the comments).
There’s no physical sign, barrier or even a chalk line that marks the zone where a black can’t enter at the risk of grave harm. But the zone is there, and blacks know that if they enter it they can be beat, shot at or killed. The twist is that the forbidden zone is not in a redneck, backwoods town in a Southern state during the rigid and violent Jim Crow segregation era. The bigger twist is that the Klan, Neo-Nazis, racist skinheads and bikers didn’t establish the racially restrictive zone. Purported Latino gang members established it. The forbidden zone is in a small, mixed ethnic bedroom community in Los Angeles. The year is 2007, not 1947.
A black family that recently fled the community in fear for their lives bluntly told a reporter that they left because blacks there are scared to death. In the past year, the hate terror escalated to the point where blacks tell tormenting tales of being harried when they leave their homes, or their children walk to school. They say that they are forbidden to go into a park, and a convenience store.
We need maps on the internet that show ethnic no-go areas with some style of coding the areas so you can know how great the risks are and how the risks vary by time of day. That way you could avoid accidentally going somewhere that could lead to harm against you.
The left-leaning web site Alternet confirms LA gangs enforce color lines.
"The way I hear these knuckleheads tell it, they don't want their neighborhoods infested with blacks, as if it's an infestation," says respected Los Angeles gang expert Tony Rafael, who interviewed several Latino street gang leaders for an upcoming book on the Mexican Mafia, the dominant Latino gang in Southern California. "It's pure racial animosity that manifests itself in a policy of a major criminal organization."
"There's absolutely no motive absent the color of their skin," adds former Los Angeles County Deputy District Attorney Michael Camacho. Before he became a judge, in 2003, Camacho successfully prosecuted a Latino gang member for the random shootings of three black men in Pomona, Calif.
"They generally don't like African Americans," Pomona gang unit officer Marcus Perez testified in that case. "If an African American enters their neighborhood, they're likely to be injured or killed."
Imagine whites were doing this sort of thing. The media would be extremely outraged. But curiously Hispanics are held to a different standard. This gets reported, but not a lot. Why is that? I can think of a number of reasons. But I'm not sure which reason is most important. My guess is that liberal white reporters are far more keen to score status points against poorly behaving whites than they are to score points against Hispanics. In a sense they are secretly racist and actually think they get a bigger boost by showing themselves morally superior to another white than to a black or Hispanic.
Where do these ethnic purger Hispanic gang members come from? Heather Mac Donald says most are illegal aliens and yet police are forced to turn a blind eye on their illegal status.
Police commanders may not want to discuss, much less respond to, the illegal-alien crisis, but its magnitude for law enforcement is startling. Some examples:
• In Los Angeles, 95 percent of all outstanding warrants for homicide (which total 1,200 to 1,500) target illegal aliens. Up to two-thirds of all fugitive felony warrants (17,000) are for illegal aliens.
• A confidential California Department of Justice study reported in 1995 that 60 percent of the 20,000-strong 18th Street Gang in southern California is illegal; police officers say the proportion is actually much greater. The bloody gang collaborates with the Mexican Mafia, the dominant force in California prisons, on complex drug-distribution schemes, extortion, and drive-by assassinations, and commits an assault or robbery every day in L.A. County. The gang has grown dramatically over the last two decades by recruiting recently arrived youngsters, most of them illegal, from Central America and Mexico.
• The leadership of the Columbia Lil’ Cycos gang, which uses murder and racketeering to control the drug market around L.A.’s MacArthur Park, was about 60 percent illegal in 2002, says former assistant U.S. attorney Luis Li. Francisco Martinez, a Mexican Mafia member and an illegal alien, controlled the gang from prison, while serving time for felonious reentry following deportation.
I say deport all the illegal aliens since our population is too high. That'll cut the size of the gangs by more than half. That will also cut out future supply of gang members.
US Transportation Secretary Mary Peters wants to use congestion pricing to reduce delays at busy airports. But the airlines oppose market-based solutions for rationing limited resources.
"Congestion pricing has worked exceptionally well in other areas of our economy such as highways, electricity, and telecommunications, and we believe the time has arrived to pursue similar approaches in the aviation sector," Peters told a Senate committee last Thursday.
The airlines are adamantly opposed to the idea of paying more to fly during peak periods, contending that it will only cause them to raise prices and reduce service. Other analysts question whether congestion pricing will work in the New York region.
"Peak pricing doesn't work in a place like LaGuardia because LaGuardia is busy all of the time," says John Hansman, an aviation expert at the Massachusetts Institute of Technology in Cambridge.
Given the shabby ways that airlines are willing to treat passengers their reaction is really par for the course. I think the South Park episode The Entity does the best job of capturing just how bad the airlines have gotten. Even Mr. Garrison's gyro monowheel beats traveling with the airlines.
As for places that are busy all the time: Raise prices high enough and they will become less busy.
Businessweek, using the politically correct term "undocumented immigrant", reports on how recent raids have driven many illegal aliens out of farm work.
A climate of fear is spreading among undocumented immigrant workers, causing turmoil in industries dependent on their labor. In August the Homeland Security Dept. announced that employers would be required to terminate workers who fail to produce valid Social Security numbers. Implementation of the new rule is delayed pending the outcome of a lawsuit brought against the government by the umbrella labor union group, the AFL-CIO.
But while the new rule has yet to take effect, its impact is already being felt by farmers like Torrey. An estimated three-quarters of agricultural workers in the U.S. are undocumented, and growers are starting to feel the paralyzing effects of losing their workforce. They say that unless the government implements workable reforms, the future of the U.S. as a food-producing nation is in jeopardy.
This demonstrates how immigration law enforcement against fairly small numbers of illegal aliens can compel much larger numbers of them to leave. Raids conducted across many industries in an area could drive the bulk of the illegals from an area. This happened with Pakistani illegals in the New York City area when federal agents targeted them after 9/11. Most of them fled back to Pakistan before they were caught.
The farmers who want hordes of low paid and low skilled illegal immigrants use labor far in excess of the amount of economic value they produce. Farmers use 2% of the workers but produce less than 1% of the total economic value of the US economy. We shouldn't subsidize the farm corporations with Third World laborers. What is the point of having an industry in the United States that pays so poorly that Americans do not want to do the bulk of that industry's work?
Agriculture does not play the role it once did in the U.S. economy, of course. Though the amount of farmland used has remained fairly steady over the past century, changes to the structure of farms and improvements in productivity have cut the number of people involved dramatically. In 1900, for example, 41% of the U.S. population was employed in agriculture, while that number now stands at less than 2%. Farmers hire workers for about 3 million agricultural jobs each year, but only one-quarter of that workforce is legally authorized. Agriculture also makes up a lower share of the U.S. gross domestic product than ever, accounting for less than 1%.
The farmers enjoy big subsidies on their crops. Plus, they get ethanol subsidies. On top of all this, their illegal alien workers cost us far more (e.g. in education and health care for them and their kids) than they pay those workers in salaries. Enough already.
An end to the use of illegal alien workers would reduce the vegetable crops more than the grain crops since grain crops are less labor intensive. In time the vegetable and fruit crops would recover since an end to cheap illegal alien labor would spur more rapid development and deployment of innovations for automation of farm work.
Crude oil rose on an unexpected drop in U.S. stockpiles and concern that supply from the Middle East may be disrupted. Oil for December delivery gained as much as 0.7 percent to $91.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. The contract was recently at $90.95.
The idea that oil production is going to surge in response to rising prices is getting a little tattered at this point.
You can see the most recent prices for oil in different markets. The higher priced oil in that table is lighter and easier to refine.
The Venezuelan and Algerian energy ministers defended the current oil output by OPEC members on Thursday and suggested there is no need for another production hike to help ease runaway prices.
Algeria and Venezuela don't have any idle oil production capacity. So they couldn't respond to rising demand even if they wanted to.
The Wall Street Journal reports that we should not expect additional oil supplies from OPEC.
Oil prices are hovering near historic highs, but consuming nations shouldn't expect quick relief from OPEC, the world's only source for big, quick supplies.
For several reasons, the Organization of Petroleum Exporting Countries has neither the clear leverage nor the inclination to open the spigots and drive down the price of crude, which jumped past $90 a barrel in intraday trading in New York last week for the first time.
They lack the capacity to increase production. Plus, they are making far more money and don't need to produce more oil.
Asian demand for oil is on track to hit 25 million barrels a day this year, an increase of 2.5% from last year, according to the International Energy Agency in Paris. World demand is set to rise a more modest 1.5% and may even decline in Europe. (The U.S. -- which is on pace to consume 20.9 million barrels a day this year, up less than 1% from last year -- remains the world's single largest consumer.)
Chinese demand is squeezing us. We will use less oil as Chinese demand drives oil prices up so far that demand destruction causes a drop in US demand.
Crude-oil demand growth in China has cooled some, too, but not dramatically. In the past three years, crude-oil demand grew an average of about 9% a year, according to the IEA. This year, the IEA says China's oil demand is on target to grow 6% to about 7.6 million barrels of oil a day, followed by similar growth next year. But China's economy continues to grow faster than expected. GDP growth is now estimated to be on track to surpass 11% this year.
That economic growth rate means China increasingly competes with the United States for raw materials and agricultural products. Will China's net effect on the world economy become inflationary?
At this point our continued economic growth depends on our ability to produce more goods and services per unit of energy. Also, we need better technologies for using non-oil energy forms, primarily electricity. We face a liquid fuels shortage, not a general energy shortage. The high price of oil makes electricity a much more attractive form of energy. We can generate as much electricity as we need from nuclear power and cheap solar will come eventually.
The two big problems weighing on the US economy at this point are the housing downturn and rising oil prices. The housing downturn is causing credit problems which has effects beyond the housing market. High oil prices cut into disposable income and create costs for businesses. But on the up side the declining dollar is boosting foreign demand for US goods. Hard to say whether the problems are big enough to push the US into a recession. But the housing market problem is getting even worse.
WASHINGTON, October 24, 2007 - Temporary problems in the mortgage market are easing and are expected to free some pent-up demand, but disrupted existing-home sales and distorted prices on sales closed in September, according to the National Association of Realtors®. Even so, prices rose in the Northeast and Midwest.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 8.0 percent to a seasonally adjusted annual rate1 of 5.04 million units in September from a downwardly revised pace of 5.48 million in August, and are 19.1 percent below the 6.23 million-unit level in September 2006.
October 17, 2007 - Nationwide housing starts declined 10.2 percent in September as builders focused on reducing their inventories in the midst of continuing mortgage market travails, according to data released by the U.S. Commerce Department today. The majority of the downward movement was centered in the multifamily sector, where a significant uptick in starts had been registered in the previous month.
Overall housing starts fell to a seasonally adjusted annual rate of 1.19 million units, the slowest since March 1993’s pace of 1.08 million units. Single-family production registered a 1.7 percent decline to a 963,000-unit rate, while multifamily production posted a 34.3 percent decline to a 228,000-unit rate.
The worse the news gets the more reluctant buyers become and the worse the news gets. Are we headed for a recession?
The US market for asset-backed commercial paper (ABCP) contracted a further $11bn last week as lenders refused to roll over short-term debt. This form of paper has shrunk by 25pc since August, cutting off almost $300bn of funding.
Dr Suki Man, an analyst at Société Générale, said "shutters" had gone up across the debt markets. "Has it just got ugly again? The jury's out, but it's enough to make one feel the chill. All this is offset by a US economy still expected to grow by more than 2pc, and China and India still growing at breakneck speed," he said.
If you are thinking of switching jobs choose a company that has growing exports.
Washington - Whatever the merits of US military action in Afghanistan and Iraq, one thing seems clear: It's very expensive.
If this week's White House request for $196 billion more for Afghanistan and Iraq is included, total costs for these operations will reach about $808 billion by the end of next year, according to figures compiled by the Center for Strategic and Budgetary Assessments (CSBA).
That's more than the Gulf War ($88 billion in today's dollars), or Korea ($456 billion), or Vietnam ($518 billion). It's within shouting distance of the price of the Korea and Vietnam conflicts combined.
But the US economy is much larger today than it was in, say, 1968 – meaning the financial burden on the nation posed by these costs is correspondingly lighter.
Bush has been able to keep the US troops in Iraq for a few reasons. First off, there's no draft and hence the college kids are relatively complacent as compared to the 1960s. Second, the US economy is much bigger and so a couple hundred billion dollars a year in costs don't impact living standards much. Third, some of the people who don't pay really close attention are at least partially convinced by the argument that the fight in Iraq is against terrorists. So the war goes on.
These costs are only for operations. The longer term costs such as taking care of disabled veterans for decades to come do not show up in these numbers. The soldiers who died are losses these dollar figures do not capture. Lots of other costs that will show up in the future aren't captured in the Congressional appropriations - yet.
Just the Iraq war will cost more than Vietnam by the end of 2008.
But according to the CSBA, the war in Iraq alone has now cost the US more than the Gulf War and Korea, and will surpass Vietnam by the end of 2008.
But again, if we include future costs due to the war then total costs are far higher. We borrowed money to fight the war. We'll be paying for the interest for years to come. The military wore out lots of equipment. We'll be paying for replacements for years to come. Some returning soldiers will commit homicide and suicide as a result of how the war has damaged their brains. Other soldiers will find it hard to hold down regular jobs due the effect of post traumatic stress and some will beat their wives and kids.
All these costs do not come with the benefit of making us any more secure in America.
If Iran continues on its current course, Cheney said the U.S. and other nations are "prepared to impose serious consequences." The vice president made no specific reference to military action.
"We will not allow Iran to have a nuclear weapon," he said.
Bush only has about 15 months left in office. So then will Bush order the US military to carry out air strikes against Iranian nuclear facilities in the first quarter of 2008? Or will Bush wait until after the 2008 Presidential elections and do it then?
That's my question for ParaPundit readers today: When will the US Air Force and US Navy begin their air attack on Iran? Also, does anyone doubt whether this will really happen?
n the years after 9/11, Flynt Leverett and Hillary Mann worked at the highest levels of the Bush administration as Middle East policy experts for the National Security Council. Mann conducted secret negotiations with Iran. Leverett traveled with Colin Powell and advised Condoleezza Rice. They each played crucial roles in formulating policy for the region leading up to the war in Iraq. But when they left the White House, they left with a growing sense of alarm -- not only was the Bush administration headed straight for war with Iran, it had been set on this course for years. That was what people didn't realize. It was just like Iraq, when the White House was so eager for war it couldn't wait for the UN inspectors to leave. The steps have been many and steady and all in the same direction. And now things are getting much worse. We are getting closer and closer to the tripline, they say.
The article provides insights into events that have occurred since 9/11. What bothers me most about it: Bush could have tried a good faith effort to negotiate with Iran (they offered as the article reveals) before deciding on his military path. The negotiations didn't have to cost him anything and he had years in which to conduct them quietly and in earnest. But no. The man hasn't learned a thing from his foolish invasion of Iraq.
When then-Interior Minister Nicolas Sarkozy pushed tough limits on immigrants last year, the left called it an attack on France's African and Arab populations. In a country roiled by changing complexion and identity, and on the eve of national elections, Mr. Sarkozy's new "contract" set a high bar: Know the French language, embrace civic values, and show means of support.
Some 600 pro-immigrant groups hit Paris streets, protesting how quickly Europe and France were closing to the foreign-born and how aggressive the measures seemed to be. But the law passed.
Now, President Sarkozy has again upped the stakes. Not only will incoming families face a higher hurdle, but an amendment quietly introduced DNA testing as a way to prove biological ties among them. In addition, French embassies abroad will be newly empowered to conduct extensive background checks of prospective residents.
Sounds like people with the legal right to immigrate to France have been bringing in non-relatives as relatives.
"Immigration is the problem of the 21st century for Europe," argues Thierry Mariani, the Union for a Popular Movement (UMP) lawmaker and author of the DNA test bill. "If Denmark, Finland, Norway, Holland ... countries that have a tradition of respect for human rights have accepted for many years the DNA approach, it is because there is a real problem."
Similar trends and views are emerging throughout Europe. In Belgium, one of the few agreements between the Flemish and Wallonians is to create far stronger measures to limit migration and asylum, and to make deportations of illegal workers easier. Last week, Holland debated whether to stop funding the protection of former Dutch lawmaker Ayaan Hirsi Ali, a Somalian who lives under a death threat by radical Muslims.
France, Belgium, Denmark, Holland, and Switzerland have all witnessed the rise of a conservative discourse that has shifted the gravitational center of immigration politics. The formerly extreme views of nationalist voices like Jean-Marie Le Pen in France are today part of the mainstream discussion.
Yet as immigration expert Judith Sunderland of Human Rights Watch in Milan, Italy, points out, immigration politics now cut across the European political spectrum. "Most of the fights are no longer over whether to proceed with new laws and policies," she argues. "Immigration is seen as a crisis for both the left and the right."
In American the Europeans are generally seen as to the left of Americans on average. For example European politicians support a larger welfare state and more intervention in labor markets. Democrats tend to see Europe as a model for social policy they'd like to implement in America. But European leftist politicians are effectively to the "right" of American Democrat politicians on immigration.
So what are the Europeans afraid of? Islam.
Riva Kastoryano, an expert on immigration at Sciences Po in Paris, argues that the root of greater apprehension among mainstream Europeans is a fear of the spread of Islam. "Much of the old xenophobia about foreigners in Europe has been recast today as a perception of 'Islamophobia,' " she says.
The fear of Islam is rational though. Muslim minorities do not accept the cultures and values of the countries they immigrate to.
Hirsi Ali: We have to revert to the original meaning of the term tolerance. It meant you agreed to disagree without violence. It meant critical self-reflection. It meant not tolerating the intolerant. It also came to mean a very high level of personal freedom.
Then the Muslims arrived, and they hadn’t grown up with that understanding of tolerance. In short order, tolerance was now defined by multiculturalism, the idea that all cultures and religions are equal. Expectations were created among the Muslim population. They were told they could preserve their own culture, their own religion. The vocabulary was quickly established that if you criticize someone of color, you’re a racist, and if you criticize Islam, you’re an Islamophobe.
Reason: The international corollary to the word tolerance is probably respect. The alleged lack of respect has become a perennial sore spot in relations between the West and Islam. Salman Rushdie receiving a British knighthood supposedly signified such a lack of respect, as did the Danish cartoons last year, and many other things. Do you believe this is what Muslims genuinely crave—respect?
Hirsi Ali: It’s not about respect. It’s about power, and Islam is a political movement.
Reason: Uniquely so?
Hirsi Ali: Well, it hasn’t been tamed like Christianity. See, the Christian powers have accepted the separation of the worldly and the divine. We don’t interfere with their religion, and they don’t interfere with the state. That hasn’t happened in Islam.
But I don’t even think that the trouble is Islam. The trouble is the West, because in the West there’s this notion that we are invincible and that everyone will modernize anyway, and that what we are seeing now in Muslim countries is a craving for respect. Or it’s poverty, or it’s caused by colonization.
The Western mind-set—that if we respect them, they’re going to respect us, that if we indulge and appease and condone and so on, the problem will go away—is delusional. The problem is not going to go away. Confront it, or it’s only going to get bigger.
I agree with Hirsi Ali on at least one point here. Westerners hold false beliefs that cause them to underestimate the demographic vulnerability of the West to Muslim immigrants. I suspect these false beliefs have their origin in the Cold War. During the Cold War the communists presented their ideology as the universal ideology suitable for all of the world. Western opponents of communism argued that communism wasn't suitable for the whole world and instead argued that Western beliefs held universal appeal. Too many Westerners came to believe this propaganda and came to believe that the triumph of Western beliefs was inevitable because no other credible belief system (secular or religious) competed with anything Western.
However, Hirsi Ali is making mistakes in how she describes the differences between Christianity and Islam. One of Hirsi Ali's mistakes is to paint Islam as somehow lagging behind Christianity in going through a process of accepting a division between religion and state. Christians were able to accept that separation in large part because the base texts of Christianity ("render unto Caesar that which is Caesar") are compatible with that separation. Jesus Christ never ruled a kingdom. He never led soldiers into battle. He never created a legal system. He never wiped out tribes that rejected his religion. By contrast Mohammed did all those things. The founder of Islam presented a model of the state that has no room for a separation of religion and state. Islam hasn't so much lagged behind as it has stayed true to its teachings while Christianity changed its relationship to the state because a change in that relationship wasn't incompatible with Christianity.
Also, Christians have not stopped bringing their religious beliefs into the voting booth. Their values still influence what they'll decide to be acceptable policy. But Christians in Western countries see less conflict between what they believe governments should do and what governments actually do because Christian values so heavily influence what Westerners (even secular Westerners) believe are appropriate values. By contrast, when Muslims come into the West they bring a different and much more incompatible set of values. The values disagreements between Christian and secular Westerners are small in comparison to the values disagreements between Western and Muslim values. Muslims do not see non-Muslims as their equals. Islam is therefore incompatible with Western notions of equality.
The Department of Homeland Security and the FBI agree that the homemade explosive devices that have wreaked havoc in Iraq pose a rising threat to the United States. But lawmakers and first responders say the Bush administration has been slow to devise a strategy for countering the weapons and has not provided adequate money and training for a concerted national effort.
First off, more money for first responders will not prevent bombs from going off in the first place. Not having people around living in your society who try to plant bombs along streets and roads is the only way to prevent IEDs from going off in your society. Yet the reporter thinks it important to report how Washington DC's bomb squad uses trailers as offices whereas LA's bomb squad has a new $8 million building. News flash: The people in LA aren't any safer as a result. Hello Mr. Reporter. You should look a little more critically at self-serving sources of information.
We invaded Iraq. Our troops stayed for years. The locals and their Jihadist allies therefore got lots of opportunities for training and practice on what works. Now the Bush Administration fears they'll put all that practical training to effective use back in America.
Homeland Security Secretary Michael Chertoff, who told the Senate last month that such bombs are terrorists' "weapon of choice," said yesterday at a local meeting that President Bush will soon issue a blueprint for countering the threat of improvised explosive devices, or IEDs. Chertoff's department said in a draft report on IEDs earlier this year that national efforts "lack strategic guidance, are sometimes insufficiently coordinated . . . and lack essential resources."
What does Mr. Chertoff think "strategic guidance" would look like? I'm sure he's not on the clue train for what we most obviously ought to do if we really think Muslim terrorists might start blowing up lots of bombs along busy streets in America. Does anyone have an idea what we ought to do about it? Show of hands? Anyone?
At the risk of stating the obvious: Keep Muslims out of America. If they aren't here they can't blow up bombs here.
Such a diabolical, fiendish plan is beyond the pale back in the halls of the US Department of Homeland Security and way beyond the pale in the White House. My guess is the Democratic National Committee would be horrified (at least publically) at the suggestion. But we already have 300 million people. We don't need any more. Most of the world is not Muslim in any case and therefore a visitor and immigrant ban specifically aimed at Muslims would not put a big crimp on commerce. Plus, a disproportionate amount of economic activity is concentrated among peoples who are not Muslims.
Here is what Mr. Chertoff imagines as elements of a strategy against IEDs:
He said his department has provided $1.7 billion in grants related to the IED threat, trained workers at 16 ports and deployed thousands of new explosives detectors at airports, and plans to increase the screening of small boats and private aircraft that might carry bombers or bombs.
Think about how huge American is. sensors at a handful of locations would provide little protection. Sensor systems do far more to assure the public than they do to provide protection.
Bomb makers who are in America don't need to smuggle bombs in. They can make bombs here. If IED makers make it into the United States with enough funding to go to work they won't need to target airplanes and ports. They'll be able to blow up bombs on very busy packed freeways and tunnels under rivers. The main problem occurs once we get bomb makers inside our borders. Techno-gadgetry in select locations will do little to protect us once that happens.
I think America exists primarily for the people who are already American citizens. I do not think we have a moral obligation to let in anyone who wants to come here. There is nothing morally wrong with trying to protect our way of life from people who believe in very different values and ways of living. I want to live in a relaxed society where security concerns do not require us to look around paranoically at people in airplanes or at boxes that fall off of trucks and lay on the sides of roads. I'm not willing to give that up just so we can pretend that all the peoples of the world share enough common values to all live together in Mayberry RFD.
Cubans who manage to set foot on US soil are allowed to stay. That partly reflects the political power of Cuban Americans in Florida. But this rule is a relic of the Cold War when escapees from communist Cuba were seen as great public relations for free America against the communist Soviet bloc. Cubans are increasingly using voyages to Mexico as a way to make it onto American soil.
Statistics make clear that Cubans now believe the route, although considerably longer, boosts their odds of reaching Miami. Almost twice as many Cubans - 11,487 - used it as in 2005.
By comparison, during the same time, the coast guard intercepted just 2,861 Cubans crossing the Florida Straits, and 4,825 others eluded American authorities and the applied for political asylum in the United States, according to the coast guard.
The figures indicate a spike in migration from the island, which in fiscal 2007 was at its highest level since 35,000 Cubans left in a mass exodus in 1994.
We ought to repeal the law that grants automatic asylum to Cubans. If they want to live in freedom they should rise up and overthrow their own government.
As employers and professional groups ask Congress to speed up immigration reform for high-skilled workers, U.S. tech workers are fighting back.
The latest clash erupted after the U.S. chapter of the Institute of Electrical & Electronics Engineers (IEEE) and the Semiconductor Industry Assn. (SIA) sent a letter to congressional leaders Oct. 11 calling for any foreign student with at least a bachelor's degree in technology or science to be granted permanent residency if they get a job offer. The letter outraged U.S. tech workers who feel displaced both by immigration programs and outsourcing (BusinessWeek.com, 10/10/07). In response, the Programmers Guild, which represents 1,500 technical and professional workers, has drafted its own letter to congressional leaders, warning that such a policy would further disadvantage American workers.
The Semiconductor Industry Association represents capital. Capital wants cheap labor. So the SIA's position makes perfect sense. They are arguing for a position that will boost short term profits of their members. But isn't the IEEE supposed to represent practicing engineers? Is it captive to companies that employ large numbers of engineers? How does that work?
Scott Rasmussen has the numbers. Public attitudes continue to shift toward ending US involvement in the war in Iraq.
For the second straight week, a Rasmussen Reports national telephone survey found that 64% of Americans would like to see U.S. troops brought home from Iraq within a year. Prior to this week’s results, support for bringing the troops home had increased in three consecutive weeks.
Twenty-eight percent (28%) who want the troops brought home immediately. That’s unchanged from a week ago but up from 20% five weeks ago.
Seventy-one percent (71%) of women want troops out of Iraq within a year. Fifty-five percent (55%) of men share that view.
Looking at the other end of the spectrum, 31% now want troops to remain in Iraq until the mission is complete. That’s down three points from a week ago and the lowest level measured since Rasmussen Reports began tracking this question in August.
The Republican decline in support is most notable.
Once the Republican support crumbles expect Congress to force Bush to start pulling out troops. How soon will Republican support drop below 50%?
The war does not further US interests. We are not made more secure by US troops fighting in Iraq. We should just leave.
While the United States will still have a much larger economy than China in 2008 the absolute size of the Chinese economy's growth is expected to surpass the absolute size of the US economy's growth.
For the first time in modern history, China will next year contribute more to global economic growth than the United States.
The landmark moment was predicted yesterday by the International Monetary Fund and is the latest illustration of the fast-growing Asian country's importance to the world economy.
While China's economy is still far smaller than America's, it has overtaken the UK as the world's fourth biggest economy.
This portends an even bigger shift in store. When will the absolute size of China's economy surpass that of the United States? Also, how expensive will oil become as Chinese demand bids up the price?
China's gross domestic product expanded 11.5 percent in the first half, after recording a blistering 11.9 percent in the second quarter and 11.1 percent for all of 2006.
If they could maintain 11% annual growth their economic would double in just 7 years. If they can only maintain 8% annual growth they'll double in 9 years.
Europe's trade deficit with China jumped 25 percent to a record in the seven months through July, increasing tensions on foreign-exchange policy ahead of a meeting of the Group of Seven nations tomorrow.
The EU, unlike the US, still runs a net trade surplus with the rest of the world. But the dollar's decline has made European goods more expensive relative to US and East Asian goods. Though on the bright side for the Europeans the rise of the Euro against the dollar has reduced oil prices for them in Euros.
The dollar crossed the barrier of $1.43 against the euro; the broader dollar index fell to 77.478, the lowest since the series began in 1973.
The plunge follows data released this week by the US Treasury showing a record $163bn (£80bn) exodus from all forms of US assets, led by unprecedented levels of US bonds sales by Japan, China and Taiwan.
The big US trade deficit has gone on for too long. Holders of US bonds have figured out that the pressures in favor of a correction have grown so strong that holding US bonds is a bad idea. Chinese holders of US bonds are thinking the Chinese yuan is going to rise against the US dollar and they do not want to hold dollar assets which will decline in value as the yuan rises.
Crude oil prices continued a months-long bullish run with another record-setting day: On Oct. 17, the price for a barrel of light sweet crude surged above $89 on the New York Mercantile Exchange, the highest mark recorded since contracts started trading on the exchange.
Given trends in world oil production I think the price of oil will go higher.
"Within a year you're going to see $100 oil," the Texas billionaire said. "It's going to get very dicey here in the fourth quarter."
But how about some demand destruction? In spite of economic growth and population growth the United States used less motor fuel in the last 4 weeks than in the same period last year.
Demand for the motor fuel over the four weeks ending Oct. 12 was 0.5 percent lower than a year earlier, averaging about 9.2 million barrels a day.
I'm expecting greater demand destruction as people shift toward more fuel efficient cars and make other changes that reduce their use of energy for travel.
China overtook Japan as the world's second-largest consumer of oil in 2003 and is closing in on the US, with demand for oil growing at about 15% a year.
The economic impact of the latest surge in oil prices, which started to soar only this month, could be substantial. The rise could reduce consumer enthusiasm, particularly for lower-income Americans. Some economists believe that if the oil price hits $90 a barrel and stays there for a few weeks, businesses could start passing on their higher costs. A rise in oil prices will also make the Federal Reserve's job more difficult as it tries to keep the economy going while maintaining price stability.
"If the price holds, it will be a real oil shock," says Don Norman, an economist at Manufacturers Alliance/MAPI in Arlington, Va. "But I'm not sure if it's enough to knock the economy into an outright recession."
The declining US dollar cuts the cost of oil to countries whose currencies rise against the dollar. The rising price of oil in dollars gets at least partially cancelled out in Europe, for example, by the rise in the Euro against the dollar. So some countries aren't seeing the same oil price rise that the United States is experiencing.
If the US dollar eventually gets hit by a big decline against East Asian currencies that will lower the cost of oil to China and therefore Chinese demand will rise even more rapidly and push up the price of oil in US dollars even more rapidly.
Oil prices soared past $86 a barrel yesterday as tension in the Middle East and uncertainty about the direction of the American economy pushed prices to record levels.
Crude oil for November delivery settled at $86.13 a barrel, up $2.44, or 2.9 percent, and the highest price since oil contracts began trading on the New York Mercantile Exchange in 1983. (In the late 1970s and early ’80s, small quantities of oil traded on the then-new spot market for $40 a barrel, or about $100 in today’s money.)
I want to know how rapidly demand destruction will occur as prices rise. People will shift toward smaller cars, take fewer trips, choose jobs closer to home, move closer to jobs, better insulate their houses, and make many other adjustments to reduce their energy usage. How rapidly will they make these adjustments when oil prices hit $100 per barrel and up? How high will prices have to go to cut demand for oil?
Pew recently released the results of an interesting survey on international attitudes toward free trade, immigration, and democracy. It's worth taking a look at.
The bottom line comes in two parts: Firstly, nations overwhelmingly like being able to trade with other nations and favor free market economies over those that are centrally-planned. Pew is a trustworthy source, but in spite of this it strains credulity to see that, of the 47 nations polled, support for free trade (59%) was the very lowest in the United States.
I counted 48 in their charts. But that included the Palestinian Territories that are not exactly a country. They are not exactly part of some other country either. The Palestinian Territories, Japan, and South Korea were the 3 places that lacked a simple majority in favor of greater immigration restriction. But the rest of the world had very large majorities in favor of immigration restriction. See the second chart for the details.
These results aren't surprising. Most people prefer to live around their own kind and do not want their countries changed by large influxes that remake the demographics of a society into something alien to the existing inhabitants.
Private college admissions coach Michele Hernandez charges as much as $40,000 to help students get into top colleges. Hernandez says she makes nearly $1 million per year helping kids get into the Ivy League.
What makes her own story so compelling is that Hernandez is an insider-turned-outcast. A former admissions officer at Dartmouth College, she dared to reveal secrets of the opaque selection process in her book, A Is for Admission: The Insider's Guide to Getting Into the Ivy League and Other Top Colleges, and then to build a thriving business that helps people game the system. As she says to parents: "You don't want to pay $180,000 for some piddling school when, by spending a little extra, your kid could get into Yale." She insinuates herself so deeply into her students' lives and is so unabashed about her money-making that she has come to be regarded either as operating at the leading edge of her profession or its cynical extreme.
She claims a very high success rate. But if so she's probably picky about who she takes on as clients. Plus, the parents who have the money to pony up are smarter on average and therefore have smarter kids on average.
I can see that she can show the students how to write a more appealing application and direct them toward extra-curricular activities that look great to Ivy admissions officers. She might also be very motivational and drive kids to study harder in high school. But there's a limit to how much training courses can boost the crucial SAT scores. Still, I would expect kids who follow her advice to get into higher ranked schools than they otherwise would manage to get accepted to.
She structures the lives of her students.
Families pay Hernandez as much as they do because she promises not just substitute parenting but parenting in the extreme. She selects classes for students, reviews their homework, and prods them to make an impression on teachers. She checks on the students' grades, scores, rankings. She tells parents when to hire tutors and then makes sure the kids do the extra work. She vets their vacation schedules. She plans their summers.
She's also written other books that help to promote her to parents: Middle School Years : Achieving the Best Education for Your Child, Grades 5-8 and Acing the College Application: How to Maximize Your Chances for Admission to the College of Your Choice (Acing the College Application). So she's marketing herself through books in order to recruit customers that she markets to colleges. Then the kids use their college degrees to market themselves to prospective employers.
Our lives seem more driven by marketing than was the case in the past. Hernandez shifted her own marketing efforts toward increasingly younger kids going back to 8th and 9th graders in order to provide more time in which to shape each kid into a brand. Yes, you aren't just a kid growing up. You are developing your own unique brand. She calls it "Brand Me". A life lived to create a brand to sell to college admissions officers. Wow.
Are these kids getting trained for jobs in advertising agencies?
Harvard labor economist George Borjas draws attention to a story about some Minnesota National Guard and how the US government connived to avoid paying them more benefits for an especially long tour of duty.
When they came home from Iraq, 2,600 members of the Minnesota National Guard had been deployed longer than any other ground combat unit. The tour lasted 22 months and had been extended as part of President Bush's surge.
1st Lt. Jon Anderson said he never expected to come home to this: A government refusing to pay education benefits he says he should have earned under the GI bill...
Anderson's orders, and the orders of 1,161 other Minnesota guard members, were written for 729 days.
Had they been written for 730 days, just one day more, the soldiers would receive those benefits to pay for school. "Which would be allowing the soldiers an extra $500 to $800 a month," Anderson said.
I no longer believe in coincidences when it comes to stuff like this. Whoever wrote the order for 729 days knew precisely what he or she was doing.
What does this say about the Bush Administration and the people in the Pentagon? When America sent soldiers abroad to fight for 1, 2, 3 years in World War II they came back to receive excellent educational benefits. Well, we have many soldiers who have been on multiple 1 year tours of duty in Iraq plus their most recent tours of 15 months and beyond.
This group from Minnesota who just served 22 months includes members who probably have served in a war for longer than the vast bulk of the US soldiers who served in World War II. These currently serving soldiers spent probably much more time in combat conditions than did the average US soldier in WWII as well. During WWII we had lots of soldiers in support outfits away from the front lines who were in friendly territory. The soldiers who marched across Europe didn't even spend 12 months from D-Day at Normandy until Nazi Germany surrendered. Now we have National Guard units spending twice the amount of time the D-Day soldiers spent and cheapskates in the Bush Administration are looking at how to shaft them by reducing their time abroad by 1 day.
Update: It angers me that someone so manifestly unworthy (i.e. George W. Bush) has these soldiers over in Iraq dying essentially to allow him and his allies to save face and to pretend that some good result can come this pointless war. Not only is he expending their lives needlessly and getting many more maimed he's also cheating them of benefits with things like this 729 day deployment.
A federal survey shows that 27 percent of adults without insurance saw a dentist in 2004, down from 29 percent in 1996, when dental fees were significantly lower, even after adjusting for inflation. For adults with private insurance, the rate was virtually unchanged, at 57 percent, up from 56 percent. Since 1990, the number of dentists in the United States has been roughly flat, about 150,000 to 160,000, while the population has risen about 22 percent. In addition, more dentists are working part time.
Notice the point above about more dentists working part time. That's probably at least in part due to a rising number of women working as dentists. Women work fewer hours than men on average. So when the number of training slots remains the same but more slots are given to women the effect is to decrease the supply of workers available.
Curiously, for those men who still manage to win a slot in dental school the effect is to raise their income. So the men who don't make it into dentistry make less money than they would have but the men who still manage to win a spot in a dental school make more. Yet another reason why inequality is rising. It really pays to be a winner. Try to avoid losing.
The inflation-adjusted cost of dentistry is rising.
Partly as a result, dental fees have risen much faster than inflation. In real dollars, the cost of the average dental procedure rose 25 percent from 1996 to 2004. The average American adult patient now spends roughly $600 annually on dental care, with insurance picking up about half the tab.
Dentists’ incomes have grown faster than that of the typical American and the incomes of medical doctors. Formerly poor relations to physicians, American dentists in general practice made an average salary of $185,000 in 2004, the most recent data available. That figure is similar to what non-specialist doctors make, but dentists work far fewer hours.
Since fewer dentists are getting trained now than in the early 1980s (a decline of over 20%) the number of dentists will actually decrease in coming years as many practicing dentists retire. So if you are thinking about getting dental work done best to get it done sooner. It will probably cost less now than in a few years from now. Another alternative is to get dental work done in another country if you have any plans for travel to countries with lower dental costs.
The article reports that pediatricians are applying flouride varnish to baby teeth so that poor parents can avoid the need to see dentists. Great idea. Avoiding cavities is the best outcome. Also, we could make much more use of cheaper dental technicians like other countries do.
Outside the United States, more than 50 countries, including some western European nations, now allow technicians called dental therapists to drill and fill cavities, usually in children.
One does not need all the knowledge of a dentist to do the drilling and filling of cavities. A dental caries vaccine would be a great way to cut the need for dentistry as well.
Several of the world’s biggest banks are in talks to put up about $75 billion in a backup fund that could be used to buy risky mortgage securities and other assets, a move designed to ease pressure on a crucial part of the credit markets that threatens the broader economy.
Citigroup, Bank of America and JPMorgan Chase, along with several other financial institutions, have been meeting to come up with a plan to create a fund that could prevent a sharp sell-off in securities owned by bank-affiliated investment vehicles. The meetings, which began three weeks ago, have been orchestrated by senior officials at the Treasury Department, and the discussions have intensified in the last few days.
If only we had access to a bunch of parallel universes we could find out if funds like this one are needed in order to prevent market meltdowns and global depressions.
Should we react to this news by thinking that wise big money knows how to prevent calamity and big money is motivated enough to prevent a depression? Or should we react by thinking that our financial system isn't all that stable and economic panics are still quite possible?
Daniel Gross, writing for the New York Times Magazine, reports signs that New York City is rapidly ceasing to be the preeminent financial capital of the world.
Some of the trends highlighted in these reports are troubling for the United States financial-services industry and for New York, its spiritual and historical home. The Committee on Capital Markets Regulation noted that the U.S. share of global initial public offerings — those outside the company’s home country — fell from 50 percent in 2000 to 5 percent in 2005. Until recently, the directors of China Construction Bank would have seen no alternative to a New York offering. Only New York had the experienced underwriters, the highly transparent, trustworthy markets and the deep pool of capital to handle such a deal. That’s no longer the case. In 2001, New York’s stock exchanges accounted for half of the world’s stock-market capitalization. Today, the total is more like 37 percent. In 2005, 9 of the 10 largest I.P.O.’s took place outside the United States. The world’s largest-ever I.P.O., the $19.1 billion offering of Industrial and Commercial Bank of China, was staged in Hong Kong in 2006. In the lucrative field of investment banking, sales and trading revenues, the McKinsey report concluded that “European revenues are now nearly equal to those in the U.S.”
Part of this is driven by technology. Trading floors are getting replaced by totally automated computerized trading. The buyers and sellers still exist scattered over many cities and countries as they always were. But there is less need for traders at the center making a market in securities. Automation is reducing labor needs. But also communications and computing technologies are reducing the need for concentrations of workers to enable them to come into close physical proximity with each other.
New York City has a great deal to lose from outsourcing.
What does all this diffusion mean for New York’s economy? Potentially, a great deal. Steve Malanga, senior fellow at the Manhattan Institute, estimates that there are 175,000 securities-industry jobs in New York, which pay an average wage of $350,000. The Committee on Capital Markets Regulation notes that the securities industry accounts for 4.7 percent of the jobs in New York City but 20.7 percent of the wages. But the impact is even larger, since the spending of Wall Street hotshots supports a huge number of other jobs. Between 1995 and 2005, the sector grew at an average annual rate of 6.6 percent in New York and provided more than a third of business income-tax revenues, according to McKinsey.
Will the high income jobs leave New York City? Will financial work diffuse across many more countries and cities?
The high cost of doing business in New York combines with technologies that eliminate the need for close physical proximity. The result is that new companies can start up in lower cost locations and rapidly grab big chunks of market share away from NYC-based companies.
Because of the high costs of living and doing business in New York, the city is likely to continue to lose market share. Take the case of BATS, an alternative trading platform based in Kansas City, Mo., that has come out of nowhere to gain a 9 percent share in the market for trading United States stocks. “Our location is one of the principal factors that enabled us to go from start-up to the third-largest equities exchange in the U.S. in a matter of 18 months,” says Joe Ratterman, its president and chief executive officer. The company’s computers reside in a New Jersey data center, and it has two sales representatives in New York. But the rest of its 33 employees work out of a 10,000-square-foot office complex with views of downtown Kansas City.
Think about that. 18 months from start-up to 9 percent market share. New York City's financial worker employment could suffer shrinkage far more rapid than what happened to the smoke stack manufacturing industries back in the 1970s and 1980s.
Gross speculates that New York City can still survive by becoming a services economy which caters to the needs of the super wealthy. The city still has the lawyers, accountants, investment bankers, and other skilled workers that allow complex deals to get put together in face-to-face meetings. But anything automated strikes me as better done in lower cost locales.
FORT LEAVENWORTH, Kansas: Here in this Western outpost that serves as the intellectual center of the U.S. Army, two elite officers were deep in debate at lunch on a recent day over who bore more responsibility for mistakes in Iraq - the former defense secretary, Donald Rumsfeld, or the generals who acquiesced to him.
"The secretary of defense is an easy target," argued one of the officers, Major Kareem Montague, 34, a Harvard graduate and a commander in the Third Infantry Division that was the first to reach Baghdad in the 2003 invasion. "It's easy to pick on the political appointee."
"But he's the one that's responsible," retorted Major Michael J. Zinno, 40, a military planner who worked at the headquarters of the Coalitional Provisional Authority, the former American civilian administration in Iraq.
The size of the initial invasion force should have been bigger assuming we should have done the invasion. But that's a big assumption. Also, we didn't just need a bigger invasion force. We really needed a far larger army to occupy Iraq. But to build up an army big enough for occupation was an obstacle to invasion that George W. Bush, Paul Wolfowitz, Dick Cheney, and Lewis Libby didn't want to deal with.
But the questions about the needed size of the military force in Iraq are a distraction from two far more important questions. First, should we have invaded in the first place? That's an easy question: No. We harmed and did not advance American interests by invading Iraq. Yet at the end of the article we find that these officers do not know whether the war should have been fought in the first place. We have tons of evidence with which to judge that question now. These officers are very disappointing.
Second, the biggest question we face today is whether we should pull out our forces. To put it another way: what justification is there for keeping soldiers in Iraq with about 100 dying per month and about 5 or 6 times that number injured? How are we being made safer by this? I think this war is worse than pointless. It does not make us safer. These officers should justify why the US military should be used or they should advocate for withdrawal.
The next generation of United Auto Workers will receive lower pay and benefits than their predecessors, judging by the contracts reached or ratified this week.
If there's a big pattern in the current round of auto-industry bargaining, that's it.
Officially, pay cuts aren't part of the deals. But the launch of a two-tier system, offering many new hires lower wages, raises the curtain on an era when overall pay will be lower.
In benefits, a new contract ratified by UAW workers this week allows General Motors to contribute to a cash-balance retirement plan for new entry-level workers, rather than providing a guaranteed pension.
Meanwhile, in deals cut this year and in 2005, union workers and retirees will be shouldering more of the rising costs for healthcare, and the companies less.
Given the higher labor costs that the Big (but shrinking) Three are saddled with it is amazing they've survived this long. The hourly labor cost gap is enormous.
GM, Ford Motor Co. and Chrysler LLC headed into contract talks with about $25 an hour more in labor costs than Toyota, Honda Motor Co. and Nissan Motor Co., according to industry estimates.
About $13 an hour of this gap can be attributed to retiree pension and health benefits, which could be dramatically reduced by the proposed VEBA trust fund for health care.
The new UAW agreement with GM will eventually put GM's labor costs close to Toyota's current labor costs but still higher.
The new deal would put GM “right on top” of Toyota within a few years, said Rod Lache, an analyst with Deutsche Bank. It could reduce GM’s labor costs from $70 an hour to about $50 an hour, Lache estimates. Toyota’s labor cost is about $47 an hour. “It’s a big, big closing of the gap,” he said.
Even as GM and Chrysler secure deals with the UAW that will close much of the labor cost gap Toyota and Honda are looking to open that gap right back up again.
The internal report suggested tying Toyota production wages and benefits to the surrounding region for plants, instead of trying to keep up with the pay scale of the overall U.S. auto industry — one traditionally set by UAW contracts.
Honda appears to be following a similar strategy. When its new plant in Greensburg, Ind., opens next year, Honda plans to start production workers at $14.84 an hour with an automatic $3.71-an-hour raise in 2009, according to report by the Indianapolis Star. The average wage rate for production workers at GM, Ford and Chrysler is about $28 an hour.
So Honda is starting new workers at a way lower rate than the hourly wage of the Big (but shrinking) Three. Plus, the UAW workers have many more benefits.
ANDERSON, Ind. -- When Honda Motor Co. announced last year that it was building a new plant amid the farms of southeastern Indiana, Hoosiers cheered. Then Honda announced in August that only people living in 20 of the state's 92 counties could apply for jobs -- a move that excluded most of the state's thousands of unionized laid-off auto workers.
Look for the US auto makers to shift more manufacturing abroad. Granted, the current UAW agreements restrict how many plants they can close. But they can't win back market share without getting their labor costs even lower.
The surge is an act of desperation by political types who are in denial of reality. He is stating the obvious.
Retired Lt. Gen. Ricardo S. Sanchez, who led U.S. forces in Iraq for a year after the March 2003 invasion, accused the Bush administration yesterday of going to war with a "catastrophically flawed" plan and said the United States is "living a nightmare with no end in sight."
Sanchez also bluntly criticized the current troop increase in Iraq, describing it as "a desperate attempt by the administration that has not accepted the political and economic realities of this war."
He thinks our political leaders are incompetent. Too true. We are incompetently ruled.
“There has been a glaring, unfortunate display of incompetence in strategic leadership among our national leaders,” Sanchez said. “They have unquestionably been derelict in the performance of their duty. In my profession, these types of leaders would be immediately relieved or court-martialed.”
“Any sequential solutions would lead to a prolonged conflict and increased resistance,” Sanchez said about these messages to Washington. “By neglect and incompetence at the National Security Council level, that is the path our political leaders chose and now America and more precisely the American military finds itself in an intractable situation.”
Yes, the situation in Iraq and in Washington DC really is that bad. I wish more people put a lot of effort into understanding Iraq so that more could see through the lies told by the Bush Administration and its allies and defenders.
But officers such as Sanchez bear part of the blame. His command in Iraq ended June 2004. But he didn't leave the Army until 2006 and didn't speak out until now, more than 3 years after he left Iraq. Well, thousands of American soldiers had to die and tens of thousand had to come back with pieces permanently missing and broken before he'd tell the public what they needed to hear.
Here is the full Sanchez speech, albeit in ALL CAPS.
He said deployment cycles aren’t working with current troop levels, that it will take decades to fix the “military’s full-spectrum readiness,” and that if the U.S. were to withdraw from Iraq, it would lead to “chaos that would lead to instability in the Middle East.” And, he said the Powell Doctrine — which requires a clear exit strategy as part of a war plan — was violated.
Here is my exit strategy: Leave. Does Sanchez have an exit strategy? His exit strategy appears to be to win first before leaving.
Sanchez blames reporters for bad strategic decisions made by generals and politicians.
He said some poor strategic decisions in Iraq had become “defeats because of the media,” and that some reporters feed from a “pigs’ trough.”
Poor strategic decisions are more important in their effects than what reporters say about them.
Writing for City Journal Steven Malanga reports on the trend toward privatization of government-owned infrastructure.
Across the country, cash-strapped governors and mayors are discovering that their airports, bridges, toll roads, water systems, and other revenue-generating operations are worth far more than they thought, and are eyeing auctions that might produce windfalls similar to those in Chicago and Indiana. They’re also looking to recruit private investors to build and operate new toll roads, bridges, and other infrastructure.
If the deals can overcome resistance from anti-privatization groups and from politicians who benefit from keeping a stranglehold on government assets, they could help make up for decades of underinvestment in infrastructure—and thereby renew America’s landscape. “There’s probably $100 billion in domestic capital alone that’s being raised to invest in these transactions, and when that’s leveraged with debt, you’re probably looking at up to $400 billion in money that’s ready to go to work,” says Dana Levenson, Chicago’s former chief financial officer and now an investment banker at Royal Bank of Scotland. Add foreign investment to the mix, and the sums get even more impressive.
I understand why shifting infrastructure from the public to private sector can make the market more efficient and perhaps increase the total rate of accumulation of capital. So it might raise living standards. But I see one problem: A government unburdened of the need to spend money on one purpose might just shift its spending to other purposes and not become any less a burden on the taxpayers. Why? If taxes get really high then enough people object that taxes get lowered. But below some threshold range it seems that governments can tax and will tax and will spend it all on something.
At the same time, privatization creates prices on road and bridge access where access previously was free. Yet taxes probably don't go down. If government doesn't make privatized roads and bridges less efficient does it just make other parts of the economy less efficient? Therefore is infrastructure privatization a benefit or maybe even a net negative for productive taxpayers?
If governments maintain roads and bridges they are basically forced to use a portion of tax revenue to engage in activities useful for the vast bulk of the population. The populace expects governments to maintain roads just as the populace expects governments to provide police and prisons and courts. When these essential functions get privatized do governments just engage in more destructive activities?
Under-investment in infrastructure is creating big costs to the economy and wastes a lot of our time.
Over the last 25 years, as the miles driven on U.S. roads have doubled, road spending has increased by less than 50 percent. Deterioration is the inevitable result. Nearly a fifth of America’s roads are in pitiable shape, according to the U.S. Department of Transportation, and nearly one out of every three bridges earns the department’s “structurally deficient” rating. Road congestion, a by-product of too little new building, costs the American economy about $65 billion annually, as trucks and cars snarled in traffic burn up time and fuel. The clogging is likely to get worse. “These costs have been growing at about 8 percent per year—almost triple the rate of growth of the economy,” Tyler Duval, assistant secretary of the Department of Transportation, informed Congress in February.
Privatization can improve the efficiency of use of assets.
The winning consortium in the Chicago Skyway auction estimated that traffic would grow annually by about 3 percent; the city’s own study used a more conservative 1 percent growth rate. The variation of merely a few percentage points of growth, stretched out over decades, helped create the huge divergence in the Skyway’s perceived value.
Further, the Skyway sale transfers risk from the taxpayer to the private owner. If the road’s traffic doesn’t grow as anticipated, the investors must accept a lower rate of return; the taxpayers will already have their money. Of course, if traffic outpaces expectations, the investors get a windfall. The Skyway’s new owners—a partnership between Australia’s Macquarie Bank and a Spanish construction firm—have shown that they intend to make their property live up to the brighter projections. Within three months of closing the deal, they had installed an electronic toll-collection system to help zoom traffic along and assigned additional collectors during rush hour to gather cash more quickly. The result: reduced wait times, boosted Skyway use—and more money coming in. Chicago didn’t bother with any of these reforms when it managed the road, a Macquarie managing director testified before Congress last year. Unlike the city, he said, Macquarie was “heavily incentivized” to run the road efficiently.
But is infrastructure privatization a net benefit to the economy?
The Western liberal media had a laugh in August when China's State Administration of Religious Affairs announced Order No. 5, a law covering "the management measures for the reincarnation of living Buddhas in Tibetan Buddhism." This "important move to institutionalize management on reincarnation" basically prohibits Buddhist monks from returning from the dead without government permission: No one outside China can influence the reincarnation process; only monasteries in China can apply for permission.
What fun. So if you want to get reincarnated in China you had better get on friendly terms with a Chinese monastery. Picture all sorts of people with fatal illnesses the world over traveling to China to get a monastery to apply for permission to reincarnate them when they die.
China uses the same strategy that American elites like to use: replace a group with a huge demographic influx of some other group.
In recent years, the Chinese have changed their strategy in Tibet: In addition to military coercion, they increasingly rely on ethnic and economic colonization. Lhasa is transforming into a Chinese version of the capitalist Wild West, with karaoke bars and Disney-like Buddhist theme parks.
In short, the media image of brutal Chinese soldiers terrorizing Buddhist monks conceals a much more effective American-style socioeconomic transformation: In a decade or two, Tibetans will be reduced to the status of the Native Americans in the United States.
This practice hasn't just been done to the Native Americans. American industries like to bring in huge waves of foreigners in order to drive down wages. This gets done today in agriculture, construction, and other industries. In the past auto companies, the meat packing industry, and other industries brought in immigrant groups to lower wages. The difference with China's elites is they want the Han Chinese majority to supplant the minorities. Whereas in the United States elites want to replace the majority with minorities.
Belgium, divided between Dutch-speaking Flanders in the north and French-speaking Wallonia in the south, has spent 120 days since national elections without a new government. Political parties have been unable to agree on the country's direction, and fears are growing that Belgium will dissolve. Yet signs of a breakthrough in the coalition talks emerged Tuesday morning when the Christian Democrats and Liberals temporarily put aside their differences and agreed on a tough new approach to asylum policy and economic migration.
Despite this agreement, political analysts stressed that the crisis was far from over with the important issue of how to grant more autonomy to Flanders and Wallonia still hanging in the balance. They underlined, however, that the deal illustrated how immigration had become a unifying issue in a country where the prime minister-in-waiting recently publicly fumbled the words of the national anthem and where the unifying force for Belgians of all linguistic stripes is a love of the country's 400 kinds of beer.
The Vlaams Belang party wants to deport the Muslims. The populace as a whole is reasonably worried about the alien and hostile Muslim parallel society in their midst.
BAGHDAD, Oct. 9 -- Two women were killed in central Baghdad on Tuesday, Iraqi police said, when private security company guards opened fire on their car after it approached a convoy the guards were protecting.
Iraqi Interior Ministry officials told The Washington Post that the security contractor was Dubai-based Unity Resources Group. The firm, founded by an Australian, is registered in Singapore and is run by several Australian nationals.
We can't win over the people in Iraq to see things the way we see things. We are in a very foreign land in a very foreign region of the world.
ISTANBUL, Oct. 9 — Turkey took a step toward a military operation in Iraq on Tuesday, as its top political and military leaders issued a statement allowing troops to cross the Iraq border to eliminate separatist Kurdish rebel camps in the northern region.
The Kurds want their own country. Who can blame them for that?
Mr. Erdogan is under pressure from Turkey's powerful armed forces and the opposition to take action against rebels of the outlawed Kurdistan Workers Party (PKK) after they shot dead 13 soldiers on Sunday near the Iraqi border.
Iraq's government said that a recent security accord with Turkey was the best way for dealing with PKK attacks.
Turkish Defence Minister Vecdi Gonul said parliament would need to authorize any large-scale military operation -- a scenario most analysts say remains unlikely -- but he said such permission was not required for limited, "hot pursuit" raids.
Will the Turks gradually edge up what they do in Iraq and start with smaller hot pursuit incursions?
Washington, DC, October 4, 2007 - New data released by the IRS today offers interesting insights into the distributional spread of the federal income tax burden, new analysis by the Tax Foundation shows.
Summary of Federal Individual Income Tax Data, 2005 (updated October 2007)
Number of Returns (thousands)
Income Taxes Paid
Group's Share of Total AGI
Group's Share of Income Taxes
Income Split Point
If you want to break into the top 1% club then you'll have to aim for $365k per year. But remember, unless a recession happens by the time you get up to that level the threshold for top 1% membership will have risen.
Growing inequality is a boon for federal tax collections because the higher income people are taxed at higher percentage rates. The same dollar earned by a high income person nets the IRS much more in taxes collected than if a lower income person in a low tax bracket earns that dollar. The top 1% alone paid almost 40% of total federal income taxes. This is why such a big chunk of the electorate isn't strongly opposed to more federal spending. They know they won't be the ones paying for it.
The table above shows that the top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent). The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.
The IRS data also shows increases in individual incomes across all income groups. Just as the highest earners lost the biggest percentage of their incomes during the recession of 2001, so they have prospered the most as the economy has continued to rebound. In sum, between 2000 and 2005, pre-tax income for the top 1 percent group grew by 19.1 percent. In the same time period, pre-tax income for the bottom 50 percent increased by 15.5 percent.
Will we reach a point where the top 1% are paying half of all income taxes?
You can see the full report here.
Besides, is honor truly at stake in Iraq? Honor is not the same thing as pride. Our pro-war stalwarts have confused the two, which is understandable. As British writer Dorothy Sayers observed: "The devilish strategy of pride is that it attacks us, not in our weakest points, but in our strongest. It is pre-eminently the sin of the noble mind."
Why? Because the noble soul accepts the moral duty to sacrifice oneself for a higher goal. Isn't that what surge advocates are doing? In their minds, likely yes. The trick comes in discerning whether the noble aspiration is motivated by pride or humility. Pride says that the ego can accomplish anything it wants to and that limitation is no barrier for the human will. Humility accepts finitude as part of the human condition and is unafraid to accept reality and the limits it places on what we can do.
Pride involves lying – first to oneself and to others. Humility requires truth.
I think it acceptable (and even good) to feel pride at one's accomplishments. As compared to Dreher's usage of the term "pride" that idea of a feeling of accomplishment seems a more consistent usage with at least some of the dictionary definitions of "pride". I also do not think an accurate feeling of pride over past accomplishments tells us we can accomplish anything we desire to do. Pride over past accomplishments needn't lead to hubris. So I take issue with how Dreher labelled the categories in this typology. However, you can pride yourself about something you can't actually do and then refuse to admit you can't because you don't want to lose status as you admit your lesser ability and that you made a mistake. That seems to be where Bush and his supporters are at this point.
Bush and company have overestimated the efficacy of the US military. They've also overestimated the appeal of Western and, in particular, American values. They are promoting a form of liberal universalism. But, no, these values do not hold universal appeal.
Bush and his supporters won't admit the truth on Iraq (that those American soldiers are dying for no good reason) because, first and foremost, they do not want to admit they made a huge mistake. Second, and probably less important in most of their minds, they don't want to admit that liberalism (whether the pure left variety or the hawkish neocon variety or other) does not have universal appeal. They've got too much invested their wrong decisions and so we have to lose about 100 soldiers a month and have lots more come back permanently damaged in mind and body.
As Christians, the Comannys had learned to keep a low profile. They even stayed in their house after many Muslim neighbors fled the daily chaos when sectarian bloodshed between Shiite and Sunni militants broke out in 2006, making this one of Baghdad's most embattled districts.But the hand-scrawled note at their door was the final straw. The message commanded the family to select one of these options:
-- Convert to Islam.
-- Pay a fee of nearly $300 monthly for "protection."
-- Leave the area.
Failure to comply would result in death.
The protection money is a large sum as measured by Iraqi wages. Also, there's no guarantee that the money will really buy protection. So the Christians have to flee to relatively safer areas in Iraq or try to find a country they can flee to. Taking flight is expensive. Once they arrive in a new area they lack jobs and a place to live.
The United States government and the cheerleaders for the war set in motion the events that caused this to happen. The Christian women now must cover themselves in burqahs and can't go to places they used to go or work at jobs they used to have. All the Christians who remain live in fear. Christian George W. Bush made this all possible.
The number of Christians is dwindling and would dwindle much more rapidly if Western nations would let them in.
While meaningful numbers are difficult to come by, the last Iraqi census, conducted in 1987, counted 1 million Christians, although many fled after the United Nations imposed sanctions in the 1990s. Today, national aid groups estimate that between 300,000 and 600,000 Christians remain among an estimated 25 million people.
The US government ought to help the smaller minorities in Iraq move to safe havens.
Read the whole article.
A little bit of reality seeps into the Bush Administration's view of the world. Will any neocons denounce Bush as a traitor for abandoning the fantasy of converting the whole world to democracy?
The secretaries of state and defense and a squadron of other U.S. officials head to Moscow next week for a series of top-level meetings. They will discuss missile defense, a conventional forces treaty and the next step in nuclear arms cuts.
Not on the official agenda -- the future of Russian democracy.
In watching Russia's slide toward authoritarianism, the Bush administration once considered the ultimate test to be whether President Vladimir Putin voluntarily gave up power in 2008 as promised. But this week Putin shrugged off U.S. warnings and signaled that he plans to keep power by becoming prime minister, once again surprising an administration that has now all but abandoned hopes of influencing Russia's internal direction.
What happened? Did the Bushies run out of hubris pills?
Also, if Russia is destined to continue to become less democratic do we need to follow the neocon logic and conclude that of course the lack of democracy and freedom will lead to Russian frustration and terrorism? Do we need to start treating the Russians like terrorist suspects because they lack democracy?
What, you ask "But what about Islam as the root cause of Muslim terrorism? What does democracy have to do with it?". Hey, I'm just trying to follow the logic of Bush and the neocons (and not a few liberals) to its logical conclusion. If lack of democracy causes terrorism and the spread of democracy is necessary in order to stop terrorism (and does Condi Rice still believe this?) then the Russians are on the road to terrorism. Watch out Finland.
Libertarianism is very much a fringe movement in American politics. Yet enough non-Democrats are sufficiently disgusted with Bush and repulsed by the Republican front runners for President that Texas libertarian Republican Congressman Ron Paul that he raised $5 million in the third quarter of 2007.
WASHINGTON — Rep. Ron Paul's presidential campaign reported today to have raised $5 million in the third quarter of this year, a sum suggesting that the Lake Jackson Republican's Internet-driven campaign continues to attract intense support despite his low standing in the national polls.
The libertarian-leaning Republican has drawn media interest and a group of devoted followers, in part because of his outspoken opposition to the Iraq war, which has set him apart from other GOP presidential candidates.
The Iraq war is a pointless waste. We have no national interests to defend there. Paul wants out and he is opposed to illegal immigration. So for paleocons and the non-open borders libertarians (and there are plenty such people) Paul's candidacy is attractive.
True, $5 million pales in comparison to the $27 million Hillary Clinton raised this past quarter or the $100 million she and Barack Obama are each expected to raise this year. But Paul's haul isn't far behind the far-more-established John Edwards' $7 million for the third quarter.
And get this: Ron Paul's $5 million is about five times what former Arkansas Gov. Mike Huckabee raised last quarter, despite all his enhanced publicity springing from a second-place finish in the Ames straw poll.
I'm skeptical of Paul's ability to win in a general election because as near as I can tell it sure looks like the welfare state is popular with the majority of the voters. Otherwise conservative Republican farmers support their farm subsidy pork. Lots of retired Republicans support Social Security and Medicare. Real limited government libertarianism is supported by a pretty small minority of the electorate.
Update: What is with Rudy Giuliani? He regularly interrupts public appearances to take phone calls from his latest wife. Can someone so nutty win the Presidency? Of course, George W. Bush won. But back in 2000 he tried to act sensible. Rudy can't be bothered. We seem to be looking at a President Hillary future.
I'm so glad I do not work as the press secretary for President Bush. I couldn't stand to justify the twists and turns and contradictions of George W's policies in the Middle East. Um, since the United States has taken on a missionary war to spread democracy around the world out the barrel of a gun shouldn't the US accede to the wishes of democratically elected Shias to not ally the US with not-democratically-elected Sunnis?
BAGHDAD, Oct. 2 -- The largest Shiite political coalition in Iraq demanded Tuesday that the U.S. military abandon its recruitment of Sunni tribesmen into the Iraqi police, saying some are members of "armed terrorist groups" and are engaged in killing, kidnapping and extortion under the guise of fighting the insurgent group al-Qaeda in Iraq.
The statement by the United Iraqi Alliance, the Shiite bloc of Prime Minister Nouri al-Maliki, is the most direct rebuke to a policy that U.S. military officers hold up as one of their most important achievements over the past year.
The United States is ignoring the wishes of the Shia majority. Does the Bush Administration now believe that thwarting the desires of the majority is sometimes morally acceptable policy? My guess is they've lost some of their faith in democracy but aren't keen to go on record about this. They claim moral legitimacy for their crusade based on the moral superiority of democracy in all cases. Their public profession of faith in democracy as the universal balm for stopping terrorism makes their current Iraqi policies a bit difficult to reconcile with their faith.
PESHAWAR, Pakistan -- Pakistan's government is losing its war against emboldened insurgent forces, giving al-Qaeda and the Taliban more territory in which to operate and allowing the groups to plot increasingly ambitious attacks, according to Pakistani and Western security officials.
The depth of the problem has become clear only in recent months, as regional peace deals have collapsed and the government has deferred developing a new strategy to defeat insurgents until Pakistan's leader, Gen. Pervez Musharraf, can resolve a political crisis that threatens his presidency.
Meanwhile, radical Islamic fighters who were evicted from Afghanistan by the 2001 U.S.-led invasion have intensified a ruthless campaign that has consumed Pakistan's tribal areas and now affects its major cities. Military officials say the insurgents have enhanced their ability to threaten not only Pakistan but the United States and Europe as well.
Pervez Musharraf is busy trying to get elected. Read the whole thing.
Musharraf reminds me of Putin. Musharraf is also changing his position in the government (giving up one title while keeping another in his case) just as Putin is going to shift from President to Prime MInister. Musharraf is also going to replace himself with an ally for a position he is giving up.
ISLAMABAD, Pakistan, Oct. 2 -- Pakistani President Pervez Musharraf on Tuesday picked his trusted former spy chief to succeed him as leader of the army, and signaled that exiled former prime minister Benazir Bhutto would be able to return to Pakistan this month without facing charges.
Taken together, the moves bring greater focus to an emerging political arrangement in which Musharraf will have to share power with others, rather than wield it almost single-handedly as he has for eight years. They also indicate that Musharraf is increasingly confident he will win a new term in elections Saturday, despite a tumultuous year in which his popularity has sunk to new lows and his ability to hang on to the presidency has often been in doubt.
So how can he win an election while his popularity is sinking to new lows?
It has long been assumed that President Vladimir Putin, whose term of office expires next March, would prefer to remain in power. But how he might try to do so while operating within the terms of Russia's constitution has been a source of endless speculation. On Monday, Putin provided what may be the answer, when he announced that he would head the list of the ruling United Russia (UR) party in December's election to the Duma, the lower house of Russia's parliament.
From his position in Parliament (and his party is expected to win by a landslide) Putin will most likely get himself appointed Prime Minister. Also, he'll choose a Presidential candidate who will accept a subordinate position and take his orders from Putin.
Some might think that this is democracy and democracy is good. Um, well, since Russia's voters can't watch independent TV news shows and since large chunks of the print media are also under control of Putin's allies it is not like the voters can know much about what is really going on or why they might want to vote for an opponent of Putin. Plus, simple majorities are not imbued with great wisdom and America's Founding Fathers make special provisions in the design of the US constitution to try to at least partially compensate for that fact. Democratic dictatorship is a real phenomenon. It is a bigger problem in societies such as in Russia where the majority doesn't feel strong support for a free society. Also, the Russians aren't big on what is called social capital. They don't form lots of independent organizations that serve as checks on government.
What I want to know: When Russian oil production starts declining at a moderately rapid rate, energy costs rise for keeping warm in those cold Russian winters, and living standards drop what will the Russian people think of their elected dictatorship and what, if anything, will they do in response?
Senator Barack Obama, the Illinois Democrat, raised at least $20 million over the summer, more than $19 million of which could be spent on the primary — showing that he continued to be a formidable fund-raiser. It was unclear whether he still led in fund-raising, as he did this spring, because Senator Hillary Rodham Clinton did not release her tally. (Her aides had said that they expected to raise a similar amount.) John Edwards raised $7 million, and Gov. Bill Richardson of New Mexico raised $5.2 million.
By comparison, Mitt Romney, who has been one of the strongest Republican fund-raisers this election, raised only about half of what Mr. Obama raised this summer, according to a senior adviser who was granted anonymity to discuss the campaign’s finances. The adviser said that Mr. Romney brought in about $10 million from donors, and that he used more than $6 million of his own money for his campaign.
President Hillary will start the troop withdrawal in 2009 if Congress doesn't force the issue in 2008. The lady that George W. Bush and various Republican front runners are working to elect as President wants to start pulling US troops out of Iraq.
"I've reached the conclusion that the best way to support our troops is begin bringing them home," the New York senator and former first lady told CNN's "Late Edition with Wolf Blitzer."
"I don't believe we should continue to vote for funding that has an open-ended commitment, that has no pressure on the Iraqi government to make the tough political decisions they have to make, or which really gives any urgency to the Bush administration's diplomatic efforts."
HANOVER, N.H., Sept. 26 — The three leading Democratic presidential candidates refused on Wednesday night to promise that they would withdraw all American troops from Iraq by the end of their first term, saying in a televised debate here that they could not predict the future challenges in Iraq.
People don't like failure. Some support the Iraq war because they don't want to admit failure. Democratic party candidates don't want to get painted as quitters and as advocates of failure. They don't come across as macho enough and so they are sensitive to the need to seem tough. Then there are the Republicans who want to save face and not admit just how badly their preferred policy decision really has failed. They don't want t admit to their very real failure. So we are in this sorry state in Iraq where about 100 American guys have to die there every month so that lots of people can posture as tough back home.
Fred Thompson, Mitt Romney, and other Republican candidates for President have a dwindling chance of getting elected the longer the Iraq debacle drags on. George W. Bush is effectively working for the election of Democrats at this point. The Republican Party (and a bunch of stupid people who fancy themselves conservative pundits who are war boosters) has reached intellectual and moral bankruptcy over Iraq.
Most Americans oppose fully funding President Bush's $190 billion request for the wars in Iraq and Afghanistan, and a sizable majority support an expansion of a children's health insurance bill he has promised to veto, putting Bush and many congressional Republicans on the wrong side of public opinion on upcoming foreign and domestic policy battles.
The new Washington Post-ABC News poll also shows deep dissatisfaction with the president and with Congress. Bush's approval rating stands at 33 percent, equal to his career low in Post-ABC polls. And just 29 percent approve of the job Congress is doing, its lowest approval rating in this poll since November 1995, when Republicans controlled both the House and Senate. It also represents a 14-point drop since Democrats took control in January.
Since the last BBC/ABC News poll in February, the number of Iraqis who think that US-led coalition forces should leave immediately has risen sharply, from 35 to 47%, although that does mean that a small majority - 53% - still says the forces should stay until security has improved.
But 85% of Iraqis say they have little or no confidence in US and UK forces.
If we pull out of Iraq then the Shias won't want to fight in the Sunni zone or the Kurdish zone. The Sunnis won't want to fight in the Shia zone or the Kurdish zone. The Kurds won't want to fight in the Shia zone or the Sunni zone. So Iraq will de facto partition. It might be possible to negotiate a confederation between the zones. Or maybe not. But the fighting will go way down either way.