The Illegal Immigration Debate
All during
the winter of '05 and spring of '06 the Big Media has been putting up story after story
about high gas prices. They never fail to detail Exxon CEO Raymond's pay and
follow it with "while Americans are paying record prices" or similar.
The high pay amount annoyed me at first, but is there an actual point here? From what I could find on the web, in 2005 we used an average of 320-330 million gallons of gas per day, or about 120 billion gallons for the year. CEO Raymond's pay for 2005 was $49 million. The media make a big deal about a $400 million retirement package, which they break down as his regular salary (since when did salary become part of retirement?), a $100 million lump sum, and $250 million in restricted stock options. It IS a ridiculously high amount no matter how you slice it, but what is the real impact on me?
If Exxon's CEO were paid nothing at all, how much would my price for a gallon of gas change for 2005? Let's take his 2005 salary and even add in his one-time 2006 retirement lump sum:
($49 + $100) million = $149 million = 14.9 billion cents.
Now divide by the 120 billion gallons of gas used in 2005:
14.9 billion ÷ 120 billion = 0.12 cents, or 1 whole penny for 9 gallons.
WOW, now that's worth getting hopping mad about, huh??? Golly, think of all the things I could do with an entire PENNY per fill-up!! And without the one-time retirement lump sum the number falls to 0.041 cents per gallon. You'd probably spend more to buy one candy bar than Exxon's CEO cost you in a month of fill-ups.
Supposedly the CEOs
at the other major oils were paid far less, but even if they had been paid the same
and we also paid all of them a salary of zero, since there are 5 major oils the
grand savings would be 5X bigger or a monstrous 0.2 cents (5 x 0.041
cents) per
gallon. "Don't spend it all in one place".
The second curious
thing is that I never heard a single reporter or pundit bring up the possibility
that the man actually earned at least some of his pay. I'm not saying he did
because I don't know, but why is it not even considered?
Did he perhaps institute transport
improvements / refinery upgrades / lower overhead cost that made Exxon more
efficient, lowered the production cost, and put them at a competitive advantage?
Would we be happier if he got paid little, and we paid a penny or two more
per gallon because he did a poor job?
My biggest complaint is that none of the journalists seem inclined to do any research, let alone math. They go with whatever story angle has the most gut-appeal, forget any attempt at being realistic or (god forbid) informative! I swear that an IQ over 90 must be a DISqualifying factor for working in a network newsroom.
The next most
unnerving thing is what politicians consider "answers" to the problem. Topping
the list is Chuck Schumer and his "let's break up the big American companies
because we didn't have these high prices years ago when there were more
companies". Hmmmm. OK, and what was the price of crude oil years ago? And
just how are much smaller American companies, regardless of how many there are, going
to compete against the foreign giants on the world oil market? Or does he
fantasize that our oil companies somehow set the price of crude in worldwide
conspiracy? 
[see rant Oil Prices on the
Details page]. Lordy, let fools like this have their way and $3 gas is going to
seem an incredible bargain.
Plenty of republicans follow a close second with their bellowing for (yet more) congressional investigations into fuel prices. How many of these useless dog & pony shows have there been in the past 20 years? Besides, the FTC constantly monitors the oil industry and has never found anything except normal market forces. Of course, voters aren't satisfied unless the politicians are "doing something" even if it is really just running in circles, so it's a good question as to where the fault lies for this sort of nonsense. The real trouble starts when politicians "do something" that runs counter to sound economics just to pander for votes.
If one more pundit calls for a Manhattan Project for cheaper gas I'm going to hurl. Not only is it a stupid analogy (was it to find a cheaper atom bomb???), but fuel cost isn't a matter of lacking technology ... it's basic physics and economics, and the alternatives have been around for over 60 years. Alternatives don't lower the cost of fuel, what they do is provide a plentiful supply at the higher prices.
Besides, it is all
self-inflicted. No one held a gun to the public's head and forced them to buy
SUVs and commute 30 miles to work. Folks who make poor choices which later come back
to bite them in the rear need to go scream at the mirror, not the corporations
or the government. McDonald's didn't cause obesity and
Exxon didn't cause $3 gas, consumers did. 
But it's soooo much easier to blame "them", isn't it?
This exact scenario of demand catching up with supply,
resulting in wildly fluctuating oil prices, has been predicted since the early
90's. As far as I can see, Big Oil managed to put off the day of reckoning for a
decade by improving supply beyond what was expected back then. So by all means
we should slam them mercilessly.
Other nations of the world are
claiming a bigger share of the resources, leaving less for us.
Time to quit whining and start getting used to it.
Who hasn't heard this in one form or another? W*M kills small towns, W*M costs the community big $$ because they don't pay their workers enough, W*M carries nothing but crummy Chinese junk, W*M causes cancer .... OK so maybe not that last one. But let's take an honest look at the others.
>>> WalMart kills small towns / businesses.
First off, I live near a small town (Mountain Grove, population ~5000), and have seen it 6 years before W*M and 10 years after W*M. This is my experience with regard to my town. The town was in fairly good shape before W*M, a little worse for wear but stable, just pretty much stagnant. All the storefronts on the main square were occupied, and mostly sold the basics. There were two grocery stores.
And after the W*M Supercenter opened? For a few years very little changed. Then lots of things started changing. The town spruced up the square. Two new small shopping centers were built. Some of the "basics" stores on the square closed and were immediately replaced by better-than-basics stores. A new discount chain store (Dollar General) opened. A small hardware store on the square dropped basic appliances and expanded into lawn & garden equipment sales & service, and a brand new home center & hardware store went up next to W*M. Two existing banks expanded and two new banks built branches. The town had to add two stoplights (it had one) due to increased traffic. A big new car/truck dealership opened about 5 miles outside town (Wehr Motors). New houses started popping up all around the edges of the existing town. The one grocery store on the square is still doing fine, the other expanded into a big new building right across the road from W*M. I cannot keep track of the new construction anymore, there is so much.
By contrast, there are a couple of small towns about 12 and 20 miles away that were similar in size and condition to MG 16 years ago, a tad tired but still chugging along. Only Mountain Grove got a W*M. Go to either of the other towns today, and they look very little different than they did 16 years ago, maybe just a little more in need of some paint.
If this is death and devastation,
BRING IT ON, BABY!
So what's the deal
with this situation? W*M obviously did not kill my town. But neither can I say
it is responsible for the prosperity. What I do know is this: without
W*M my budget covers very little beyond the bare necessities. With W*M I have a good bit of money left over after buying the necessities, so I can
buy some needed but not strictly necessary things, many of which I buy from
other stores. W*M has significantly raised my standard of living.
What have the critics and complainers ever done for me??
>>> WalMart costs the community because it underpays its workers
OK, and before there was W*M where did these people work? At the small stores, yes? Maybe your community is different, but around here
W*M pays higher wages than the small stores, and provides better job stability.
W*M provides at least discounted insurance benefits, the small shops generally provide nothing at all.
W*M provides a retirement plan and matching contributions, the small stores provide nothing at all.
In my specific town and its neighbors, there are as many or more small businesses than there were before, so it is not as if W*M harmed total employment.
So where were all
the "studies" and pious wailing when
some small businesses were costing the community more by underpaying those
workers worse?? 
I smell a big rat with
these people suddenly screaming about how W*M is inadequate while they
conveniently ignore the issue that, by their own yardstick, it was worse before
and yet they stayed silent. It is more than being hideously dishonest ... "Hidden Agenda" comes strongly to mind.
I suspect that some bunch sees a big pot of gold they might be able to get their
hands on if they can come up with enough phony morality to cover their greed,
and fool enough well-meaning people into joining the crusade.
>>> Walmart carries only cheap Chinese junk
First off, I find a
wide variety of products made in many places, USA included. But the main point
is that W*M is just a
store; it can't make anyone buy anything. If you don't like the offerings or you
don't like the service, you simply vote with your feet. Ten, maybe 15 years ago
W*M had a major Buy American campaign with big displays of union-made goods at a
good discount compared to other stores. Yet it soon went away because it
didn't sell. WE the consumers determine what any store, including W*M,
carries so blaming them for the selection is ludicrous nonsense.
Besides, I have bought a number of the
low-priced Chinese made small appliances and have found them to work reliably
and represent an excellent value.
I refuse to join the bandwagon of using government to force what kind of goods I think people should buy. It is like freedom of speech: I must support others' freedom to buy what they choose, lest my freedom be restricted.
The Illegal Immigration Debate
I've watched the great debate about illegal immigration
for
some time now, and the thing that sticks out most glaringly is the huge amount
of nonsense arguments. Anytime a subject leads to this much phony moralizing and
other smoke-and-mirrors tricks, it means a lot of people are trying very hard to
obscure the real issues.
"Immigrants take jobs Americans won't". Only semi-true. Americans won't take many of these jobs at the prevailing wage. But the prevailing wage in these job areas tends to be low precisely because the demand for workers is often being filled by illegals willing to work for far less. Supply and demand - lower the supply and wages must rise to fill the demand. The solution to low wages is not more wage laws; it is less oversupply of laborers, plain and simple. The hidden downside is, of course, that higher wages generally raise the cost to consumers, since as a cost of doing business it is passed along in the product or service price.
"Without cheap immigrant labor everything will cost too much".
If you're talking about legal visa workers, then getting rid of illegals changes nothing and this argument doesn't even apply.
If you're talking about illegals, it is completely ludicrous to say we must keep them illegal and ignore border control for the supposed cost savings (see "Immigrant Farm Labor Cost" in the Myths section).
And if you're talking about legalizing the illegals, once they're legal they will no longer be cheap, so the argument doesn't make any sense here either.
Bottom line, the
cost argument with regard to illegals is utter nonsense.
The
left presses for unions & laws raising wages for unskilled and semi-skilled
workers, while also pressing to greatly enlarge the official labor pool by
legalizing huge numbers of illegals. These two things are wildly inconsistent.
Either the left has not one working brain cell, which is certainly not true, or
they have a hidden agenda and are trying their best to keep it hidden.
Raising wages significantly for a job lowers employer demand for that job. Business paying more in costs must either raise prices, thus reducing sales, or use more automation to reduce per-unit cost. Either way, demand for the higher cost labor is less so the available jobs fall.
A policy of enlarging the labor pool while simultaneously lowering the available jobs obviously means higher unemployment. The higher drain on the state unemployment insurance funds, which are funded by a tax on employers based on their workers, then requires a higher tax assessment. Since employers have the same or fewer workers, the tax cost per worker must rise, further discouraging hiring.
Increasing the unemployment
rate raises the probability that a longtime citizen will become unemployed
and/or have more trouble finding a job. It does not have to be a matter of an
immigrant directly taking a longtime citizen's job for the impact to be felt,
though the left argues it this way to dodge the statistical realities.
Increasing the labor pool is not in the interest of the union rank-and-file, since it pushes down wages for nonunion labor and makes unions even more uncompetitive, plus it makes negotiating higher union wages that much more difficult.
So why
is it that unions and Democrats are so in favor of a large jump in low-end labor
pool numbers by easy legalization of present illegals? It is entirely against
the interests of their supposed constituents, yet they spend great efforts at
making obtuse moralizing arguments and demonizing their opposition. The leaders
are not stupid, so my best guess is that it is really about gaining or
preserving power for those leaders, and hiding the reality from their
constituents. 
Here are some strong possibilities:
The Democrats gain a big new voting block in the newly-legalized. First, they are thankful for being handed all the benefits of citizenship without having to go through the work. Second, their unemployment problem becomes much less, since they can now openly compete and not be concerned about being found and deported.
The Democrats can hold onto this block more easily, since most will be in the higher-unemployment end of the labor pool, thus much more dependent on government benefits. As a bonus, the Democrats will have all low skill people looking to them for jobs programs to pay their way to higher skilled jobs and an escape from the high unemployment that the Democrats themselves created.
Even though the Democrats
harm their existing core constituency with their immigration policy, they know
they can get away with it because people at the low end have nowhere else to
turn. They hold their old block and they gain a new block at the old block's
expense.
It is all gravy for the leaders.
And what about the unions? What are they getting out of the deal so that they are supporting the Democrats in a policy so clearly not in the interest of their members?
First, even though legalization is not beneficial to the existing membership, backing Democrats helps secure the power of the union leaders because the Democrats will stand behind the unions and preserve their positions of influence. Republicans are a threat to union power.
Second, a large, unhappy nonunion workforce facing poor job security is much easier to organize. Happy folks with stable jobs don't need unions, so creating suffering is to their advantage.
Third, the Democrats will
make it easier to organize, and even though this will drive down overall jobs
by raising costs, the union leadership benefits by gaining dues-paying
members. The existing members may not even realize that their leaders sold out
their chance for better wage negotiations in the scheme to enlarge membership.
But even if they do, what is their option? They sure can't look to the
Republicans for help. So it is all gravy for the union leadership.
From the right, the argument is less underhanded but still presents a threat to low
end labor. The Republicans are open about wanting to change
unregistered immigrants to registered ones with a temporary time of stay. The
aim is simple: satisfy the outcry from their constituents about security, while
not totally giving up the supply of cheaper labor. They make some half-hearted
claims about wanting to preserve jobs for Americans.
While this is theoretically possible with
tight control of the borders and employment, they always have the option of
granting sufficiently large numbers of guest worker permits to suppress wages in
some industries. Still, at least a viable mechanism would be in place for
actually controlling the problem, a much better option than the self-serving, do-nothing-about-the-true-problem approach of the Democrats. A small lie versus a big one.
All
the moralistic arguments concerning illegal immigrants are complete garbage,
just high sounding smokescreens to keep everyone from focusing in on the true issues.
"They came here to better themselves." Well so what, who ever came here to make themselves worse off??? In the first place it is not the responsibility of the U.S. to provide an avenue to betterment for anyone on the planet who wishes it. But beyond that, is it a reasonable approach to immigration control, making the only requirement a wish to better oneself? Of course not, so this argument is totally bogus on its face.
"But they've been here for years, behaved themselves, and had kids." They entered with full knowledge of their risk of being deported. They accepted that risk to begin with. To whine about it when their luck runs out is worse than baseless. Suppose I wish to better myself because I believe I can beat the odds at a casino. When I lose my gamble, should you be required to cover my losses? The argument is: if I get away with a crime for a while, I should get away with it forever. And it is not comparable to a statute of limitations, because being here illegally is the crime, not just entering, so the crime never stopped.
"They worked hard and
contributed." Should I have the right to use your car without your consent as long
as I fill the tank? Should you be
required to let me occupy a room in your house provided I sweep up and do the
laundry? Besides, they
worked for THEIR benefit, and any benefit to us was simply incidental. Trying
to turn it into some sort of high moral act is ludicrous.
"They have no home to go back to." Uhmmm, they had no home here before they came, and yet it didn't stop them. Why should it be any more of an impediment to returning?
"Sending them back is
inhumane." Aside from this being just a modification of bogus argument #2, it
is beyond melodramatic. Are they going to be imprisoned? Shot? Tortured? The
worst that happens is their standard of living becomes the same as it was when
they left. Besides, they can always register and come back as temporary guest
workers, which solves our problem and theirs. There isn't even an argument
here, it is just dumb.
The
correct answer is too obvious and simple for politicians to embrace, because it
does not directly serve them in any way: dry up employment for unregistered
immigrants, and control the allowed number of registered ones.
Facing the prospect of no future employment, the
unregistered will quickly deport themselves. They made it here by themselves,
all they need to do is reverse the steps, yes? Allow 6 months for any
unregistered alien to get registered in the guest worker program. Registered
workers may remain for the time period specified by the program, and have the
same path to citizenship as anyone else, no special privileges. After 6 months,
crack down hard on illicit employment. Anyone caught unregistered gets deported
and banned from the registered worker program for 10 years.
It is so simple: play by the rules or get kicked out of
the game. The whole liberal philosophy of rewarding bad behavior is
beyond stupid. 
And how do you control the employment? Maybe take a cue from how mutual funds and banks handle electronic transactions. While not perfect, it is very good, and very fast.
Every business already has a taxpayer ID number (TID). If you want to be employed, you need either a valid SS number or Guest Worker (GW) number. A valid number must already be in the database, along with other validating information.
When someone applies for a job, the employer keys in its TID, your SSN or GWN, and maybe some security code, and the origin of the request must be valid. It can be done on a touch-tone phone. If your identifying number is bogus, you cannot be employed.
If the number is valid, your associated information must match reasonably well: existing or previous address, phone number, or whatever makes sense. Virtually all businesses have internet access, and the very few that don't can do it by mail. The information must be fairly consistent with what is already in the database - database returns yes/no, never data. If the database indicates that your number is in use at another business, you should be able to provide some basic information about that employer as a check. If things don't match adequately, the employer can still employ you temporarily while you straighten out the issue with INS. Note: think about how Google lists results based on how well each result matches the keywords; the quality of match can be set anywhere, minor misspellings aren't an issue.
Hiring people off-the-books means stiff fines and possible jail time for the employer. The penalties for skirting or defrauding the system would need serious teeth. It is not sensible to enforce this against individuals unless someone complains and provides some evidence, same as the present issue with individuals hiring people and not withholding taxes. Hiring the neighbor’s kid to mow the lawn is not the problem, a lawn service hiring dozens of unregistered day laborers is.
It does mean no more hiring day laborers directly. Day laborers would have to work through a temp agency that verifies their numbers first. But this is trivial, a non-issue. This would be the proper channel for that lawn service.
For the vast majority of people, the check would be routine and take a few
minutes, but it would be very hard to forge a bogus identity or even steal an
existing one. Being fast and easy and applied to everyone eliminates the usual
lame discrimination complaint. If you try to steal an existing identity, whoever
is on record first is bound to be the true user - you get your SSN at birth or
upon naturalization (proof already in place), and you'd need to have all your
identification correct and verifiable when you apply for your Guest Worker
Number (GWN).
The database should be write-only,
so that all modifications remain as an audit trail even if some entries have
been invalidated.
Notification of any pending change goes to the last address & phone of record
(just that a change is pending, not the data).
If you’re trying to steal the identity, the existing user has the chance to
prevent it. There are very few issues with stolen identities among mutual fund
customers, yet accessing your accounts is fast and easy. Besides, a hitch
doesn't do anything but require you to contact INS. Much as I dislike
intrusive government, this is one of the few places where, properly monitored, it can
serve a useful purpose. The actual database management may well be carried out
by the private sector for cost efficiency (not to mention competency) reasons.
And privacy nuts ... get over it; all of this information already exists in
various places. Besides, as long as
the database only corroborates the information you supply and never
divulges any, it is not a privacy issue. Consider that the employer has all of
the same information on your filed application. What you mean when you say
"privacy" is actually anonymity. However, if you expect your identity to
be protected then anonymity is not an option, since if nobody knows who you are,
they also cannot know who you are not.
How many times have you been given the impression that global warming is all the fault of greedy, profligate Americans sucking up the world's resources and spewing garbage? And how if we just accepted some severe restrictions on our lifestyles, which is our duty by moral imperative, the problem would be solved?
Well, making movies and pontificating about moral
imperatives is all very easy. But the politicians and pundits proposing to solve
global warming within the USA with taxes & regulations , hybrid cars, fluorescent
light bulbs and so on, are either very misinformed or very dishonest.
From Energy Information Administration data, worldwide CO2 production due to fossil fuels from 1995 to 2005 in million metric tons (MMT) breaks down like this for the major producers:
| CO2 in Million Metric Tons | |||||
| REGION | 1995 | 1998 | 2000 | 2003 | 2005 |
| USA | 5,289 | 5,581 | 5,823 | 5,813 | 5,957 |
| Europe | 4,272 | 4,434 | 4,445 | 4,622 | 4,675 |
| (China + India) part of Asia Total | 3,707 | 3,867 | 3,907 | 5,012 | 6,488 |
| Asia Total | 6,559 | 6,910 | 7,252 | 8,678 | 10,362 |
| World | 21,651 | 22,901 | 23,193 | 25,780 | 27,044 |
These raw numbers are not very informative, but one thing is clear: the emissions of the USA and Europe have not changed that much whereas the emissions of Asia have increased dramatically. In fact, as of 2005, China and India together already emit more CO2 than the USA. If we chart the emissions of the major players and world total, a stark picture emerges:
The world CO2 emission had been on a steady climb until around 2002 when it accelerated dramatically.
The emissions of both Europe and USA have been nearly flat throughout the period, and nearly parallel. Interestingly, this totally debunks the common "knowledge" that the Europeans have been careful stewards of the planet while Americans went on a wasteful binge. It also means that the steady rise before the sudden increase was also happening mostly outside the USA.
The emissions of Asia are the big driver in the world CO2 emissions rise, lead by China and India.
As the chart clearly shows, the big story lies in the how the emissions have changed in the second half of the period. Look at the increase in emissions for several 5-year periods to get a feel for not just how the emissions have increased, but how the rate of increase has changed:
| Rise in CO2 By Region for Several 5-year Periods | Rise 1995 - 2000 | Rise 1998 - 2003 | Rise 2000 - 2005 | Change of Rise Per Year '00 to '03 | Change of Rise Per Year '03 to '05 |
| USA | 534 | 231 | 133 | -101 | -49 |
| Europe | 173 | 188 | 230 | 5 | 21 |
| (China + India) part of Asia Total | 200 | 1,146 | 2,582 | 315 | 718 |
| Asia Total | 693 | 1,768 | 3,110 | 358 | 671 |
| World | 1,542 | 2,879 | 3,851 | 446 | 486 |
Several key issues stand out dramatically:
In the last decade USA emission increase slowed greatly, becoming almost flat and trivial compared to the world total increase.
European emission increase, while small, continued a slow but steady climb and became higher than the increase of the USA, which somewhat begs the question of what the Kyoto Protocol they signed with such fanfare is really worth.
Asian emission increase exploded, primarily due to China and India. As of 2005, these two countries alone not only emit more CO2 than the USA, but their increase has become nineteen times higher. What is far worse is that the rate of increase in emission doubled between 2003 and 2005 - not only are the emissions increasing, but the amount of increase is also rising rapidly. Note that the rate of increase for (Asia total) became less than for (China + India) for 2003-2005, meaning other Asian nations recently slowed their rate of increase a little.
If we assume that the emission increase pattern of the last 5 years continues for another 5 years, what will the world CO2 emission be with and without the USA? I found the answer to this question both unexpected and shocking:
| PROJECTED 2010 Emissions based on 2000-2005 | Output | Percentage of World | |
| USA | 6,090 | 18% | |
| Europe | 4,905 | 14% | |
| Asia | 16,829 | 50% | |
| World 2010 | 33,873 | ||
| World 2010 without USA | 27,782 | ||
| World output 2004 | 27,186 |
World total CO2 emission in 2010 will be worse even
without the USA than it was with the USA in 2004.
The stark truth is that if we eliminated ALL CO2 emission in the USA, the
problem gets delayed by a whole 6 years. Put another way, we Americans can all commit
suicide and the polar bears are still toast, just 6 years later. If we suffer
huge taxes, regulations, and whatever else to cut our CO2 in half, we delay the
problem by a mere 3 years. 
I looked into gasoline as a contributor. Burning 1 gal gasoline yields 8.9 Kg CO2. 2004 gasoline consumption was roughly 120e9 (billion) gallons. 1 metric ton = 1000 Kg. So,
(120e9 gal) X (8.9 Kg/gal) ÷ (1000 Kg/MT) = 1.1e9 (billion) MT (metric tons) CO2 from gasoline.
1.1billion MT = 1100 MMT (million metric tons). So of the total 2004 USA 5900 MMT, 1100 was from gasoline or 18.6%.
If we doubled the national average gasoline economy (at the bleeding edge of possible but brutally hard & expensive), we could reduce our CO2 production by 9%. Worldwide CO2 2004 was 27000 MMT, so a 9% USA drop would be 2% of world, pretty much a non-event.
No matter what we demand of Congress, global warming is coming. Unless our standard of living falls drastically AND Asia agrees to give up trying to improve theirs, global warming is not going to slow down, let alone stop. Asking government to do the impossible merely shifts it to “baloney mode” where it spends lots of time and money on things that look good but aren’t going to work. The problem is NOT within the power of the USA to control. No amount of tax increases, regulations, hybrid cars, ethanol, or any of the rest of that stuff within the USA alone is going to make a substantive difference.
The point is NOT that we should
ignore the problem. It is that we need to avoid the trap of doing things that are not
actually solving the problem, while thinking that they are. Fooling ourselves
won’t change reality; it will only ensure that we are unprepared when reality
comes home to roost. We must either truly solve the problem on a worldwide
basis (good luck with that ) , or find ways to live with it before the crisis hits full force.
Links:
http://www.eia.doe.gov/pub/international/iealf/tableh1co2.xls
The annoyingly early start of the presidential election cycle has dragged up some of the old issues surrounding the Clintons, meant either to smudge them or paint the Republicans as narrow-minded. In that vein, it is time to bury the Lewinsky affair once and for all. We all know the song and dance surrounding the Lewinsky scandal: it was his personal life, Ken Starr and the Republicans were just fishing, it was a bunch of prudes upset about a little harmless sex, and so on. Carville spun it, the media mindlessly repeated it, and the average dolt-in-the-street bought into it.
The whole argument is BULL FRITTERS. The Lewinsky scandal had nothing to do with sex, personal life, or uptight prudes. The real issues were these:
Congress acted correctly in impeaching the President, which is simply the equivalent of holding a trial, and it also acted correctly in not removing him from office because the severity of his transgressions were not sufficiently serious as to present a grave danger to the nation. The system worked precisely as it was meant to.
I am not surprised that the Clinton Immune System shoveled out its pile of bovine excrement, but I am very disgusted with the mainstream “journalists” who merely repeated it rather than make clear what the real issues were. The usual excuses made to trivialize the issue are childish and without basis.
Why everything we "know" about jobs, dollars, and prosperity is WRONG.
Many politicians of both parties, union leaders and the vast majority of the
people-in-the-street put forth all sorts of populist "reasoning" about how the
key to prosperity in America is to take control of the corporations, restrict
global trade, bring jobs back from overseas and use government to force higher
wages. It is very sad and disturbing that so many supposed leaders are either
appallingly ignorant of basic economics or are shamelessly pandering to a
woefully uninformed public. Sorry, but anyone claiming that the key to
prosperity is jobs and dollars is clueless.
The factors that determine prosperity are productivity and efficiency. Productivity is how much can be produced with the materials and labor available, and efficiency is how well the materials and labor are being used constructively rather than sitting idle or being wasted. It is all about the "stuff", beginning and end of story. From the rant "Economic What-Ifs" in the Things Explained page, two basic equations of economics are
[2.0] (Amount available to consume) = (Total Economic Base) - (Amount fed back in to make it go) - (Amount put into nonproductive sectors).
[2.1] (Amount available to me) = (Amount available to consume) - (Amount everyone else is consuming).
Now think about how the following basic facts play out within our economy:
Our standard of living is measured by the things that meet our needs or wants: the materials and services we receive either individually via what we purchase, or receive in aggregate in the form of general living conditions, infrastructure, or public services.
No one can consume what is not available. Therefore, the overall standard of living is set by the pool of consumable goods & services (left side of [2.0]), and the only thing that jobs and dollars accomplish is how the pool is divided among the consumers.
Within the industrialized world, we have a full consumption economy; that is, there are no large reserves of cost-effective untapped resources, no large pool of unutilized labor, and no large amount of productive capacity that is unused. With minor exceptions, all that is available to consume is being consumed, and the limitation on the available pool is the ability to increase production faster than the cost (in material and labor) of that extra production.
Our economy is highly productive, in the sense that we have lowered the labor part per unit of production of both direct production and [Amount fed back in to make it go] by using updated technology and adequate infrastructure to the point where there is not a great deal of improvement to be had until newer technology is developed.
Our economy is also rather efficient, at least within the business community where competition is a force, in that the usage of materials and labor are carefully managed to minimize waste and avoidable losses. The one glaring source of inefficiency is government (including the legal system), where there is little or no competition and thus no incentive to monitor and trim wasteful practices. Government’s use of goods and services is part of the [nonproductive sectors] in [2.0], and the pay of government workers is in the [amount everyone else is consuming] in [2.1].
Every worker gets promised a certain amount to be taken from the consumable
pool (pay) regardless of whether his output contributes to the consumable
pool. Here is where the myth of jobs/dollars takes hold, because more dollars
(bigger promise) for one person or small group of people does lead to a higher
ability to consume. HOWEVER, since achieving more
total consumption from the pool without enlarging the pool is impossible,
raising wages economy-wide without improving net productivity or efficiency,
or reducing [nonproductive sector] losses sufficiently to cover the
promise being made accomplishes nothing but inflation.
What then is the real impact of some of the economic policies being bandied about by the politicians and others? What is the real impact of global trade on our standard of living? Answering this sort of question requires picking apart the effects of a given policy upon the basic equations above. It is not that hard, so let’s have at it.
Does importing manufactured goods help or hurt our standard of living? The populist argument is generally that if we forced these "high paying" jobs back here it would be beneficial to us all. While it sounds very appealing, it is based on the dangerous fallacy that what works for one will work for all. Consider:
First, a large portion of the manufacturing jobs lost to foreign producers involve fairly mundane items, such as clothing, shoes, small appliances, home electronics, auto parts, and similar that require a large amount of labor per unit of production. Second, the foreign producers use similar facilities and production techniques as would be used here because the basic manufacturing technology for these goods is standard and widespread, so there is limited productivity improvement that can be achieved in domestic facilities.
When we trade, we give away part of our consumable pool, or a promise of future part of it in the form of money, and receive in return a certain amount of consumables which get added to our pool. The domestic workers demand a significantly higher level of consumption (standard of living) for each unit of goods they return to our pool as compared to foreign workers. If we brought the same amount of production back home that we now import, the demand on the pool would be higher than what we were trading away yet the pool would be no larger, so the only way our new manufacturing workers could consume more than their foreign counterparts would be for everyone else here to consume less – a lower standard of living.
It gets worse. Since we do not have a large supply of untapped labor and these
manufactured items are labor intensive, the new manufacturing workers would
need to be stripped from other occupations that would remain underpopulated
for lack of available labor. Whatever part of the consumable pool these
workers provided before they switched to manufacturing must disappear without
labor to provide it. Since the new manufacturing workers are producing only
what was previously imported, the pool actually shrinks because they are no
longer providing whatever they used to do. So on two fronts the standard of
living must fall. And forget any notion of expanding any other part of the
economy because of the labor shortages. Where are the huge numbers of
healthcare workers that universal coverage will require going to come from?
But wait, there’s more! For every unit of domestic production, we skim off a significant amount toward bureaucracy, health & safety, regulation & inspection, pollution control and abatement, social safety net, and so on. All this new manufacturing, which remember merely replaces what was previously in the pool from trade, is going to trigger a greater withdrawal from the total output toward the [nonproductive sectors], leaving even less to be put into the consumable pool. On three fronts our standard of living falls.
Bottom line, reversing globalization as the populists promote would be
catastrophic to our standard of living, the exact opposite of their claim.
Some propose to solve a labor shortage by expanding immigration. But is
importing workers any different than importing goods? Actually, yes it is
different: it is far worse.
The newly imported workers will be paid (consume) similarly to the domestic workers in the same occupation so their output is no bargain, and all the [nonproductive sectors] losses apply to their output which is not true of imported goods.
When the economy slows down, it is fast and simple to reduce the importation of goods no longer needed, but immigrants are here to stay with all the associated nonproductive baggage such as healthcare, education, social safety net benefits, retirement benefits, and a raft of other things that never stop. Until the economy improves, they are an extra drag that could have been avoided.
And what about all the wailing and gnashing of teeth over outsourcing jobs? Outsourcing a job is essentially importing the labor without importing the warm body. With regard to manufacturing, the difference between outsourcing and importing is that the American company has investment and involvement in the facilities.
Only a small number of services or professions lend themselves to an outsource
model. The vast majority need to be hands-on or at least face-to-face; an
awful lot of the services outsourcing issue is simple hysteria. Given our
limited domestic labor supply, would we be better served by having more
healthcare workers or more call center workers? 
Foreign professional services companies are increasing their sophistication rapidly, and if we insist on having no connections to them they will in time simply pass us by and leave us behind. Partnering with foreign providers at least gains us a share in the benefits as they expand their operations.
All but the most advanced manufacturing technology is readily available on the world market from many sources, and other advanced countries other than the USA are rapidly expanding their out-of-country facilities. Regardless of whether American companies invest in overseas facilities, either other advanced nations or in time the less developed nations themselves will establish these same facilities and provide quality products at a cost that cannot be matched by domestic production.
If American companies establish lower cost facilities overseas, they will at least remain competitive and be able to preserve a workforce at home, and benefit from the growth in developing markets. If we insist on keeping all jobs of an American company in America, we will likely both price ourselves out of the international markets and be unable to compete with the inexpensive imports domestically. The companies and all their jobs, not just a portion, stand a good chance of disappearing.
What the populists fail to comprehend is that in the long run wide trade allows tasks to migrate to where they are done the most efficiently for any of a variety of reasons such as proximity to resources, energy supply, labor availability, transportation network, and so on . Inefficiency and waste are not beneficial. In a purely economic sense it is stupid to force a certain task to be done where it takes more labor or resources for the same level of output. In a few cases there may be a valid reason, such as internal stability or security, to restrict how and where certain things are done, but mundane manufacturing and non-critical services certainly do not fall into that category. The key to prosperity is not attempting to isolate ourselves from competition since that is self-defeating; it is to pursue those things we can do better than most (such as aircraft & parts, medical equipment, biotech, advanced pharmaceuticals, custom machining & tooling, and yes many agricultural products to name just a few) and minimize waste and inefficiency within our own economy.
A closely related bit of nonsense is the notion that the "rich" represent a large source of potential consumption for the middle and lower classes. Aside from the fact that they are far fewer in number and pay a much larger portion of their income in taxes, a person with five times the income does not eat five times as much food, drive five times as many vehicles, live in five times as many houses, and so on. Their consumption is however less useful to the overall economy and represents a certain amount of inefficiency, just less than most imagine. A lot of the extra cost in the fancier things that the rich consume is caused either by scarcity or by the much smaller volume of product that does not enjoy the same economy of scale as more common things. But eliminating caviar will not increase soybean production, and the materials and labor used to build a $100,000 vehicle will not build four $25,000 vehicles. Think about it: the rich use a lot of dollars to remove a small amount of special stuff from the pool. Giving those dollars to everyone else won’t increase the amount of ordinary stuff available since dollars aren’t what is setting the amount in the first place, and eliminating the fancy stuff does little to increase the amount of ordinary stuff. Filet mignon costs vastly more than hamburger, but grind a pound of it into hamburger and you still have only a pound, so eliminating the market for filet does almost nothing for the supply of hamburger. Unless the rich are causing large scale underproduction of common goods or services, which has not been the case in the industrialized world for many decades, they are not lowering the standard of living of others significantly. Rather than indiscriminately targeting the rich, it would make more sense to balance what they receive against the value of whatever they are doing that is good for the economy in general, be it providing an extraordinarily useful service that benefits many, supplying intelligently managed risk capital for new or expanding small business, or functioning as the "early adopters" that wring out the deficiencies and pave the way for more widespread and lower cost production.
