Wednesday, June 27, 2018

How To Solve The Immigration Crisis At the Border

(first published in the North State Journal 6/26/18)

‘Move all decision-making on all permanent and work-related visa applications away from the border’.

Make the US/Mexico border solely a checkpoint line where ‘go/no-go’ decisions are made allowing people with proper credentials to pass through.

Roughly 11 million US visas are granted each year. 80% are non-permanent tourist visas.

In 2012, it was estimated that up to 5 million people at the time had valid green card applications in process with the Department of State. Approximately 1 million permanent green cards are issued each year to people from all parts of the globe who have followed every step of the immigration process legally, in most instances, many times for many years.

There are 20 US consular offices, including the main Embassy in Mexico City, geographically dispersed throughout Mexico. People leaving Central American countries such as El Salvador, Honduras and Guatemala intending to immigrate to the US probably pass within 100 miles or so of 7 consular offices in the interior of Mexico.

People seeking political asylum or permanent visa status in the United States can apply at any of these local offices in Mexico today. The application process for permanent visas or asylum requests is clearly spelled out at

President Trump could issue an executive order tomorrow directing the Secretary of State to reallocate resources and personnel within the Department of State to expand visa application services at all of the 17 consular-related offices in Mexico not located on the US border.

No longer would Central American people or children with or without accompanying parents be enticed to travel hundreds, if not thousands, of miles in unsafe conditions, on a very arduous and dangerous journey to the US border with no guarantee of success in the first place.

They can visit the consular office in Oaxaca or Acapulco instead.

One thing everyone the world over learns in childhood is ‘not to break in line!’ There is no valid reason to allow anyone from any country to skip ahead of the 5 million other people who have taken all the legal steps and paid all the legal money to get a permanent green card ahead of them.

Another step would be to adopt the Mexican legal immigration process as a precondition for evaluating US approval of their green card application.

Mexico has granted permanent status to roughly 1 million foreigners out of their population of 127 million people. Mexico has a very strict policy about immigration; once anyone qualifies for admittance to Mexico, their background checks have been thoroughly checked, verified and vetted.

If you want to apply as a couple for permanent residency in Mexico, you have to demonstrate an income stream over the past six months of at least $2,325 per month from a pension or other verifiable work-related accounts or have savings in the bank amounting to $93,000 US over the past 12 months.

If we followed the official Mexican government policy lead as a qualifier for consideration for permanent American immigration, then if a person has lived in Mexico as a bonafide Mexican citizen and complied with the laws of Mexico in an impeccable and spotless manner, perhaps then they could apply to come to the United States on a permanent basis later.

Everyone can agree that the American system of immigration is broken and in need of dire reform and replacement. Until then, we need to enforce existing law and protect the rights of law-abiding citizens who immigrate to America the legal way.

One reason why millions of people each year apply to come to the United States is because we are supposed to be a ‘nation of laws’ where citizens have equal rights and equal opportunities.

The day we cease to be a ‘nation of laws’ is the day people will stop lining up to come here.

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Wednesday, June 20, 2018

Rapid Economic Growth Cures A Lot Of Sins

(first published in North State Journal 6/20/18)

‘We now estimate real GDP is expanding at a 4.0% annual rate in Q2, up from our prior estimate of 2.75% and almost twice the 2.2% growth rate experienced in Q1," JP Morgan chief U.S. economist Michael Ferol’—6/14/18

Are real GDP growth rates of 4%+ even remotely possible?

Of course they are. We experienced an extended period of real GDP growth over 4% annually from 1994-2000. Bill Clinton was President; Congress and the Senate were controlled by Republicans.

Before that, under President Ronald Reagan’s economic policies, we saw extended real annual economic growth rates over 4% from 1983-1988.

Economic booms are fueled primarily by productivity gains and pro-growth fiscal and monetary policies, not population growth as many assume. Most importantly, economic booms are fueled by abundant amounts of pure business optimism by owners and workers alike.

Business owners essentially ‘went on strike’ during the Obama years as they saw avalanches of federal regulation, taxes and control descend upon the American economic landscape. They reined in their hiring of new employees and capital investment for 8 long years and have only recently been ignited to invest and expand by the Trump and Republican tax and economic policies.

Besides the fact that there are more job openings today in America than there are people to fill them for the first time in recent history, what else does 4% annual real GDP portend for our future?

For one thing, if sustainable, 4% annual growth for the next 5 years will solve our exploding budget deficit and debt dilemma. Even though our elected leaders of all parties in Washington have been reckless and irresponsible since 2001 when it comes to federal spending.

CBO publishes regular updates of economic and budget projections, most recently April of 2018 (pictured above).

CBO makes pro-forma projections on a regular basis. Their predictions about what may happen is based solely on the most recent experience they can look backwards at and measure.

Annual economic growth under President Obama was 1.9% for 8 long years. Based solely on that precedent, CBO has made predictions about the next 10 years based on that same dismal rate of real growth.

Even though we now have a different President with a 180-degree different approach to business, capitalism, freedom and free enterprise.

In the attached spreadsheet, projections have been made based on 4% real GDP growth rates for the next 10 years, highlighted in yellow. 2% inflation is added on for nominal GDP growth of 6%.

Roughly 20% of GDP is captured by federal income, payroll, estate, and excise taxes each year so those numbers are extrapolated from the higher GDP projections to get the new revenue numbers, also highlighted in yellow.

If, and this is a humongous ‘IF’, we don’t spend any more money than projected under CBO current baseline assumptions, we will balance the budget by 2024 or certainly 2025 with real economic growth rates of 4% of more until then. (as indicated by green highlights above).

Virtually all economic forecasts were wrong in 1981 when President Reagan was in office or in 1993 before the Clinton Internet boom years. No one clearly predicted real GDP growth rates exploding under each Administration except the economic policy advisors in each Administration who privately hoped and prayed that things would turn out better than anyone had hoped or prayed.

The absolute key factor in all of this? Congress and President Trump can not increase spending over the current baselines for the next decade. Holding overall spending to 2% annual growth as was done from 1994-2001 would insure fiscal sanity.

If we experience 4% real GDP growth for any extended period of time, that sure will be a lot of ‘crumbs’ as Nancy Pelosi has called it.

It will be darn near a wedding cake for every American household.

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Wednesday, June 13, 2018

What Do China, The EU and G7 Nations Fear More Than a Trade War?

'Look, Donnie, we can't allow ANY foreign wienerschnitzel to come
into Germany to compete with OUR wienerschnitzel!'*
(first published in North State Journal 6/13/18)

Total free and fair trade.

Unmitigated by tariffs, trade barriers or artificial restrictions established by government to avoid pure unadulterated business competition.

Our trading partners around the world, as well as many business leaders in America, like the way things are right now. The more protection they receive from government, the harder it is to wean them off government assistance to compete on a fair and level playing field worldwide.

President Trump is right to call for an end to all tariffs and barriers and move toward a global free trade zone. He should press to lower nation-specific U.S. tariffs by 10 percent per year and tell each trading partner nation that as long as they lower their tariffs on U.S. goods and services by commensurate percentages annually, the U.S. will continue to trade with them and lower tariffs until they hit zero on both sides of the equation.

Countries will have to reduce their dependence on unfair trade barriers such as overregulation and currency manipulation which will obviate the need for tariffs in the first place.

The very existence of mutually agreed-upon tariffs between nations sets up the threat of retaliatory tariffs that lead to trade wars later. Free and fair trade can only be accomplished in a tariff-free world.

Tariffs are used typically to protect domestic industries in developing countries that want to grow up the economic ladder to modernity. However, once protected, an industry always wants to “stay protected,” be they in America or overseas.

The Canadian tariff on U.S. milk is 270 percent to protect the interests of 11,000 Canadian dairy farmers. Not the consumers.

In 1791, America was “China” in terms of trade piracy and protectionism. Treasury Secretary Alexander Hamilton wrote the first “Report on Manufactures” which encouraged the nascent government to pay spies to steal English textile manufacturing secrets and bring designs of textile machines back to New Jersey.

It worked. Soon textile mills were all over New England only to be lured to North Carolina and the South a century later by the attraction of cheap hydroelectric power supplied by the Southern Power Company, soon-to-be Duke Power, and other trade incentives such as “cheap labor” costs.

Once a nation has established itself as a stable economy and player on the world stage, the need for prohibitive tariffs and trade barriers diminishes exponentially.

China is now the second-largest economy in the world behind the U.S. They are no longer a “developing” country in need of tariff protection.

They are an economic powerhouse.

China achieved economic success partly due to economic reforms under Deng Xiaoping in 1978 but predominately through unfair trade practices. The Chinese government has engaged in imposing excessive regulatory hoops for foreign companies entering the Chinese market; deliberate manipulation of their currency to maintain price advantages over foreign competitors and serious theft of U.S. technology and ignoring U.S. trademark and patent protection that would make even Alexander Hamilton blush in admiration.

Milton Friedman argued that American consumers benefit from other nations acting so stupidly since they are using their resources to provide cheaper products to American consumers which meant Americans could enjoy a higher standard of living regardless of how unfair foreign trade practices were.

That may be true. But wouldn’t every person on this planet benefit from a perfect trade world absent any tariffs or trade barriers?

Prices would fall precipitously across-the-board around the globe. Nations that hold natural competitive advantages in certain resources and talent would produce and sell top-quality goods and services to the rest of the world and receive high quality goods and services from other nations in return.

Economic reality ultimately trumps human manipulation of trade at every turn. We don’t need new trade agreements built on mercantilist tariffs and protectionism.

We need a new world order of zero tariffs and trade barriers. Everywhere.

*photo courtesy of Bundesregierung/Jesco Denzel/Handout via REUTERS German Chancellor Angela Merkel speaks to U.S. President Donald Trump during the second day of the G7 meeting in Charlevoix city of La Malbaie, Quebec, Canada, June 9, 2018. 

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Wednesday, June 6, 2018

The Danger of 'Latent Hypocrisy' in American Politics

(first published in North State Journal, 6/6/18)

Do you think you are a completely fair and objective evaluator of politics?

Take this test:

‘Donald Trump is a completely immoral man and shouldn’t be president of the United States!’

Agree or disagree?

Now do this: Replace ‘Donald Trump’ with Bill Clinton and see if you can say the same thing.

‘Bill Clinton is a completely immoral man and should not have been president of the United States!’

No ifs, ands, or buts allowed. No moral relativism on a scale of your choice. No saying ‘Well, Bill Clinton may have been bad but Donald Trump is worse!’

If you can’t say exactly the same thing about both men, you probably have ‘latent hypocrisy’ and you don’t even realize it.


Latent hypocrisy is what is really hurting our political discourse lately. The inability not only of politicians themselves but commentators, news reporters and partisans to honestly admit both the good, the bad and the ugly about their side as well as the other side makes it virtually impossible to gain any traction on the truth, or as close of an approximation to the truth as we can humanly achieve.

We all know what ‘blatant’ hypocrisy is. That is where elected politicians know they are playing certain roles in public debate and staking positions out in public to frame the issue from both ends and to see a parameter within which a compromise can be hammered out.

Republican President Ronald Reagan and House Democrat Speaker Tip O’Neill used to routinely set out pretty harsh lines in public against one another in the 1980’s when Democrats held insuperable 85+ seat majorities to satisfy activist partisans on both sides. However, they would retire in the evening to play gin rummy, drink scotch and trade stories and jokes before settling down to some serious reasonable compromise they would both be willing to accept for the good of the country at large.

Not just for the good of their respective political parties.

North Carolina Democrat Senator and former Governor Terry Sanford and Republican Senator Jesse Helms grew up together in North Carolina politics as Young Democrats before Helms ran as a Republican in 1972. They would stake out diametrically opposed positions in public on an issue that made some people think they hated each other. Then they would go behind closed doors and hammer out a compromise because of their life-long friendship to get things done rather than waste time with endless and many times senseless yammering and posturing in public.

As long as political people acknowledge their ‘blatant’ hypocrisy in public is a tool to the ultimate end of a solution to the problem at hand, it can be accepted and used to good effect.

It is when people don’t recognize they have an inherent bias that troubles arise. If you think you are always right and your opponent and their party is always the Spawn of Satan, you will never drop your guard behind closed doors and give an inch on anything.

Your supporters and partisan followers won’t either. Who then go on talk shows to talk about the speck in the opposing side’s eyeballs when they have a railroad tie sticking out of both of theirs.

Try this exercise in the weeks to come. Anytime you hear someone on the other side say something nasty or terrible about your candidate or political party, say the same name of your favorite candidate or party and see if you can say it out loud in front of your spouse, friends or colleagues.

If you can’t say it without swallowing your tongue and breaking out into hives, then you are part of the problem.

If you can say it, congratulations on being an adult in a world of arrested development.

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