Tag Archives: government

Another Musing on Immigration

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Juliana Gruenwald, in a National Journal piece, reports that Senators Mark Warner (D, VA), Chris Coons (D, DE), Jerry Moran (R, KS) and Marco Rubio (R, FL) are proposing an immigration bill—Start-up Act 2.0—that would create two new visas.

One visa would make it easier for foreign students who’ve gained American schools’ post-graduate STEM degrees to remain in the US after graduation.  These folks also would be eligible for permanent residency if they then remained employed in a STEM field for the next five years (and presumably eligible for citizenship, but this visa is separate from that).

The other visa would be for the roughly 75,000 skilled legal immigrants per year who start a business in the US, employ Americans, and invest or raise capital in the US.  This entrepreneur visa would provide another pathway to permanent residence and eventually to citizenship.

This is a step in the right direction; however, it isn’t enough by itself, and it’s muddled by inclusions that, while important in their own right, have nothing to do with immigration.

It isn’t enough because it only addresses one narrow aspect of one part of a three-part immigration problem.  I wrote earlier about those three parts; some of that is quoted here for convenience:

Most modern Conservatives agree that our borders need to be secured, including against illegal immigration.  This need is based on…the right of any nation—the right of any society in their social compact—to determine for themselves who they will allow into their nation: no foreign entity has an inherent right to enter another nation without that nation’s permission….

There are two additional aspects to immigration, and if these are not also solved, the immigration matter will continue to be a serious risk to our national security.  These two aspects are what to do about the population of illegal aliens currently present in the United States, and what to do about legal entry for immigrants into our country.

[W]e need to remove the impediments to legal immigration, we need to eliminate the quotas that put an upper bound on the number of talented who want to work here, on the number of foreign-born who are educated in our Universities and want to stay past their college days. … It simply shouldn’t be that hard to enter the United States legally.  There should be border crossing stations every mile along our border….

These visas are, as I said, a step in the right direction, but the idea falls short on two fronts: it adds to the breadth and complexity of the visa bureaucracy without addressing the overall problem of legal entry for all immigrants, and it doesn’t address at all the other two aspects of our immigration problem.

The muddle consists of tax and regulation clauses that the Senators consider politically necessary to get the bill passed—or at least publicly debated in Senator Harry Reid’s (D, NV) Senate.  Among these extraneous items are:

  • a tax credit intended to encourage start-ups to engage in R&D,
  • a tax exemption that would eliminate capital gains taxes on investments in start-ups held for at least five years, and
  • a requirement that any new regulation with an impact of $100 million or more be subject to a cost-benefit analysis prior to approval.

These are important in their own right, and the need to include these things, which are irrelevant to an immigration bill, in an immigration bill is a testament to the partisan, obstructionist nature of the Democrats’ hold on the Senate.

The tax questions are better handled in a tax reform bill that moves to a flat tax and maintains that flatness by eliminating subsidies of all types.  The isolated regulation item is better handled in a separate regulatory reform bill that eliminates most of the existing regulations (much of which are mutually conflicting, much more of which are obsolete) and that returns regulation generation to the Congress as the most direct means of forcing that body actively to satisfy in its regulatory oversight responsibility.

The Senators’ immigration bill is well worth supporting, but only if it’s made clear that this is only an opening salvo in the struggle seriously to reform our immigration process.

Some Thoughts on Freedom

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The Archdiocese of New York, headed by Cardinal Timothy Dolan; the Archdiocese of Washington, DC, headed by Cardinal Donald Wuerl; the University of Notre Dame; and 40 other Catholic dioceses and organizations around the country announced on Monday that they are suing the Obama administration for violating their freedom of religion, which is guaranteed by the First Amendment to the Constitution.  The problem, as described on the DC Archdiocese’s new Web site PreserveReligiousFreedom.org, is this:

It is not about whether people have access to certain services; it is about whether the government may force religious institutions and individuals to facilitate and fund services which violate their religious beliefs.

President Obama’s Health and Human Service’s mandate, which is intended to facilitate his Patient Protection and Affordable Care Act and is the proximate object of the suit, forces religious organizations, against their most fundamental beliefs, to provide access to, or to make access available through their insurance programs, contraceptives, abortifacients, and sterilization procedures.

These drugs and services, and many of the behaviors that “need” these drugs and services, are held by a host of religions (Catholicism and Baptist congregations are only the most well-known) to be sinful.  It is, then, not only morally wrong for a religious entity holding these beliefs to provide these things, it is impossible for that entity that is true to its beliefs to do so, or to wink at their insurance programs that do so.

Take careful note: this problem is not about whether such things are, in fact, sinful.  This problem is not about whether Catholic women, by regularly going to Mass and then to their neighborhood pharmacy for contraceptives, seemingly give the lie to Catholicism’s position.  (Indeed, the existence of sin is a raison d’être for churches of all types—to help those sinners.)  This problem is not about “free” access to these services. (In fact, they are not free: by the government’s mandate, if the recipient isn’t paying for them, you and I are—whether it violates our religious teachings or not—through higher prices to us to pay for the subsidy.)

No, this problem is about whether government can define for religious entities what is sin.  It is about whether government can dictate to a religious entity what its religious tenets are.  It is about whether government can dictate to a religious entity what its practices in furtherance of its fundamental tenets are.  It is about whether government can dictate to us individually what our beliefs, what our private decisions, must be, and whether we must sin at government’s behest.

As a practical matter, which patients are being “protected” under the Act of that name?  Plainly only those of whom Obama approves.  Certainly not those with beliefs with which he disagrees.

As a matter of freedom, what is being protected by this government diktat?  Certainly not the fundamental freedom of conscience that Christian religions teach.  Certainly not the fundamental freedom of religion—a part of our Creator’s endowment—that is codified in our Constitution.

A False Premise

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It’s being widely reported that a continued, or accelerated, EU economic crisis could threaten President Obama’s reelection.

It’s certainly true that, in this increasingly globalized world (!?), the European crisis could impact the American economy, and through that, President Obama’s reelection.

But that’s an outcome, not a cause.  The cause is Obama’s mishandling of our economy in the first place, to the point that it’s so enormously vulnerable to the European downturn.

That mishandling is a…misunderstanding…of the type of growth that’s needed.  What President Obama and many of his EU counterparts pushed for at the just-concluded G-8 summit is growth in government spending and borrowing—and in Obama’s case, growth in tax rates—under the rubric of stimulating an economy.

On the other hand, we have Christina Romer (that Christima Romer) and David Romer demonstrating in a 2010 American Economic Review article (login required; sorry) the powerful effect of increasing tax rates on economic growth: an increase in taxes of 1% of GDP lowers GDP by nearly 3%.

And we have Swedish economists Andreas Bergh and Magnus Henrekson in a 2011 Journal of Economic Surveys article (again, login required; sorry again) concluding that a 10% increase in government size (relative to GDP) is associated with a 0.5%-1.0% lower annual growth rate in the economy.

Plainly, the answer, as I’ve been arguing lately, is smaller government and lower tax rates, to produce economic growth.

Economic, not government, growth.  Now that’s growth we can believe in.

Europe Can Spend Its Way to Growth

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That’s the claim made by Hannes Swoboda, an Austrian MEP and President of the Progressive Alliance of Socialists and Democrats in that European Parliament, in a recent Wall Street Journal op-ed.

Mr Swoboda said about German reluctance to support continued excessive government borrowing:

Should companies that seek to grow not be allowed to take out loans anymore?  Should states, in order to fight recession and unemployment, not assume debt?

The first, of course, is little more than a disingenuous red herring.  Companies are not governments.  When a company (spends and) borrows too much and cannot repay, only the company’s investors and creditors, and in the most extreme cases the company’s employees, lose.  When governments (spend and) borrow too much, it is that polity’s taxpayers…well, we’re seeing the results of this sort of government irresponsibility play out today in Greece, California, Illinois, the United States as a whole.

…austerity politics and…their antisocial character, proven by record unemployment figures.  The collapse of some governments…notably in France and Greece…further demonstrate the political danger.

Of course generations of dependency on, and addiction to, government handouts don’t have anything to do with the pain of the forced withdrawal that results from these governments’ having run out of OPM.  Not a bit of it.  In fact, though, the only real, long-lasting political danger is to the political incumbents who find at risk their ability to keep the handouts coming and the capacity of the resulting dependency to preserve their power.

Then Swoboda (to coin a phrase) doubled down.

The fact that the current recession was preceded by a decrease of public investment in measures and policies that produce growth and employment clearly indicates that these must be the starting point of an alternative strategy.  In the evaluation of national budgets,…[e]xpenditures for these purposes should not be integrated in calculations of structural deficits….

Italian Prime Minister Mario Monti has already called for policies that favor targeted public investments in growth and employment.…

We actually need to go a step even further. … The European institutions should enact legislation that requires all members to make public investments in growth and employment.

Those public investment measures are nothing more than the repeatedly failed Keynesian policy of “stimulus” spending at the expense of necessary fiscal discipline.  In fact, the current European recession also was not preceded by an increase in private investment—because the money wasn’t available due to excessive taxes and high government spending and borrowing for those dysfunctional spending and borrowing efforts.

Moreover, any remaining government expenditures, including any Keynesian “stimulus” (is there any serious economist who still thinks stuff is sound economics?), must strictly be on the books and in the public’s view.  If Swoboda thinks his policies are so wonderful, why does he demand to hide them behind locked doors and in the secrecy of off the books crony deals?

Finally, Mr Swoboda, not trusting the people to make their own personal and business decisions, demanded to codify in international law a permanent government interference with the market place.

No.  The answer to Europe’s—and the United States’—problems are for government to get out of the way of the private economy.  To get out of the way of the flower of individual ingenuity and out of the way of the collective wisdom of private citizens.

Mr Swoboda had more fanciful claptrap, but you get the idea.  One can only hope that we get the idea this fall.

Progressives Didn’t Get It then, Either

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[I]n a free enterprise economy, increased production increases the number of jobs.  It might be said that one job creates another, which is true as far as it goes, but open to misinterpretation; for only productive employment does that.  If a man were paid to pick up pebbles on a beach and throw them into the ocean, it would be just the same as if he were in a “government job,” or on the dole; the producers have to supply his subsistence with no return, thus preventing the normal increase of jobs.  Putting the unemployed on the dole does not increase “purchasing power.”  The dole divides up what is already in production.

Isabel Paterson understood this in 1943 in her The God of the Machine [the emphasis is hers], and FDR’s Secretary of the Treasury, Walter Morgenthau, had come to understand it as early as 1939.  But the Progressives then didn’t get it, and the Progressives today still don’t.

Keynesian economics simply does not work in the real world.  Government spending, whether on “jobs” programs or on other goals, is not stimulative; it is depressive of an economy, in no small part by crowding out private demand and private spending for products—and here by increasing the cost of private labor.  The taxes and the borrowing—which are future taxes—which must occur in order to pay for the spending are even more depressive.  The taxes take money out straight out of the hands of the people who have the most interest in its value and the clearest understanding their purpose for their money, and they give it to government bureaucrats for spending on government purposes, whose loftier goals are handed down from on high by fiat.  Meanwhile, the government’s borrowing drives up the cost of debt for private borrowers, who have more carefully thought out purposes for the loans and more carefully thought out plans for repaying those loans.

Paterson’s remarks about jobs and productive jobs, in particular, also were clear then, as she wrote in the era of FDR’s Civilian Conservation Corps.  The distinction is just as clear today, with the added fillip that at least the CCC laborers were doing something.  The present administration’s “jobs” programs have done nothing.  They haven’t even produced jobs, as this note illustrates.

These things were apparent in the latter stages of the New Deal, and they’re apparent today.  This fall, we will have an opportunity to confirm our choice of two years ago and to strengthen it, or to repudiate it.  This fall, we must choose wisely.