The Wages of Trust

…or its lack.  Readers of this blog—all half-dozen of you—are well aware that I favor immigration reform (and of a broad, generous variety, but that’s neither here nor there in this post).

There is a serious immigration reform move in the House and Senate, or was until recently.  Congressmen Sam Johnson and John Carter (both R, TX) have walked away from the House’s Gang of … which was working a House version of comprehensive immigration reform.  Their reasons are telling, and they present the difficulty of achieving serious reform at any time in the near, or middle, future:

After years of hard work and countless meetings, we have reached a tipping point and can no longer continue working on a broad approach to immigration.  We want to be clear.  The problem is politics.  Instead of doing what’s right for America, President Obama time and again has unilaterally disregarded the US Constitution, the letter of the law and bypassed the Congress—the body most representative of the people—in order to advance his political agenda.  We will not tolerate it.  Laws passed by Congress are not merely suggestions, regardless of the current atmosphere in Washington.  Laws are to be respected and followed by all—particularly by the Commander-in-Chief.

If past actions are the best indicators of future behavior; we know that any measure depending on the president’s enforcement will not be faithfully executed.  It would be gravely irresponsible to further empower this administration by granting them additional authority or discretion with a new immigration system.  The bottom line is—the American people do not trust the president to enforce laws, and we don’t either.

And there’s the rub.  This president cannot be trusted.  Worse, though, Obama’s mendacity has reached the point that he’s badly stained the reputation of the office.  It will be difficult to pass any comprehensive immigration reform that depends on a President’s execution of it—indeed, this will be true of any serious legislation, since any law enacted depends on a President doing his Constitutional duty to enforce that law.

Wages of Government Controls

…Cyprus example.  Deposits continue to shrink (read: disappear from the country) in the country’s banking system.  As the Wall Street Journal last week cited the European Commission as reporting [emphasis added],

the radical shake-up of the banking sector coupled with unprecedented restrictions on the movement of capital in and out of the tiny island have left it exposed to deep economic pitfalls.

And

Confidence in Cyprus’s banks has plunged after the bail-in of depositors, culminating in the gradual flight of deposits despite the government’s imposition of capital controls to stem the outflow[.]

Why?  Not despite the government’s controls, but because of them.  The Cypriot government

appropriate[ed] all uninsured deposits above €100,000 [$135,000] to pay for [Cyprus Popular Bank]’s resolution.  The biggest bank, Bank of Cyprus, underwent a long, deep restructuring, during which 47.5% of uninsured deposits were blocked and then converted into shares in the new bank.

Whether the depositors wanted a slice of a failing bank or not.  Whether that slice could be used to put food on a depositor’s table, or pay his rent, or not.

People found a way to get their money and get it out of the government’s reach.  And now it’s hard to find money to loan, even to a willing borrower.  Because there’s no money to lend to support business expansion, it’s hard to hire.  Because there’s no money to lend to roll existing debt, bankruptcies occur, and jobs are lost.  Because there’s no money to lend to cover the time gap between payouts due (e.g., existing debt or payroll) and money arriving (e.g., payments for goods sold), bankruptcies occur.  And so on.

Thus:

17% of the Cypriot workforce would be out of a job this year [reported the EC], up from an original projection of 15.5%, while unemployment will hit 19.6% in 2014, not 16.9% as previously thought.

The wages of government controls are lost jobs.