Tag Archives: economics

A Thought on Immigration

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Greg Ip has a piece on demographics in Sunday’s Wall Street Journal.

Next year, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline…and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket.

There are two competing factors that dominate those statistics: people are living longer, in particular in retirement, and women are bearing fewer children over their lifetimes. As Ip put it,

[C]ompanies are running out of workers, customers, or both. In either case, economic growth suffers.

The solution to this, of course, is immigration. Blocking immigration because—pick a reason—means we won’t have the labor force we need for, among other things, saving our retirement safety net in substantially its current form or privatizing it.

We’ll have to get our immigration kit in order promptly, though, and be prepared actively to compete for them, much as our private enterprises already have to compete for employees.

By 2050, the world’s population will have grown 32%, but the working-age population (15 to 64 years old) will expand just 26%.

The competition will sharpen:

Among advanced countries, the working-age population will shrink 26% in South Korea, 28% in Japan, and 23% in both Germany and Italy….

That competition cannot be based on how many goodies our government can hand out; our existing and unaffordable Progressive/Democrat welfare state is the outcome of that. No, our competitive advantage is, and must be, centered as it always has been, on our individual liberties and the opportunities our freedoms create.

This is a national security matter, too. Absent a growing, vibrant labor force, we won’t have the economic wherewithal to fund a capable military establishment, much less equip it with the technology required to stay globally dominant—or even strong enough to defend us.

Certainly, we need to secure our borders, and we need to do an efficient, prompt job of vetting those we let in. And those we let in do need to either be satisfied with green cards/work permits, or they need to assimilate into American culture as part of their gaining citizenship.

But we must have those immigrants, just as we’ve needed—and gained—them at critical junctures throughout our history.

SEC Dishonesty

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I’ve written before about the SEC’s internal administrative judge stacked deck system.

Judge Brenda Murray explained to [eight] brokers that the commissioners who run the SEC and approve all the civil charges filed by the agency don’t want its judges second-guessing them.

“So for me to say I am wiping it out,” Ms Murray said at the [motion to dismiss] hearing last year, “it looks like I am saying to these presidential appointee commissioners, I am reversing you. And they don’t like that.”

It doesn’t get any more blatant than that.

And yet, there’s this:

In another glimpse inside the SEC’s court, [Judge Cameron] Elliot told the defendants during settlement discussions on a case they should be aware he had never ruled against the agency’s enforcement division, said a person who was there. The judge said the defendants might therefore want to do a deal with the agency rather than fight their case at a hearing before him[.]

No extortion here. Mm, mm.

Whether this is dishonesty or rank cowardice isn’t material here. What is material is that these performances by SEC administrative judges are, by themselves, reason to do away with the SEC’s administrative judge system altogether and refer cases the SEC brings to Federal—or State—courts, where the defendants can get an actual fair trial.

These sham performances also should prompt a Congressional review of all administrative judge systems, Federal government wide, with a requirement that each entity having such a system prove it needs it and that the Federal and State court systems cannot handle the cases.

Moving in the Right Direction

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For 13 years the countries of Southeast Asia have tried building a framework with China to resolve their territorial disputes in the South China Sea.

That plan has been eclipsed in part, officials at high-level talks in Malaysia this weekend acknowledged, in favor of a blunter strategy for dealing with China: strengthening alliances between countries anxious about Beijing’s increasingly assertive behavior.

This also runs counter to the People’s Republic of China’s strongly stated and often repeated preference for dealing with each of the South China Sea nations in strictly bilateral talks—one-on-one talks that the PRC could easily dominate.

Events like Vietnam and the Republic of the Philippines moving outside ASEAN to deal directly with each other and with other interested parties are intended to give those with disputes with the PRC’s sea grab a more powerful position from which to answer the PRC’s aggressions.

These budding arrangements also surround the signing of a new US-ASEAN strategic partnership, an arrangement that is intended to guide interactions between the two over the next five years and to

deepen the relationship as well as priority areas for cooperation not just between the two sides, but also on regional, global and transnational issues.

Whatever that means.

It’s good that the South China Sea nations are beginning to band together in order to better address the PRC’s acquisitiveness. That their moves don’t involve the US, despite President Barack Obama’s “pivot to Asia,” is…instructive.

Trust is a Two-Way Street

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Of necessity, trust must flow both ways. If one does not trust another, the other cannot rely on the one even to behave in a predictable manner toward that other, much less be trustworthy in turn.

The IRS has begun pushing 501(c)(3) nonprofits—the sort of nonprofits that the IRS has been caught targeting punitively conservative versions of—to give up the social security numbers of their donors.

Under the proposed rule, the IRS would create an optional filing for 501(c)(3) nonprofits. Those participating would, as part of their yearly report, turn over the Social Security numbers of any donors who give $250 or more to a charity in a given year.

The IRS’ claimed rationale for this is to simplify the ability of donors to claim the deductions on their tax returns by allowing the IRS to “verify” donors’ claims on their returns.

No. Since the IRS cannot be trusted by American taxpayers, it’s in no position to worry about the trustworthiness of an American taxpayer. There is no legitimate rationale for this “voluntary” reporting.

Further, for those who think this “optional” form of reporting will remain voluntary, I may know of some beachfront property north of Santa Fe in which you might also be interested.

Inversions

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Corporate inversions occur when a business in a high tax country gets bought out by a company in a low tax country and the bought-out company moves its own headquarters to the buyer’s country. This is occurring increasingly with American companies laboring under US’ usurious corporate tax code.

The Treasury Department—the Obama administration—demurs from these, and it has written, and it is writing more, rules to interfere with such moves. For instance,

The government still is working on tighter rules for a corporate tax-avoidance technique known as earnings-stripping and could release them in the coming months.

And this one:

One aspect of the rules, which limit companies’ ability to transfer foreign operations to a new foreign parent company, will apply to future transactions by all companies that completed inversions since Sept 22, 2014….

Such moves are things that a Progressive, Democratic Party-dominated government would love, but they’re anathema to liberty—interfering with the private decisions of American business owners as they do—and to a free market, which at the core of liberty.

The correct move, although it would restrict the personal power of government officials and their cronies and lobbyists, is to lower the corporate tax rates to globally competitive levels so that inversions of American companies become unattractive and so that other countries’ businessmen want to come here. With the job opportunities for Americans such additional businesses would represent.