On Destructive Partisanship

I’m going to insert a short note here, interrupting the flow of thoughts about economic matters. This past week’s news was a peak demonstration of why we need a movement or a party of centrists.

On the right, we have the so-called Freedom Caucus of hard-right Republicans, sinking the attempt of Speaker Paul Ryan and President Trump to repeal and replace the ACA (aka Obamacare), to fulfill six years worth of campaign pledges. Whether you prefer the current law or liked its proposed replacement, the irresponsible and destructive hard right would not permit sufficient votes to pass the bill in the House. Once the ACA became law,we made a very complex health delivery and insurance situation even more complex. Any change is going to help some people, annoy some people and hurt same people. With 320 million Americans, no bill could please everyone. The Republicans, having won both the Legislative and Executive branches in the 2016 election, had the right to propose a bill more to their liking. But it was not ideologically pure enough for Tea Party Republicans, so rather than accept an improvement, they caused it to fail.

On the left, we see Senator Schumer calling for a filibuster to prevent the seating of Judge Gorsuch on the Supreme Court. And what is their grievance against this jurist? Why, he was nominated by President Trump. Any Republican nominee would by opposed because, well, he’s not a liberal Democrat. And the Republicans will probably vote to change Senate rules to eliminate filibusters against Supreme Court nominees. And of course the Democrats will squawk, and the Republicans will say (with some justification) that when the Democrats had a majority in the Senate, Harry Reid led the charge to eliminate filibusters against Appellate Court judges. Does anyone see a pattern here?

I am writing this brief post, trying to be even handed to show just how destructive the politics of extreme ideologies has become. Only a strong centrist movement or party, with a leader who possesses strong communications skills, can begin to turn the situation around, can begin to sound the voice of reason, of compromise, and of doing what is best for our nation.

Economics–Growth

Everybody says that economic growth is a good thing. I have no disagreement with that, in fact, it is an essential element for a happy society. But let’s examine why, and what the real benefits are, so when we look at various elements that could contribute to it, we can estimate their effects.

First, we are fortunate to still have a growing population. Only an economy that is growing will provide increasing numbers of jobs to be filled, to provide salaries or wages to support that population growth. Only the goods and services the new workers provide will enable the fulfillment of the material needs of the growing population.

Next, a growing economy has the ability to provide a higher level of wages. It would be impossible to create an exactly zero growth/zero decline economy, so if it’s not growing, it’s shrinking. And when it does, businesses tighten their belts by freezing wages, freezing hiring, or letting people go. Only when businesses are expanding to fill growing demand do they (net) hire, raise wages, and open promotional paths.

In a growing economy people can sense opportunity, which makes them more optimistic, happier, more likely to increase demand, more willing to take risk. These attitudes and behaviors are likely to increase demand in what becomes a virtuous circle. The converse is true in a shrinking economy.

New business formation rises in a growing economy. This results in more competitive pricing, better services and in more jobs. Young and small businesses, in the aggregate, hire more than large, established firms. New businesses are also a source of innovation, an important growth engine that will be discussed at some length in a a subsequent posting.

A growing economy will encourage investment, often in construction or in the purchase of capital goods. Either will create jobs in those providing companies, and the investment will increase the productivity of the investing company.

A growing economy results in higher incomes, higher profits, and fewer government expenditures for support programs (like unemployment compensation, food stamps, etc.). Tax revenues rise without complaint, government outlays are smaller, helping to reduce the enormous national debt we have incurred. The debt reduction will lower government interest payments, and thus produce greater deficit reduction or spending flexibility in the future.

Obviously, how widely the benefits of this growth are spread through the population is also an important subject. But without growth, the economy becomes at best a zero sum game, where how the economic rewards are spread takes front row seating, causing animosity, class separation and enmity, and feeding partisanship.

Future postings on the economy will include such sub-topics as job creation and the government, measurement and standards of living, productivity, innovation, and many others.

Political and Economic Systems

Before I go into today’s topic,I want to mention an editorial in today’s (3/21/17) Wall Street Journal by Bret Stephens. It is entitled, ” ‘Other People’s Babies’ “, and can be found in its entirety at https://www.wsj.com/articles/other-peoples-babies-1490050955. Basically, he expands on the points I made in the post on legal immigration, what it adds to our society, and how important it is to prevent a demographic disaster, like that facing Japan, Russia, Italy and others, where the population is aging and will be shrinking. Try growing GDP or financing old age entitlements in that scenario!

Turning now to political and economic systems, this is just a broad outline to make sure we are all on the same page. The two are different animals, at least most of the time. Sometimes we get them confused and intertwined in our minds, so this is an attempt to make sure they are separated. Except when they are not, as in a communist or fascist dictatorship!

Political systems are all about who has the power to make the rules that everyone has to live under. The rules themselves can be about economics, religion, human rights, how we live, any or all aspects of our lives. They can be democracies, monarchies, aristocracies, oligarchies, theocracies, plutocracies, empires, tribes, dictatorships, etc.

Economic systems are how we go about satisfying our physical needs and desires within a society. Economics has existed ever since humans began cooperating with one another, by division of labor between hunters and gatherers. Economic systems include barter, tribal, feudal, mercantilist, free market, capitalism, socialism, communism, etc.

Since we are dealing with 7 billion humans, we will never have a political or economic system that gets universal agreement. Therefore, no system is perfect. But clearly, some are better than others. The most important question to ask is this: Since any system will result in some mistakes (especially in hindsight), does the system have a built-in mechanism to self-correct, or can it only change through violent overthrow? Since most people in power tend to cling to that power, and rarely, if ever, acknowledge mistakes, the only way of correcting the mistakes in systems other than democracy is removal of the ruler, not usually a pretty sight.

Winston Churchill is reputed to have said, “Democracy is the worst form of government, except for all the others”. Democracies make mistakes, but they have the ability to self-correct. And the ultimate power of who makes the rules resides in the population who lives under the rules. We in the United States live in a representative democracy–with 320 million souls, direct democracy where everyone debates and votes on every rule is an impossibility. But we get to choose our President, our Governors, and Mayors, our Senators, Congressmen, state and city legislators.

Hybrid political systems also exist–constitutional monarchies that function as a democracy, purported democracies that function as a theocracy, Empires that functioned as a collection of tribal societies.

Economic systems can also be hybrids. Capitalism can be blended with some socialism to produce welfare capitalism. Blended systems also produced the economic aspects of fascist states–National Socialism.

Then political and economic systems can play mix and match. You can have democratic capitalism or democratic socialism. You can have monarchical mercantilism or monarchical free market capitalism. The worst case, we can all agree, is when the political system is a dictatorship that forces an unpopular or ineffective economic system on the nation–communism or fascism, for example.

This is all pretty simple, well-known stuff, right? So why am I writing about it? Because I have found that too many people get tied up in knots of confusion when discussing them. Friends on the right tend to confuse socialism with a loss of democracy. Friends on the left confuse capitalism with plutocracy. Capitalism can be changed to socialism, or vice-versa, as long as the political system is democratic. The Obama Administration, in writing 80,000 pages of new business regulation moved a few feet toward socialism, where the state controls economic activity, just as the democratically elected Trump Administration can roll those back again. You may agree with one side or the other, but the point is that the changes can be made peacefully, and changed back again in the future, also peacefully.

The next post will follow up with more on economics.

Immigration, part 3

This third and final installment about immigration will cover two other, somewhat unrelated, topics: assimilation and integration of immigrants, and the current (March 2017) flap concerning the Trump Administration’s Executive Orders, temporarily restricting immigration from six nations. After this post, we will leave immigration and move on to other issues.

“E Pluribus Unum”, out of many, one nation, is above the eagle on our national seal. We are a nation of the descendants of immigrants from many lands, religions, and cultures. Although the newest wave of immigrants has not always been welcomed with open arms, most groups were assimilated into America, although sometimes it took more than one generation. The resulting mixture has created a vibrant culture of our own, different from that of any one of the nations our ancestors hailed from. It has been the genius of our nation to allow and encourage all to participate.

Assimilation and integration was often difficult. It required determination and hard work on the part of the immigrant. But most came here wanting a better life, wanting to be part of the nation that could provide it, and knowing hard work would be necessary. First and foremost, they learned the English language. They learned our customs and mores, our ways of work and life, and enough of our history to pass required citizenship knowledge. But the key to all, was learning to speak the English language.

Well meaning people have seen the difficulty, and passed legislation to make government documents readily available in multiple languages. Leaders of various ethnicities have pushed for this as an issue to gain prominence within their own community. Bilingual education became a vogue. However, it is not clear that this has helped newcomers integrate into our society. It is easier to speak only your native tongue, easier to speak only with those who speak it too, and easier therefore to segregate into ethnic enclaves, and resist assimilation and integration.

Easier, yes, but less successful, for both the immigrant and society at large. We would be far better off subsidizing English-as-a-second-language classes for immigrants, than spending the same money translating and publishing documents in multiple languages. Ethnic leaders who do not support the necessity of learning English are like the politicians who curry favor and votes with ethnic blocs by segregating them, telling them they are victimized, and offering to “help” them.  Fears of their culture of origin will disappear are exaggerated; they will survive.

This does not absolve our native-born from treating immigrants and their children as fairly and equitably as they would anyone from their own background. I realize this is an unrealistic goal for 100% of our people, or of any people. Nonetheless, while the burden to assimilate needs fall upon the immigrant, the rest of us have an obligation to shun prejudice.

On the second issue, President Trump’s Executive Order(s) concerning the suspension of travel here from six (or seven) nations where there is a substantial chance of importing a terrorist, a hot emotional issue has arisen. Right now, it is ablaze, but in the total scheme of things, it will seem unimportant as time passes. It doesn’t help at all with the larger potential of terror attacks, those by people who are already here, radicalized over the internet, or through other contacts already here (Major Nidal, the Tsarnaev brothers, the San Bernardino killers, the Oklahoma City bomber).

The Commander-in-Chief should have substantial control over immigration, especially on a temporary basis, when there is a threat to our national security. Having said that, the initial Executive Order was poorly thought out, amateur, and implemented too quickly without coordination of the involved agencies. It also singles out Muslim nations (of course they are the nations with chaotic and dissolved states with lawless areas and lack of government control) when we need friends among other Muslim nations to help eradicate Islamic jihadists in the MidEast region and in the world. Symbolically it was important for the Administration to fulfill a campaign pledge and to appear strong on national security, but some less spectacular action, better thought out and implemented was clearly possible. However it resolves, it is temporary in nature and will prove to be less important than the other immigration issues discussed, in the long run.

Immigration, Part 2

The issue of illegal immigration is much tougher than legal immigration, in the sense of finding a centrist position upon which people across a wide range of our society can agree, or at least reluctantly accept as a compromise. There are three main elements to consider: keeping our border secure in the present and future, dealing with the substantial number of illegal immigrants in our country today, and and Sanctuary Cities.

Most people will agree that present and future border security is important, and that we have every right to implement a good plan. It is important for national security, but also because we now have many government paid benefits that should not go to other than our citizens–social security, Medicaid and Medicare, unemployment and disability compensation, food stamps, etc. In the days of open immigration, before the Act of 1924, government benefits were small to non-existent.

The question of how to provide that security is an open one–President Trump has been proposing a giant wall. Although I have not studied the economics, I believer that there are better, cheaper and less obtrusive ways to close the borders, using technology. Some combination of cameras, lasers, drones, infrared and motion sensors, married to GPS locations and wireless communications should be able to seal the land border quite effectively. I don’t believe that illegal immigration by air or by sea is significant, but I’m sure we could find effective ways of dealing with it; in any event, a land wall wouldn’t work either.

Another source of illegal immigration is people who enter legally with a temporary visa, but never leave. Once again, technology in the form of a data base with alerts and required contact information should be able to curtail that substantially.

Actually, illegal entry has declined in recent years, and the greater problem is what to do with the large number of past illegal entrants, who now live in our country. Most estimates for their number is around 12 million, which is roughly 4% of our population. Many are from Mexico and Central America, but by no means all. Some have lived here for many years, with jobs, paying taxes, owning cars and homes. All live in fear of being deported.

Some are criminals, but I’ve seen no evidence that the illegal immigrant population outstrips native born in crime rates per 1000 inhabitants. I’ve seen economic studies that “prove” illegals cost us $ Billions per year, and I’ve seen some that “prove” they contribute far in excess of what they cost. As Mark Twain said, “Statistics don’t lie, but liars can use statistics!” What to do with our 12 million illegals has been a dilemma, because of strongly emotional and conflicting viewpoints.

On the one hand, they are human beings with lives, families, children. We have let them in though our own neglect. They came, seeking to work and have a better life, just our ancestors did, before 1924. They can, and do, contribute to our society. They often take jobs that native Americans wouldn’t do. However,they did enter the country illegally and knowingly so. Their first act on American soil was thus to break our laws. Some have managed to obtain benefits that should be reserved for citizens. Because they live in the shadows, they are willing to work for lower pay in unskilled labor jobs, and are thus competing unfairly with similarly unskilled native labor. Amnesty is proposed by some, and is anathema to others. Deportation of 12 million people is inconceivable to most who think seriously about what it would entail.

What we need is a centrist solution, and here is one proposition that fits that definition. Any that are known felons, guilty of a violent crime, drug dealing, or grand larceny should be deported, with no mitigating circumstances. All others would be encouraged to register with the INS (Immigration and Naturalization Service), and pay a moderate fine for illegal entry, on the order of $5000. In return for registration, they will be granted a permanent resident alien status, and a work permit. They will not become citizens, and will not be entitled to the government benefits that citizens are. If they choose to become citizens, they must do so by going back to their country of origin, and applying through the normal legal process, although if they do that, they could return to the US as a resident alien while waiting.

What can’t they do? They cannot vote. They cannot received Social Security payments when retired. They cannot collect unemployment compensation or disability income. They cannot get food stamps, Medicaid, subsidized housing, aid to families with dependent children, and other benefits we have that don’t immediately come to mind. They can work, and enjoy the minimum wage laws, and they would not have to have deductions for the benefits they do not receive. But the employer share of those payments would still be mandatory, so as not to give the former illegals a cost-competitive edge over native born.

They should be encouraged to register by being offered English as a Second Language courses for free, for all those who register in the first 12 months. Those who wait will not get that benefit, and will have to pay an additional modest fine for not having registered when first permitted, say $1000 in the second twelve months, and $2000 thereafter. The entire program should voted and implemented as a one-time solution, and not be available to future illegal entrants.

Lastly, turning to Sanctuary Cities, where local governments have chosen to defy Federal law, we see behavior that is unsupportable. We cannot say we are a country or government of laws, if citizens and municipalities can choose to obey only the laws they approve. The Federal government has every right to withhold funds for any and all other programs to force these entities to follow law. Imagine if a city decided to serve as a sanctuary for rich, white-collar embezzlers, because they could pay large “stay-out-of-jail” fees and live freely.

Only the most extreme Nativists will call this “Amnesty”. Only the most permissive Progressives will equate this treatment with deportation. And otherwise law-abiding resident illegals can come out of the shadows, keep their family intact, and become contributing members of their community and of the economy.

Immigration, part I

Immigration to the United States is a hot topic right now, and one on which emotions run deep and logic runs shallow. Few have expressed a rational, centrist position on the topic. This posting will tackle the easier issue first, legal immigration. The next one will cover the thornier, illegal immigration. The final post on the subject will deal with integration and assimilation of the new Americans.

Prior to the Immigration Act of 1924, and the McCarran-Walter Act of 1954, there was little legislation prohibiting open immigration. Therefore, almost all immigration was legal, as long as the immigrant could pass a basic health screening. The Native Americans were the first immigrants to arrive, some 12,000 years ago, via a temporary land-bridge from Northeast Asia. Centuries later came the English, the French (in the North), and the Spanish (in the South and Southwest). Then came Dutch and Swedes. Africans came, usually against their will. All of this was before we became a country. In the mid 1800s the Irish came, and were roundly rejected by the Nativists. Then came the Germans (and German Jews) and the Scandinavians. Chinese were recruited to build the Transcontinental Railroad, then were despised and further immigrants excluded. Eastern Europeans (Poles, Russians, Hungarians, Czechs and Jews) and Southern Europeans (Italians and Greeks) came in increasing numbers from the end of the Nineteenth Century. The numbers were sufficiently large to prompt the Nativists to pass the 1924 act, limiting legal immigration for the first time.

Annual quotas were enforced, based by nationality on the percentage of the US population of that nationality already in our country. The McCarran-Walter Act made adjustments to the numbers, and clarified screening criteria, giving preference to the skilled and to family members of those already in this country.

If our country wasn’t built by immigrants and their children, we must believe it emerged from thin air. Every one of us is an immigrant or the descendant of an immigrant. Even what we call Native Americans can be traced to another continent of origin. Immigration has made our country, the richest and most sought after in the world, what it is.

If we were to further restrict legal immigration we would experience relative economic decline within a generation, due to the insufficient number of scientists and engineers our native-born produce. We would suffer a great decline in new business startups, the source of innovation and competitiveness, as immigrants or their children represent a far greater proportion of entrepreneurs than their population numbers would imply. And growth in numbers of working population is in itself important–try funding Social Security and Medicare on a declining wage-earning base, especially as longevity increases. Japan, Russia, Italy and others will face serious problems in this regard within 20 years.

We are one of the few nations where people with skill and ambition want to immigrate. Why would we not want to take advantage of that? Legal immigration limits should be raised. Of course, proper vetting to keep out those who would do us harm is in order. But it is doubtful that the doctors, engineers and scientists that we need are potential malefactors. We make only a small exception for now, with the H1-B skilled employee visa program, which puts a low annual ceiling on the number allowed in for work permits. Why do we educate many graduate students in our latest technologies, only to send them back to their countries of origin, to compete with us? These foreign students are studying at our research universities because they are the brightest, and because too few Americans choose to apply for these fields.

After I drafted these thoughts, but before posting them, I read an editorial in the March 7th Wall Street Journal that stated 83% of the finalists in the national Regeneron Science Talent Search were children of immigrants, and nearly 70% had a parent who came to this country as an international graduate student. Further, the article cited research that showed immigrants have founded more than half of American startups that have become valued at $1Billion or more. Do you know how many jobs that has created? Do we want that talent creating those companies in other countries?

One of the problems with immigration is that we do a poor job of separating legal and illegal immigration in our discussion, conflating the two. Let’s deal with them as two separate issues, and foster legal immigration of those we know will help our society.

First Post

In 1919, the poet William Butler Yeats wrote:

“Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world.”

Many of us feel that way today, as our minds inhabit the disappearing center of American politics, while we watch the Democrats lurch to the far left and the Republicans are pulled to the far right.  A huge number of American voters see the ideological extremes of each party pulling away from the center, where we are all most comfortable, and which has worked over the decades and centuries to make our country the envy of the world.

Hello!  I am Bob Blumberg, and I am starting this blog to help fill this missing center, at first for friends, then acquaintances.  If you like the concepts, I hope you’ll recommend the blog to your friends and acquaintances.  If they like it, perhaps it will spread to a large audience, that might attract viable candidates for political office, and maybe, just maybe, form the basis for a new party.  America needs one now.  If not, at least the blog will provide a forum for a network of people to share their ideas and beliefs.

I am new to blogging, so forgive any incompetence demonstrated.  I welcome your comments on this or any future blog, and will try to respond to them whenever a response appears appropriate.

Some of the subjects I intend to cover in future postings on this blog include comments on U.S. and world events, economics, gerrymandering, religious freedom, technological change, social change, foreign policy, trade, income inequality, and many more.  At the present writing, I am thinking of  posts less than daily, but more than weekly, perhaps 2 or 3 per week, but with variability.