What Actually Doesn’t Work

While I realize that every post can’t be about everything, I don’t think it’s too much to ask for an article titled “What Will ‘Actually Solve’ Terrorism Problem?”, like this one at Breaking Defense by James Kitfield to present some proposals for actually solving the terrorism problem. Instead it lists a few things that don’t work including torture and decapitation strikes. To those I would add overthrowing the governments of countries that are probable homes for terrorist groups and losing track of immigrants from those countries when they’re in the United States.

I don’t honestly know what would work. The only things I can think of are mass exterminations and bottling the populations of countries producing terrorist groups up until the fever passes. I reject the former as immoral and consider the latter a much more humane solution. It wouldn’t solve the problems of the countries being bottled up but it would solve ours. That appears to be more than Americans or at least American elites will stomach so I guess we’re stuck with terrorism for the foreseeable future.

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Mexico’s Future

At the Center for Strategic & International Studies Richard Miles underscores what I’ve been saying for some time and summarizes it succinctly in his opening paragraph:

Lower birth rates and freer markets have led to a sustained drop in Mexicans moving north to find work, developments that will reshape the immigration debate in the United States. Meanwhile, the passage of the North American Free Trade Agreement (NAFTA) in 1994, combined with Mexico’s entry the same year into the Organization for Economic Cooperation and Development (OECD) has transformed its economy and slowly made its citizens better off. By 2055, Mexico will be smaller, wealthier, and with citizens less prone to leave their country. These fundamental trends may be thwarted by changes of government policies in the United States and Mexico, but they are unlikely to stop for the remainder of the twenty-first century.

and the graph at the top of the page illustrates the demographic forces that will promote those changes. It also explains why I’m not particularly worried about Mexican immigration.

I am, however, concerned about the rule of law and business models that assume a continuing supply of low-level workers. The studies most cited to demonstrate that Mexicans-Americans do eventually assimilate also found that assimilation is taking much longer than previous cohorts of immigrants.

The next cohort of immigrants will present new and more difficult problems. Look to the Somalis for a vision of things to come. As a community their unemployment rate is still a multiple of the general unemployment rate. Compare that with the unemployment rate of the Mexican immigrants. There are costs that are not worth bearing just so that somebody can say “Do you want fries with that?” in strongly accented English.

One factor not mentioned in the piece: when a significant fraction of the emigrants are women of child-bearing age, it tends to depress the birth rate. Expect Mexico to want to keep its young people at home in the coming years.

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Disney and Fox

I really don’t have a great deal to say about the proposed Disney and Fox merger other than to express my opinion that we should be breaking up horizontally integrated monopolies rather than creating them.

I also think that the cost of the deformation of copyright law that Disney bought and paid for back in 1999 should be that the company should be barred from the distribution business entirely. Under the Constitution copyrights must be for limited terms and if you can extend a copyright after the fact there’s no barrier to their terms being unlimited.

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The Web

Speaking of a difference of opinion, although I agree with James Freeman about the dangers we’re facing in the too cozy relationship among the Clinton campaign, the Democratic National Committee, and the Department of Justice, I disagree with his proposed solution. We already know that the Clinton campaign and the DNC were involved in what amounted to a criminal conspiracy to evade the campaign financing laws, siphoning off state and local funds into the Clinton campaign’s coffers. Things being the way they are they’ll never be prosecuted.

Here’s the way he portrays the situation:

The Wall Street Journal reports:

A top FBI agent and an FBI lawyer, who were involved in the investigation into Hillary Clinton’s email arrangement and the probe into Russian electoral meddling, exchanged texts disparaging then-candidate Donald Trump, including calling him an “idiot” and a “menace,” according to copies of the messages the Justice Department provided Congress.
Peter Strzok, 47 years old, was one of the highest-ranking agents at the Federal Bureau of Investigation. He was removed from his post with special counsel Robert Mueller’s investigation of Russian meddling this past summer after a Justice Department watchdog launched an inquiry into the texts.
The messages between Mr. Strzok and FBI lawyer Lisa Page include one in which Ms. Page tells him in August 2016: “Maybe you’re meant to stay where you are because you’re meant to protect the country from that menace.”

The New York Times reports on another 2016 text:

On July 27, Ms. Page wrote, “She just has to win now. I’m not going to lie, I got a flash of nervousness yesterday about Trump.” That text message was sent after the Clinton investigation had been closed. Days later, the F.B.I. began investigating possible coordination between Russian officials and the Trump campaign.

Recently the Journal’s Kim Strassel noted the stone wall against congressional oversight that has been constructed by Mr. Mueller, his Department of Justice colleagues, and Mr. Mueller’s deputies, many of whom have demonstrated their political opposition to the President.

Is there really no way to run a special counsel’s office or a federal law enforcement agency without appointing liberal political activists—or at least people with close ties to the President’s adversaries—to senior roles?

Simply stated, that isn’t the way our government and politics are supposed to work. Campaigns should not control political parties and Justice Department investigators shouldn’t be political operatives. And there shouldn’t be such close ties between Justice Department officials and oppo research organization as this:

A co-founder of the opposition research firm Fusion GPS acknowledged in a new court document that his company hired the wife of a senior Justice Department official to help investigate then-candidate Donald Trump last year.
The confirmation from Glenn Simpson came in a signed declaration filed in U.S. District Court in Washington, D.C., and provided a fuller picture of the nature of Nellie Ohr’s work – after Fox News first reported on her connection to Fusion GPS.
Her husband, Bruce Ohr, was demoted at the DOJ last week for concealing his meetings with the same company, which commissioned the anti-Trump “dossier” containing salacious allegations about the now-president.

At the very least it conveys the impression of corruption. Caesar’s wife should be above reproach. However, this solution:

The better path is the constitutional one. The existing special counsel should resign, given numerous documented conflicts of interest, and let the President direct federal law enforcement as the law demands. If voters don’t like his execution of the laws, they can fire him and hire a replacement in 2020.

Does anybody believe that the Trump Administration is capable of investigating itself? Or even willing to? Or that turning the DOJ from an anti-Trump political advocacy group to a pro-Trump political advocacy group would be an improvement?

It’s certainly a tangled web. There are far too many conflicts of interest.

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Difference of Opinion

There’s obviously a difference of opinion between the Federal Reserve governors and the Trump Administration on the likely rate of economic growth over the next few years, both reflected in opinion pieces at the Wall Street Journal. First, the editors of the WSJ recount the Fed’s estimate:

The median forecast of the board and Fed presidents moved up a tick to 2.5% this year from 2.4% in September. And it moved to 2.5% in 2018 from 2.1%. Beyond that the Fed’s fearless forecasters have the economy falling back to near 2% and even lower in the “longer run.”

while in an op-ed Phil Gram and Thomas R. Saving give something closer to the administration’s view:

In the past eight years, private loan demand has been weak in an economy kept in a stupor by high taxes and an avalanche of regulations. In this stagnant environment, the Fed has been able to manage a massive balance sheet and inflated bank reserves without igniting inflation or causing interest rates to rise, further crippling growth. But the Fed’s challenge will grow enormously when the economy returns to normal growth. That will drive up the demand for bank loans, increase interest rates, and induce banks to lend excess reserves. The money supply will start to grow.

Neither Sen. Gramm nor Dr. Saving define what they mean by “normal growth”. Clearly, they don’t mean normal for a developed economy. That’s what the Fed governors are predicting. I presume they mean normal for the United States before the boom-bust cycles began which would be between one and two percentage points higher than that.

I’ve already expressed my skepticism about the likelihood of the measures taken to date by the Trump Administration’s having the results they think it will, at least not without further constraints. I believe that the reforms will create growth somewhere—probably in producer countries like China, India, Japan, and South Korea rather than in the consuming United States. That’s my explanation for the shortfall in business investment, the obvious cause of our slower growth. Businesses are investing all right. They’re just not investing in the United States the way they used to.

I think it’s also worth mentioning that the Fed’s policy is best explained as a recognition as a strategy for avoiding pulling out the rug from under banks they don’t want to acknowledge were technically insolvent. I still think we should have adopted the strategy used by Sweden. We would have been back to normal whatever normal is now without creating the enormous income and wealth inequality that Fed policies have bolstered.

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IBGYBG Comes to Chicago

At the Investor’s Business Daily Nicole Gelinas outlines the city of Chicago’s reprehensible plan for delaying the inevitable:

Chicago is in the throes of a New York-circa-1970s-style fiscal crisis. Abetted by Illinois’ government, the Windy City is adopting one of the borrowing tools that helped New York get its finances in order: a complex municipal bond, structured to protect investors in a possible bankruptcy.

But unlike New York, Chicago and Illinois are using this invention to delay reform.

Chicago has spent two decades digging itself into a hole. Back in 2000, the city had racked up $12.3 billion in debt, in current dollars; now, it owes $20.2 billion. Back then, the debt burden per person was roughly $4,400; these days, it’s $7,500.

Even scarier is what Chicago owes to pensioners: $31.5 billion, up from $5 billion in 2000. Last year, Chicago’s pension funds took in $900 million from the city and its employees and earned nearly $541 million in investment income, but the fund paid out more than $2 billion.

Chicago has less money set aside in its pension funds today than it did a decade and a half ago.

Chicago has zero hope of fixing this mess if it keeps to its current path. Since 2000, it has run a surplus once (in 2002).

The reason that it is reprehensible is that the scheme requires future Chicagoans, of whom there will be fewer, to pay more than would otherwise be the case. The smart, courageous, and decent thing would be to grasp the nettle as me auld mither used to say and deal with the problem now rather than foisting it on those who’ll still be here when the bill comes due.

“IBGYBG” stands for “I’ll be gone; you’ll be gone”. It was allegedly a popular saying among the hedge fund managers who contributed mightily to the financial crisis of 2007-2008. Clearly, the sentiment still thrives among the unscrupulous.

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A Basic Difference Between Canada and the U. S.

The editors of the Wall Street Journal pass along the results of a study of wait times for health care in Canada:

The Fraser Institute’s new report, “Waiting Your Turn: Wait Times for Health Care in Canada” in 2017, documents the problem. The Vancouver-based think tank surveyed physicians in 12 specialties across 10 provinces and found “a median waiting time of 21.2 weeks between referral from a general practitioner and receipt of treatment.” This is worse than 2016’s wait of 20 weeks, making it the longest in the history of Fraser’s annual survey and 128% longer than the first survey in 1993.

The wait to see a specialist for a consultation is now 177% longer than in 1993, while the wait from consultation to treatment is 95% longer than in 1993. At 10.9 weeks it is more than three weeks longer than the 7.2-week wait considered clinically reasonable. The shortest waits are in radiation and oncology. But long waits for orthopaedic surgery, neurosurgery and ophthalmology, among others, far exceed what’s recommended and aren’t benign.

Author Bacchus Barua says the negative consequences can include “increased pain, suffering, and mental anguish” and sometimes “poorer medical outcomes—transforming potentially reversible illnesses or injuries into chronic, irreversible conditions, or even permanent disabilities.” He adds that “in many instances, patients may also have to forgo” wages while they await treatment.

Demand for diagnostic technology also outstrips supply, creating shortages in the form of lines: “This year, Canadians could expect to wait 4.1 weeks for a computed tomography (CT) scan, 10.8 weeks for a magnetic resonance imaging (MRI) scan, and 3.9 weeks for an ultrasound.” CT scan waits have increased while the nationwide average for MRI and ultrasound waits decreased this year.

Some provinces perform better than others. “The shortest specialist-to-treatment waits are found in Ontario (8.6 weeks)”—still longer than reasonable—“while the longest are in Manitoba (16.3 weeks),” says the report. Waits between general-practitioner referral to treatment in Ontario and Newfoundland & Labrador shortened this year but the nationwide wait went up as access in the other eight provinces worsened. In New Brunswick the median wait from general practitioner to treatment is an appalling 41.7 weeks.

I have no opinion on whether this is right, wrong, fair, unfair, or anything else. I’m merely passing it along.

My one observation is that there’s a big difference between Canada’s circumstances and ours. People in Canada have the alternative of seeking care in the United States and they are increasingly availing themselves of of that option. There is no second United States for Americans to go to. If Americans engage in “medical tourism”, as it’s called, it entails greater travel and they assume higher risks than Canadians do when traveling to the United States.

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Illinois’s Decline


The editors of the Wall Street Journal point out the embarrassing reality—Illinois’s labor force and population are declining sharply:

The Prairie State lost a record $4.75 billion in adjusted gross income to other states in the 2015 tax year, according to recently IRS data released. That’s up from $3.4 billion in the prior year. Many of the migrants were retirees who often flock to balmier climes. But millennials accounted for more than a third of the net outflow in tax returns.

While Florida with zero income tax was the top destination for Illinois expatriates, the Illinois Policy Institute notes that Illinois lost income and people on net to all of its neighbors—Wisconsin (6,000 people based on claimed exemptions), Indiana (8,200), Iowa (1,900), Missouri (2,000) and Kentucky (1,100). What’s the matter with Illinois?

Too much for us to distill in one editorial, but suffice to say that exorbitant property and business taxes have retarded economic growth. Illinois’s corporate tax rate is 9.5%, and pass-through business owners pay 6.45%. Though Illinois’s flat 4.95% income tax rate is relatively low compared to its neighbors, Democrats have found other ways to clobber their citizens.

Property taxes in Cook County and Chicago’s “collar” counties are the highest in the country outside of California and the Northeast. The average homeowner who moves from Lake County, Illinois, across the border to Kenosha County, Wisconsin would receive an annual $3,200 annual property tax cut. Taxes may increase as Democrats scrounge for cash to pay for pensions. Fitch Ratings reported this week that Illinois’s unfunded pension liabilities equalled 22.8% of residents’ personal income last year, compared to a median of 3.1% across all states and 1% in Florida.

They fail to mention sales taxes. Cook County’s sales tax are the highest of any major metropolitan area in the country.

Taxes aren’t the only reason for the decline in labor force and population. Demographics is another reason but that makes no difference to the state. Illinois’s obligations continue to grow while its indebtedness and its ability to pay decline, a consequence of its shrinking tax base.

As the graph above illustrates Illinois’s labor force has declined by about 5% over ten years. I believe that the decennial census will reveal that Illinois’s population has declined as well, possibly by as much as 10%.

Illinois needs reform not more indebtedness or higher taxes. That means that if Democrats are elected they need to be reform-minded Democrats rather than continuing the corrupt practices of Illinois’s establishment Democrats. Sadly, the likelihood of that is bleak. It’s a lot easier to attract voters by promising them the moon with no ability to pay for the moon than it is by campaigning on belt-tightening.

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Let Them Stay

The editors of the Washington Post make another plea to allow illegal immigrants brought here as children, the “DREAMers”, to remain:

QUICK, NAME a major public policy issue on which overwhelming numbers of Americans are united. Stumped? (Granted, it’s a short list.) Here’s one answer: allowing “dreamers” — young undocumented immigrants brought to this country as children — to remain in the United States if they pass background checks, go to school and fulfill other basic requirements. In a dozen polls this fall, including one released Tuesday, respondents who favor permitting dreamers to stay in the United States generally outnumber those who would deport them by at least 3-to-1, and often by 4-to-1 or 5-to-1.

The support for dreamers is bipartisan, and it shows up clearly and almost identically in surveys conducted by Fox News and CNN, among other media outlets, including The Post. Despite that, an array of bills that would protect dreamers from deportation, either by granting them a form of legal status or by putting them on short- or long-term pathways to citizenship, remain stalled in Congress.

The Congress should vote on a measure to give the DREAMers legal status and President Trump should sign it into law. As I’ve said before, there are good arguments in favor of such a course of action.

However, by and large those arguments do not apply to the parents of DREAMers and the same consideration should not be extended to them. Furthermore, whatever qualifications are required by the legislation should be enforced. That’s what the rule of law requires.

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Compounding Errors in Alabama

You’ve probably heard by now that Roy Moore lost his Senate bid in Alabama to the Democratic challenger, Doug Jones. It seems to me that there are a number of lessons to be learned from that election including:

  1. Don’t chase after girls half your age.
  2. Don’t even be open to the charge that you’ve chased 14 year old girls.
  3. The bad or just dumb things you’ve done in the distant past can come back to haunt you, even if you’ve been given a pass on them for 30 years.
  4. Don’t support a bad candidate for strategic reasons.
  5. Don’t double-down on your support for a bad candidate for strategic reasons.
  6. There are some boundaries that shouldn’t be crossed even in presumably rock-solid states.

There are also some lessons that shouldn’t be learned, i.e. that the election in Alabama is a sign of an anti-Trump wave sweeping across the country. It was a sign that there are boundaries that shouldn’t be crossed. Whether it’s a sign of an anti-Trump wave remains to be seen.

I’m not an Alabaman and as I’ve noted before I wouldn’t have voted for Moore before the allegations of sexual misconduct but I’m glad that he won’t be joining the U. S. Senate and I think that all of us should be.

Will anyone take any of these lessons to heart? I doubt it. Doubling-down is the mode of the day.

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