Shutdown Politics

I don’t have a great deal to say about the federal government shutdown. Those who say that President Trump is only pursuing his wall to to fulfill a campaign promise are right. Those who say that the Democrats are only refusing to give him the $5 billion for political reasons are right. The total federal budget is around $4 trillion. $5 billion is .125% of that—a significant amount to you and me but completely insignificant in the larger scheme of things. I wouldn’t be a bit surprised if the shutdown itself costs us more than $5 billion.

I have made my views of illegal immigration and what to do about it clear and I won’t repeat them here. I don’t believe any real principle is at stake in the conflict. It’s primarily a headbutting contest between Donald Trump and Nancy Pelosi. The news media who are overwhelmingly blaming Trump for the shutdown are rather obviously taking an overtly partisan stance. The president is under no obligation to knuckle under to the Speaker of the House and, contrariwise, the Speaker of the House is under no obligation to defer to the president.

They should craft a compromise that allows both of them to save face, an ironic diction under the circumstances. Both should get something they notionally want and both should relinquish something they notionally want. My confidence that will take place approaches zero.

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Rule #1

When I saw the title of the post in the Small Wars Journal, “Phil Walter’s Five Rules for Counterinsurgency from a U.S. Perspective”, I was prepared to hate it but his Rule #1 changed my mind:

1. Don’t do counterinsurgency. Better to let the insurgents win and then engage their newly-formed country in state-on-state warfare, a U.S. strength, than to play the game the insurgent prefers.

Read the whole thing. It is short and to the point and advice I wish that American politicians would heed.

I would add one additional rule:

6. Never, ever do insurgency. It has never ended well for the United States.

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What Are the Congress’s Powers?

In a post at Outside the Beltway James Joyner points out something of which I was unaware or at least have no recollection of knowing—the Trump Administration’s failure to pay exempted federal employees is a violation of the Fair Labor Standards Act of 1938:

The partial government shutdown caused by President Trump’s bizarre insistence on more than $5 billion being budgeted for a border wall is now in its 22nd day, breaking the record set by the 1996 shutdown. Additionally, those in affected agencies missed their scheduled payday yesterday, creating a violation of Federal law for exempt workers ordered to work.

Government Executive‘s Eric Katz explains (“Saturday, the Shutdown Becomes the Longest Ever. And Illegal“):

The missed pay brought the shutdown further into new territory: it is now illegal. That is according to a precedent set by a federal court after the 16-day 2013 shutdown, in reference to many of the “excepted” or “exempted” employees who are forced to work during the lapse with only the promise of retroactive pay once their agencies reopen. A group of those workers sued the government after that lapse; 25,000 workers ultimately signed onto that lawsuit.

In 2014, Patricia Campbell-Brown, a judge in the U.S. Court of Federal Claims, ruled the government violated the 1938 Fair Labor Standards Act when employees worked without receiving immediate pay. While the government sought to argue the delay in payment was not “egregious,” the judge said a violation occurred under the FLSA as soon as the checks were not delivered on time. She also rejected the government’s argument that any financial hardship occurred only because of federal workers’ “poor financial management decisions.”

My preferred solution to this is for each side to allow the other to save face but, as I noted earlier, the main purpose of the shutdown is to embarrass the other side so that’s unlikely to happen.

By my calculation these exempt employees have now missed exactly one paycheck and that by one day. There’s an obvious resolution to this technical violation of the court’s decision: pay the exempt employees.

However, I do have a question. With all due respect to Judge Campbell-Smith (the snippet quoted above is in error—the deciding judge was Patricia Campbell-Smith), does the Congress actually have the authority to micromanage the executive at this level? Do the courts? I’m skeptical. I would think that a reasonableness standard would apply. Perhaps someone can enlighten me on this.

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Heads I Win

At The Conversation academic Parker Ellen uses his study of the science of negotiation in considering a way out of the impasse between President Trump and the Democratic-led House:

Although the current political climate clearly amplifies both sides’ competitive approach and hinders a shift from positions to interests, that is the most productive path to an agreement. Unfortunately, we have seen only hints of a discussion of interests to date.

To end the shutdown, both sides should find a way to make that shift. For example, Trump could do more to acknowledge the Democrats’ interest in fair treatment of those who want to enter the United States. Schumer and Pelosi could put more emphasis on the importance of Trump’s desire for increased border security.

And most importantly, both sides should present proposals to end the crisis that satisfy the other party’s legitimate interests. It’s a difficult task, but it’s the only way both sides, and the country, can win.

Hat tip: The Moderate Voice

I don’t think he quite apprehends the present situation. In this instance the actual material of the positions is overwhelmed by the interests at stake and the primary interest is for the other side to lose. Trump must get his wall. The House Democrats must refuse it. There is no middle ground. They are completely incompatible.

In a purely rational world without political considerations a resolution along the lines produced by pundits of both parties would have prevailed. But it’s not a purely rational world without political considerations and the political considerations have overflowed their banks and are threatening to drown the negotiation.

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Land of Opportunity?

Economic Advantage of Dense Cities


There’s an article in the New York Times which, as you will discern, does not surprise me at all but will no doubt come as a bolt from the blue to those who think that the U. S. can use all of the low-skill workers it can get. A recent study has found that large metropolitan areas no longer provide the advantages to low-skill workers that they once did:

For decades, workers migrated to big cities in America that promised abundant jobs and decent wages — in clerical offices in New York, at shipbuilding yards in Oakland, on auto assembly lines around Detroit.

Big, dense cities offered not just better pay for lower-skilled workers; cities offered them better kinds of jobs.

This is much less true today, as workers hurt by the decline in manufacturing know. Because of this, cities no longer offer low-skilled workers the economic advantages they once did, according to new analysis by the M.I.T. economist David Autor.

Workers, whether with a college degree or not, could long count on earning more in denser urban areas than in rural ones. Today, that pattern holds for highly educated workers — and has in fact grown much stronger. For workers without any college education, the added wage benefits of dense cities have mostly disappeared in Mr. Autor’s data…

I would add that I suspect that the economic advantage to highly dense cities does not hold for all workers with college educations but is mostly concentrated on workers with degrees in just a few fields but that’s just my suspicion.

I have one question and one observation about this. First, the question. Who are these low-skilled workers. I think there are several categories:

  • Illegal immigrants
  • The children of illegal immigrants
  • The unskilled spouses of skilled legal immigrants
  • Other legal immigrants sponsored by legal immigrants
  • Blacks
  • Some whites, particularly those from rural areas

And here’s the observation. The cost of these low-skill workers is higher in highly dense cities than in smaller cities or rural areas.

I’ll leave you with this thought from the cited article:

“People have lamented, ‘Well, all these areas that lost manufacturing, why don’t those workers just get up and go somewhere else?’” said Mr. Autor, who looked at wage data from the census and American Community Survey and recently presented the findings at the annual meeting of the American Economic Association. “It’s just not at all obvious what that place is. It’s less obvious to me now than it was a month ago.”

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Endemic

I had to laugh, a rueful, sardonic laugh but a laugh nonetheless when I read the caption of this op-ed in the Wall Street Journal: “Early Withdrawal Will Lead to More Terrorism”. Also, failing to withdraw with lead to more terrorism. Doing something will lead to more terrorism. Doing nothing will lead to more terrorism.

Terrorism is endemic in the Middle East. There has been terrorism in the Middle East for at least the last millennium and a half. The differences between now and then are that then we just didn’t care and the population of the Middle East was staying in the Middle East. The Ottoman records are actually pretty clear on this subject. Every so often a Jewish village or a Coptic village or a Shi’ite village would be burned to the ground but what’s one Jewish or Coptic or Shi’ite village?

The problem with the Middle East is the Middle East. We should be looking after our actual interests in the region and otherwise maintaining a low profile there.

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Do We Actually Agree?

I agree with a lot of what’s in Peggy Noonan’s latest Wall Street Journal column, a plea to end the shutdown. So, for example, I largely agree with this:

Those of us who are not politicians agree that neither party has really wanted to solve the problem. Both played it for their own gain, cynically, as if they weren’t even invested in this place. They should be ashamed.

It was not in the interests of the Republican Party to address the border problem because that might leave them open to charges they were driven by questions of race and color. Also their major donors didn’t mind illegal immigration, which was good for business. It’s always convenient when you see things the donors’ way! The affluent and powerful in America enjoy feeling liberal and are uninterested in how poor Americans view chaos (as a threat—America is all they have; they don’t have two passports and a share on a plane) and jobs lost to cheaper labor.

Democrats never intended to control the border because they think doing nothing marks them as the nonracist party, the compassionate, generous party that Hispanics will see as home. They would reap the electoral rewards in a demographically changing country. They will own the future! Their big donors too opposed border strictness. They don’t think about security a lot, even after 9/11. I think it was Murray Kempton who said Republicans are always hearing the creak of the door at night. It’s true. Democrats are less anxious about security. It’s fair to point out they tend to be more affluent and have the protections money can buy. Their fearlessness is not bravery but obliviousness. They off-load anxiety onto Republicans, who are always mysteriously eager to take it up.

But the crux of the problem is in this paragraph and, sadly, I don’t think it’s true:

Almost everyone would agree we have a right to determine the rules by which legal entry is attained. Most Americans would agree it is desirable to set those rules according to the nation’s needs. America is beginning to experience a shortage of registered nurses. Have you noticed? You will. Wouldn’t it be good to address the shortfall through immigration policy, inviting nurses from other countries to become legal residents and citizens? My people, from Ireland, were welcomed because the dynamic America of 1900 needed laborers and domestic workers. That, luckily, is what my people were. Two generations later I worked for an American president. What a miracle this place is. Let’s keep that up, the miracle part.

It has many problems. I’m not sure that most Americans agree that “we have a right to determine the rules by which legal entry is attained”. I’m not sure when “her people” arrived but when my people, i.e. my Irish ancestors, arrived in the United States (pre-famine Irish), the United States would experience more than another century in which wages would rise for typical workers. That hasn’t been true for nearly two generations now. Importing nurses will increase the number of nurses today but it will also keep wages for nurses down and discourage young Americans from seeking a career in nursing.

Why aren’t more young Americans seeking to become nurses? That’s the question I think she should be asking.

We presently have as high a proportion of immigrants in the population as at any other time in our history. Under the circumstances claiming that more immigrants will solve our problems is extraordinary and deserving of a high standard of proof. Maybe what we need as a society is fewer laborers and domestic workers and more social equality, something that cannot be obtained by importing workers.

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Know Your Place, Knaves!

Keep the prediction I made immediately following the November elections in mind. When all of the dust has settled the Congressional leadership, Republican and Democratic, will still be in charge. The newly-elected young “radicals” (I don’t know whether they’re actually radicals or not and I don’t much care) will be relegated to the backbenches. They’ll hold their offices as long as they do what they’re told. They are not off to a great start.

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A Word About Health Care Spending

Most large companies presently self-insure when it comes to their employees’ health care plans. Frequently they hire erstwhile insurance companies to administer their plans. They do this for a reason: they save money relative to what they would otherwise spend.

How payments for a “Medicare for All” system would be structured is important. In all likelihood it would cause those companies to pay more than they do presently and many people who presently have insurance will end up paying more.

The U. S. health care system is very complex. There isn’t just a big pile of money labelled “health care spending”. There are tens of thousands or millions of little piles and how the money is shifted from pile to pile will make the difference between a program that can be passed and one that gets its proponents thrown out of office.

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Marginal Argument

You may have noticed that I haven’t posted on the brouhaha about claims about tax rates in the 1960s which has drawn in not just newly-elected Congressional representatives but Paul Krugman. I have the utmost of respect for Paul Krugman as an economist but much less in his political judgments and, let’s face it, politically he’s a weathervane. Whether he supports or opposes something depends on what the prevailing wisdom among the Democratic leadership is at any given time.

The reason I haven’t posted on it is that there are so many things being said that are untrue or half-truths it’s hard to know where to begin. The top marginal tax rate in 1960 wasn’t 70% it was 91%. Only a handful of families paid it—something like the top .002% IIRC. Those paying a rate of 70% weren’t a lot more numerous. Something like the the top .01% of income earners.

And—a key point—the effective tax rates being paid were about the same as today. What Americans have been willing to pay in taxes has been tremendously persistent over time, not just the last ten or twenty years but for at least the last 80 years or even longer.

The bottom line is a top marginal rate of 70% would be very, very difficult politically to effect and it won’t bring in nearly as much as either the proponents or foes are claiming. Try again.

One final word, something I’ve mentioned before. In 1960 the top 1% of income earners held 9% of wealth. Today they have 40%. Opinions can differ but I don’t think that’s due to unions, tax rates, or the inherent gifts of the top 1% of income earners. I think the change is due to a web of government policies that include tax policy, trade policy, immigration policy, and many, many others. I don’t think we can maintain a society of social equality in the presence of such stark inequality in wealth. Maybe I’m wrong. We’ve spent 80 years weaving that web of policies and it will take us at least that long to unweave them, its beneficiaries fighting to the death every step of the way.

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