Why Immigration Reform is not as Easy as Sound Bites

CNN has an interesting article about a couple that married in Kansas several years ago. What the wife, who is a US Citizen, didn’t know while they were dating was that her husband was an illegal immigrant. He tried to do the right thing earlier this year, which was to return to Mexico and apply for legal immigration status. The problem is, since he was in the country illegally for over a year, he is barred from returning for over 10 years unless there are extreme extenuating circumstances. You can read about it here.
While I have my doubts about this case (a 26 year old man marries a 40 year old woman, hmm…), this is one case out of over 12 million currently in the US. It illustrates, however, the difficulty faced by true immigration reform. When an illegal immigrant marries a US Citizen and they start a family (where under the Constitution the kids are US Citizens), do we tear the family apart to enforce immigration laws?
How we tackle this debate will in some ways define us as a nation, since we are a nation of immigrants. Keep in mind that 100 years ago, to the best of my knowledge, there was no such thing as “illegal” immigration. Here’s my two-cents:

Why does the media continue to insist Al-Sadr “won” in Basra?

It is interesting to look back at the fighting that occurred in Iraq this past week and a half when Iraqi forces entered Basra to contain and control militias in the second largest city in Iraq. All week we’ve been subjected to headlines of “The Lessons of Basra” (The Nation), “A Civil War Iraq Can’t Win” (NYT), “Basra Assault Exposed U.S., Iraqi Limits: Anti-Sadr Gambit Seen Aiding Cleric” (The Washington Post)…you get the picture. Here’s the part I don’t understand:
1. As of March 30th, when the cease-fire was declared, Iraqi forces had killed 571 Mahdi Army fighters, wounded 881, captured 490, and accepted the surrender of 30 throughout Iraq.
2. Al-Sadr ordered his fighters to quit fighting, then called it a “cease-fire.” While he tried to put terms on it, the Iraqi government did not accept any of the terms, with the exception of “if you quit fighting us, we won’t kill you.”
3. Al-Sadr “brokered” the cease-fire with the help of Iran, because that is where he is at. He is not in Iraq (nor has he been seen there in over a year), because he fears to return.
4. The Iraqi army has entered Basra in Brigade strength to restablish order. Curfews still exist for Sadr City and Basra. Not exactly conditions for the Medhi Army to be dancing in the streets.
5. In six days of fighting, the Mehdi Army suffered major setbacks in Hillah, Najaf, Karbala, Diwaniyah, Amarah, Kut, and Nasiriyah.
6. When the cease-fire was granted by the Iraqi Army, Al-Sadr’s Medhi army was critically low on food, water and ammunition in Basra due to the border with Iran being sealed.
Explain to me please how people can say he “won?” I just don’t get it.

Election Shenanigan’s on the Part of the Obama Campaign?

One of the stories from Ohio’s primary yesterday that is really bothering me was a report of 21 precincts in Cuyahoga County ordered to remain open by a Federal Judge’s decree until 9:00pm due to “voting improprieties.” Specifically, the Obama campaign sued the Ohio Secretary of State about a shortage of ballots and heavy winter weather supposedly preventing voters from being able to get in line to vote before the 7:30pm deadline. Here’s why this bothers me so much. Within the documents presented, there were no witness statements or evidence collaborating the charges (normally a requirement), and more importantly the 21 precincts appear to have been “cherry picked” due to their racial demographics (i.e. mostly African-American).

How Fair are the Rules for How Democrats Select Their Presidential Candidate?

I’ve been wondering for a while how fair the rules are governing who gets a state’s delegates for the democrats. I feel a little disenfranchised right now, because there is no reasonable way for me to have a say in who is selected from my home state (Wyoming). As a military family, because Wyoming is a “Caucus” state for all intents and purposes we don’t count. My wife is an ardent Hillary Clinton supporter, and at least in the primaries my loyalties follow the same path (though in the general right now my preference is for McCain). It bothers me a little bit that she cannot make her opinion known because she is currently deployed to Iraq, and that the only way I could participate would be to buy two very expensive plane tickets to our home state, then arrange for a babysitter for my four year old daughter while I go stand in a gym someplace waiting to very publicly (vs. a secret ballot) make my selection known.
Because I couldn’t sleep, I decided to take a look at a couple of figures related to how the candidates in this election are selected. An interesting contrast is created when you look at a couple of “what if” scenarios involving the way democratic delegates are awarded. What if the states were awarded like the general election, namely “winner-take-all” vs. the current allocation. If this were the case, the numbers would be Clinton in the lead with 1738 to Obama’s 1559 (at the time I am writing this, Texas Caucus results are unknown, though the primary in Texas has been called for Clinton). My assumption here is that Texas would be awarded solely to Clinton due to the Primary. If you factor in Florida and Michigan (which Clinton won, but don’t count due to moving their primaries up) the numbers would jump to 2051 vs. 1559. In other words, the contest would be over, and Clinton would be the nominee.

Why are we talking about McCain’s Citizenship?

Why is the question of John McCain’s citizenship being brought up now? Not meaning to sound like a conspiracy theorist, but it sure seems like the NY Times has suddenly made it their mission to bring up the most asinine of charges against the presumptive Republican nominee. Here is the article McCain’s Canal Zone Birth Prompts Queries About Whether That Rules Him Out.
This issue hits a little close to home for me. My daughter was born overseas, specifically in the US Military Hospital in Wuerzburg, Germany while my wife was assigned there as a member of the US Army. If you follow the argument set out by the NY Times (and now floating around the blogs), she would be ineligible to become the President of this country, while the child of an illegal immigrant born in an Arizona hospital could someday become the Commander-in-Chief. Now I’m not a Constitutional Scholar, but I believe that the common sense definition needs to come into play.
Why was John McCain born in Panama? His father was a career US Navy Officer, stationed at the US Military Base in Panama at the time he was born. By pushing this argument, it means that the child of any military member, ambassador, embassy worker, or citizen serving their country outside the US borders born overseas is ineligible for this nation’s highest office. This is just flat out stupid.

True Stimulus

Is it just me, or are the Congress and the President doing the usual two-step “we must be seen to be doing something about a recession because it is an election year” dance when it comes to “stimulus?” Think about it. As proposed, what would the stimulus really accomplish? We give individuals $600.00 ($1,200.00 to families or couples) to spend as they wish. It will cost approximately $150 Billion dollars. WHY?!?!? From what I have read, people are usually going to do one of two things with their checks, either pay off their credit cards (no new jobs) or go to Wal-Mart and spend it (most of the money going to China). If we are determined to put ourselves in debt that much more (and I personally don’t think we should) why don’t we address it differently?
If you want to truly stimulate the economy, do something that will help people long-term. This country is beginning to have major infrastructure problems. Why not propose it as a comprehensive Infrastructure Refurbishment Bill instead. Think of how many construction workers and American businesses would be hired with this amount of money? American Steel used to rebuild bridges. American families reaping the benefits of new jobs. All of the money would go into stimulus, and it would stay in the USA.
If you want relief for all Americans, then release 15% of the Strategic Petroleum Reserve over the course of a year to stabilize (reduce the price) of the oil markets. 15% is equal to 104 million barrels of oil (the current reserve level is at 697.5 million barrels). This would result in lower gasoline costs, lower heating oil costs, lower jet-fuel costs, etc. It would probably knock the price of oil back down into the $50-$60 range, which would translate to a savings of approximately $0.50 per gallon of gasoline for each consumer. Considering each family on average uses 15 gallons of gas a week (conservatively), this translates to a savings of nearly $400.00 per year per family, and jump starts the transportation industries (airlines, shipping, etc) by boosting their profits and allowing them to afford to create new jobs. It’s not like we’re draining the reserve, it will still be at a higher level than it was in 2001 (when it held 545 million barrels).

Part 2 – Why the Bush Presidency is one of the Worst in History – Economics

I hit the argument for Tax Cuts pretty hard when I wrote about it here. However, I did not mention one of the classic problems with the Supply Side Economic model when I addressed it. When the government fails to take in enough revenue to cover expenses, it creates a deficit. This is economics 101. When this occurs long enough over time, it causes inflationary conditions to develop, and it devalues the currency against the world market. Let’s start this part of the discussion with the cost of oil.
Is it just me, or is it odd that the price of oil has spiked from $28.00 a barrel in 2001 to $88.49 in 2007? How about the fact that the 50 year trend in oil pricing prior to 2001 saw the median for oil at less than $24.00 per barrel with the exception of times when conflicts around the Middle East were occurring, yet it is projected to potentially go as high as $110.00 a barrel within the next year? You can find an analysis of the past 100 years worth of oil sales and figures here. The most common justifications that has been given for the increase in oil price are that a)more countries are consuming it (i.e. China and India), b) the market is just catching up for 30 years worth of inflation, and that the cost of oil is really low considering what was paid for it in 1980 and c) the weak US dollar is driving oil prices up, which means that the commodity in the world market is right where it is supposed to be.
Sorry, not buying it.
Can you honestly tell me that the chairmen of two oil companies, who just happen to be occupying the #1 and #2 political positions in this country, had absolutely no control whatsoever over the 300% increase in crude oil pricing over a 6 year period? Oil prices (and the corollary, gasoline prices) affect just about every aspect of the economy. The cost of gas is figured into everything from freight bills to school district budgets. Oil prices directly affect electricity and heating costs. Anyone paid any attention to the cost of milk recently? At the local grocery store, it will cost you approximately $3.50 for a gallon of milk. Contrast that with $1.40 in 2003. Why the rise? Increased costs for everything from cow feed to trucking to send the milk to market.
My point is that there are already inflationary storm clouds starting to form on the horizon. Do we really want to return to the economic model of the late 1970s, with 16% interest for a home mortgage and double-digit inflation? So how could the Bush administration prevent this from occurring? Simple. The National Strategic Oil Reserve currently holds 690 Million barrels of oil out of a possible 720 Million. In other words, it is currently holding over 95% of its capacity, which also happens to be the most it has ever held in history. OPEC affects the price of oil by setting price controls and then turning the tap on or off as appropriate to get oil to the level they want. Let’s take a page out of their book. If the President was to release 15% of the existing reserve (100 Million barrels) in a controlled manner over the next year to two years, it would probably have a huge dampening effect on the market, bringing the cost of oil back down to around $50 a barrel (if not lower). The argument could be made that this is a garden hose next to the OPEC fire hose. It doesn’t matter. The economic principles that drive the oil commodity market are keeping it artificially inflated. All it takes is puncturing the balloon for the prices to reset to where they should be. Will this administration even consider it? Probably not, because it is not in their political interests.
Let’s talk about the free-falling dollar against world economies. In February 2001, then Treasury Secretary O’Neill made the statement that “We are not pursuing, as often said, a policy of a strong dollar. In my opinion, a strong dollar is the result of a strong economy.” Federal Reserve Chairman Bernanke, when asked about it recently, made it clear that it is the role of the Department of the Treasury, and not the Fed, to control international currency valuation policy. Since 2001, this administration has given lip-service to supporting a “strong dollar,” but always with the caveat that market conditions would set the price. In other words, where the dollar falls is where the dollar falls. This is the first time in history that the US has not used the Department of Treasury to ensure a strong dollar.
So where has it fallen? Let’s look at the Euro for a price comparison. In February 2002, $0.87 bought €1.00. If you wanted to buy a new BMW from the factory in Bavaria that cost €50,000.00 it would set you back $43,500.00. In today’s world, the Euro just closed at an all time high against the dollar, where it costs $1.43 to buy €1.00. That same BMW at today’s conversion…$71,500.00. Pick a different currency? The Canadian Loonie reached parity with the US Dollar for the first time in over 30 years this month. In February 2002 $0.66 bought $1.00 of our northern Strange Brew cousin’s money (Cool, eh’). What does this mean for America? In the short term, it means that the US gets to act like a kid in the candy store. Our goods cost less in other countries, which means we sell more. Other countries goods cost more, which means we buy less. Our trade deficit lowers and American manufacturing makes a comeback. Everybody sings Kumbaya.
Not so fast.
Remember oil? We buy it from other countries. A lot of it. We also happen to buy a lot of other products we use in our day to day lives from foreign countries. Most of our fruit and produce this time of year comes from South and Central America. Electronics from Japan, China and South Korea. You get the picture, there is a reason it is called the “Global Economy.” In the long term, a devalued US dollar can cause long-term double digit inflation. There is no such thing as a free lunch. It is a lot like one of the scams you see advertised on TV. A company offers to give you a large lump sum as long as you sign away your monthly pension to them. They’ll give you $100,000.00 right now, as long as you give them your retirement check of a paltry $800.00 a month. Of course, this means that at the end of 10 years, they’ll continue to collect your pension for the rest of your life, a long time after you’ve spent the $100,000.00. If the math is confusing you, in 10 years at $800.00 a month, you would have earned $96,000.00 not including any compounding interest. For a short term gain, in the end you get royally screwed. In other words, the Bush administration has utilized a sledgehammer to attempt to dictate fine economic policy. And just like hitting a stained glass window with a sledgehammer, it’s hard to put the pieces back once you’re done.

Part 1 – Why the Bush Presidency is one of the worst in History – Tax Cuts

As my co-blogger PuddlePirate wrote yesterday, he and I got into something of a spat over the presidency of George W. Bush. My position is that, in the past 7 years with him as president, he has done more damage to this great nation of ours than just about any other person in history.
Needless to say, my good friend the PuddlePirate turned beet red with rage and demanded to know how I could possibly justify a statement like that. It all went down hill from there.
He has put together a very nice argument for tax cuts and why supply-side economics are just what the country ordered. You can find that here. The problem with this, in my opinion, is that it is disingenuous and misses the point of my argument. Let me start by making a very broad disclaimer – I am not, nor do I pretend to be, an economist. Having said that, I trust the words of the economists who should be setting policy.
The justification for the 1.35 Trillion (yes, that is Trillion with a T) tax cut package that Bush passed through congress in the first part of his presidency was that the country was projecting 10 Trillion dollars in budget surpluses over the next decade. The goal was to spur the economy, create new jobs, and replace the tax revenues through growth. In this package, it accomplished some very good things, most namely eliminating the “marriage penalty” (i.e. two people with income would be better off not getting married due to higher taxes). It also increased the tax credit to lower income people with children (not that I am against this, but it smacks a little bit of a “buy your vote” kind of deal). The bottom line is that of the 1.35 Trillion dollars in tax cuts, according to the IRS’s own statistics, approximately 70% is going to the top 0.5% of society (those individuals making over $1,000,000.00 in reportable income). The last time I checked, the last year the country had a budget surplus was 2001. It also just about completely failed in its stated purposes (create jobs), since approximately 5,000,000 jobs were lost between when it was passed in 2001 and 2004.
The argument has been made that the idea behind the tax cuts bears out, since tax revenues are up. This is, again, disingenuous. The reason tax revenues are up is that the top 0.1% (those making over $1.6M per year) account for over 10% of the nation’s income and 19% of the taxes. Contrast this with 1979 when the top 0.1% accounted for 3% of the nation’s income and 7% of the taxes. When income in this group goes up, tax revenues go up a lot faster than if income rose evenly across all tax brackets. This is borne out by the fact that, while income tax revenues are up significantly, Social Security and Medicare tax receipts have remained flat (indicating that the average wage earner’s salary has not been rising, nor have there been additions to the average wage earner’s numbers). In other words, the rich have gotten richer while the average person has stagnated. Where did this money come from? A large chunk came from Capital Gains taxes. Where did the capital gains taxes come from? Unfortunately, a very large chunk came from investments in foreign markets, where the returns have been up significantly due to the falling dollar (I don’t even want to get started on that presidential economic fiasco). Think about that for a second, our tax revenues are up because the top 1% of the population has been investing their money in other countries. How do I know this? To quote an example, Warren Buffet, the “Oracle of Omaha,” has made no secret of the fact that Berkshire Hathaway has been exploring the foreign markets as a primary source of growth for their investors.
My view on this is that, in a time of war when the country is running huge deficits (with most of the debt being bought by the Chinese, by the way) it is not the right time to continue giving the top 0.5% of people a tax cut that is costing the country more than the entire cost of the Iraq war. I have some folks who agree with me, too. Namely, some of the top economists in the nation who signed a letter in 2003 titled Opposing the Bush Tax Cuts. Like I said, I’m not an economist, but when 10 Nobel Laureates in Economics are calling the president to the carpet, I tend to take notice. If that particular piece of prose is a little dated, there is also the Briefing Paper from the Economic Policy Institute updated in March of 2006 titled THE BOOM THAT WASN’T – The economy has little to show for $860 billion in tax cuts. The long-term health and well-being of the country has been seriously compromised by this gift to the rich.
A couple of final notes. My friend quotes from his research that “Overall, we find that America’s lowest-earning one-fifth of households received roughly $8.21 in government spending for each dollar of taxes paid in 2004. Households with middle-incomes received $1.30 per tax dollar, and America’s highest-earning households received $0.41.” My only issue with this is how do we come up with these numbers, since it is not explained? Are we talking about Social Security and Medicare for retirement? Income credits for the poor, or building highways that lower income people drive to work on? All of the above?
Let me put it another way. If a single person makes $30,000 a year, of that amount they will pay $3,159.00 in Federal Taxes and $2,295.00 in FICA (Social Security and Medicare). Not taking into account State or Local tax burdens, this means that already they have paid out 18.2% of their income in taxes. This is the standard deduction, because most people in this income range cannot itemize deductions (which require the ability to itemize more than the standard deduction of $5,150.00). This leaves them with roughly $2,050.00 per month to pay their bills and feed themselves (assuming no state taxes). Am I advocating lowering their tax burden further? No, I am not. But I am also not going to hold them to the same standard as someone who makes in a day what they make in a month. A serious reexamination of the tax code and all the tax benefits are necessary, including the sacred cows of “home mortgage interest deduction” and “State Income Tax deduction.” Why should a millionare who owns a $750,000 house get to deduct $60,000.00 in mortgage interest because they chose to buy a bigger home? Most financial advisers will tell you it is better to buy a home with a mortgage rather than spend your money on it for the tax savings that you will realize (as long as the size of the mortgage allows you to itemize deductions), with the argument being “you can invest your money then into a mutual fund and receive a return of 8-12%, while the government subsidizes your home.”
On the flip side, let’s take a look at another example. A single lawyer who makes $250,000.00 a year and owns a $750,000.00 home will pay approximately $6,885.00 in FICA and $30,000 in Federal taxes after taking itemized deductions for his home, unreimbursed business expenses, charitable contributions, a home office deduction and the like. This equals out to approximately 14.8% of their income. It also means that they have only $17,760 per month to pay their bills and feed themselves (again, assuming no state taxes). You will notice that I state they will pay $30,000, not $66,303.00. The $66,303.00 is what they would pay if they took the standard deduction. I am making the argument that they would be able to shelter approximately $125,000.00 via deductions. Does this sound excessive? It isn’t when you consider that as a small example your car can be deducted if used for business, and that the miles are deducted at $0.485 per mile not considered commuting. There’s a reason CPAs get paid big money for working on people’s taxes (which is also a deductible expense). Oh, and if they did take the standard deduction (foolish lawyer!) that would leave them with only $14,700.00 per month to live on. Someone needs to let them know where they have to go to get the food stamps.
Here is the bottom line, and the most important part of the debate in my mind. My daughter is 4 years old. All these deficits will come due to be paid when she reaches the work force. Her mother is currently serving in Iraq. The cost of that war, the crumbling infrastructure of this country and crippling debt that will occur in the future could be averted for the most part if we were to reset the tax rates for the top 1% back to what they were paying in 2000 before Bush took office. If we don’t do something, we’ll be leaving it to our children to shoulder the responsibility for our inaction. I’m sorry, telling people that the best way to support the troops is to go to the mall and buy a pair of jeans is not my idea of good policy. Ask them to sacrifice a little instead by paying what they were paying only a couple of years ago. That would be supporting the troops, because it would mean that the country they are fighting to defend will still be around when they grow old.
OK PuddlePirate, ready for Round 2?

Democrats are their own worst enemies

Just when you think they can’t manage to shoot themselves in the foot (again), MoveOn.org runs a full page ad in the NY Times with the title “General Petraeus or General Betray Us.” The gist of the ad is that Petraeus is a Bush sympathizer disconnected from the facts, before he has even uttered one word to congress. It’s no wonder the american people don’t take democratic politics seriously when they are represented by this bunch.
As a former member of the Armed Forces, with a spouse who is currently in Iraq fighting the good fight, this kind of crap only emboldens the enemy and undercuts our military. Take it from someone who’s inside source is over there, this guy knows what he is talking about and we finally have an effective military strategy in place, even if it is 4 years late in coming (thanks to the arrogant and incompetent former SecDef). The troops on the ground have faith in the guy, too bad the politicians are more concerned with sound bites than listening to a professional military general give his assessment on how to win the war. It’s time for MoveOn to move on.
You can see a copy of the ad here.

Puddle Pirate’s addendum: Guess who got a sweetheart discount on that ad?

Joining the Blogging World

Greetings online community. I am going to be blogging with my fellow co-horts here at Brainshavings as a more reasoned voice (I’m not a right-wing nut like the Pirate) for the online community. In fact, both the Pirate and the Spider Slayer like to refer to me as their “left-wing moonbat friend.” I’ll take that as a compliment. I’ll bring a more centrist personal perspective, or as the Pirate likes to say “I’ll stick my finger in the air and figure out which way the wind is blowing before I give my position.” I’ve actually registered as both a Democrat and a Republican in the past based upon the issues, though recently I’ve been an Independent due to my disgust with both national parties. Let the debate begin!