Democrats want to take over government but can’t make up their minds about governance

The Democrats are a flighty bunch. Since January 2017 they have been all over the place looking for a narrative that can gain traction with voters. So far, they have come up with the following:

1. Trump the Pussy Grabber is Not Fit for President
2. Trump the Russian Sympathizer is not Fit for President
3. Trump the Disloyal Friend to Canada is not Fit for President
4. Trump the Banger of Porn Stars is not Fit for President
5. Trump the Disruptor of Immigrant Latino Families is not Fit for President

So far, five major ones but the President’s first term is still young.
Do any of these issues have anything to do with how Mr. Trump is running the political economy? How does admitting on a video tape made in 2005 on the set of a soap opera that he approaches women like a boar translate in to his implementation of commerce policy?

Is Russia really an enemy of the United States? Granted Russia probably still is a little pissed 100 years after American troops known as the Polar Bear Expedition invaded northern Russia back in 1918 and the United States may be tired of Russia referring to Soviet Union soldiers passing themselves off as just technical “experts” in the Vietnam War, but forty-plus years since the Vietnam War was declared over, and no official hostilities recorded on either side, Democrats simply can’t convert the “Russia ain’t our friend and Trump talked to them” into any substantive narrative for the better informed.

While women on the Left may find Canada’s Boy Toy prime minister, Justin Trudeau, to be a hottie, does Mr. Trump’s trade disagreement with Mr. Trudeau over steel and timber imports amount to the president being a poor manager of foreign policy or economic affairs? Not at all. For example, under the North American Free Trade Agreement and section 301 of the Trade Act of 1974, the President has wide power to address unfair or discriminatory practices of a foreign country. Ally or not, if the President determines via an International Trade Commission or United States Trade Representative investigation of Canada, why should America’s friends in the Great White North get cut any slack versus its friends south of the border?

The Trump/Stormy Daniels narrative tells me that Mr. Trump is no saint. Did Mr. Trump, during the run up to the November 2016 elections, pay off Stormy Daniels to avoid the embarrassment of knocking boots with a porn star while married in 2006? I don’t know nor care. That’s a private marital problem and Democrats who are gung-ho for an impeachment should at least provide evidence where Mr. Trump denied otherwise unimportant, non-government related incidences to federal officials ala Bill Clinton in the Monica Lewinsky affair.

Lastly, there is Donald Trump the Disruptor of Latino Families. Mr. Trump implemented a policy, in development since December 2017, to separate children from parents who cross the United States-Mexico border without documentation. The Democrats argue that such acts are cruel and that such cruelty is not what America is about and is further evidence of Mr. Trump’s despicable character. But while Mr. Trump may be auditioning for Machiavellian of the Month, the Democrats never argue that his policy is illegal. By the Administration’s admission, the separation policy is designed to scare parents, to make them think twice about making the trek through central America and Mexico. For the majority of Trump supporters, Mr. Trump’s prosecutorial discretion and scare tactic in this case is on point.

So, what is really going on with the Democrats? Their scatter-brained approach to keeping the President in check is so unfocused and non-sticky that by the end of December they will need a fresh batch of heart-tugging, nonpolicy-based narratives to toss at the American electorate. I suspect the Democrats will spend 2019 ensuring that 2020 Democratic presidential hopefuls tie and spin these events.

It won’t work, because a more important event will take place during 2019: the slow down of the economy. Americans will spend more time worrying about how to feed their own children.

Citizenship is not property

Everyone’s citizenship i.e., license for occupancy, can be revoked. How you got your license determines the length of time it takes for revoking it. Having an occupancy license doesn’t provide you with much sway as to whether a license to occupy should be extended to another person. Nor does having a license provide you any basis of authority for commenting on the form of occupancy another occupant holds. The license is not exclusive.
 
In short, your license was issued to you by a stroke of luck and the stroke of a pen. It is not your property, this thing called citizenship. You didn’t earn it. It was given to you because like any tax and customs farm, a good farmer (politician, capitalist, economist) knows that the higher the population of occupants, the greater the amount of tax receipts and number of potential voters.
 
Hell. You haven’t even taken a few minutes, like any mature, self-actualized person would do, to ask yourself why should you need a license of occupancy i.e., citizenship, permanent residency, visa, etc., to live anywhere?

Of Congressional factions, disruptive economy, and Donald Trump

The Goodlatte-McCaul Immigration & Border Security bill, HR 4760, failed to pass a few minutes ago.  I believe that Mr. Trump will gain more traction from the failure of both bills to pass and from the further weakened position of congressional Republicans as their majority starts looking like the majority that former president Barack Obama had in the first two years of his first term in office.  I would go further and argue that the sweet spot for Donald Trump would be the finish the second half of his first term with at least one chamber of Congress under the control of Democrats.

While on the surface the disruption may seem abnormal or undesirable, disruption, as represented in a split Congress, disruption is what Americans should expect. A majority of interests cannot exist without a minority of interests.  There is no such thing as congressional harmony.  There cannot be harmony given the political goal of a party: to persuade the electorate that the party should have a monopoly on the power and prominence that comes with office.  Mr. Trump, I believe, already had a sense of this going into office and the dysfunction of his party may have strengthened the rationale for his findings.

For example, take Obamacare. The premature consensus was that with majorities in both chambers, Mr. Trump would be able to move a repeal of the controversial Affordable Care Act through a friendly Congress. Pundits and constituents were wrong. The Affordable Care Act is still on the books thanks primarily to its provisions that extend care to children up to age 26 and its protection of consumers with pre-existing conditions.  Mr. Obama put a bomb in the ACA that Republicans are now afraid to detonate.

Another example: tax reform. While the GOP was able to pass some measure of tax reform, the level of difficulty in getting a bill to Mr. Trump to sign caught Congress watchers off guard.  Did Republicans doubt their chances so much in November 2016 that they started a new Administration and entered the 115th Congress with no coordinated plan?

It doesn’t help that the electorate does not look favorably on Congress. The average approval rating for Congress is 17%, according to a May 2018 Gallop poll.  Among Democrats the approval rating is approximately 12% while Republicans hold Congress in slightly higher regard at 22%.  The President’s approval rating is another matter.

According to Gallop, Mr. Trump’s current approval rating is approximately 45%, up from a low of 35% back in December 2017.  While his overall approval rating gives him some cushion against the low view of his colleagues in Congress, what is being overlooked is his performance among independents and Democrats.

Mr. Trump’s approval rating among Republicans is 90%. No surprises there. Among independents, Mr. Trump’s current approval rating among independents is 45%. At the low point the approval rating among independents was 29% but has been hovering in the thirties throughout 2017 and 2018. Meanwhile, a small number of Democrats are flirting with the idea of liking Mr. Trump. While his favorable rating among Democrats has mostly been in the single digits, since his inauguration his weekly average favorable rating has been in the double digits twelve times. It is currently at 10%.

I see Mr. Trump having room to maneuver away from the congressional Republicans and while moving away from the party may seem disruptive, disruptive is the modus operandi in today’s economy. We hail disruptors like Elon Musk, Brian Chesky, and Garrett Camp for using technology to upend the electricity, hotel, and transportation industries. Mr. Trump is doing the same thing, albeit not with the smooth intellect of an Elon Musk.

He has shown no fear in governing as an executive, using the executive order option with no hesitation. And while his ability to transfer his deal making skills from the world of real estate to the game of thrones has taken heat, his negotiations with Kim Jong-Un could move him toward silencing critics.

Politics is about creating the political packages that win over the pawns necessary for winning the throne. Mr. Trump, so far, is beating the Democrats.

Too bad the Democrats chose to politicize today’s EB-5 immigrant investor hearings

I am always reminded when watching a congressional hearing that the first duty of Congress is to keep the Executive in check. Today was no exception as I tuned into the U.S. Senate Committee on the Judiciary’s hearing on the Employment Based Immigrant-Fifth Preference Program. The chairman of the committee, Senator Chuck Grassley, Republican of Iowa, called the meeting to discuss the problem of fraud in the program.

The EB-5 immigrant investor program promotes foreign direct investment in the United States by granting a green card (permanent residency) to an immigrant and his or her family where the immigrant invests $1 million or $500,000 in an investment that targets rural or underserved urban areas.

I was less interested in the fraud aspect, hoping that between any discussion of the downside of theft that the panel and its lone witness would shed some light on its benefits.

I should have known better….

A number of Democratic members of the panel, Senator Dick Durbin, Democrat of Illinois, and Senator Diane Feinstein, Democrat of California, decided to go off script and ask questions that had more to do with the issue of children being separated from parents detained at a Mexican-U.S. border non-port of entry versus how to tweak an investment program so that underserved communities in the United States get some economic attention.

It is no wonder that Congress gets blamed for not getting things done. One could argue that one thing these senators could have gotten done was ask why there were no immigrant investor regional centers in the United States Virgin Islands or Puerto Rico. Given the high rates of poverty in both territories and the need for more economic development, attracting investment to underserved areas like U.S. Caribbean territories should have been among the committee’s priorities.  If they had any sense of awareness, one look at the calendar should have told them that it was that time of the year where Caribbean territories are preparing for another hurricane season.  Maybe one of those foreign immigrants they give so much credit to as innovators could be incentivized to invest a million or so dollars in the USVI or Puerto Rico in exchange for a visa….

… but that’s asking too much …

The political takeaway here is that criticism of any sitting president’s policy is the “doing something” that Congress is best at. You have to apply an entropy effect approach to understanding congressional politics. Taking time to conflate the EB-5 program with President Trump’s “zero tolerance” policy on immigrants trying to enter the U.S. without a visa should not be a surprise. It should be expected.

Immigrants coming from the Caribbean and Latin America to the United States over the next two years should prepare for a rough patch thereafter.

The International Monetary Fund today released a report describing a robust 2017 and 2018 U.S. economy, but 2019 and 2020 may be brutal for Americans as the economy is expected to taper off during those two years.

First the good news. Growth in gross domestic product was 2.3% in 2017 and is expected to climb by 2.9% in 2018. In 2019, the United States will see a slight tapering off in GDP growth at a growth rate of 2.7%.

Now, the bad news.  By 2020, the next presidential election year, growth will fall off almost abysmally when Americans see a GDP growth rate of 1.9%. It won’t get better in 2021, 2022, or 2023 as the growth rate continues to decline with growth rates projected at 1.7%, 1.5%, and 1.4% respectively.

At first blush the unemployment rates may look good during those periods. For example, by the end of 2017, the unemployment rate was 4.1% which is considered an indicator of an economy at full employment. The numbers, at least on the surface get better. In 2018, unemployment is expected to be at 3.5%, under the historical full employment mark. The U.S. will continue to see low unemployment in 2019(3.5%), 2020(3.4%), 2021(3.5%), 2022(3.7%), and 2023(3.8%); all figures again reflecting full employment.

Now we have to reconcile the low unemployment rate with low GDP growth. I suspect that more members of the tail end of the Baby Boom will contemplate retirement and may opt for leaving the workforce. As more people leave the workforce, all other things remaining equal, the number treated as unemployed also falls. Also, as the population ages, people on fixed incomes will adjust their budgets to reflect their new spending realities. Reduced spending by Baby Boomers will contribute will contribute to the slowdown in growth.

Also constraining spending will be the rise in interest rates as the Federal Reserve exceeds its targeted 2% federal funds rate goal. America runs on credit and the more expensive is to purchase, the less of it Americans have to spend.  According to IMF data, the ten-year bond rate ended at 2.4% in 2017. The rate on a ten-year note sets the interest rates for lending in the United States. By the end of 2018, the rate on the ten year is expected to climb to 3.2%; in 2019, 3.7%; and in 2020, 3.8%.  The rate will then level off to 3.6% in 2021 and 2022; and hit 3.7% in 2023.

Inflation is expected to peak at 2.8% in 2018 but fall to 2.4% and 2.0% in 2019 and 2020, respectively. The years 2021 and 2022 will see inflation at 1.9% climbing slightly to 2.0% in 2023.

While the economy will be in a sluggish mode, immigrants should be mindful of the social mood. A lot of the animosity toward undocumented immigrants has been tossed at immigrants from Mexico and Central America. Today, media is honing in on the Trump administration’s preferred policy to separate parents attempting to enter the U.S. across its border with Mexico without visas from their children.  I suspect this treatment will be carried out at all points and ports of entry. But given the animosity hurled at immigrants during booming years of an American economy, the social fabric may be a bit worn and the welcome less warm during a sluggish one.

Trump calls out the big guns at the Mexico-United States border…

A few moments ago, President Donald Trump issued a statement describing his authorization of national guard troops to provide back up for federal customs and border agents along the Mexico-United States border. Mr Trump caused a little confusion on 3 April 2018 during a conference with some Baltic region presidents when he told the press that the Administration was “preparing for the military to to secure our border between Mexico and the United States.” Military was a poor word choice thus the confusion not only in published press reports but on the part of the Mexican government as they considered Mr Trump’s proposal last Tuesday..

Under 18 USC § 1385, no part of the Army or Air Force can be used as a “posse” to execute any U.S. laws. The Department of the Navy has rules that follow Posse Comitatus Act, but I can see a president trying to get around that hole in the law by arguing that the statute does not specifically prohibit the Navy and the Air Force from playing police.

Under 10 USC § 12406, however, the president can “call into federal service members and units of the National Guard of any State in such numbers as he considers necessary to repel the invasion, suppress the rebellion, or execute the laws.”

Mexico may not take too kindly to an implication that their citizens are invading the United States, but a significant number of Americans, particularly those living along the southwest border, may believe that. I don’t see the actions of Mexicans attempting to enter the United States without so much as a visa or passport as being aggressive, especially those who get in front of a border agent and are willing to plea their case for some type of amnesty.

What could be looked at as aggression would be a tragic scenario where a guardsman shoots a foreign national. Gunned down by a federal or state law enforcement agent is one matter. Gunned down by a soldier becomes an international nightmare.

 

The average American’s opinion on #immigration doesn’t matter

I just finished reading an article in The New York Times concerning the minority view toward illegal immigration in the United States. The article describes the overall opposing attitude held by 10% to 25% of the American population toward foreign nationals who enter the United States without proper documentation. Included in this group of opponents are immigrants who entered the United States in full compliance with American law.

For most Americans today pushing back against illegal immigration, the argument, in my opinion, comes from a fear of cultural dilution. Liberal elites, in their advocacy for the continuance of the Deferred Action in Childhood Arrivals (DACA) are standing up for the immigrants that look more like Sofia Vergara. Those pushing back against DACA are fearful that America will be overrun, for example, by the darker skinned Garifuna or K’iche; by the immigrants that they see working blue collar labor jobs and living on Buford Highway in Dekalb County Georgia.

Most of America’s immigration history has been less about cultural integrity and more about economic necessity. America could not actualize its manifest destiny, its push to the Pacific and beyond without human capital. European monarchs issued charters to barons, lords, dukes, soldiers, explorers, and stock companies to explore North America and take possession of land by any means necessary.

Labor, whether slave, indentured, or voluntary, was brought to the Americas for the purpose of extracting resources and organizing those resources into product for sale and export. The goal was to generate returns from the land with proceeds going to the monarchs and later the nation-states in the form of taxes and to the the private parties lending to the government, in the form of bond coupon payments. Immigration is, for the most part, about contributing to the returns on America’s capital.

A public ignorant to how the American economy works should be silent on immigration policy.   Rather, the American public, especially those who occupy the middle strata, should occupy themselves with questions of relevancy in an emerging political economy prepared to replace workers with artificial intelligence, machine learning, and robotics.  The immigration issue is just a distraction for the American middle class.

Over the next two to three decades, unless one is employed in a knowledge-intensive occupation or can add value to an automated process from a design or engineering perspective, the question won’t be whether an immigrant who doesn’t look like me now lives in “my country.” The issue will be, can I really function in a society where my skill set is so useless that I have no option but to be a ward of the state?