The rise of Donald Trump is due to his being right on
some of the most important issues of concern to the American middle and working
classes. The following, extracted from a study completed in 2012, long before
the current campaign, show why he has obtained wide support. Our current
leadership has consistently refused to address the critical issues of trade,
mass immigration, including Muslim immigration, and crony capitalism.
Why Trump is right about:
Trade
For forty years the United States has increasingly
diverged from balanced trade. U.S. trade was relatively balanced in the 60s;
there was a small positive surplus in merchandise and a much smaller deficit in
services. By the late 1970s this pattern had shifted dramatically; large
negative balances in goods became the norm along with much smaller positive
services balances. The following graph shows the U.S. merchandise trade
deficit:
Starting at the beginning of the century China has pulled
away from all of the other major exporters; it alone now accounts for over a
third of U.S. net imports. The enormous manufacturing trade surplus run by
China has undermined large parts of the U.S. industrial base and poses a threat
to the entire world economy. Almost three years ago economists Hindery and Gerard
predicted that the massive loss of manufacturing would lead to an anemic
jobless recovery.[1]
Events have since borne out their dire prediction. While America dithers other
major industrial nations are taking steps to preserve their manufacturing in
the face of the Chinese onslaught.[2]
Chinese trade domination has inflicted economic
difficulties on the U.S. above and beyond the more general problems incurred by
trade deficits in general. A study conducted by economists David Autor, Gordon
Hanson and David Dorn found that the cost of increased government payments wipes
out between one and two-thirds of the gains from trade with China. Most of
these gains consist of the benefit to American consumers of inexpensive Chinese
goods. In addition the estimated gain leaves
out the cost to those workers who have been made unemployed as a result of the
influx of Chinese goods. The authors found a measurable differentiation between
U.S. regions in the economic impact of Chinese trade. Nonmanufacturing wages in
the high-exposure areas were also dampened. Economic efficiency in the impacted
areas also suffered as a result of the large increase in government transfer
payments and other benefits due to higher taxes, larger bureaucracies and
lowered work incentives. The research confirms the contention of such former
proponents of free trade as the late Nobel Laureate Paul Samuelson and one-time
Federal Reserve Board vice chairman Alan Blinder that the benefits from free
trade come at a cost to millions of blue-collar workers. Another distinguished
economist, Michael Spence, bluntly states that “the new finding reflected how
prevailing theories of trade aren't up to the task of dealing with the
breakneck pace of China and other developing economies. Since the world has
never seen such large countries grow so quickly, history isn't much of a guide.”[3]
The study supports the assertion that unfettered free trade, on the part of the
U.S., is similar to unlimited immigration in causing a transfer of wealth from
lower to higher economic groups.
Moreover, another detrimental effect of U.S. trade
deficits appears on the financial side of the ledger. Foreign holdings of U.S.
long-term debt securities have increased from 7.9 percent in 1994 to 18.8
percent in 2007. Should these creditor nations “get fed up with their losses
and pull the plug, the US economy will be a long, long time coming back.”[4]
The Trade Deficit is one obvious indication of U.S.
decline brought about by the free trade ideology. Over the last thirty years
the cumulative balance of payments, measuring the amount Americans have bought
from the rest of the world less the amount they have sold to the rest of the
world amounts to almost $8 trillion; the cumulative trade deficit in goods over
that period is some $9.6 trillion. To balance this massive deficit, foreigners
have been acquiring U.S. assets. Some of this takes the form of direct foreign
investment in the U.S. However, such foreign investment does not go for
creating new business. In 2007 92% of the $277 billion invested went to buying
existing assets. This, of course represents a rather large transfer of wealth.
Indeed, the economic hollowing resulting from
unrestricted free trade has had a great effect on wages. “The largest cost from
trade is the permanent and steady drag on the wages of all American workers
whose education and skills resemble those displaced by trade.”[5]
Those working in the large non-tradable sector of the economy may be somewhat
indifferent to the problems caused by trade. But they too will eventually find
their own wages impacted by increased competition from displaced workers and by
the increasing lack of opportunities for labor mobility. The relatively small
Trade Adjustment Assistance program providing supplemental unemployment
insurance, retraining and relocation assistance has provided almost no
protection to workers impacted by trade.
As the trade deficit has worsened, the economy has been
sustained by consumer spending which in turn has been helped by the wealth
effect primarily resulting from the run-up in the value of real estate. Another
factor bolstering the economy has been massive foreign borrowing. However, both
massive consumer spending and foreign borrowing may be unsustainable and the
process will be coming to an end.
Foreign countries bring very different cultural
predilections, social policies and national interests to the trade table. Japan
and China are two prime examples. In the case of China government owns 60% of
industry, companies are highly subsidized and their system of intellectual
property policy is designed to obtain foreign innovations through any means and
not one of protecting foreign intellectual property rights. They are seeking to
gain control of resources all over the world and become dominant in technology
and industry; satisfying domestic consumption wants is not a priority. In Japan
there is a culture of government-business cooperation and companies are
encouraged to share information and technology in ways that would violate U.S.
law. On the other hand for the U.S. the goal of trade negotiations is to
facilitate free trade.
Other East Asian countries are following the path first
pioneered by the Japanese. These are the so-called Asian tigers – Korea,
Taiwan, Singapore, Hong Kong and more recently Malaysia and Thailand. The
Japanese style policy where business and government work together to increase
exports, to impede imports, stop foreign investment and build up huge financial
reserves would have been recognized by Adam Smith as mercantilism. Today this
Japanese style of mercantilism is occurring throughout Asia.
Europe has long since developed its own version of
mercantilism under the aegis of the European Union. The EU’s Monopolies
Commission is tasked with making sure that no foreign industry operates without
accommodating Europe’s cartels. The EU also has a variety of non-tariff tricks
such as discretionary enforcement of anti-dumping laws to encourage foreign
companies to locate their technology driven processes in Europe. Indeed, such
protectionist maneuvers have buffered the countries employing them from some of
the worst effects of the Chinese onslaught. Both Japan and Germany are holding
on to their manufacturing despite their relatively high labor standards.
One might think that the much hyped World Trade
Organization would come to the rescue of free trade; but one would be wrong.
The WTO ruled against the U.S. in 40 out of 47 cases forcing it to change its
laws and regulations. One of these was to prohibit the U.S. from distributing
fines from goods dumped on the U.S. market back to the victimized parties;
another penalized the U.S. for prohibiting Internet gambling. U.S. sovereignty
is diminished as foreign governments use the WTO to eliminate penalties for
dumping and to change its domestic laws in deference to WTO rulings. Member nations are supposed to accede to the
rulings of WTO bureaucrats e.g. the standards promulgated by the International
Organization for Standards regarding food additives set by the Codex
Alimentarius Commission of the UN. Thus lower standards are imposed on the U.S.
The single most audacious of the free trade agreements,
and one that set the template for subsequent pacts was the North American Free Trade Agreement,
NAFTA. On December 18, 1992 the pact was
signed by representatives of the three nations; the United States, Canada and
Mexico. It consisted of a 1,100 page agreement whose details were not released
to the American public until Clinton was inaugurated. As would be the case with
Obamacare the American public had to be shielded from the messy details. Once
publicly available it was evident that this was the first “globalist” trade
treaty. It was a political, immigration and investment agreement; it prohibited
Mexico from expropriating the property of foreign investors and the U.S. was
bound to accept unlimited Mexican imports with almost no duties. In effect
NAFTA made Mexico into a duty-free manufacturing center for American business.
The U.S. trade balance has worsened after NAFTA. From
1990 to 1994 the annual deficit with Canada averaged $8.1 billion; twelve years
later it was $71 billion. In 1993 we had a $1.6 billion surplus with Mexico; in
2007 it was a $74.8 billion deficit. “The Department of Labor has estimated
that NAFTA cost America 525,000 jobs between 1994 and 2002.” The Economic
Policy Institute estimates that NAFTA has cost some 766,000 jobs in
manufacturing. In addition to the
deterioration of environmental and labor conditions in maquiladora industries
“NAFTA turned Mexico from a food exporter to a food importer overnight and over
a million farm jobs were wiped out by cheap American farm exports, massively
subsidized by our various farm programs.” [6] Of course, this also resulted in increasing
the immigration pressure. It would seem that there has been a tradeoff: in
exchange for mucking up our farm economy you allow us to replace your
population.
The failure of America to protect and cultivate its
intellectual property resources and turn them into sources of comparative
advantage is an important factor in our current trade debacle. Despite its
onetime lead in innovation the U.S. has often failed to translate these into
mass production. The major beneficiary of Pentagon funded research in Silicon
Valley style high tech has been the Japanese. One example is that of Ampex
which invented the VCR in 1970 only to end up licensing the actual production
to Japan. America’s share in sunrise industries such as photovoltaic cells
continues to drop. This does not bode well for the future. The industries in
which we have a technological advantage are diminishing: the major remaining
ones are aircraft, aircraft parts, weapons, and specialized machine tools. Our
remaining manufacturing exports are mostly the result of past Pentagon
industrial policy. Since 2002 the U.S.
has been running a deficit in high technology industries. China is now running
a surplus in such goods with the U.S.; free trade cheerleaders initially
claimed that China would be specializing in low-end manufacturing leaving the
U.S. free to concentrate its efforts on the high end. In the year 2007, the
nation that pioneered space travel became a net importer of spacecraft.[7]
Recently the Obama administration has brought America’s long tradition of
manned space flight to an end.
Pirating, counterfeiting and outright intellectual
property theft is yet another assault on America’s naïve free trade ideology.
In addition to impacting the balance of trade such illicit activity deprives
American companies of a rightful return on their R&D investments and
exposes American consumers to toxic or hazardous products. Other nations, China
in particular “are pursuing national development strategies based on the
uncompensated, unapproved stealing of other nations’ best ideas and
technologies.” Thus the processes of innovation and creativity are undermined
everywhere. Delivery of counterfeit goods is no problem; global shipping is
ubiquitous and inexpensive, customs inspections rare and the developed world
has opened their borders wide after the Cold War. China and other large nations
have intellectual property laws on the books but often fail to enforce them and
even encourage violators.[8]
In addition to a general indifference to protecting intellectual property, high
appointed and elected officials in charge of patents were frequently involved
in conflicts of interest.
China has followed, and indeed surpassed, the Japanese
trade strategy example. China uses familiar means: licensing, theft, piracy,
intimidation, espionage. And they have also adopted the venerable Japanese
technique of joint ventures and improved on this as a way of obtaining foreign
intellectual property. Foreign corporations are required to share their
intellectual capital as a condition of doing business in China.[9] The anxiety of American corporations to do
business with the vaunted enormous Chinese market or to obtain sources of cheap
labor has been a major boon to the Chinese; one more example of the triumph of
short-term greed.
In addition to intimidating foreign companies to share
advanced technology by locating advanced research facilities in China, the
Chinese have also been sending its brightest students to American scientific
research centers. In this, of course, they have been joined by more benign Asian
trading rivals. Between 1985 and 2000
China, Taiwan, India and Korea had thousands of students earning PhDs in
science and engineering in the U.S. The U.S. government and universities are
thus transferring advanced technology to China. While the U.S. gets temporary
benefits from this, China reaps benefits when these students return home with
their advanced technical knowledge.
Despite quite unfavorable terms, foreign investors are
attracted to China as moths are to a flame. These investors contribute capital,
patents, copyrights, trademarks, knowhow and distribution networks. The Chinese
partner has half the equity in the enterprise; improvements and innovations
developed by the joint venture remain in China.
In return China contributes an unlimited quantity of low-wage, compliant
and skilled or semiskilled labor in addition to very limited labor, safety and
environmental regulations. The average wage in China in 2002 was one fortieth
of that of an American manufacturing worker. Motorola, a pioneer in shipping
jobs to China, announced in 2002 a plan to move one third of its research and
development to China. By 2002 Microsoft invested $130 million in R&D
centers and pledged an additional $750 million in Chinese technological
development and training.[10]
This is par for the course for Bill Gates who regards himself as a
philanthropist to the entire world except, perhaps, for middle and working
class Americans. GE also planned to do at least $5 billion yearly worth of
production in its Chinese facilities. More recently, Obama’s “jobs czar” Immelt
is now shifting GE’s cutting edge research centers to China.
The attitude of the current American elite toward their
middle and working class countrymen is neatly encapsulated in Obama’s famous
guns and religion speech given to elite San Franciscans. They have no sympathy
for the concerns of ordinary Americans in rustbelt states such as Pennsylvania
or Ohio regarding the displacement of jobs due to trade or immigration; indeed
they do not even understand this on an intellectual level. From the safety of
their wealth and their status, members of the elite are bewildered as to how
anyone can possibly be concerned with such matters.
This common practice of outsourcing strategic technology
is at the point where in 2006 a consortium of ammunition producers report that
71 out of 302 critical items had just one supplier; 10% of U.S. ammunition
components come from 13 different countries.
Thus, a guaranteed supply of parts or weapons needed for national
defense is no longer possible. Chinese government hackers have also repeatedly
penetrated computers of U.S. corporations, banks, utilities, agencies and even
the Pentagon. Yet the federal government buys computers that rely on Chinese
and other foreign made components without even inspecting them for Trojan horse
viruses. These technology transfers reflect the greed or naiveté of business
leaders and the incompetence and/or corruption on the part of government
officials; Chinese money had illegally gone to the campaigns of politicians
from both parties. A select committee chaired by Congressman Christopher Cox,
he of SEC subprime fame, reported that China has more than 3,000 companies in
the U.S. many of which are fronts for acquiring advanced military technology;
the full report remains classified.[11]
Yet another technological danger occurs with the global integration of computer
networks where lax security may give hostile powers the potential to bring down
major economic or defense systems.[12]
There is yet another externality that must be subtracted
from the vaunted benefits of free trade. As we have seen American workers have
been forced to compete against those in China and other nations where extremely
lax environmental, labor, safety and other regulations are the rule. In addition
to the hollowing out of American manufacturing with a massive loss of jobs,
American consumers are subjected to a host of hazardous imports. The
pharmaceuticals industry is one case in point. More than 80% of active
ingredients in American prescription drugs are imported with only 18% of the
manufacturers known. Many manufacturers have, therefore, never even been
inspected by the FDA; China and India are home to most medicinal
counterfeiters.[13]
[1] Leo Hindery Jr. and Leo W. Gerard, “Our Jobless Recovery”, The Nation, July 13, 2009, p. 22.
[2] Ibid, p. 23.
[3] Justin LaHart, “Tallying the Toll of U.S.-China Trade”, September 27, 2011, http://online.wsj.com/article/SB10001424052970204010604576595002230403020.html
[4] William Greider, “Economic Free Fall?”, The Nation, August 18, 2008, p. 20.
[5] Ibid, p. 120.
[6] Ian Fletcher, Free Trade Doesn’t Work, Washington D.C., U.S. Business & Industry Council, 2010, pp. 158-161.
[7] Fletcher, Free Trade Doesn’t Work, pp. 67-70.
[8] Pat Choate, Hot Property, New York, Knopf, 2005, pp. 13-17.
[9] Ibid, p. 170.
[10] Ibid, pp. 172-73.
[11] Choate, Hot Property, pp. 173-177.
[12] Pat Choate, Dangerous Business, New York, Knopf, 2008, p. 175.
[13] Choate, Hot Property, p. 83.
Immigration
A human flood, building over the last forty years will
reach massive proportions over the next forty.
Nor is that due to a decision that had been made by the American people.
The change is a consequence of decisions taken by pandering politicians aided
and abetted by intellectual elites under the thrall of political correctness,
business interests seeking cheap labor, union leaders betraying their members
and environmental spokesmen betraying their principles.
George Borjas, the foremost immigration economist, notes
the strong similarities between immigration and trade. “The economic impacts of
immigration and trade are closely linked. …both immigration and trade help
connect the American labor market with the labor markets of other countries.
They both increase the ‘effective’ labor supply of particular groups of workers
in the United States.”[14]
However he adds that “nevertheless … immigration … has a much larger economic
impact in the long run. … if the United
States stopped trading … trade would no longer influence the effective labor
supply in the American labor market. … Immigration, however, increases the
labor supply permanently.”[15]
With recent immigrants being less educated than
native-born Americans, or than past immigrants for that matter, it is only to
be expected that they account for a disproportionate use of welfare. Immigrants
are as quick to learn about welfare opportunities as they are to learn about
employment opportunities. In both of these they are aided by the ethnic
clusters established by previous immigrants. New immigrants also seem to be
well informed in this day of mass electronic communication and established
ethnic networks as to which states and localities provide the most generous
benefits and, for the undocumented, sanctuaries from scrutiny. Furthermore, the
increasingly abused anchor baby loophole suggests a wide awareness, even prior
to immigrating, of the medical benefits provided to immigrant mothers and their
newborn.
The influx of new immigrants has had a marked effect on
wages, employment and working conditions of native workers. Between 2000 and
2010 some 14 million new immigrants,
both legal and illegal entered the country. This was in spite of the fact that
there was a net decline of jobs during that decade. Some 13 million entered
during the 1990s, a decade of great job growth. Thus the indication is that
immigrants are motivated by a wide variety of factors; public amenities,
welfare, family reunification, desire for freedom; in addition to strictly
economic incentives.[16]
It is an elementary principle of economics that an
increase in the supply of labor, ceteris paribus, must lower wages. Earlier in
the last decade Borjas estimated that the immigrant influx that entered the
United States between 1980 and 2000 lowered the average wage of U.S. workers by
3.7%.[17]
Using Borjas’ finding that each 10
percent increase in the U.S. labor force due to immigration reduces native
wages by about 3.5 percent, Ed Rubenstein updates this estimate at two later
time periods. In his earlier analysis Rubenstein comes up with a 5.25% wage loss; a few years later with a
further increase in the foreign born he ups his estimate to 5.5%. Earlier in
the last decade immigration reduced the average annual earnings of native-born men by about $1,700; toward the
end of the decade the reduction increased to $2,503.[18]
Over the last few decades it appears that the immigrant impact on wages has
been accelerating.
Borjas found that immigration had a differential effect
on workers by education and skill level. Wages fell by some 7.4 percent for
high school dropouts; college graduates lost some 3.6 percent in average wages.
The mid-level groups, high school graduates and those with some college were
less impacted with a reduction of about 2 percent. Borjas’ estimates also
indicate that the group of native workers hurt most by immigration were high
school dropouts with between five and twenty five years of experience.
Gains in employment since the year 2000 have gone
overwhelmingly to immigrants. In testimony before Congress Steven Camarota
presented data indicating that foreign born workers “accounted for just 34 percent of the growth in
the working-age population (18 to 65) between 2000 and 2010, but 100 percent of
the net increase in jobs went to immigrants during the entire decade.”
Furthermore, there was “a dramatic decline in share of natives holding a job
during the decades — from 76 percent in 2000 to 69 percent in 2010.”[19]
U.S. born Teenagers were particularly hard hit. Their summer labor force
participation declined from 64 percent in 1994 to 48 percent by 2007
immediately before the current recession.[20]
Researchers at the Center for Immigration Studies estimate that this decline in
teenage employment is the result of newly arrived young immigrants
displacing potential young American workers from employment.
Young and
unskilled workers are not the only victims of employment displacement. Taking
advantage of the H-1B visa program U.S. employers have imported highly trained
workers at much reduced wages. The available labor market evidence
indicates that there is no shortage in the United States of workers in science,
technology, engineering, and mathematics (STEM) occupations. In 2006 there were
an estimated 16.6 million Americans with science and engineering degrees while
there were some 4.3 million to 5.8 million employees in the STEM sector.[21]
Industry apologists point to the high proportion of foreign graduate students in
science and engineering as proof that immigrants are needed to fill STEM
positions. However, the high proportion of foreign-born graduate students is a
result of the success of industry in lobbying for guest worker programs. With
reduced earnings in STEM employment, capable native students have been driven
into other career paths.[22]
“Immigration can be viewed as an income redistribution
program, a large wealth transfer from those who compete with immigrant workers
to those who use immigrant services or buy the goods produced by immigrant
workers.”[23]
The native born may benefit from immigration in two ways. In the first place
immigrants may bring in skills and abilities that are scarce thereby increasing
production efficiency. In addition immigrants may have new ideas and insights
into the production and distribution of goods and services. These positive
externalities may not be as necessary in a world with modern communications as
they once were. The relation between skills and machines differed a century ago
so that skilled workers and machines were substitutes for one another in the
production process. Thus the entry of unskilled immigrants to operate the new
machines at that time was beneficial to industrialization. However, that does not imply that unskilled
immigration is a benefit to the country now.
The real economic debate regarding immigration is between the winners
and losers in the wealth redistribution process.[24]
A convenient way of measuring income inequality is
through the use of the Gini statistic. The following chart shows the U.S. Gini
statistics since 1970:
Source: U.S.
Census Bureau, Current Population Survey, Annual Social and Economic
Supplements
Gini assumes values between zero and one with zero
representing complete income equality. Income inequality has shown a steady
increase over the period, occasionally slipping down but then resuming its
upward march in subsequent years.
Immigration is one obvious factor that may result in the
rise of the Gini statistics. Statistical regression analysis was used to
measure this relationship. Data on foreign stock was obtained from a study by
the author for the Federation for American Immigration Reform. There is a
highly statistically significant relationship between U.S. Gini coefficients and
percentage Hispanic foreign stock defined as post-1970 Hispanic immigrants and
their offspring (r2 = .96). The results also indicate that when the
Hispanic foreign stock doubles from its current 10% the U.S. will reach Latin
American levels of inequality with a Gini exceeding 0.56. An even stronger
relationship exists between the total foreign stock percentages and the Gini
coefficients with an r2 of .97. This result might seem a little
anomalous at first. After all the large number of Hispanic immigrants tend to
be very low income. However, the immigrant flow tends to be bifurcated with a
large low income group at the bottom and a small high income group at the top
with very little in between. The high earning upper immigrant group consisting
mostly of Asian immigrants, although fewer than Hispanics, are still
considerable and would tend to slightly increase the inequality by adding to
the numbers at the top of the income scale.
Immigration has a major fiscal impact as shown in
numerous recent studies. The most thorough and extensive set of estimates of
the fiscal impact of illegal immigration are those from the Federation for
American Immigration Reform[25]
In this study Jack Martin and Eric Ruark find that the net cost of illegal
immigration in excess of tax receipts amounts to some $99.6 billion a year. Economist
Ed Rubenstein has
studied immigration’s fiscal impact in great detail. In 2006 he estimated the
unreimbursed cost of all immigrants on state and local government
expenditures for
health, education and welfare to be $201.3 billion.[26]
This estimate, an extrapolation this author’s 1999 estimate of $84.5 billion and 1992 estimate of $37.2 billion, indicates that
such spending is accelerating. Rubenstein also estimated gross federal expenditures for all
departments of $346.4 billion. As was the case with state
and local expenditures, both legal and illegal immigrants are included.[27]
He also finds that the net
federal, state and local transfer payments to immigrant households amounts to
some $110.7 billion in 2010.[28]
It is apparent that immigration, in addition to all of
its other economic effects entails a large fiscal cost; and one that appears to
have increased substantially in recent years. Education and welfare, including
direct payments to immigrants, constitutes a major part of such spending.
Illegal immigration also has a significant impact. Furthermore a comparison of
the gross and net expenditure estimates indicates that immigrant tax receipts
cover less than half of their fiscal costs.
In 1970 environmentalists expressed a well-founded
concern regarding the effect of rapid population growth on the environment. The
American people without the type of coercive government policies found
elsewhere were close to achieving replacement level population growth. The
American elite decided otherwise and by massively increasing immigration
repealed that sensible decision. Immigration also has a large impact on natural
resource consumption, notably that of energy, and on infrastructure. “America faces
not only an aging society, higher energy prices and the costs of refurbishing
aging roads, sewers, ports and schools. It must cope with these challenges
while also absorbing a huge tide of immigrants.”[29]
Moreover the challenges will mount; by 2050, as projections from the Census
Bureau and a number of private organizations demonstrate, a continuation of
present trends will result in a population approaching 450 million. Most of
this increase will be due to immigrants and their progeny.[30]
Immigrant
crime is another major concern. Former INS agent Michael
Cutler has written extensively on this issue. He emphasizes the importance of
not rewarding those who have willfully disregarded our laws with any future amnesties.
He notes how “fraud and a lack of integrity of the immigration system not only flooded
our nation with illegal aliens who ran our borders, hoping that what had been
billed as a ‘one time’ amnesty would be repeated, but it also enabled a number
of terrorists and many criminals to enter the United States and then embed
themselves in the United States.”[31]
[14] George Borjas, Heaven’s Door, Princeton University Press, 1999, p. 85.
[15] Ibid, p. 86.
[17] George Borjas, Increasing the Supply of Labor Through Immigration: Measuring the Impact on Native-born Workers, CIS Backgrounder, April 2004, p. 5.
[18] Edwin Rubenstein, The Economic Case for a Moratorium, The Social Contract, Winter 2009-2010, p. 78 and The Economic Case for an Immigration Moratorium, The Social Contract, Winter 2011, p. 48.
[19] Steven Camarota, Immigrant Gains and Native Losses in the U.S. Job Market, 2000 to 2010, Testimony Prepared for House Judiciary Committee, March 2011.
[20] Ibid.
[21] Eric Ruark and Matthew Graham, The Myth of a Skilled Worker Shortage, FAIR, November, 2011, p. 3.
[22] Ibid, p. 6.
[23] Borjas, Heaven’s Door, p. 13.
[24] Ibid, pp. 102-3.
[27] Rubenstein, What Price Mass Immigration?, The Social Contract, Winter 2007-2008p. 142.
[28] Rubenstein, The Economic Case for an Immigration Moratorium, p.16.
[29] Robert Samuelson, The Great Inflation and its Aftermath, New York, Random House, 2008, p. 242.
[30] See for example Jack Martin and Stan Fogel, Projecting the U.S. Population to 2050, Federation for American Immigration Reform, March 2006.
[31] Michael Cutler, Crime and Immigration, The Social Contract, Summer 2011, p. 18.
Muslim Immigration
Muslim immigration, in particular, has been very
problematic. The fragile democracies of the West cannot, indefinitely, withstand
the massive transfer of excess population from lands that refuse to implement
responsible demographic policies. Such large movements of population would be a
serious problem in and of itself. When combined with a large Muslim component
such migration is a sure recipe for disaster. Islam’s scriptural justification
of violence and slavery as means of spreading the faith throughout the world
make it unique among religions. Immigration reform including an indefinite
moratorium on Muslim immigration is necessary for the survival of Western
culture.
A realistic
foreign policy regarding the Islamic world is also essential. Western style
democracy cannot be imposed on populations suffering with a legacy of centuries
of the Islamic slave mentality. Of course, there should be encouragement and
support given to true Muslim reformers and secularists within Islamic
countries. Accompanying that should be the ending of the Western “jizya” in
terms of foreign aid. Wealthy Muslim nations should bear the burden of aiding
their impoverished co-religionists without any fundamentalist strings attached.
In addition mutual respect and forbearance should be expected on the part of
Muslim states claiming to seek friendship. They should be required to cease
financial support for terrorists, seek good relations with their neighbors,
cease funding propaganda, replace sharia with modern law, implement a true
separation of mosque and state, cease persecuting minorities and provide the
latter with equal rights of citizenship. The following outline of the history
of Islam illustrates why mass Muslim immigration has such deleterious effects.
All Muslim societies show remarkable similarities in the
patterns of expansion and decline occurring during and subsequent to the
political establishment of Islam. In the majority of cases Islam expands via
conquest, usually by vigorous recently converted nomadic warriors. Islam is in
essence a powerful meme with great appeal to nomads and other primitive
peoples. Muhammad, the founder of Islam was a charismatic leader with many
admirable qualities and a clear sense of an obligation to elevate his violent and
primitive countrymen to a higher level of culture. Unfortunately, he was unable
to overcome a number of personal flaws. The religion he founded was
inextricably contaminated with the shortcomings of its great prophet. The
ideology expressed in the Prophet’s meme became the most powerful and
successful engine of conquest in history, right up to the modern era. Arab
Muslim imperialists, in an amazingly brief period of time conquered the entire
Middle East, North Africa, most of Spain and parts of India and Central Asia.
The ideology of Islam and holy war provided powerful incentives in terms of
material and sexual advantages for its male followers. At a later date the
Islamic meme was carried primarily by various Turco-Mongolian peoples
originating in north central Asia. The latter spread Islam further into Central
Asia, conquered most of India, overthrew the ancient Byzantine Empire and
brought the frontiers of Islam deep into central Europe and southern Russia.
Other Islamic expansions followed a more peaceful course; these were carried by
merchants and missionaries into sub-Saharan Africa, Southeast Asia and China.
Nevertheless, the latter history of these peaceful expansions usually saw the
rise of jihads carried out by local Muslim settlers or by converted native
rulers who used the holy war ideology as a means of subduing their neighbors
and expanding their territory.
Of course, Islamic imperialism, like all others,
eventually reaches geographic limits. Its lines of communication and supply are
overextended and a spirit of grim resistance arises on the part of yet
unconquered nations. Thus, the expansions of the various Muslim empires were
eventually halted and in many cases other civilizations adopted parts of the
martial spirit of holy war in imitation of the Islamic meme. However, the
learning curve on the part of those living on the Islamic frontier was
distressingly protracted. This is shown by a repeated pattern of treachery and
betrayal on the part of factions and religious minorities in the bordering
lands. In other cases unscrupulous politicians sought to utilize the Islamic
warrior zeal to serve their own ambitions. The shortsightedness of these
ethnic, religious and factional leaders in underestimating the power and
permanence of Islam is a recurring feature in the history of Islamic conquest. Indeed
we see numerous cynical or naïve politicians in the West today following the
same course.
Such shortsightedness does not take account of a number
of characteristics in the ideology and development of Islam that made it both
more contagious and tenacious than was true of other imperialisms before or
since. In the first place, Islam had an inherent tendency toward proselytism
and conversion. This tendency was not expressed in the wake of the earliest years
of the Arab Empire; but eventually it came to the fore. When combined with the
economic and social disabilities inflicted on the conquered population,
conversion to Islam was an attractive option for vast numbers of non-Muslims.
The Muslim breeding system was another important factor making for the
permanence of Islam. Polygamy and the legalized rape represented by the system
of sexual slavery solidified the hold of Islamic culture in the generations
following the initial conquests. Slavery was the third major reason for the
spread and tenacity of Islam. Vast numbers of slaves accompanied by the
movement of large populations was a permanent characteristic of Islamic
civilization. These immense deracinated slave populations having their own
cultural traditions erased adopted in total the culture and religion of their
conquerors and masters.
After three centuries of quiescence due to the
technological dominance of the West, Islam is once again on the offensive. The
re-emergence of Islam is due to the exhaustion of the West after a century of
war, the petroleum windfall and the demographic explosion in Islamic countries
at the same time as demographic collapse in the West. The most important
factor, however, is the social suicide of the West. The betrayal of western
civilization by members of its own elite is reminiscent of the pattern of
treason that has, throughout history, facilitated the triumph of Islam.
Finally, reforming Islamic society is not a task that can
be imposed from the outside. The most troublesome characteristics of Islam are
deeply rooted within Muslim society since these are the very factors underlying
Islam’s historic success. Furthermore, in the absence of any strong opposition,
these characteristics give promise to the adherents of the Islamic meme of the
ultimate attainment of world-wide domination. The jihad ideology of war and
violence, present in the root scriptures of Islam, has not diminished over
time. The fatalism and anti-intellectualism of these scriptures are still potent
in modern times. The legacy of slavery, oppression of women and the dhimmi
system continues to exist even where these institutions have, in theory, been
abolished. Muslims, themselves, must be open to both scriptural
reinterpretation and to embracing a secular society with all citizens having
equal rights under the law and freedom from persecution. To truly enter the
modern world, they must follow in the footsteps pioneered by the philosophers
of the Enlightenment and critically examine their own institutions and history.
There was a time in the not too distant past when the
Western intelligentsia was not blinded by political correctness when it came to
Islam. The threat posed by a resurgence of the Islamic meme was noted by the
famous historian Will Durant. He had a refreshing sense of reality in contrast
to very many contemporary scholars. Writing about the plight of India
[1] Will Durant, Our Oriental Heritage, New York, Simon and Schuster, 1954, p. 463.
Lobbyists, Crony
Capitalism and Corruption
An
outright war has been waged against the great American middle; the middle class
and the productive working class. The American political system is dominated by
corporate and special interests who are indifferent to the interests of the working
and middle classes. In addition to these corporate special interests, the
country’s middle class and working class is also under assault by media and
academic elites; those who prior to the 1960s were among their staunch
defenders.
The leaders of the transnational corporations abetted by
Clinton, the two Bushes and Obama found that cheap foreign labor held the
potential for great profit. Nor was it only businessmen who benefited.
Politicians, regulators and government officials at all levels shared in the
booty. These often passed through a revolving door becoming lobbyists or
executives in large global firms. This was a particularly acute problem when it came to Wall Street firms. While
both political parties are at fault it has been the Democrats who were the
prime movers; surprising though it may be, those who run the country’s
financial institutions lean toward the Democrats; and they have done so for
almost three decades. A great misconception on the part of the media is that
Wall Street is a bastion of right-wing Republicanism. This myth persists
despite the fact that in 2008 most of its leaders supported the Democrats and
Obama.
A dinner at a trendy seafood restaurant in Washington DC
in June of 2007 should explode the belief that Wall Street is composed solely
of greedy hard-nosed Republican types. Here a cast of characters from the
Street gathered to make the acquaintance of freshman Senator Barack Obama.
Present were Richard Fuld CEO of ill-fated Lehman Brothers, Greg Fleming second
in command at Merrill Lynch, Larry Fink head of the hedge fund Blackrock, Paul
Volcker avuncular former Chairman of the Federal Reserve Board, Gary Cohn a
senior executive from Goldman-Sachs and Warren Spector a top executive at Bear
Stearns. Like most senior executives on the Street these were committed
Democrats, media myth to the contrary notwithstanding. This clique of rabid
limousine liberals was initially supporting Hillary Clinton. Her supporters
additionally included Goldman’s Lloyd Blankfein and a former Republican, John
Mack of Morgan Stanley.[1]
Members of the financial elite have found their way
easily into government office and the political arena; they passed with great
ease from business to government and out and in again.[2]
More often than not they have found a comfortable home within the confines of
liberal politics and Democrat administrations; it was a mutually profitable
arrangement for both politicians and Wall Street. A leader amongst these
peripatetic bureaucrats is undoubtedly staunch Democrat Robert Rubin. As
Chairman of Goldman Sachs he was mentor to such future political leading lights
as Jon Corzine and consultant Rahm Emanuel. Rubin went on to be Clinton’s
Treasury Secretary where his policies helped to ignite a massive bond rally to
the benefit of Wall Street and most especially Goldman Sachs. He also pushed
for the disastrous repeal of Glass-Steagall which had insulated commercial
banking from the more risky investment banking. After Rubin left the Treasury
Department he was given the very lucrative job of Citigroup vice chairman.
Goldman Sachs must certainly be awarded first place on
the revolving door list. Phil Murphy the one time head of Goldman’s Asia Region
became National Democrat Committee chairman and later ambassador to Germany.
Rahm Emanuel, much better known as a political operative, also benefitted from
a Goldman Sachs connection. In the early 90s he was a Goldman political
consultant who used his Chicago connections to help the firm secure government
business. He also was friends with other Wall Street powers such as Jamie Dimon
and Tom Nides of Morgan Stanley. It also appears that as Obama’s chief of staff
he was able to deliver for his many Wall Street friends. One of these friends Steve Koch, the
co-chairman of mergers and acquisitions at Credit Suisse Group AG, has recently
joined Chicago Mayor Emanuel’s team. Koch, who spent three decades at Credit
Suisse, has been appointed Chicago deputy mayor. It appears that the Republicans are not the
only ones to have a well-heeled Koch.
The executives and directors at the agencies were quite
skilled in finding friends and defenders to protect their high paying
sinecures. Lawrence Summers while deputy Treasury secretary, buried a
department report recommending that Fannie Mae and Freddie Mac be privatized.
Fannie Mae hired Republican attorney and famed Whitewater investigator Ken
Starr to bury the requests of one Congressman to find out exactly how much its
top executives’ were receiving in compensation.[3]
Thus, members of both political parties had the chance to obtain fat paychecks
from these quasi-private agencies.
Many Republicans have passed through the revolving door
between government and the financial industry as a whole. The difference between
the parties is that the big Wall Street firms have a larger number of Democrats
and that it was the liberals who were more apt to piously pontificate on the
sins of Wall Street even as they
served the interests of the financial companies. Alan Greenspan, a conservative
influenced by the libertarian theories of Ayn Rand, during his tenure as
chairman of the Federal Reserve always made sure to benefit Wall Street by
lowering interest rates or pumping up the money supply in response to the needs
of the Street. The ubiquitous Goldman Sachs was always well represented when
Republicans held power. In addition to Treasury Secretary Henry Paulson, other
one time Goldman Sachs executives holding positions in the Bush administration
included chief of staff Josh Bolten and World Bank president Robert Zoellick.
Changes in administration over the last two decades have
made little difference to the power brokers of Wall Street. It has been pretty
much business as usual under Clinton, Bush and now Obama. During the Clinton
administration the large players often got their way. Officials and advisers
such as Rubin and Summers served the interests of Goldman Sachs, Citigroup and
the rest of the large firms. During the Clinton administration deregulation, in
particular the repeal of Glass-Steagall, was a priority for the big banks and
Rubin with the help of Summers got it done. Wall Street found ready supporters
in Congress such as Barney Frank whose committee approved many pieces of
deregulation.[4]
Regulatory agencies were also glad to help out the big firms in their quest for
deregulation.
Favors being exchanged between politicians and management
at government sponsored corporations are not unexpected. However, much of Wall
Street and banking has turned into one big Fannie Mae with financial
corporations carrying out government policy in exchange for favors accompanied
by a back and forth flow of personnel. When Wall Street and the banks wanted
deregulation they found friends on both sides of the aisle willing to assist. For
example, to achieve his desired repeal of Glass-Steagall, Rubin found an ally
in Republican Phil Gramm, chairman of the Senate Banking Committee. Gramm
followed up by supporting another favored Clinton initiative the Commodity
Futures Modernization Act which, among other things, exempted over-the-counter
derivatives transactions notably credit default swaps from government
regulation. It was no great surprise when Gramm moved into a position with a
major financial firm, UBS AG, in 2009.
Business may not be as much inclined to liberal notions
as Hollywood or academe, but these all share a similar globalist worldview. Many
in the corporate elite are enthusiastic proponents of diversity,
multiculturalism and affirmative action. In addition the commitment to
globalism is one that unites the liberal elite with that of their mainstream
conservative counterparts. In this they have been greatly assisted by the
revolving door, crony capitalism and well compensated lobbyists. The defenders
of the status quo should be confronted with the following question. We have had
a virtual free trade regime with China, East Asia, and NAFTA. We have also had
the largest immigration flow in history owing to the 1965 immigration reform
bill; a flow that has accelerated over the last quarter century. If these have
been so beneficial, then why are we in such dire circumstances today?
