Posts Tagged ‘ obama ’

Examining the German and Californian shifts on immigration

International Organization for Migration sign promotes the benefits that immigrants bring.

International Organization for Migration sign promotes the benefits that immigrants bring in front of the UN building in New York. Credit: internationalcomparisons.org

“Kinder statt Inder” or “Children before Indians” was reverberated throughout Germany pervasively in both policy and public attitude only a decade ago. Since then, Germany’s success at withstanding the financial crisis has brought about a good problem, albeit one that requires a shift in such policy and attitude. Germany’s joblessness and decline in overall population has required it to look elsewhere than domestic means in order to fill gaps in its labor force.

In a relatively abrupt 180 degree turn, Germany has welcomed over 33% more immigrants in 2011 than 2010, attempted to ease the adaption process socially by providing language lessons, and have reduced the required financial requirements like minimum salary.

Germany is hardly experiencing a change of heart. The shift comes from certain political motives and not necessarily humanitarian benevolence.  Meanwhile in California, although the impact is yet to prove as profound (especially from the national front), considerable victories have been accomplished just this past week.

While Washington waffles on immigration, California’s forging ahead. I’m not waiting.

California Governor Jerry Brown sweepingly signed immigration bills one after the other last week in an effort to demonstrate to Washington that, outside of President Obama’s Deferred Action for Childhood Arrivals (DACA) from summer of 2012, it will neither lean nor wait on Washington to make demonstrative moves toward immigration reform. DACA has provided some foundation by applying prosecutorial discretion to all cases concerning the children of parents who have immigrated illegally. This has opened the door for states to grant certain liberties to immigrants, and Governor Brown is taking full advantage.

In his first move he granted immigrants the ability to obtain driver’s licenses. Since DACA, the number of states that have allowed driver’s licenses to immigrants has jumped from three to eleven.

He also signed a refined version of the TRUST Act after it easily passed through the state Assembly and Senate. The TRUST Act limits detentions to only those who have committed felonies, not misdemeanors. The TRUST Act is a direct response to the Secure Communities program which was originally intended to remove the most dangerous immigrants with a criminal history. The program, however, has been criticized for removing immigrants with petty misdemeanor charges as well.

Also signed were bills to limit an employer’s ability to threaten to report their immigration status to authorities. This gives the concerned employee more ability to handle wage issues, abuses in the workplace, and to work in an overall better environment according to an LA Times article.

Still another bill has been passed to disallow ones immigration status as a hindrance to becoming an attorney in the state of California.

With his hands more or less tied in Washington, President Obama has no other choice after seeing his Dream Act fail miserably but to resort to relatively quiet measures like DACA and depend on states to take charge from there. California has done just that. Unlike Germany where the motive has been ulterior politically and economically, California truly stands out as it achieves these steps toward immigration reform for the sake of the immigrant, himself.

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US joins 90 other Arms Trade Treaty signatories

Making news last week directly affecting research on internationalcomparisons.org, the U.S. became the 91st signatory of the international Arms Trade Treaty (ATT) which regulates illicit arms trade–everything from helicopters and tanks to small and light arms–among countries in order to prevent weapons being sold to countries involved in human rights violations. Secretary of State John Kerry signed the treaty on President Barak Obama’s behalf much to the chagrin of the National Rifle Association and U.S. conservatives. Kerry has assured that “… we would never think about supporting a treaty that is inconsistent with the rights of Americans, the rights of American citizens, to be able to exercise their guaranteed rights under our Constitution.” The Bureau of Alcohol, Tobacco and Firearms already regulates that which is required by the ATT and no supplemental enforcement or legislation is required to support it. Kerry further guaranteed that the treaty still allows “the ability of both individuals and states to obtain, possess, and use arms for legit purposes,” and that their 2nd Amendment rights had no reason for concern.

As extensively reviewed on internationalcomparisons.org, the U.S. has left many forefront international treaties unsigned (official endorsement from the head of state) and still more unratified (official endorsement from the legislature). Many of the snubs are absolutely confounding. Organizations like Amnesty International, who have pushed for such an agreement for the past 20+ years, are rightfully celebrating this achievement as potential progress on cracking down on international arms trade. Since the U.S. signing, 21 more nation states have signed the treaty and ratifications have almost doubled from 4 to 7.

The solution to Syria; looking beyond the U.S. and the U.N.

Guest editor: Dr. Sherman Lewis, Professor Emeritus Political Science, California State University East Bay

U.S. policy toward Syria has, from the start, been too simplistic and short term. It has been too highly influenced by domestic politics and U.S. exceptionalism. President Obama’s latest proposal, a limited cruise missile strike on chemical weapons, is like a scalpel without an operating room. The Russian initiative, while better than a U.S. strike and helpful, deals with too little of the problem. Syria certainly has crossed a red line against chemical weapons, evidently more than once, but there should also be action in response to another red line that was crossed, war crimes against civilians.

We need a long term, multilateral strategy to overcome two powerful networks, the secular Baathist Alawite regime under Assad, and the Jihadists. Our previous blog reviewed policy from a U.S. perspective. Here, we present a complex policy in which the U.S. plays an important but limited, less visible role.

Credit: truthdig.com

In wake of the UN’s “indesputable” and “thoroughly objective” report that Syria did use chemical weapons,

most eyes are fixed on the U.S., Russia, and Syria for the next step, but they will not affect the larger, more important problem that has caused many more deaths: the Syrian Civil War. Stopping Assad’s use of chemical weapons is impotent unless it’s part of a larger strategy.

The primary requisite is cooperation among critical anti-Assad stakeholders: the U.S., NATO, the European Union, the Arab League, the gulf states, the Free Syrian Army (FSA), Syrian civilian leaders with their various interests, ethnicities and sects, and Turkey. The stakeholders would commit a process taking five to ten years.

First, the Arab League would establish a Task Force with Turkey as its Secretariat. The Task Force, in consultation with Western powers, makes policy decisions. The Secretariat serves as the exclusive spokesperson to the media for the multilateral effort. All other stakeholders and actors take a step back from the media for the sake of multilateral functionality. When asked what the U.S. strategy is, President Obama defers to the Arab League saying that the U.S. will work through the Task Force, and that as conditions change and news develops, the Secretariat will keep everyone updated. The U.S. is a superpower, but must act like it is not. Syrian and Arab national interests need to be the major driving force.

Secondarily, the Secretariat establishes an area in the Hatay area of Turkey north and west of Syria for greater refugee capacity and for political and military operations. The Hatay area is about 20 to 30 miles (30 to 50 kilometers)  wide and seems to have room for a sizable, temporary new town. This area of Turkey has access to the Mediterranean at Iskenderun, and has small airports. The flat areas are farmed, to be avoided, and the barren hills are difficult to use, but still feasible.  The area would be a capital in exile for the FSA and Syrian civilian leaders for political, diplomatic, military, and educational purposes.

Every Syrian who wants to be a part of a post-Assad regime is required to spend most of the year there to begin the networking necessary for a functional post-Assad regime. The fractious leadership has to work out its differences and find a way to work together. The FSA and Syrian civilians lack political and diplomatic cohesion and need a place for extended discussion to coordinate civil and military leaderships. They need to agree on who will hold what positions in a post-Assad regime, on what the major policies will be, and on some process for making decisions. This can be developed only over a long period of time. FSA commanders are required to rotate out of Syria for political education and networking. Upon return, they educate their troops about the discipline necessary to get the arms and training they want. Part of that education includes how to relate to the Jihadists, the danger they pose to Syria and Islam, and why the West is so sensitive about them.

With outside military support, the FSA would be able to gradually liberate and secure more nearby areas of Syria. The strategy assumes that military action is necessary to create the conditions for a cease fire and negotiations. When the FSA agrees to critical conditions, the West and gulf states assist it. The Turkish Secretariat manages military assistance from all stakeholders. A select few and trusted FSA fighters receive training and the arms necessary to take out Syrian airplanes, tanks, and heavy artillery. If there are no Assad airplanes, there is no need for the West to have a no-fly zone. The Syrian army will still be strong, but the FSA will have a better chance, and fewer civilians will be slaughtered.

Gradually, as Sunni areas are secured by the FSA, Syrian civilian leaders go from the temporary capital to relatively safe areas of Syria. If civilian leaders want to avoid being frozen out of politics by the FSA, they should take some role in the fighting and get to know the fighters. The liberated areas need to be well-administered and have some economic recovery to show that a future under the FSA and civil leadership can work.

Credit: internacional.elpais.com by Enric González

The Secretariat helps train the FSA and civilians for control and civil administration of liberated Sunni areas. The FSA avoids Alawite areas and does everything possible to avoid communal war, which is a goal embedded by their political education.

Assad commanders and leaders increasingly become subject to International Criminal Court (ICC) indictments. The combination of staying out of Alawite areas and indicting Assad officials gradually develops a wedge to break the Alawite allegiance to Assad. This helps to avoid more communal violence but requires discipline and will lead to a more federated, less centralized Syria. Easing of communal tensions also reduces the intensity of fighting where the Syrian army feels it is defending not just Assad, but its community. Local cease-fires allow the FSA more resources to suppress the most dangerous jihadist operations.

A similar strategy is established to persuade the Russians that a post-Assad situation of decentralization with less fighting is not a power gain for the West and can protect Russia’s economic interests. Similarly, the Iranians need to feel confident that Shiite interests are protected and that an FSA victory improves Iranian security.

Having the Arab Task Force as the leading policy maker is important to prevent the West and particularly the U.S. from imposing its version of the Syrian national interest.

Once Syrian civilians and the FSA have a coherent working relationship, essentially a one-party system over an expanding area of Syria, they negotiate with Alawite communities so that Assad and his officials are removed from power. Once a ceasefire is stable, reintegration begins and, eventually, Syria can achieve some degree of democracy.

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Syria vs Obama: duplicity’s consequences

Simultaneously venerable yet duplicitous. If the US is to use force to respond to the Syrian conflict, the discouragement of chemical weapons is a worthy ends, yet the means are hardly beyond reproach. It is a bit ironic, indeed, that the US is playing the role of the UN (with Russia, of course as Syria’s ally, debilitating any serious action with its veto power in the Security Council) and enforcing the agreements from the Chemical Weapons Convention (CWC), one of the few major international agreements ratified by the US. For every supposedly venerable reason to make war, there’s two or three more international treaties the US has not ratified or has ratified yet violates.

Still, President Obama’s decision was a cunning one from a domestic policy and an international relations (IR) perspective.

I will seek authorization for the use of force from the American people’s representatives in Congress.

Domestically, his decision to welcome the debate and leave it to Congress to have the final say when it’s his authority ultimately as Commander in Chief is a wise one. Not only does this allow Obama to share responsibility should things go awry, he also creates a difference between himself and his predecessor’s assumption of power. Of course it is also placative for the US war-tired public that he has promised the omission of ground troops. Let’s hope this isn’t him leaving the door open for a drone showcase–yet another controversy (note the date of linked article).

Concerning an IR perspective, Obama walks a tight rope of (supposedly) humanitarian interventionism between warmongering and pure-hearted assistance. Again, Obama is clear in claiming that he desires to have no political impact with the strike than to discourage the CWC breach. According to these statements, Obama has no intention in affecting the outcome of the war, lingering in Syria, imposing the Washington Consensus, or meddling in Syria’s politics to influence their resources.

(It should still be said that the US’ decision to dish out the punishment for international treaty violations is controversially overstepping to put it mildly, let alone absolutely hypocritical as far as international agreements are concerned. The US is trying to exemplify Syria, but does this set the precedent for the US’ responsibility to enforce the CWC?)

Even after Saturday, we have no idea what cards Obama is keeping close to his chest or to what extent the content he has revealed is intended as a cover for undisclosed incentives. But if Obama doesn’t follow through with what he assured on Saturday, that the “… action will be limited in time and scope,” he will be held responsible by not only the international community, but his own Congress and people. And if Obama means what he says, he’s got a hell of a road ahead of him and obstacles to overcome before he’ll be able to follow through.

Tackling taxes and misconceptions concerning US recovery

US deficits are a result of massive tax cuts, huge increases in military spending, the new Medicare drug benefit, and a serious recession caused by poor use of tax cut funds, crazy mortgages, and a massive housing and financial derivatives bubble. First: taxes. American politics is awash with the idea that lower taxes will help the economy; however, higher taxes properly spent will, in fact, help the economy. Advanced democracies (such as many of the subjects on internationalcomparisons.org) all have significantly higher tax rates than the US while maintaining a higher standard of living. In modern US economic history, higher tax rates are usually associated with higher growth rates. The last tax reform in 1986 increased taxes on business and was followed by years of increased investment. When taxes were lowered during a boom in 2001, it was followed by the biggest bust since the Depression. The danger is posed not by taxes, but by debt, speculation, and excessive money growth.

Under-taxation causes deficit spending, which increases borrowing. Money in Treasury bonds may or may not be invested in growth. The borrowing can be redeemed if the spending it supports is productive, that is, longer term and causes more growth than the burden of debt. Otherwise, taxes that are designed to pay interest on debt become a dead weight on economic growth. Unfortunately, in recent years most of the deficit has not been invested in growth. At the end of the Clinton years, the US budget moved into the black, a rare event, followed by the biggest tax-cut deficits in US history under Republican G. W. Bush. Tax cuts have gone to increase upper incomes with devastating results for the deficit, jobs, and growth. Job growth, in fact, slowed down and the economy went into the worst crisis since the Great Depression. On top of tax cuts, doubling down on bad policy, for the first time in American history, the elite decided to fight wars without paying for them, ballooning debt even more. Over comparable six year periods, Clinton’s tax increase was followed by a 16.2 percent jobs growth; Bush’s tax cuts were followed by a 4.8 percent job growth. For GDP growth, the score was Clinton, 26 percent; Bush,16 percent. For median income, Clinton, up 14.7 percent; Bush, up 1.6 percent. Bush claimed his policies would decrease national debt by $3 trillion; the debt went up by $1.7 trillion over the six years. Continuing the cuts raised the debt by $2.5 trillion over 10 years.

I have been unable to find any audit of where the tax cut money actually went. I only found: “Moody’s Analytics Chief Economist Mark Zandi estimates that making the Bush income tax cuts permanent would currently generate only 35 cents in economic activity for every dollar in forgone revenue.” A lot seems to have gone to personal consumption by the wealthy. One corporate mogul bought a bigger boat in Italy, for example. A lot must have gone into purchases of assets without increasing their productivity, that is, into houses, collectibles, and housing speculation. Unqualified buyers bought homes they could not afford and gullible investors trusted corrupt bankers, insurance companies, and bond rating agencies who pushed the Ponzi bubble higher and higher. Some of the money that went abroad came back from Asian exporters into US treasuries, an unproductive investment. Some of the money probably went into US growth and jobs. (If you know of a good quantitative analysis, let me know.)

The underlying reality is that, within some limits, taxes usually create more jobs and growth than does private spending, so long as the taxes are progressive and the money is wisely spent. Government does a better job because the private sector has a higher cost per job than government. Taxes shift money from high-cost jobs to a larger number of low-cost jobs, creating more jobs for the same amount of money. Consumer demand shifts from serving high income consumers, who spend less and save more as a percent of income, to average incomes who spend more of their income.

Keynes was right: slack economies can recover very slowly or government can prime the pump of demand for growth. Adequate taxes and anti-cyclical spending combined solve the problem. The late W. Bush and early Obama bailouts to the bankers and AEG who caused the problem, the stimulus, and the rescue of GM prevented a deeper recession. Recent Fed policy, however, seems misguided: lower interest rates do little good when businesses won’t borrow because consumers can’t buy because of unemployment.

The value of taxes for the economy is very well understood by the banks themselves who received government funds to maintain liquidity during the recession. The banks also forecast that lack of federal spending and its spillover into lower state and local spending will be a drag on the economy through 2021. California alone gets $79 billion per year, 40 percent of the General Fund, from the federal government.

So, more specifically, how should the money be spent and how should the taxes be increased? First, how to spend: Non-ideological economists agree that using the money for infrastructure, aid to states, temporary payroll tax reductions, and unemployment benefits would have been more productive for short-term demand and long term productivity. The tax cuts, by contrast, were like a quick blood transfusion from the weak to the healthy that in the end reduced the ability of the weak to buy much, undermining the long-term health of the wealthy, themselves. I am not, however, happy with payroll and unemployment ideas. I like what the CCC and WPA did and I’d like to adapt it to current needs. There is a lot of work not being done, and low to middle level skills are still needed. There are a lot of people willing to work for what they used to make or less, which has a low cost per job, is not inflationary and is not enough to keep them when better jobs come along with recovery. It’s a triple play: it gets work done, helps aggregate demand, and provides a social benefit totally superior to giving the affluent even more money.

Another issue is how taxes should be reformed, with five choices:

  • reduce taxes by raising fees,
  • raise rates above historic levels (tax rate increase),
  • restore rates to previously prevailing levels (tax rate restoration),
  • close tax loopholes, and
  • shift taxes from “goods” to “bads.”

Fees replace taxes: If a state lowers tax support for its colleges and raises tuition, is it a tax increase on students? For a social good like education, the fee approach is regressive. However, for private goods it requires beneficiaries to pay, which makes sense.

Concerning rate increases or restorations, the US is fortunate to not have to raise rates; it only needs to restore rates that prevailed during a better economy.

Concerning loopholes, they need to be understood as a budget expenditure, a tax budget
expenditure, no different from an outlay budget expenditure. Is closing a loophole a tax
increase or a budget cut? It’s both, but it is not a tax rate increase. Closing loopholes has four benefits: it reduces deficits, improves vertical equity, improves horizontal equity, and improves economic fair play. Vertical equity improves because more taxes come from some upper incomes, increasing the amount from all upper incomes. Horizontal equity improves because people with similar incomes are taxed in a similar way. Fair play improves by creating a level economic playing field by not using the tax code to promote market winners.

The tax code does hundreds of favors to vested interests reducing their taxes relative to other high incomes. The Joint Committee on Taxation and Treasury Department disclose the tax expenditure budget but only list the loopholes without adding them up. In 2011 Citizens for Tax Justice estimated $365 billion in subsidies for business and investment.

Tax expenditure budget spending is out of control, perpetuating itself, unlike the outlay budget, without annual review by Congress. Upper income people who do pay their share—and many pay much higher taxes than other high income people—should be more concerned about the unfairness to them and the distortion of markets, undermining market-based growth. Many giant corporations pay little or no tax. Corporate tax incidence is difficult to figure out, but assuming half falls on owners and half on consumers, the result is the same for individuals: corporate tax avoidance equals personal income tax avoidance. In June 2011 the Center for Tax Justice reported that 12 big corporations with profits of $57 billion per year paid taxes of minus $833 million. That is to say, they did not pay takes; on average, they received checks from the IRS.

We should shift taxes from “goods” to bads”: A simple carbon tax, increased gradually, is a tax on “bads” that can easily allow reduction of taxes on “goods” like earned income. This policy will not harm the economy, but, instead, shifts prices at the margin to create an incentive for real growth, improve US competitiveness, and reduce the cost of buying foreign fossil fuels. It will be difficult to catch up with Denmark and Germany; they are decarbonizing and growing sustainably.

“Our addiction to foreign oil is hampering our economic recovery and we desperately need investments in clean energy. We can address these pressing problems, while reducing our budget deficit and pollution, by enacting a simple carbon tax.” –Congressman Pete Stark, Sept. 2011.

Do you know of any other Representative stating the obvious?

Government can promote jobs and growth in the several ways outlined above, but does much more if it does what it is supposed to do. Both private and government investment help economic productivity, but in different ways. Government consumer protection creates consumer confidence, reducing the cost of selling. Government investor protection creates investor confidence, increasing the availability of capital. Government spending on natural resources and reducing pollution provides quality of life services and nature services of great economic value that the private sector is unable to provide. Government spending on health reduces what private business would spend or, absent business spending, increases worker health directly, promoting economic growth either way. Government spending on education has a pay-off in human capital essential for long term growth. Government spending on research provides technological capital used by business for growth. Under-funding government spending on social programs leads to high costs of criminality, jails, and prisons. The US prison population is so big it ,reduces the labor force, increasing the cost. The Advanced Democracies, as reviewed at internationalcomparisons.org, with a fraction of the US crime rate and a fraction of the costs, show how effective education and social programs can be.