Cyreenik Says
The immigration issue is white hot right now among Republican candidates. But it seems that heat is all based on much emotion and little fact.
So I'm issuing a Blunder Alert.
These two articles, a 26 Apr 12 Economist article Mexican Immigration: Low Tide and a 23 Apr 12 WSJ article, Tide Turns on Border Crossing
"Number of Immigrants Arriving From Mexico Now Equaled by Those Going Home" by Miriam Jordan, both cite a nonpartisan Pew Hispanic Center report which states "The net migration flow from Mexico to the United States has stopped and may have reversed." It is based on an analysis of U.S. and Mexican government data, and basically says that the net immigration over the last ten years has declined from huge to zip.
So we have a lot of Nativist heat being fanned over a problem that has solved itself because of changes in the economies and demographics of the US and Mexico.
Any legislative action taken at this point, other than to reduce spending on immigration protection and to simplify legal immigration processes, will be a Blunder.
On the other hand... now that it doesn't matter as much, it will be easier to do. And politicians sure love emotional and easy. <sigh>
Update: A 28 Apr 12 Economist article about the political expense of Nativism, The Nativist Millstone, "Republican policies on illegal immigration are annoying Latinos and becoming a serious handicap in the presidential election."
This thought was inspired by reading the 20 Apr 12 WSJ article, A Quixotic Quest to Mine Asteroids by Amir Efrati, which describes how private entrepreneurs are now picking up where NASA is leaving off. These entrepreneurs have different goals than NASA, so where they are devoting their time and energy is different. Space exploration is about to take a new path.
NASA was a child of the Cold War. It grew mighty and prospered when the Russians demonstrated they could launch an earth-orbiting satellite, Sputnik, in 1957, and Americans sincerely worried that they were falling behind... "sincerely" meaning: they were willing to put a lot of tax dollars behind those worries.
Because NASA was about building US prestige and confidence, the projects it favored were high profile and no economic return was expected from them, although all through the 1960's NASA was happy to point out how many products of the Space Race found profitable uses in civilian life.
NASA reached its high point with the manned moon landings in 1969, and its meaning in life became severely challenged as the Berlin Wall fell and the USSR broke up in the early 1990's, but it soldiered on. It was, after all, important.
Now in the 2010's space exploration is less important to Americans, but the dream of space exploration is still a vivid one for many people. As a result the NASA-solution is loosing its importance and commercially-oriented solutions are springing up in its place.
This is an example of the Curse of Being Important diminishing. Other issues are replacing space exploration as important to Americans, and, sadly, they are picking up the curse in its place. Space exploration is transforming from "vital to America" into a sport of kings. This is a good transformation for space exploration. Ironically, because return on investment is now part of the picture, it will develop much faster and in more interesting ways.
This is turning into a month of articles simpatico with Cyreenik Says themes. Here are some from 9 Apr 12 Forbes and Bloomberg Businessweek.
o In Forbes Opinion Politicians say they can cure the Middle-class blues. Don't believe them. by Geoff Colvin. Colvin points out the strong correlation between good jobs and education, and how America's percentage of well educated people has been declining since the 1960's. From the article, "The high school graduation rate peaked in 77% in 1969 and has since dropped to about 69%."
I take this to mean two things:
o First, these kids of the 2010's are dropping out because they see little to no value in completing the program. We as a community need to look very hard and diligently at how to fix that. The value to the community of well educated community members has been clear since the time of the French and American revolutions in the late 1700's. But if the individual participants aren't seeing that value, there's something seriously wrong with the educational system they are participating in.
o Second, the strong correlation shows that politicians appealing to voters' instinctive thinking isn't going to fix this big problem. The appeal to instinct may get politicians votes, but it's not fixing the getting-Americans-good-jobs problem. The politicians have not figured out how to reform education. Given the complexity of education's goals in modern civilized living, I recommend letting the competitive free market system do the heavy lifting for this goal. Competitive education systems can adapt more quickly and they can avoid some of the distractions, such as providing social justice to the teachers and getting emmeshed in emotional controversies over what to teach, that have ensnared the current system.
It's not obvious, or intuitive, but widespread good education will fix the jobs problem, and with it the wealth inequality problem. This happens because when Americans are well educated and using a lot more analytic thinking in their day-to-day lives, including their voting preferences, better choices will be made all through the community. Once again, this goes back to realizing how important it is to be working very hard and diligently at improving America's education systems. Poor education is the root of a whole lot of America's social problems.
In Bloomberg Business week:
o The Secret Strength of Pakistan's Economy by Naween A. Mangi talks about how much of Pakistan's economy is underneath the official radar. From the article, "Nasir’s business, his home, his power and water supply, and even the cup of tea Abid brings him don’t exist in Pakistan’s official figures. They’re part of another economy that doesn't pay taxes or heed regulations. It probably employs more than three quarters of the nation’s 54 million workers and is worth as much as 50 percent of Pakistan’s 18 trillion rupee ($200 billion) official gross domestic product."
This demonstrates an enfranchisement issue. Pakistan's official government is deeply disenfranchised from the day-to-day lives of its people. This is clearly a livable arrangement because it's been going on for decades, but it's also clearly a wasteful arrangement. The country could be growing a lot more quickly and smoothly if the government and people were playing from the same sheet of music.
This kind of deep disenfranchisement explains why the Osama Bin Laden debacle was possible, and why the political and economic situation in Pakistan can swing so dramatically from one year to the next. The government-people relation in Pakistan is not that far off from Somalia's. Both are places with deeply disenfranchised official governments.
Update: a 21 May 12 Economist Banyan article, Power Politics, talks about the disconnect between electricity generation and the marketplaces it serves. This is describing a toxic mix of both Disenfranchisement and The Curse of Being Important. Somehow, the Pakistanis are more happy with this current arrangement than something with a more direct connection between producers and consumers.
o The article The People vs. the IRS by Elizabeth Dwoskin is about the role of taxpayer advocate in helping US citizens tangle with the IRS. My thought: Why do we as American taxpayers still live with such a complicated system? We can have our politicians vote in a simpler system as quickly as we can get on tweets, e-mails and blogs and demand one! This is 21st century America, for goodness sake, a democracy! And we have tons and tons of computing power that can be used to create a much simpler tax system virtually overnight. We lack only the social will to cast off that instinctive feeling that increasingly complex taxes and government regulations are a necessary part of the American Way because they are protecting us from evil. Evil is not causing the problems and abuses, complexity is causing those.
For some reason we Americans choose to have our politicians vote in complicated taxing schemes rather than very simple ones. The IRS and the federal tax code is iconic, but far from the only example -- state and local systems are just as bad.
Simplicity in taxes is something we should be striving for, and except for the social inertia, it's not that difficult to implement. The huge benefit is that if the tax system is simple, then our brightest and best can be focusing their attention on other issues, such as entrepreneurship and other ways of making America better and more prosperous.
It's pretty simple. <sigh>
Update: This 28 Apr 12 Economist article, Not so easy: The high price of tax breaks: Closing loopholes is politically painful, is also talking about this topic. From the article, "Like most sins, tax breaks are easier to condemn than to resist. Politicians regularly decry the inefficiency and complexity that tax breaks introduce to the overall tax system, while merrily adding to the pile."
The 14 Apr 12 Economist was chock-full of interesting articles relating to Cyreenik Says topics. Here are my thoughts on these various articles:
o Modell Deutschland über alles -- "The lessons the rest of the world should—and should not—take from Germany" This relates directly to one of my perennial topics, the Midwest Disease -- how the Midwest of the US has been blowing its huge economic advantages for the last fifty years. A key point in this article, "Thanks mainly to the Agenda 2010 reforms begun by the Social Democrat-led government of Gerhard Schröder in 2003, Germany has liberalised many of its labour-market rules, one reason for today’s enviably low unemployment." The Midwest has been trying to use government laws and policies to enforce social fairness, and in the process has driven away the job creators. (A longer version of this article is What Germany offers the world.)
Two other articles relate to this topic: The good news article is a 12 Apr 12 Businessweek article, Berlin Cracks the Startup Code by Caroline Winter, which discusses how Berlin is getting much friendlier to high tech startups. Ambitious people are constantly looking for the best places to start new businesses, and willing to relocate easily. The bad news article in that issue is, The Building Boom That's Sinking Stockton by Alison Vekshin, which is a case study in a city government getting distracted. Stockton city fathers viewed solutions to the problem of an incipient central city decline through the prism of activist politicians (activist as in, "We have to do something.") synergizing with opportunistic real estate developers who were familiar to the politicians. Both of these groups figured that fame and glory would build their city center, so they devoted their time, money and attention to building fame and glory. The point of view not considered was that of the ambitious business entrepreneur. These people would have been lots more impressed with the politicians working on simplifying rules and regulations and lowering taxes. Had they seen that happening they would have set up shop in city center and created jobs.
Without quite realizing it, the city fathers had a choice between creating a Central Valley Disneyland and a Central Valley Silicon Valley. They chose the Disneyland. Sadly, it hasn't paid off, and the article is about how that famous fairy tale piper must now be paid. This relates to the Midwest Disease because it is a choice that faces many cities in decline, and too many city fathers (and the citizens who support them) miss seeing the virtue of supporting enterprise over fame and glory.
o Chile: Lessons from the students is covering the Midwest Disease issue as it is unfolding in Chile. There students are demonstrating for Midwest-style changes in wealth distribution now that Chile is becoming prosperous. The moral: social fairness is always in competition with growth in decisions of how to cut up the prosperity pie. (Here is a 29 Apr 12 WSJ editorial on the same topic, Chile's Cautionary Lesson for Americans by Mary Anastasia O'Grady, "A free economy is at risk when a demand for equality is not answered by a defense of liberty.")
o Mall of the Masses provides a vision as to how the developing-world middle classes will be different than the developed-world middle classes. The article is about Dragon Mart, a shopping mall in Dubai, on the Persian Gulf, that services Chinese and African customers, and apparently what is offered there gives incredible punch to the term "plastic" when used to describe emerging world middle class preferences. The article also points out that this is a viable mix of state-sponsored and free enterprise businesses -- the state put up the mall and smaller enterprises cluster inside. The moral: This is serious business innovation going on in the Middle East. Relating to the Midwest Disease again: If the US is ready to drop the innovation ball by paying a lot of attention to social fairness instead of growth and innovation, there are others around the world ready to pick it up. A somewhat related article is The Question of Extractive Elites -- "Bankers and the public sector may both be enemies of growth" which ponders how much the financial and public sectors in the developed world are helping growth and innovation.
o And finally two articles about health -- Medicine and its rivals: The believers "Alternative therapies are increasingly mainstream. That means headaches for scientists—and no cure in sight" -- talking about what role alternative medicine should play in health care, and Misery Index -- an article about how social status affects health. Based on experiments done with rhesus macaques monkeys, it appears that social status affects immune system activity, with low status producing too much activity, leading to various inflammation disorders. (Apparently your body agrees that, "It's good to be the king.") All this relates to my take on the healthcare issue: That we need to be moving health care away from patronizing patients and into what I call "Patient Pays" so that patients get what they think is good for them, not what some healthcare providing institution thinks is good for them.
o And a quick good news article, Uncuffing capitalism, about the JOBS act being passed by Congress in America. This is helping growth and enterprise.
All-in-all, quite a heady issue of Economist. I congratulate them on being on top of a lot of important issues.
In April the Mega Millions lottery made news. First because of its size and second because the media started covering a bogus winner in Maryland before the real winners there came forward.
A McDonalds restaurant worker claimed she had the winning ticket but it turned out to be in the hands of three anonymous medical workers who bought tickets from the same store.
Like many other forms of gambling, lotteries have been around for a long time. What makes them an interesting social study is how much they are used for team gambling. Many, many tickets it seems, are bought by groups of people. The McDonalds lady was causing a lot of heat because she had bought tickets for a team at the restaurant where she worked, and then claimed that her winning ticket was not part of that batch -- it was one she bought separately. The people who had the real winning ticket were also a team, and I have read numerous case studies in ethics books about team buying of lottery tickets, so it's common.
Most forms of gambling are structured as solo activities. Lottery ticket buying can also be solo, but it seems that team buying is common and is satisfying a different social need. It seems to be more about group unifying, "We are a team and we are sharing our wish to get lucky and become rich." This desire makes news when a win happens and is followed by a defection announcement -- one team member declares the ticket is only their's and they are taking all the goodies.
The case of the McDonalds lady above is bizarre because she made that defecting declaration over a bogus ticket. Either she was mistaken about what ticket she had, or she was really, really upset with her team, or she was pathologically desperate for her fifteen minutes of fame.
-- The End --