Wednesday, October 28, 2015
Canada's Turn Left
It is not yet clear if the political sea change that has taken place in Canada will also be ideological. Under the leadership of Justin Trudeau, the 43-year old neophyte who has never held an executive post, the left-of-center Liberals have unseated Stephen Harper's Conservatives with an overwhelming parliamentary majority that no poll or commentator had predicted. They will have virtually a free hand to govern.
But there are two problems. One: the Canadians have not necessarily voted in these elections, dominated by character and personal issues, for a lot more government intervention. Two: Trudeau-who has promised to preserve a big chunk of Harper's legacy, including tax cuts, free-trade agreements and support for major oil-related projects, including the Keystone XL pipeline that has met with such resistance across the border-wants to have it both ways. His otherwise interventionist agenda is incompatible with Harper's legacy on fiscal policy, taxes and resource-related free enterprise.
Not that Harper was a free-market champion. His rhetoric was often much bolder than his actions, hampered by the fact that he had to govern with a minority in Parliament during the first half of his tenure-and that, in the wake of the financial crisis in 2008, they were temporarily influenced by Keynesian fiscal ideas.
All in all, it is fair to credit Harper with bringing the corporate tax rate down to 15 percent, signing dozens of free trade agreements, including a major one with the European Union (none were perfect, because these types of arrangements never are), and maintaining a decorous restraint when the commodities-related downturn led to calls for massive government spending, particularly this year. (Canada has had five consecutive months of economic contraction.)
Trudeau says he will keep the corporate tax rate and the trade agreements, maintain support for the Keystone XL pipeline, and lower taxes for the middle class, a move that he will fund with a moderate tax hike affecting the richest 1 percent. In this, to some extent he keeps the recent Liberal tradition-Liberal Prime Ministers Jean Chr‚tien and Paul Martin also lowered the corporate tax rate. Except that his agenda hinges on a massive infrastructure-related spending plan that he calls an "investment" but which will entail an extra US$46 billion in government expenditure. He admits that this effort will generate a US$25 billion fiscal deficit during the first three years, but he promises to deliver a surplus in his fourth year.
It is easy to picture the deficit becoming structural, Trudeau's promises to keep most taxes rates where they are thrown out the window and, unless the prices of commodities pick up, the Keynesian stimulus expanding. I would not be surprised if he ended up pressuring the central bank to lend him a monetarist help. There is no telling where these policies end.
Trudeau is commendable on some social issues, including his proposal to legalize marijuana, and he seems prudent on foreign policy issues, but his view of the economy is riddled with contradictions. It is also unclear whether he will provide the leadership that will be necessary to overcome the pressure by many left-leaning members of his party who will want to scuttle part of the Harper legacy. (He has said, with regard to the Trans-Pacific Partnership, that he will let Parliament decide.)
Whether Canada makes real progress in the years ahead will depend to a large extent on whether Justin Trudeau decides to emulate his father, the late Prime Minister Pierre Trudeau, who was infused with the big-government Zeitgeist of the 1970s, or to take Harper's legacy one step further down the path of liberalization.
A False Choice: Mass Deportations vs. Mass Legalization
The debate over what to do about the illegal population has too often been framed by supporters of amnesty as a choice between mass amnesty and mass deportations. A new report by the Center for Immigration Studies challenges this false choice and presents a real-world alternative.
The report, by William W. Chip, an international attorney and a member of the Center's Board of Directors, divides the illegal population into three groups in order to understand the real choices we face: those who will return to their homelands voluntarily, those who will return reluctantly, and those who are legalized and allowed to remain.
Chip emphasizes that large numbers of illegal aliens return home on their own; many illegal immigrants "will voluntarily repatriate because they are homesick, cannot find a steady job, or have achieved their financial objectives." He cites an earlier Center study which found that "during the first 5.5 years of the Obama administration the illegal alien population would have declined by approximately 2.5 million, nearly 25 percent, had the president's truncated enforcement of our immigration laws not facilitated the arrival of an equal number."
The "reluctant returnees" are illegal aliens who wouldn't otherwise go home - usually because they have found the steady, gainful employment needed to put down roots - but who can be induced to do so by policies that make finding and keeping a job difficult. Rather than relying solely on the "hard-power" approach of deportations, Chip outlines an additional "soft-power" strategy. If Congress would pass the required legislation, this would involve universal use of E-Verify, the free online system already used to screen nearly half of new hires.
But in the absence of new legislation, a president could still pursue a soft-power strategy by instituting what Chip calls "G-Verify" (G standing for "government"). This would use information already in the possession of the Social Security Administration to bring about a steady reduction in the illegal workforce through measures targeting identity fraud, namely the use of false or stolen Social Security numbers to obtain employment. Chip writes "Because the G-Verify process would play out over a period of years, the great majority of unauthorized workers would have time to arrange their affairs in order to make an orderly return to their homelands."
View the entire report at: http://cis.org/Mass-Deportations-or-Mass-Legalizations-A-False-Choice.
The report notes that some 10 million legal aliens - tourists, students, workers - enter the U.S. every three weeks, while over the same period some 10 million leave when their permission to remain here expires. If the "reluctant" illegals were incentivized to return home over a period of several years, their departure would mount to a rounding error in this normal ebb and flow of alien arrivals and departures.
Via email from CIS
Thousands of Alien Felons Are Being Released from Prison. And Congressional Action Could Lead to Thousands More
The Center for Immigration Studies examines sentencing reform legislation now before Congress and finds provisions of concern that could lead to the release of dangerous criminal alien offenders.
The Obama administration has announced the pending release of 6,000 felons from federal prisons, of whom an estimated 2,000 are non-citizens. This is the first wave of releases; the total number of serious alien drug offenders released could exceed 13,000.
A bill under consideration in the Senate Judiciary Committee, known as the "Sentencing Reform and Corrections Act of 2015," S.2123, proposes to go down the same path and shorten the sentences for repeat cross-border drug traffickers, manufacturers, and distributers caught in the future.
Dan Cadman, a Center fellow and author of the analysis, said, "It is beyond incomprehensible that Senate leaders would attempt to fast-track a sentencing reform bill painted with such a broad brush that tens of thousands of aliens will be released from federal penitentiaries with no assurance of prompt deportation - putting public safety at great risk."
View the entire article at: http://cis.org/cadman/thousands-alien-felons-are-being-released-prison
The present bill affects sentences going forward, and also is retroactive in effect, which could make it easier for some alien offenders to challenge their deportation.
Equally concerning, it does not ensure that released alien prisoners will be detained while in deportation proceedings following their release. Since 2013, the administration has freed more than 76,000 convicted criminal aliens while in deportation proceedings, resulting in an uncounted toll of new crimes.
Several specific provisions will shorten the sentences of aliens who are repeat offenders convicted for trafficking illegal drugs into the United States from abroad, and for those caught serving as drug mules. In addition:
Courts will be required to seal juvenile offenders' records, including those
The bill shortens the sentence for those also charged with illegally possessing or using a firearm to effect the crime (often drug trafficking), from 25 down to 15 years.
"The immigration and public safety priorities of the Republican-led Senate will be apparent if this bill is rushed through like the Trans-Pacific trade and Iran sanctions bills, while Sen Vitter's solid anti-sanctuary bill, S.2146, languishes," said Cadman. "The tragic death of Kate Steinle and so many others seems to have already been forgotten."
Via email from CIS
The Cascading Collapse of Obamacare's COOPs
One piece of Obamacare is already collapsing: The COOPs (cooperative insurers) that the federal government propped up with loans to compete in exchanges. Many are now closing down under pressure from state insurance departments, as they are threatened with insolvency because they charge premiums in the Obamacare exchanges that do not cover costs.
The administration is desperate to stave off the day of reckoning, going so far as to insist the federal loans be categorized as "assets" (rather than liabilities) on the COOPs' balance sheets. Well, state insurance departments are having none of it. The story of Colorado's Obamacare COOP illustrates why these new insurers were willing to risk insolvency in the exchanges, despite insisting they were doing business prudentially.
Last Friday, Colorado's Division of Insurance ordered the state's Obamacare COOP not to offer policies in the state's Obamacare exchange next year. To show how quickly this COOP has fallen, I'll share three stories:
First, from November, here's the Colorado HealthOP's CEO bragging about her low premiums as Obamacare's second open season rolls out:
"Colorado HealthOP chief executive Julia Hutchins said critics and competitors who say their aggressive pricing for the second open enrollment was an attempt to buy up market share have the wrong spin on things. The CO-OP is a fundamentally different approach, she said". "We're a nonprofit. We're not trying to buy anything," Hutchins said. "We were created to serve everybody."
Second, after the end of the second open season, here she is explaining how her grabbing huge market share through low premiums is a good business practice:
"Colorado HealthOP, one of 23 CO-OPs nationwide, reduced premiums on its middle-tier, or silver, plans by an average of 10 percent. Its customer count shot up from about 14,200 in late 2014 to about 75,000 this enrollment period.
"We're right about where we projected we'd be," said HealthOP chief executive Julia Hutchins. "Growth is really important for stability. You really need a big pool to spread risk effectively."
Finally, here is Colorado HealthOP's press release, looking back in anger, in response to the regulator's decision last Friday:
"This morning, the Colorado Division of Insurance (DOI) announced that Colorado HealthOP will not be able to sell its plans on the Connect for Health Colorado marketplac
Colorado HealthOP's closure is the latest in a series of CO-OP shut downs across the country, spurred by the federal government's failure to pay billions of dollars in promised funding."
So, the COOPs' business plans did not fail. It is the taxpayers who failed! The COOPs expected to be able to go back to Congress for unlimited bailouts. Too often, this is a credible strategy for businesses dependent on government. Unfortunately for the COOPs, the taxpayers chose to elect representatives who were not interested in continuing this game.
What the Obama Recovery REALLY Looks Like
With Hillary Clinton running as the heir to Barack Obama, it's worth examining his economic record. Turns out, it's not so hot:
"Fifty-one percent of working Americans make less than $30,000 a year, new data from the Social Security Administration (SSA) shows.
That’s $2,500 a month before taxes and just over the federal poverty level for a family of five. The new numbers come from the National Wage Index, which SSA updates each year based on reported wages subject to the federal income tax.
In 2014, half of working Americans reported an income at or below $28,851 (the median wage), and 51 percent reported an income of less than $30,000. Forty percent are making less than $20,000. The federal government considers a family of four living on an income of less than $24,250 to be impoverished."
It's worth mentioning, because most of the press won't, that Bernie Sanders has been running against the Obama economic record for months, pointing frequently to stagnant wages and the unemployment rate. One would think that this would be newsworthy, but it's not.
Perhaps this is why political outsiders are dominating the election so far. As is usually the case, the American people are way ahead of the politicians. The conservative candidate who wants to win would do well to harp on how Obama's billions in stimulus spending have helped create eight years of stagnation and desperation.
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Posted by JR at 1:36 AM