All posts by Frugal Ron

Frugal Ron is passionate about numbers. If something can't be quantified, how can it be discussed? He loves questioning those things that others hold sacred.

Immigration

Illegal immigration’s solution isn’t taller and stronger fences, more guards and more deportations. Theses are  band-aid fixes. Illegal immigration is both an act of desperation and a caution be damned leap of faith for people devoid of hope. For the receiving country, immigrants are an economic spark plug yet at the same time a political bombshell for Republicans concerned that people whose skin isn’t white are becoming a majority in the US .

Real solutions require understanding the reasons people emigrate and the reasons employers hire illegal immigrants. Meet those needs and you solve the immigration problem.

There is a two-step long-term solution. Besides stemming the tide of immigrants, they have economic and social benefits for the US.

First, remove the job incentive to emigrate by forming a free trade area mimicking the European Union between the US, Mexico and Central America that eventually encompasses the Western Hemisphere. This isn’t a simple fix and may not happen in my lifetime, but it is the right solution. Having one of the world’s richest countries bordering some of the world’s poorest is a recipe for disaster. Make the border more advanced and the people trafficking immigrants will simply become more advanced. Conversely, a free trade zone would be a win – win for everyone.

If we want to stem the flood of Latinos coming to the US for jobs, it only makes sense to take the jobs to them and ship product to the US. People with jobs and hope for their future are much less likely to split up their families and forsake everything they know for a perilous trek north.

The myth

When you hear a lie enough times, people start to believe it. This is the reason US citizens continually equate trade agreements with job losses. We  have Merchandise and Trade deficits (job losses) because we have Net National Savings deficits. The two should roughly equal each other. In the US, we now have a -$465.6 billion Merchandise and Trade deficit and a -$466 billion Net National Saving deficit.  (The Net National Savings deficit is money we borrow from abroad). The reason we have a Net National Savings deficit is our $593.5 billion federal government budget deficit.

If our elected officials eliminated our budget deficit, logically our Net National Savings deficit would be dramatically lowered or eliminated resulting in an equal change in our Merchandise and Trade balance. The bottom line here is opening a free trade zone  will not impact our trade balance. We export jobs because our elected government officials lack the wherewithal to balance our government’s spending and income.

The  North American Free Trade Agreement (NAFTA) was supposed to open trade between the US, Mexico and Canada.  NAFTA is a  1,700 page mixture of conditions, regulations and rules that belies its name. While it has certainly helped Mexicans, it has stifled the opportunity for more trade and offers nothing to Central Americans. A free trade zone fixes that.

The second step to stemming the flow of illegal immigrants is legalizing the sale of presently illicit drugs in the US. In a single swoop, we can do more to promote individual safety and well-being in Mexico and south than all the aid and drug enforcement money we’ve squandered in the last 40 years.

From anyone’s perspective, the War On Drugs is a failure. Just like Prohibition, we might as well admit government does an ineffective job of preventing citizens from imbibing in things that aren’t good for them. Long prison sentences for sellers don’t work and capturing drug kingpins doesn’t work. There is always someone willing to take their places to keep the drugs coming into the US.

The Berlin Wall, at least it solved Western Europe's immigration problem.
The Berlin Wall, at least it solved Western Europe’s immigration problem.

The only argument advocates of continuing drug enforcement still use is that legalization will increase the availability of drugs. It is difficult to imaging them being more available than they are now. Instead of breaking up mostly minority families in the US with long prison sentences for selling drugs, legalization would allow us to focus on the much more effective solution of treating drug users’ addictions.

Summing up illegal immigration

It is easy to simply blame Mexico and Central and South American countries for the violence, corruption and bad government that fuels illegal immigration to the US. However, it is the US’s insatiable demand for drugs and our government’s almost insane insistence to continue doing what hasn’t worked that is responsible for creating lawlessness in neighboring countries. If we want to fix illegal immigration, we need to fix our approach to drugs.

At the same time, we need to get our government out-of-the-way of protecting powerful industries from foreign competition. A hemisphere wide free trade zone will give US consumers dramatically lower sugar prices and bring higher end new jobs to the US as southern countries start improving their economies.

Shifting the illegal immigration argument away from more enforcement and higher fences to addressing the causes will result in a win-win for all countries. Unfortunately, this will require a seismic change in our politics.


U.S. Puppet Governments

Why can’t the greatest democracy on earth set-up decent puppet governments anywhere? Ever since World War II, regardless of the party in the White House, the people we put in charge of running their countries are consistent disasters.

Transparency International’s 2013 Corruption Perceptions Index ranking of 177 countries lists Iraq’s government as seventh most corrupt. Afghanistan tied North Korea for second. Not exactly something to brag about.

President Dwight Eisenhower’s CIA overthrew Iran’s popularly elected president and established the hated Mohammad Reza Shah Pahlavi as the new leader. His tenure of corruption, brutality and arrogance made us the Great Satan for generations of Iranians.

Democrats made a merry-go-round of leadership coups in South Vietnam. New governments each seemed more inept and corrupt than the one before it. In contrast, we conduct joint military exercises with the Vietnamese government we spent 50,000  U.S. lives trying to keep from power.  We are also Vietnam’s largest export market.

President Ronald Reagan conducted a secret war in Nicaragua against the Sandinistas and their leader Daniel Ortega. Since then, Nicaragua elected Ortega as president three times.

Back to the present and installing new governments

President George W. Bush, the “Nation Builder”, handpicked Hamid Karzai as Afghanistan’s president. It would have been difficult to make a worse choice. The former commander of U.S. and NATO forces in Afghanistan, Ret. Gen. John Allen,  said corruption, not the Taliban, is the worst threat to the future of the war-torn country.

“For too long we focused our attention solely on the Taliban as the existential threat to Afghanistan,” Allen told a Senate subcommittee. Compared to the scope and the magnitude of corruption, “they are an annoyance.”

So, here we have our former top general saying the government we installed is a bigger problem than the enemy we are fighting. That is a problem.

In Iraq, Bush’s choice of Nouri al-Maliki as prime minister is equally disastrous. Aligning his religiously divided nation as almost a satellite of Iran and its Shiite government provoked a civil war. Maliki’s inability to deliver even the most basic government services is another contributing factor to his unpopularity even among Shiites.

Saddam Hussein was far from an ideal leader, but he kept Iraq functioning and people of different sects lived peacefully next to each other. While today Al Qaida is actively  entrenched in Iraq, during Saddam’s rule the only Al Qaida operatives in the country were either dead or soon to be.

So what’s the solution? President Barack Obama is the first president in generations to finally get it right by keeping us out of other countries’ wars. While members of congress and the press may wave their machismo and want us to send our young soldiers to die in wars from the Ukraine to Nigeria, this is simply wrongheaded. We may win the war, but after installing a government, our real problems begin.

The other part of this solution is to make ourselves less vulnerable to other countries problems. We are currently using drone attacks on extremists in Yemen that might be considered threats to neighboring Saudi Arabia. While we are protecting Saudi Arabia, it is a good bet that most of the advanced weaponry and training  the Sunni groups attacking Iraq’s government have is financed by Saudi oil money.

The real solution to this convoluted mess is making the U.S energy independent. Not only using new energy extraction technologies but developing new conservation technologies that can be adapted by other countries. Isolationism isn’t the solution, but recognizing our limitations in involving ourselves in other countries’ internal and external conflicts and installing pseudo governments is a major step.


Investigations, Benghazi = 8, Iraq = 0

Republicans in the House of Representatives are starting their eighth investigation of the attack on the US Libyan Embassy in Benghazi. Something doesn’t make sense. Four Americans died in the Benghazi attack while 4,487 US soldiers died in George W. Bush’s Iraqi War. How does Benghazi rate eight investigations while Bush’s War has never rated a Congressional investigation of any kind?

The Benghazi investigation revolves around questions about semantics such as if President Barack Obama correctly called the attack “terrorism” or “act of terror”. How pathetic. Just a few of the questions demanding answers about Bush’s War:

  • Was the Central Intelligence Agency (CIA) under pressure from the White House to claim there were weapons of mass destruction (WMD) in Iraq? If yes, who is accountable?
  • If the intelligence community was not pressured, how could they make such a mistake, especially considering how our NATO allies continually rebutted the CIA evidence? Who is accountable?
  • Were international laws broken when Bush ordered the invasion while Iraq was fully cooperating with the United Nations weapons inspectors who claimed they were a few weeks away from determining Iraq had no WMDs?
  • Did White House officials break a 1982 law prohibiting the disclosure of the identities of covert CIA officers when they revealed Valerie Plame’s status to columnist Richard Novak and other reporters?
  • Plame’s husband, former ambassador Joseph Wilson, investigated claims that Iraq attempted to buy nuclear weapons grade uranium from the African nation Niger and found the claims were false. Why did President George W. Bush knowingly lie to Congress in his 2003 State of the Union address when he stated that Iraqi President Saddam Hussein bought the uranium? Should Bush be held accountable?
  • Vice President Cheney’s top aide, I. Lewis Libby, took responsibility for Plame’s disclosure as a covert CIA agent. Libby was convicted of lying about his role in the leak of Plame’s identity, two counts of perjury, one count of making false statements and one count of obstruction of justice. Before Libby’s sentencing, he was pardoned by President Bush. Who in the White House actually authorized Plame’s outing?
  • Knowing that the UN weapons inspectors were verifying our allies’ findings that there were no WMDs in Iraq, what  was the real reason George W. Bush ordered the invasion?

While the Republican Benghazi investigation dances around smoke and mirrors, the investigation they refuse to hold about Iraq goes right to the heart of our democracy, the integrity and independence of our intelligence community and whether a US president is immune from international law.


Religion, Education and Job Creation

For years living in rural Wisconsin, Frugal Ron listened to Tea Party predecessors recite their solution for solving our nation’s ills, “We need to get Jesus back into schools!”

Religion

Of course, before the Supreme Court’s 1962 decision striking down state sponsored prayer in public schools, we didn’t have all this homosexuality and abortion nonsense.  So, according to current Republican logic (or lack thereof), if we can put the fear of God into today’s children for several hours a day while they are in school, we won’t have any more of this liberal decay of our society.

For sure, God-fearing children won’t choose homosexual lifestyles or have promiscuous sex.  (Editor’s note: We don’t want to complicate this argument with facts. Please ignore, as Republicans do, that almost all peer-reviewed current literature suggests sexual preference is determined before birth and among those born in the 1940s and turning 15 from 1954 to 1963, 82% had premarital sex by age 30, and 88% had done so by age 44).

Education

Not deterred by a simple Supreme Court ruling, using voucher schools, which are almost all religiously affiliated, Wisconsin’s Republican Governor Scott Walker found a way to use taxpayer money to get Jesus back into schools. Unfortunately, with education, like so many other things, you get what you pay for. Voucher school teacher pay is a fraction of  public school teacher compensation and results mirror that.

A 2011 study found students participating in the Milwaukee Parental Choice Program scored proficient or advanced on standardized tests at a rate of 34.4 percent in math and 55.2 percent for reading. Students in Milwaukee Public Schools scored proficient or advanced at a rate of 47.8 percent in math and 59 percent in reading on the same assessments, according to the Wisconsin Department of Public Instruction. And, this was comparing against Milwaukee public schools, some of the worst in the country.

But, Governor Walker seems to have a plan to fix this learning gap. Continually expanding the voucher school program by taking money away from public schools will put more downward pressure on public school teacher salaries.  This will result in an exodus of teachers able to get jobs elsewhere and an influx of lower skilled instructors taking their places. In this race to the bottom, we will see public school student performance drop to the voucher school level.

Job creation

For any organization,  attracting the right people is the secret to success. So, what does Wisconsin offer companies who must attract well-educated and creative employees? The first thing managers note are the exorbitant health insurance costs in Wisconsin compared to neighboring states that accepted the federal Medicare funding Walker spurned.

If your work has anything to do with stem cell research, the state legislature delivered a strong message that you aren’t welcome here. Gay employees must accept they are second class citizens in Wisconsin. Why would they want to move here?

Employees with children will demand outstanding schools. Don’t expect Walker’s church affiliated voucher schools that teach the earth is 6,000 years old to impress them. They want the outstanding teachers Republicans sacrificed to fund their minuscule tax cuts and voucher schools.

C They are the direct result of his policies. Walker is a lifetime politician who violates the first rule of marketing;  always design your product to meet your target customers’ needs and wants , not yours.  While Walker and his supporters want to take Wisconsin schools back to the 1950’s, companies with 21st century technology and information needs will look elsewhere.

 

 

 

 

 


Job creation lessons

Note: Frugal Ron is adding a new section to his website! While liberals are continually doing really stupid things, Frugal Ron misses out on the fun of pointing out their foibles in the long article format used so far on this website. This new section will aim for shorter posts on current news. Hope you enjoy them!

Capital Times editorialist Dave Zweifel’s April 13, 2014 column , Gophers find a way that eludes Walker, focused on the differences between Minnesota’s fifth place tie in job creation compared to Wisconsin’s bottom third in the US placing.  Zweifel brought up the large difference in health insurance costs that Frugal Ron documented months ago in Competitiveness and Health Care Costs.

While Wisconsin Governor Scott Walker and his legislative allies focused on their goal of “keeping low-income citizens from becoming more dependent on government” by refusing the expansion of Medicaid in Wisconsin, they did nothing to keep these folks from getting free medical care at the Emergency Room. About  70 percent of the costs they don’t pay are passed on to those of us who buy health insurance and 30 percent to state government.

So, while Walker campaigns on the $1.25 extra per two-week pay period the average taxpayer gets due to his tax cut, potential employers look at the extra hundreds of dollars per month they will pay in health insurance if they make the mistake of locating in Wisconsin and not Minnesota.  Yet, that isn’t the biggest long-term problem Walker will leave us with.

Walker focused on bringing manufacturing to the state with reduced environmental regulations, an anti union atmosphere, subsidies through his Economic Development Commission and lower taxes. Unfortunately, Wisconsin cannot compete with China and other developing countries for these jobs and Walker’s job creation record attests to his failure.

While Macy’s may charge $80 for a pair of slacks imported from Bangladesh that have about $5 of cost  in them when they arrive in the US, the other $75 of value is added here. Walker focuses on getting manufacturing jobs, Minnesota’s Governor Mark Dayton wisely goes after employers that add the big value to products.

Walker’s white, over 50 , non college graduate core supporters are cheering when he cuts teacher salaries, tries to restrict stem cell research in the state and makes no effort to give Gays equality. However, the college educated upwardly mobile “Idea People” who are the real job creators and value adders in our information age economy migrate to states committed to great schools, supportive of disease fighting research and accepting of Gays having the same rights as everyone else.

Unfortunately for Wisconsin, we have a governor who says he is pro-business. In contrast, Minnesota has one that walks the walk for today’s entrepreneurs. Their job creation records leave no doubt who is most effective.