4th of July: The Hypocrisy of Hate

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Another year and another celebration of Independence day. My peeve about this day is that it is the day liberals come out of the woodwork to complain about all the “terrible” things America has done in the past. I put the word terrible in quotation marks because it is precisely these actions which allow Americans to enjoy the standard of living they do now.

Liberals hold America to an impossible standard. Particularly when you consider the actions of other countries in that time period. If you were to actually follow the rules prescribed by those who complain about the actions of America in the past the country would have never become anything more than a minor power and would have most likely failed completely. For this article I will take a look at the two major complaints that normally come up. That of slavery and the various wars of aggression the US has engaged in.

Wars

When the subject of wars come up the first thing that gets brought up is the American Indian war and the Mexican American war. This is the best place to see the impact of these policies liberals condemn America for as the America we know today would literally not exist without them. The first thing we need to realize is that the Indian nations, Mexico, and the early form of America made up of the initial colonies were distinct countries. Each with their own diplomacy, interests, economy, and people. The Indians and Mexicans were not Americans. The Indians just happened to live in the same continent.

Without these wars of expansion America would have never extended beyond the original colonies. The rest of the continent would not have remained vacant. A combination of Mexican, Indian, or Canadian interests would have taken over. Instead of one great nation spanning from sea to shining sea we would have 3 to 4 nations of equal strength throughout the continent. When we look at the history of Europe and Africa I can think of no greater evil to inflict on North America than this. The entire reason the continent has been stable and escaped the damage of the world wars is because of the relative strength of the US as compared to its neighbors.

Slavery

What would this discussion be without slavery? Everyone is against it and acknowledges how horrible it was. The truth is America would not have the economic power it now does if we did not go through a period of slavery. At the end of the Revolutionary War the US was bankrupt. It had no money to pay its soldiers and most of its economy consisted of subsistence farming. The government even had to pay some soldiers with land grants because it had no money.

Without slavery there would be no cotton or other cash crops. Other countries in this time period used slave labor or some form of its equivalent with their colonies so US agricultural products would not have been competitive in other markets. Without this capital the US would have a difficult time setting up other industries. In fact it would be very likely that the country would never have developed out of subsistence farming and would have been the equivalent of yet another third world country.

Think of all the good America has done for the world. Take a look at World War 1 and World War 2 for example. Without American intervention how much longer would those have lasted? Would the allies even have won? An America that did not go thru a period of slavery and expansionism would not have had the men or materiel to send over. The most likely outcome is that it would have had its own fight with the other nations in the continent.

America is America warts and all. If you are a liberal and want an America that can take the lead in Climate Change, rescuing refugees, forcing people to acknowledge there are 30 million genders, or whatever other cause you are fighting for then it would have to be an America that went thru slavery, imperialism, and all other things that you hate. The moralist America that you preach, that never existed, would never have made it out of infancy.

 

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The Great Democrat Con

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The Democratic party has run the most amazing con job in political history. For the longest time it has convinced the American public that it is the party that works for the benefit of the working class while painting the Republicans as evil tools of corporate greed. In reality every single one of their major policies have massively enriched the big business they are supposed to be railing against. Despite their demonization from the press and complete lack of effort in defending their viewpoints it is actually the Republicans who pursue efforts that end up helping the poor and middle class citizens.

Lets take a look at a few of the most popular Democrat accomplishments.

Dodd-Frank

I have written about this in the past. According to Democrats this was supposed to protect the economic system from the banking industry being too big to fail and requiring bailouts. In reality it increased the market share of giant backs from 25% to 63% and increased the share of 4 banks from 11% to 43%. It has devastated smaller banks causing 25% of them to close outright and creating a period in the Obama administration where only 3 new banks opened as opposed to 100’s per year under Bush. Of course since there is no competition consumers take it on the chin as well as they have more fees to contend with.

Due to their brilliant marketing consumers still think Dodd-Frank is good for them and major Democrats like Bernie Sanders still want to continue this policy even after seeing its effects.

Obamacare

Obamacare was billed as a way to deliver affordable quality healthcare to every man , woman, and abortion in America. It was supposed to lower all premiums, let everyone keep the same doctor, and let people with existing illnessess benefit from insurance. The insurance companies complain about Obamacare but in reality they have more than doubled their profits under this system. In exchange for their doubled profits they have delivered massive premiums and sky-high deductibles. People were indeed covered but deductibles are so high very few people could use their insurance effectively. After all there is no incentive to provide quality insurance when the government holds a gun to your head and forces you to purchase it. In most cases you are forced to buy it from an effective monopoly.

Illegal Immigration

Democrats have always been big supporters of illegal immigration. The cynic in me says they do it for voters. Others will say because they want to help the poor citizens of South America and other places. Whatever the reason the policy depresses income for those who make the least.

Labor like anything else is a commodity. As with any commodity when there is plenty of supply its value drops. Illegal immigration increases the supply of labor massively undervaluing the labor provided by citizens. The concept is similar to plantations importing slaves in the past because they could not make the same profit paying citizens fair wages.

It is very sad that Republicans are too shy to point out these failures of Democrats enabling them to continue misleading their public about their image.

 

 

Dodd-Frank is a Failure

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The other day I wrote an article explaining why we needed to repeal Dodd-Frank and showing why the Financial Choice Act was better. Today I want to focus more on why Dodd-Frank has been such a colossal failure. One of the most exasperating thing about Dodd-Frank is how effectively the democrats and their media allies have brainwashed the public into thinking that Dodd-Frank is effective.

If you support Dodd-Frank there are certain things you likely believe. The financial crash was caused by giant banks controlling too much of the banking industry so that when they took certain risks and failed they risked taking down the entire economy with them. You also believe that giant banks should be given less power and that a healthy banking industry involves more banks, not less, to foster more competition. Of course you also believe that Dodd-Frank has been successful in producing these results.

Here are some facts regarding the banking industry before and after Dodd-Frank. I will leave it to the reader to decide whether or not it has been successful.

  • Before Dodd-Frank there was an average of 170 new banks a year. In the seven years since Dodd-Frank was implemented 3 new banks have opened
  • Before Dodd-Frank 4 banks controlled 13% of the banking industry. After Dodd -Frank these same 4 companies controlled 43%
  • In case you missed the last bullet after Dodd-Frank 4 companies control NEARLY HALF THE BANKING INDUSTRY
  • After Dodd-Frank NEARLY HALF THE BANKING INDUSTRY IS CONTROLLED BY 4 BANKS
  • As of 2015 Bank of America controlled the same percentage of the Banking industry as all small banks combined
  • Since Dodd-Frank 25% of all local banks have closed
  • Of that 25% a quarter have been total failures requiring the FDIC to come in and make sure depositors got their money
  • Before Dodd-Frank 75% of Banks offered free checking. After Dodd-Frank 39% did. This is a direct result of less competition
  • Before Dodd-Frank there were 14000 banks in America. As of 2014 there were 6900. This number is decreasing every year

Were you concerned about banks being too big to fail before? Has Dodd Frank made this better or worse?

The Truth About the Dodd-Frank Repeal

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Republicans in the house have voted to repeal Dodd Frank and replace it with the choice act. As usual they have declined to explain why this is done and have let the Democrats control the airwaves with their message of the Republicans who have been bought by the banks and are going to crash the economy with their greed. One of the most frustrating things about supporting Trump and the Republicans is that they generally do the right thing but cannot seem to explain why they are doing it. This is especially important in a complex issue like this one. By all means the article I am writing should come from the Wall Street Journal, National Review, or even the Trump administration itself. Yet they decline to do so placing the burden of explaining why this must happen on the shoulders of independent bloggers like myself with our vastly more limited reach.

It is very easy to have a knee jerk reaction to this issue but for something this critical it is very important to understand why it is being done.

State of the Banking Industry

In order to understand why this must be done we have to take a look at how the banking industry is doing. After all maybe there is no problem and this is just being done for the sake of corporate greed.

If I were to ask you why you support Dodd-Frank your answer would most likely be to rein in big banks, to break up big banks, or something along the vein of placing less power in the hands of big banks. After all it is because of the irresponsibility of the banks that are deemed too big to fail which caused the financial crash to happen.

How has Dodd-Frank affected these banks? The best data I could get is that in 1995 giant banks controlled 22% of the assets of the banking industry. 13% of which are controlled by 4 companies Citigroup, Chase, Wells Fargo, and  Bank of America. As of 2015 giant banks controlled 63% of the assets of the banking industry and the top 4 banks mentioned control 42%. The giant banks nearly tripled their market share. What about the smaller banks? Since Dodd-Frank started a quarter of local banks have closed. Can you guess how many new banks of any size have opened since Dodd-Frank started? How many new banks we have had in the 7 years since Dodd Frank was signed into law? Take a moment to take a guess before going on. There have been a total of 3 new banks. 3. Before Dodd-Frank you had hundreds opening every year. Now we have 3. In seven years.

If Dodd-Frank was supposed to curb big banks it has failed spectacularly. In fact it has even helped concentrate even more assets into these banks. If you thought they were too big to fail before then they are even more so now. This is a dangerous trend that we have to break and instead of having it slow down it is accelerating. As of right now we have 4 companies who own almost half the banking industry. Repealing and replacing Dodd-Frank into something that helps smaller banks must be done.

The Solution

Republicans have put forth the Financial Choice Act as a solution to the problem. The bill is very long and a copy of it is available in the government website so I will give the barebones summary. In a nutshell the bill says that if a bank of any size were to meet a reserve requirement of 10% then they would be exempt from most of the regulations of Dodd-Frank. Under Dodd-Frank the reserve requirement is 3%. The crucial section here is that it is voluntary. A bank would have to choose to meet the requirements to get out from the regulations of Dodd-Frank but is not forced to. At this point it is important to understand what the reserve requirement is otherwise it will seem like the banking industry is getting something for nothing.

Most countries have something called a reserve requirement. This is the percentage of the total assets the bank has lent out that it must have on hand. This is usually in the form of physical cash in a bank vault or deposits to the central bank. For instance if a bank has lent out 100$ then it must have 3$ in its  reserves under Dodd-Frank or 10$ if it wants to get the benefits of the Choice act.

This is important because banks earn money by lending out money. Whether it be thru fees, interest or any other method money has to be lent out before it can earn money. This is also the reason why Giant banks cannot benefit from the Choice Act. All the giant banks have shareholders who expect the same level or more of profits every year. You just cannot make the same level of profit by loaning out that much less money.

Giant banks also make most of their money on fees. Whether the accounts are paid back or not what is most important is there is a lot of them generating various fees. If they go into collections then the big banks just sell it to an agency and make some of the money back anyway. Smaller banks make most of their money on interest. It is important to them to have the loan active and current. They have to pick and choose who to lend to carefully so the 10% reserve requirement fits their portfolios perfectly.

This creates a two tiered system. When you ask for a loan or a credit limit increase with a giant bank they do not generally want to have a live person make a decision for you. They don’t really have the manpower or inclination to decide whether Bob gets a 200$ increase or whether you get your 10000$ loan to start a pizza shop with a basement. They want to run everything thru an algorithm based on current regulations and base the decision on that.

Smaller banks are different. Since they normally service local communities they rely more on face to face interactions as well as judgement calls based on the persons history with the community. Instituting a system with far less regulations makes sense for them. This also creates a unique market for them of customers who literally cannot do business with giant banks due to regulations but can do business with them increasing their market share.

Why Small Banks?

Smaller banks need to be encouraged and protected instead of systematically eliminated under Dodd-Frank. Smaller banks have a significantly lower default rate on loans and they make significantly more loans to start-up businesses. 33% of business loans come from small banks while only 23% come from giant banks. Having the assets of the banking industry spread out over more sources reduces the risk of any single one of them causing a crash and needing to be bailed out.

We finally have legislation that will help fix the banking industry and Republicans are to shy to explain it to the public.

 

 

Send the Paris Deal to the Senate

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As a nationalist I fully support the decision of President Trump to pull out of the Paris deal. My objection is not based on the environment but rather on the fact that the restrictions on the US are much harsher than the restrictions on China, India, and our other competitors despite these countries producing just as much if not more pollution than the US. If democrats and other environmentalists wanted nationalist support for something like this they would simply have to make sure that our competitors are hit harder than we are and we would gladly take the comparative advantage.

President Trump has the opportunity to exit the agreement the proper way and I fear he will miss it. The worst way President Trump can exit the treaty is the same way Obama entered it: By executive action. When this treaty was offered to the countries of the world it was ratified by their respective legislatures. It was only the US, with the dictatorships of the world, who entered to it soley on the will of one man, Barrack Obama. Instead of saying that the US will pull out of the agreement President Trump should do what should have been done in the past and send it to the senate. This creates precedent for things like this to be ratified by the senate in the future.

Article 28

There is also a hidden provision in the Paris agreement that we need to pay attention to. Article 28 section 1 says that a nation can only withdraw from the agreement three years after the agreement was entered into. With this provision we are stuck in the agreement for 3 years. If the decision gets sent to the senate and they fail to ratify then we would never have entered into the treaty in the first place and can leave it as soon as possible.

The Truth About the Trump Budget

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The Democrats are up in arms about the Trump budget. Cruel, Barbaric, Mean are some of the nicest words they have used to describe it and it just goes downhill from there. As usual the spokespeople of the Trump administration have not been able to defend the budget effectively so it falls upon independent bloggers like me to get the truth out the best I can. On a side note I am convinced Trump would be better served if he outsourced his messaging to independents , 4chan, and reddit. We would do a better job than his current team.

The primary line of attack the democrats are using is that President Trump is cutting 800 billion dollars from Medicaid therefore he is throwing grandma off a cliff. This is not true. The budget actually adds more money to medicaid and other entitlements every year. This is what is actually happening. There is a projection of how many people would be enrolled for Medicaid in the future and that medicaid would need a certain amount of money in the future. If you allocate less than that then the democrats deem it as a cut. If you are on medicaid this year and next this will not affect you.

Philosophy

The philosophy behind the budget plays a major part in the conflict here. When democrats and republicans make a budget they expect that the amount of people seeking entitlements will increase or stay at the same pace that they are now. When Trump and sane republicans make a budget they expect that this budget will help people earn more money and therefore this will reduce the number of people who rely on entitlements or at the very least slows the growth of the enrollees.

The budget is the blueprint of your plan for the economy. It is what you would like the economy to achieve. With the plans they present if the democrats are successful then you would have more people enrolled via welfare than ever. If the Trump plan is succesful then you would have fewer people enrolled for entitlements. Remember the budget is only supposed to be for one year. If it turns out the projections are not working then you can always add more money in the future. In essence the democrats want people mired in poverty and living of entitlements while Trump and sane republicans are taking a risk to lift them out of it.

Debt

At this point in the conversation it is usually the Republicans that cry out. What about the debt? If the plans to remove more people from entitlements fail then the deficit will be higher than ever. This is true, but then so what?

One thing that republicans don’t like to admit is that if Romney had won the debt would still have gone up. It may not have doubled like it did under Obama but it would still have gone up. If you put the most committed deficit hawk in power during the time of Obama the debt would have still gone up. At the end of the day any meaningful attempts to tackle the debt and deficits will have to go through entitlement reform. That is only possible if people are earning enough that they get out of it and are able to look at it objectively. Presiding over 8 years of supposedly massive growth while ordinary people have the same income they did when your massive growth started will not help it. If we have budgets that promote the status quo where we add more and more people to welfare then nothing will change and the problem will get worse. At some point we have to take the risk and try to lift people off poverty so they no longer need entitlements. Only then will they agree to change it.

Stimulus vs Tax Cut

Everyone democrat who was wildly applauding the stimulus by Obama is now staunchly opposed to the tax cuts by President Trump. The tax cuts and stimulus achieve the same thing. They stimulate the economy by making more money available to people. In the stimulus companies were able to stay open and keep paying their employees while others were able to expand and with tax cuts the same results are achieved.

There is one major difference that has to be pointed out. With the stimulus you gave all the benefits up front. Each company was handed a sack of money from the Obama administration. If the companies did not live up to their end of the deal then there was nothing Obama could do. Incidentally this is also the problem a lot of people have with the Iran deal. Tax cuts are different. They are not sacks of money to be handed out but rather promises that we will not take as much of their income in the future. It is implied that we are doing this so they can employ more Americans and offer higher wages. If this does not materialize then we can always remove the tax cuts.

In the past tax cuts were given but America was not a competitive place to invest in. Companies instead invested in India, China, and other countries. In effect our tax cuts funded their growth. To be completely fair with the corporations it is very hard to invest in a place that says on paper it will take 39.1% of your profits when other places say they will only take 15-20% sometimes less. It is time we used tax cuts to fund our growth.

The Trump budget is good enough. Something needs to be done to attempt to lift people up from poverty. If we keep doing what we have done before we will only achieve the same results.

Debunking the Myths on the Trump Tax Plan

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There have been plenty of attacks against the tax plan proposed by President Trump. I personally love the tax plan as it is everything you could want. Realistic taxes for the rich and corporations. Lower taxes on the poor and middle class. Best of all the new tax code is simple and easy to use as it pushes everyone to use standardized deductions. It’s no wonder tax attorneys and accountants are against it. They would lose a lot of business as people begin using standardized deductions.

There are two main arguments people use when they claim they are against the tax reform proposed by Trump. First that it would blow up the deficit. Second only the very wealthy would benefit from the tax cut.

The Tax Cut Will Increase the Deficit

When discussing how the tax cut will affect the deficit we have to take a look at how the taxes collected are calculated. Whenever any analysis is done on this point people assume that the figures presented are gospel truth and base everything on that. There are two main problems with how the figures are calculated.

The first major problem is it assumes there are no deductions and other loopholes and that everyone paid the statutory tax rates. Whenever business leaders on the left discuss the tax cuts they always say that the tax rate is not as high as you would think like Warren Buffet for example in his recent interview. The document detailing the differences in tax collection are almost always prepared by tax attorneys and accountants as well. People who make a living finding and maximizing these deductions. According to the Wall Street Journal the actual tax rate is 24%. The GAO says around 12-16%. The amount should be in the middle of that. Calculating your collection based on 35% is dishonest and does not present a clear picture. If companies actually paid that there would be none left registered in the US.

The second major problem with their numbers is that it takes income tax by itself. Economists have a phrase called “ceteris paribus” to hand wave away all variables they do not want to deal with. In the report by the Tax Policy Center they specifically mention that they do not take any other macroeconomic effects into consideration. The concept may have some uses but it distorts what is actually happening with this tax cut. When you are given a tax cut you do not use it to swim around in a pool of Trump bucks like Scrooge Mcduck. You would use the money. It would most likely be used to buy other things which would generate sales or other local taxes. You could invest it if you have nothing to buy which would then generate capital gains tax. You could deposit it into a bank allowing them to lend out more money. Almost everything you can do with the money that is not taken from you would be taxed after you use it in some shape, way, or form. This would make up for any shortfall in collection from income taxes. After all nothing states that all the funds of the government must come from income taxes. If you have ever heard anyone argue for giving a stimulus to boost the economy the exact same arguments would apply.

The Tax Cut is For the Rich

There are two things people refer to when they state this. First the tax brackets for the rich when it comes to personal income taxes and next the corporate income taxes dropping down from 35 to 15%.

I will go with the corporate tax argument first as it is easier to explain. As I explained earlier numerous sources respected by the left from Warren Buffet to various publications have stated that the actual tax rate is not 35%. Moving the tax bracket from 12% to 15% or 20% to 15% does not sound as controversial does it? That is not the entire picture though. When companies pay taxes the companies that can scale to afford excellent tax lawyers invariably end up paying lower taxes while those who can only afford turbotax or do their own pay higher taxes. Aside from the tax rates not being what is advertised it ends up being higher for smaller companies than it is for larger ones. Reducing the rate and then removing deductions means that all companies pay the same rate. This actually hurts the rich companies and helps the poor ones.

On to personal income taxes. The defining characteristic of the tax plan is that it pushes almost everyone to take standardized deductions. If you wanted a tax plan to benefit the poor and middle class this would be how you do it. As a general rule the poorer someone is the better standardized deductions are for him. Those with lower incomes would not have the disposable income necessary to have plenty of deductions nor would they be able to avail of services of an accountant to find all the deductions that they could benefit from.

In 2016 75% of people filing income taxes decided to use the standardized deduction because it is more than what they would by itemizing. President Trump would more than double this deduction in his tax plan which means everyone gets more than double the deductions. In contrast the highest earners rely almost exclusively on deductions to get their taxes down. Most of the deductions are going away under the Trump tax plan. Just removing the SALT (state and local tax) deduction alone would remove a lot of the deductions high income earners use. Add the fact that President Trump is also proposing a limit on the amount of deductions of 100000 on single and 200000 on jointly filed taxes and the case that the tax cut is favorable to the rich is harder to make. Of course this will never get discussed as the media will only discuss the changes to the raw tax rates. My personal fear is the reverse might be true. Removing the deductions and placing a hard limit on the amount that can be claimed may cause the wealthy to flee the country like that French actor who took Belgian citizenship to avoid a tax hike.

Once you take a look at the entire plan it is both very fair and remarkably simple. I encourage everyone to take a look at the tax code themselves instead of relying on media or “the experts”. Remember they need the tax code to be complex or they would not be able to charge a high amount for their services.

Lowering Taxes is Moral

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President Trump has come out with his proposal regarding corporate taxes. He wants to lower it to 15% while closing all the loopholes. There will be a lot of discussion on both sides on the effectivity of this act. One side will say that it will generate new business and the other will say there is no use to it and it is a payoff to the rich. Neither side will discuss the morality of the act.

Lowering corporate taxes is the only moral choice in this scenario. As it stands right now our corporate taxes are 35-39%. It varies slightly depending on the actual state you are in. The amazing thing about this rate is that when you ask any politician whether they are from the right like Ted Cruz or from the left like Bernie Sanders they will all say the same thing. Corporations do not pay this as it is. They pay an average of 15% to 20%. Some corporations pay lower and some higher depending on how aggressively they are willing to exploit loopholes and the talent of their lawyers and accountants. There is a consensus that if corporation were to actually pay this tax rate which is the highest in the world they would leave or go under. We are in effect operating under laws we expect no one to follow.

Laws

Since I am discussing morality it will be useful to first discuss what a law is. A politician will give you one answer, a law student will give you another, and a layman will give you a third. The best description I have found comes from a thinker in the Qin dynasty. A law is a wish. It is the physical incarnation of the ideal society of the lawmaker. In simple terms if you make laws penalizing rape and murder it is because you do not want rape and murder in your society. If you make laws protecting dolphins it is because you want the environment and that animal protected. If you make laws attracting business it is because you want your people employed. The laws you make define the type of society to live in. If you make laws that you expect people to break then you get a society of lawbreakers.

Should be Followed

Ayn Rand got a lot of things wrong in her philosophy but one of the things she got absolutely correct is that the most evil thing you can do is to design laws so people have no choice but to break them. Once you do that you have turned your entire society into criminals and have control over them. Take the tax rate for example. If you have a group of moral companies who paid the 39% as mandated by law and another group of companies who cheated and paid only 15% the companies who made the moral choice would cease to exist. What is worse the officials tasked with enforcing the law would not care as no one expected the law to be followed anyway.

Once you have created your society of lawbreakers then all the power rests in the hands of those who enforce and make the laws as opposed to the citizens. Your success or failure does not depend on the skill of labor or management but on the grace of the officials who choose which laws they would like to enforce. After all the easiest way to actually kill your company would be to enforce the laws that are already there. You have basically institutionalized corruption.

The Moral Choice

Laws should be made with the expectation that they be followed. If you want companies to pay 40% tax then make then declare that they will pay 40% tax. If you want them to pay 100% tax then make a law that compels them to do it. If your system does anything else then it must be changed.

Deconstructing the Argument for Illegal Immigration

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When people defend illegal immigration they do so by saying it is beneficial to the economy. They point out that the illegal immigrants contribute more to the society than they take out. First because they pay sales taxes on the things they buy and second because the products they buy with their salary create demand for products and services which then creates more jobs. They also argue if the jobs were given to the citizens it would raise the prices of goods as they get paid more. If you don’t think about it too hard it does sound plausible. As always when the left makes an argument it only looks good on the surface.

Jobs

The first flaw in the argument comes with the jobs the illegals take. These jobs exist independent of the illegals. In fact the reason why the illegals come here is that these jobs exist in the first place. Whether the illegals are here or not these jobs still need to be done. Fruit still need to be picked, tables need to be waited on, and buildings still need to be constructed. All that would happen is you have American citizens employed in these jobs instead most likely earning higher wages. At the end of the day the defining characteristic of the illegal is that he is willing to work less than the citizen. In most cases there is no special skill set that he alone possesses.

Illegals Spend

Now that we have established that the jobs would be there whether illegals are here or not we move on to the next point. The money will get spend on the economy whether a citizen or an illegal earns it. In fact the results are worse when an illegal spends the money. The illegal alien would have family in Guatemala, Malaysia, or whatever his home country is which he would have to send money to. This usually results in around 50% of his salary getting sent abroad. The citizen would most likely spend most of his money in the country. True they would not spend their entire salary in the economy as they may buy products from other countries from time to time but that is true for both illegal and citizen. The citizen would also earn more than the illegal which means he has more money to spend than the illegal. Giving the money to the citizen means that there is more of it to spend and that a greater percentage makes it into the economy.

More money spent in the economy means more jobs created as demand rises. The citizen getting the job boosts the economy by a greater amount.

High Prices

When confronted by this argument the first thing you should do is take a deep breath and smell the hypocrisy. The very people who argue for minimum wage increases and say that it will somehow all work out are saying that raising the wages of some workers will cause economic Armageddon. Let us think about this first. The common argument is that businesses can pass on whatever costs they want to the consumers. Is that assumption true? If Pepsi were to suddenly charge you 100$ per bottle would you still drink Pepsi? Or would drink Coke instead? What if both Pepsi and Coke raised their price would you still buy? Or would you buy Juice instead?

The reality is there are numerous reasons why a company cannot just raise prices. Competition, similar products, marketing strategies for market share, and more. Sometimes companies do have to eat the cost. For example some credit cards don’t charge foreign transaction fees. That is not because the bank does not have to pay those fees it is because they choose to eat those fees to be able to offer something that other credit cards don’t. This all means that it is not true that prices are going to skyrocket if you pay people more. The increased demand caused by the higher wages may even allow some companies to lower prices and make up the profit in volume sold.

Once you begin to look at things objectively you find there is no rational economic justification for illegal immigrants.

Why Russia?

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Since the campaign President Trump has been going out of his way to repair relations with Russia. He has faced intense criticism from both Republicans and Democrats who prefer that we maintain an adversarial relationship with this country. Russia as a country presents several problems as they have their own national interests that they are trying to pursue which is sometimes at odds with ours. It is a very fair question to ask Why Russia? Why should we bother pursuing warmer relations with this country?

By itself Russia is not important. Taken on their own there is not much value in forming better relations with them. The value of Russia lies not with them but with their proximity and historical relationship with another country, China.

Worldview

To understand the importance of Russia you first have to understand how the President looks at the world. Trump looks at the world thru the lens of the economy. That is his primary consideration. Military, diplomacy, human rights, climate, and everything else you can think of is only a distant second. From this standpoint the primary competitor of the US is China. It is the only country worldwide that is capable of overtaking the country in global dominance. By this standard Russia, with an economy the size of Italy, is barely a secondary power. In fact the military of Russia would be a burden to them in this case as they would not be able to afford it long term.

This worldview might be different from other people but it is not wrong. In a micro sense we see richer people being afforded better interest rates than poorer ones. We also see that when they default on their obligations the banks are more willing to work with the richer customers while taking the collateral of poorer ones. Trump has taken advantage of this himself. You would be foolish to think he is the only one to have done so. This also holds true in a macro sense. Debts of countries with weak economies like Greece do not get renegotiated and its people are forced into austerity while everything is done to make sure that countries with stronger economies are not inconvenienced by paying their debt.

In this world view everything flows from a stronger economy. Economy leads to military success as you are able to afford a bigger army and pay to keep it deployed longer and in more areas. Economy leads to diplomatic success as you have more leverage in dealings with other countries. Economy even leads to domestic tranquility as the populace is more content.

Military

Every simulation done by the Chinese general staff on a potential conflict with the US assumes that Russia is a friendly nation or at worse a neutral one. A Russia that has a chance to be friendly to the US in a conflict with China is the worst nightmare for the Chinese. First off you have the massive border between Russia and China. There is just no real way to defend a border of that size while still keeping your coasts adequately protected. Second you have the type of military the US has and the type Russia has. At the end of the day the US is and always will be a naval power. Most of our force projection involves the navy and our carriers. Russia on the other hand is a land power. They also have the willpower to sustain casualties that the US cannot.

Trade

At first glance you would not see any great importance of Russia to China in trade. While it is true that the first priority of China in trade is the southeast region of Asia, this area is also the most easily disrupted if conflict were to arise with the US. The more China relies on this region for its wealth the more power it gives the US over it.

China knows that its navy will never equal that of the US. It is just too far behind and the US improves its navy all the time. This means that the Southeast China sea and Southeast Asia will always be at risk. Due to this the Chinese are spending trillions of dollars developing a land trade route modeled along the lines of the Silk Road used in the middle ages.

The silk road is not one straight line but rather a spiderweb of land based trade routes stretching from China all the way to Europe. These routes have to pass thru one of two major regions. The Middle East or Russia. The Middle East is the Middle East, there is no reasonable expectation for it to be a stable region anytime in the future. At any point in time any of its countries can enter a state of war. In any case the US already has significant allies in the region with Israel and Saudi Arabia. A Russia friendly to the US would mean that even these routes can be cut off.

Diplomacy

The Chinese have been trying to set up an alternative world order without the US. From Brics, to its own version of the TPP, to various bilateral relations with countries around the world. In most of these endeavors Russia is its biggest partner and helps provide stability and credibility to these alternative institutions.

A Russia that is friendly to the US would mean that one of the primary members of this new world order would be able to make decisions that is favorable to the US.

Leverage 

Trump needs Russia in order to contain the Chinese and make it harder for them to compete with the US. China has a history spanning thousands of years. The current communist government does not see themselves as a New China but rather a continuation of the Old Chinese dynasties. Even Rome the longest civilization the west has had can only claim a history of 1000 years.

This gives the Chinese a mindset that favors the long term rather than the short and favors certainty above all else. The more uncertain they are over their alliance with Russia and all the plans coming from it the more they will be willing to give up to the US in the negotiating table.