Why Immigration Is Good For The US

Anti-immigration politics have been spreading around much of the developed world.  In the US anti-immigration sentiment is usually disguised as opposition to illegal immigration.  That disguise has been uncloaked in this article.  The Wisconsin Governor, Scott Walker, who is running for the GOP presidential nomination, gave the game away in his discussion with Glenn Beck.  Walker told Beck that he was against legal immigration because he wanted to protect US jobs.  Apparently, the anti-union governor is really a friend of labor.  Or perhaps, he really wants to capture the anti-immigration sentiment in the GOP base.

Noah Smith makes a strong case against Walker's claim that restricting immigration will protect US jobs.  US firms can hire immigrants in the US, or they can hire non-domestic workers in countries where they relocate.  Immigrants, hired in the US, will spend money in the US, and that will expand the US market.  When they hire non-domestic workers the spending will occur in a foreign location and expand the foreign market.  Businesses prefer to locate in large markets.  Shrinking the US market by restricting immigration is bad for US workers. Smith offers Japan as example of a country that has restricted immigration and has shrunken its domestic market.  Japan has been unable to maintain the level of growth that is needed to attract investment into the Japanese market.

The Role Of The American Psychological Association In CIA Torture Program

The Bush Administration authorized an "enhanced interrogation program", which included the use of such techniques as water boarding on prisoners captured after the 9/11 attack.  The Justice Department provided a legal report which supported the legality of the enhanced interrogation program.  The legal defense has been made public and it has been widely criticized by legal scholars. The participation of the American Psychological Association in the enhanced interrogation program is described in this article.  The APA Board cooperated with the CIA and other government agencies to alter its code of professional ethics so that its members could directly participate in the enhanced interrogation program.  The APA has consistently denied its cooperation with government and private organizations that were involved in the enhanced interrogation program.  A group of medical and psychology professionals investigated the involvement of the APA in supporting the enhanced interrogation program.  It documented the role of the APA Board  in altering its code of ethics so that its members could participate in the interrogation program.

Tom Friedman Makes His Case For TPP

Tom Friedman devotes the bulk of this article to chaos in the Mideast.  He then positions the TPP as a step in the direction reducing chaos.  If the US is not successful in establishing trade agreements that  reduce global chaos,  Russian and China will respond to our leadership gap.  Apparently, that would only create more chaos. He offers no defense of TPP itself; its all about chaos reduction.  Friedman contributed to chaos in the Mideast by supporting the US invasion of Iraq.  His credentials on chaos reduction are not very strong.

US Economic Growth Below Forecast

The US economy grew by only 0.2% in the last quarter.  That is well below the 1% consensus forecast for the quarter.  Exports declined, perhaps in response to the stronger dollar, and imports increased.  The trade deficit reduced net GDP by 1.25%.  Consumer spending, which accounts for around 70% of GDP was strong but business investment was below expectations.  Decreasing investments in the energy industry, caused by falling prices, accounting for a large portion of the drop in business investment.  Speculation has now turned to how the Fed may alter its plans in response to lower than expected growth.

The Battle Over The History Of Ukraine

What people believe about the past has become an important issue in Ukraine.  In particular, the Ukraine famine in the 1930's, and collaboration with Nazi's during WW ll,  is undergoing revision in separatist controlled regions of Ukraine.  It has reduced the focus on Ukraine nationalism, and it has aligned the region with Russia, while it remains critical of the Soviet Era under Stalin.  I am not an historian, and I am not very familiar with the historical relationship between Ukraine and its Eastern neighbor.  History is often written to serve political purposes.  It has to be revised when politics change.

How Should We Think About Greg Mankiw?

Noah Smith begins this article by praising Greg Mankiw's intelligence and the success of his introductory economics text.  He ends the article by reminding us again that Mankiw is very smart, but he chastises him for assuming that the opponents of the Pacific trade agreement are stupid.  Sandwiched in between his ode to Mankiw's intelligence, he criticizes Mankiw for over simplifying his defense of the trade agreement.  Mankiw made the traditional case for free trade, which is not the same thing as a trade agreement.  Trade agreements are more about protecting corporate intellectual property rights, and the mechanism for settling disputes between corporations and nation states, than they are about free trade.  The comments that follow this article are quite good on this point.  My concern about Smith's critique of Mankiw is that it was too narrow.

Greg Mankiw is prominent economist, and like most highly educated academics, he is not stupid.  Smith only reminded us of this because publically attacking a prominent economist can be harmful to the career of a newly minted economist.  Accusing Mankiw of over simplifying his defense of the trade agreement, perhaps because he is so smart, will not get him in trouble.  Mankiw's use of his intelligence is another matter.  He has consistently used his brains, and his prominence in his profession, to serve the most powerful interests in our society.  Economics has very little to say about morality or society in general.  Mankiw likes it that way.  Trade agreements have little to do with economic theory.  They have a lot to do with morality and social welfare.

What's Causing The Rise And Fall Of The Euro?

International investors have been purchasing euros in order to purchase EZ stocks.  That has placed a floor on the fall in the relative value of the euro.  On the other hand, the declining yield on EZ treasury bonds has lessened the demand from international investors for euros.  The relative value of the euro is caught between the demand for EZ equities and EZ treasury bonds.