How the Supply-Side Cult Hijacked American Politics

Jonathan Chait looks at the Laffer curve cult (there's quite a bit more in the article):

How a cult hijacked American politics: Flight of the Wingnuts, by Jonathan Chait, TNR: American politics has been hijacked by a tiny coterie of right-wing economic extremists, some of them ideological zealots, others merely greedy, a few of them possibly insane. ... Notions that would have been laughed at a generation ago ... are now so pervasive, they barely attract any notice. ...

It was not always this way. A generation ago, Republican economics was relentlessly sober. ... Over the last three decades, however, such Republicans have passed almost completely from the scene, at least in Washington, to be replaced by, essentially, a cult. ...

The cult in question generally traces its political origins to a meeting in Washington in late 1974 between Arthur Laffer, an economist; Jude Wanniski, an editorial page writer for The Wall Street Journal; and Dick Cheney, then deputy assistant to President Ford. ... Wanniski and Laffer believed it was possible to simultaneously expand the economy and tamp down inflation by cutting taxes, especially the high tax rates faced by upper-income earners. ...

Wanniski and Laffer were laboring with little success to explain the new theory to Cheney. Laffer pulled out a cocktail napkin and drew a parabola-shaped curve on it..., the Laffer Curve... Cheney apparently found the Laffer Curve a revelation, for it presented in a simple, easily digestible form the messianic power of tax cuts.

The significance of the evening was not the conversion of Cheney but the creation of a powerful symbol that could spread the word of supply-side economics..., ... the Curve explained it all. ...

With astonishing speed, the message of the Laffer Curve spread through the ranks of conservatives and Republicans. Wanniski evangelized tirelessly ..., both on the Journal's editorial pages and in person. ...

Today, ... the core beliefs of the supply-siders are not even subject to question among Republicans. Every major conservative opinion outlet promotes supply-side economics..., deviation from the supply-side creed has become unthinkable for any Republican with national aspirations. ...

Like most crank doctrines, supply- side economics has at its core a central insight that does have a ring of plausibility. The government can't simply raise tax rates as high as it wants without some adverse consequences. ... And there are justifiable conservative arguments to be made on behalf of reducing tax rates.. But what sets the supply-siders apart from sensible economists is their sheer monomania. ... They believe that economic history is a function of tax rates...

It doesn't take a great deal of expertise to see how implausible this sort of analysis is. ... All this is to say that the supply-siders have taken the germ of a decent point--that marginal tax rates matter--and stretched it, beyond all plausibility, into a monocausal explanation of the world.

Aside from popular articles in places like the Journal's editorial page, two classic tomes defined the tenets of supply-side economics: Wanniski's The Way the World Works and George Gilder's 1981 manifesto, Wealth and Poverty. Both have had enormous influence...

Here is what makes the rise of supply-side ideology even more baffling. One might expect that a radical ideology that successfully passed itself off as a sophisticated new doctrine would at least have the benefit of smooth, reassuring, intellectual front men... Yet, if you look at its two most eminent authors, good sense is not the impression you get. Let me put this delicately. No, on second thought, let me put it straightforwardly: They are deranged. ... [...continue reading...]

Comments

[Lafayette]

JC: Like most crank doctrines, supply- side economics has at its core a central insight that does have a ring of plausibility. The government can't simply raise tax rates as high as it wants without some adverse consequences

Well, it can. At least Europe proves that it can raise taxes a damn sight further than in the US, if the intent of those taxes is provide Public Services -- instead of kowtowing to "free enterprise" wrapped in the Declaration of Independence.

Justifying the crank "No taxes, at any cost!" of the knee-jerking Ayn-Randian Right is not the point, I think. Most Americans can't distinguish between Laffer and Lafayette, I say. (And, of course, I should know ...)

I can give similar idiot-simplistic justifications of bleeding-heart Leftist ideology exhorting exorbitant taxation to fund statist subsidies of its favorite causes.

So both extreme ideologies miss the point, which is this: "What taxation for what purpose"?

Taxation for Public Services is not all bad. Were it thus, we'd have outsourced to China our local police and firemen, our Judiciary System and, why not?, secondary school education and national defense. After all, they'd be cheaper, wouldn't they? Cheaper is better, isn't it?

I have bored the piss out this blog's readers with my arguments for generalized Health Care and Education being paid by the public purse, not because I am a bleeding-heart Left-wing nutter (i.e., eccentric). I argue that these services are crucial for our survival:
1 - Giving the opportunity for as many people as possible to get the skills necessary for their survival, and
2 - Education tends to make people a great deal more aware of the ways of the world in which they must contend and live,
3 - Our need for Health Care is no less a consequence of pure happenstance (no one chooses to get cancer, it just happens) than a fire or a crime or any natural disaster,
4 - A healthier nation is also more productive.

I have no hopes whatsoever that a free Education up to the Doctorate level will make some diplomaed numskull sign-up for a sub-prime loan. Really, gullibility and the "perceived need" (i.e., greed) to have it all and as quick as possible is a cultural trait. It is inculcated by the societal values at any given moment in its history.

A university (somewhere in Europe that will remain unnamed, since it was a hoax) announced a student "Debate on American Cultural Values". Also announced was the fact that "the debate shouldn't take more than fifteen minutes". (sic!)

Cultural values in America ARE significantly different than elsewhere. So, from the outside looking in, it is perfectly normal to witness un-amazed the speculative/buying frenzy that seems commonplace in America. It actually surprises no one that it was allowed to occur in America – and this from people who know that safeguards in place would never allow it in their own country.

If America is the role model for an Affluent Society, having attained that status, many European countries are looking beyond “conspicuous affluence” to “merit worthy affluence” – i.e., a good-enough lifestyle that is more harmonious with non-net-worth values.

Which is why arguments for lowering taxation in hopes of maximizing personal net worth IS NOT merit worthy. Taxation that broadens the personal net worth of the greatest amount of the population IS merit worthy, because it clearly makes them bettor off in ways that net worth cannot.

America has one of the lowest overall tax rates (as a percentage of GDP) of any western nation ... and one of the worst Health Care systems in that same classification. It also has the highest percentage of young adults graduating from university to begin life with a significant debt. And, one of the highest percentages of youth who do not obtain further education/training (beyond secondary school).

Those are examples of goodness? Methinks not.

[realpc]

"the supply-siders have taken the germ of a decent point--that marginal tax rates matter--and stretched it, beyond all plausibility, into a monocausal explanation of the world."

They were probably reacting against the 70% top rate that was stifling the economy in the 1970s. Something had to change and Reaganomics was needed at that time.

But expecting one simple idea to fix all problems in all situations is of course ridiculous. Lowering taxes can do wonders when taxes are too high. When taxes are not too high, lowering them can result in cutting needed services or running up a deficit.

As in almost everything, there is no substitute for thought.

Before Reagan we were on the same path as Europe, and we have raced ahead thanks to tax cuts. In my opinion, a flat tax would be simpler and better. But at least we aren't paying 50%. That would be deadly.

And by the way, the Americans who pay most of the income tax are not rich. They are middle class, living in expensive areas to be near their jobs. Their salaries might sound high, but after subtracting income tax and social security, etc., almost half is gone and they can barely support a family.

The progressive income tax punishes the middle class much more than it punishes the rich.

[evagrius]

realpc;

You really should read the entire article. Your argument is quite faulty based on the article.

Here's the conclusion;

"In February 2006, the conservative journal Policy Review published an essay that was shockingly heretical, though perhaps unintentionally so. In it, Carles Boix of the University of Chicago argued that there is a link between democracy and economic equality:

In an unequal society, the majority resents its diminished status. It harbors the expectation of employing elections to drastically overturn its condition. In turn, the wealthy minority fears the outcome that may follow from free elections and the assertion of majority rule. As a result, it resorts to authoritarian institutions to guarantee its social and economic advantage.

Of the many taboos that prevail among conservatives, the one forbidding any serious discussion of inequality is perhaps the strictest. Any forthright examination of this topic will lead one quickly to the realization that American society has been spreading apart rapidly for three decades and that Republican economic policies have without a doubt contributed mightily to this gulf. So conservatives usually ignore the subject of inequality, except perhaps to minimize its scale or importance.

Why, then, did Policy Review, which is published by the staunchly conservative Hoover Institution, open its pages to such apostasy? Well, it didn't intend to. Boix's essay (which was brilliant and widely discussed) concerned the inculcation of democracy abroad and did not deal directly with the United States. And the circumstances Boix envisioned--mainly, developing countries attempting a transition to democracy--are different from those in an advanced democracy. Americans, fortunately, do not have to worry about kleptocrats, political violence, and massive vote fraud.

But, while Boix's theory may be less applicable to the United States than it is to the Third World, it is still somewhat true. Indeed, this theory offers an uncannily precise description of what has happened in American politics over the last 30 years. The business lobbyists have turned the Republican Party into a kind of machine dedicated unwaveringly to protecting and expanding the wealth of the very rich. As it has pursued this goal ever more single-mindedly, the right has by necessity grown ever more hostile to majoritarian decision-making for the obvious reason that it's hard to enlist the public behind an agenda designed to benefit a tiny minority. The old ways of conducting politics have broken down in the face of this onslaught. The mores of the old Washington establishment--the assumption of some basic intellectual goodwill on both sides, the focus on character over substance, the belief in compromise--all developed during an era when there were few ideological differences between the parties. The old ways may have done a decent job of safeguarding the national interest when the great moderate consensus prevailed, but they have proven unequal to the challenge of a more ideological time.

All this has happened at the same time as a massive increase in income inequality, which is exactly what Boix's theory would predict. In the same essay, Boix marvels at the fortunes amassed by autocratic ruling elites throughout history:

Rulers such as the Bourbons, the Tudors, or the Sauds seize an important part of their subjects' assets. For example, at the death of Augustus (14 a.d.), the top 1/10,000 of the Roman Empire's households received 1 percent of all income. In Mughal India around 1600 a.d., the top 1/10,000th received 5 percent of all income.

Presumably, readers looking at these numbers are supposed to gape in astonishment at the sheer inequity of those autocratic regimes. But the numbers are less astonishing when you compare them to those in the contemporary United States, which Boix does not. As of 2004, the top one-ten-thousandth of Americans earned over 3 percent of the national income--a somewhat smaller share than that earned by the Mughal elite but several times higher than that enjoyed by the wealthiest Romans.

Meanwhile, the gap between Americans and Mughals is closing rapidly. Since the late '70s, the share of national income going to the top 1 percent has doubled. The share of the top 0.1 percent has tripled, and the share of the top 0.01 percent has quadrupled. This gulf was widened precisely at the same time that the right, growing ever more plutocratic and suspicious of popular demands, was battering away at the culture of American democracy. Many people have looked at the depredations of the Bush era--the bizarre cult of personality, the anti-intellectual demagoguery, the incessant flouting of norms, the prostrate media--as the product of the president's character, or Karl Rove's machinations. But it is, in the main, the consequence of a cult-like fringe taking control of a political party and using it to wage class warfare on behalf of a tiny minority.

Jonathan Chait is a senior editor at The New Republic."

[reason]

realpc...
Before Reagan we were on the same path as Europe, and we have raced ahead thanks to tax cuts. In my opinion, a flat tax would be simpler and better. But at least we aren't paying 50%. That would be deadly.

Why do you think the US has "raced ahead" of Europe? Do you figures that clearly show that (On a per capital, better still in terms of medien income for the US vs gesamt Europe - no cherry picking).

[reason]

And realpc...
Just remember the US has consistantly been able to exchange potentially worthless paper for goods, in one of the best rorts ever.

[Lafayette]

rpc: They were probably reacting against the 70% top rate that was stifling the economy in the 1970s. Something had to change and Reaganomics was needed at that time.

Bollocks. The top rate was stifling what? The incentive of 1% of the economy that garners 50% of the wealth created? Or, the 5% that take home 80%?

What planet do YOU live on?

[Lafayette]

reason: Why do you think the US has "raced ahead" of Europe? On a per capital, better still in terms of medien income for the US vs gesamt Europe

Bollocks, again.

Life is far better here in Europe, even with half the growth, less per capita income abd twice the employment rate.

It is nonsense to base the "standard of living" or lifestyle on one single money parameter. A suitable Health Care system and non-debt incurring college education, a crime rate lower than most of the US and, yes, high taxes for Public Services that you can only dream of -- these means nothing to you?

Probably not.

says...

Lafayette,
What I wanted to point out (perhaps clumsily) is that realpc is continually making bland statements of what he appears to think are undisputed facts, when the facts are not anywhere near as clear as he thinks. And even if in the short term US per capita growth rates (since the middle of the Clinton years) have been somewhat above total European growth rates, it is far from clear that tax policy is the main reason.

[Lafayette]

evg: Rulers such as the Bourbons, the Tudors, or the Sauds seize an important part of their subjects' assets. For example, at the death of Augustus (14 a.d.), the top 1/10,000 of the Roman Empire's households received 1 percent of all income. In Mughal India around 1600 a.d., the top 1/10,000th received 5 percent of all income.

You MacLeod, the Highlander? Wow! Have you been around a long time!

The stats you quote, do you really think they can be trustworthy?

[Brenda Rosser]

" A generation ago, Republican economics was relentlessly sober. ... "

????? A close examination of economic history fails to reveal a 'sober' period.

1960 – present – Exponential rise in the cost of producing oil
1960 – [the hundred largest ] TNCs concentrated in five countries. US based corporations owned 82% of foreign subsidiaries.
1961 April – Bay of Pigs invasion
1961 May – Kennedy sends 44 Special Forces Troops and other military advisers to South Vietnam
1961 – 1980 – Average real interest rates low
1962 - Marilyn Monroe murdered? (by member of Sam Giancana family, a group linked to President Kennedy).
1962 – 1998 – largest transnationals and their foreign penetration
1963 – Assassination of President Kennedy. Kennedy declares his intention to reform the central banking system of the US and to pull out of Vietnam not long before he was killed. VP Johnson implicated
1964 – $9 billion Eurodollar market
1964 – Peak in oil discoveries
1965 – US supported coup in Indonesia by General Suharto
Mid 1960s – 1981 and to 2006. Commercial fertiliser use doubled reaching a peak
1966 – 1975 – Vietnam War
1967 – 1973 – pressure from the Air Force and military-industrial complex to create worst-case scenarios on the Soviet threat.
1968 – Assassination of Martin Luther King and Robert Kennedy and Black Civil Rights leader. (Vietnam War)
1968 – Economic Hit Man visits Ecuador. Oil. Texaco
1968 – The last vestige of legal reserve and reserve ratio requirements (against the US Federal Reserve Note, demand deposit and inter-bank demand deposit (IBDD) liabilities of the Reserve banks) eliminated. (Vietnam War)
1968 – Interest rates raised to levels unparalleled for forty years. Caused as JK Galbraith said by the eccentric enterprise of the Vietnam War and the long delay by Congress in raising taxes to offset the increased expenditure from the war. An unparalled reliance on monetary policy.

[save_the_rustbelt]

If liberals do not like supply siders they should beat them at the ballot box instead of name calling.

The long string of wretched presidential candidates presented by the Dems is not the fault of Republicans.

And marginal tax rates do indeed matter. Higher marginal rates tend to protect established businesses to the detriment of entrepreneurs.

[Paul C]

We should bring this back to the actual top of the Laffer curve which plots Government against marginal income rates, to debunk "Supply Side", the notion that one can continue to reduce marginal tax rates and increase Government revenue.

Someone pointed out that during the Reagan years the marginal tax rate may indeed have been so high that reducing it would in fact lead both to economic growth and therefore increased tax revenues, but that is surely no longer the case.

Today's supply siders would be debunked if tax cuts reduce government revenues. Very simple to prove. Why not some real research to show if and where the "Laffer optimum" actually occurs?

What would be most helpful in debunking the Laffer curve would be for real economists to use actual historical data to show revenue declines that result from tax cuts at certain marginal rates, and show where the peak effective rate really is. Increasing marginal rates to higher than the "Laffer optimum" would reduce government revenues, and decreasing rates below the "Laffer optimum" would also reduce government revenues. I have heard it asserted without proof that "Laffer optimum" occurs somewhere near 80% marginal rates.

"Supply side" has been even further honed to be simply "no new taxes". This, of course leads to deficit spending, which in turn leads to more government. Why? Because despite what people say, they value government outputs, and, deficit spending under prices these outputs, so people consume more.

It illustrates the beauty of karma that abuse of tax policy by "small government" types has led to large government.

The debate about what is "the best" tax rate is a policy issue that has no simple answers. In political reality, people use the word "waste" in two different ways:

1.) If I spend too much to buy an apple, I have wasted money.
2.) If I buy an apple, but I want an orange, I have wasted money.

Government engages in both kind of waste, but most "waste" is the type 2.) waste that occurs because few government outputs are priority values for overwhelming majorities. Hence most government outputs benefit segments, and, to insure each segment gets value, there are many segments, and hence much "waste."

Small government may not be possible, but, refusing to engage in deficit spending probably is possible, and it may be the antidote to the ideology that seeks monotone reductions in marginal tax rates.

[calmo]

Thanks for joining us Brenda and Paul C...such detailed, thoughtful and labor intensive posts.
I better get dressed, the heavies are here.

[Meh]

Mr Thoma:

You forgot to quote an important bit:

"As Robert Bartley, The Wall Street Journal's editorial page editor, boasted, "Economists still ridicule the Laffer Curve, but policymakers pay it careful heed.""

And indeed, Brad Delong noted how Greg Mankiw's economist's attitude to supply-side notions started to as he spent more time with the Republican policymakers...

[reason]

STR..
I'm sure you yourself mentioned that wrt entrepeuners, targeted measures could be more effective than marginal rate changes. For instance variable accelerated depreciation that would allow depreciation to better match revenue flows.

[Lafayette]

str: The long string of wretched presidential candidates presented by the Dems is not the fault of Republicans.

You are right, str!

The ineptitude of Democratic candidates is entirely the fault of the Democrat Party ... and its constituents, let's not forget.

In fact, just look at the makeup of the present Congress. Does such a bunch of millionaires really, truly reflect America and Americans?

Of course, this is due to the fact that money not only begets money, but money protects money. Moneyed interests cannot appreciate and promote the concerns/values/needs of the lower classes. (Yes, America is a class society, just like any other, and perhaps more so in its willingness to condone income inequity.)

The fall of communism showed that "all people being equal" was not a recipe for mankind. We are not all equal. Some of us are more competent than others ... and therefore should earn more than others. This is a fundamental of a meritocracy. But, how much more? Hundreds of thousands more. Millions more? Billions more? The skies the limit?

This present set of plutocracy has also showed us that a class of politicians, reflecting a select class within American society, can control the reigns of power to further their own interests. (And diminish those of traditional America.)

Was that the intent of the founding fathers, themselves already a very select group of individuals in their time. (Let's not forget that one of the first propositions for a Senatorial post was that the person show a net worth of $10,000.) The "value" of riches is a sentiment that is American since long ago.

Were the Dems only different. But, are they? Really?

Tell us how ...

[Bruce Webb]

This statement kind of jumped out from the Chait article;

"And there have been periods in American history when, nearly any contemporary economist would agree, top tax rates were too high, such as the several decades after World War II."

Umm well certainly most economists might agree. But if you had to pick the several decades during which the middle class made the most material advances you would have to pick out 1948 to to 1974. We taxed the wealthy at 90% and built Interstate Highways and International Airports.

Were Eisenhower rates too high and Kennedy just right? Or Kennedy too high and Reagan just right? Well from the middle class worker perspective it is not clear that either of those two questions is really settled. 90%, 70%, 50%, 39%, 35%? Well the last two times the budget was in balance had 39% and 70% top rates. Which suggests compromising at 50%. We can call it the "Restoring Ronald Reagan Taxes Act" to make the wingnuts happy.

Forget the napkins. If you examine historic tax rates from the Pragmatic 'Greatest goods for the greatest number' position it is clear that the majority of Americans would benefit from substantially higher marginal rates. In a Democratic system there is no demonstrated reason to conclude that we always need to argue from Efficiency and lots of reasons to conclude that we should make decisions based on Equity.

Ultimately Supply Side crumbles under its own assumptions. It operates with a model that assumes that maximizing one's own self interest is not only acceptable but admirable. As such it is vulnerable to the fundamental challenge; "What is in it for me?"

"What is in it for me?" is not only a legitimate question, it seems to be at the basis of every market transaction. Seen from this perspective Supply Side simply failed to make the sale, the tide never rose, not enough trickled down. Well we want our money back.

[save_the_rustbelt]

Bruce:

It is very difficult to compare marginal tax rates unless you also factor in the contemporaneous deduction, credits, etc. And of course the economy of the 1950s was nothing like the economy of 2007.

Quiz:

The last time the Democrats controlled both the White House and Congress the marginal personal rate was raised to:

a) 70%
b) 60%
c) 55%
d) 39%

[ndd]

Let me just mention the heretical notion that lower tax rates might actually stifle, rather than assist, innovation. Is there any reason innovators, unlike everybody else, won't decide that once they have accumulated X dollars, they will cash in their chips and retire from the fray to run out the clock in Florida?

If an innovator plans to retire from innovation once he has made $10 million, do we want him/her to earn $10 million from one innovation or from earn $1 million apiece from 10 innovations? Clearly the second choice is more beneficial for society.

[Bruce Webb]

d) 39% under Clinton

S-T-R I guess I must be missing your point. If the question is whether we should return rates to Clinton's 39% or Reagan's 50% then fine, I'll take either figure or anything in between. Was 39% the precise ideal rate of the Laffer curve (not that I have much truck with Voodoo)? Well that is an awfully good question. But it worked. Deficits over time turned to a surplus, employment and real wages were solid, we had a tech boom that got ahead of itself eventually but set the stage for Internet 2.0.

So once again what is the question? Should we raise the top marginal rate? Well the pragmatic answer is 'Yes absoultely, we had our best combination of revenue and growth at 39%'. If that is not the question then what is?

Because I sense you are hinting at 'Gotcha' while I am clue free at what supposedly has bitten me here.

[robertdfeinman]

Perhaps someone can point to some studies which relate marginal tax rates to economic activity. To me there seem to be too many other forces acting at the same time to make any firm statements.

There are some things that a higher tax rate can do that seem incontrovertible (to me). The first is that it can reduce the amount of spending for "bling". One would have to prove that a diamond encrusted dog collar generates as much economic benefit as the same amount given to those at the bottom, say to pay for a college education.

The second is that lopsided wealth distribution distorts the democratic process. When some people have too much money they are able to influence public policy out of proportion to their numbers. I always cite the estate tax "debate" as the perfect example. Repealing the tax will benefit several thousand people at most, but these same people have spent millions to influence public policy on the issue. This is anti-democratic. It's not a debate of ideas, but the purchase of public opinion and legislators.

Finally, maldistribution of wealth push the prices of things up. This is one area where things do trickle down. Look at what happened to housing in Manhattan as an example. The super wealthy pushed the prices of luxury housing up which made the next layer down rise as well. This has cascaded down to the point that there is almost no middle class housing anymore. The poor still live in tenements and public housing, but the rest has gone upscale.

A society where those who work running things can no longer afford to live in their own communities is not my idea of a democratic, equitable, community.

[calmo]

Scuse me and my big nose for butting in, butttttttttt, would you (not just rusty and Bruce) say that given the increasing distribution of wealth (which Mankiw can complain about in terms like 'the top 1% pay more than half the total taxes') over this period (decades) makes these comparisons of percentages moot...as rusty points out, then erases?

[Peter Schaeffer]

All,

Jonathan Chait does well to critiqute the utopian optimism of “supply-side economics”. However, he doesn’t quite take his quite sane argument far enough. Virtually without exceptions, the leading advocates of supply-side economics are fanatical advocates of Open Borders (trade and illegal immigration). A few examples:

1. Arthur Laffer – He recently stated that "illegal immigrants are the lifeblood of our society". A farfetched notion at best given that illegals account for 2% of total labor by value (5% by numbers). Of course, perhaps the end of valet parking would the end of the world for Laffer and his class.

2. Jack Kemp – It would be far to say, that Jack Kemp’s fervor for tax cuts is only matched by his lust for illegal aliens. Indeed, Jack Kemp played a crucial role in sabotaging the presidential campaign of Bob Dole by neutering the Republican party on immigration.

3. George Bush – It should be obvious that Bush’s ardor for upper-class tax cuts is exceeded only by his greed for cheap labor.

4. Ronald Reagan – The first failed Amnesty was under Reagan and his record on taxes is well known.

Readers of this blog would be wise to consider the links between “supply-side economics” and uncontrolled immigration. Both are based on naïve fantasies about how the world works. Both ardently reject any kind of “reality based” examination of the consequences of the policies in question. Both serve utterly greedy special interest groups contrary to the well being of the American people.

[Peter Schaeffer]

Sorry, missed point 5 the first time around.

All,

Jonathan Chait does well to critiqute the utopian optimism of “supply-side economics”. However, he doesn’t quite take his quite sane argument far enough. Virtually without exceptions, the leading advocates of supply-side economics are fanatical advocates of Open Borders (trade and illegal immigration). A few examples:

1. Arthur Laffer – He recently stated that "illegal immigrants are the lifeblood of our society". A farfetched notion at best given that illegals account for 2% of total labor by value (5% by numbers). Of course, perhaps the end of valet parking would the end of the world for Laffer and his class.

2. Jack Kemp – It would be far to say, that Jack Kemp’s fervor for tax cuts is only matched by his lust for illegal aliens. Indeed, Jack Kemp played a crucial role in sabotaging the presidential campaign of Bob Dole by neutering the Republican party on immigration.

3. George Bush – It should be obvious that Bush’s ardor for upper-class tax cuts is exceeded only by his greed for cheap labor.

4. Ronald Reagan – The first failed Amnesty was under Reagan and his record on taxes is well known.

5. WSJ – The editors of the WSJ deserve special note in this context. They have spent decades promoting high-end tax cuts and… A Constitutional Amendment to abolish any limits on immigration.

Readers of this blog would be wise to consider the links between “supply-side economics” and uncontrolled immigration. Both are based on naïve fantasies about how the world works. Both ardently reject any kind of “reality based” examination of the consequences of the policies in question. Both serve utterly greedy special interest groups contrary to the well being of the American people.

[Bruce Webb]

Excellent points Peter. And you can throw 'free trade' into the mix.

They simply do not believe you should have to pay taxes on returns from capital. Forget the Laffer Curve, the end result of adopting the entire economic platform of what we conveniently call 'Supply Side' is the total elimination of tax on profit. The argument varies but the end result is the same. Is there an economic argument for not taxing corporations? For not taxing estates? For not taxing capital gains? For not taxing dividends? Certainly there are, none of them particularly convincing to me, but not by that token irrational. But if we in fact 'reformed' on all four fronts the wealthiest among us would simply be free of all taxation.

Steve Jobs has a salary of $1 per year. Last I heard he wasn't panhandling for gas money for the Pinto he lives in. It is a trifling measure to restructure all executive compensation as returns on capital, ask your typical billionaire hedge fund operator with his 'carried interest' and 15% rate. None of this stuff is about tax simplification, or growing the economy, or generating more net revenue, its all about cutting taxes for the wealthy.

Why are there so many European counts and barons? Because a title from the Prince or King exempted you from taxes.

The fundamental story never changes. The setting does as does the economic system in place, but the plot is always the same, the rich trying to shift tax burden down the economic ladder. Now certainly in the last century the story line shifted, particularly after WWII, and I'll even grant that things went too far the other way (the British tax system of the 40's and 50's being ridiculously punitive). But the wealthy never accepted it, they just waited for their time. Which in the event was 1980.

[evagrius]

There's no need to keep harping about illegal immigration. It isn't the illegal immigrant that's at fault but those who benefit from illegal immigration.
Those who benefit are the very rich in the countries from where the illegal immigrants come from and the ones in the U.S.

If there is to be a reform of immigration focus on why those immigrants come to the U.S.

Failed economies continue to be propped up by a U.S. policy which encourages the destruction of local economies, encourage migration to cities and from there to the U.S.

Put two and two together, Mr Schaeffer, and realize that there are two victims in the illegal immigration story; the illegal immigrant and the ordinary American. There is only one winner, the very rich, who care not for the country they live in, only for their wealth.

[Peter Schaeffer]

Bruce Webb,

Of course, you are correct. However, I did try to imply that "free trade" was another folly of "supply-side economics". For example, I wrote

"the leading advocates of supply-side economics are fanatical advocates of Open Borders (trade and illegal immigration)"

It is quite true that hedge fund operators have a cozy and totally unjustified tax deal. However, don't be so sure about Steve Jobs. He appears to benefit from nonqualified stock options. Gains on the exercise of nonqualified stock options are treated as ordinary income.

By the way, the Piketty / Saez data appear to show that very high earners mainly benefit from labor income, not returns on capital (gains or dividends). I don't quite get this, but the Piketty / Saez papers are readily accessible.

[Lafayette]

BW: Excellent points Peter. And you can throw 'free trade' into the mix.

Nonsense, all of it.

Close off trade and you lose more than you gain. Do you know how many shirts China has to make/sell in order to buy a 747? Probably not. One must suppose you think America should still be making shirts. What else? Buggy whips?

And just because America is getting the wrong kind of immigrant doesn't mean it does not need talented labor from abroad.

You are both recommending the policy of the ostrich, with its head stuck firmly in the ground.

[Lab Rat]

A thought experiment on the issue of free trade and open borders:

If you were living in Indiana, would it be of benefit or detriment to close your borders to trade with or immigration from California or New York?

The world is not a zero-sum game. Exchange of commerce and culture enriches BOTH parties. Don't give in to fear of the Other.

[ken melvin]

Democrats operate under a great handicap and should be given one in the form of votes , say one million, because the repubs have more money and more media.

'Tis a mistake to hang onto tax rates of the fifties as examples. The fifties were completely different. Then, a tax cut might have increased capital investment by industry and thus have created jobs. In 2002?, they couldn't get industry to borrow at two? per-cent. Then, in the fifties, wealth came from industry. Today - from investment in financial paper here and abroad. We don't have an industrial economy. The service industry doesn't require much capital and paybacks are too slow from utilities.

Today, rather cut taxes for the rich, raise them back up to 70 - 90%.

[Peter Schaeffer]

Evagrius,

I think I was pretty clear about the special interests that promote “supply-side economics” and Open Borders. Perhaps

“Both serve utterly greedy special interest groups contrary to the well being of the American people”

Wasn’t clear enough.

I am all in favor of reform in Mexico (hello Carlos Slim) and everywhere else. However, those countries have their own governments and people. The citizens of each nation (including the United States) need to take responsibility for reform at home. In other words, it’s not our problem.

[Peter Schaeffer]

Kevin Melvin,

Last time I checked the Democrats were raising vastly more money than the Republicans.

However, you are correct about capital investment. Interest rates and taxes are certainly no obstacle. We do have a rather large industrial economy (check the export statistics). However, as a consequence of trade policy we have vast trade deficits and not nearly enough industrial capacity to pay for our imports. Someday that will be important and the adjustment to balanced trade painful.

As should be clear, I advocate immediate action to fix our trade balance. Of course, I am in a distinct minority in that respect.

Of course, “supply-siders” also think trade deficits are irrelevant. What would you expect?

[ken melvin]

Peter, what is it that we're exporting? In the SFBay area, the only industry left is biotech.

[german_reader]

@Lafayette,

you're always entertaining.

I think a common mistake many ordinary right-wingers make, is, that they believe, tax cuts will always save them money. They don't see that most of the tax cuts benefit only the wealthiest individuals in a country. They ignore that a lack in public services can confront a country with additional costs in return ( for example crime, bad health status of the population, waste of talents, use of "cheap" energy sources with high long-term environmental ( = public ) costs...). And they don't understand that paying taxes and social security fees can be a very cost-efficient and relatively cheap way to provide common goods like health care, education, pensions, energy, water, public infrastructure or public security.

Private solutions are often more expensive for a society than public ones. And cutting taxes or social security fees means sometimes higher not lower costs for most citizens. The advantage of public solutions is that they ( in an ideal case ) not only share the burdens - according to individual ability -, but also the benefits.

Private solutions tend to be exclusive. Those, who can afford it, get first class services for a high price, the middle class pays at least as much ( out of their after-tax income ) as they would under a public solution, but with less security and calculability, and the poor often get nothing. You can see this in the US health care system, which is more privatized than health care in other countries. And you can see it in education, where the wealthiest get world class education for a very high price, the middle class probably pays as much or more ( college fees ) for average quality as they would with higher taxes, and the poor often can't afford advanced education.

Private solutions are often combined with additional costs from monopoly gains or excessive manager wages. We can see it here in Germany, where energy prices are steeply rising and the large energy cooperations ( four ) realize record profits after the liberalization of the energy market a few years ago. Multi-million dollar boni for health insurance managers like in the US are unthinkable in the public controlled health care systems of Europe. And many private companies seem only to be more effective, because they are dumping worker wages or externalize other costs ( pollution ) to the public sphere. The total costs for a society from the loss of stable, fair paid jobs or the repair of privately produced environment damages are not seldom higher than the financing of public services would be.

The United States are the poster-child of reforms for many supply-side economists, because the government share of the economy is lower than in most other rich countries. It would be interesting to see, if Americans really pay less than other nations for basic services, if private and public expenditures are added. Health care seems to prove the opposite. And a proper calculation of the costs should also include the expenditures, which arise from the lack of public services or a sufficient social safety net. May be Americans need not only to work longer hours, because they are world champions in consumption, but because they organize central tasks of the society less effective than other nations.

[Lafayette]

PS: By the way, the Piketty / Saez data appear to show that very high earners mainly benefit from labor income, not returns on capital (gains or dividends). I don't quite get this, but the Piketty / Saez papers are readily accessible.

Piketty-Saez says this: “Therefore, the secular decline of top capital incomes is the consequence of a decreased concentration of capital income and not of a decline in the share of capital income in the economy as a whole.”

Secular decline means since 2000 and as compared to the period from 1900 to the end of WW2 (1946), by those receiving the top 0.1% of Income Share. Since that year, the spectacular rise of salaried income more than replaced this decline, by as much as ten times – as our Corporate Chieftains fed at the trough they manipulated via their Board Compensation Committees.

If you think this means that this is “Return on Labor”, then I must agree -- the “labor of salaried Corporate Directors” and certainly not their blue collar workers down below.

Look at Figure 2 of their study, where Capital Income is shown to remain fairly constant since 1946, and then, strangely, in the early 1980s begins to burgeon from 0.5 to 1.5 in 2000. Furthermore, look at Salaried Income that explodes from an historical base of 0.2% to a whopping 1.5%, seven fold, during that same period.

In fact, look at the entire time expanse (1900 to 2000) of Figure 2. Note that the top 0.1% of income earners are back to where they were in the 1900s at about 2.5% of the total income. After a steady decline over half a century, the total income of this 0.1% plateaued at 0.7% -- then magically, in the early 1980s (who was President?) exploded upwards skyrocketing to 2.5% in 2000.

The Robber Barons are back! In force ...

[reason]

german_reader
Don't make the mistake of labelling Lafayette right wing, he isn't. He is a party of one.

[Lafayette]

g_r: Private solutions tend to be exclusive. Those, who can afford it, get first class services for a high price, the middle class pays at least as much ( out of their after-tax income ) as they would under a public solution, but with less security and calculability, and the poor often get nothing

I have to agree with what you say in almost all of your post, "entertaining" as it was ...

I would underscore the basic unfairness (there's that word again!) about corporate/institutional private program-insurance. If an employee is institutional, the cost is recuperated from the general tax base. If the employee works for a private company, then the company recuperates the cost from its products/services. As consumers, we pay it as if it were an additional tax. Like a Value-Added-Tax.

In fact, private insurance companies could care less what it costs. They are simply intermediaries who pass the cost on from the practitioner to the company client, with very little concern about how much, because they get their percentage of the cut anyway.

A Public Service Health Care system would mandate the fees and private insurance companies would be out of the Health Care market. The practitioners can then negotiate their fees with the Federal government. (Which they prefer to avoid at all costs, since this would fraction the market between those who accept state mandated fees and those who are "free to set their own fees". Their market share would then depth-dive.)

In neither circumstance above does someone who is employed illegally or is unemployed, do they benefit from private Health Care program-insurance. This represents anywhere between 15 and 18% of the working population in America. This means family wage earners, which means further their children are not covered either.

I cannot imagine a country that can well afford a Public Service Health Care being so blind to this disservice to either their fellow citizens OR illegal immigrants.

Let's not forget that if push comes to shove, these people will share the burden of defending their families as much as anyone. (In fact, if you look at the body bags coming back from Iraq, you will note the number from countries like Haiti (or other Latin American countries) who are literally dieing such that their families can benefit from American nationality. They are soldiers of fortune, meaning mercenaries. Nobody complaining about these "illegal immigrants", are they?)

I never would have believed that America could ignore such fundamental unfairness. But, apparently it can. It's become a Darwinian nation where survival of the fittest has become the Golden Rule.

[reason]

In general I would say, left and right is too simple and not particularly useful. We regulars all have our particular hobbyhorses, which are mostly well understood.

[realpc]

"Let me just mention the heretical notion that lower tax rates might actually stifle, rather than assist, innovation."

No. Extremely high taxes inspire creative ways to hide income. More tax burden gets shifted onto salaried employees, who can't hide income.

The main result is that salaried professionals stop trying to get raises, and more people go into businesses where they can avoid paying income tax.

The losers are employees at all levels, because they have to pay more to make up for the rich paying nothing.

If we had a flat tax, without deductions and exceptions and loopholes, more tax would be paid by the rich. Tax lawyers, however, would be out of business.

[reason]

Realpc...
sort of depends what you mean by "extremely" doesn't it.

[PeterRabid]

Supply side economics in practice seems to mean the big TNC's decide what to supply, and then hype us into buying it.

[Lafayette]

rpc: The losers are employees at all levels, because they have to pay more to make up for the rich paying nothing.

Robber Barons

The rich are richer, as my previous post regarding Income Sharing over the 20th century indicated. You did not bother evidently to read it.

So, I'll reiterate the explanation of what has been happening. The 0.1% (the group of 1/1000 of all income earners) are getting presently upwards of 2.5% of the national income. This puts them at a par with the same group at the end of the 19th, beginning of the 20th century -- famous for its Robber Barons.

The entire 20th century saw this percentage decline to 0.5% (of total income) by 1966, probably due to progressive income taxation that came into effect with the advent of the 16th Constitutional amendment in 1913. The "bite" has since varied considerably, but somewhat increasingly.

Then, with "Reagonics" in the early eighties, one sees the percentage of national income begin to climb steadily. In 1986 it skyrockets to 2% as both Business Income (profits) and Salaried Income bump up to 2% of total national income. In 1994/95, the percentage starts a precipitous climb to reach, in 2000, 2.7/2.8% of national income. This last period was the administration of Bill Clinton.

The rich paid more, but with lower marginal rates on more income. They made a killing and it is not because they paid nothing.

The unfairness exists in the fact that the top 0.1% should have quintupled (5X) their percentage share of national income in barely fifteen years, due mostly to decreasing income tax progression. The lowest 0.1% didn't do nearly as good.

Nice job, Robber Baron ... if you can get it.

NB: You can find such denizens, called Masters of the Universe (of Finance), quaffing in the various bars around Wall Street or on Sand Hill Road in San Francisco (Silicon Valley). The latter often call themselves "philanthropists" -- which means that some of their dubious gain makes its way to the poor. But, not so much as to make any great difference in America's level of poverty.

[realpc]

"sort of depends what you mean by "extremely" doesn't it."

90% is extreme, 70% is extreme, 50% is extreme. 30% is too much but at least it's less than half. NO ONE wants to pay half or more.

I am, however, paying almost half counting federal, state and social security. This is severe punsihment for being an employee.

When I was self-employed it was a lot higher because of social security. Since I'm honest I got really screwed.

So the big losers when it comes to income tax are employees and honest people.

We need a flat tax.

[ken melvin]

Any economic philosophy based on the rationalization of greed is perforce invalid. Far, far better an economic model where all are afforded great opportunity to realize their potential and each can hope to realize their dreams. Which be worse, an economy based on the psychosis of greed or the morality play of a 5,000 year old tribal history.

[anne]

"I am, however, paying almost half counting federal, state and social security. This is severe punishment for being an employee.

"When I was self-employed it was a lot higher because of social security. Since I'm honest I got really screwed."

What utter rubbish; I suggest an accountant who knows how to account.

[german_reader]

@reason,

I don't see Lafayette as right wing. I would label him "sozialliberal" by our German measures. A true believer of capitalism, but someone with a social atitude and a sense for fairness. Someone in the middle of the (European ) political spectrum. I'am more sceptic in regard to capitalism, but I share his views ( and those of many others in this site ) about taxes, health care and other public services.

And "entertaining" was meant sincere. He seems to be often well informed and has an fluid, sometimes provocative style, which is a pleasure to read even for me as somebody, who is not a native English speaker. May be I should establish a "Lafayette"-monument ( not for the historic one ) anywhere in the Internet?

[John M 307]

A flat tax is ridiculous. The notion of tax simplification and flat tax are two completely different issues. We should not tax anyone in poverty, nor should we tax anyone into poverty. This means that there should be the equivalent of a zero tax bracket, and therefore a flat tax is ruled out.

With a basic understanding of math, two thousand tax brackets are no more complicated than two. Simply follow the rule, "If taxable income is at least (bracket's lower end) but less than (bracket's upper end), then pay (a base amount) plus rate times (income - bracket's lower end).

For me, an ideal rate scheme would go something like:

0 for the first $50,000
20% for the next $100,000
50% for amounts above $150,000 (and below $3 million)
90% for amounts above $3 million.

The last bracket's purpose is more to establish a maximum income rather than to raise revenue. The actual rates and bracket boundaries are a matter of detail.

[John Morrison]

The supply-siders' discussion of the Laffer curve reminds me of the following physics joke:

A physics professor is on trial for running a red light. On the witness stand, he explains eloquently how the Doppler effect works, and how it shortened the wavelength and made the red light green to him.

Unfortunately for the professor, the cross-examining attorney was a former Physics I student of his that he'd failed. The attorney asked him, "Okay Professor, how fast were you driving? A hundred thousand miles a second?"

Upon learning the speed required to Doppler-shift red light to green, the judge dismissed the red-light-running charge and convicted him of speeding.

There are certain subjects where discussion is pure Bull unless once considers the numbers involved. The Doppler effect for visual light is one. The Laffer curve is another. Until last July's legendarily awful Laffer curve in the Wall Street Journal's editorial pages, the supply-side politicians all discussed the Laffer curve without any consideration of where the maximum actually occurred.

[Lafayette]

JM: 0 for the first $50,000
20% for the next $100,000
50% for amounts above $150,000 (and below $3 million)
90% for amounts above $3 million.

To which I would add a confiscatory 100% for all income above $7M.

That will bring Wall Street's Masters of the Universe back to earth. And piss the hell out of Dubya's friends in Houston living off BigOil investment accounts.

[Peter Schaeffer]

Lab Rat,

You have erred on any number of levels. At least three come to mind

1. Mass migrations do lower income levels in the receiving regions (and raise them in the sending regions). See the work of Goldin and Williamson for how mass immigration drastically reduced US wages 100 years ago (by around 1/3rd). See “Immigration Policy and Low Wage Workers: The Influence of American Unionism” (http://www.cis.org/articles/2003/briggstestimony103003.html) for some details.

2. Movement of people from California to Indiana doesn’t change the population of the United States. Immigration does. Population growth makes American less prosperous by shrinking the resources available for each person. Like it or not, diseconomies of scale and negative congestion effects dominate the economics of population growth. If you doubt this, check out housing prices in California or other densely population parts of the United States.

Of course, other scarcities include clean air, water, recreational space, mobility, etc.

3. The idea that immigrants can be compared to tradable goods fails at any number of levels. First, from a purely economic standpoint you have ignored the very large negative externalities associated with unskilled immigrants. The Heritage foundation found that each unskilled immigration household cost the taxpayer around $20,000 per year. See “The Fiscal Cost of Low-Skill Immigrants to State and Local Taxpayers” (http://www.heritage.org/Research/Immigration/tst052107a.cfm)

“In FY 2004, the average low skill immigrant household received $30,160 in direct benefits, means-tested benefits, education, and population-based services from all levels of government. By contrast, low-skill immigrant households paid only $10,573 in taxes in FY 2004. A household's net fiscal deficit equals the cost of benefits and services received minus taxes paid. The average low-skill household had a fiscal deficit of $19,588 (expenditures of $30,160 minus $10,573 in taxes).”

The dismal economics of unskilled immigration notwithstanding, there is a deeper point. Human beings are not cotton towels. The United States fought a great and terrible war to abolish this ideology. Apparently, even the Civil War has to be refought from time to time.

When the United States imports cotton towels, we engage in a simple economic transaction that can be repeated or terminated at will. Immigrants impose costs and burdens that may well last forever. To state this directly, cotton towels don’t make housing unaffordable, cotton towels don’t devastate public schools, bring gridlock to freeways, commit horrific crimes, force hospitals to close, impose bilingualism, exacerbate racial conflicts, demand racial quotas, etc.

Your remark about the “fear of the other” demonstrates a willful ignorance of the world as it. Like it or not, immigration frequently fails. The world is full of countries that have been wounded by failed immigration policies. Amy Chua wrote a rather good book on this subject, “World on Fire”. I recommend it.

Sadly, the recent history has not been a positive one. After WWII, Europe thought that North Africa would be a wonderful source of cheap labor. Now Paris is burning and the vast majority of criminals are immigrants or their children By some estimates the immigrant (including offspring) crime rate is 20x the native rate.

[Peter Schaeffer]

Ken Melvin,

You asked “what does the US export?” To answer this question I located the BEA trade statistics. See “News Release: U.S. International Trade in Goods and Services” (http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm). The numbers are from the attached Excel table. I used the year-to-date 2007 values.

Total, Census Basis 948,202
Foods, feeds, and beverages 40,101
Industrial supplies and materials 297,558
Capital goods, except automotive 218,806
Automotive vehicles, parts, and engines 126,335
Consumer goods 235,201
Other goods 30,201

The Excel table has much more detail. For example, the US exported $5.078 billion of Soybeans and $15.081 billion of organic chemicals. Overall, US exports are strongly weighted towards industrial goods.

[Patricia Shannon]

save_the_rustbelt says...
If liberals do not like supply siders they should beat them at the ballot box instead of name calling.

The long string of wretched presidential candidates presented by the Dems is not the fault of Republicans.

Unlike the Republicans, who saddled us with Bush?

It's not that the Democrats have chosen "wretched presidential candidates". It's that the media, owned by and depending for advertising revenue on the extremely rich, that has overlooked problems with Republican candidates and bludgeoned Democratic candidates with lies and inanities.

Eg., on MSNBC, the latest article in the political news section which had "John Edwards" in the title, from Fri. Aug. 31, begins :
The hair, up close, is peppered with tiny strands of blond. Chestnut brown and so finely trimmed, mellifluous, smooth, and feathery, it could almost be a weave, the Platonic ideal as imagined by the Hair Club for Men. Along with the piercing blue eyes, slashing V-shaped smile, and a shimmering burgundy shirt tucked into stonewashed Levi's resting low on the hips, the hair completes the man: John Edwards, a populist Adonis, a golden god of a Southern Democrat.

I would say John Edwards is the candidate who seems to have a decent chance of winning who is most likely to make real change. So first the media slimed him, then when that caused his donations to increase, they started ignoring him. They have made it clear that they have chosen Clinton and Obama to be the Democratic candidates. Unfortunately, it has been working.

In 2000, the press repeated lies over and over about Al Gore. Eg, they continually referred to Al Gore claiming the hero of "Love Story" was modeled after him. In reality, Gore never said that. The author of the book made that statement.

I could fill up several pages of comments with such examples.

For a web site that keeps up with the way the press is distorting the political news, see
www.dailyhowler.com

[calmo]

My goodness Patricia Unlike the Republicans, who saddled us with Bush?that was crushing...and the coverage of Edwards's hair instead of his political views, reminded me instantly of the identical smear tactic used on Kerry.

Dang, if you aren't right (agreeing with me and what could be wrong with that?) about this too: They have made it clear that they have chosen Clinton and Obama to be the Democratic candidates. Unfortunately, it has been working.
And the reference to the dailyhowler...ok, that means we're perfectly compatible.

Are you going to connect the media choices, (Clinton and Obama) to their relationship with the military industrial (this includes major media folks) complex (decode for Hilary's: "We can work with Republicans" and I'm not sure that they don't feel they can just Powellize Obama.)?

[anne]

"After WWII, Europe thought that North Africa would be a wonderful source of cheap labor. Now Paris is burning and the vast majority of criminals are immigrants or their children By some estimates the immigrant (including offspring) crime rate is 20x the native rate."

Always fear-mongering prejudice, all the time; always rubbish.

[ken melvin]

Peter, yeah, I noodled around there, but can't get a handle on what constitutes 'industrial supplies and materials'; broad range of possibilities, - chemicals?,- I don't know.

[anne]

France has been and is and will be fine and finer because of immigration, as we have been ans are and will be fine and finer because of immigration, as country on country has so prospered culturally and materially because of immigration. The continual sewing of fear and hatred to immigrants, especially ethnic fear and hatred is everything that should not underpin our contemporary political discussions.

References to Paris burning and criminality to the tenth generation and beyond as simply perverse, but so is the incessant smearing of the Wall Street Journal editorial board for a line written in a wholly different context more tha n 20 years ago. No matter, integrity of of no consequence when sewing prejudice is the focus.

[calmo]

ken, here and now, mostly: Canadian lumber.

[Bruce Webb]

Well I don't know about the Bay Area, I thought something was being manufactured in Emoryville and Fremont. I left in 1993 so who knows.

I do know what we export up here in the Pacific Northwest. Not only a hellacious amount of wheat, substantial amounts of apples, lots of lumber, millions of over priced Microsoft Windows and Vista licenses, but ooh boy large numbers of really, really expensive jet planes. (Of course using large components made in Italy and China to begin with, but still.)

[James Killus]

Having read this here comments thread, I'll add 2 cents.

The first is a penney of a thought that I noticed the last time we went over the Laffer Curve: as sketched it assumes that the output of a nationalized industry (which of course, has all its output going into government coffers)must be zero. Although this is empirically ridiculous, I can see how it might impress someone with the limited intellect (but powerful prejudices) of a Dick Cheney.

The second cent is to marvel at the awesome power of illegal immigrants. Shaeffer says that they are 5% by number and 2% by income, and yet they have managed to totally wreck the U.S. economy, as least by some accounts, and You Know Who You All Are.

[Peter Schaeffer]

Anne,

Just for you I found an article about how well mass immigration is working in France. It turns out that immigration has introduced a new word (or perhaps just a new use, Lafayette can tell us) into the French language. The word is “tournantes”. It means “taking turns” while gang raping a girl in one of your immigrant paradises.

The following article from UK Indymedia. If I remember correctly, UK Indymedia was condemned for publishing this article. Apparently sexual assault is really OK if the criminals are PC.

“In Gang-Rape Hell: Life in Islamic France” (http://www.indymedia.org.uk/en/2003/08/275522.html)

Here, young men try to rule their families and neighbors under a macho code drawn partly from Muslim tradition, partly from the violence and porn in the media. Women submit to men, they say. Good girls, good sisters, cover themselves and stay home. Otherwise they are putes, whores, who can be used and abused even if they say no.

GRIM AS SUCH crimes may be, they’re becoming commonplace in the police ledgers of Paris, Lyons or Toulouse. The scene is almost always the same: the housing projects called cites on the outskirts of France’s major cities. Built by socially progressive governments in the 1960s, they’ve since been taken over by a generation of mostly Arab immigrants—impoverished, cut off from their native lands and culture, ghettoized.

Such stories, then, are not just about urban crime and rough neighborhoods. They reflect a core issue of Muslim integration in Europe. Can the young men and women of the cites break out, or will they become ever more isolated, turning inward against themselves? Will they build their lives and relationships on egalitarian values, or on the worst of Islam and the Internet? Young men trapped in a world with no jobs and no future, and violently confused about sex, tend to make women the symbols and the victims of the frustrations around them. Ten years ago, the boys in these hoods burned cars in the streets. Today, they increasingly turn their anger against “their” women in the basements of their apartment blocks.

That looks to be a longer fight. “Sexuality has always been a thorny issue in the quartiers ,” says Safia Lebdi, 29, who is one of the first members of Ni Putes, Ni Soumises, and could be a poster girl for confident, in-your-face sexuality. The other day she was wearing a pink see-through top, low-rise cargo pants and soft, beaded slippers. Born into the cite outside Clermont-Ferrand, where Michelin makes tires, she knows what she’s talking about when she says that “feminist thinking never reached the ghettos.” Girls, for their own protection, have taken to wearing loose-fitting track suits or veils over their hair. “They’re locked up in a world where their fathers have failed to break out of unemployment, where they have failed at finishing school or finding a job,” says a young woman activist with another group, Female Voices, Rebel Voices. Lacking hope or the opportunity for a better life, she adds, “all the men have left is their virility.” And some have savage ways of asserting it.

Late last year, two events galvanized the women of the cites. A young woman named Samira Bellil published a book, “In Gang-Rape Hell,” recounting her experiences in the ghetto, including twice being subjected to the tournante —men taking turns using her, one after another. She urged her “sisters in suffering” to speak out before they lost all self-esteem. Then reports hit the press about another —incident even more gruesome than those before it. A 17-year-old woman named Sohane told off an old boyfriend, and he burned her alive.

[Peter Schaeffer]

Ken Melvin,

The Excel spreadsheet breaks down the “Industrial supplies and materials” total into categories. The data is below. Note that I sorted the data into descending order. As before, this is year-to-date 2007 (June) data. The URL is http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm. My sense of it is that directly or indirectly, these are generally petrochemical exports.

Industrial supplies and materials 150,164
Chemicals-organic 15,081
Plastic materials 13,932
Chemicals-other 10,016
Other industrial supplies 9,726
Petroleum products, other 9,008
Finished metal shapes 7,412
Nonmonetary gold 6,760
Fuel oil 5,866
Newsprint 5,563
Steelmaking materials 4,948
Iron and steel mill products 4,227
Precious metals, other 3,900
Aluminum and alumina 3,764
Nonferrous metals, other 3,754
Chemicals-inorganic 3,495
Pulpwood and woodpulp 3,255
Chemicals-fertilizers 2,811
Manmade cloth 2,809
Iron and steel products, other 2,771
Copper 2,594
Logs and lumber 2,394
Mineral supplies-manufactured 2,384
Cotton, raw 1,999
Gas-natural 1,798
Synthetic rubber-primary 1,724
Shingles, molding, wallboard 1,689
Industrial rubber products 1,592
Cotton fiber cloth 1,430
Metallurgical grade coal 1,345
Finished textile supplies 1,279
Hides and skins 1,112
Nuclear fuel materials 1,047
Agric. farming-unmanufactured 1,003
Agric. industry-unmanufactured 955
Agriculture-manufactured, other 925
Natural gas liquids 886
Coal and fuels, other 718
Glass-plate, sheet, etc. 707
Wood supplies, manufactured 607
Leather and furs 551
Tobacco, unmanufactured 475
Electric energy 395
Crude oil 346
Tapes, audio and visual 322
Hair, waste materials 290
Nonmetallic minerals 279
Nontextile floor tiles 220

[anne]

Always racism, all the time; the more hideously crazed the racism the better, for the purpose of spewing fear and hatred.

[Peter Schaeffer]

Anne,

Your fondness for the Open Borders (immigration and trade) ideology of the Wall Street Journal has been dully noted. However, you should at least be honest enough to admit to nature of the beast. Back on July 2, 2001 Robert L. Bartley published an article titled “Open Nafta Borders? Why Not?” (http://www.opinionjournal.com/columnists/rbartley/?id=95000738) . A useful quote

“We annually celebrate the Fourth of July with a paean to immigration, the force that tamed this vast continent and built this great Republic. This is not simply history; immigration continues to refresh and nourish America; we would be better off with more of it. Indeed, during the immigration debate of 1984 we suggested an ultimate goal to guide passing policies--a constitutional amendment: "There shall be open borders."”

Last time I checked, 2001 wasn’t 20 years ago. However, maybe your version of math works differently.

[Peter Schaeffer]

Anne,

I am really sorry that you find the truth so uncomfortable. You might try facing facts rather than just shouting "racism" whenever reality gets painful.

[anne]

Always racism, all the time; the more hideously crazed the racism the better, for the purpose of spewing fear and hatred. The stereotypes are startlingly stable for different races over different times; a lesson in racist history, really.

[Peter Schaeffer]

Lafayette,

“The Robber Barons are back! In force ...”

Hey, that is unfair to the Robber Barrons. Their flaws may have been vast, but at least they built vast industries that made America a world power. The same can not be said for America’s current business and financial establishment. However, the connection between 1907 and 2007 is stronger than you might think.

100 years ago was also a period of mass immigration and massive inequality. Mass immigration ended around WWI and resumed roughly around 1970. The correlations between inequality, mass immigration, and political polarization are amazingly high.

See “Polarized America” (http://polarizedamerica.com/). The link comes from Krugman.

[anne]

Remember, spread fear and loathing, and lie and lie and lie.

[Peter Schaeffer]

James Killus,

If you check, you will note that I attacked Open Borders, including both trade and immigration. Illegal aliens appear to be around 5% of the labor force. However, legal immigrants raise that to roughly 15%. This is roughly the same level as 100 years ago. Then as now, mass immigration is bringing poverty and chaos to our nation. Check out “Polarized America” (http://polarizedamerica.com/) for the strikingly high correlations between mass immigration, income inequality, and political polarization.

[ken melvin]

Thanks Peter. I'm not surprised by the makeup, you? (I think that part of the link is getting cut off). Most petro-chem is very automated and, at present, politically connected. I can't think of a US Industry with significant labor input that's exporting its products.

[Peter Schaeffer]

Ken Melvin,

Petrochemicals are very automated. However, I don't see any political connections. The politically well connected are doing deals in China... See “Are US trade politics really driven by the profits US banks hope to earn in China?” (http://www.rgemonitor.com/blog/setser/150535/

However, I disagree about labor content in exports. Check out the ‘Capital goods, except automotive”, “Automotive vehicles, parts, and engines”, and “Consumer goods”. The biggest subcategories of Capital goods are

Semiconductors 24,996
Civilian aircraft 21,430
Industrial machines 18,736
Electric apparatus 15,478
Computer accessories 15,206
Tellecommunications equipment 15,001,
Medicinal equipment 11,542

The Automotive category is not broken down but is 57,388. The top subcategories of Consumer goods are

Pharmaceuetical preparations 17,539
Other household goods 7,725
Gem diamonds 5,686
Toys, games, sporting goods 5,103

Checkout Exhibit 7 from the link provided earlier. There is quite a bit of detail.

[James Killus]

Ah, it's so very refreshing to have someone like Peter Shaeffer being honest about his outright xenophobia. So many hide behind the phrase "illegal" in relation to immigrants. Mr. Shaeffer is honest enough to admit that it's all foreigners that he fears (well, I do have a suspicion that he is not seriously opposed to immigrants from Britain, Canada, or Australia), though I rather doubt that he has much insight into the source of his fear.

It is interesting to observe however, that in the case of Hispanic immigration, one is dealing with a population that contains a high percentage of pre-Colombian ancestry. Thus, we should be fearful of those whose are moving a few hundreds of miles from where their ancestors lived, because, after all, our own ancestors came thousands of miles, and the journey is what is important, isn't it?

[Lafayette]

JK: Mr. Shaeffer is honest enough to admit that it's all foreigners that he fears

Shaeffer, Shaeffer? Sounds German to me.

Definitely an immigrunt.

[cm]

german_reader: "Those, who can afford it, get first class services for a high price, ..."

Only first-class in relative terms. In many fields, the quality of the highest-priced goods/services is a function of how broad-based the aggregate market for the respective industry or technology is. For one thing, that's because of competitive reasons, but also the fundamental reason that innovation and improvement are to an extent probabilistic phenomena, and a function of industry/technology "liquidity" -- innovators can only develop their ideas when there is a functioning support infrastructure where they can draw on a base on which to add their value.

As a corollary, when the broad population does not have access to a good/service, the "rich" will get the lowest quality above that level with which purveyors will get away.

Eventually, the highest bidder will get only the best of what is there, which may often be good but not always.

I could have made this shorter by saying the "rich" will only get the best or better of what the "middle class" is getting.

Look at what living standards the rich were enjoying before the emergence of a broad middle class.

[reason]

cm...
That is a very good argument. Of course it is not entirely true where products are resource based but when one is talking about technology it makes sense.
That is why I like to distinguish between development and growth, there is a distinction between the two that our statistics don't show. Quality is not so easy to measure (or even define). (Zen and the Art of Motorcycle Maintainance anybody).

[Cyrille]

Well, of course there are horrific things happening in France. That's true. Tournantes do exist and they are appaling.
But to assert that they are a direct consequence of immigration is a bit simplistic, and then some. Porn as a means of sexual education is a far more likely factor. And, well, we have our local bred rapists you know (not that I am proud of it).

Anyway, ranting against mass immigration in the US is OK as long as you are prepared to ask all Europeans descendants to pack up and leave. Cherokees are free to stay though. Clearly, Europeans brought FAR more trauma to the American societies than Northern African immigrants (you do realise that in France, Italians, Poles, Portugueses, Chineses, Vietnameses, Laotians, Armenians are plentiful too?) could ever do to Europe.

[real person from the real world]

Late to the party, and I suppose no one will read this. Lafayette may hate me, but I enjoyed the comment about the Ayn Rand hyper individualists. Sort of what Jared Bernstein talks about too, the over hyped ideal of individualism. I recently started reading:

All Together Now
Common Sense for a Fair Economy
By Jared Bernstein

ISBN: 978-1-57675-387-3 or (1-57675-387-5)
$12.00, 120 pages, 5 1/2” x 8 1/2”
Available in May 2006 from Berrett-Koehler Publishers

I searched for a site to refer to and found this (I hope this is not some biased think tank)

http://www.epinet.org/content.cfm/books_all_together_now

I think we need to pull together as a nation. For so long, we have some sort of PC attitude that we should encourage cutural identity at the expense of national identity. We used to celebrate the melting pot that took the best from everyone and made a nation unique and special. Now every thing is fractionalized. Outsourced work to the lowest bidder, privatized health care and retirement. Some things, as Lafayette has pointed out so often, go beyond polarized interests: Education and Heath should be priorities, if we are to compete globally.

[calmo]

Don't tempt us realpc:Late to the party, and I suppose no one will read this. Nobody (esp laffy) hates you. (Everyone tolerates you.)
Glad you are reading. [Will Jared share his profits from 'All together Now' or is he not that altoghernow?]
All think tanks are biased (hence the "tanks": barriers and boundaries --to define their biases.
No tanking here in River City.
Are you thinking of running for some public office with this:I think we need to pull together as a nation.I thought Cyrlle's arrow above"Cherokees are free to stay though." might have tainted/squashed this "melting pot" idea:We used to celebrate the melting pot that took the best from everyone and made a nation unique and special.
Ok, thanks for the temptation.

[reason]

calmo
realpc? Try rpftrw - different animal entirely. What are you taking tonight?

[cm]

reason: Of course, "technology" is a matter of degree. It starts with know-how and craftsmanship. One other thing about "liquidity" is that you can have effective quality controls, and can compare products/service and choose based on quality only when broad and repeatable availability provide a standard against which to judge.

And I have not even gotten into the realm of "professional ethics". Typically, while perhaps not always, the purveyors of goods and services to the "rich" are of lower status, but certainly the workers performing them, which is not exactly instilling a lot of motivation and pride in one's work (esp. on the part where you know nobody is looking) I imagine. Before "incentive programs" you needed pretty much one supervisor behind every worker, or every few. Hence the old adage "the help is not what it used to be", though of course it never was (probably).

[calmo]

Thanks for the reference correction 'reason'...abbreviating those long tags myself can get me in trouble. Sorry to put realpc's tag on you 'real person from the real world'.

[Peter Schaeffer]

Cyrille,

Thank you for your post. You get points for admitting that tournantes “do exist and they are appaling”. That puts you well above the likes of “Anne” who can’t even get that far. I wonder if the woman who was raped 80 times could convince “Anne”. I rather doubt it. She seems to be quite capable of excluding reality from her privileged world.

Your notion of porn as sex education doesn’t stand even a modicum of scrutiny. First, you haven’t produced any evidence that the porn is more prevalent in the immigrants slums versus other parts of France. However, the deeper point is that porn appears to be negatively correlated with rape. See “How the Web Prevents Rape” (http://www.slate.com/id/2152487/?nav=ais) and “Pornography, Rape and Sex Crimes in Japan” (http://www.hawaii.edu/PCSS/online_artcls/pornography/prngrphy_rape_jp.html).

To be direct, you need to stop making excuses for crimes of violence and face the tragic facts of who is committing them. It would appear that the people of France are (somewhat) willing to do so. They elected Sarkozy who called the immigrants underclass “scum” ("racaille") and called for using a pressure hose ("Karcher") to clean out the slums.

I am certainly opposed to mass immigration to the US. You can that “ranting” if you like. However, you will note that my posts are full of factual detail as to the harm brought by Open Borders. The US did end mass immigration after WWI and there is abundant evidence that the American people benefited as a consequence. Time for act 2.

You are quite correct in pointing out that European immigration to the new world brought ruin to the indigenous population. Sadly, that is just another example of the sad fate of nations that don’t control their borders.

I do know that France has many immigrants groups. Several are indeed thriving in French society. For example, Sarkozy is descended from immigrants on both sides of his family as is his wife. However, other immigrant groups are failing badly in France. The fact that some groups are succeeding while others sink into a quagmire of underclass poverty shows several things. First, that the fault lies with those who have failed to take advantage of the opportunities that France provides. Second, the dire need for selective immigration so that only those who can and will do well are admitted to France.

[Peter Schaeffer]

James Killus, Lafayette,

I have written dozens of posts filled with well documented data about the adverse consequences of mass immigration. My posts have covered wage depression, broken unions, housing (un)affordability, public education decline, mobility (gridlock), crime, taxes, living space, air quality, water availability, social and economic divisions, inequality, racial conflicts, demands for racial quotas, bilingualism, etc.

And what is your response? To use a word like “xenophobia” and contrive a “fear of foreigners”? I guess that puts you above “Anne” who never rises above some random combination of “racism, loathing, fear, lies, crazed, hatred, etc”. Her limit seems to be two syllable words.

Sadly, your approach is symptomatic of much of the immigration debate where the Open Borders crowd thinks they can win by shouting “racism” and/or declaring their moral superiority. David Brooks caught this worldview rather well in "Karl's New Manifesto" (http://www.nytimes.com/2005/05/29/opinion/29brooks.html?incamp=article_popular). A useful quote

"They congregate in exclusive communities walled in by the invisible fence of real estate prices, then congratulate themselves for sending their children to public schools. They parade their enlightened racial attitudes by supporting immigration policies that guarantee inexpensive lawn care."

[Patricia]

Like it or not, cultures are different. I would think that is a tautology.

I am unhappy with the large degree of Mexican immigrants because of personal experience with them.
When I moved into the mobile home park where I lived, more than ten years ago, it was a quiet place of working and lower-middle class people. In the last several years, it has been taken over by Mexican immigrants. They drove out everybody else who could afford to move by playing their car and home stereos VERY LOUD, with VERY BIG BASS. The bass travels a long way, and is impossible to escape, even in our homes. This goes on all the time they are awake and at home. If they come in at two in the morning, the car stereos are on as loud as possible. Talking to them politely gets nowhere. Sunday, I was being disturbed in my home by someone at the end of the block. I went down and asked him politely whether the stereo I could hear in my home was coming from his vehicle. He said it was in his house. (Our mobile homes are our houses). In regards to my hearing it in my house, and being greatly bothered by it, he would say repeatedly was "I don't care". He said it was day time, not night, and to call the police if I wanted. Of coures, they know that where we live, the laws against noise apply only between 11 pm and 7 am. It is common for someone to turn on their car radio, with it's big bass, as loud as it will go, and they go inside. When I tell them that it is the bass that is the problem, and ask if I can help them figure out how to turn it down, they are totally uninterested. One time, a neighbor across the road had his car stereo blasting, while he and a friend stood a several yeards away. When I asked him nicely to turn it off, he said he couldn't, he was "testing" it.

The managers of the park also hate the noise, but if they kicked out everybody who is so noisy, the park would be almost empty. The few non-Mexicans I know plan to leave when we can afford it.

The only way I have found to keep from being driven crazy is to go out in the middle of the night and blow my car horn or stadium horn and wake them up. Then there is peace for a few weeks, which seems to be the limit of their learning ability. And I have been retaliated against - bunches of screws in my driveway, hub caps stolen, my planter thrown violently against the side of my home at nighttime while I was there in the kitchen, my outside faucet left running, increasing my water bill. A friend who lives in an apartment and called the police about Mexicans playing the music so loud at night, found her car filled up with empty beer cans.

I do disagree with the laws that are being passed around here (Atlanta metro area) limiting the number of non-related people who can share a house or apartment. Housing is expensive, and people who don't get paid much have to live somewhere.

I can live with people throwing their junk mail on the ground by the mail building, even when there were large trash cans nearby, even though I don't like it.

But I have no way to avoid the noise. And if they wanted to, they could avoid it. A couple of times recently, when I went outside on a weekend, I heard loud music coming from a party at a house a few lots away. But I hadn't heard it in my house because they didn't have the BIG BASS. And even outside, it didn't have the torturing quality of the others.

I don't know what the average citizen of Mexico is like. I suspect that people who choose to immigrate from anyplace when it is not totally necessary are more self-confident, arrogant, and pushy than the ones who stay behind.

Also, when I was working at Waffle House (because of age discrimination) for four years, when I tried to find a hirer paying retail job, I was unsuccessful, because they only wanted people bi-lingual in English and Spanish.

Anne, I am sorry for people who have poor conditions in their country, but I also care about the lower income people in our country, and these large numbers of Mexicans severely degrade life for them. But I notice that the people who think Mexicans are really nice people, and any criticism of them is racist, don't live in neighborhoods that have been taken over by them. And I do agree that Peter Schaeffer sounds xenophobic. Also, as long as it doesn't result in qualified Americans getting jobs, they could let in as many people from India as they want, and Indians are often darker-skinned than Mexicans, I'm not racist. All the Indians I know are intelligent and polite, and I have never heard anyone complain about them making noise. I have never heard an Indian co-workers car radio blasting. The only problem is that raising the visas for them will allow employers to go back to discrimination on the basis of age, and make life hard for new graduates.

[James Killus]

Mr. Shaeffer,
I agree that you have written dozens (scores, even hundreds) of posts. I will even stipulate that you cite lots and lots of other people who agree with you. You believe that all your citations are well-reasoned, fact-based, and that your interpretations of them are the only possible interpretation, formed by an unbiased mind. You believe that those who disagree with you do so because of a sort of prejudice that sees bigotry everywhere and racism where it does not exist.

I have suggested that it is possible to hold the contrary position without doing violence to either fact or logic. I understand that considering this as a possibility would require a degree of self-reflection that few people find comfortable. Still, in the final analysis, you are arguing that there are more pro-immigrant bigots than anti-immigrant bigots, though I am sure that you could never bring yourself to consider the question in those terms. Because if you did, you would have to consider the possibility that you are being ridiculous.

[Peter Schaeffer]

Patricia,

Thank you for your post. Life outside of "Anne"'s privileged world is "different".

However, I disagree with

“Housing is expensive, and people who don't get paid much have to live somewhere”

Yes, they do. However, illegal aliens have a place to live. It’s called “the country they came from”.

James Killus,

I do cite other folks with similar views. However, I also rely on a wealth of statistical data, much of it from sources that are pro-immigration or neutral. I rather doubt that the Census department or the BLS can be accused of anti-immigration ideology. Nor do I think any similar charge can be leveled at the NAEP or the OFHEO or the Pew Hispanic center.

I do not generally attribute pro-immigration sentiment to “racism” or “bigotry”. Special interest rapacity is my dominant theme. I do argue that the US is burdened by ethnic/racial interests that put group loyalty ahead of any national interest. However, my central argument has always been that a corrupt alliance of these groups (see the board members of the National Immigration Forum) is responsible for America’s failing immigration policies.

An interesting note is that there are a few people on the Open Borders left who are just as appalled by the NIF as I am. They are in the minority, but they do exist. Of course, the restrictionist left is totally disgusted by the NIF.

[cm]

Peter Schaeffer: "First, that the fault lies with those who have failed to take advantage of the opportunities that France provides."

I'd add to that "to them".

By overwhelming appearances, there is a considerable bias in the "failure to take advantage of opportunities", strongly suggesting that people visibly outside the cultural and ethnic mainstream (e.g. in the cases quoted here, with African/Middle-Eastern features and/or Muslims) are largely presented with a range of opportunities effectively relegating them to the place where they now are.

That as a response, or concurrent phenomenon, they hole themselves up in closed ethnic communities doesn't remove that causality.

[cm]

And BTW this is not a recent phenomenon. Recent generations of immigrants have been arriving into a context (rut?) that has developed over the centuries.

[Lafayette]

C: Cherokees are free to stay though.

Hell, no. Useless drunkards. Send them all back to central Asia! ;^)

Of course your are right. Scratch anyone's genealogy and you'll find an ancestor who came from somewhere else.

[Peter Schaeffer]

cm,

Asian immigrants in France are visibily different and apparently doing quite well.

[Peter Schaeffer]

Lafayette,

Is "tournantes" a new word or a new use of an old word?

[anne]

There are we know the good races and the bad races and we know just who they are and how to deal with them. Always lunatic racism, all the time. Racism forever, now back to "Birth of a Nation."

[cm]

Peter Schaeffer: I did not say "different", I said "outside the mainstream". And perhaps I should have been more eloquent and said "noticeably" not "visibly".

"Race" is just one aspect of it, and not the sole determinator, and the "mainstream" is never and nowhere entirely homogeneous. As for "Asians", there are such and such from various "backgrounds", some are (well) integrated, others not.

Also there are everywhere nontrivial subgroups of the ethnic majority that are ostracized for belonging to "off" subcultures, lifestyles, or in any which way characterized groups, so it's not necessarily, or exclusively, an issue of "race".

And xenophobia or sorting people into boxes are not homogeneous either -- it is well known that many "integrated" "minority" members are welcome and respected in certain circles or micro-regions (e.g. their workplace, neighborhood, urban core) where they are known, but all bets are off in the uncharted territory beyond those.

I'm sure that there are a number of quite successful people of African or Muslim origin in France.

[real person from the real world]

Sorry about Patricia's experience, but that could happen to anyone who is some kind of minority of one kind or another, in any neighborhood. I lived as a minority in a neighborhood for decades. While some of the neighbors made life miserable, I did make good friends with others who at times told those who were harrassing me off.

Look around, make friends with some your age, and talk to them like a real friend, and try to be a real friend. IF you succeed, after a while, those friends will come to respect you. If you live separate and isolate yourself, you are an "outsider." As an outsider, if you retaliate, they will retaliate back, since this is now THEIR turf despite the injustice of it, since you were there first.

Make some friends, and you will find they will help you. Most latinos are family oriented, and religious. You don't like their music, and while you may have some ligitimate compaints, you may tend to be overly critical, especially since you feel they are retaliating and are resentful.

[Lafayette]

cm: I'm sure that there are a number of quite successful people of African or Muslim origin in France.

That number is very few indeed. But, it is not for lack of trying. It is for lack of acceptance in the mainstream mentality. But, that is coming too.

It is curious how the media can influence that mainstream mentality, and even more curious that the media in question should not be French but American.

Successful blacks/women portrayed on French television are almost wholly from movies/television series that are Made in Hollywood. And, even from this media, there is rarely a successful Muslim being portrayed.

Even successful women, particularly those managing men in any context, are a bit of a rarity on French television -- except in American imported movies/TV series. But, the French are beginning to "get it", that is, the notion that their national collectivity is as much a rainbow of ethnicities as is America's.

Each successive government has more women and more ethnicities in top positions -- and given that the French news freak out on politics and politicians (it's gruesome the quantity of nightly news that turns around their every word and gesture), the media is an important vehicle for conveying the image of "role models". A very strong image is coming across nowadays, with a number of women in prominent positions within the French government.

I would say, still, that women, blacks and Muslims are better integrated into the mainstream in Britain than France ... but, as regards Muslims, that integration is bringing about an altogether different problem as has been seen frightfully recently.

The French, not so long ago, forbade young Muslim girls from wearing a headscarf to school, in a genuflection towards a kind of rabid secularism that remains obvious, if no longer prominent, in French political thinking.

France has never come to terms with the fact that the Catholic Church supported the French monarchy for so many centuries. And never forgiven ... in order to move on.

[real person from the real world]

BTW Peter Schaeffer, in the trailer park Patricia menitons, we have no way of knowing if all the inhabitants are "illegals" who should go back to Mexico. There are Latinos here legally or who are citizens. Proximity is an issue. We have borders with Mexico. There is a difference between those who cross a river, and those who fly here over an ocean. If things got bad enough, Americans just might be the illegals in Mexico. Not too long ago, there was discussion in these blog pages about Canandians using American hospitals. When it comes to borders, you have to be a good neighbor, even if the kids are noisy.

[Patricia]

People who play their bass so loud it makes your windows rattle are not "good neighbors".

[Pat R.]

The nerve of America allowing corporations to pick and choose to whom credit will be extended based upon credit scores kept by years and years of experience, and instead, extending credit to illegal aliens with no credit history.

Even if they are the world's best debtors from the view of American corporations, why should companies worry about Americans when they have no particular investment in them?

The ability to compare legals and illegals on the same basis is sure to be a benefit for illegals since they have no credit history here, and are so conscientious about paying their bills because they are illegal to begin with. That gives a faulty view of illegals, but under current credit standards, makes them better choices to extend credit to than Americans themselves.

Why America has been placed in this position of having to compete with illegals for government and corporate services can only be due to the fact that the nation is now citizenship-blind...that is, there is no difference to them whether an applicant is an American citizen or not. Their interest is only in numbers, and financial security. Knowing that illegals will not be deported, they are free to allow such competition to exist, burdening Americans with the collateral harms of being second class citizens in their own country. What kind of corporation does that except one that acknowledges it belongs to no nation?

Corporations are, in essence, playing both sides of the fence, and donning hats that claim they are American when it works for them, and not claiming to be American when it works for them. That dual status is much the same as the illegal aliens share - and disloyalty apparently rules the day. What kind of country is this?