US Controversies and Big Ideas 2008 and Beyond

The Logjam on Immigration: False assumptions and lost opportunities

American immigration seems immune to reform. False assumptions have been deeply ingrained over many decades and blithely parroted by the large majority of citizens. Employers protest before Congress but have not invested in research and communication with the purpose of presenting the facts which would help to verify the assumptions. Their strategy for dealing with immigration is just so inept. This despite the fact that the urban legends about immigration are just plain silly.

The refrain is that H1 employees displace locals. This is a half-truth. More often than not, H1 employees do technical work that Americans prefer not to do and choose management and marketing jobs. I have heard terms like programming monkey widely used to belittle such functions.

The other story is that as immigrants H1 employees are more likely to turn into entrepreneurs. Their chances of upward mobility are lower in the American corporate world due to cultural barriers. As entrepreneurs, they create jobs for Americans.

The current legal system in the USA is horribly dysfunctional. If companies need technical talent and don't get in the USA, they have the option of setting up an office in Vancouver where immigrants are easily available. The Canadian system is a transparent system which lowers the uncertainty and the costs of hiring foreign labor both for the employer and the employee. I made an application for the Canadian permanent card and had to do nothing after the initial application was filed. Also, the attorney was expected to return my fee if my application was not accepted. By contrast, the American application cost a huge amount, I had to make two attempts and all the time there was no way of knowing whether I would be accepted. The Canadian system takes an economic approach and matches the country's needs for workers with supply by using a point system. The system clearly works as indicated by the fact that you don't have intense controversies as in the USA.

I have worked previously on an H1 visa and always found that employers took this option as a last resort. Employers don't like the hassle of the legal process involved in H1 or the harassment of explaining to immigration officials why they chose a foreigner over a local American. Also, foreigners take a more than a while to adapt to the culture and the processes which is an added cost. The only time H1 candidates are employed are when the economy is in a midst of a boom and immigration is more relaxed.

I have heard a lot of people say that foreign labor is hired because it is cheap. Never have seen a single piece of evidence cited to support the assertion. The only thing that stops H1 visa holders from rising is the lack of mobility that comes with the byzantine immigration processes. Really, Americans with conscience will not support this banana Republic variety capricious legislation.

I might add and ask why the detractors don't ever mention the jobs that are created when foreigners turn into entrepreneurs or facilitate the global expansion of American multinationals. The tax rules for Americans overseas are just not attractive for them to go work abroad. American companies have to rely on local workers and American trained employees help in bridging the cultural gap.

California State's Bankruptcy and its Economic Future: A report from a conference

Liberty on the Mind (an offshoot of Liberty on the Rocks for conferences) organized a conference on the subject of the fiscal crisis of the state of California at Santa Clara University on 27th April 2009. As a grassroots organization, LOTR attracts members who are capable of animated public policy discussions in bars, the background noise notwithstanding. They agitate for a freer and more prosperous world and they like to be well-informed citizens rather than partisans.

The topic of the conference generated some controversy. A member of one of the think-tanks, close to the state’s establishment, felt that bankruptcy does not accurately describe the current state of finances in the state. According to him, the current crisis is an administrative issue created by the two-thirds majority rule for passing a budget which an unnecessarily high bar.  He added that there has never been a bankruptcy in any of the Union’s states anytime in history. We checked with an economic historian and confirmed that some states did experience bankruptcy in the early nineteenth century. A deficit of $40 billion clearly reflects a deep-rooted economic malaise especially when consider the fact that the credit rating of California is the lowest of any state, the tax rates are the highest and cost of doing business in the state is 20% higher than the average cost of doing business in USA. Also, there has been an out-migration of 1.2 million from California over the last four years. We concluded that his comments about the two-thirds majority rule are a not-well-disguised rationale for an unhindered spending binge.

We, therefore, sought speakers who had done research on the state’s expenditure policies as well as the business environment for growth. Seven speakers from think tanks and universities around California agreed to come and speak. Michael Shires of Pepperdine Public Policy Institute was eventually called for jury duty and could not make it.

Professor Fred Foldvary, Director of Civic Society Institute, displayed data on persistent deficits in the state which are accounted largely by soaring expenditures on education, health and prisons. One striking slide showed that expenditures on prisons are rising at the same rate as education. Liberalization of drug sales and their regulated use is one way of relieving the pressure on prisons and for increasing the revenue base for the state.

Expenditures keep rising despite the constitutional provisions for citizens to vote against them on the ballot.  A wide variety of checks and balances exist in the state, such as the use of two-thirds majority rule for raising taxes, Proposition 13 which caps property taxes, provisions for recalls of elected representatives, term limits on legislators and voter approvals for major initiatives, to guard against political intransigence. The voices of ordinary citizens, nevertheless, are overwhelmed by sophisticated advertising campaigns by organized groups such as teachers unions, firefighters and law enforcement officers unions. Vallejo had to recently go into bankruptcy because it was unable to honor its pension liabilities to 17 of its firefighters. Professor Foldvary recommends a cellular democracy, widely discussed by public economics expert and Noble Prize winner James M. Buchanan, where politicians are elected at the micro-local level. At this level, the actions of politicians to be visible to each citizen and they can be easily recalled when voters don’t approve of them. A constitutional convention will clear the way for a new set of rules to govern the state.

Lisa Snell, an expert in school reform at the Reason Foundation, pointed out that nearly 20% of expenditures on education are incurred on retirement and health liabilities of teachers. Teacher layoffs are usually a chimera. Typically, teacher layoffs are widely reported in the press. However, the reversals of layoff decisions are ignored by the press. Altogether, only 31 teachers have been laid-off mostly for cause.  Other egregious wasteful use of resources is the $20 billion bonds on new schools building while enrollment in older schools drops.

Innovative school education methods account for only about one-percent of the students but they have been able to provide better quality education at lower costs. Charter schools are initiated at the local level and are spared a backlash from teachers’ unions.  The state has refused to call even a meeting to consider school vouchers but a small program, sponsored by private foundations, has been successful. She was particularly enthusiastic about virtual academies similar to the free learning materials provided by MIT. These are internet based learning options that aggregate teaching materials from a wide range of sources.

Health spending accounts is the next highest budget item. John R Graham, Director of Health Care Studies at the Pacific Research Institute spoke on the built-in incentives to increase health expenditures regardless of the outcomes.  Between 1997-1998 and 2006-2007, Medi-Cal (the state version of Medicaid) spending nearly doubled. The 2009-10 budgets of $135 billion for the California state allocates $38 billion of state funds for health & human services. In addition, the U.S. government throws in $40 billion for Medicaid & SCHIP: almost three quarters of the total budget. At the end of the day, physicians have to be prepared to serve patients if any of this spending is to help at all. One survey, quoted by Dr. Graham, found that there are only 46 primary care physicians per 100,000 Medi-Cal beneficiaries, versus 75 per 100,000 for users of other health insurance plans in California. This is not hard to explain given that Medi-Cal pays less; in 2003, Medi-Cal paid physicians only 59 percent of what Medicare paid. According to a study by Professor Daniel Kessler, the premiums paid by private individuals would fall by 11 percentage points if Medicare and Medi-Cal were to pay the full costs of their patients’ hospital care. Next time anyone buys insurance, remember you are subsidizing someone else.

Health Savings Accounts (HSA) have already proved to be a means to lower costs. In 2007, CIGNA HealthCare conducted a two-year study to compare cost management by consumer-directed and more traditional HMO/PPO plans among its membership of 430,000. It found that the costs of subscribers of consumer plans were lower by 12% even though they spent more on preventive care and maintenance medications. Despite the proven benefits of HSAs, the California Government chooses not to provide tax benefits for money invested in these funds. Consequently, only 4% of Californians have invested in HSAs compared to 8% nationwide.

David Zetland, a Wantrup Fellow at UC@Berkeley spoke on the mismanagement of natural resources, especially water, in California.  The state still treats water as a free good and farmers don’t have to pay for it. The state’s investments in water infrastructure are hard to recoup. Farmers resist paying prices by drawing on underground water. The effects are especially devastating in times of drought when crops are left to wither.

Dr. Robert W Fairlie, Professor of Economics at the University of California, Santa Cruz, spoke about trends in entrepreneurship and its effects on California’s economy. New businesses rely a great deal on their personal savings, such as second mortgages on their homes, financial investments and savings, to bootstrap their businesses before financiers are willing to risk their money. The decline in personal wealth, as a result of fall in home and stock prices, has affected financing of new businesses. Immigrants, especially Asian entrepreneurs, are important sources of human and start-up capital. They are able to raise capital from additional sources such as their ethnic networks.  A slowdown in immigration will have an affect on growth.

Jim Atkins from the law offices of James E. Atkins P.C. is a specialist in bankruptcy law and provided a window into the experience of businesses in recent months. While business cycles are a common experience and most owners learn to rough it out till growth starts again, this time the mood is less optimistic and entrepreneurs dread a worse turn of events.

BAILOUT OF THE AUTOMOTIVE COMPANIES: THE ALTERNATIVE MARKET BASED AMERICAN SOLUTION

While our loony politicians are hell-bent on bailing-out Detroit’s automotive dinosaurs, entrepreneurship is alive and kicking in the specialized automotive aftermarket. The industry for customized automotive accessories notched sales of $38 billion in 2007. The revenue earned from accessories has grown at an average rate of 7.4% over the last decade compared to an anemic 1.07% for new car sales. While the sales of accessories have slowed down to 4% in 2008, they are still out-performing many other industries.

Consumers are bored with the drab cars churned out by large automotive companies. The recession was really the last nail on their coffin. Cheap credit had for years propped up the Big 3 and the house of cards crumbled as the credit crisis hit.

Younger customers crave for fun vehicles personalized for them. They like cars like Scion, Cooper and Mustang. Market research by Deloitte indicates that two-thirds of Gen Y customers see vehicles as a reflection of their tastes and status and they consider these factors in their purchase decision. As many as 67% of them consider how well a vehicle reflects their personality.

Dealers, with a focus on customization, are reporting strong performance despite the recession. Galpin Auto Sports, with seven dealerships in Los Angeles area, earns $500,000 a month in revenue from innovative customization. Half of Ciener-Woods Ford in Kernersville, N.C customers are loading up their Mustangs, Fusions and F-150 pickups with as much as $20,000 worth of accessories. MWW Automotive, a global automotive design company, which supplies customized accessories to the Big 3, reported 11.4% rise in sales and 7.4% rise in gross profits at the end of the third quarter of 2008. The company attributed improved profitability to higher sales of spoilers--customized and popular accessories which provide a sporty look.  
 
Skilled mechanics in the automotive after-market have been driving the growth of the accessories markets while the Original Equipment manufacturers have been much slower in adapting to this trend. While vendors in the after-market are responsive to consumer need for personalization, factory made accessories tend to be more reliable and OEM warranties trustworthy. An expanded market for personalized vehicles will develop with the growth of the role of OEMs in this segment of the industry.

Large automotive companies are hobbled by state franchise laws which protect their dealers. Manufacturing companies incur enormous costs when they want to change their products and brands. General Motors was mired in 19 lawsuits in 17 states when it decided to discontinue its Oldsmobile car in the early 2000s. For this reason, OEMS prefer to payoff dealers when they want to end their relationship. Customization can hardly be successful if OEMs cannot change their products without losing money on the way out.

State franchise laws vary between states and provide different levels of protection. The most problematic aspect of it is the inability of manufacturers to communicate directly with consumers which is critical for product differentiation and direct marketing to the most desired consumer segment.  They prohibit internet sales which have been instrumental in personalization in other industries. When consumers search web sites for car information, the manufacturers are not allowed to direct the leads to dealers best able to fulfill the demand.  Digital signage increasingly provides opportunities for engaging customers with motion video. Automotive manufacturers are unable to take advantage of this medium.
 
In addition, state franchise laws inflict costs that would be saved in a more competitive environment. Inventory and distribution costs, financing and insurance costs and excess margins add about $1,500 dollars to the cost of a vehicle according to studies conducted by the Consumer Federation of America.
 
The American genius for innovation and customer service is the best bet to save the domestic automobile industry. No other country has a comparable vibrant class of entrepreneurs reinventing the automotive industry focused on providing personalized vehicles. By abandoning the archaic franchise laws, the American government will pave the way for a new phase of growth in the industry.

When will the US Economy Recover?

The US recession is getting longer and the end is not in sight. The future is muddied by political and economic mismanagement that borders on the burlesque. In recent months, one seat of the government has proposed a plan and the other disposed it. The bail-out or the rescue bill was first proposed by the White House and then disposed by the House. On the second attempt, the House acquiesced as the economic crisis deepened. The very fact the Lehman Brothers bankruptcy precipitated the meltdown suggests that the Treasury Secretary, Mr. Henry Paulson, did not anticipate the consequences of letting it go under.  The freeze in the commercial paper market was not an accident, Lehman Brothers played a role of a market-maker in the commercial paper market. Before letting Lehman Brothers go, the Treasury Secretary ought to have set up alternative mechanisms for keeping the commercial paper market liquid. A secondary effect of the credit freeze was its effect on trade credit for exporters in emerging markets. Their exports plummetted as trade credit dried up.

Now the wrangling over the auto bail-out is showing similar confusion. The Senate sees clearly that a hand-out to the automotive companies is not going to help. The one thing that stands out is the difference in the attitude of auto companies in the South and in the North. None of the Southern auto companies are looking for assistance from the Government. The unions in Detroit are not budging over wage cuts. A Chapter 11 will work the magic to bring them to their senses. Clearly, they are hoping that the new administration will prop them up. Yet the White House is now suggesting that some funds should be used from TARP to keep the auto companies solvent till they end of January next year. 

The poverty of ideas is pervasive. A massive stimulus package has been initiated by Nancy Pelosi. During the lost decade of Japan, close to ten stimulus plans with a total expenditure of one trillion dollars were implemented in the 1990s and they did not help. Japan's world competitiveness score went from number one to twenty two today. You have to wonder why nothing was learned from the long period of stagnation. Japan had a brief period of growth during Prime Minister Koizumi's term when he implemented reforms in the financial sector of the economy.

Leadership in the USA is showing the same signs of an intellectual impasse as in the lost decade of Japan in the 1990s. This is bizarre given that the USA has the world's best economists with a reputation for finding pratical solutions for policy problems.

Simply put, the way to kick-start economic growth is to lower the cost of doing business. This can be done by lowering costs of risk-management, lowering the cost of providing social services, regulatory and legal compliance and improved infrastructure. In all of these areas, the USA could make huge improvements.

A great deal of money is lost on farm subsidies. The Doha Round of negotiations, focussed on freeing international trade could be a major boost to business confidence as it will lower the cost of producing agricultural commodities and increase incomes in poor countries of Africa.  Western farmers resist the discontinuation of subsidies because they fear the impact of sharp swings in commodity prices and weather related disasters. The reality is that a switch to leisure activities, such as hunting, will compensate for lost revenues and lower risks. Catastrophic insurance for the farm sector will help as well.

The health sector is a huge drag on the American economy. A  single payer system will only aggravate the problem as it will have no in-built mechanism to lower costs. The alternative of consumers buying is a possibility although chances are that many individuals will not be able to shoulder the additional risk. In all likelihood, a freer market in health services will encourage intermediaries to strike deals with insurance companies and provide advice to individual customers.

American public schools are a disaster. Too many graduate without the minimal skills to do their jobs and businesses have to incur costs to train them. The school reform in Washington DC is uncovering the challenges of switching public schools to something that resembles private schools. Teachers are reluctant to trade the security of unionized schools for higher wages.  

American economic recovery will not be quick this time as the latent pathologies in the society stand in the way. Change, the much bandied buzzword, will run into conflicting perceptions of reform. Worse, we have bumbling idiots for leadership.

  

Election 2008 and its aftermath

Ths issues raised in the Election of 2008 will linger well beyond the voting process. As the current recession persists, the underlying structural weaknesses of the US economy will come into relief. The economy will not respond to the routine monetary and fiscal policy interventions. The Reagan economic revival was driven by tax cuts, declining barriers to trade worldwide and deregulation of business. This paradigm is beginning to run is course. Increasingly, there will be a need for new programs for lowering the costs of business such as by reducing health care costs, opening new opportunities for growth such as by deregulating the energy sector and by increasing the efficiency in the delivery of social services such as retirement entitlements.

Tired minds on the Left see the problem simply a result of extreme deregulation of especially the financial sector that the Republicans encouraged. They have initiated several rounds of Keynesian fiscal stimulus and now they are suggesting public works programs for building the infrastructure. More on the nutty side, they are suggesting nationalization of 401K accounts. Overall, they hark back the the New Deal which was a failure and would be seen so if it was not associated with Franklin D Roosevelt and the aura surrounding him. It is possible that better sense will prevail and the most recent pronouncements from Nancy Pelosi and Barack Obama suggest a move to the center. Pelosi went so far as to suggest tax cuts whatever that means.

However, the Democratic frame of mind is unlikely to give up on socialized medicine or embrace private owned retirement accounts. They are also unlikely to soften their stand on renewable energy. Between now and the 2010 elections for Congress, we are going to see these issues take centerstage as the economy continues to stagnate just like the Japanese economy has been doing for the last twenty years. Aside from occassional spurts of growth, the Japanese economy has crawled despite numerous stimulus programs.

The onus of demonstrating the viability of an entirely private sector health care system lies with the USA. With the exception of Singapore, it is hard to point to any country which does not have a significant government role. To be sure, governments will still need to provide for the very poor in society. The needs of low income patients is best taken care of by providing an equivalent of a health stamps which can be used in any private hospital just as food stamps are used by the poor to buy grocery in any retail store.  

Barack Abomination

Barack Obama, when he began his campaign, seemed like a naive liberal with a beguiling smile. When I heard his opinions, he came out clearly like a left populist very familiar to people born in former third world countries. As I looked more closely, I saw increasingly alarming signs. His oratory sounded more and more like demagogy. The cheering crowds in the background  hinted a growing personality cult building up. Then, when he started accumulating votes in the primary in caucus states, I suspected a person working on underhanded deals while he was preaching change. 

Then came the flimsy lies. He had not heard the inflammatory speeches in all the twenty years he attended Rev Jeremiah Wright's church. Anyone with any degree of familiarity with the liberal left in the USA could have recognized the familiar anti-American rage that is the sum total of the world view of this creed. Obama with his record as a left wing community organizer was in his church to be with his political brethern.

Then he dressed up his redistribution program as a tax cut. The definition of the rich has started to decline from $250,000 to $120,000 as Governor Richardson announced today. What is more alarming is that he is willing to raise taxes on capital gains even if the revenues decline. Just to be fair!

Now it is getting creepy. Punish those who dare to question him. An anchor asked Joe Biden a question about the similarity between Karl Marx's famous quote "from each according to his ability and to each according to his need" and his redistributive program and was slammed with a ban on any appearances. The trade unions will lose their right to a secret ballot and will be lorded over by the union bosses.

The chilling finale is Obama's willingness to even change the constitution to bring about redistributive justice. He is not just the pinko left in democratic countries but a communist in the closet. We have heard the lies and now the outlines of a diabolic plan are emerging. This is the way communists always worked. They collaborated with proponents of liberal democracy to oust monarchies and then stabbed their former partners in the back to launch a coup d'état. Americans will make a big mistake to vote for this stealth mode abomination.

Alternative to the $700 billion bail-out plan--a costless way to build confidence

The probability of a policy error in an emergency is high and once again the $700 billion bail-out plan is likely to leave behind a legacy of poor judgment and government folly much like the "New Deal" did. Clearly, the distrust that people had of financial institutions and the possibility of running out of cash was keeping banks away from lending. Surely, this cannot be solved by either monetary expansion or measures such as cash infusion by the Government. A much more direct way is suggested by the Levy Economics Institute of Bard College. In one of their papers, they recommend that the Fed could be temporarily turned into a clearinghouse and use its financial clout to support it. Banks then deal with a counterparty which is credible.

The commercial paper market froze after the demise of Lehman Brothers which had in the past acted as the market-maker in short-term borrowing and lending. In addition, the inter-bank lending market froze because it raised the specter of other banks being allowed to fail. Before letting Lehman go, the Fed could have announced that it will be a make-shift clearinghouse for ensuring the flow of commercial paper. The cisis had been underway for a year so the Fed had enough time to prepare for it. If it had, the $700 billion bail-out plan would not have been necessary.

Several possibilities are conceivable to directly address the confidence issues. Some people such as Warren Buffett continue to enjoy the confidence of the public. It should be possible to set-up a non-profit organization, headed by Warren Buffett, which administers funds from the public and other non-profits to extend loans to banks and businesses during the course of the emergency. One simple way could be to have individual banks park their funds with the non-profit and borrowing banks could be in touch with the non-profit. The Government could have simply provided a temporary gaurantee to support the non-profit.  

The $700 rescue plan may well recover the costs incurred to buy bad debts when the markets recover. They do have housing assets backing them. The one thing that the taxpayer is not going to be able to recover are all the goodies, amounting to another $150 billion, that were attached to the bill or simply put the spoils of office. The alternatives would have saved these extra costs and the attendant corruption.

Nobama: The Economic Rip Van Winkle

Barack Obama is best decribed as a Rip Van Winkle who appeared years after a free market across the world, with an extensive framework of rules, was established in 1995 along with the World Trade Organization. He has dusted off some old cliches of socialist redistribution and changed the language with worlds like "fairness", neighborliness, etc. As he enters the modern world, he encounters a familiar bewildered population. The old communists knew how to manipulate people in times of crisis. It was in 1917 that Russia, after a period of 50 years of solid economic growth, had fallen on bad times. The old monarchy had lost control of a country torn apart by the stresses of a long war. The Bolsheviks, with their demogogy, knew how to fire up the soldiers returning from the battlefield. Where calm minds would have focussed their attention on solving problems, they set about their agenda of grabbing power.

The confidence that Americans suddenly have in Obama's ability to be an able steward of the economy is completly inexplicable. He has neither the expertise nor a belief in the ability of free markets to ensure prosperity. Market economies have always gone through their ups and downs. Not so far back, cataclysmic downturns such as the Asian meltdown, the Mexican crisis and the Internet bubble have come and gone not to mention the Savings and Loan crisis. The one difference between this and the previous crisis is the absence of the confidence Americans have always had in their ability to cope with bad times. 

It is ironical that the very people who brought about this disruption are the ones who are posing as saviors.  Freddie Mac and Fannie Mae liberally bought housing related securities and ignored warnings about the dangers to the rest of the financial system. The Chris Dodds and Barney Franks of the world shielded them from any scrutiny while helping themselves to sweetheart deals from the Countrywide and others. Now they want regulation of the private financial world! Barack Obama received generous contributions from Fannie Mae and Freddie Mac.

There is something about the social psychology of the people influenced by Barack Obama that is hard to understand. I suspect people are soon going to get a rude awakening if they do elect Obama.

NObama's fallacies: reality and populism

A steady stream of harebrained notions bubble out of the Nobama campaign. At regular intervals, the bubbles burst as a Republican or conservative thorn pricks them. Barack Obama steps out of the cloud, stares at the ground reality and realizes that he has to swing to the opposite end of his belief system. After a momentary encounter with the world we are familiar with, he is back to propogating the same old poppycock. We see this spectacle of reverse movements, a bizarre dance happening over again.

If Obama does not makes these corrections from the holy progressive path, he will simply be seen as insane. This happened when he finally signed the bill to grant immunity to telecommunications companies who share terrorism related information with the Government without a warrant. We know how FBI was unable to take action against suspected terrorists following the 1993 bombing of the World Trade Tower; the process of obtaining a warrant from a court was way to cumbersome to take action in real time.

One of the latest such notions is that money can be saved from defense expenditures to pay for social programs. That defense expenditures are rising so rapidly that poor folks don't have enough anymore for medical treatment, education and social security. Nothing could be further from the truth. Ross Perot has assembled figures in a very user-friendly presentation about government revenues and expenditures. The remarkable fact is that the share of defense expenditure has been halved since the Vietnam war. On the other hand, medicare and medicaid expenditure is growing by more than the three times the rate of the GDP. Obama is suggesting more of the same--a universal care system which is not much different from medicare and medicaid.

The only reason medicaid and medicare expenditure rises is that there is no in-built price mechanism to put any check on the growth of these expenditures. Nobama refuses to acknowledge this simple reality. The guy is so blind to economic facts that the dance is going to continue when he is in office. I have seen this happen before in India whenever the Janata party came to power. A bunch of crackpots came to some twisted conclusions and disrupted the daily life of people. Nobama's dance is all the more surreal as it is happening in a society that is otherwise sane if nothing else.   

Barack Obama: Accidental Presidency?

Peter Sellers "Being There" was a hilarious comedy of an accidental Presidency. An obscure recluse for life decides to step outside in the world and finds himself campaigning. A comedy of errors ensues and his every word is interpreted to be more profound than it was intended. The audience, hearing the candidate from a distance, separated by a wall of mass media is enthralled! The actual person happens to be an empty suit bumbling along step at a time and eventually into the White House....I remember the movie almost twenty years after I saw it.

Barack Obama's path to Presidency seems so much like the movie. An unknown person till last year, he has already gained worldwide fame. He got a series of lucky breaks along the way as his opponents in elections floundered following scandalous revelations about them. Now he is talking about change and the crowd loves it. The reality of his traditional liberal views be damned.

He addresses the Jewish community and lies that he would take a firm stand against Iran. In the Senate, he opposed characterizing the Iranian Revolutionary Guard as a terrorist organization. He invokes the memory of Reagan, of all people, to describe his stance. It would be hard to find a contrast as stark as Ronald Reagan and this impostor. Yet, the Jewish community is solidly Democratic.

Regardless, the poll numbers suggest that he is going from strength to strength. The foul mood of the electorate will, in all probability, propel him to the Presidency. Hey, where are all the comedians.

 

Conservative Obduracy on Immigration

Conservatives have relentlessly and insanely opposed any reform of the immigration policy. The erosion of their support across the USA, major losses in former bastions of support and recent warning from Newt Gingrich of a possible disaster has not led them to be more introspective. A recent poll published by Wall Street Journal shows that John McCain is running even with his Democratic challengers even though support for the Republican party has touched rock-bottom. Even a person as astute as Newt Gingrich expressed only surprise but had no explanation for this stark contrast.

The pièce de résistance was the interview Bill O' Reilly had with a representative of the Roman Catholic Church who stood up for the human rights of illegal immigrants. Bill was, as usual, was not listening. He went as far as to criticize the Pope for supporting immigration reform! Over again, Bill used the opportunity to  continue his propaganda against immigration.  Maybe, Bill ought to know that America lectures the rest of the world about human rights.

Clearly, the electorate has drifted away from a party that annoyed them with its intolerance of immigration, gay and lesbian rights and and an overzealous faith in religion. America needs immigrants as much as immigrants need America. The departure of "illegal" immigrants has created labor shortages across the USA. Skilled engineers are returning to their prospering countries and will surely undermine America's competitive edge over the longer run.

John McCain was willing to listen to the conservatives on border protection while he consistently reaffirmed his commitment to legal entry for unskilled immigrants. The conservatives did not return the favor and are expressing displeasure at his "disrespectful" attitude reflected in his support for a comprehensive reform of immigration. The only way John can protect conservatives from themselves is to ignore them on immigration issues. That and gay marriage--it appears that freedom is for only some people.

American citizens are turning to somebody as dishonest as Barack Obama out of disillusionment with the second term of the Bush administration. The man is a phoney but could well win given the mood of the electorate. John McCain has in his program for health reform a very innovative initiative which could significantly change the political landscape in the USA. If only conservatives shut up for now--especially on immigration.