BULLY IN THE CHINA SHOP

NAFTA:   I will have a short discussion about the much maligned NAFTA.  Initiated by former President George H.W. Bush and signed into law by former President Bill Clinton in 1994, NAFTA has helped boost U.S. exports to Canada and Mexico, the nation's largest and 3rd largest trading partners. not including the Europe Union as a whole. (https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement).

"Goods exports totaled $236 billion; goods imports totaled $295 billion. The U.S. goods trade deficit with Mexico was $58 billion in 2015. "

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"The top import categories (2-digit HS) in 2015 were: vehicles ($74 billion), electrical machinery ($63 billion), machinery ($49 billion), mineral fuels ($14 billion), and optical and medical instruments ($12 billion)"*

President Trump has succeeded in raising the hackles of the Mexicans by trying to bully them into directly paying for the Great Wall of Trump.  Not surprisingly Mexico confronted the bully and said hell No.   If the U.S.had problems with Mexico before, now they seem to be a disaster.

There is a proposal to put a border tax of 20% on Mexican exports to the U.S.  Please note that the only government owned operation in the above list  of  imports is the mineral fuels so all the border tax would be paid by private industry, often U.S. companies.  So with a border tax, it will be the U.S. consumer who pays the tax because of increased pricing, everything else considered equal.  However, everything else is not equal and the value of the dollar index is expected to rise.  If the dollar index were to rise by 20% (which might happen if the border tax applies to all countries), then I think (but do not know) that the whole thing is a wash.

Institution of the border tax would, of course, scrap NAFTA.  the proposal is to use that money gained from the border tax to pay for the Great Wall of Trump.  At any rate, I am sure that it is the U.S. consumer that pays the tax thus the Great Wall of Trump.

Under consideration by the Republicans is to make the border tax universal, e.g. apply to all countries.  I hope the Republicans think this whole thing through, something they are not known to do. ** In addition to the complexity of the dollar index, Mexico is almost certain to institute a border tax of their own.  It was NAFTA that got Mexico to do away with their import taxes and exports from the U.S. to Mexico rose greatly as a result.  So our border tax plus Mexico's new border tax probably ends up costing U.S. jobs.

U.S. goods exports to Mexico in 2015 were $236 billion, down 1.6% ($3.9 billion) from 2014 but up 97% from 2005. U.S. exports to Mexico are up 468% from 1993 (pre-NAFTA). U.S. exports to Mexico account for 15.7% of overall U.S. exports in 2015.**

I hope present day politics doesn't screw NAFTA up.

There is some modification of NAFTA in the TPP (Trans-Pacific Partnership) (a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,Singapore, the United States and Vietnam.) (https://en.wikipedia.org/wiki/Trans-Pacific_Partnership); however, we are going to trash that before it begins and cede Asia to China.

It is hard for me to see how all this ends well.

* https://ustr.gov/countries-regions/americas/mexico 

** For example, Republicans were all for the President having a line item veto, apparently never thinking that there might be a Democratic President; however President Clinton was elected.  When he used the line item veto, Republicans howled and took it to the Supreme Court that said it was unconstitutional.   Some Republicans still want the line item veto.

THE TRANS PACIFIC PARTNERSHIP - TPP

Anti-trade has become a major political issue in both major political parties in the 2016 election and has forced the candidates for president  to disavow foreign trade.  Without doubt, automobile assemblers in Michigan and some other states have been hurt by NAFTA, even though, over all, there was a net gain in jobs in America.*  The fact that those workers left out of the benefits of free trade did not get any Adjustment Assistance (for what this is, see below) is a failure of government and not of the trade deal.   I suspect that few of those against foreign trade know of this program.  This is the target they should be aiming at and not foreign trade. Below are excerpts from the Guardian and the Washington Post on the Trans Pacific Partnership.  Bolding and underlining have been added for emphasis.

From the Guardian:
But the reality is that, if two sides willingly trade, it can be assumed that both are better off; otherwise, one of them would refuse to trade. So, while trade liberalisation may entail some (smaller) losses for certain groups, these can – and should – be addressed through domestic relocation and assistance schemes, such as America’s Trade Adjustment Assistance programme, [See note on the Trade Assistance Program below]and transition rules for affected industries, firms, and workers.
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At a time when growth is failing to meet expectations almost everywhere, the TPP thus seems like a good move. To be sure, because tariffs in the TPP member countries are already low (with some exceptions, such as Canada’s tariffs on dairy products and Japan’s on beef), the net benefit of eliminating them would be modest (except for a few items that are very sensitive to small price changes). But the TPP is also expected to reduce non-tariff barriers (such as red tape and protection of state enterprises); harmonise policies and procedures; and include dispute-settlement mechanisms.
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That would be a major loss. Allowing existing protectionist trade barriers to remain in place – or worsen – would not only deprive citizens in TPP countries of higher incomes; it would also deal a damaging blow to international cooperation.***

And from the Washington Post:

The security effects of trade agreements can be significant — indeed, one could argue that this was the most important thing about the North American Free Trade Agreement, the deal that has caused DeLong such existential angst. It’s worth remembering that prior to NAFTA, Mexico had a … let’s say “fraught” relationship with the United States. NAFTA made it clear to U.S. policymakers that Mexico was now a key partner and merited treatment as such. Which is why the United States helped Mexico in the mid-1990s and during the 2008 financial crisis. And the lock-in effects of NAFTA also helped Mexico transition from a one-party-dominated state to a true multiparty democracy.****

The Trade Assistance Program The Trade Adjustment Assistance (TAA) Program is a federal program that provides a path for employment growth and opportunity through aid to US workers who have lost their jobs as a result of foreign trade. The TAA program seeks to provide these trade-affected workers with opportunities to obtain the skills, resources, and support they need to become reemployed. The program benefits and services that are available to individual workers are administered by the states through agreements between the Secretary of Labor and each state Governor. Program eligibility, technical assistance, and oversight are provided by the US Department of Labor's Employment and Training Administration's Office of Trade Adjustment Assistance.(https://www.doleta.gov/tradeact/factsheet.cfm)


* http://stopcontinentaldrift.blogspot.com/2016/07/the-american-economy-great-recovery.html
*** https://www.theguardian.com/business/2015/oct/30/tpp-trans-pacific-partnership-the-case-for-trade
**** https://www.washingtonpost.com/posteverything/wp/2015/05/07/the-trans-pacific-partnership-is-about-more-than-trade/

WHAT IS A NATURAL BORN U.S. CITIZEN?

I think a way should be found to litigate what "natural born American" means.  You couldn't do it for Papa Romney who was born in Mexico because he didn't get the Republican nomination.  You have to have "standing" i.e. you have to be injured. Because he didn't win the nomination, no one was injured. Democrats decided not to try McCain who was born in the Panama Canal zone, but he was born in a U.S. military hospital on an American military base to two American parents; however he didn't win the presidency either so it was mute.  At any rate, I would accept McCain as a natural born American.  Goldwater was born in Arizona, but before it became a state, his credentials are suspect also, but he didn't win the presidency either so Democrats had no "standing."   If anyone was injured in these three cases it was the candidates Republican opponents in the nomination process but none have tried to take out a lawsuit over it.

Obama was born in the U.S. to an American mother and an immigrant father* (He is a natural born citizen on two counts and many Republicans (including Trump) refuse to recognize him as a legitimate American born.  Snopes has an interesting discussion as to whether Obma is a legitimate president. The minimum qualifications for the presidency of the United States specified in Article II of the Constitution are few and seemingly straightforward: In order to be President, a person must be a natural-born citizen of the United States, must be at least thirty-five years old, and must have been a resident of the United States for fourteen years.**  Mitt Romney may have claimed he was injured by Obama's victory, but he too didn't take out a suit.  At any rate, I doubt he would have won.
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A few facets of this claim [of being a natural born American] immediately jump out as being far-fetched: first, that a sitting U.S. Senator who has already spent a good deal of time and money securing his party's nomination for the presidency would suddenly be discovered as ineligible due to an obscure provision of U.S. law; and second, that U.S. law would essentially penalize someone who would otherwise qualify for natural-born citizenship status simply because his mother was too young. The fact is, the qualifications listed in the example quoted above are moot because they refer to someone who was born outside the United States. Since Barack Obama was born in Hawaii, they do not apply to him.

The Fourteenth Amendment states that "all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States." Since Hawaii is part of the United States, even if Barack Obama's parents were both non-U.S. citizens who hadn't even set foot in the country until just before he was born, he'd still qualify as a natural-born citizen.

Some have claimed that Barack Obama's Hawaiian birthplace doesn't qualify him as a natural-born citizen because Hawaii was not yet a state when he was born. This claim is wrong: Hawaii was admitted as the 50th state almost two years before Barack Obama's birth there (21 August 1959 for statehood vs. 4 August 1961 for Obama's birthdate).

But Cruz was born in Canada to one American parent (mother) and even carried a Canadian passport and he didn't renounce his Canadian citizenship until he decided to run for president.*  I certainly hope he doesn't win because he scares the H@LL out of me, but his case is questionable.  Constitutional law Prof. Laurence Tribe of Harvard said that as a student, Cruz was an "originalist" who said that the constitution should be interpreted as it was originally intended.***

Here are some other possibilities.  Consider this one, suppose you are born in the U.S. to legal immigrants or even better suppose you are born in the U.S. to illegals.  Technically you are a natural-born American even if your parents are not citizens (see above quote).  Can you imagine Republicans on that one?  Or suppose you are born by C-section.  Is that "natural born?"

I think we ought to get this thing out of the way for good.  It is fine with me if the Supreme Court says born anywhere in the U.S. and/or born to an American citizen.

NOTE ADDED 01-16-2016: Houston attorney Newton Schwartz, who said he isn’t connected to any campaign, filed the lawsuit Thursday in U.S. District Court in Texas. The court is being asked to settle whether Cruz, a Republican senator from Texas, meets the “natural born citizen” requirement in the Constitution. (http://www.marketwatch.com/story/lawsuit-filed-over-whether-ted-cruz-is-a-natural-born-citizen-2016-01-15)

* Until 1934 if your mother was American but the father wasn't, you were not considered a natural born American citizen and had to be naturalized.  In 1934 a law was passed making you a citizen not needing naturalization if it is you mother is an American citizen and your father isn't. So it is only since 1934 that you are considered an American citizen with either parent being an American citizen.
** http://www.snopes.com/politics/obama/citizen.asp
***https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/01/11/professor-laurence-tribe-questions-whether-ted-cruz-is-a-natural-born-citizen/

WHO WORKS THE MOST AND LEAST?

If you work 40hrs/wk for 52 weeks, you will have worked 2080 hrs for the year.  So who works the longest and who works the least in 38 major countries (China not included)?*

Who works the longest? Turns out it is Mexico (2,237 hrs/yr), South Korea (2,i63 hrs/yr), and, surprise, Greece (2.060hrs/yr).  A problem with Greece is that only about 52% of the labor force works.  In contrast 60.5% of the Mexican labor force works and 61.5% (rank 21 out of 38 major countries) of the South Koreans (rank 7).

Then who works the least?  Surprise.  In 38th and last place is Germany at 1,362 hrs/yr, followed by Norway at 1,408 hrs/yr and Netherlands at 1,421 hrs/yr. Germany has about 60.3% of the work force occupied (20th place), Norway at 71.2%(!) (3rd place), and Netherlands at 65.2%  (10th place).  Who beats Norway for work force participation - Sweden at 71.5% (1,607 hrs/yr), and at Number 1 Iceland at 81.4% (1,846 hrs/yr).

The hottest economies were Latvia, Chile and Turkey, all at 4.2% increase in GDP during 2013.  Not surprisingly, Greece had the worst economic performance with a 3.9% decline in GDP, followed by Italy at -1.7% and Portugal at -1.6% (because it is mentioned so much,Spain declined by 1.2%).

Well, where was the U.S. in this?  We ranked 16th in hours-worked/year (1,788 hrs/yr), 9th in GDP gain at 2.2%, and 13th in work force participation (63.2%).

* http://blogs.wsj.com/economics/2015/07/10/are-americans-working-less-than-the-rest-of-the-world/?mod=djemRTE_h

CHILD REFUGEE PROBLEM IN U.S.

The influx of child refugees into the U.S., some accompanied by adults but many not, is creating a number of problems in addition to processing them:

One side effect of the crisis: Easier drug smuggling by cartels. "The arrival of large groups of women and children on the U.S. side of the Rio Grande is pulling agents away from their patrol stations elsewhere along the border, creating gaps in coverage that the traffickers can exploit, according to Chris Cabrera, the Border Patrol union representative here. The smugglers wait on the southern banks of the Rio Grande as migrant groups as large as 250 wade across at dusk and turn themselves in to the Border Patrol, he said. Then groups of single men proceed to cross under cover of darkness....The most recent statistics...show that narcotics seizures have fallen across the entire border with Mexico this year, with the drop being larger in Texas than the average."Joshua Partlow and Nick Miroff" in The Washington Post.  (http://webmailb.juno.com/webmail/new/5?userinfo=8b254f2f4f26b1dc56d8fe41da329a7b&count=1403622068&cf=SP2&randid=1822163293)

We should remember that there was a bill passed by the Senate and submitted to the House of Representatives but never acted upon that contained provision for 19,000 new border agents.  The inability of the House to act on anything but try to repeal Obamacare is causing problems I'm sure that opponents of immigration reform don't like.  Why can't they at least try to see if they can get through the 19,000 new agents?  Among other things it is a good lower paid jobs program. (http://stopcontinentaldrift.blogspot.com/2013/07/complete-danged-fence.html)