McCain’s Valentine’s Day Message to Republicans

McCain to get Bush 41 endorsement

Associated Press

By LIZ SIDOTI – 1 hour ago

WASHINGTON (AP) — Former President George H.W. Bush will endorse John McCain in Texas on Monday, Republican officials said.

The endorsement represents another step in McCain’s tightening grip on the Republican presidential nomination. The officials spoke Friday on condition of anonymity because the formal announcement is next week.

Since he took a commanding lead in the delegate count, the Arizona senator has been working to solidify his support from the Republican base. On Thursday, he picked up the endorsement of his one-time chief rival, former Massachusetts Gov. Mitt Romney. The endorsement of the former president and patriarch of the Bush family also could help with party stalwarts.

His son, the current President Bush, has not yet formally endorsed McCain because former Arkansas Gov. Mike Huckabee in still in the race, but he strongly signaled his support last weekend in a cable television interview.

The president told “Fox News Sunday” that McCain is a “true conservative” but may have to work harder to convince other conservatives that he is one of their own.

McCain “is very strong on national defense,” Bush said in the television interview. “He is tough fiscally. He believes the tax cuts ought to be permanent. He is pro-life. His principles are sound and solid as far as I’m concerned.”

When asked about criticism of McCain by conservative commentators Rush Limbaugh and Ann Coulter, the president said, “I think that if John is the nominee, he has got some convincing to do to convince people that he is a solid conservative and I’ll be glad to help him if he is the nominee.”

Bush said some of the criticism of McCain was the result of “probably, some personal animosity toward me. You can’t please all the people all the time.”

Poll: Obama takes lead in Texas

American Research Group Poll:

February 15, 2008 - Texas Primary Preferences

Democrats	TX
Clinton	42%
Obama	48%
Someone else	3%
Undecided	7%

Hillary Clinton leads Barack Obama among self-described Democrats 47% to 42%. Obama leads Clinton among self-described independents and Republicans 24% to 71%. Obama leads among men 55% to 29% (47% of likely Democratic primary voters) and Clinton leads among women 54% to 42%. Clinton leads Obama among white voters 51% to 40% (53% of likely Democratic primary voters), Obama leads Clinton among African American voters 76% to 17% (22% of likely Democratic primary voters), and Clinton leads Obama among Latino voters 44% to 42%.

22% of likely Democratic primary voters say they would never vote for Hillary Clinton in the Democratic primary and 20% of likely Democratic primary voters say they would never vote for Barack Obama in the primary. 30% of men say they would never vote for Clinton in the primary.

For details, click on the R or D for each state in the column on the left under 2008 Presidential Polls.

 

Republicans	TX
Huckabee	36%
McCain	42%
Paul	11%
Someone else	2%
Undecided	9%

John McCain is at 41% among self-described Republicans and Mike Huckabee is at 40%. Among self-described independents and Democrats, McCain is at 49%, Ron Paul is at 23%, and Huckabee is at 17%. Huckabee and McCain are tied at 36% each among men (53% of likely Republican primary voters) and McCain leads Huckabee among women 48% to 37%.

For details, click on the R or D for each state in the column on the left under 2008 Presidential Polls.

Putin on Hillary: A head of state should have a head

Politico.com reports:

Putin vs. Clinton

When Hillary Clinton said, way back in New Hampshire, that Vladimir Putin “doesn’t have a soul,” I figured that would be the sort of thing the Russian wouldn’t be pleased about. But when I called the foreign ministry the next day for comment, it was Orthodox Christmas, and I let it slide.

He was asked about the remark at his press conference yesterday, however, and indeed wasn’t pleased.

The former KGB lieutenant colonel appeared to lash out at U.S. Sen. Hillary Clinton — a leading Democratic candidate for president — when one reporter quoted her as saying that former KGB officers have no soul:

“At a minimum, a head of state should have a head,” Putin said.

Jobless Claims Fell in January

Feb. 14 (Bloomberg) — The number of Americans filing first-time claims for unemployment benefits fell for a second week, while staying in a range consistent with a slowing job market. Initial jobless claims decreased by 9,000 to 348,000 in the week ended Feb. 9, from 357,000 a week earlier, the Labor Department said today in Washington. The four-week moving average of claims, a less volatile measure, rose to the highest level since October 2005.

Homebuilders, lenders, carmakers and other manufacturers are stepping up firings, threatening to slow consumer spending that makes up the largest part of the economy. The U.S. in January lost jobs for the first time in four years, increasing the odds that the economy’s expansion will end.

“The numbers are capturing some loosening in the labor market,” said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, who forecast 350,000 claims. “It confirms the economy is going through a slowing, but whether we are going into a sharper downturn remains to be seen.”

Economists had forecast claims would fall to 347,000 from the previously reported 356,000 for the week ended Feb. 9, according to the median of 40 forecasts in a Bloomberg News survey. Estimates ranged from 330,000 to 392,000.

Third Gain

The four-week moving average of claims increased for a third straight week, to 347,250 from 335,250.

The number of people staying on benefit rolls dropped to 2.761 million in the week ended Feb. 2, according to today’s report, from 2.77 million.

The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, stayed at 2.1 percent.

The U.S. lost 17,000 jobs last month, the first decline since August 2003, and service industries shrank more quickly than any time since the last recession, reports showed in the past two weeks.

The Federal Reserve cut its key rate by 1.25 percentage point during two meetings over nine days in January, the fastest rate reduction since the federal funds rate became the main policy tool around 1990. Citing “some softening in labor markets” in its Jan. 30 statement, the Fed said it would act “as needed” to address downside risks to growth.

In today’s report, 30 states and territories reported an increase in new claims, 22 had a decline and one was unchanged. This data is also reported with a one-week lag.

Rising Trend

Claims tend to rise as job creation slows, and filings for jobless benefits have been creeping higher. Weekly claims have averaged 335,000 so far this year, compared with 322,200 for all of last year and 313,000 in 2006.

Carmakers are reducing staff along with home builders, mortgage lenders and other companies impacted by the worst housing recession in a quarter century.

General Motors Corp. is increasing buyout offers to its most-senior U.S. workers to encourage more of its 74,000 union employees to leave and make way for replacements who can be paid half as much, the Detroit-based automaker said Feb. 12.

The buyouts are part of Chief Executive Officer Rick Wagoner’s plan to cut U.S. labor costs in half and trim another $5 billion from expenses by 2011.

Morgan Stanley, the second-biggest U.S. securities firm, will eliminate 1,000 jobs by scaling back its U.S. residential mortgage business and closing the Advantage Home Loans unit in the U.K., the New York-based company said yesterday in a statement.

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

The Government is the Problem

Forbes Commentary
To Stimulate The Economy, Liberate It
Yaron Brook

While some in Washington are quibbling about the details of the economic stimulus package, nearly everyone agrees with its basic idea: that our ailing economy needs Uncle Sam to play doctor and hand out some $150 billion in consumer spending money. But this sort of government intervention is not the cure for our economic troubles. It is the cause.

To understand why, we must first recognize that the key economic activity that causes growth is not consumer spending but production.

Economic growth means an increase in the amount of wealth that exists in a country–and all wealth must be produced. Houses, health care, air-conditioning and transportation do not come ready-made from nature. We have them only to the extent that individuals and businesses bring them into existence.

The focus of today’s stimulus packages on consumer spending is therefore completely backward. Consumption is a consequence of production. This fact is ignored by the Bush plan, which attempts to achieve prosperity through $100 billion in deficit-spending. Though this might bring the appearance of prosperity, in the same way that an unemployed man appears prosperous if he goes on a shopping spree with his credit cards, the reality will be the opposite.

The fact is that consumer spending is slowing because production is slowing. There have been massive misallocations of capital–witness, for instance, the housing market–which are now coming home to roost. The resulting financial losses, economic uncertainty and more tenuous job market are all contributing to the American consumer’s inability or unwillingness to spend.

If the Bush spending plan can’t productively stimulate the economy, what government economic plan can? None. Production does not need stimulation from the government; it needs liberation from the government . What a productive, dynamic economy requires of a government is that it restrict itself to protecting property rights from force and fraud, and refrain from interfering in free production and trade.

Now it is of course popular practice to blame economic problems, not on government intervention but on the free market. But observe that all of the most prominent problems today–problems with housing, financial markets, health care, oil–involve some of the least-free sectors of our economy, those with the most government intervention.

Consider the extent of government culpability in the current subprime meltdown. There is the Federal Reserve, which wrought havoc with the markets by manipulating interest rates, first setting them below the rate of inflation and then quintupling them.

The Fed’s initial policy convinced subprime borrowers that if they took out mortgages tied to Fed rates, they could afford homes that they ordinarily couldn’t. The Fed’s artificially low rates fueled a borrowing spree and housing bubble that were instrumental in the subprime meltdown. Then there is the network of entities backed by the government, like Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), which were big champions of subprime lending and big propagandists for the idea that everyone needs to own a home to live the American Dream. Finally, there is the government’s long-standing policy of assuring large financial institutions that they are “too big to fail,” which encourages short-range, high-risk investments.

Given all these influences, is it any surprise that so many people with poor credit bought expensive homes, that so many financial institutions lent them the money and that all hell broke loose once the unsustainable could no longer be sustained? In an unhampered market, private lenders and borrowers don’t behave this way.

And this is just the tip of the iceberg of how our government today stifles economic productivity through its gargantuan regulatory and welfare state. Try to project the impact on productive businesses of the vast burden of federal and state regulations–regulations that render off-limits a huge range of productive endeavors.

For example: If a fast-growing software company needs to quickly import a dozen eager and talented Indian programmers, it can’t, thanks to our immigration laws. If a company needs to fire a group of incompetent employees to make its workforce more productive, it risks a million-dollar lawsuit. If a developer seeks to offer low-cost housing in the vast, unused tracts of land in expensive California districts, too bad–that would go against environmentalist “open space” laws.

If a health insurance company tries to win more customers with deductibles, coverage and limits that will make insurance far more affordable, the idea is sunk; states dictate the terms of health insurance contracts. If a group of venture capitalists want to invest in new nuclear power, to supply cheap energy to a new market, it cannot–environmental regulations have prevented any new plants for decades, despite the technology’s stellar safety record.

If the board of a struggling public company wants to hire a top-flight CEO to turn its company around, its job is much harder (and more expensive) thanks to the CEO-repelling climate created by Sarbanes-Oxley, whose vague laws and new criminal penalties make managing a firm much riskier. Even the simple project of building a larger facility to house a growing business can easily be held up for six months, while the owner must glad-hand zoning and permit bureaucrats.

And this is just the smallest indication of the regulatory strangulation that American businesses suffer. Imagine the economic stimulus, the explosion of productivity, that would occur if these regulatory nooses were removed.

For that matter, consider how our government wreaks economic destruction by taxing the wealth of the productive and diverting it unproductively. Americans pay trillions of dollars in taxes annually–the vast majority of which is not for the agencies that protect our rights (police, military and courts), but for regulations and for entitlement programs that transfer wealth from productive individuals who have earned it to those who haven’t.

Over the years, these programs have prevented individuals from investing trillions of dollars in new ventures. It took a million dollars to start Google (nasdaq: GOOG - news - people ); if the government hadn’t drained us of millions of dollars, picture what other amazing technologies, products and services we would be enjoying today.

The economic stimulus that would result from drastically cutting government regulation and spending (and thus taxation) is almost unimaginable.

Faced with recession, therefore, we should be asking not, “What can the government do to stimulate the economy?” but “What can it stop doing?” Washington should be debating which disastrous programs to phase out first: Sarbanes-Oxley, or the constellation of agencies that distort the housing market, like Fannie Mae and Freddie Mac. Politicians should be committing to drastically cutting government spending, so that Americans can have real and lasting tax relief.

What our economy needs is not a stimulation package, but a liberation package.

Yaron Brook is managing director of BH Equity Research and executive director of the Ayn Rand Institute.

Selective immigration policy: will it work?

Timothy Hatton
14 February 2008

Europe is moving towards immigration policies that favour the acceptance of highly skilled applicants. This column summarises research showing that such policies may have some effect but cautions that there are limits to the power of selectivity.
It is widely believed that Europe admits too many low-skilled and too few high-skilled immigrants. For more than a decade, immigration researchers have championed the idea that the countries of the EU should adopt the kind of immigration points system for which Australia and Canada are famous. Britain and France have already taken steps in that direction. And last October the European Commission entered the fray when it unveiled a Blue Card scheme, along the lines of the US Green Card, with the aim of attracting highly skilled immigrants.¹

Building skill selection into immigration policies seems to be an idea whose time has come, as I noted in my July 2007 Vox column explaining the trend. The question now is: will it work? Will skill- selective immigration policies improve the skills of immigrants as much as European policy makers hope and expect?

Skilled migrants

The Table below summarises a key piece of evidence in favour of selective immigration policies. The first column of figures shows, for a number of OECD countries, the percentage of the immigrant stock in 2001 that was educated to tertiary level. Nearly 40 percent of Australian and Canadian immigrants are tertiary educated while continental European countries languish at around 20 percent or less. Particularly telling to some observers is the comparison between Canada, which has a points system, and its neighbour the United States, which does not.

Host Country	Percent of foreign-born tertiary educated	Adjusted percent of foreign- born tertiary educated
Australia	37.9	33.1
Canada	38.0	32.2
United States	25.9	22.8
Austria	11.3	20.0
Belgium	17.4	24.2
Germany	14.9	17.4
Denmark	19.4	27.6
France	18.1	18.7
Great Britain	30.5	33.0
Italy	12.2	25.9
Netherlands	17.6	20.6
Spain	21.8	24.8
Sweden	22.3	26.8

Source: Belot and Hatton (2008) Table 1.

But things are not quite that simple. For example, 30 percent of US immigrants are Mexicans with low average education, while Canada has relatively few Mexicans. The composition of immigrants by source may itself be influenced by selective policy, but for the most part, this is due to location (as with Mexicans in the US) or colonial heritage (as with Indians and Pakistanis in Britain).

The second column of the Table applies the proportion of high-educated emigrants to the OECD as a whole from each source country to the weight of that country in each destination’s immigration. If the figure in the first column exceeds the figure in the second column then the destination country selects relatively high-educated immigrants given its source country composition. Notice that the gap is positive for Canada and Australia and negative for the leading European countries (but not the US). Policy might be one reason why some countries select more highly skilled immigrants. For example, Abdurrahman Aydemir (2003) finds that, for migration from the United States to Canada, the highly educated are less likely to apply but more likely to be accepted through Canada’s point system to such a degree that the skill-selective policy outweighs the incentive effects that would otherwise favour low-skilled migration. But there are other factors that may also induce high-skilled migration.

What attracts highly skilled immigrants?

In a recent paper, Michéle Belot and I modeled the economic and non- economic forces that drive immigrant selection by education (Belot and Hatton, 2008). We found that economic incentives work: the higher the return to skill in the destination and the lower the return to skill in the source country, the more highly educated the migration stream. We also found that the poorer the country, the more educated are its emigrants relative to the population from which they are drawn. Poverty seems to trump policy in selecting highly educated immigrants from the third world.

Our analysis also revealed that immigrants are more positively selected by education the greater the distance between the source and the destination. And, not surprisingly, past colonial links are associated with negative selection from the source country. Curiously, having a common official or primary language is associated with positive selection while linguistic proximity (between two different languages) is associated with negative selection.

Once we allow for the influence of economic incentives, poverty, cultural and historic links, the remaining differences in immigrant selection between destination countries should reflect differences in policy. But these ‘policy residuals’ do not correlate well with what we know about immigration policies in different countries. They seem instead to reflect past trends and migration choices that are not easily captured by aggregate variables. The very fact that policy effects are obscured in such cross-country comparisons suggests that they cannot be very strong.

The power of policy

Perhaps selective immigration policy is simply not worth the candle. Bur before we jump to that conclusion we need better evidence on the effects of changes in policy. A good example is the change in the Australian points system in the late 1990s that gave even greater emphasis than before to educational qualifications, language ability and recent labour market experience. The evidence from this policy experiment indicates that the reform perceptibly improved the skills of immigrants. And as a result, labour market participation rates were higher and unemployment rates were lower for immigrants admitted after the reform (see Cobb-Clark and Khoo, 2006).

But beefing up the skills criteria for admission will typically have modest effects, as most of those entering through employment streams are well qualified anyway. More importantly, employment-stream immigrants (those who would be subject to a skills test) are only a small proportion of all immigrants. In Europe (as in the US), the overwhelming majority of immigrants come through family reunification or as refugees. For most countries a radical shift towards employment-based immigrants is limited by international treaty obligations towards protecting families and providing sanctuary for refugees. So raising the share of employment-based immigrants up to the Canadian level (about half) would imply significant increase in total immigration – something that would make policy makers think twice.

The bottom line is that adopting more skill selective immigration criteria (and applying them to a larger share of immigrants) is a move in the right direction. It is likely to lead to some improvement in the skills of immigrants and in their labour market performance. Over time it might also take some of the heat out of the immigration debate, as it has in Australia and Canada, where immigration is less controversial despite the fact that immigrants are a much larger share of the population. But it will not transform the immigration landscape, nor will it happen overnight. So let us not expect too much too soon.

References

Aydemir, A. B. (2003), “Are Immigrants Positively or Negatively Selected? The Role of Immigrant Selection Criteria and Self-Selection,” Statistics Canada: Unpublished paper
Belot, M. V. K. and Hatton, T. J (2008), “Immigrant Selection in the OECD,” CEPR Discussion Paper No. 6675.
Cobb Clark, D. A. and Khoo, S-E. (eds.) (2006), Public Policy and Immigrant Settlement, Cheltenham: Edward Elgar.

Wow: NY Times picks up Phoenix human smuggling story

February 15, 2008

Major Immigrant Smuggling Ring Is Broken in Phoenix, Police Say

By RANDAL C. ARCHIBOLD

PHOENIX — In a case highlighting this city’s prominent role in the smuggling of illegal immigrants across the border, the authorities conducted a series of raids on Thursday, arresting what they said were the leaders of a ring that helped transport hundreds of people to way stations in Phoenix.

In some ways, it was just a typical day here, where the police regularly discover houses with dozens of people held by smugglers until they can pay their passage from Mexico. In a separate operation, Immigration and Customs Enforcement officials and the Maricopa County sheriff here announced the arrests of more than 100 people suspected of being in the country illegally who were on probation for various crimes.

But the raids on Thursday morning, by a task force of state, local and federal officers, provided a glimpse behind what the authorities described as one of the more elaborate operations that bring thousands of people across the border in this state, which has more illegal crossings than any other.

At dawn, officers swarmed houses, mostly in western Phoenix, seizing ledgers, money, weaponry and people suspected of involvement in a major, lucrative cell that controlled the transportation of people from a border town, Naco, to Phoenix.

The authorities made 20 arrests, including those of two Cubans accused of directing the operation. They also detained 210 illegal immigrants and discovered 13 so-called drop houses that were way stations for smuggled immigrants, the police said. In all, the authorities planned to arrest about 75 people, they said.

Oddities abounded along the way.

At the house of one man described as a ringleader, the police found several hundred roosters bred and grown for his cockfighting hobby. Another housed a shrine with a life-size statue of Jesus and a pile of $1 and $5 bills and burning candles at his feet, apparently offerings for good fortune.

In another house, a large family photo of a suspect showed him holding a baby, the hand gripping the girl displaying four large, ostentatious rings. An antique four-poster bed filled a small bedroom.

“We often see ‘Scarface’ or ‘Godfather’ posters,” said Lt. Vince Piano of the Phoenix Police Department, a lead investigator. “That’s the mentality.”

Roger Vanderpool, the director of the Arizona Department of Public Safety, said toppling organizations like the one on Thursday was central to disrupting smuggling.

“It’s organized crime,” Mr. Vanderpool said. “Going after the head of the snake, cutting it off, is the effective way of dealing with organized crime.”

Several years ago, as border crackdowns in California and Texas funneled illegal immigrant traffic into Arizona, Phoenix supplanted Los Angeles as the prime transshipment point in the Southwest for human smuggling, federal investigators say.

The role has brought increased violence, including assaults and occasionally the killing of people unable to make full payment for their crossing, shootouts among smugglers stealing one another’s human cargo and kidnapping.

There has been a surge in the discovery of drop houses, where illegal immigrants are kept while waiting to be transported to destinations across the country, aided by an extensive freeway network here not heavily guarded by a Border Patrol focused to the south.

Where drop houses were rarely found a decade or so ago, nearly 100 were discovered last year in Phoenix and several so far this year, including one on Thursday afternoon with 35 people. This suggests that despite reports of immigrants’ leaving Arizona under pressure from the economic downturn and a crackdown by the authorities, others continue to arrive.

The group arrested on Thursday morning, the authorities said, primarily drove people who had just crossed the border at Naco to Phoenix, nearly 200 miles away. They often had their own security escort to ward off bandits known as bajadores.

The suspects were said to have worked with a smuggling ring that is based in Naco, Mexico.

The two men described as ringleaders, Jose Luis Suarez-Lemus of Peoria, Ariz., and Roel Ayala-Fernandez of Phoenix, were charged by the state attorney general’s office with several crimes, including human smuggling, money laundering, conspiracy and participating in a criminal syndicate. They may also face federal charges.

The immigrants, who were charged about $2,500 for their transit, were smuggled across the border through the San Pedro River Riparian National Conservation Area, a remote desert site, the authorities said.

The group typically transported two to four loads of six to 10 people a day mainly using rental cars, perhaps several hundred people in all, the authorities believe. The organization made as much as $130,000 a week.

Tancredo: Mexican President Advocated Illegal Immigration

Tancredo says Mexican president advocates illegal immigration

Associated Press - February 15, 2008

DENVER (AP) - Republican congressman and former presidential candidate Tom Tancredo is accusing visiting Mexican President Felipe Calderon of meddling in U.S. affairs, telling him he should focus on his country’s own problems instead of “encouraging illegal immigration.”

Tancredo made his comments yesterday in a letter sent to the Mexican Embassy, responding to remarks that Calderon made to the California Legislature on Wednesday.

Calderon said Mexico and the United States “will never find prosperity by closing their doors.”

Tancredo says he appreciates Calderon’s concern for joint prosperity, but wrote that Mexico’s economic and social ills can’t be resolved by exporting its citizens to the U.S.

Tancredo ran on an anti-illegal immigration platform before abandoning his campaign for the GOP presidential nomination.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.