Private Sponsorship of Immigrants Is a Viable Alternative

Immigration is a highly contentious topic in modern societies, with almost all of the different regimes across the OECD showing failures on some measure. As populist responses increase to rising levels of immigration, a policy solution must exist that assuages the concerns of those who have gripes with the current system in order to maintain political stability. Amongst the myriad of potential immigration policies, the one that stands out with the most suitable incentives is that of private sponsorship.
Private sponsorship asks that either an individual or an organisation from the host country vouches for the potential immigrant before they arrive. They bear the risks associated with immigration. For example, if the individual commits a crime, the sponsor would have to pay the costs of judicial process and deportation. The added benefit of allowing private organisations or individuals to sponsor immigrants is that the government no longer needs to pry into personal affairs, asking why someone is coming or why someone is a sponsor. It would simply be assumed that by bearing risk, the sponsoring party is making a rational decision. This incentive results from the skin in the game principle, that those who bear the risk of an action are more likely to make better decisions.
Private sponsorship regimes prove superior to current systems by removing the bureaucratic issues currently associated with immigration. Among these problems is the arbitrariness of certain features, such as quotas or occupational restrictions, which change over political cycles at great costs to current and potential immigrants. Another problem is the application of Goodhart’s Law, the principle that when a measure becomes a target, it ceases to be a good measure. Points-based, and other skills or aptitude-based immigration systems all succumb to the fact that by using a quantitative measure that correlates to success as an immigrant, the relationship breaks down once the rules of the system are known. These together lead to inefficiencies that prevent adequate coping with high volume of movement, and post-migration inefficiencies that pose threats to the mental health and social integration of migrants.

This post was published at Ludwig von Mises Institute on December 27, 2017.

26/12/17: U.S. Wars Budgets: More Lessons Never Learned

An interesting report on the official accounts for war-related spending in the U. S. is available here: Which is, of course, a massive under-estimate of the full cost of 2001-2017 wars to the U. S. taxpayers.
It is worth remembering that war-related expenditures are outside discretionary budgetary allocations (follow links here: And you can read more here: The problem, as I repeatedly pointed out, is that no one can tell us what exactly – aside from misery, failed states, collapsed economies, piles of dead bodies etc – did these expenditures achieve, or for that matter what did all the adventurous entanglements the U. S. got into in recent year deliver? In Afghanistan, Libya, Yemen and Syria, in Pakistan and Sudan, in Ukraine, in Somalia and Egypt. The sole bright spot on the U. S. ‘policy horizon’ is Kurdistan. But the problem is, the U. S. has been quietly undermining its main ally in the Syria-Iraq-Turkey sub-region in recent years. In South China Seas, Beijing is fully running the show, as multi-billion U. S. hardware bobbles up and down the waves to no effect. In North Korea, a villain with a bucket of uranium is in charge, and Iran is standing strong. In its historical backyard of Latin America, the U. S. is now confronting growing Chinese influence, while losing allies.

This post was published at True Economics on Tuesday, December 26, 2017.

Truly Bizarre Treasury Data

I’m not sure what’s going on here, but this much I do know — nobody is talking about this in the media, and they should be.
The latest MTS (Monthly Treasury Statement) has some interesting data that I cannot explain when it comes to Medicare and Medicaid.
Specifically, it appears that Medicare and Medicaid spending is down materially in the first couple of months of the year (by about 5%). This is chimera, however, and the internals are really troubling.
First, the funds given to the states for Medicaid are up by 4.55%. That’s bad. Worse, by a lot, are the SCHIP (children’s health fund) payments, which I’ve flagged repeatedly — they’re up an outrageous 13.9% over comparable year period.

This post was published at Market-Ticker on 2017-12-26.

A Christmas Thought

First, any politician who spouts anything about Christmas in a religious context needs to be the recipient of a pile of horse**** in a gift box. Oh wait, someone already did that with our Treasury Secretary. It’s a good start; long live the First Amendment.
Thus my first Christmas wish is that the rest of the political class get enough of these that they have to be delivered by front-end loaders. And asteroids.
My second is that the people of this nation wake up from their toper, but I know better. After all one need merely see “what matters” this time of year on display in every town in the country to figure that out. Amish excepted, of course. Speaking of which I have a special Christmas wish for Wood County, WI: May everyone in the county government get an asteroid down their chimney of sufficient size to level their house.

This post was published at Market-Ticker on 2017-12-25.

Trump Is A Swamp Creature

You need no further proof than this:
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Trump has now publicly acknowledged that McCabe violated several federal laws, not the least of which is the Hatch Act. Yet he now proposes to allow McCabe to retire next year, keeping his federal pension and benefits.
What he should do is have Sessions immediately indict him – after firing McCabe for cause, which terminates his right to any sort of federal pension or benefit. If McCabe wants to sue for his pension let him, because that will force into the public record all of the evidence on exactly what he did as he will have to defend the claim that his firing “for cause” wasn’t actually for cause.

This post was published at Market-Ticker on 2017-12-24.

The Hype of ‘Net Neutrality’

While many people make it sound like the end of the world is approaching with the Federal Communications Commission (FCC) vote to repeal the Obama-era power grab to regulate the internet, the reality is not much is likely to change. The FCC repealed the Obama act in a 3-2 vote, but what is not being explained is they have simply restored the way everything existed before 2015. Obama administration sought to regulate internet service providers (ISPs) which were previously covered under the Telecommunications Act of 1934.

This post was published at Armstrong Economics on Dec 24, 2017.

Next Phase in Forcing Biometric Tracking on Consumers

Ironically, banks in Mexico lead the way. In 2018, banks in Mexico will face new regulations that will oblige them to collect biometric data (finger prints and iris scans) on all of their customers. Whenever a customer asks for a new home or car loan, cashes in a paycheck, applies for a credit card or opens a new savings account, the bank in question will have to request the customer’s digital fingerprints and then match those fingerprints with data against information in the database of the National Electoral Institute.
Foreign-owned subsidiaries of global banks like BBVA and Citi are thrilled with the initiative arguing that it will help them combat identity theft. Most high street lenders in Mexico have already agreed to help build a single biometric database, says Marcos Martnez, president of Mexico’s Banking Association (ABM).
The ultimate goal is to develop a unique identification system that will work alongside the government’s national ID scheme, which is in the final stages of development. According to the former Secretary of Finance and Public Credit (and now presidential candidate for the governing PRI party), Jos Antonio Meade, by the summer of 2018 all Mexicans will have a single biometric identification number.

This post was published at Wolf Street by Don Quijones ‘ Dec 23, 2017.

23/12/17: Bloomberg View on Asymmetric Military Budgets: Russia v U.S.

I have written before about asymmetric conflicts and power balances in the context, among other bilateral comparatives, the U. S.-Russia military spending: And the latest budgetary appropriations from the U. S. for 2018 are suggesting that Washington has a serious problem learning any lessons – whether these are lessons from being punched around repeatedly in the Afghanistan, or being derailed in Iraq, being made irrelevant in Syria and so on.

This post was published at True Economics on Saturday, December 23, 2017.

What Will Drive The Next Oil Price Crash?

Authored by Tsvetana Paraskova via OilPrice.com,
As we roll into 2018, analysts and investors are more optimistic that the oil market will further tighten next year and support higher oil prices, but rising U. S. shale production will likely cap any significant price gains.
On the demand side, expectations are that global economic growth will support solid oil demand growth.
On the supply side, Venezuela’s dire situation, possible new sanctions on Iran, and increased tension in the Middle East mostly with the Saudi-Iran issues and the Iraq-Kurdistan standoff may take more barrels off the market than OPEC and friends plan, and send geopolitical jitters through the oil market.

This post was published at Zero Hedge on Dec 22, 2017.

Escobar: Vladimir Putin Takes Spotlight As Eurasia Connector

Authored by Pepe Escobar via The Asia Times,
At his trademark annual year-end press conference in Moscow, Russian President Vladimir Putin once again let drop selected foreign-policy nuggets essential to understanding what lies ahead on the turbulent Eurasian geopolitical chessboard.
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By now it’s well known that Putin will run again in the presidential elections scheduled for March 18 (‘it will be self-nomination’ and ‘I hope for the overall support from the public’). The Man in Charge might as well continue to be in charge. So it’s always enlightening to bring down the (spin) noise: sit back, relax, and just listen.
On President Trump: ‘I am on first-name terms with Trump; yes, we would probably use the familiar ‘you.’ I hope he’ll get the opportunity to improve relations with Russia. Look at the markets, how they have grown. This means that investors trust the US economy, this means they trust what he [Donald Trump] is doing in this field.’

This post was published at Zero Hedge on Dec 20, 2017.

A Review Of The Most Disturbing Events Of 2017

With events like the British vote to leave the EU, the peak of the mass Muslim immigration into Europe, the “surprise” (for some people) upset win of Donald Trump in the U. S. presidential election and the subsequent leftist riots, it may be difficult to top the absolute geopolitical and social mayhem of 2016. However, when examining recent history and ongoing trends, it’s important to understand that these shifts are often cumulative; they tend to build upon each other like sheets of ice on a mountainside, storing up energy for a great avalanche.
We witnessed what I would consider a moderate build up and “avalanche” in the economic world in 2008, and of course this merely set the stage for an evolving form of fiscal collapse for the ten years that followed. This time around though, that ongoing collapse will surface in the form of currency crisis and treasury bond crisis, as well as all the international tensions and conflicts that come with these financial atom bombs. If I was to define the year of 2017 and its place in the grand scheme, I would say it represents the moment that the path became obvious for the next decade, at least for those that have been paying attention.
There have been some incredible revelations this year, things that will change the face of global economics and international relations, but most them have gone unnoticed in the mainstream overall. Here are just a few of the earth shattering events that will lead to unprecedented instability in 2018, probably through to the year 2030.

This post was published at Alt-Market on Wednesday, 20 December 2017.

In Legalizing Marijuana, Uruguay Trips over the Dollar, US Laws, and Global Banks

It’s far from easy to do business without the financial support of any bank. But Uruguay, in its efforts to create a legal, regulated market for the recreational use of marijuana, is trying. In August it was revealed that some of the pharmacies that had agreed to sell the two varieties of cannabis distributed by the Uruguayan State had received threats from their respective banks, including the local subsidiary of Spain’s Santander, that they would close their accounts unless they stopped participating in the state-controlled sales.
To fill the funding void, the state-owned lender Banco Repblica (BROU) announced that it would provide credit to the pharmacies involved in the scheme as well as producers and clubs. But within days, it too was given a stark ultimatum, this time from two of Wall Street’s biggest hitters, Bank of America and Citi: Either it stopped providing financing for Uruguay’s licensed marijuana producers and vendors or it’s dollar operations could be at risk – a very serious threat in a country where US dollars are used so widely that they can even be withdrawn from ATMs.
Why Drug Lords Love the Patriot Act
The main reason why this is all happening is that under the US Patriot Act, handling money from marijuana is illegal and violates measures to control money laundering and terrorist acts. Despite the fact that US regulators have made it clear that banks will not be prosecuted for providing services to businesses that are lawfully selling cannabis in states where pot has been legalized for recreational use, major banks have shied away from the expanding industry, deciding that the burdens and risks of doing business with marijuana sellers, both within and beyond U. S. borders, are not worth the bother.

This post was published at Wolf Street on Dec 18, 2017.

A Handy Summary of Incongruities About 9/11

Lew Rockwell ran a detailed article on these incongruities. It originally appeared on the Collective Evolution site.
The article makes a claim that half of Americans don’t believe the official story. This is certainly good news. It indicates that people are not so easily suckered. But something in the same percentage range applies also to Kennedy’s assassination. Within a year of the assassination, Mark Lane wrote his book debunking the Warren Commission report, and there have been hundreds of books since then that have been equally skeptical. This is not something new.
In contrast, the percentage of Americans who believe Franklin Roosevelt’s version of Pearl Harbor, which he delivered to Congress in his speech on December 8, 1941, remains high. Revisionist historians began going to work on the official story as early as 1946. But, even today, American history textbooks give no indication that the official story has always had gigantic holes in it. These holes have not been successfully patched. They have simply been ignored. Universities don’t teach anything except the official party line. In this respect, there has been an extraordinarily effective barrier to the truth regarding Pearl Harbor from the day after it took place.
The article on 9/11 contains lots of valuable information on the famous event. There are lots of such summaries online. There are lots of skeptical videos. A cursory examination of half a dozen of these exposs leads the typical person to conclude that there is no way that the official story that the government has pushed could possibly be true. The problem is this: there is nothing like a coherent alternative to the official narrative. We are back to the age-old problem: you can’t beat something with nothing.
THE VIETNAM WAR
There has been a fundamental change in public opinion ever since the Vietnam War. When young people began to turn against Lyndon Johnson when they began to get drafted to fight in that war, there was a loss of confidence in the federal government. The victims of conscription began to figure out that the official justifications of the war were illegitimate. This made them question the narrative regarding the 1964 Gulf of Tonkin and the supposed attack on American ships by the North Vietnamese. We know now that the story really was fake news.

This post was published at Gary North on December 18, 2017.

Trump Transition Team Emails: Here’s Why Washington Insiders Are Freaking Out

On Saturday, the news broke that Kory Langhofer, counsel to Donald Trump’s transition team known as Trump for America, Inc. (TFA), had sent a 7-page letter to House and Senate Committees stating that Special Counsel Robert Mueller’s office had improperly received ‘tens of thousands of emails’ from the General Services Administration (GSA), a Federal agency, that had been sent or received by members of Trump’s transition team.
Both the GSA and Mueller’s spokesmen denied that there had been anything improper about the turnover of the emails.
Peter Carr, a spokesman for Mueller, said that ‘When we have obtained emails in the course of our ongoing criminal investigation, we have secured either the account owner’s consent or appropriate criminal process.’
Lenny Loewentritt, a veteran lawyer for the GSA told Buzzfeed that transition team members were told by the GSA that materials ‘would not be held back in any law enforcement’ actions and were also informed that there were a series of agreements between the GSA and the transition team that there would be ‘no expectation of privacy’ because there could be monitoring and auditing of communication devices provided by the government.

This post was published at Wall Street On Parade on December 18, 2017.

You Milked It, You Own It

This is the sort of horse**** that really pisses me off.
Like everyone in my generation, I am finding it increasingly difficult not to be scared about the future and angry about the past.
I am 35 years old – the oldest millennial, the first millennial – and for a decade now, I’ve been waiting for adulthood to kick in. My rent consumes nearly half my income, I haven’t had a steady job since Pluto was a planet and my savings are dwindling faster than the ice caps the baby boomers melted.
So let me see if I get this right. You’re 35, which means you were of voting age when Obamacare was passed. You went to college after the scam of ramping college prices, driven by student loans, went into place. In other words you got to vote for the majority of that **** too.
But generalizations about millennials, like those about any other arbitrarily defined group of 75 million people, fall apart under the slightest scrutiny. Contrary to the clich, the vast majority of millennials did not go to college, do not work as baristas and cannot lean on their parents for help. Every stereotype of our generation applies only to the tiniest, richest, whitest sliver of young people.
Well that last sentence is true.

This post was published at Market-Ticker on 2017-12-16.

With FCC’s Net Neutrality Ruling, the US Could Lose Its Lead in Online Consumer Protection

The internet may be an international system of interconnecting networks sharing a rough global consensus about the technical details of communicating through them – but each country manages its own internet environment independently. As the US debate about the role of government in overseeing and regulating the internet continues, it’s worth looking at how other countries handle the issue.
Our research and advocacy on internet regulation in the US and other countries offers us a unique historical and global perspective on the Federal Communications Commission’s December 2017 decision to deregulate the internet in the US The principle of an open internet, often called ‘net neutrality,’ is one of consumer protection. It is based on the idea that everyone – users and content providers alike – should be able to freely spread their own views, and consumers can choose what services to use and what content to consume. Network neutrality ensures that no one – not the government, nor corporations – is allowed to censor speech or interfere with content, services or applications.
As the US continues to debate whether to embrace internet freedom, the world is doing so already, with many countries imposing even stronger rules than the ones the FCC did away with.

This post was published at FinancialSense on 12/15/2017.

Australia gives Parking Ticket to Man in His Own Driveway

Once upon a time, police aspired to protect society. Today, police, in general, are more interested in harassing the public to raise money for the government. In Australia, a man was given a parking ticket in his own driveway. The incident has gone viral in Australia and the government claims his car partially blocked the sidewalk.

This post was published at Armstrong Economics on Dec 15, 2017.

What The Blankety-Blank?

This letter is something everyone in the US ought to read, understand and act upon.
Some of these texts appear to go beyond merely expressing a private political opinion, and appear to cross the line into taking some official action to create an ‘insurance policy’ against a Trump presidency.
Get this through your head, America. You have people within the FBI who, it appears, had some sort of “insurance” arrangement they were actively working on to change a political outcome.
The document goes on to talk about the fact that there apparently was an active conspiracy to keep the contents of the conversations between these people private as well despite the fact that they were acting within their official capacities at the time. In other words they perverted their public employment for the purpose of expressing and acting upon personal political animus.
We’re all entitled to our political opinions and First Amendment protections are very broad. However there is also the matter of long-standing federal law (The Hatch Act, principally) and policy, which bars partisan political activity by a wide swath of executive branch employees.

This post was published at Market-Ticker on 2017-12-15.

Banks Demand 11th-hour Reprieve On Key Part Of MiFID II

The clock is ticking down and there are only about three weeks to go before the dreaded MiFID II regulatory structure is implemented on 3 January 2018. While it’s been difficult to judge the industry’s preparedness for the change, several aspects of the new regulations have attracted the most debate and concern. These have included transaction reporting, unbudling of research costs and whether institutional investors will absorb the costs or pass them on to their clients and trade identifiers. As the deadline nears, one of these issues – Legal Entity Identifiers (LEI) – has assumed more significance than the others.
The enforcement of LEI’s to identify legal entities is targeting increased market transparency via audit trails. Each market participant will need its own 20-character ‘alphanumeric code’ and the relevant codes for buyers, sellers and issuers of the security will be required to complete a trade.

This post was published at Zero Hedge on Dec 15, 2017.

The ‘Unknown Unknowns’ That Threaten U.S. Shale

Three years after the oil price crash, the U. S. shale patch is on its second growth phase and is expected to continue to increase its production, at least through the next five years.
The global oil markets have become increasingly dependent on U. S. tight oil supply – and the oil industry is still coming to grips with this new reality, Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, wrote in a recent article.
Current projections put the Permian on the forefront of the United States’ ability to deliver increased tight oil supply to the global markets. However, forecasts for the shale patch are as dynamic as production and drilling rates are. And some ‘known unknowns’ have been surfacing such as higher gas-to-oil ratios in some wells, and the parent/child wells issue, Flowers says.
Wood Mackenzie said last month that signs had started to show that intensified drilling in the Permian doesn’t delivercommensurate volumes of oil. Although WoodMac thinks that such setbacks could just be growing pains and Permian drillers could indeed ‘change the laws of physics’, it had warned three months ago that drillers might soon start to test the region’s geological limits. If exploration and production companies can’t overcome the geological constraints with tech breakthroughs, Permian production could peak in 2021, putting more than 1.5 million bpd of future production in question and potentially significantly influencing oil prices, WoodMac said in September.
In his December article, WoodMac’s Flowers included this observation in the Permian’s ‘known unknowns’:

This post was published at Zero Hedge on Dec 14, 2017.