By Karl Reiner
The U.S. government’s
effort to improve security along the Mexican border is delivering
results. The combination of towers, physical barriers, better
intelligence and an increase in the number of agents has made the
crossing more difficult. As a consequence, the number of arrests
made by the Border Patrol is down approximately 12%.
According to the Border
Patrol, 202,563 arrests were made in the Tucson Sector between
October 1, 2007 and April 30, 2008. Of the apprehensions,
approximately 96% were Mexican nationals and about 3% came from
Central America. While improved enforcement is slowing the rate of
illegal migration, the underlying causes remain to be addressed by
our reluctant national policymakers.
While focusing
attention exclusively on border control may generate a feeling of
real accomplishment in some political circles, it is akin to trying
to walk in the desert with only one boot on. Because border defense
and economic issues are intertwined, we cannot continue to ignore the
other half of the problem.
The overall standard of
living in Mexico is about a quarter of the living standard in the
United States. The growing imbalance and the resulting lack of
opportunity fuels the need migrate in search of work. Addressing the
economic problem has to be part of our overall strategy if we want to
achieve long-term success.
Infrastructure- poor
southern Mexico is stagnating. While the northern part of the
country has mostly benefited from the impact of the North American
Free Trade Agreement (NAFTA), the southern part of the country has
not. Nearly 50% of the population of Mexico’s southern states
- Guerrero, Oaxaca, and Chiapas - lives in extreme poverty. In the
adjacent Central American countries things are no better; 30% to 50%
of the population is below the poverty line.
The United States has
long avoided pressuring the Mexican and Central American governments
into confronting the problems fostering migration. Unless we decide
to act, southern Mexico and Central America will remain ensnared in a
poverty trap that cripples regional development and continues to
force people to head north to find work.
Mexico’s Ministry
of Agriculture estimates that only 6% of the nation’s farms are
highly efficient and profitable. When NAFTA began, a program to help
small Mexican farmers switch from growing corn and coffee to more
profitable and labor intensive crops such as fruits and vegetables
was supposed to have been implemented. Nothing much in the way of
support actually materialized; the funds apparently went to other
purposes.
The governments of
Mexico and the Central American countries rely on a defacto policy of
exporting labor as an economic safety valve and as a major source of
national income. A review of CIA and World Bank data reveals that
the remittances workers send back to Mexico are the country’s
second largest source (after oil) of foreign income.
In El Salvador, the
remittance inflow nearly equals the income generated by the nation’s
exports. In Guatemala and Honduras, remittance income equals
two-thirds and three-fourths of the value of those nations’
exports.
By uncoupling the need
for economic progress from the issue of border security, we are
setting the stage for failure. If migrant workers can’t go
north while development at home remains stifled, instability and
political chaos will eventually result. We face a stark choice. We
can start to push economic development and reform now, or plan to
deal with the more menacing problems that will develop in the future.
In 1950, with America’s
blessing, war-devastated Western Europe began to rebuild its economy
when France, West Germany, Belgium, Italy and the Netherlands agreed
to form the European Coal and Steel Community. From those humble
beginnings emerged what today has become the European Union (EU).
Over time, the EU has
developed into an economic powerhouse with 27 member states. With a
population of nearly a half billion, it accounts for almost a third
of the world’s gross national product despite the fact that
more than 20 languages are spoken within its geographical boundaries.
Strangely, the EU the
current administration once considered irrelevant and out of touch
with modern military reality, also believes prosperous countries have
an obligation to help poorer and less developed nations if peace and
stability are to be maintained. We need to relearn that lesson, the
same one we taught to Europe at after World War II, and apply it to
our foreign policy south of the border.
Polls reveal that over
75 % of Americans are dissatisfied with the way things are going in
the United States. The president’s approval rating is in the
20% range. Not to be outdone, Congress has managed to do worse, with
a dismal approval rating of 14%.
The consequences of a
terribly flawed war strategy, the lack of an energy policy and the
mediocre results delivered by world’s most expensive health
care system have made Americans apprehensive.
The situation is made
worse by the self-inflicted economic damage of the ongoing mortgage
debacle and the festering problems stemming from countries below our
southern border. The governments of Mexico and Central America have
ignored the need for economic development for years. The impact of
their failure to act has been compounded by a United States that
remains oblivious to the result.
The next president will
have the unenviable job of trying to rejuvenate a malfunctioning
government while trying to salvage something from a host of failed
international policies. Let’s hope he also gets a Congress
more inclined to face reality rather then wallowing in political
platitudes.
Karl Reiner: Ordinary People Buffeted by Extraordinary Events
By Karl Reiner
The Great Recession was caused by covetous bankers, slapdash regulation, a glut of cheap money and too much enthrallment with home ownership. Since peaking at 10% in 2009, the unemployment rate has been on a slow decline, unfortunately ticking back up to 8.2% in May. Chronic underemployment has been the only alternative for millions more. The housing market remains spongy; many homeowners owe more on their property than it is currently worth. The foreclosure rate remains near record levels, the nation’s home ownership rate is sliding downward.
The Executive Branch and Congress should be cooperating on a plan to get the debt problem under control in the medium-term. Instead, the Tea Party’s supporters in Congress maintain a rigid focus on cutting spending. Economists already know that reining in spending is less a drag on the economy than raising taxes. They also know the federal debt problem is so large that some tax increases cannot be avoided. As the members of Congress trade barbs, wary taxpayers worry about who will get stuck with paying the bill and the unsettling effect the political gridlock has on the recovery.
Recent surveys reflect the consequences of the recession. Americans are down in the dumps. Only 28% of the population is satisfied with the current state of things in the country. Dissatisfaction with the current status runs high, about 70%. Depending on the locality, between 69% and 83% of Americans think the country remains in recession. Other polls show that only half of the population believes a recovery is really underway.
A survey conducted in 12 swing states found that 55% of those polled supported the notion that the jobs created so far in the recovery were of lower quality than the jobs lost in the recession. About 35% of those surveyed believe America’s best days are behind it.
By a margin of two to one, melancholy Americans expect their children’s jobs, salaries and benefits to be worse than their own.
Federal spending and debt are considered by 82 % of those polled to be as important as the unemployment problem. The federal debt is hovering around $15.7 trillion, pushed up by the recession’s debilitating impact. The government’s aggressive stimulus spending and frantic effort to patch up the financial system moderated the recession’s effect. We should not forget that it would have been a lot worse without government intervention.
Although policymakers tried hard, the slow recovery has put a big dent in America’s productive capacity and confidence. Things, however, are not quite as appalling as the polls indicate. Economists are predicting an average U.S. growth rate of over 2% for 2012 and 2013. Although not a surge, it is fairly good for an economy recovering from a major financial meltdown. After all, the recession sopped up $800 billion in stimulus spending and another $700 billion in bailouts to banks and industry as the government struggled to stabilize the situation.
As did the Great Depression of the 1930s, the Great Recession has had a global impact. Growth is slowing in China, India and Brazil. In just five years, Greece’s economy has shrunk by 13%. Greece now totters on the verge of leaving the Euro. Spain has an unemployment rate of 24.1%. Its bankruptcy filings climbed by over 21% in the first quarter of 2012. Portugal and Italy are beset by a cycle of slow growth and declining competitiveness.
The crisis may have halted European integration as the risk of a Greek exit from the Euro increases. As Europe struggles to contain the damage, the euro-zone’s GDP is expected to contract in the second quarter of 2012. The unsettling economic and political repercussions bouncing around the globe will make it harder for the U.S. recovery to stay on track. If it can be maintained, a 2% U.S. growth rate will look mighty good.