Opinion

Nicholas Wapshott

Immigration reform could tear GOP apart

Nicholas Wapshott
Jan 25, 2013 17:06 UTC

Immigration reform is being discussed again on Capitol Hill. At his inauguration, President Barack Obama declared, “Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity.” Senior Republicans, too, seem ready to make a deal. They sorely need to do so, because Mitt Romney’s damaging policy of self-deportation ensured that Hispanics voted overwhelmingly for Obama, and demographic changes mean unless the party changes tack fast it will keep losing. But there is an enormous gulf between what the Republicans need to do and what the base will go along with. What is at stake is whether the GOP remains a party of government or becomes a mere protest movement.

Although he does not have a majority in the House, the president appears in no mood to compromise. He wants to help create a more tolerant America and believes he has the country behind him. Recent polling confirms that his views on gay marriage, gun control, abortion, immigration and other social issues all chime with a majority of the electorate, and he is determined to press his case. His inauguration speech spelled out the direction he is heading in, and his Feb. 12 State of the Union address is expected to chart the course. He appears to be relishing the chance to embarrass the Republicans if they stand in the way of progress. Catching Obama’s new sense of purpose, House Speaker John Boehner has become convinced the president wants “to annihilate the Republican Party” and “shove [it] into the dustbin of history.”

Senior Republicans appear to be aware that they are out of step with America and need to make significant changes to policies and their public image if they are to stand a chance of winning the midterm elections in 2014 or the White House in 2016. Former Secretary of State Condaleezza Rice believes “the Republican Party certainly has to stop turning off large segments of the population” and urges it to face “the big issue,” immigration reform. Says Senator Lindsay Graham (R.-S.C.): “We’re in a death spiral with Hispanic voters because of rhetoric around immigration.” Senator John McCain (R-Ariz.), who burned his fingers pushing for immigration reform in 2006-07, thinks “we have to do immigration reform … There is no doubt whatsoever that the demographics are not on our side.” Conservative commentator Seth Mandel suggests it may be too late: “When they arrived here with nothing but the clothes on their back, desperate for a chance at a better life for themselves and their children, one party said, ‘Come on in,’ and the other said, ‘Turn around and go back.’”

There are good business and economic reasons to embrace immigration reform. The GOP’s libertarian wing, following the dictums of Emile Levasseur and Friedrich Hayek, who advocated a free market in labor, has long understood the importance of a making it easier for immigrants to find work here. Rand Paul, heir to his father Ron’s mantle as leader of the GOP libertarians, argues for bringing illegals into the fold. “If they’re willing to work, willing to pay taxes, I think we need to normalize those who are here,” he said. George W. Bush’s commerce secretary, Carlos Gutierrez, promises to raise millions from big business to press for changes in the law to allow illegal immigrants to stay. “We have millions of job openings that go unfilled,” he said. “Either the workers come here to fill them or those jobs go somewhere else.” Small businesses, particularly high-tech startups demanding highly qualified technicians, also want reform. “About 95 percent of the applications I get, I have to turn away because I can’t get them a visa,” said Ash Rust, leader of an entrepreneurs group lobbying to relax immigration rules.

So, if so many senior Republicans and Republican donors and a majority of all Americans want to do a deal on immigration, who stands in their way? The party’s rank and file. While the portion of Americans opposing a path to citizenship for illegal immigrants has slumped from 55 percent in 2011 to 43 percent today, and even a majority of Republicans now agree that reform needs to be achieved, die-hard opponents remain within the Republican Party. One in three Americans continues to oppose an amnesty for illegals, with one in four “strongly” opposed, but Tea Party members are most vociferous in their opposition to immigration reform. Just 1 in 10 Tea Party types agree there should be a path to citizenship for illegals, compared with 24 percent among Americans at large, while 17 percent disagree. As with gun control and raising taxes, Republicans who dare defy their base may find themselves facing primary opponents spouting more populist, less tolerant views.

Getting Europe out of its mess

Nicholas Wapshott
Jan 23, 2013 20:57 UTC

When the 2012 Nobel Peace Prize was awarded to the European Union, jaws dropped from Belfast to Belgrade. The citation said the EU had helped transform Europe “from a continent of war to a continent of peace,” and that its “most important result” was “the successful struggle for peace and reconciliation and for democracy and human rights.” Many think that is a strange way of interpreting the last 100 years, given that the maintenance of a free Europe since the end of World War Two is due more to the thankless diligence of NATO and the unsung generosity of the United States.

The timing of the award was also puzzling. The very existence of the European Union is under severe threat as it struggles to maintain its common currency, the euro. To protect the euro, EU bureaucrats in Brussels and political leaders in Berlin and Paris have made the poorer member nations the target of austerity measures that threaten to undermine those nation’s democracies. Instead of celebrating the EU as a benign force for peace and trans-national cohesion, the Nobel Committee might just as easily have condemned it for using the global financial crisis as a pretext to double down on its grand plan to forge a single European state. The award by the notionally apolitical Nobel Committee – whose host country, Norway, chose in 1972 and again in 1994 not to join the EU – appeared to be a desperately needed vote of confidence for an ambitious dream that has turned into a divisive nightmare.

Neither awards nor plaudits will save the European Union. Central bankers alone won’t fix it, either. That’s because a lasting remedy for what’s ailing the region must be political as well as financial. The modern history of Europe largely revolves around the bitterly fought and seemingly eternal contest between France and Germany, with Europe’s third great power, Britain, sometimes wisely and often mischievously maintaining the balance. Both of the 20th century’s ruinous world wars and several other destructive conflicts stemmed from Franco-Prussian enmity. It was primarily to bring this perennial conflict to an end that the EU founders – French diplomat Jean Monnet, French statesman Robert Schuman and the Belgian premier Paul-Henri Spaak – envisioned a Europe in which the nations were bound ever closer by an economic pact. The other unstated aim was to create a single European state to rival the United States in population and wealth, and, as time went on, to compete with the burgeoning economies of India, China, Russia and Brazil.

The looming currency war

Nicholas Wapshott
Jan 23, 2013 20:34 UTC

Are we about to be sucked into a currency war? As the world economy continues to splutter, countries are looking for ways to break out of the mire. One way of gaining popularity is to promote growth through making exports cheap. The key to an export-led recovery is to devalue a national currency, thereby lowering the prices of exports. By allowing its currency price to slide, a nation can launch a surreptitious trade war against its commercial rivals. Western nations have for years accused China of taking an unfair trade advantage by keeping its currency, and therefore export prices, artificially low. By allowing their currencies to devalue, Western countries are fighting back.

There are indications that the early skirmishes of a currency war have begun. This is a dangerous business. If countries undercut their competitors’ prices by devaluing their currencies, the stability of the world economy is put at risk. A full-fledged currency war invites deflation, a ruinous downward spiral of prices that in turn invites a worldwide recession. The cause of the conflict lies in the failure of the chosen measure to offset a Great Recession since 2008: wave after wave of “quantitative easing” (QE) by central banks to beat stagnant growth. QE was intended to funnel cheap money into national economies to boost economic activity and increase aggregate demand, thereby creating growth and jobs. But persistent QE has had an important unintended consequence. It has removed a key measure by which traders judge sovereign interest, or the ability of a country to pay its way.

Before the financial freeze of 2008-9, traders who worried about a country’s solvency would decline to buy government bonds or insist on a punishingly high return. That mechanism became confused when, to head off a precipitous Great Recession, finance ministers from the leading industrial nations agreed to pump vast amounts of newly minted money into their economies until the danger had passed. QE, or the buying of government bonds by central banks, was intended to reduce general borrowing costs and allow businesses to borrow cheaply to invest, and thereby employ the jobless.

How the NRA hijacked the Republican Party

Nicholas Wapshott
Jan 18, 2013 15:38 UTC

There are few better ways of grasping how far the Republicans have abandoned the middle ground, where they used to win elections, than the way their leaders have become agents of the gun industry. Conservatives used to consider themselves law-abiding citizens who put great store by the permanence of institutions, by the rule of law, and by the traditional caution and common sense of the sensible majority. Such devotion to stability, continuation, and moderation explains why so many conservatives were alarmed when the social revolution of the Sixties erupted. Suddenly, it seemed, everything was on the move. Children no longer believed in the wisdom of their elders, nor obeyed the unwritten rules that had guided every previous generation. The days of everyone knowing their place and remaining in it were overthrown and it appeared that anarchy had broken out in America.

Nowhere was this more evident to traditional conservatives than in the way African-Americans responded to the civil rights legislation enacted by Lyndon Johnson. Instead of being grateful for the overdue democratic changes wrested from reluctant Southern lawmakers, a significant number of African-Americans demanded more profound change. There were riots in Los Angeles, Detroit, and other major cities which were met by calls from conservatives for tighter gun controls. The Black Panthers, dressed as soldiers and carrying guns, as was their right under the Second Amendment, demanded that African-Americans be allowed to live in a separate self-governing state. In May 1967, 30 Panthers took loaded rifles, shotguns, and pistols into the California State Capitol to protest against new gun control laws. The California governor, Ronald Reagan, declared: “There’s no reason why on the street today a citizen should be carrying loaded weapons.”

After John F. Kennedy, Robert Kennedy, and Martin Luther King were assassinated, Johnson joined with conservatives to pass the federal Gun Control Act that stipulated a minimum age for gun buyers, restricted traffic across state lines to federally registered gun dealers, limited the sale of certain destructive bullets, required guns to carry serial numbers, and added drug addicts and the insane to those, like felons, who were already forbidden to own guns. When it transpired that Lee Harvey Oswald had bought the rifle that killed the president mail order from the pages of the National Rifle Association magazine, the NRA Executive Vice-President Franklin Orth backed an end to mail-order sales. “We do not think that any sane American, who calls himself an American, can object to placing into this bill the instrument which killed the president of the United States,” he said.

Austerity still doesn’t work

Nicholas Wapshott
Jan 16, 2013 16:26 UTC

Does austerity work? As many Tea Party activists and conservative economists suggest that the solution to America’s economic ills is a large spoonful of the bitter medicine of austerity, it is a question worth asking. A few months of misery may be worth it if the result is strong growth and full employment. First witness for the austerity prosecution is Latvia, for which some extravagant claims are being made. The economy of the former Soviet satellite and current member of the European Union was nose-diving in 2008-9. Now it is growing again.

Latvia’s premier, Valdis Dombrovskis, has written a self-congratulatory book, How Latvia Came through the Financial Crisis, with the help of Anders Aslund of the Peterson Institute, who claims that if America followed the Latvian example we would all be better off. Aslund extrapolates from the Latvian example, “Keynesian thinking has been tested, and it has failed spectacularly.” So what does Latvia’s experience of austerity really tell us? As you might expect, things are not quite as rosy as they are made out to be.

Back in 2008-9, Latvia was at its lowest ebb, losing a fifth of its output in just two years. Its second largest bank went bust, leaving thousands of Latvians without their lives’ savings. Unemployment was above 20 per cent, and 40 per cent among the young. Credit froze and construction, which prior to 2008 was booming thanks to low interest rates, collapsed. In December 2008, the Latvian government won a €7.5 billion bail-out from the IMF, the World Bank, and the EU – worth more than a third quarter of its annual GDP of $28.25 billion – on the condition that it introduce “structural reforms” and a generous, temporary safety net to offset the harsh effects of austerity. The reforms meant slashing public spending from 44 per cent of GDP to 36 per cent and removing legal safeguards from trade unions to reduce labor costs. By early 2009, violent rioting erupted on the streets of the capital, Riga.

The Oscars: Reflections of America

Nicholas Wapshott
Jan 11, 2013 21:03 UTC

When the Oscar presenters rip open the envelope for best picture at the Academy Awards next month they will be offering a rare glimpse into the soul of America.

Movies have held a special place in American cultural life since they first flickered on sheets stretched across theater stages. And the pictures and people chosen to receive the Oscars have come to represent an artistic aristocracy to revere and admire.Among the movies Academy members are considering are three that offer distinctly different views of how Americans see themselves and their place in the world.

Ben Affleck’s Argo is about a group of American diplomats in Iran who slipped out the back of the embassy in Tehran the day Islamic fundamentalists rushed in the front. They took refuge in the plucky Canadian ambassador’s residence and, by posing as Canadian filmmakers looking for locations for a nonexistent Hollywood movie, obtained papers that allowed them to fly to freedom.

Since when have personal guns been used to defend political liberty?

Nicholas Wapshott
Jan 9, 2013 21:23 UTC

Piers Morgan is the most unlikely campaigning journalist. The smooth-faced Morgan, who arrived from Britain to replace Larry King as CNN’s chief celebrity interviewer, can, if pushed, engage with serious guests on serious topics. But, as someone who cut his teeth writing showbiz tittle-tattle for Rupert Murdoch, he seemed more at ease pitching softball questions to boldfaced names plugging their latest products.

What a difference a massacre of children makes. After a frivolous November guest list that, despite the presidential election, included Mike Tyson, Kitty Kelley, Oliver Stone and Tyler Perry, among other gossip column fodder, he turned to a subject that celebrity interviewers keep well away from because, even in the wake of another mass killing, it is so painfully pointless to raise: gun control. And in doing so, Morgan found his voice. Americans have become so weary at the grip the NRA and other gun industry lobbyists have on the gun debate that the simple horror and amazement Morgan expressed on hearing of the Sandy Hook bloodbath came as a refreshing surprise. What sort of country, he asked, cannot defend its schoolchildren from mad people with automatic weapons? What has to be done to bring the repeated slaughter of innocents to an end?

For his pains, Morgan attracted a full magazine of gun nuts, including one Alexander Emerick “Alex” Jones, a self-described libertarian, “paleoconservative” and “aggressive constitutionalist” who once ran as a Republican in Texas House District 48 (facing certain defeat, he withdrew before Election Day). He believes George W. Bush was behind the September 11 attacks and Bill Clinton plotted the Oklahoma City bombings. He was so incensed that Morgan dare use his First Amendment rights to ask an awkward question about guns that he is demanding the president deport the chat show host for sedition. To find a more invidious example of muddle-headed, brazen hypocrisy, you have to go back to 2009, when anti-government Tea Party activists held up placards screaming “Government Keep Your Hands Off My Medicare.” Being a good Fleet Street tabloid editor, Morgan promptly invited Jones to make his case on Piers Morgan Tonight.

The real reason Obama wants Hagel

Nicholas Wapshott
Jan 8, 2013 16:58 UTC

You might imagine the president has quite enough trouble on his hands with the looming battle with House Republicans over extending the debt ceiling without opening a second front over the appointment of Chuck Hagel as secretary of defense. Although a distinguished former Republican senator, Hagel has already attracted venomous opposition from his old colleagues who think, among many other complaints, he is not sound on Israel and has been too critical of American policy in Iraq and Afghanistan.

Does the president really need more aggravation? Isn’t it a golden rule of politics not to spend your political capital all at once, as the president did in his first term when he pressed through healthcare reform to the detriment of an effective plan to reshape the wayward financial institutions? Having achieved a partial victory in the fiscal cliff negotiations by raising taxes on the super-rich, does Obama really need to take on the House and Senate at the same time?

The Republican charge list against Hagel is long, starting with the accusation that he is not really a Republican at all. Hagel, who believes “the Republican Party has come loose of its moorings,” might argue with conviction that it is the Republican Party that has deserted him, not the other way around, but he has certainly relished tweaking the noses of his old pals. In short, he thinks they are not up to snuff. “When you ask the question, Has [the Republican approach] worked? I don’t think many people will say it has worked,” he said. “God knows, I would never question the quality of our elected officials. That’s why I’m so popular with many of them.”

The high cost of hating government

Nicholas Wapshott
Jan 2, 2013 16:26 UTC

The tourniquet applied by the outgoing Congress to the economy allows a two-month breather before we are consumed by the next deadline. The president and his party can allow themselves a brief moment of celebration for imposing higher taxes on the richest Americans, but the next stage in fixing the nation’s fiscal problems may not be as easy. By the end of February, lawmakers must find enough cuts in public spending to allow the debt ceiling to be raised. Two more months of uncertainty will prevent businesses and consumers from making spending decisions that would bolster the economic recovery.

The devil is not so much in the detail of the arguments to come as the big picture that frames the debilitating running debate. While the difference between the sides is ostensibly over taxes and public spending and borrowing, the more profound division is over where government should begin and end. For many of the Republican Party’s Tea Party insurgents, the choice is even more fundamental: whether there should be a government at all. Their unbending position, demanding an ever-diminishing role for the federal government, has levied an enormous unnecessary cost on everyone else.

Since Republicans regained control of the House in the 2010 mid-terms, when the Tea Party tide was in full force, they have attempted to freeze the size of government, coincidentally putting a brake on economic recovery. They have vetoed attempts at further economic stimulus, encouraged America’s economy to be downgraded by the ratings agencies by threatening not to extend the debt ceiling, and tried to veto any and every tax increase in the fiscal cliff talks. Their aim is to shrink government by starving it of funds. Such uncompromising absolutism has led to the dampening of business confidence and investment that would have created jobs.

Yes, there is a better way to run a railroad

Nicholas Wapshott
Dec 28, 2012 15:19 UTC

Before we consign Mitt Romney and the whole of his failed program to the trash, it is worth recycling one of his proposals that has considerable merit: the privatization of Amtrak. Passenger railroads have rarely if ever made money. Even at the peak of the Railroad Age, the ferrying of humans rather than freight was a money-losing enterprise designed to add allure to the more mundane but profitable business of hauling goods. Amid the failure of private enterprise, however, a clear need was exposed for an environmentally friendly passenger service that linked city center to city center.

Human rail transport was considered so desirable, and met such a public need, that when the free market failed it was considered unconscionable to simply abandon the idea as a noble experiment that failed. Out of the ashes of the free enterprise rail system was salvaged a truncated nationalized railroad network, Amtrak – and what an awkward, unloved, poorly run travesty of a public service it has become. The heir to the romantic experiment of the iron horse and railroad barons that opened up the continent and funneled pioneers and investment into sparsely populated spaces has become a faded, complacent, dowdy rail system that would not pass muster in the Third World.

Rescuing the best of the passenger rail service so it will earn at least part of its keep for the rest of the century offers a conundrum that cuts to the heart of the argument about the border between the public good and the free market. Like the provision of universal healthcare, social security and welfare, there is no easy way to match the evident public benefit of a rapid transit rail system to the failure of the free market to provide one. The quandary is made more confused because, while railroads no longer compete with one another, they do compete with airlines, cars and buses.

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