This month’s Rattle brings us a host of stories that the mainstream media didn’t cover sufficiently-preferring instead to shower accolades upon the man responsible for abandoning immigration enforcement in the name of political opportunism. We’ll cover everything from the latest spate of violent crimes committed by illegal aliens to Barack Obama’s continued roll out of administrative amnesty, which now includes directives to ignore both interior enforcement and border security.

But first, we’ll examine this administration’s ongoing obstruction of Congress’s investigation into the ever-broadening gun-walking scandals. Courtesy of Sipsey Street Irregulars-whose coverage of Fast and Furious is non pareil-we learn that the White House is blocking testimony from Kevin O’Reilly, a former staff member of the National Security Council who wants to speak with the Senate Judiciary Committee and House Committee on Oversight and Government Reform. This administration’s invocation of executive privilege is just the latest example of obstruction of justice  relating to Fast and Furious.

It should be recalled that last July the acting head of the ATF told Congress that his agency was paying FBI agents to ignore the law in pursuit of this administration’s bizarre and opaque political goals. Immigration control, not gun control, is a solution that Barack Obama’s Justice Department dismisses out of hand. We can only hope that, as Katie Pavlich reports in Town Hall, Chairman Darrell Issa pursues this investigation to its conclusion, which hopefully will result in a more than a few stiff prison sentences. Speaking of Katie Pavlich, she has a fantastic new book about Fast and Furious entitled-appropriately-Obama’s Bloodiest Scandal, which I urge you all to read.

Obfuscation and evasion are hallmarks of this administration, especially as it pertains to immigration and border security, as an insightful commentary from Michael Cutler published by Fox News Latino illustrates. The former INS agent and current immigration watchdog points out that Janet Napolitano’s Department of Homeland Security is effectively “cooking the books” by relying solely upon  documented arrests-a misleading statistic-in order to pretend that this administration is cracking down upon illegal entry into the United States. FAIR’s Legislative Update further dissects this policy, which is drawing increasing scrutiny from Congress-particularly Chairman Darrell Issa and Rep. Jason Chaffetz- notwithstanding what Tom Tancredo accurately describes as a bipartisan conspiracy to hobble border security and immigration enforcement. By not logging and tracking the number of illegal border crossers who were not detained, Customs and Border Protection is painting a rosy picture of a much more dire situation.

The deceit of this administration extends beyond the CBP and encompasses virtually every aspect of immigration enforcement, both at the border and inside of the United States. Even though ICE is touting the Cross Check raids it initiated earlier this month-intended to apprehend ostensibly violent criminals, absconders and  fugitives from justice-this is merely a political expedient designed for election year consumption. The truth is that Barack Obama’s administrative amnesty proceeds apace, with four cities ordered to halt deportations, according to the Dan Stein Report. Remarkably, the Executive Office for Immigration Review has closed San Francisco’s immigration court and plans to completely halt its proceedings for the entire summer. Jim Kouri reports on yet another component of Barack Obama’s administrative amnesty, the decision to suspend deportations of illegal aliens with “families,” inside of the United States.

And while illegal aliens are not being deported, they will be able to enjoy state-of-the-art detention facilities, including some new amenities such as beach volleyball and cable TV. Lamar Smith excoriates this administration for its skewed priorities in a must-read op-ed published in The Hill. Although this new detention manual  might seem farcical, it’s far from a laughing matter. As Jim Kouri points out in his Examiner column, the Department of Homeland Security has taken virtually no action against foreigners who overstay their visas. This negligence persists over a decade after the September 11th massacres, which were committed by a cadre of jihadists whose visa applications are symptomatic of our country’s dysfunctional immigration bureaucracy. This is not merely an hypothetical problem, even after the destruction of the World Trade Center, as the case of illegal alien Amine El Khalifi demonstrates. The fact that this indifference to the lives of American citizens continues unabated, despite repeated pressure exerted by the GAO serves to illustrate this administration’s fundamental lack of accountability.

Even as it lags behind in locating and detaining criminal aliens, the administration of Barack Obama has deigned to grant Temporary Protected Status to thousands of Syrians living in the United States. As we’ve pointed out in the past, Temporary Protected Status is anything but temporary. In fact, it is merely another expedient used to grant de facto amnesty to a group of illegal aliens who can prove “hardship” circumstances, most of which persist indefinitely-making their stay in the United States permanent. This is even more disturbing when juxtaposed against the State Department’s recent decision to bar inspection of a visiting Egyptian delegation consisting of Muslim Brotherhood officials. Of course, Egypt isn’t the only country where the Ikwhan has a strong foothold.

The problem is that Barack Obama’s ostensible opposition, i.e. congressional Republicans, are doing virtually nothing to investigate the egregious overreach of his administration on immigration matters. Quite the contrary, some are hard at work developing proposals that would only worsen the situation, such as DREAM Lite, in hopes of  cultivating the ever-elusive Hispanic vote. Republican leaders in the states are not faring much better in this regard, as the difficult struggle in New Hampshire to prevent illegal aliens from capitalizing upon in-state tuition benefits demonstrates.

In an update to a story that we’ve covered recently, the North Carolina General Assembly held another hearing on illegal immigration and potential enforcement mechanisms. Unfortunately, according to NC Listen, it was dominated by illegal aliens and their supporters in the legislature, including some of the very people who had disrupted a previous hearing about these problems. Heading further south, we learn that the Support Our Law Enforcement and Safe Neighborhood Act has been killed in the Mississippi State Senate. Apparently, Judiciary Chairman Hob Bryan has caved knuckled under to the Mississippi Poultry Association and its desire for cheap labor, notwithstanding the harm such a decision may inflict on innocent Mississippians. Its neighbor to the East, Alabama, has revisited HB 56, the landmark legislation that targeted illegal aliens living in that state. Rep. Micky Hammon has decided to alter some of the provisions that have been enjoined by a federal court, but maintains that he and his fellow Republicans will not repeal the law, which is welcome news.

In not so good news, Cook County Board President Toni Preckwinkle has decided to defy Immigration and Customs Enforcement and refuse detainer requests for criminal aliens housed in her county’s jails. Saul Chavez is one beneficiary of Preckwinkle’s benevolence, having fled the country upon being released from jail after killing William McCann. The carnage our government’s policies wreak is not limited to the odd vehicular manslaughter though, as the massacre at Oikos University in California makes clear to any impartial observer. Limits to Growth has an insightful story about mass-murderer One L. Goh which explains the circumstances surrounding his rampage which the main stream media willfully ignores. Oikos was apparently more concerned with harvesting tuition payments by foreign students-often with loans backed by American taxpayers-than ensuring the safety of its student body. It brings to mind  9/11 mastermind Khalid Sheikh Mohammed, whose entrance to the United States was facilitated by a campus administration eager to recruit students from the Middle East, heedless of the potentially deadly repercussions.

The fact that there are visa mills exploiting the F-1 Visa program should come as no surprise to people who are aware of the extensive fraud and exploitation present in the legal immigration system. Just as in Canada-which recently charged attorney Sandra Zaher with inventing false refugee claims-the United States is plagued by immigration fraud so pervasive that the conviction of Earl Seth David, aka Rabbi Avraham David, head of a New York law firm, headlines an ICE press release. The irony of an agency headed by John Morton-who’s tasked with expediting illegal immigration-spotlighting the conviction of someone for immigration fraud is apparently lost on this administration.

In another prime example of abuse, a lawsuit by two former employees of Larsen & Toubro InfoTech Limited Inc alleges systemic fraud at the India-based IT firm for which they once worked. Joining an earlier class action filed against the firm, this suit asserts that the plaintiff was forced to not only forge documents related to H-1B visas-a program rampant with corruption and fraud-but told not to report the crime to outside authorities. Read the sickening story for yourself, if you feel you have the requisite stomach. The baffling purposes of the H1-B visa program weren’t illuminated by a recent decision by Judge Gregory Frost, who ordered suppressed almost all information related to the case of  Geza Rakoczi, who is described thusly,

…a young alien man with a mysterious legal status, probably an illegal alien, who has a bachelor’s degree from a marginal educational institution, a private one that accepts all applicants, and his employer, a mortgage finance company in trouble in two different states.

Putting the lie to the idea that these visas are reserved for “highly-skilled” immigrants. More often than not they are merely convenient bodies used to replace the more demanding, highly-compensated Americans who they’ve made redundant. If you don’t believe me, just ask the wife of unemployed semiconducter engineer Darin Wedel, who is still waiting to hear back from President Obama. But do not fear, the virtual border fence is back on track,which I suppose is small comfort to the thousands of hard-working Americans like Mr. Wedel.  However, India is not the only nation to take advantage of the nebulous, easily exploitable H1-B visa program. As Phyllis Schlafly  points out, the Islamist Gulen movement in Turkey has used these same visas in order to indoctrinate Muslim students in American charter schools. The dangers posed by the Gulen movement have been explored ad nauseam in other forums, but it should be noted that even if you ascribe the most benign of intentions to the Gullenists, the idea that fundamentalist Muslim teachers are somehow highly skilled workers is implausible on its face.  Focusing on yet another rising Asian power, the New American has an interesting story about the PRC’s use of the EB-5 immigrant investor visa program in the state of Idaho which is well worth reading.

Returning to more timely issues, we discovered this past week that it’s not all that difficult to register to vote using a fabricated identity, or even assuming the persona of the current Attorney General  of the United States. Thanks to James O’Keefe we’ve discovered how simple it is to game the system, although officials at the increasingly misnamed Justice Department don’t seem to agree. Of course, acknowledging that vote fraud exists would require the Obama administration to prosecute those responsible for it, which wouldn’t bode well for the electoral prospects of Barack Obama’s party. From New York to Florida, from Indiana to Arizona, stealing elections has become quite commonplace, even as the White House-and its complaisant cronies in the media-scoff at the notion. Some Democrats, though, readily admit that trying to manipulate the outcome of elections is a routine practice, and a few even have the integrity to support measures that would rectify this betrayal of democracy.

In an ironic twist, labor unions-which were some of the most vehement supporters of President Obama’s Stimulus plan-are now complaining about some of the jobs stemming from stimulus projects going to Korean workers. I suppose the lesson is to be careful what you wish for, especially if it is over 700 billion dollars worth of taxpayer-financed boondoggles.

In more border violence, two illegal immigrants were murdered just northwest of Tucson on Thursday by two camouflaged gunman, echoing an attack that occurred  near the same city in 2007. This sort of bloodshed is rare but not unheard of in Arizona, especially in the Tucson sector, where over forty percent of this nation’s  illegal aliens come through. It is yet another reason why the constitutionality of SB 1070 must be upheld by the Supreme Court, in spite of the hostility of open borders dogmatists such as the misleadingly named Democrats in the House of Representatives.

Our final story is related to our relationship to the state as individuals, and how that relationship is changing as a result of our government’s decades-long recalibration of this country’s demographics. Courtesy of the Pew Hispanic Center, we now know that over seventy percent of Latinos want the government to provide more services to Americans, not less. Limits to Growth has a fascinating summary of the survey’s other findings, which include a belief among Hispanics that they should learn English in order to succeed in the United States, but not in order to integrate into the broader society. The findings about faith in government are worth exploring though, because they reinforce something that our side has been saying for a very long time. Namely, that Hispanic voters’ support for Democrats and generally left wing political candidates has very little to do with the GOP’s position on immigration, but a lot to do with their endorsement of redistributive economic policies.

The findings of the Pew Hispanic Center demonstrate that the cause and effect most often cited in declining Republican Party affiliation among Hispanics-embodied by the specious narrative about Pete Wilson and the waning fortunes of the California GOP-is reversed. Hispanics do not support the Democratic Party because it advocates open borders, the Democratic Party supports open borders because it enhances its ability to win future elections. In effect, what is happening is that the political elite is electing a new people. This dynamic needs to be remembered whenever we hear mealy-mouthed Republicans exhorting us to abandon any attempt to impose reason upon an anachronistic immigration system that is designed to thwart the wishes of the vast majority of the American public.

It’s going to be a long, tumultuous election year.

Such was the title of a debate held at the Asia Society, sponsored by Thomson Reuters, which I attended several weeks ago. Coming at a time of agonizing societal fissures arising from debates over austerity, stimulus, and the wisdom of government intervention into the economy, this event pitting the backers of a Hayekian view of economics against those who espoused a Keynesian model seemed incredibly timely. After explaining to the audience the general structure of the debate and how it would be judged-spectators were given gadgets similar to those distributed at IQ2 debates, which they were to use to vote for the side they agreed with at the beginning and conclusion of the debate-Harold Evans and Nicholas Wapshott, author of Keynes Hayek: The Clash That Defined Modern Economics, limned the underlying philosophical division that gave rise to this debate. 

As the introductory remarks made clear, the 80 year-old clash between Keynes and Hayek was “one of the most vituperative divisions in economics,” and the fact that this debate still carried resonance many years after the deaths of both men demonstrated the pertinacity of both schools, which reflected in some measure the confidence that both men had that their views reflected the definitive understanding of how economics works at an empirical level. Despite the deep esteem in which Hayek held the world-renowned English economist as a young man in post-war, inflation-wracked Austria-Keynes was celebrated throughout the territory  of vanquished Central Powers for his anti-Versailles manifesto, The Economic Consequences of the Peace-he would eventually become the chief intellectual antagonist of Keynes among neo-classical, liberal economists.

Although attempting to synopsize either man’s complex body of work into a few sentences is impossible, it’s generally understood that where the two men differed was in their philosophies about economic growth. Whereas Hayek was adamantly opposed to the easy money policy pursued by some central banks and felt that inflation was the primary scourge of humanity, Keynes believed that deflation and mass unemployment were more pressing concerns. He felt that there were moments in history where a misallocation between supply and demand because of microeconomic actions led to recession and unemployment. Therefore, the government needed to spur demand in certain sectors of the economy whose stagnancy could not be sufficiently addressed by the free market.

This point was emphasized by one of the Keynesians in particular, Steven Rattner, who most of you might remember as President Obama’s car czar. Others might remember him chiefly for the 10 million dollar settlement he was forced into by Andrew Cuomo after a lengthy SEC investigation involving his private equity firm, Quadrangle. Either way, he maintained that, despite his abiding faith in capitalism, there were moments in history when the government needed to rescue the free market from itself. His chief example of such a case was the large federal bailout of failing Detroit auto-makers Chrysler and General Motors, which he supervised. Rattner asserted that the domestic auto industry would have collapsed, had it not been for the direct intervention of Congress and the White House in 2008 and 2009. The capital markets were simply not willing to lend to GM or Chrysler, with the result being that both companies faced imminent bankruptcy-and their suppliers a similarly parlous fate-if the government did not step in to save both corporations with a desperately needed line of credit. In this case, one extended at the expense of American taxpayers.

It should be noted that the federal government’s response to what Rattner described as a “market failure,” but which his Hayekian opponents-during the question and answer period-labeled a “market verdict,” has come in for criticism from both the left and the right. This critique of the actions by Washington D.C., at least from a Hayekian perspective, is remarkably similar to the criticism leveled against the New Deal policies Keynes played a large role in shaping during the Roosevelt administration. Namely, that the government does not have enough knowledge, and certainly hasn’t the right tools, to redress structural, macroeconomic problems such as unemployment and deflation. Even if there is a place for government intervention-and James K. Galbraith, the lead debater for the Keynesians, was quick to specify all the areas in which Hayek believed the government should play some role-it must recognize the inherent danger of trying to manipulate economic outcomes.

The two most critical areas where that danger manifests itself are fiscal stimulus in the form of deficit spending, which inevitably leads to a greater debt to GDP ratio, and the inflation that results from monetary easing. These were also the two areas that came in for the most criticism from the Hayekian side. In particular, Manhattan Institute economist Diana Furchgott-Roth, who pointed out that our current debt to GDP ratio was higher than at any time in this nation’s history since the Second World War. She also took aim at a report co-authored by former Obama administration officials Christina Romer and Jared Bernstein, which attempted to predict future  unemployment rates both with and without the American Recovery and Reinvestment Act, otherwise known as the Stimulus Bill. Romer-then in charge of President Obama’s Council of Economic Advisors-famously predicted that without the stimulus plan the unemployment rate could rise as high as 8.8%. Of course, our currently unemployment rate, stimulus included, well exceeds that figure.

Sylvia Nasar, a business journalist who teaches business journalism at Columbia University, countered that monetary policy is more effective in dealing with problems like persistent unemployment, citing the work of Milton Friedman, probably the most emblematic monetarist of the latter half of the 20th Century. She also invoked the examples of pre-WWII Sweden and Japan, neither of which experienced the deep economic depressions of Western Europe and North America, yet both of which  ”ignored Hayek’s advice” with regard to monetary policy. Nasar insisted that there was a deep correlation between monetary stimulus and economic recovery, using the two examples above as evidence that determined policy had prevailed against “nature’s cure” in the realm of ideas. This raised yet another point of contention during the debate, which was the Keynesians’ accusation that their Hayekian opponents were complacent do-nothings who had no concrete plan to address pressing macroeconomic dilemmas such as unemployment.

Lawrence H. White, an economics professor at George Mason University, vigorously disputed this assertion, noting that Hayek advocated constancy in the money supply when advising central banks, and advocated the maintenance of nominal spending in order to avoid deflationary spirals. Even so, White reiterated the Hayekian critique of fiscal stimulus, reasserting a classical liberal maxim that we “don’t undertake public works whose costs exceed their benefits.” This jab was aimed at the public infrastructure investment envisioned by the Obama stimulus package, which Diana Furchtgott-Roth described as a thinly-veiled payoff to President Obama’s supporters among organized labor. In a swipe at an iconic passage from Keynes’s General Theory of Employment, Interest, and Money, White summed up his contempt for this sort of public investment for the sake of stimulating the economy by asserting that “we can’t restore prosperity by having the government build pyramids.” This, in turn, prompted a retort by one of the Keynesians that the construction of the Giza pyramids was an abundant source of jobs for Egyptian laborers. Hence, a boost for the economy of Egypt.

In addition to the standard Hayekian critique that this sort of fiscal stimulus debases the currency, and therefore impoverishes the standard of living, White also tackled what most feel is the proximate cause of the 2008 economic crisis. Namely, the burst of the housing bubble. He claimed that “we had permanently reduced our living standards by over-investing in real estate during the economic boom.” John Cassidy, a staff writer for The New Yorker and perhaps the most solidly anti-Hayek speaker on the Keynesian side, also identified the cause of America’s economic as being the collapse of the housing market, but assigned blame to the private sector. He dismissed the Austrian diagnosis of the causes of the collapse, asserting that the Community Reinvestment Act had little to with the skyrocketing foreclosure rate, and the culpability of GSEs like Fannie Mae and Freddie Mac was minimal when compared to the exposure of private sub-prime lenders who engaged in reckless lending and catastrophically bad or ill-timed investments. Cassidy went even further than most of his colleagues on the Keynesian side, asserting that “Hayekianism is not even a distinct policy doctrine,” and that Hayek himself “gave up the debate with Keynes about macroeconomics.” Cassidy wrapped up his remarks by quoting current chairman of the House Budget Committee Paul Ryan, who at a congressional hearing during the 2001 recession encouraged deeper tax cuts that would “juice the economy.” Cassidy, echoing the sentiment of other Keynesians, such as Ezra Klein, claimed that this statement demonstrated the resonance of stimulus spending, even among those who would reject the label of Keynesianism.

For his part, Stephen Moore agreed that tax cuts were an integral component of economic growth. However, he rejected the notion that Keynesianism was responsible for the economic growth the United States experienced during the 1980s. Using September 1983 as a benchmark, since it was the same point in the Reagan presidency as we are experiencing in the Obama presidency, he contrasted that month’s employment figures, which saw the creation of over 1.1 million jobs and a third quarter growth rate of 8.4%, with the anemic growth our economy is currently experiencing. Moore also pointed out that the Paul Volcker-led Federal Reserve had applied precisely the Hayekian remedies that the other side decried, yet his constriction of the money supply not only slayed the inflationary dragon but seemed to disprove the Keynesian assumption-voiced by Keynes followers like Sylvia Nasar-that monetary easing was inextricably linked with economic growth and robust employment. At the same time that Moore praised the policy prescriptions adopted by President Reagan, he faulted his inability to encumber spending by Congress. Of course, John Cassidy took a contrary view, asserting that David Stockmam’s failure to rein in discretionary spending as Chairman of the Office of Management and Budget was a boon to the U.S. economy. He also claimed that the tepidity of the current economic recovery should be attributed to the decline in spending at the state and local level, which is commensurate with the rise in spending at a federal level.

Perhaps the most intriguing statement made during the course of the hour and a half-long debate was the claim by James K. Galbraith that “the United States is not in a debt trap; debt levels, by historical standards, are not that large.” While this might seem like an implausible claim when viewed in the context of a national debt that eclipses 14 trillion dollars, and a government whose payment obligations range from 100 to 200 trillion dollars, it is not an entirely aberrant perspective. In fact, there is a rather popular book whose author attacks the very notion of retiring the national debt.

What was surprising about this debate was the willingness among some of the Hayekians to countenance government intervention into the economy, although perhaps it shouldn’t have been considering the political views of Hayek himself, who supported numerous interventionist policies during his lifetime. To the chagrin of my anarcho-capitalist friends in the audience, Edmund Phelps-a 2006 Nobel laureate in Economics-repeatedly emphasized areas in which he supported government intervention into the economy, at one point during his closing statement even rejecting the label of “Hayekian.” During his opening remarks, he made the point that the depressions experienced by Keynes were monetary in origin-signaled by rapid deflation-and that, as a response, monetary policy had to be altered. Since the economy in our current financial crisis initially faced what was essentially a liquidity problem, “the Keynesians were right to urge the Fed to increase demand for money.” Phelps contended, however, that since today what we are facing is a “structural slump” Keynes’s theory of employment was not applicable. In addition to supporting the first round of quantitative easing undertaken by the Federal Reserve, in his closing remarks Phelps seemed to imply that portions of the jobs’ plan put forth by President Obama were worthy of consideration.

I’m not sure if it was this nuance that led to the ultimate result, but at the conclusion of the debate a slim majority, 52% of the audience, professed themselves to be “pro-Keynes.” It should be noted, however, that this was only an increase of 5% from the outset of the evening’s debate, whereas the “pro-Hayek” side of the ledger gained the support of an additional 9% of the crowd, from a starting point of 33%. The Hayekian interpretation of this result is that the anti-Keynes forces were more persuasive in making their arguments, although strategic voting might have also played a role. In either case, I think the debate over whose ideas are more sound will persist for some time. Perhaps it will even be expanded to include an even more consistently anti-state Austrian viewpoint that will satisfy my disenchanted anarcho-capitalist friends.

Mises vs. Fisher anyone?

Yesterday, as I was standing behind hundreds of other job-seekers in line for one of the periodic job fairs held by the New York Post at the Affinia Hotel, I realized how pivotal forums like the Intelligence Squared U.S. debate-pictured above-which I attended on Tuesday are to the economic debate occurring in this country. This was the first in a series of insta-debates hosted by Intelligence Squared, which are intended to “debate a topic at the forefront of current events,” according to the program guide for IQ2. 

That topic, in this instance, was President Obama’s proposed jobs plan, which had recently been rejected by the United States Senate. Therefore, the resolution was modified to reflect the President’s legislative defeat: Congress Should Pass President Obama’s Jobs Plan…Piece By Piece. 

One of those pieces-as labor economist and former advisor to President Obama Cecilia Rouse pointed out during the debate-is a law that would prohibit firms from publicly dissuading potential applicants who are unemployed from applying for advertised job openings. The tangibility of this issue was brought home during the job fair I attended, when in response to a recruiter asking what the best strategy for being hired is, someone caustically replied, “have a job.” In addition to this provision, which Rouse admitted was mostly a cosmetic measure-mitigated to some extent by discretionary waivers that could be issued by the government, similar to those issued under PPACA-intended to encourage those long term unemployed seeking work, there are a host of other measures that Democrats in Congress and President Obama continue to push in one form or another.

As Professor Rouse described it, 40% of the bill would consist of direct stimulus, e.g. $1,500 in tax cuts for those earning 50,000 dollars or less, the extension of unemployment benefits for those who’ve exhausted their 73 weeks, while 20% would be earmarked for labor cost efficiency. That would encompass everything from an extended payroll tax cut for employers to federal stipends for hiring those who are among the long term unemployed, which as the debate was taking place stood at 6.2 million. Another element of the jobs package would be the creation of a national infrastructure reinvestment bank, an idea that has been in circulation since the beginning of the housing and banking crises in 2007. Most of these measures would be funded through the elimination of certain tax credits attaining to wealthier Americans and hedge funds, something that Mark Zandi-Chief Economist at Moody’s Analytics, and Professor Rouse’s partner in supporting the debate resolution-conceded was “a negative, but a modest negative.”

All of these measures are intended to provide short term stability and integrity to an economy experiencing a profoundly sluggish recovery, notwithstanding its slightly improved showing this 3rd quarter. As Mark Zandi pointed out during his introductory remarks, the 75,000 new jobs that are being added per month need to be doubled simply in order to maintain a stable rate of unemployment. Both Zandi and Rouse emphasized that there would need to long term, deep structural changes in order to achieve permanent economic growth for the foreseeable future. Zandi’s recommendations included reform and simplification of the tax code as well as implementation of recommendations submitted by the deficit reduction commission, a.k.a. the Simpson-Bowles Commission. Professor Rouse, on the other hand, touted the work sharing programs in place in nations that have weathered the recession slightly better the United States; specifically, Germany and Canada. This proposed solution has been suggested by other analysts who’ve tried to resolve the seemingly intractable problem of joblessness plaguing the United States for the past three years.

Both Rouse and Zandi, however, agreed that the best short term solution to the woeful economic problems we’re currently facing is to immediately enact the proposals advocated by the Obama administration. Zandi asserted that the original, 850 billion dollar stimulus package, known as the American Recovery and Reinvestment Act of 2009, succeeded in its intended effect, i.e. propping up an economy that was reeling from the implosion of the housing industry and concurrent banking crisis. In support of this argument, Zandi cited the fact that in February of 2009 the American economy was shedding 750,000 jobs every month, whereas by June of that same year-after the stimulus had been enacted-the economy was showing a monthly increase in job growth. He asserted that we have created 2 million new jobs since February of 2010, demonstrating that the stimulus was an effective stop gap measure in shoring up our economy.

By contrast, the opponents of the debate resolution, NYU Law School professor Richard Epstein and Cato Institute economist Daniel Mitchell, argued that the Obama stimulus plan had been a complete failure, and that enacting a stimulus-heavy jobs bill would simply recreate the same problems found in the first legislative attempt at restarting our sputtering economy. Mitchell took particular aim at the Keynesian underpinning to these plans, which relies upon the notion that government injecting money into the economy will spur private sector growth, without acknowledging that the public sector needs non-governmentnal, private sector prosperity in order to fund its expenditures. He asserted that “government can’t put money into the economy without taking money out,” which amounts to the central critique of Keynesianism. Rather, Mitchell suggested that expanding economic growth entailed expanding the pie, not redistributing pre-existing wealth-a reference to the surcharge that would defray the costs of this jobs bill.

When Mark Zandi claimed that “fiscal stimulus is a tried and true response to recession,” which had been implemented after every major economic downturn since World War II, Mitchell countered that it was a solution that had proven to be a failure time and time again. To buttress his argument, Dan Mitchell cited the 47 percent increase in government spending during four years of the Hoover administration, the over 100 percent increase in spending from 1932-1940, the government support of industry during the Ford administration, as well as the 16 different stimulus programs Japan has experimented with since its lost decade-none of which succeeded in spurring economic growth or job creation-as examples of why centrally planned management of the economy does more harm than good when it comes to creating employment opportunities.

His partner in opposing the debate’s resolution, Richard Epstein, acknowledged that infrastructure spending, such as building roads, bridges, etc., might be justified, yet insisted that the way this spending was channeled through the federal bureaucracy insured that whatever benefit might obtain from such projects would never materialize. He described the institutions set up as a result of the American Recovery and Investment Act as “a massive bureaucracy designed to waste money.” He took aim at the buy America provisions in particular, claiming that these caused the government to spend as much as possible on labor, whereas the goal of businesses is to minimize labor costs. Epstein had a corollary critique of the prevailing wage mandates that contractors accept while working on stimulus projects, which he believes negate whatever benefit might be derived from new construction projects. This is why he suggested stripping the Davis-Bacon Act from any future stimulus projects, despite opposition from organized labor-one of the central themes in Professor Epstein’s argument was that much of the spending overseen by federal agencies is directed at rewarding President Obama’s political benefactors, rather than boosting the American economy.

The opponents of the resolution disputed both the methodology and the figures employed by Rouse and Zandi to support their position; arguing that the projected economic growth forecasted by the Congressional Budget Office after analyzing the proposed jobs bill relied upon a static, econometric model which didn’t reflect real world consequences of government policies or the responses of individuals to those policies. Both Epstein and Mitchell disputed the notion that the first stimulus package had saved jobs, asserting that this claim was not falsifiable. Cecilia Rouse acknowledged that it was impossible  to prove a counterfactual, i.e. we can’t know what the unemployment rate would have been had the stimulus package not been passed, but contended that an analysis of states that received more stimulus funds-and experienced job stabilization or growth-demonstrated that it was a worthwhile endeavor in staving off even greater unemployment.

Richard Epstein was critical of what he saw as a decision to raise taxes on the most productive citizens, only to put it “into the hands of the government, which doesn’t know how to use it.” This comment drew a vociferously negative response from the audience in the Skirball Center. Rouse countered with the assertion that there has never been a strong relationship between high marginal tax rates and economic growth, citing what was then the largest tax increase in American history during the Clinton administration which coincided with robust economic growth. Dan Mitchell contested the linkage, but averred that he would gladly exchange the budget consciousness of the Clinton Era-which was eradicated by successive presidents-in return for slightly higher marginal tax rates.

One audience member attacked Rouse’s defense of the Clinton Era policies-both fiscal and monetary-pointing out that many have blamed the Greenspan-led Federal Reserve for the boom and bust cycle that ultimately led to the unraveling of the American economy during the last year of President Clinton’s second term. As to the more immediate question of whether the Obama jobs plan would stimulate economic growth, the supporters of the resolution insisted that congressional action-even in a piecemeal fashion-was preferable to doing nothing, insofar as inaction carried the risk of creating a double dip recession. And while Mark Zandi conceded that “Keynesian theory is not an immutable fact” and “it doesn’t work in every environment,” he believed that in this case, it was dictated by the pressing lack of job growth and continued stagnant housing market. His debate opponents vociferously attacked this assumption, maintaining that the first goal of the government with respect to the economy was to “do no harm.” Epstein encapsulated the philosophy of the resolution’s opponents by stating that, “If you don’t know what you’re doing, don’t spend government money doing it.” His solution was doing away with industrial policy altogether, as well as thwarting microeconomic policies that he felt were retarding economic growth, such as the  decision by the National Labor Relations Board  to penalize Boeing for moving manufacturing from Washington to South Carolina, the President’s support for card check legislation, in addition to what he described as implicit taxes contained within the health care overhaul enacted by Congress and signed into law by Barack Obama. In the end, Epstein concluded that the best way to boost job growth was to deregulate labor markets through a reversal of the aforementioned Obama-supported policies. Zandi and Rouse rejected the notion that this would do anything to spur economic growth in the short term, and accused their opponents of not having an immediate program for job development.

The audience was unpersuaded by the argument put forth by the opponents of the resolution, ultimately voting in favor of it by a margin of 69% to 22%, with 9% of the audience remaining undecided. That was actually an increase of 24% from the initial pre-debate audience survey, indicating that Cecilia Rouse and Mark Zandi had “won” the debate. It must be said that the result probably had more to do with the ideological inclinations of the audience coming in to the debate than the persuasiveness of the affirmative’s arguments-unfortunately, that’s one of the more problematic features of IQ2 debates, which occasionally cause a reification of political views rather than an expansion of the spectator’s world view. That said, I was still pleased to be able to attend a debate about such a pivotal issue, which featured some of those most knowledgeable about the current economic crisis.

The carnage  emanating from the Obama administration’s gunwalking adventures continues to mount, as reported by CBS News. And the havoc created by the BATF’s inexplicable attempt to arm murderous crime syndicates isn’t restricted to Mexico, as we’ve known for some time. In a new development, we’ve learned that in addition to enriching the Mexican coffin-making industry, the ATF has now been accused of aiding and abetting crime within our country. David Codrea, the leading investigative reporter thus far in exposing the administration’s subterfuge on these matters, has all of the details in his latest post for The Gun Rights Examiner.

Perhaps unsurprisingly, the dogged investigation into the ATF’s disastrous gunwalking campaign-and the administration’s obstruction of  subsequent congressional inquiries-has led leftist attack dogs and administration flacks to shoot the messenger. Most likely with guns provided by the BATF. In all seriousness, the latest revelations about this administration’s disastrously ill-conceived gunwalking program only lends credence to the accusations that it is covering up something much bigger, which might inculpate top White House officials. The buck obviously didn’t stop with ATF bureaucrats. Hopefully the much-maligned Darrell Issa-and his colleagues in the House and Senate-will find out who’s ultimately responsible for these lethally idiotic decisions.