Tax the rich

[KaskadskyjKozak]

top-to-bottom fraud and greed across the board

There were a lot of distortions alright, but interest rates may have been the least of them...

I am glad, I am not the only one with such opinion. The funny thing is how many people who supported deregulation were dry-tooled in the process (I mean not even spit for extra friction) and still keep repeating the same old drivel. Just the same unproven drivel, that lower taxes create jobs. No they don't- they destroy jobs.

 

1. How are jobs created and maintained, in your opinion?

 

2. How does lowering taxes destroy them in your opinion?

 

They are created by the magical libtard jobs unicorn!

[prole]

The job-creation narrative that helped sell the Bush tax cuts never materialized in the midst of another jobless recovery. That's pretty obvious.

 

In related news, the connection between job destruction and another conservative fantasy ("free trade creates jobs"), got much clearer this week:

 

Tallying the Toll of U.S.-China Trade

Justin Lahart

WSJ 9/27/11

 

For years, economists have told Americans worried that cheap Chinese imports will kill jobs that the benefits of trade with China far outweigh its costs.

 

New research suggests the damage to the U.S. has been deeper than these economists have supposed. The study, conducted by a team of three economists, doesn't challenge the traditional view that trade is ultimately good for the economy. Workers who lose jobs do eventually find new work or retire, while the benefits from trade, such as lower prices, remain. The problem is the speed at which China has surged as an exporter, overwhelming the normal process of adaptation.

 

The study rated every U.S. county for its manufacturers' exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline. Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments.

 

The authors calculate that the cost to the economy from the increased government payments amounts to one- to two-thirds of the gains from trade with China. In other words, a big portion of the ways trade with China has helped the U.S.—such as by providing inexpensive Chinese goods to consumers—has been wiped out. And that estimate doesn't include any economic losses experienced by people who lost their jobs.

 

"There are really huge adjustment costs to local communities that were far worse than people had appreciated," said David Autor of the Massachusetts Institute of Technology, who conducted the study with Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Financial Studies in Madrid. While Mr. Autor, who specializes in labor markets, receives some funding from the National Science Foundation, this research was conducted independently of any interest group.

 

The theory of comparative advantage, framed two centuries ago by British economist David Ricardo, says nations prosper by focusing on what they do best and trading with other countries that have different strengths. But amid the surge in inexpensive imports over the past decade, some prominent economists have challenged that view.

 

In a 2004 article, the late Nobel Laureate Paul Samuelson argued that while trade may benefit some Americans, it does so by "decimating" the wages of blue-collar factory workers. Princeton University economist and former Federal Reserve Board vice chairman Alan Blinder, once a champion of free trade, in recent years has argued that U.S. firms' increased outsourcing to low-wage countries puts millions of American jobs at risk.

 

Michael Spence, a Nobel Laureate economist at New York University, said the new finding reflected how prevailing theories of trade aren't up to the task of dealing with the breakneck pace of China and other developing economies. Since the world has never seen such large countries grow so quickly, history isn't much of a guide. "It's not like we can look to the past and ask ourselves what happened last time this happened, because there wasn't a last time," he said.

 

Because the surge in goods from China has swamped import growth from other low-wage countries, the researchers focused on Chinese imports. They studied 722 clusters of interrelated counties covering the entire U.S. Some communities were more exposed to China, because they produced goods such as small appliances where Chinese imports have surged. Other regions were concentrated in industries like heavy machinery where Chinese competition has been slower to build.

 

A pattern emerged, with areas where factories were most exposed to Chinese import growth faring worse than the less exposed. Between 2000 and 2007, a community at the 75th percentile—one with a greater exposure to Chinese import growth than 75% of all communities—saw a manufacturing employment decline of roughly one-third more than communities at the 25th percentile.

 

Factory job losses were just the beginning. High-exposure areas tended to see employment outside manufacturing fare worse than in low-exposure areas. With fewer high-paying factory jobs supporting the local economy, and a growing pool of former factory workers entering the labor market, nonmanufacturing wages in the high-exposure areas were depressed.

 

The economists also found that higher exposure to Chinese imports led to larger increases in unemployment insurance, food stamps, disability payments and other government benefits. Those add up to big losses, they said, because the higher taxes the government must collect to pay for benefits, and the way benefits reduce people's incentive to work, makes the economy less efficient.

 

Dartmouth College economist Douglas Irwin said the new research painted too bleak a picture. There are important benefits of trade that aren't captured, he said, because nobody has figured out how to measure them. For example, commodity-producing countries the U.S. exports to have been boosted by China's growth, creating greater demand in those nations for U.S. goods. "But if we had more exports of (Caterpillar) heavy equipment to Australia, that's not being measured" as a gain from trade with China, he says.

 

It's also worth noting that many U.S. manufacturing jobs have been lost to factors such as the recession, outsourcing and technology, not Chinese imports.

 

The economists themselves were surprised by the results. Research Mr. Hanson conducted in the 1990s, based on data from before China became such a global player, suggested trade's effect on the U.S. labor market was small. "With the China study, I did not anticipate that a dozen years could make such a large difference in terms of the greater quantitative impact of trade," Mr. Hanson said.

 

The research is still awaiting peer review, but the economists have been presenting it at conferences.In earlier versions, they calculated gains from trade with China were completely wiped out by the losses from the increased use of government benefits. Some conference participants objected that the economists didn't weight appropriately how much of the rise in imports from China was due to growing American demand rather than low-cost Chinese goods winning out over higher-priced U.S. ones. The three adopted a more conservative approach.--from here

 

 

[ivan]

 

1. How are jobs created and maintained, in your opinion?

 

2. How does lowering taxes destroy them in your opinion?

1. jobs are created when a demand exists for a service or a good and someone steps up to meet (or even create) that demand

 

2. i don't see that lowering taxes moderately destroys jobs, nor that raising them moderately does so either - at some point it makes sense that the risk of losing an investment in a business outweighs the likely actual profit from a successful payout, which clearly taxes eat into - but at some point, a failure for the government to provide services (basic ones like maintaining roads and bridges but also complex ones like banking and securities regulation) also endangers the success of an enterprise, too, right? like: you can't get the goods to market b/c the bridge fell into the river or you can't sell the house you built b/c banks played crazy fucking games w/ the cash while the g-man was greasing his pole in the men's room so now nobody can borrow money to pay you so now you gotta lay off all the carpenters on your crew. so, in theory, low taxes could fuck jobs, right? especially when the political system is simultaneously pushed to not provide the service the taxes were there for in the first place?

[JayB]

 

1. How are jobs created and maintained, in your opinion?

 

2. How does lowering taxes destroy them in your opinion?

1. jobs are created when a demand exists for a service or a good and someone steps up to meet (or even create) that demand

 

2. i don't see that lowering taxes moderately destroys jobs, nor that raising them moderately does so either - at some point it makes sense that the risk of losing an investment in a business outweighs the likely actual profit from a successful payout, which clearly taxes eat into - but at some point, a failure for the government to provide services (basic ones like maintaining roads and bridges but also complex ones like banking and securities regulation) also endangers the success of an enterprise, too, right? like: you can't get the goods to market b/c the bridge fell into the river or you can't sell the house you built b/c banks played crazy fucking games w/ the cash while the g-man was greasing his pole in the men's room so now nobody can borrow money to pay you so now you gotta lay off all the carpenters on your crew. so, in theory, low taxes could fuck jobs, right? especially when the political system is simultaneously pushed to not provide the service the taxes were there for in the first place?

 

Sounds right to me on both counts. I think you can also add in persistently large deficits that make people concerned about the solvency of the government and become much more risk averse than they would otherwise.

 

I think the main place where we differ on the second count is that I think that the government should limit what it does to things that only it can do, and it should maximize efficiency (crank out the most services that only it can provide at the lowest price that doesn't compromise the delivery of the said service). The low hanging fruit that we'd probably agree on is saving money by getting the government out of the business of policing things that people do to themselves or that consenting adults do to each other without directly harming anyone else.

 

The flip side of the tax coin is that when the costs of providing the services grows at a rate faster than the underlying economy, and tax collections increase accordingly - eventually people figure out that they can get a better deal somewhere else and leave, decide it's not worth the trouble and leave, or lose the capacity to pay for the services the government is providing and stay in business. Or government will simply cut capacity without doing anything to change its basic cost structure - which means less services, and gets us back to the scenario you outlined above. Different path to the same destination.

 

You can see this dynamic writ large in the US by following the re-distribution of both population and production away from the Northeast and Midwest and towards the South and West over the past few decades.

[prole]

2. i don't see that lowering taxes moderately destroys jobs, nor that raising them moderately does so either - at some point it makes sense that the risk of losing an investment in a business outweighs the likely actual profit from a successful payout, which clearly taxes eat into - but at some point, a failure for the government to provide services (basic ones like maintaining roads and bridges but also complex ones like banking and securities regulation) also endangers the success of an enterprise, too, right? like: you can't get the goods to market b/c the bridge fell into the river or you can't sell the house you built b/c banks played crazy fucking games w/ the cash while the g-man was greasing his pole in the men's room so now nobody can borrow money to pay you so now you gotta lay off all the carpenters on your crew. so, in theory, low taxes could fuck jobs, right? especially when the political system is simultaneously pushed to not provide the service the taxes were there for in the first place?

 

In the current smash and grab mode of accumulation, disaster capitalists have traded your realist understanding of the role of the State for their own propaganda. We now have a comparative advantage in aging fatties and payday loan interest payers. Not much else.

 

[JayB]

The job-creation narrative that helped sell the Bush tax cuts never materialized in the midst of another jobless recovery. That's pretty obvious.

 

In related news, the connection between job destruction and another conservative fantasy ("free trade creates jobs"), got much clearer this week:

 

Tallying the Toll of U.S.-China Trade

Justin Lahart

WSJ 9/27/11

 

For years, economists have told Americans worried that cheap Chinese imports will kill jobs that the benefits of trade with China far outweigh its costs.

 

New research suggests the damage to the U.S. has been deeper than these economists have supposed. The study, conducted by a team of three economists, doesn't challenge the traditional view that trade is ultimately good for the economy. Workers who lose jobs do eventually find new work or retire, while the benefits from trade, such as lower prices, remain. The problem is the speed at which China has surged as an exporter, overwhelming the normal process of adaptation.

 

The study rated every U.S. county for its manufacturers' exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline. Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments.

 

The authors calculate that the cost to the economy from the increased government payments amounts to one- to two-thirds of the gains from trade with China. In other words, a big portion of the ways trade with China has helped the U.S.—such as by providing inexpensive Chinese goods to consumers—has been wiped out. And that estimate doesn't include any economic losses experienced by people who lost their jobs.

 

"There are really huge adjustment costs to local communities that were far worse than people had appreciated," said David Autor of the Massachusetts Institute of Technology, who conducted the study with Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Financial Studies in Madrid. While Mr. Autor, who specializes in labor markets, receives some funding from the National Science Foundation, this research was conducted independently of any interest group.

 

The theory of comparative advantage, framed two centuries ago by British economist David Ricardo, says nations prosper by focusing on what they do best and trading with other countries that have different strengths. But amid the surge in inexpensive imports over the past decade, some prominent economists have challenged that view.

 

In a 2004 article, the late Nobel Laureate Paul Samuelson argued that while trade may benefit some Americans, it does so by "decimating" the wages of blue-collar factory workers. Princeton University economist and former Federal Reserve Board vice chairman Alan Blinder, once a champion of free trade, in recent years has argued that U.S. firms' increased outsourcing to low-wage countries puts millions of American jobs at risk.

 

Michael Spence, a Nobel Laureate economist at New York University, said the new finding reflected how prevailing theories of trade aren't up to the task of dealing with the breakneck pace of China and other developing economies. Since the world has never seen such large countries grow so quickly, history isn't much of a guide. "It's not like we can look to the past and ask ourselves what happened last time this happened, because there wasn't a last time," he said.

 

Because the surge in goods from China has swamped import growth from other low-wage countries, the researchers focused on Chinese imports. They studied 722 clusters of interrelated counties covering the entire U.S. Some communities were more exposed to China, because they produced goods such as small appliances where Chinese imports have surged. Other regions were concentrated in industries like heavy machinery where Chinese competition has been slower to build.

 

A pattern emerged, with areas where factories were most exposed to Chinese import growth faring worse than the less exposed. Between 2000 and 2007, a community at the 75th percentile—one with a greater exposure to Chinese import growth than 75% of all communities—saw a manufacturing employment decline of roughly one-third more than communities at the 25th percentile.

 

Factory job losses were just the beginning. High-exposure areas tended to see employment outside manufacturing fare worse than in low-exposure areas. With fewer high-paying factory jobs supporting the local economy, and a growing pool of former factory workers entering the labor market, nonmanufacturing wages in the high-exposure areas were depressed.

 

The economists also found that higher exposure to Chinese imports led to larger increases in unemployment insurance, food stamps, disability payments and other government benefits. Those add up to big losses, they said, because the higher taxes the government must collect to pay for benefits, and the way benefits reduce people's incentive to work, makes the economy less efficient.

 

Dartmouth College economist Douglas Irwin said the new research painted too bleak a picture. There are important benefits of trade that aren't captured, he said, because nobody has figured out how to measure them. For example, commodity-producing countries the U.S. exports to have been boosted by China's growth, creating greater demand in those nations for U.S. goods. "But if we had more exports of (Caterpillar) heavy equipment to Australia, that's not being measured" as a gain from trade with China, he says.

 

It's also worth noting that many U.S. manufacturing jobs have been lost to factors such as the recession, outsourcing and technology, not Chinese imports.

 

The economists themselves were surprised by the results. Research Mr. Hanson conducted in the 1990s, based on data from before China became such a global player, suggested trade's effect on the U.S. labor market was small. "With the China study, I did not anticipate that a dozen years could make such a large difference in terms of the greater quantitative impact of trade," Mr. Hanson said.

 

The research is still awaiting peer review, but the economists have been presenting it at conferences.In earlier versions, they calculated gains from trade with China were completely wiped out by the losses from the increased use of government benefits. Some conference participants objected that the economists didn't weight appropriately how much of the rise in imports from China was due to growing American demand rather than low-cost Chinese goods winning out over higher-priced U.S. ones. The three adopted a more conservative approach.--from here

 

 

There's nothing magical about geographic boundaries. If trade between countries destroys jobs, so does trade between states, counties, cities, and individuals.

 

Unions are smart enough to recognize that it doesn't matter where the competition comes from, as long as people can whatever they're making for a lower price - they're toast. Doesn't matter if it's across town or across the globe. Which is why they do everything they can to either prevent people from buying from someone else, or hamstring their competitors with enough penalties to neutralize any price advantage that their competitors have.

 

 

[prole]

The job-creation narrative that helped sell the Bush tax cuts never materialized in the midst of another jobless recovery. That's pretty obvious.

 

In related news, the connection between job destruction and another conservative fantasy ("free trade creates jobs"), got much clearer this week:

 

Tallying the Toll of U.S.-China Trade

Justin Lahart

WSJ 9/27/11

 

For years, economists have told Americans worried that cheap Chinese imports will kill jobs that the benefits of trade with China far outweigh its costs.

 

New research suggests the damage to the U.S. has been deeper than these economists have supposed. The study, conducted by a team of three economists, doesn't challenge the traditional view that trade is ultimately good for the economy. Workers who lose jobs do eventually find new work or retire, while the benefits from trade, such as lower prices, remain. The problem is the speed at which China has surged as an exporter, overwhelming the normal process of adaptation.

 

The study rated every U.S. county for its manufacturers' exposure to competition from China, and found that regions most exposed to China tended not only to lose more manufacturing jobs, but also to see overall employment decline. Areas with higher exposure also had larger increases in workers receiving unemployment insurance, food stamps and disability payments.

 

The authors calculate that the cost to the economy from the increased government payments amounts to one- to two-thirds of the gains from trade with China. In other words, a big portion of the ways trade with China has helped the U.S.—such as by providing inexpensive Chinese goods to consumers—has been wiped out. And that estimate doesn't include any economic losses experienced by people who lost their jobs.

 

"There are really huge adjustment costs to local communities that were far worse than people had appreciated," said David Autor of the Massachusetts Institute of Technology, who conducted the study with Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Financial Studies in Madrid. While Mr. Autor, who specializes in labor markets, receives some funding from the National Science Foundation, this research was conducted independently of any interest group.

 

The theory of comparative advantage, framed two centuries ago by British economist David Ricardo, says nations prosper by focusing on what they do best and trading with other countries that have different strengths. But amid the surge in inexpensive imports over the past decade, some prominent economists have challenged that view.

 

In a 2004 article, the late Nobel Laureate Paul Samuelson argued that while trade may benefit some Americans, it does so by "decimating" the wages of blue-collar factory workers. Princeton University economist and former Federal Reserve Board vice chairman Alan Blinder, once a champion of free trade, in recent years has argued that U.S. firms' increased outsourcing to low-wage countries puts millions of American jobs at risk.

 

Michael Spence, a Nobel Laureate economist at New York University, said the new finding reflected how prevailing theories of trade aren't up to the task of dealing with the breakneck pace of China and other developing economies. Since the world has never seen such large countries grow so quickly, history isn't much of a guide. "It's not like we can look to the past and ask ourselves what happened last time this happened, because there wasn't a last time," he said.

 

Because the surge in goods from China has swamped import growth from other low-wage countries, the researchers focused on Chinese imports. They studied 722 clusters of interrelated counties covering the entire U.S. Some communities were more exposed to China, because they produced goods such as small appliances where Chinese imports have surged. Other regions were concentrated in industries like heavy machinery where Chinese competition has been slower to build.

 

A pattern emerged, with areas where factories were most exposed to Chinese import growth faring worse than the less exposed. Between 2000 and 2007, a community at the 75th percentile—one with a greater exposure to Chinese import growth than 75% of all communities—saw a manufacturing employment decline of roughly one-third more than communities at the 25th percentile.

 

Factory job losses were just the beginning. High-exposure areas tended to see employment outside manufacturing fare worse than in low-exposure areas. With fewer high-paying factory jobs supporting the local economy, and a growing pool of former factory workers entering the labor market, nonmanufacturing wages in the high-exposure areas were depressed.

 

The economists also found that higher exposure to Chinese imports led to larger increases in unemployment insurance, food stamps, disability payments and other government benefits. Those add up to big losses, they said, because the higher taxes the government must collect to pay for benefits, and the way benefits reduce people's incentive to work, makes the economy less efficient.

 

Dartmouth College economist Douglas Irwin said the new research painted too bleak a picture. There are important benefits of trade that aren't captured, he said, because nobody has figured out how to measure them. For example, commodity-producing countries the U.S. exports to have been boosted by China's growth, creating greater demand in those nations for U.S. goods. "But if we had more exports of (Caterpillar) heavy equipment to Australia, that's not being measured" as a gain from trade with China, he says.

 

It's also worth noting that many U.S. manufacturing jobs have been lost to factors such as the recession, outsourcing and technology, not Chinese imports.

 

The economists themselves were surprised by the results. Research Mr. Hanson conducted in the 1990s, based on data from before China became such a global player, suggested trade's effect on the U.S. labor market was small. "With the China study, I did not anticipate that a dozen years could make such a large difference in terms of the greater quantitative impact of trade," Mr. Hanson said.

 

The research is still awaiting peer review, but the economists have been presenting it at conferences.In earlier versions, they calculated gains from trade with China were completely wiped out by the losses from the increased use of government benefits. Some conference participants objected that the economists didn't weight appropriately how much of the rise in imports from China was due to growing American demand rather than low-cost Chinese goods winning out over higher-priced U.S. ones. The three adopted a more conservative approach.--from here

 

 

There's nothing magical about geographic boundaries. If trade between countries destroys jobs, so does trade between states, counties, cities, and individuals.

 

Unions are smart enough to recognize that it doesn't matter where the competition comes from, as long as people can whatever they're making for a lower price - they're toast. Doesn't matter if it's across town or across the globe. Which is why they do everything they can to either prevent people from buying from someone else, or hamstring their competitors with enough penalties to neutralize any price advantage that their competitors have.

 

 

Yes, the failure of the union movement to grasp and act on the necessity of a true international in the context of global capitalism has been a monumental mistake.

 

But anyway, simply saying that "trade destroys jobs" as if all this were just an unfolding of God's everlasting plan overlooks the vast arsenal that a state or other kinds of communities have at their disposal to shape the terms of those relationships and to mitigate the impacts in ways that actually benefit citizens (given of course that their political and intellectual leadership isn't composed of the kind of frothing zealots that we've had for the last few decades). I think that's the point of the paper, yes?

[112]

Unions are smart enough to recognize that it doesn't matter where the competition comes from, as long as people can whatever they're making for a lower price - they're toast. Doesn't matter if it's across town or across the globe. Which is why they do everything they can to either prevent people from buying from someone else, or hamstring their competitors with enough penalties to neutralize any price advantage that their competitors have.

Slave labor has a really good price advantage. It seems pretty obvious to me that modern society doesn't need (and can't actually make effective use of) all the people currently on the planet (and there will likely be more tomorrow). If you force people to compete for their needs thru the market (where can I go and homestead these days???), then this race to the bottom is going to result in major violence. We have to change our economic paradigm (or accept people dying in front of us) as the infinite growth model isn't going to work forever. Maybe you are for periodic massive resets in population with growth in between? Or do you believe Jesus is coming? Or something else?

[ivan]

I think the main place where we differ on the second count is that I think that the government should limit what it does to things that only it can do

that suuuure don't leave much

 

obviously the private sector can provide education, security, transportation, healthcare, pensions, libraries, anything really, but it's not like they have a superb record at providing those services, especially when they can (and always will, when the conditions are right) twist the rules to benefit themselves.

[ivan]

Or do you believe Jesus is coming?

more like adam smith?

 

seems like free trade is one of those things that you can fuck you just as well as fix you - seems like in the old days governments played whichever card worked best for them at the time, with mixed results - seems like half-assed and half-best is the best folks can hope for?

[tvashtarkatena]

Or do you believe Jesus is coming?

more like adam smith?

 

seems like free trade is one of those things that you can fuck you just as well as fix you - seems like in the old days governments played whichever card worked best for them at the time, with mixed results - seems like half-assed and half-best is the best folks can hope for?

 

How about limiting what government does to activities that cannot and should not be provided by self interested parties driven by the profit motive?

 

I'm amazed at the assumption, not even questioned by so many, that private organizations are more efficient and cost effective than public. You mean those organizations that fail 80% of the time within two years? Those organizations that have brought us stratospheric levels of fraud and abject abuse of the public interest through pollution, unsafe drugs, horrific food, and even worse health care?

 

Smart and ethical organizations produce good results, whether public or private. So to you morons out there who make this idiotic assumption (given the stats), you can STFU now about how awesome the private sector is. It's half a bowl full of assholes mixed with half a bowl full of dumbfucks, just like any other sector.

 

In times of scarcity, and we are certainly in one, amortizing risk by banding together with the public's long term interest in mind produces the best outcome. Every man for himself is a recipe for increased fuckedupedness.

[mattp]

I'm amazed at the assumption, not even questioned by so many, that private organizations are more efficient and cost effective than public. You mean those organizations that fail 80% of the time within two years? Those organizations that have brought us stratospheric levels of fraud and abject abuse of the public interest through pollution, unsafe drugs, horrific food, and even worse health care?

 

Don't forget, the mostly private interest financial organizations who gained de-regulation and tanked our economy.

[JosephH]

There are lots of variables to consider, and its certainly worth considering the role of each. I presume that you are aware of the connection between the price of a given debt-financed asset, and the cost of borrowing the money to purchase the said asset. When interest rates go down, the price of the asset typically goes up in a manner that's proportionate to the interest rate reduction.

Normal market mechanics are one thing, systemic fraud on a scale not seen in recent times is another. What happened politically in the decade prior to '99 and what followed financially was nothing less than organized crime on an institutional scale and a open raid on the four main forms of consumer debt. From board members, to underwriters, to originators, and hell, even higher-ed boards and financial aid directors - the system was deliberately gamed at every level.

 

That it took a couple of years to gin/spin-up and co-op a ubiquitous fraudulent infrastructure isn't exactly a surprise. Again, the fact all the origination mills are now foreclosure mills pretty much says it all. Everyone on Wall St. and in DC want to talk about our current situation from the perspective of market dynamics - no one wants to acknowledge what really went on and the fact we basically arrived here on a wink and a nod.

[tvashtarkatena]

Reagan (and just about everyone after him) said to the private sector: "Do whatever you want."

 

They did.

 

Not a smart negotiating technique.

[prole]

Spray, so timely...

 

Companies Use Immigration Crackdown to Turn a Profit

By NINA BERNSTEIN, NYT 9/28/11

 

The men showed up in a small town in Australia’s outback early last year, offering top dollar for all available lodgings. Within days, their company, Serco, was flying in recruits from as far away as London, and busing them from trailers to work 12-hour shifts as guards in a remote camp where immigrants seeking asylum are indefinitely detained.

 

It was just a small part of a pattern on three continents where a handful of multinational security companies have been turning crackdowns on immigration into a growing global industry.

 

Especially in Britain, the United States and Australia, governments of different stripes have increasingly looked to such companies to expand detention and show voters they are enforcing tougher immigration laws.

 

Some of the companies are huge — one is among the largest private employers in the world — and they say they are meeting demand faster and less expensively than the public sector could.

 

But the ballooning of privatized detention has been accompanied by scathing inspection reports, lawsuits and the documentation of widespread abuse and neglect, sometimes lethal. Human rights groups say detention has neither worked as a deterrent nor speeded deportation, as governments contend, and some worry about the creation of a “detention-industrial complex” with a momentum of its own.

 

“They’re very good at the glossy brochure,” said Kaye Bernard, general secretary of the union of detention workers on the Australian territory of Christmas Island, where riots erupted this year between asylum seekers and guards. “On the ground, it’s almost laughable, the chaos and the inability to function.”

 

Private prisons in the United States have long stirred controversy. But while there have been conflicting studies about their costs and benefits, no systematic comparisons exist for immigration detention, say scholars like Matthew J. Gibney, a political scientist at the University of Oxford who tracks immigration systems.

 

Still, Mr. Gibney and others say the pitfalls of outsourcing immigration enforcement have become evident in the past 15 years. “When something goes wrong — a death, an escape — the government can blame it on a kind of market failure instead of an accountability failure,” he said.

 

In the United States — with almost 400,000 annual detentions in 2010, up from 280,000 in 2005 — private companies now control nearly half of all detention beds, compared with only 8 percent in state and federal prisons, according to government figures. In Britain, 7 of 11 detention centers and most short-term holding places for immigrants are run by for-profit contractors.

 

No country has more completely outsourced immigration enforcement, with more troubled results, than Australia. Under unusually severe mandatory detention laws, the system has been run by a succession of three publicly traded companies since 1998. All three are now major players in the international business of locking up and transporting unwanted foreigners.

 

The first, the Florida-based prison company GEO Group, lost its Australia contract in 2003 amid a commission’s findings that detained children were subjected to cruel treatment. An Australian government audit reported that the contract had not delivered “value-for-money.” In the United States, GEO controls 7,000 of 32,000 detention beds.

 

The second company, G4S, an Anglo-Danish security conglomerate with more than 600,000 employees in 125 countries, was faulted for lethal neglect and abusive use of solitary confinement in Australia. By the middle of the past decade, after refugee children had sewed their lips together during hunger strikes in camps like Woomera and Curtin, and government commissions discovered that Australian citizens and legal residents were being wrongly detained and deported, protests pushed the Liberal Party government to dismantle some aspects of the system.

 

But after promising to return the work to the public sector, a Labor government awarded a five-year, $370 million contract to Serco in 2009. The value of the contract has since soared beyond $756 million as detention sites quadrupled, to 24, and the number of detainees ballooned to 6,700 from 1,000.

 

Dangerous Problems

 

Over the past year, riots, fires and suicidal protests left millions of dollars in damage at Serco-run centers from Christmas Island to Villawood, outside Sydney, and self-harm by detainees rose twelvefold, government documents show. In August, a government inspection report cited dangerous overcrowding, inadequate and ill-trained staff, no crisis planning and no requirement that Serco add employees when population exceeded capacity.

 

At the detention center Serco runs in Villawood, immigrants spoke of long, open-ended detentions making them crazy. Alwy Fadhel, 33, an Indonesian Christian who said he needed asylum from Islamic persecution, had long black hair coming out in clumps after being held for more than three years, in and out of solitary confinement.

 

“We talk to ourselves,” Mr. Fadhel said. “We talk to the mirror; we talk to the wall.”

 

Naomi Leong, a shy 9-year-old, was born in the detention camp. For more than three years, at a cost of about $380,000, she and her mother were held behind its barbed wire. Psychiatrists said Naomi was growing up mute, banging her head against the walls while her mother, Virginia Leong, a Malaysian citizen accused of trying to use a false passport, sank into depression.

 

Naomi and her mother became a cause célèbre in protests against the mandatory detention system, leading to their release in 2005 on rare humanitarian visas. They are now citizens.

 

“I come here to give little bit of hope to the people,” Ms. Leong said during a recent visit to Villawood, where posters display the governing principles of Serco, beginning with “We foster an entrepreneurial culture.”

 

Free-Market Solutions

 

Companies often say that losing a contract is the ultimate accountability.

 

“We are acutely aware of our responsibilities and are committed to the humane, fair and decent treatment of all those in our care,” a Serco spokesman said in an e-mail. “We will continue to work with our customers around the world and seek to improve the services we provide for them.”

 

But lost detention contracts are rare and easily replaced in this fast-growing business. Serco’s $10 billion portfolio includes many other businesses, from air traffic control and visa processing in the United States, to nuclear weapons maintenance, video surveillance and welfare-to-work programs in Britain, where it also operates several prisons and two “immigration removal centers.”

 

“If one area or territory slows down, we can move where the growth is,” Christopher Hyman, Serco’s chief executive, told investors last year, after reporting a 35 percent increase in profits. This spring, Serco reported a 13 percent profit rise.

 

Its rival G4S delivers cash to banks on most continents, runs airport security in 80 countries and has 1,500 employees in immigration enforcement in Britain, the Netherlands and the United States, where its services include escorting illegal border-crossers back to Mexico for the Department of Homeland Security.

 

Nick Buckles, the chief executive of G4S, would not discuss the company. But last year he told analysts how its “justice” business in the Netherlands blossomed in one week after the 2002 assassination of a politician with an anti-immigrant and law-and-order agenda.

 

“There’s nothing like a political crisis to stimulate a bit of change,” Mr. Buckles said.

 

In Britain last fall, the company came under criminal investigation in the asphyxiation of an Angolan man who died as three G4S escorts held him down on a British Airways flight. Soon afterward, British immigration authorities announced that the company had lost its bid to renew a $48 million deportation escort contract because it was underbid by a competitor.

 

Even so, G4S has more than $1.1 billion in government contracts in Britain, a spokesman said, only about $126 million from the immigration authority. It quickly replaced the lost revenue with contracts to build, lease and run more police jails and prisons.

 

In 2007, Western Australia’s Human Rights Commission found that G4S drivers had ignored the cries of detainees locked in a scorching van, leaving them so dehydrated that one drank his own urine. The company was ordered to pay $500,000 for inhumane treatment, but three of the five victims already had been deported. Immigration officials, relying on company misinformation, had dismissed their complaints without investigation, the commission found.

 

There was a public outcry when an Aboriginal man died in another G4S van in similar circumstances the next year. A coroner ruled in 2009 that G4S, the drivers and the government shared the blame. The company was later awarded a $70 million, five-year prisoner transport contract in another state, Victoria, without competition.

 

G4S pleaded guilty to negligence in the van death this year, and was fined $285,000. Mr. Buckles, its chief executive, alluded to the case at a meeting with analysts in March, reassuring them.

 

“There is only two or three major players, typically sometimes only two people bidding,” Mr. Buckles said. “In time, we will become a winner in that market because there’s a lot of outsourcing opportunities and not many competitors.”

 

In August, when GEO, the Florida prison company, posted a 40 percent rise in second-quarter profits, its executives in Boca Raton spoke of new immigration business on both sides of the Atlantic.

 

John M. Hurley, a GEO executive for North American operations, cited “the continued growth in the criminal alien population,” larger facilities, and longer federal contracts, some up to 20 years.

 

At the company’s Reeves County Detention Center in Texas, immigrant inmates rioted in 2009 and 2010 after several detainees died in solitary confinement. GEO executives declined to comment. But speaking to shareholders, they credited much of the quarter’s $10 million increase in international revenue to the expansion of a detention center in Britain, where immigration was a hot issue in the 2010 election.

 

A Policy Backfires

 

“Britain is no longer a soft touch,” Damian Green, the immigration minister, said in August 2010 when he visited the center, near Heathrow Airport, reopening wings that had burned in 2006 during detainee riots under a different private operator.

 

The riots started the day the chief inspector of prisons released a blistering report about abuses there, including excessive waits for deportation. Months after Mr. Green’s appearance, an independent monitoring board complained that at the expanded center — now Europe’s largest, with 610 detainees — at least 35 men had been waiting more than a year to be deported, including one locked up for three years and seven months at a cost of at least $237,000.

 

The camp that Serco took over in the Australian outback, the Curtin Immigration Detention Center, had also been shut down amid riots and hunger strikes in 2002. But it was reopened last year to handle a surge of asylum seekers arriving by boat even as the government imposed a moratorium on processing their claims. Refurbished for 300 men, the camp sits on an old air force base and held more than 1,500 detainees in huts and tents behind an electrified fence. Serco guards likened the compound to a free-range chicken farm.

 

On March 28, a 19-year-old Afghan from a group persecuted by the Taliban hanged himself after 10 months’ detention — the system’s fifth suicide in seven months. A dozen guards, short of sleep and training, found themselves battling hundreds of grieving, angry detainees for the teenager’s body.

 

“We have lost control,” said Richard Harding, who served for a decade as Western Australia’s chief prison inspector. He is no enemy of privatization, and his praise for a Serco-run prison is posted on the company’s Web site. But he said Curtin today was emblematic of “a flawed arrangement that’s going to go wrong no matter who’s running it.”

 

“These big global companies, in relation to specific activities, are more powerful than the governments they’re dealing with,” he added.

[tvashtarkatena]

Efficiency at its best. After all, why feed 'em?

[prole]

Barely noted in the article is how these companies profits are plowed back into lobbying on the issues that drive their business warping the democratic process and skewing the frame of debate. Would anyone in their right mind want a company that profits from detention strongly influencing how a community handles immigration? The question of course is not limited to immigration, but pretty much cuts across our entire society at every level in this day and age.

Edited September 29, 2011 by prole

[G-spotter]

 

I'm amazed at the assumption, not even questioned by so many, that private organizations are more efficient and cost effective than public. You mean those organizations that fail 80% of the time within two years?

 

You want 80% of public organizations to fail, too? That gets pretty expensive for the taxpayer. Allowing private organizations to do the failing is cheaper. Constant failure is good. Let's not forget that 99.9% of all species that have ever existed are extinct. Would the world be better off if trilobites still dominated things?

[tvashtarkatena]

 

I'm amazed at the assumption, not even questioned by so many, that private organizations are more efficient and cost effective than public. You mean those organizations that fail 80% of the time within two years?

 

You want 80% of public organizations to fail, too? That gets pretty expensive for the taxpayer. Allowing private organizations to do the failing is cheaper. Constant failure is good. Let's not forget that 99.9% of all species that have ever existed are extinct. Would the world be better off if trilobites still dominated things?

 

Your brain doesn't work very well.

[rob]

[KaskadskyjKozak]

 

I'm amazed at the assumption, not even questioned by so many, that private organizations are more efficient and cost effective than public. You mean those organizations that fail 80% of the time within two years?

 

You want 80% of public organizations to fail, too? That gets pretty expensive for the taxpayer. Allowing private organizations to do the failing is cheaper. Constant failure is good. Let's not forget that 99.9% of all species that have ever existed are extinct. Would the world be better off if trilobites still dominated things?

 

But "failure" in the public sector simply results in raising taxes repeatedly to prop up the "failure", so it doesn't exist, see? In the private market, eventually you'll stop getting financed but not in the public sphere.

 

 

 

[rob]

all you have to do is go to your local Department of Licensing franchise to see the brilliant efficiency of private enterprise.

[KaskadskyjKozak]

all you have to do is go to your local Department of Licensing franchise to see the brilliant efficiency of private enterprise.

 

Beats the public DMV of Cali by orders of magnitude.

[rob]

I saw some firefighters fighting a blaze once. It was neat to watch. Also, they seemed very efficient. I wonder how they manage such competence, being a nasty, ol' socialized public service an all.

 

 

[ivan]

But "failure" in the public sector simply results in raising taxes repeatedly to prop up the "failure", so it doesn't exist, see? In the private market, eventually you'll stop getting financed but not in the public sphere.

 

 

no, as the current moment shows, the political process can kill government programs, should it gather enough numbers.

 

seems to recall endless lectures on the dreary subject of jackson killing the national banks back in the 19th century, as an example...