The Bush Presidency So Far

Each day brings another portent of doom for George W. Take the awful mess he's got himself into over Social Security. Just four days before the election Gov. Bush told a crowd in Saginaw, MI, that protecting the Social Security trustfund was going to be one of his top priorities. The employee's Social Security taxes, he promised, were "only going to be spent on one thing-what they're meant for-Social Security. We're not going to let Congress touch them for any other reason."

Then last May he instructed his carefully stacked Social Security Commission that, whatever the reform proposals, there should be no change in benefits for current or "near-retirees." Nor should there be any increase in Social Security payroll taxes; no government investment of Social Security funds in the stock market; no change in survivor or disability benefits. Given all these restrictions (the consequence of Bush fighting to stay off the famous Third Rail) it's hard to imagine the panel, which has to deliver its recommendations to Bush sometime this fall, will have anything convincing to offer.

Less than a year later, the Congressional Budget Office forecasts that the administration will need $9 billion from the Social Security trustfund to balance its budget this year and much more next, even as Bush reassures Democratic Senate Majority Leader Tom Daschle that he won't raid the famous Social Security lockbox, which The Wall Street Journal tirelessly reminds the world is entirely imaginary. Savor the ironies. It was the Republicans who originally invented the lockbox. Bill stole it from them. Now, in this Monday's Times we have William Safire calling for a jimmy to prise open the lockbox. It's as though Bill Clinton is still triangulating from beyond the political grave.

In late August the Congressional Research Service reported that the proposed overhauls would engender significant benefit cuts even if people diverted only 2 percent of their earnings to private accounts. For people retiring in 2020 the cuts would range from 4.7 percent to 10.8 percent, which is quite a chunk of change.

Of course there is a big problem, and Democrats howling about the lockbox aren't facing up to it. Recession is here. All the usual vultures and chickens are coming home to roost. This is no blip, or interval or temporary lapse. This is big economic trouble, and soon we can expect the more adventurous commentators to be pulling Kindleberger's The World in Depression off their shelves, and social realism will come back into favor. Since last year, already we've seen a net loss of one million jobs. So how do they think the economy can be kick-started? The tax refunds certainly aren't going to do it. The Cockburn Plan: use a federal lottery to boost the discretionary spending power of enough people to make a difference. As things stand, lotteries are set up to resemble irrational acts of God. Some guy pulls in $100 million or some such insane sum. As a pump-priming mechanism it's useless, since the lucky one will take years to spend some portion of his haul. So let's democratize the lottery. Under the Cockburn plan a federal lottery would reward a high percentage of players each week, with the size of payouts depending on the strength or weakness of the economy. The payouts would be instant, like a kind of rolling potlatch.

Nor would there be any retrogressive foolishness about squirreling away the winnings in a rainy-day savings account. The fuel of the lottery is the desire to be lucky (unless you take the Freudian view that gamblers want to lose). Lucky people don't save. They're too excited. They spend, partly because they think what they've done is contrary to the economic laws of nature and they'd best get rid of the evidence. Of course progressives don't care for lotteries, any more than they approve of giving change to beggars. They believe in rational allocation of resources through appropriate agencies. But we're in a society that has declining faith in "appropriate agencies" and rising respect for miracles. So let's see what we can do with the lottery.

Bush and Mexicans

Here's another Bush mess. What possible political capital does he hope to reap with the immigration issue, with the talk of amnesty and so forth? Pundits solemnly intone the news that he wants to increase the appeal of the Republican Party among the Hispanic population, which has risen in the USA by 58 percent between 1980 and 2000, largely through immigration. In 1970 the Mexican immigrant population was less than 800,000, compared to nearly eight million in 2000. (This must be one of the most rapid mass migrations in world history. When I was growing up in Ireland, the emigration rate was sometimes 70,000 a year, and we thought that was a lot.) Non-Hispanic whites now comprise 72 percent of the population, and according to the census this will probably fall to 53 percent by 2050. Bad news for Republicans. The Democrats have been importing their future voters at an astounding clip. A cynic could say that the reason the Democrats fast-tracked NAFTA was to bankrupt Mexico sufficiently to ensure a steady flow of future voters northward.

Hispanics overwhelmingly tend to vote Democratic. The longer they stay and the better off they become, the more likely they are to be Democratic voters. You can find the relevant figures and polling data in a handy August report from the Center for Immigration Studies. For Latinos with less than eighth-grade educations, loyalty to the Democratic Party wins by 17.7 points. In a few months this spread rises to 21 points. After 30 years the Democratic advantage increases to 27 points. For those with four years of college, Democrats have no less than a 32 point advantage. Even Al Gore beat George Bush among Hispanics by 27 points. In the Center's report, James Gimpel and Karen Kaufmann write, "These data lead to the bizarre conclusion that Republicans would be better off if Latinos remained uneducated and left the country after a few years."

From the Marxist point of view the role of immigrant labor is to increase the reserve army of unemployed, undercut pay scales and unions. Another report from the Center of Immigration Studies, by Steven Camarota, makes it clear this is exactly what has happened. The main effect of Mexican immigration has been to increase the supply of unskilled workers: 22 percent of all the high school dropouts in the U.S. labor force were born in Mexico. These workers don't threaten the majority of U.S.-born workers because most of them have completed high school and have higher-skilled jobs. But in Camarota's words, "By increasing the supply of unskilled labor, Mexican immigration during the 1990s likely has lowered the wages of workers who lack a high school education by roughly 5 percent. The native-born workers adversely affected by Mexican immigration are already among the poorest in the United States." Real wages of high school dropouts who work full-time dropped by 7.2 percent in the 1990s.

In other words, the strategists of capital can revel that the reserve army from across the border is performing its correct Marxist function, while simultaneously fostering useful divisions among the working classes and the poor, who can complain that Mexican immigrants are a drain on the public exchequer. Camarota cites the National Academy of Sciences as estimating the lifetime fiscal drain (taxes paid minus services used) of the average adult Mexican worker is negative $55,200.

So the rational tactic for Bush would be to push for some version of the old bracero program, letting cohorts of workers in for limited periods, ensuring that they performed the function of holding unskilled wages down and undercutting unions, while being kicked out before they could become Democratic voters. Of course this would mean alienating the Hispanic vote, but it's alienated anyway. Hispanics know where Republicans stand on healthcare and social welfare. Maybe that's what the Republican policy on immigration will boil down to in the end. Not that it will make much difference. Labor will always flow back and forth across the border, no matter how many fences they put up.

The Tunku Watch

Tunku Varadarajan, deputy editorial features editor of The Wall Street Journal, floats a column on the WSJ's ed page each Tuesday, and I await his awful prose as hungrily as I do that of Todd Gitlin. Last week Varadarajan managed to squeeze 900 words out of the claim that in late summer he and his wife are plagued by fruit flies attracted by the bottle of red wine the couple consumes each night. "No sooner have we poured ourselves a glass than the squadrons appear, clouds of fruit flies, weaving and wobbling in the air, their sole aim being to take a kamikaze plunge into our goblets."

The response of these beleaguered topers is "to cover our glasses-rather in the manner of medieval tipplers-with flat, protective disks (usually compact discs with scotch tape stuck over the perforation in the middle, a space that would, otherwise, allow passage into the wine for the more audacious flies..."

It's the kind of prose that was once, in a gentler time, called "urbane," meaning a slow-moving river of polysyllabic archness. England used to turn out urbane writers by the sackful. They wrote Punch. They wrote the features page of the old London Times (and its fourth leaders). It's nice to see that the WSJ has a niche for such a practitioner. All the same, there must be something rotting in the Varadarajan household or in their neighbor's backyard. Fruit flies don't just rally ex nihilo merely because decent claret is being poured.