President Barack Obama’s economic record is roundly criticized by Republicans. Considering he has outperformed any Republican president elected in the last 35 years, they should instead be learning as much as possible from him .

President Obama’s Economic Record 

Reducing Unemployment

While President Obama made giant strides in reducing unemployment rates, Bill Clinton’s Administration is the Gold Standard in this area and all others. Obama has a little over a year left to match Clinton’s modern-day record unemployment rate drop.

Table 1

Refusing to acknowledge the great progress Obama made putting our country back to work, Republicans claim huge numbers of discouraged workers quit looking for work and are not included in the unemployment rate data.  According to them, this makes the above data useless.

These folks could use some remedial math. The  U.S. Bureau of Labor Statistics provides a plethora of data, including the monthly number of “Discouraged Workers”. In January, 2009 when Barack Obama assumed the presidency, the Bureau of Labor Statistics reported that 154,210,000 people made up the Civilian Labor Force. This includes people with full or part-time jobs and people looking for work. The bureau also reported for the same month that 142,152,000 had jobs. Using the equation 1-(142,152,000/154,210,000), the Unemployment Rate is 7.8 percent.

Republicans are correct that Discouraged Workers are not included in the Civilian Labor Force and are not included in the Unemployment Rate calculation. To get an idea of the Discouraged Worker’s impact on the Unemployment Rate, we can fix this and add their total number to the Civilian Labor Force and get an Adjusted Unemployment Rate. In January, 2009 there were 734,000 Discouraged Workers. Adding them to the Civilian Labor Force gives us a total of 154,944,000 people who are employed, looking for work or who gave up looking for work. Using this adjusted labor force number 1-(142,152,000/154,944,000), we find this does increase the unemployment rate and we have an Adjusted Unemployment Rate of 8.3 percent at the start of Obama’s term.

In the most recent month data is available, the Bureau of Labor Statistics reported 156,715,000 people in the Civilian Labor Force and 148,800,000 people working. This works out to the 5.1 percent Unemployment Rate in Table 1. However, there are now 635,000 Discouraged Workers. Repeating the math above and including the Discouraged Workers, we have an adjusted Unemployment Rate of 5.4 percent instead of the 5.1 percent in Table 1. The equation is 1-(148,800,000/(156,715,000+635,000))

To calculate how much our adjusted Unemployment Rate has changed during Obama’s term with the new numbers that take the Discouraged Workers into consideration, we use the equation ((0.054-0.083)/0.083). This is the adjusted ending Unemployment rate minus the adjusted beginning Unemployment Rate divided by the adjusted beginning Unemployment Rate.

This works out to a -35 percent change in the Unemployment Rate (a 35 percent drop) during Obama’s term to date, exactly what we have in Table 1 using published unemployment rate data. The Discouraged Worker numbers are so small compared to the Civilian Labor Force that they are inconsequential. They are just a foolish Republican ploy to detract attention from Obama’s employment renaissance.

While Obama’s record in this area so far comes up short compared to Bill Clinton’s, he has outpaced any Republican elected in the last 35 years.

Stock market gains

Another metric for measuring economic policy is changes in stock market indices. A broad-based index such as the S&P 500 measures investor faith in a wide swath of the economy.

Table 2

Bill Clinton’s policies resulted in the greatest investor confidence. However, Barack Obama’s 19% annual increase beats out any Republican president in the last 35 years.

Gross Domestic Product

Gross Domestic Product (GDP) measures overall output of goods and services.

Table 3

While Obama has not performed to a high level here, much is due to a disastrous first term. In this writer’s opinion, the bulk of the problems for slow economic growth were Obama’s horrible decision to keep the George W. Bush tax cuts in place as well as adding some of his own. After Obama’s re-election in 2012, the Budget Reconciliation Act eliminated many of Bush’s tax cuts (and all of Obama’s).  The deficit dropped by almost 40 percent and GDP output improved. The most recent quarter saw a 3.9 percent increase in Real Gross Domestic Product.

Obama’s secret formula – Frugality

Elect a Republican to the White House and watch spending go out of control. Elect a Democrat and watch annual spending stay close to the estimated inflation rate. Unfortunately, today’s liberal, big government Republicans have not learned that government spending does not build real wealth in an economy.

Table 4

For true conservatives, Table 4 is the holy grail for measuring presidential performance. Small spending increases show a commitment to smart government. While hypocritical Republicans predicted Obamacare would bust the federal budget, the reality is it has had virtually no impact.

Budget Deficits

Because of inflation, it is inaccurate to simply compare government ending spending balances over a 35 year period. Instead, we can get a more accurate picture measuring what the federal government’s annual ending balance is compared to the economy’s annual output of goods and services, or GDP. Therefore the ending balance is a percent of that year’s GDP.

For those of us true conservatives, a negative balance as a percent of GDP is a bad thing. A large negative number indicates the government uses up available domestic lending capacity and has to borrow from foreign interests to cover debt. For comparison, since 1981, the average government spending balance as a percent of GDP is -3.5 percent.

Table 5

President Clinton lost his congressional majorities in the next election after Democrats passed the major tax increase he asked for. However, the economy flourished like nothing seen before,  for all income groups. In contrast, President Obama experienced huge $multi-trillion deficits during his first term due to continuing the George W. Bush tax cuts and adding his own. Thankfully, he eliminated many of the tax cuts and the budget deficit is heading back down to historical levels

Table 6

Table 6 should give every Republican that believes budget deficits don’t matter something to consider. Notice how the Employment Rate (1- Unemployment Rate) is almost a mirror image of the government spending balance as a percent of GDP. In other words, if the federal government’s spending deficit rises compared to that year’s GDP, a lower percent of people are employed. Conversely, during the Clinton years when we had government surpluses instead of deficits, the percent of people employed went up to record high levels.

Using a two tailed t-test, the relationship between the two data lines in Table 6 are highly significant (p<0.01). Although these numbers are closely related, the data here doesn’t tell us if one causes the other. This is investigated more thoroughly in https://www.frugalron.com/frugal-ron/tax-cuts-employment-and-economic-growth/.

Summing up

Evaluating any president’s performance invites the question, “Compared to what?” When we compare President Obama’s economic record to Republicans, he shines. When we compare him to Bill Clinton, some of the luster is gone.

For true conservatives, Table 6 tells it all. When liberal, big spending Republicans are in office combining huge spending increases and insane tax cuts for the rich, we have large government spending deficits and lower employment. In other words, the economy tanks. When a President Obama combines low spending increases with insane tax cuts, the economy is better but never really gets its footing until many of the tax cuts are eliminated and the budget deficit drops. It took Obama four years to figure this out. Slow learning Republicans still haven’t figured this out after 35 years of failure.

When you have a President Clinton that combines small spending increases and budget balancing tax increases that eventually result in government surpluses, the economy flourishes. Clinton got the government out of the credit markets and his small spending increases lowered the government’s impact on the overall marketplace. His resulting record of success speaks for itself. Again it would be wonderful if Republicans paid attention.

Conservatism isn’t about shafting the poor, old or sick. In a macroeconomic sense, it is all about knowing where capitalism falls short and identifying where government can create a greater good for the majority of its citizens. After making these decisions, conservatism is about keeping out-of-the-way of citizens and the marketplace.

Wisconsin Republican Governor Scott Walker’s short-lived presidential campaign revealed four things about him:

• Scott Walker is far more intellectually challenged than ever imagined. His Great Wall of Canada “legitimate issue” may well be the least rational idea ever proposed by a presidential candidate. Yet, not far behind is his statement that there are only a “handful of reasonable, moderate followers of Islam” among the world’s 1.6 billion Muslims. And, his assertion that dealing with the teacher’s union prepared him to handle ISIS is a classic.
• Scott Walker makes stuff up. Most politicians embellish their records. However, Walker takes this a huge step further making up blatant lies. Throughout his presidential campaign, Walker told about the February 15, 2011 incident in LaCrosse, Wisconsin when hundreds of  union protestors rocked his car, beat on the windows and pulled a truck in front of Walker and his security detail car blocking their escape path. However, according to La Crosse law enforcement and reporters covering the event, it never happened. The most thorough investigation of the incident is at Politifact.com’s website http://www.politifact.com/wisconsin/statements/2013/dec/23/scott-walker/gov-scott-walker-says-protesters-surrounded-his-ca/. Walker’s penchant for telling people what they want to hear, regardless of the truth, came through in a meeting with Republican donors about President Obama’s leadership. Walker told the roomful of donors, “I heard that from David Cameron back in February earlier when we were over at 10 Downing, I heard it from other leaders around the world. They’re looking around realizing this lead from behind mentality just doesn’t work. It’s just not working.” British Prime Minister Cameron issued a statement saying he never said that and does not believe it.

• Scott Walker is broke. According to the Boston Globe, Walker’s total net worth is minus $72,500.  http://www.newsmax.com/Politics/GovScott-Walker-debt-credit-cards-owes/2015/04/28/id/641333/ His personal financial statements show caviar tastes on a beer budget. Walker is a spendthrift with no respect for debt. He has between $100-250,000 of school loan debts for his two sons, owes more than $50,000 to Green Tree, a mortgage loan company, owes between $5-50,000 to Think Bank for an unspecified debt, owes between $10-15,000 on a Barclay’s credit card, $10-15,000 on a Bank of America card and up to $50,000 on a Sears card. He is paying 27.24% interest on the Barclay card and 11.99% on the Bank of America one. That’s a lot of $1.00 Kohl’s sweaters.
• Scott Walker is a hypocrite. In suspending his presidential campaign, Walker stated, “Sadly, the debate taking place today in America is not focused on an optimistic view of America. Instead it has drifted into personal attacks.” Duh, excuse me? Is this the same Governor Scott Walker that launched countless attack ads against “Millionaire Mary” in 2014?  Then in the last few days before the gubernatorial election, his campaign dredged up some fired Trek employees to personally attack Mary Burke’s record at Trek.

You can’t cure stupid

What’s left of Scott Walker’s supporters are looking for him to bounce back on the national stage in a few years with a different campaign team. Unfortunately for them, Walker’s campaign team isn’t the problem. What these supporters must accept is that stupid is forever.

While Walker’s campaign revealed much about him, it also showed the strengths of our long, drawn-out presidential campaigns. Walker was annointed as the favorite of the Koch brothers and other billionaires, assuring him unlimited campaign funding. Yet, voters recognized Walker was intellectually incapable of keeping up with fast paced debates, continually said foolish things and changed positions depending on who he was talking to. Regardless of his financial backing,voters sent him packing.

Betrayal, hurt, anger – just some of the emotions Wisconsin Governor Scott Walker and people finding their partners listed as Ashley Madison members are sharing. Walker’s presidential campaign targeted the most vulnerable Republican voters, holy roller, Bible thumpers that passionately believe the world was created 6,000 years ago.  Walker spent decades positioning himself as the devout Christian son of a preacher, an Eagle Scout, a faithful husband and humble servant of the people to appeal to this group. For heaven’s sake, he even prayed with these folks!

All was going well with Walker leading the Republican polls and looking like an easy winner in the Iowa caucuses. But, then along came Donald Trump.

Suddenly, Trump, a well-known philanderer best known prior to this presidential campaign for taking his wife and mistress on the same Colorado ski vacation, was surging ahead in polls. Talk about infidelity! Trump was making off with Walker’s core group of voters!

Like Ashley Madison victims, the at least outwardly devout Walker must wonder what he did wrong do lose his base to a three times married Donald Trump. What could he have done differently?

While Walker talked about his brown bag lunches and the $1.00 sweater he got at Kohl’s (conveniently neglecting to mention his penchant for private chartered jets), there was The Donald buzzing 30,000 people waiting to hear him speak in an Alabama stadium with his private 757 jet. And, the redneck Bible-belters went wild! These were Scott Walker’s people. These were Scott Walker’s voters!

The two-timing holy roller voter betrayal from Walker marginalized his campaign. From Republican leader to barely ranking in the top ten of presidential contenders, Walker is taking his campaign the next step to absurdity with his recent remarks categorizing almost all Muslims as terrorists and his Great Wall of Canada blunder.

What this all means

While supporters call for the “real” Scott Walker to reappear, those of us who’ve watched him for years know the blathering fool who just makes stuff up and continually says really stupid things is the “real” Scott Walker.  Former Texas Governor Rick Perry and former Alaska Governor Sarah Palin can vouch that once you let voters know you are clueless, there is no come-back. Your political career is finished.

Scott Walker is completely out of his league as governor. Yet, he probably could have continued in Wisconsin for as long as he wanted. His mistake was overestimating his ability and launching a presidential campaign. National press scrutiny and his budget fiascos made him a national laughing-stock. Abandonment by his core supporters punctuates the end of a forgettable political career.

Anyone looking at a map of the Middle East and understanding nuclear weapon capabilities might wonder if Iran’s nuclear agreement is much ado about nothing? It is one thing to worry about countries thousands of miles apart using nuclear weapons and a very different scenario for Middle East countries using nukes on each other.

Israel is the very small and hard to find nation on the above map. It has the Mediterranean Sea on one side and shares borders with Syria, Jordan, Lebanon and Egypt. Israel is 424 km (263 miles) from north to south and at the widest point 114 km (71 miles) wide. When looking at this map, realize nukes are not precision weapons.

According to Nucleardarkness.org, a 15 kiloton nuclear explosion, which is a relatively small one unless you are within a kilometer of it, will cause 3rd degree burns on everyone within 2km. However, the bigger danger is when the fireball of the nuclear detonation touches earth’s surface. When this happens, large amounts of soil, water and whatever else is nearby vaporizes and is drawn up into a nuclear cloud. This cloud becomes radioactive and larger particles (fallout) settle to the earth within 24 hours. Lethal levels of fallout can extend hundreds of kilometers from the blast area. Contaminated areas may be uninhabitable for decades or even centuries.

While the initial blast from a well placed Iranian nuclear attack on Israel is limited to Israel, the fallout would almost certainly solve the Palestinian problem forever and likely cause huge numbers of deaths in Moslem countries bordering Israel. It is very possible the fallout could cause devastation in Iraq and might even reach Iran. However, fallout would be the least of Iran’s problems considering the massive nuclear retaliation Israel would launch.

Mutually Assured Destruction (MAD) has worked to prevent any country from using nuclear weapons since the end of World War II. Add in the holocaustic damage an Iranian nuclear attack on Israel would cause to Iran’s closest allies and it becomes even less likely such an attack would ever take place.

While listening to Republican diatribes against the Iranian nuclear agreement, recognize many Republicans won’t be satisfied with anything less than a full scale invasion of Iran. (Of course, you won’t find their sons or daughters in the body bags coming home.)  Balance this with knowing the nuclear agreement may lead to better US relations with Iran and make your own decision if the US rapprochement with Iran is worthwhile.

Wisconsin Governor Scott Walker (R) recently told President Obama he “should be looking to states like Wisconsin as an example.” If Walker had any sense, he should be looking for a rock to hide under.

The Bureau of Labor Statistics recently updated their Quarterly Census of Employment and Wages (QCEW). This is the Gold Standard of employment data.

The most recent month analyzed was September 2014. Compared to the same month a year earlier, the US increased private sector employment 2.31%.  Wisconsin increased private sector employment 1.16% in the same period or 50% of the national increase. This is not good since annual gains during  Walker’s governorship were running 60% of the national rate.  (This compare to 100% of the national rate over Governor Jim Doyle’s eight years in office). However, Mississippi, with supposedly the US’s worst schools and job prospects need not worry about the challenge to the bottom from Walker led Wisconsin. Their increase in private sector employment from the previous year was only 0.5%.

Wisconsin’s private sector weekly wage increases that were just below the national rate were a relative bright spot during Walker’s  governorship. This changed with the latest data release.  Average weekly pay in the US increased 2.8% from $914 to $940 from September 2013 to September 2014. In Wisconsin, average private sector pay went from $795 to $809 during the same period, or a 1.8% increase. Wisconsin’s wage gain is 65% of the national increase while average wages are 14% lower than the US level.

There is one area where Wisconsin’s employment picture is rosier than the nation . The number of state government employees in Wisconsin increased another 1% as Walker builds the largest government workforce in the state’s history. The federal government workforce dropped 1% in the same period.  (Military are not included in state or federal government workforce totals).

All leaders occasionally have things not go their way. The best re-evaluate what went wrong and make changes that fix the problems. Not so with Governor Walker. The latest job and wage numbers show the impact of Walker’s ultra-liberal, big spending, big government and anti-education policies in his first four years in office. Rather than make changes, he has taken on the destruction of the University of Wisconsin and continued hits of K-12 financing while planning on giving government even more power over women’s family planning.  The future looks bleak for Wisconsin’s job and wage prospects.

The only way Wisconsin can get back to matching national wage and job gains is to get Scott Walker elected president. Working his “Wisconsin magic” on the nation will result in an economic recession that makes George W. Bush’s look mild. Wisconsin will finally blend in with the rest of the country again.

Ever since President Barack Obama signed Obamacare into law, Republicans have tried to shut down. They may want to be more cautious about what they hope for in the future.

Republicans criticize the Affordable Care Act at every opportunity, yet they have never come up with any kind of alternative. This tactic will have run its course if Supreme Court rules in the King versus Burwell case that federal government insurance subsidies are illegal in the 27 states that do not have state insurance exchanges.

If this happens, Republicans seem under the illusion the Affordable Care Act will simply go away. We’ll go back to pre Obamacare and all will be well with the world. Unfortunately, this scenario is naïve at best and blatantly stupid at worst .

The Obamacare reality

Wisconsin does not have a state insurance marketplace. Eighty-nine percent of the 207,349 Wisconsinites enrolled in the Affordable Care Act’s online exchange in 2015 qualified for subsidies averaging $315 per month. This works out to over $58 million. The average subsidy for these folks is 76 percent. Add in the 24 percent paid in additional premiums and the total paid by this group is over $72 million per month.

Without the subsidies, most, if not almost all the people in this group couldn’t afford their insurance and would drop it. On an annual basis, this would take $865 million out of Wisconsin’s health care system. One doesn’t have to be an expert in health care economics to figure out that taking $865 million of income out of Wisconsin’s medical system will at least seriously cripple and in a worst case scenario, bankrupt the state’s health care establishment.

Governor Scott Walker would be inundated with protestors. These won’t be the kind of protesters he could have the state police shag out of the Capitol. These would be insurance and hospital executives with six and seven-figure salaries worried about their personal livelihood unless something is done to get the people subsidized by the federal health insurance marketplace back into the system.

Newly uninsured people with health problems and not enough income to pay for them will go back to expensive emergency room treatment. Doctors who swore an oath to treat the sick and injured will do so, causing even more problems for cash strapped hospitals and clinics.

To make matters worse, health insurance is more expensive in Wisconsin than states like Minnesota that have state health insurance exchanges. An online calculator at the Kaiser Family Foundation website (http://kff.org/interactive/subsidy-calculator/) quantifies the differences.

Entering in a family of four with non-smoking adults aged 42 and 43 making $55,000 annually and two non-smoking children using both St. Paul, Minnesota and Madison, Wisconsin zip codes, the Silver policy in Minnesota cost $639/month and in Wisconsin $789/month. After federal subsidies, they each cost $340/month.

Worse nationally

Multiply the $865 million income loss Wisconsin’s healthcare system potentially loses by 27 for an estimate of the national impact. Republicans in Congress will have to come up with a replacement for the Affordable Care Act very quickly. They won’t have time to do their usual pontificating.

Other articles on this website have argued that the Affordable Care Act was always more about rescuing the health insurance industry than providing universal health care insurance for all citizens.  If the Supreme Court rules against Obamacare, Congress must face this reality.  Health care represents about 18 percent of the US Gross Domestic Product. Letting that part of the economy become insolvent simply isn’t an option.

The insurance industry won’t allow efforts to re-engineer the Affordable Care Act without the insurance mandate. The insurance mandate is the requirement that everyone must have health insurance or they will have a penalty fee added to their taxes.  One Obamacare criticism is that not enough people have signed up to keep the system solvent. Take away or weaken the health insurance mandate and the problem is exasperated. Under intense time pressure from all directions, Republicans would be forced to re-write the Affordable Care Act to include the federal exchanges and with no other substantive changes.

Odds are, the Supreme Court won’t let this Doomsday scenario unfold. However, the thought of Republicans having to put their name on something they’ve fought for years would be poetic justice.

Democrats have all but anointed Hilary Clinton as their 2016 presidential nominee. This does not make a lot of sense. Clinton’s supporters should ask what she accomplished during her career and specifically her eight years as New York’s senator that would compel people to vote for her?

Right up front, let’s make clear this is not about Benghazi. Only nut-bags and half-wits consider the unfortunate U.S. Libyan embassy deaths a campaign issue.

Far more important is Clinton’s 2003  vote as New York’s senator authorizing then President George W. Bush’s war of aggression against Iraq.  At the time, the U.S. public was clamoring to atone  for the catastrophic 9-11 attacks that happened during Bush’s watch. Never mind that Iraq had no part in them.

Frugal Ron, and many others who live far from Washington D.C., figured out early Bush’s War was far more about George W. Bush’s personal vendetta against Saddam Hussein than national security. Yet Senator Clinton, who had easy access to her husband’s advisors that dealt with  an irreconcilable George W. Bush after the alleged 1993 assassination attempt on former President George Bush by supposed Iraqi agents, either didn’t do her research or ignored it.  George W. Bush called the alleged assassination attempt an “act of war” and demanded a major military response. President Bill Clinton didn’t give him the response he wanted. It didn’t take a genius to figure out a President George W. Bush was going to one way or another make a war against Saddam Hussein happen. Senator Clinton aided and abetted his efforts with her Senate vote.

After the invasion, we confirmed Iraq’s weapons of mass destruction were just a  Bush lie. Senator Clinton acted surprised. The rest of us were surprised she was so easily duped.  Perhaps Clinton’s supporters think her 2003 vote and lack of judgement is less important now or that we forgot her lack of courage and her joining the mob mentality Bush fostered.

The vision versus the reality

President  Bill Clinton’s economic miracle encompassed all social-economic groups.  Ms. Clinton’s supporters believe she will replicate the same results. This is more than likely wishful thinking.

Bill Clinton’s presidency was the most economically conservative in a generation. It was no coincidence that it was the most successful. The key was Clinton sacrificed his Congressional majorities for a tax increase that enabled him to balance the federal budget. Pushing through the Uruguay round of global trade agreements and giving China Most Favored Nation trading status  were almost equally important. And, for good measure, he passed the most comprehensive welfare reform bill in history.  Nothing in her labor union supporting history would lead us to believe the independent thinking Hillary Clinton would follow her husband’s path.

Alternatives

A Hillary Clinton presidential nomination is all the more puzzling when one looks at the many strong alternatives Democrats have. While Republicans toy with nominating one of the country’s worst governors in Wisconsin’s Scott Walker, Democrats have the complete antithesis in neighboring Minnesota’s Mark Dayton. Another alternative is Delaware’s Governor Jack Markell who is pioneering unbiased, databased ways to find superior teachers. Long after we bomb the the Islamic State into history, the U.S. will need the world’s strongest intellectual capital to keep up global economic leadership. Markell could supply that.

Democrats somehow believe Hillary Clinton is unbeatable in 2016. This overconfidence could be disastrous.  In 2012, Republicans cooperated by nominating an unelectable presidential ticket. In 2008 , they nominated an unelectable vice presidential candidate. Democrats can’t count on that generosity again. It could be a short election night for Democrats  if  a  viable Republican presidential candidate continually asks Democratic nominee Hillary Clinton, “What have you done for us lately?”

Illegal immigration’s solution isn’t taller and stronger fences, more guards and more deportations. Theses are  band-aid fixes. Illegal immigration is both an act of desperation and a caution be damned leap of faith for people devoid of hope. For the receiving country, immigrants are an economic spark plug yet at the same time a political bombshell for Republicans concerned that people whose skin isn’t white are becoming a majority in the US .

Real solutions require understanding the reasons people emigrate and the reasons employers hire illegal immigrants. Meet those needs and you solve the immigration problem.

There is a two-step long-term solution. Besides stemming the tide of immigrants, they have economic and social benefits for the US.

First, remove the job incentive to emigrate by forming a free trade area mimicking the European Union between the US, Mexico and Central America that eventually encompasses the Western Hemisphere. This isn’t a simple fix and may not happen in my lifetime, but it is the right solution. Having one of the world’s richest countries bordering some of the world’s poorest is a recipe for disaster. Make the border more advanced and the people trafficking immigrants will simply become more advanced. Conversely, a free trade zone would be a win – win for everyone.

If we want to stem the flood of Latinos coming to the US for jobs, it only makes sense to take the jobs to them and ship product to the US. People with jobs and hope for their future are much less likely to split up their families and forsake everything they know for a perilous trek north.

The myth

When you hear a lie enough times, people start to believe it. This is the reason US citizens continually equate trade agreements with job losses. We  have Merchandise and Trade deficits (job losses) because we have Net National Savings deficits. The two should roughly equal each other. In the US, we now have a -$465.6 billion Merchandise and Trade deficit and a -$466 billion Net National Saving deficit.  (The Net National Savings deficit is money we borrow from abroad). The reason we have a Net National Savings deficit is our $593.5 billion federal government budget deficit.

If our elected officials eliminated our budget deficit, logically our Net National Savings deficit would be dramatically lowered or eliminated resulting in an equal change in our Merchandise and Trade balance. The bottom line here is opening a free trade zone  will not impact our trade balance. We export jobs because our elected government officials lack the wherewithal to balance our government’s spending and income.

The  North American Free Trade Agreement (NAFTA) was supposed to open trade between the US, Mexico and Canada.  NAFTA is a  1,700 page mixture of conditions, regulations and rules that belies its name. While it has certainly helped Mexicans, it has stifled the opportunity for more trade and offers nothing to Central Americans. A free trade zone fixes that.

The second step to stemming the flow of illegal immigrants is legalizing the sale of presently illicit drugs in the US. In a single swoop, we can do more to promote individual safety and well-being in Mexico and south than all the aid and drug enforcement money we’ve squandered in the last 40 years.

From anyone’s perspective, the War On Drugs is a failure. Just like Prohibition, we might as well admit government does an ineffective job of preventing citizens from imbibing in things that aren’t good for them. Long prison sentences for sellers don’t work and capturing drug kingpins doesn’t work. There is always someone willing to take their places to keep the drugs coming into the US.

The only argument advocates of continuing drug enforcement still use is that legalization will increase the availability of drugs. It is difficult to imaging them being more available than they are now. Instead of breaking up mostly minority families in the US with long prison sentences for selling drugs, legalization would allow us to focus on the much more effective solution of treating drug users’ addictions.

Summing up illegal immigration

It is easy to simply blame Mexico and Central and South American countries for the violence, corruption and bad government that fuels illegal immigration to the US. However, it is the US’s insatiable demand for drugs and our government’s almost insane insistence to continue doing what hasn’t worked that is responsible for creating lawlessness in neighboring countries. If we want to fix illegal immigration, we need to fix our approach to drugs.

At the same time, we need to get our government out-of-the-way of protecting powerful industries from foreign competition. A hemisphere wide free trade zone will give US consumers dramatically lower sugar prices and bring higher end new jobs to the US as southern countries start improving their economies.

Shifting the illegal immigration argument away from more enforcement and higher fences to addressing the causes will result in a win-win for all countries. Unfortunately, this will require a seismic change in our politics.

Why can’t the greatest democracy on earth set-up decent puppet governments anywhere? Ever since World War II, regardless of the party in the White House, the people we put in charge of running their countries are consistent disasters.

Transparency International’s 2013 Corruption Perceptions Index ranking of 177 countries lists Iraq’s government as seventh most corrupt. Afghanistan tied North Korea for second. Not exactly something to brag about.

President Dwight Eisenhower’s CIA overthrew Iran’s popularly elected president and established the hated Mohammad Reza Shah Pahlavi as the new leader. His tenure of corruption, brutality and arrogance made us the Great Satan for generations of Iranians.

Democrats made a merry-go-round of leadership coups in South Vietnam. New governments each seemed more inept and corrupt than the one before it. In contrast, we conduct joint military exercises with the Vietnamese government we spent 50,000  U.S. lives trying to keep from power.  We are also Vietnam’s largest export market.

President Ronald Reagan conducted a secret war in Nicaragua against the Sandinistas and their leader Daniel Ortega. Since then, Nicaragua elected Ortega as president three times.

Back to the present and installing new governments

President George W. Bush, the “Nation Builder”, handpicked Hamid Karzai as Afghanistan’s president. It would have been difficult to make a worse choice. The former commander of U.S. and NATO forces in Afghanistan, Ret. Gen. John Allen,  said corruption, not the Taliban, is the worst threat to the future of the war-torn country.

“For too long we focused our attention solely on the Taliban as the existential threat to Afghanistan,” Allen told a Senate subcommittee. Compared to the scope and the magnitude of corruption, “they are an annoyance.”

So, here we have our former top general saying the government we installed is a bigger problem than the enemy we are fighting. That is a problem.

In Iraq, Bush’s choice of Nouri al-Maliki as prime minister is equally disastrous. Aligning his religiously divided nation as almost a satellite of Iran and its Shiite government provoked a civil war. Maliki’s inability to deliver even the most basic government services is another contributing factor to his unpopularity even among Shiites.

Saddam Hussein was far from an ideal leader, but he kept Iraq functioning and people of different sects lived peacefully next to each other. While today Al Qaida is actively  entrenched in Iraq, during Saddam’s rule the only Al Qaida operatives in the country were either dead or soon to be.

So what’s the solution? President Barack Obama is the first president in generations to finally get it right by keeping us out of other countries’ wars. While members of congress and the press may wave their machismo and want us to send our young soldiers to die in wars from the Ukraine to Nigeria, this is simply wrongheaded. We may win the war, but after installing a government, our real problems begin.

The other part of this solution is to make ourselves less vulnerable to other countries problems. We are currently using drone attacks on extremists in Yemen that might be considered threats to neighboring Saudi Arabia. While we are protecting Saudi Arabia, it is a good bet that most of the advanced weaponry and training  the Sunni groups attacking Iraq’s government have is financed by Saudi oil money.

The real solution to this convoluted mess is making the U.S energy independent. Not only using new energy extraction technologies but developing new conservation technologies that can be adapted by other countries. Isolationism isn’t the solution, but recognizing our limitations in involving ourselves in other countries’ internal and external conflicts and installing pseudo governments is a major step.