Hey Republicans: If You Reduce Cantor’s Loss to Immigration Reform, You Will Keep Losing

As Peter Suderman
pointed
out yesterday
, one of the major fauxplanations for House
Majority Leader Eric Cantor’s stunning primary loss to David Brat
is that Cantor was “soft”
on immigration
. Exactly what that means is anybody’s guess,
given that Cantor wanted a militarized, wall-defended border with
Mexico and got a 100 percent rating from the anti-immigration group
FAIR.

As I argue in
this Daily Beast column
, Cantor’s sins against the
ideals of limited government are long and numerous. Fact is, since
taking office in 2001, he never missed an opportunity to vote for
every major expansion of government power he was given, as long as
a Republican was in the White House. No Child Left Behind, Medicare
Part D, extension of the Patriot Act, TARP, auto bailouts, endless
war: It’s all there in his record. As a self-styled (read: sad and
pathetic) “Young Gun,” he also pushed the GOP’s Path to Prosperity
budget, which would grow annual spending over the next decade from
about $3.7 trillion to $5 trillion. On top of that, of course, he
hit all the sour notes possible on social issues: He was dismissive
of marriage equality, loved the drug war, and anti-abortion all the
way. 

In other words, Cantor represents big government conservativism
in its most fulsome manifestation. And it’s this package of B.S.,
not anything related to immigration, that has driven voter
identification with the GOP down to 25 percent according to Gallup.
Until Republicans understand that they cannot mix libertarianish
rhetoric about reducing the size, scope, and spending of government
with a massive buildup of spending and regulation and a buttinsky,
intolerant attitude toward social issues, they will keep losing
elections.

Either own the fact that you are in favor of slightly less
spending than Democrats and want to marginalize social outgroups or
start living up to your rhetoric. Voters, it seems, are neither
stupid nor receptive to lies.

When it comes to immigration specificially, Sen. Rand Paul
(R-Ky.) is right that Republicans have become “trapped” by their
rhetoric on the topic, especially regarding the concept of
“amnesty.”

“We’ve been somewhat trapped by rhetoric and words, and
amnesty’s a word that has kind of trapped us,” he said, adding that
some people think it means giving undocumented immigrants a right
to vote, while others say it means allowing them to obtain legal
status without a penalty….

Paul is no champion of open borders or even last year’s Senate
immigration-reform bill (he explains his vote against
the plan here
). But he is already being attacked by “real”
Republicans for even talking about immigration in
less-than-apocalyptic terms, especially by people who are quick to
say Eric Cantor got crushed because he was “soft” on
immigration.

As it happens,
64 percent
of Republicans nationwide favor immigration reform.
They are joined by 71 percent of independents and 78 percent of
Democrats. Within Cantor’s own district,
a large majority of voters
(as many as 72 percent) favored
immigration reform.

If the Republicans decide that
being virulently anti-immigrant and immigration reform is a way to
succeed, they will be on the losing side of not just that issue but
history.

Even though polls routinely show that immigration is actually
not a particularly important issue for voters, hostility to
immigrants confirms in many people’s mind a vision of the
Republicans as mean, intolerant, and white. That simply doesn’t
play well in an increasingly diverse and globalized America.

More to the point, large numbers of voters—including 65 percent
of the independents who decide all national elections—think that
government “has too much power.”
A majority of voters
(55 percent) think the “government is
doing too much.” These are not new findings or recent turnarounds.
Voters have been saying the government does too much and spends too
much
for a long time
.

The Republican Party, especially its doltish leadership, keeps
saying, “Yeah, yeah, we hear you, we’re on your side, shrink the
state, stop spending, we get it.” And yet when it is power it
cranks up spending and regulation like LBJ’s bastard child. And
when it is in opposition, it still proposes to spend more money in
the future and refuses to abide by its attractive libertarian
rhetoric by going on and on about abortion, drugs are bad mmkay,
gays need fixing, immigrants scare me, and all the rest. Think
about it, Republicans: Large majorities of Americans keep saying
they want a government that spends less and does less. Large
majorities are also favorably disposed to immigrants and
immigration. And you’re seriously fixating on keeping immigrants
out of country as a successful electoral ploy while laying out
budgets that increase spending by at least 35 percent over the
coming decade? Run the numbers again, pal.

As much as a single person could personify everything that sucks
about the contemporary GOP—a patently fake commitment to small,
limited government, a lack of social tolerance, and uncritical
support for a military-industrial complex that has lost the last
two wars it foisted on Americans—that person was Eric Cantor. Good
riddance.

Republicans who sound like him and legislate like him won’t be
any more successful come this November or in any other future
elections either.

News flash: Voters dislike Republicans (and Democrats, too) not
despite their policies and the way they wield power but
because of their policies and the way they wield
power.

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With Rand Paul’s Endorsement, You Can’t Count Immigration Reform Out

Sen. Rand PaulOne popular
takeaway from Tuesday’s primary loss by (soon to be former) House
Majority Leader Eric Cantor to newcomer David Brat is that
immigration reform—any effort to create an eased path to legal
residency and citizenship—took a big hit. That’s because Brat,
aside from being a
market-minded economics professor, is also something of a border
warrior
who opposes expanded immigration. But that may not be
the case with libertarian-leaning Sen. Rand Paul (R-Ky.) apparently
joining forces with an immigration reform group.

Paul has walked something of a fine line on the immigration
issue, which is a sensitive one for the Republican Party. Many GOP
hardliners on the issue seem absolutely committed not only to
making it harder to legally enter the country, but to offending
those who have already arrived. Paul hasn’t taken it that far, but
he has risked giving offense anyway without committing himself to a
clear position. His website says:

I do not support amnesty, I support legal immigration and
recognize that the country has been enriched by those who seek the
freedom to make a life for themselves. However, millions of illegal
immigrants are crossing our border without our knowledge and
causing a clear threat to our national security. I want to work in
the Senate to secure our border immediately. In addition, I support
the creation of a border fence and increased border patrol
capabilities.

But yesterday, the Partnership for a New American Economy

announced
“Senator Rand Paul (R-KY) Joins Grover Norquist to
Address Need for Immigration Reform.” The press release from the
business-oriented immigration reform group is short on details
about Paul’s specific take, but Paul reportedly
told participants
“the ball is moving forward” on immigration
reform.

The Partnership’s release adds, “Senator Rand Paul (R-KY) joined
Grover Norquist to talk about immigration reform and the Senator’s
ideas to strengthen border security, reform existing immigration
laws for employers and attempt to find common ground on smaller
immigration related matters.”

How that shakes out in terms of legislative votes and policy
proposals we’ll have to wait to see. Last year, he
voted against
a major immigration reform proposal.

But Paul is a potential serious
contender
for the 2016 Republican presidential nomination. He’s
already
chastised his party over the Voter ID issue
, saying it’s
offending people who might otherwise consider supporting the GOP.
The shift on immigration reform might well be part of his larger
effort to improve his own appeal—and that of his party.

Brian Doherty
yesterday explored just how libertarian American politics can
actually get
, even at a “libertarian moment” that creates an
opening for people like Rand Paul. In this case, it could be that
the moment is pushing one prominent libertarian-leaner even further
toward personal freedom.

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Global Temperature Trend Update: Third Warmest May in Satellite Record Might Portend Record-Setting El Niño

Global temperaturesEvery month University of Alabama in Huntsville
climatologists John Christy and Roy Spencer report the latest
global temperature trends from satellite data. Below are the newest
data updated through May 2014:

Global Temperature Report: May 2014

Global climate trend since Nov. 16, 1978: +0.14 C per decade

May temperatures (preliminary)

Global composite temp.: +0.33 C (about 0.59 degrees Fahrenheit)
above 30-year average for May.

Northern Hemisphere: +0.33 C (about 0.59 degrees Fahrenheit)
above 30-year average for May.

Southern Hemisphere: +0.33 C (about 0.59 degrees Fahrenheit)
above 30-year average for May.

Tropics: +0.17 C (about 0.31 degrees Fahrenheit) above 30-year
average for May.

Global Temperature Trend

The University of Alabama in Huntsville release
comments: 

May 2014 was the third warmest May in the 35-year
satellite-measured global temperature record, and the warmest May
that wasn’t during an El Niño Pacific Ocean warming event,
according to Dr. John Christy, a professor of atmospheric science
and director of the Earth System Science Center at The University
of Alabama in Huntsville. The global average
temperature for May was 0.33 C (about 0.59 degrees Fahrenheit)
warmer than seasonal norms for the month. The warmest May was in
1998, during the “El Niño of the century.” Temperatures in May 1998
were 0.56 C (about 1.0 degrees F) warmer than normal. May 2010 —
also an El Niño month — was second warmest at 0.45 C (0.81 degrees
F).

While May 2014 was not officially an El Niño month, indications
are that an El Niño is forming in the eastern central Pacific off
the equatorial coast of South America. Even if that El Niño is
nothing spectacular, it might become a record setter simply because
it is getting a warmer start, Christy said. “The long-term baseline
temperature is about three tens of a degree (C) warmer than it was
when the big El Niño of 1997-1998 began, and that event set the
one-month record with an average global temperature that was 0.66 C
(almost 1.2 degrees F) warmer than normal in April 1998.”

January through August of 1998 are all in the 14 warmest months
in the satellite record, and that El Niño started when global
temperatures were somewhat chilled; the global average temperature
in May 1997 was 0.14 C (about 0.25 degrees F) cooler than the
long-term seasonal norm for May.

“With the baseline so much warmer, this upcoming El Niño won’t
have very far to go to break that 0.66 C record,” Christy said.
“That isn’t to say it will, but even an average-sized warming event
will have a chance to get close to that level.”

Go here to see maps
showing global temperature anomalies.

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The Biggest Loser From Cantor’s Stunning Collapse: Boeing

While Eric Cantor may have been nothing but a Wall Street pawn, eager to appease whoever the highest lobbying bidder du jour was, the biggest loser from his dramatic fall from grace at the hand of the tea party is not a Wall Street company at all, but Boeing. The reason, as Bloomberg explains is that Cantor’s defeat threatens congressional reauthorization of low-cost lending that benefits the world’s largest planemaker.

The name of the entity whose fate is at stake: the US Export-Import, or Ex-Im bank. From Ex-Im’s description:

It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012 which will expire in September 2014.

Said otherwise, Ex-Im arranges financing that helps foreign airlines buy jets, a service that Boeing said last month would support $10 billion of 2014 sales. As Congress debates reauthorization, House Financial Services Committee Chairman Jeb Hensarling of Texas is being promoted as a possible Cantor successor. He has said the U.S. should “exit the Ex-Im.”

Of course, why a world flooded with $10 trillion in excess liquidity would need yet another taxpayer-funded subsidy for corporate profits is not exactly clear. Which is why Boeing’s order book suddenly seems at risk now that big-business advocate Cantor is gone:

Cantor has been an Ex-Im advocate, and his upset brings the bank’s “future into question,” two Bloomberg Industries analysts, Caitlin Webber and George Ferguson, said in a note today. “If the bank isn’t renewed by Sept. 30, the agency can’t finance new deals, though it could service existing commitments, estimated at $114 billion.”

 

The majority leader was upended by a Tea Party-backed challenger, David Brat, a move that may embolden more-conservative Republicans to buck party leaders. Washington-based Krueger said the bank has now been thrust into a “conservative uproar” over what critics decry as “corporate welfare.”

Keeping alive the Export-Import Bank will be an “even more high-profile/challenging fight,” Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said today by e-mail. Boeing was the “biggest loser” besides Cantor in the Virginia Republican’s surprise loss yesterday, Krueger wrote.

Perhaps, just perhaps, with the victory of David Brat, the crony “politics as usual” play, in which US taxpayers relentlessly subsidize big global corporations, is finally coming to an end. Or at least one can dream.




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A.M. Links: Hagel Admits Mistakes Were Made on Berghdahl, Rand Paul Pushing Immigration Reform, N.J. Shelling Out For Sixers

  • Secretary of Defense
    Chuck Hagel
    says mistakes were made in the deal to swap
     Sgt. Bowe Bergdahl for five Guantanamo detainees.
  • Sen.
    Rand Paul
    (R-Ky.) is joining the push for conservatives to
    participate in immigration reform.
  • The gunman who killed two police officers and another person in
    Las
    Vegas
    last night was shot and killed by police, not his
    partner.
  • New Jersey is offering $82 million in tax credits to get the
    Philadelphia
    76ers
    to practice in Camden.
  • Iraq’s prime minister,
    Nouri al-Maliki
    , would like the U.S. to conduct airstrikes
    against insurgents in the country.        
          
  • Ukraine’s new president says he’s ready to talk to opponents in
    eastern
    Ukraine
    , is pro-Russian separatists lay down their arms.

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The Chamber of Commerce vs. Libertarian-Leaning Republicans

Paid for by an a-hole! |||Oh, those libertarians! Always shilling for Big
Business! Except, um, when libertarian-leaning Republicans are
actually in power, in which case the Chamber of Commerce agitates
to replace them with more traditional GOP types. Cato Executive
Vice President David Boaz rounds up several examples in this
helpful Daily Beast
column
:

Why, for instance, did big companies spend so much money
to defeat
a Republican Georgia legislator
last month? Apparently Rep.
Charles Gregory was just too libertarian for the Georgia Chamber of
Commerce and the companies like Coca Cola, Delta Airlines, Georgia
Power, and AT&T, who suddenly set up a the “Georgia Coalition
for Job Growth” to oppose him and other tea party legislators. It’s
not the only example this primary season.

In Kentucky, business leaders lobbied
hard
 though unsuccessfully to persuade Steve Stevens, head
of the Northern Kentucky Chamber of Commerce, to run against Rep.
Thomas Massie. Massie, a businessman himself, is a strong fiscal
conservative, but some local business leaders don’t like what they
see as his stand-off approach.

A Washington business consultant has moved to northern
California to challenge anti-earmarks Rep. Tom McClintock, because
he “thinks representatives should deliver for folks back
home,” in
the words of a local reporter
. […]

In Michigan business
leaders are funding financial consultant Brian Ellis’s primary
challenge
 to Rep. Justin Amash. […]

In an interview
with the Weekly Standard
, Ellis strikingly
dismissed Amash’s principled, constitutional stand: “He’s got his
explanations for why he’s voted, but I don’t really care. I’m a
businessman, I look at the bottom line. If something is
unconstitutional, we have a court system that looks at that.”


Plenty more at the link
. Brian Doherty wrote yesterday about
the challenges of
making the Republican Party more libertarian
.

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May Retail Sales Miss, Core Retail Sales Unchanged, Control Group Declines

Another swing and a miss for the so-called Q2 GDP surge.

After April data was revised higher, with headline retail sales pushed from 0.1% to 0.5%, and core retail sales ex-autos and gas boosted from -0.1% to 0.3%, May showed a big drop in whatever momentum may have resulted from the March spending spree. As a result May headline retail sales missed expectations of a 0.6% increase, printing at 0.3%, with the entire positive print due to auto and gas sales. Indeed, when looking at core retail sales excluding autos and gas, these were unchanged from April, printing at 0.0%, far below the 0.4% expected.

As the table below shows, segments that saw a decline in May were Electronics stores (again), as well as food and beverage stores, health and personal care, clothing stores, sporting goods stores, restaurants, as well as general merchandise stores. In other words a decline across the board.

As usual, the biggest wildcard is just how accurate and relevant the seasonal adjustment is: the headline change from April to May was a substantial $26 billion, which however was neutered to just $1.5 billion when applying seasonal adjustment factors, which however as the ISM data recently showed, are nothing but a farce.

Finally, and what’s worst for GDP calculations, the retail sales control group which goes into GDP calculations showed the first sequential decline since January when the full brunt of the “harsh weather” which is now said to have subtracted 2.0% from Q1 GDP hit. Clearly, US consumers are still delaying all those purchases they would have otherwise made in January.

Just blame it on the blamy balmy May weather.




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Initial Claims Rise, Miss Expectations For 2nd Week In A Row

At 317k, initial claims remain close to cycle lows but it is noteworthy that this is the 2nd week in a row of rising claims (missing expectations) when all we hear about is how great things are and how Q2 will be the big swing back. Continuing claims rose for the first time in 7 weeks but remains just off cycle lows (the biggest rise in 2 months). Perhaps the celebration of escape velocity job creation was – once again – premature.

 

 

Charts: Bloomberg




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Summer Gas Prices Highest Since 2011 As Oil Hits 9-Month Highs

It seems, as we noted earlier, that the machines running the crude oil pricing algos are running on a 24-hour delay but as ISIS pushes on towards Baghdad, takes Tikrit and images of burning refineries hit YouTube, crude oil prices have shot up. WTI Crude is back over $106, a level not seen since Sept 2013 and is the highs for this time of year since 2008’s consumer-sapping levels. This recent strength has already leaked into gas prices (though there is more to come if the normal lag is anything to by) as regular gas prices have not been higher for this time of year since 2011. So there we have it – the excuse for Q2 GDP consumption weakness….

 

WTI is at 9-month highs (and highest for this time of year since 2008)…

 

And gas prices are highest since 2011 for this time of year…




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