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The Great Wall of America

So Trump is still pushing his idea of a wall between Mexico and the U.S. The wall is a horrible idea even just as an idea, but as an actual project it will most likely be even more of a horrible thing. Bent Flyvberg has studied what he calls Megaprojects and has some really bad news for Trump and those who think his Wall™ is a good idea.

Megaprojects have a 90% failure rate in terms of coming in at or below costs. Megaprojects have a 90% failure rate at providing the stated benefits or outcome. Megaprojects have a 90% failure rate at being completed on time. So what does all this mean? My guess is that Trump’s Wall™ will not stop illegal immigration. It will likely cost $75 billion (at least) and will take a decade to build (at least). I arrive at that figure by taking the $25 billion estimate and tripling it. This is not that outrageous when you consider the cost over-runs associated with other Megaprojects such as Boston’s Big Dig and others. And no, I do not give even the slightest credence to Trump’s assertion it will cost a mere $10 billion.

Not only that, but it will be a point of contention between Mexico and the United States…one of our largest trading partners. If the U.S. starts or becomes in embroiled in a trade war with Mexico it will be nothing but bad for both sides. Trump’s notion that a trade deficit is bad for a country is completely ridiculous. As I noted in the past, I have had a trade deficit with Trader Joe’s and will almost surely have a trade deficit with them for the indefinite future. But this does not make me worse off. In fact, it makes me better off. I am able to specialize in those areas I am good at and earn more money, and then give it to Trader Joe’s who are good at what they do and I get to have stuff I could not hope to produce myself. It is a win-win arrangement. I am better off, and Trader Joe’s is better off.

This is true between individuals, individuals and firms, firms and firms trading and also states trading between each other. If there is trade between California and Arizona and California has a trade surplus is Arizona somehow made worse off? Of course not. The same is true with Mexico. How are we worse off if, for example, the U.S. buys oil from Mexico? We have oil, and Mexico has more more money to spend either on goods produced by the U.S. or other countries or even domestically. The people in the U.S. who bought the oil clearly valued the oil more than holding onto the money. Those same people always had the option of not making such a purchase. So again, where is the down side?

Further, a trade deficit with our trading partners means we have a capital account surplus. That is, they are investing in our country. If Mexico invests in the United States how is that bad? Such investments will employ people inside the U.S. Such investments will indicate that the U.S. is a good place to do business.

Finally, a large portion of the imports into the U.S. are intermediate goods and raw materials. That is they are inputs to American production processes. Restricting those will undoubtedly harm those American production processes…as in leading to job losses in those processes.

So Trump’s Wall™ is just another sign that Trump is stuck on stupid.

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About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research.

Comments

  1. Gustopher says:

    Great Wall of Mexico. If they are paying for it, they should have naming rights.

    Like or Dislike: Thumb up 7 Thumb down 0

  2. bill says:

    i’m sure some of you know there are already parts of “the wall” up and they were approved/voted on by many of your liberal hero’s!? and that mexico has built parts of one already?
    i doubt there will be wall along the entire border but hey- at least we’ll know where the choke points are.
    still, if you’re monday morning qb’ing this you must realize it all could have been avoided if we just enforced our existing immigration policies.
    as for the “mega=project” slam, sure- that happens mainly in the uber-corrupt dem states, not where the wall is going. heck, we could you mexicans on work visa’s to keep the corruption at a minimum…..

    Poorly-rated. Helpful or Unhelpful: Thumb up 2 Thumb down 33

  3. Dave Schuler says:

    I agree that it’s a bad policy. If your objective is to reduce the number of illegal economic migrants, it seems pretty obvious that the way to accomplish that is via workplace enforcement rather than border control. It’s impossible to create a non-porous border.

    Welcome back, Steve. I’ve missed you.

    Highly-rated. Helpful or Unhelpful: Thumb up 24 Thumb down 0

  4. rodney dill says:

    @Gustopher: …and it should be built with Manuel labor.

    Like or Dislike: Thumb up 3 Thumb down 9

  5. Lit3Bolt says:

    And no, I do not give even the slightest credence to Trump’s assertion it will cost a mere $10 billion.

    With Trump, and the federal gov’t in general, I think it’s safe to simply add another zero.

    We also have to fight all the eminent domain and environmental damage cases, dam up the Rio Grande unless we want to cede it to Mexico, pay for security to fight off the protesters and/or terrorists and/or drug gangs, pay for PR to help lift the public’s mood about the project, have it structurally inspected and approved, etc.

    Then we watch as illegal immigrants and drug gangs and terrorists simply invest in tunnels and speedboats and yachts and drone technology, or hop on trains and trucks like they usually do, or simply overstay their work visa. So then we have to pay people to fight all of that while paying them to watch the wall and man it 24/7, so we have to have it lit and pay for the electricity costs, and build THOSE power stations in the middle of West Texas, as well as roads, gas stations, hotels, and restaurants for the men staffing it 24/7…

    However, if you simply invested 100 billion into border patrols and enforcing existing immigration law, you would see immediate and far-reaching results.

    But no, White America demands a monument to racism to ease their easily perturbed fee-fees because despite having limitless guns and the government and police on their side it STILL isn’t enough to make them feel safe.

    It will never be enough.

    Highly-rated. Helpful or Unhelpful: Thumb up 36 Thumb down 1

  6. cian says:

    It’s just noise for the base. Haven’t we learnt anything yet? It’s a con, just like his university, like his condo deals. None of his supporters will care when it falls apart because they won’t know. They will have been told it was a success, and no amount of proving otherwise will make a blind bit of difference. To this day a majority of republican supporters still believe Muslims were cheering the collapse of the twin towers from New Jersey. A majority still believe President Obama is an Islamic infiltrator, that Trump’s inauguration was attended by the largest crowds ever seen. For the republican base this isn’t a case of ‘your facts vs mine’, it’s ‘your facts represent everything I hate’.

    Trump is a buffoon, but the people behind him have a definite plan. Steve Bannon and his ilk see this as a war and the enemy is reason. The only way to ensure white America stays on top is to take control, of government, the media, and how America votes. They’ve got four years to discredit and dismantle the organs of truth- academia, the sciences, independent expertise and those institutions charged with delivering nonpartisan analysis like the CBO. The period we are now living through could be described as a Cold Civil War between right wing nativists and liberal democracy. The nativists understand this, liberals don’t and as a result are falling further and further behind.

    Highly-rated. Helpful or Unhelpful: Thumb up 32 Thumb down 0

  7. Scott says:

    Texas conservatives are up in arms over the whole idea.

    1) it tramples property rights. Even if eminent domain is used, it will be ties up in courts for a long time. Even the walls today splits people’s property and denies access to parts of their property

    2) a 20% tariff is a tax on American consumers,

    3) about 25% of the construction workforce in Texas is illegal aliens

    4) People who live here know it won’t work

    5) a tariff will create a depression in many parts of Texas

    The list can go on.

    It is so monumentally stupid; so Trumpian.

    Highly-rated. Helpful or Unhelpful: Thumb up 33 Thumb down 0

  8. Pete S says:

    @Dave Schuler

    Actually, you can also reduce all immigration, legal and illegal, by trashing the economy to the point that there is no incentive for people to come here. Trump may achieve his supporter’s goal this way by starting a few trade wars…..

    Like or Dislike: Thumb up 9 Thumb down 0

  9. KM says:

    @scott:

    it tramples property rights

    Imagine loosing the 5 generation family ranch because the federal government came in, said “mine now”, paid you less then what it was worth (gotta cut those costs!) and tossed out without your consent. Imagine watching your home torn down because it’s too close to the proposed Wall and beautiful places you love to hike and fish being churned up for a concrete base. Imagine watching people cheer for this, say you were overpaid for your dirt anyways and GTFO if you don’t like it, we won!!1! Imagine that this is the result of your voting Republican and you cannot believe the only ones on your side are those bleeding heart liberals when your home is on the line.

    We may be getting some strange allies in the future.

    Highly-rated. Helpful or Unhelpful: Thumb up 16 Thumb down 0

  10. michael reynolds says:

    @bill:

    Hey, genius: immigration from Mexico is at a 40 year low.

    Yes: low. Because we have been enforcing border security, and because the Mexican economy is stronger thanks in part to NAFTA.

    I realize you don’t live in ‘reality’ but that’s the truth. Now, you can either adjust your beliefs to fit reality, or you can refuse reality and choose to live in crazytown with your idiot president. I have zero doubt as to which you’ll do.

    Highly-rated. Helpful or Unhelpful: Thumb up 28 Thumb down 0

  11. J-Dub says:

    @Pete S:

    Actually, you can also reduce all immigration, legal and illegal, by trashing the economy to the point that there is no incentive for people to come here. Trump may achieve his supporter’s goal this way by starting a few trade wars…..

    But if you destroy the Mexican economy then they will come here by the million anyway. It seems like we have a good system in place now that could be improved through an improved guest worker program.

    Like or Dislike: Thumb up 3 Thumb down 1

  12. J-Dub says:

    Trump is stuck on stupid

    People really hate to be called stupid, or insinuated that they are stupid, as happened in this election. They hate it so much that they were willing to elect Donald Trump, thus proving that they are, in fact, stupid.

    Like or Dislike: Thumb up 7 Thumb down 0

  13. Scott says:

    @michael reynolds: The BS thrown up about Mexico is amazing in its profound ignorance. By and large, Mexico is a thriving, vibrant country. About a million Americans have retired there, creating a good life with rational, efficient healthcare. My daughter over the summer completed some college courses in San Luis Potosi. Stayed with a host family, went to restaurants and night clubs, Facetimed with us since wifi was ubiquitous. The city had three Walmarts , a Costco, and several HEB grocery stores. Never once worried about safety (at least not any more than I worry here).

    No wonder Mexicans are insulted.

    Highly-rated. Helpful or Unhelpful: Thumb up 18 Thumb down 0

  14. Blue Galangal says:

    @cian: You’re spot on. I was at a party last weekend where a seemingly sane woman (we’ve been acquainted for several years) suddenly began discussing how great it was to have a president who was “born here.” She was in the wrong crowd for that; several people (gently) took her to task and explained… and she absolutely refused to listen.She just kept asserting he was born in Kenya and everything else was a lie. In *2017.* It was eerie.

    Like or Dislike: Thumb up 10 Thumb down 0

  15. cian says:

    @Scott: Not that President Pena Nieto is a good guy, but he is right when he says respect between countries is the starting point to all else. Trump, of course, is the business man he always was, which means it’s not enough to win, the other guy has to be crushed. This is not about the United States, it’s about someone standing up to the bully and the bully can’t possibly lose. That’s where the county is now, a lunatic’s plaything.

    Like or Dislike: Thumb up 5 Thumb down 0

  16. Daryl's other brother Darryl says:

    @bill:

    i doubt there will be wall along the entire border but hey- at least we’ll know where the choke points are.

    But that’s what your Dear Leader is saying. That’s what you voted for.
    Immigration is at a 40 year low. You voted for a $25 billion solution to a problem that does not exist.
    Now you’re trying to back pedal….and pretend you are not part of the Dear Leaders sycophant fringe.

    Like or Dislike: Thumb up 13 Thumb down 0

  17. Facebones says:

    @KM:

    We may be getting some strange allies in the future.

    That’s for sure.

    Not a single Texas congressman is fully supporting the wall. Apparently Texans hate eminent domain more than they hate Mexicans.

    Like or Dislike: Thumb up 7 Thumb down 0

  18. Joe says:

    @bill:

    still, if you’re monday morning qb’ing this you must realize it all could have been avoided if we just enforced our existing immigration policies.

    So, we are building this wall now to punish ourselves for our past failure to enforce our then-existing immigration policies? Putting aside the more rhetorical question of how they were our policies if we didn’t enforce them, how does it make sense to cut off our hand today to punish ourselves for our behavior yesterday. We have a new administration. Wouldn’t it make more sense for them to enforce these “existing immigration policies” of which you speak? Or do we need to wall in the immigrants whom we earlier failed to keep out? Or do you need to wreck the whole economy today just so you can say to someone else, “See! Look what you did!”

    Like or Dislike: Thumb up 12 Thumb down 0

  19. michael reynolds says:

    @Joe:
    Oh, dude, Bill’s brain can’t begin to process that.

    Like or Dislike: Thumb up 9 Thumb down 0

  20. al-Alameda says:

    @bill:
    good luck with your Trump Vanity Project Wall …

    Like or Dislike: Thumb up 3 Thumb down 0

  21. Bob@Youngstown says:

    My guess is that Trump’s Wall™ will not stop illegal immigration.

    Your QUESS ??? If 40% of the “illegals” arrived by air, a land-based wall will not “stop” illegal immigration.

    Like or Dislike: Thumb up 3 Thumb down 0

  22. grumpy realist says:

    And now Mexicans are starting to boycott US companies.

    Like or Dislike: Thumb up 1 Thumb down 0

  23. george says:

    @Facebones:

    Not just Texans. Some of the allies for environmentalists and first nations in fighting pipelines going across conservation areas and reservations in both Canada and the United States have been large conservative ranchers who despise eminent domain with a passion that has to be seen to be believed.

    As the saying says, some of them are nuts, but wrt eminent domain, they’re our nuts. And interestingly enough, they’re pretty consistent about it – they’re just as strongly against eminent domain applying to reservations and conservation areas as they are against it applying to private ranches. I get the feeling that many of them think its the worst evil out there … sure murder and rape and treason are bad, but when you’re get to eminent domain you’ve crossed a line.

    Like or Dislike: Thumb up 6 Thumb down 0

  24. Pch101 says:

    I don’t see the wall as being a disaster because it will be mostly a fiction.

    Trump can write a ton of memos, but there won’t be the appropriations to pay for it. We may get a few bits of wall here and there so that there is a photo-op for the idiots, but I’m not expecting much more than that.

    We already have a lot of pretty formidable border fence. Perhaps Trump can go stand in front of a section that was built during the Bush administration and take credit for it, telling us how beautiful it is and how he personally designed it.

    Like or Dislike: Thumb up 4 Thumb down 0

  25. Hal_10000 says:

    TBF, the 20% tarriff is Mexico’s part of a general “border adjustment tax” which sounds very bad to me. But I agree that the wall is a huge waste of money. If you want to stop illegal immigration, one big step is to make it easier for people to come here legally.

    Megaprojects have a 90% failure rate in terms of coming in at or below costs. Megaprojects have a 90% failure rate at providing the stated benefits or outcome. Megaprojects have a 90% failure rate at being completed on time

    Note, this applies to California’s high-speed rail project which hasn’t even started and is massively overbudget as well.

    Like or Dislike: Thumb up 2 Thumb down 0

  26. cian says:

    Looks like this row with Mexico is turning out to be more than first thought. The US is not uniting behind Trump in his conflict with Mexico. A majority see it as unnecessary and unprovoked, causing more problems than it can possibly solve. Across the border, however, the Mexican people are rowing in behind their president. It’s fast becoming a battle between a whole nation and a bully who can’t and won’t back down.

    America is losing friends fast. China continues to strengthen it’s standing in Asia, taking on the leadership role the Trump Presidency has decided to abandon. Europe is waking up to the reality that they are the meat in the US/Russia sandwich which bodes ill for the right wing parties who are planning to return Europe to a state last seen pre 1945. Should the centrist parties survive the upcoming elections, it might herald the start of all this nationalist madness being rolled back. We can only hope.

    Like or Dislike: Thumb up 11 Thumb down 0

  27. C. Clavin says:

    @Hal_10000:
    Sure…but at least high speed rail has a legitimate purpose and a proven record.
    We can have an intelligent discussion about pros and cons.
    No such discussion is possible regarding the wall. There is only logic versus nonsense.

    Like or Dislike: Thumb up 7 Thumb down 0

  28. Pch101 says:

    Not quite on topic, but I just saw a guy on another website argue in earnest that the Birthers have a point because Obama had a “certificate of live birth” instead of a “birth certificate.”

    Welcome to “real America”, folks. As in real stupid.

    Like or Dislike: Thumb up 11 Thumb down 0

  29. george says:

    @Pch101:

    I think that its been pretty clear that there’s a significant portion of stupid, especially conspiracy theory stupid, in America since at least the moon landing hoax days. And maybe the Kennedy assassination days, tho’ I’m not sure when the conspiracy theory actually started. And then of course the truthers, birthers, and now the 4 million illegal voters conspiracies are carrying on that tradition.

    I’m not sure if its all about stupid either – sometimes it just seems people love conspiracy theories. I know several reasonably intelligent moon landing hoaxers. I get the feeling that for some there’s just a need to believe you know something the average person doesn’t.

    Like or Dislike: Thumb up 1 Thumb down 0

  30. Lemuel Vargas says:

    Build the effing #The Wall and deal w/ Mexico later. They will thank us later on when they realize the benefits to them on building the #The Wall.

    Like or Dislike: Thumb up 0 Thumb down 10

  31. george says:

    @cian:

    America is losing friends fast.

    I think that’s right. Foreign politicians most likely can understand politicians promising all sort of silly things to their people – most (if not all) do it themselves. However, actually acting on stupid promises is different. Trump is burning bridges that took time to build, and will take time to rebuild once he’s gone.

    Like or Dislike: Thumb up 8 Thumb down 0

  32. wr says:

    @Scott: “The BS thrown up about Mexico is amazing in its profound ignorance”

    They all recite the same crap about California. Apparently, anywhere other than a single-wide in Hog Walla, Arkansas is an unlivable helllhole.

    Like or Dislike: Thumb up 11 Thumb down 0

  33. Tyrell says:

    I think that this could be done more effectively with technology
    than bricks, cement, concrete, wire, steel.
    There is a new movie out – “The Great Wall”: it looks interesting.

    Like or Dislike: Thumb up 0 Thumb down 0

  34. gVOR08 says:

    @Scott:

    1) it tramples property rights. Even if eminent domain is used, it will be ties up in courts for a long time.

    Yes. As someone observed, if there’s anything Texans hate more than facts and reason, it’s eminent domain. IIRC none of the TX House delegation has endorsed a wall.

    Like or Dislike: Thumb up 2 Thumb down 0

  35. al-Alameda says:

    @Lemuel Vargas:

    Build the effing #The Wall and deal w/ Mexico later. They will thank us later on when they realize the benefits to them on building the #The Wall.

    Keeping some Americans out is indeed a benefit.

    I’m surprised that Canada doesn’t want to build a wall too. Perhaps they’re waiting for the Keystone Project to wrap up before they commence their wall project. I wonder if they’ll ask Trump to pay for it?

    Like or Dislike: Thumb up 2 Thumb down 0

  36. Liberal Capitalist says:

    Sigh…

    Protectionism and isolationism started the great depression.

    It just doesn’t matter if we all do the Willy Wonka “Stop… Wait … Don’t” bit, because the whole administration is conspiracy theorists.

    Logic wont work. Facts will be ignored, and the whole thing will plow forward in a graceless awkward stumbling manner.

    It reminds me of the great American film: “Meatballs”.

    The sage American poet, Bill Murray (as Tripper), stated the following prose:

    Phil: Cut the crap, Morty. I mean, the Mohawks have beaten us the last twelve years, they’re gonna beat us again.

    Tripper: That’s just the attitude we don’t need. Sure, Mohawk has beaten us twelve years in a row. Sure, they’re terrific athletes. They’ve got the best equipment that money can buy. Hell, every team they’re sending over here has their own personal masseuse, not masseur, masseuse. But it doesn’t matter. Do you know that every Mohawk competitor has an electrocardiogram, blood and urine tests every 48 hours to see if there’s any change in his physical condition? Do you know that they use the most sophisticated training methods from the Soviet Union, East and West Germany, and the newest Olympic power Trinidad-Tobago? But it doesn’t matter. It just doesn’t matter. IT JUST DOESN’T MATTER. I tell you, IT JUST DOESN’T MATTER! IT JUST DOESN’T MATTER! IT JUST DOESN’T MATTER!

    The group: IT JUST DOESN’T MATTER! IT JUST DOESN’T MATTER…

    Tripper: And even, and even if we win, if we win, HAH! Even if we win! Even if we play so far over our heads that our noses bleed for a week to ten days. Even if God in Heaven above comes down and points his hand at our side of the field. Even if every man, woman and child held hands together and prayed for us to win, it just wouldn’t matter, because all the really good looking girls would still go out with the guys from Mohawk cause they’ve got all the money! It just doesn’t matter if we win or we lose. IT JUST DOESN’T MATTER!

    The group: IT JUST DOESN’T MATTER! IT JUST DOESN’T MATTER…

    https://www.youtube.com/watch?v=e9mf3Bypyk8

    Yes, we all see that the next 4 years could bring a chance that Americans will resolve themselves to admitting and embracing defeat.

    However, if the last week shows us anything then in the next few moths, we will likely see President Trump embrace his inner Captain Queeg:

    https://www.youtube.com/watch?v=-95QqBXLG2I

    Terrific!

    Like or Dislike: Thumb up 1 Thumb down 0

  37. ltmcdies says:

    @Blue Galangal: well Trump is cult, isn’t he. No different that Jim Jones….

    Like or Dislike: Thumb up 2 Thumb down 0

  38. chainlinq says:

    Further, a trade deficit with our trading partners means we have a capital account surplus. That is, they are investing in our country. If Mexico invests in the United States how is that bad?

    Its bad enough to get Trump elected. Overly simplified but a trade deficit takes money from main street (jobs) and places it into Wall Street (investments). This is part of why most of the income growth the last 10 years has gone to the top 10% of the economy. The rich earn there money on Wall Street (unearned income) where as the middle class and working class make their money on main street. If you favor Wall Street over Main Street then the rich people who write checks and finance your campaign are going to be happy but the people who vote are going to get increasingly pissed off.

    And it is a myth that Wall street money is a productive investment. the overwhelming majority of Wall Street money is used to make a bet on an asset by buying it from someone else who had earlier made a bet on the same asset. Very, very little of that money ever makes it back onto Main Street as a true investment in capital assets.

    Like or Dislike: Thumb up 2 Thumb down 0

  39. gVOR08 says:

    @chainlinq: Not my territory, but I believe there are econ studies saying the financial sector is necessary and productive. Up to a certain percentage of GDP. Beyond that finance is parasitical and a drag on the economy. I forget the percentage limit, but we’re way past it.

    Like or Dislike: Thumb up 2 Thumb down 0

  40. chainlinq says:

    @gVOR08: Overly simplistic but ultimately econ is about turning raw materials into useful ‘things’. In quotes because services count as useful and I am not just talking about manufacturing. It takes raw materials, energy, labor and capital (money mostly) to convert materials into something useful. The finance sectors usefulness is in providing capital to convert materials into ‘things’. When it does that, it is awesome.

    But way too much of the current finance sector, like the overwhelming majority of it, is dedicated to trading assets in an attempt to make money by betting that an asset will rise in value, not by spending it to turn materials into things. There is is nothing productive in betting on assets. It can be VERY profitable but it is not productive.

    When you buy a stock on the NYSE, you are not investing in the company whose stock you bought. In order to invest in that company, you have to give it money directly so it can use it to convert materials into things. When you buy a stock on the NYSE you are betting that the stock price will go up and you are giving your capital to some one who early bet that the stock price will go up. The company sees none of that money, it is speculation, not investment.

    It can be very profitable, and dont get me wrong, I love making money on the stock market. But is not productive which is why our economies growth has stalled the last 20 years. Too much capital is being used to speculate and too little is actually used in productive investments.

    Assets rising while economy is stagnate means an asset bubble is forming. And we know how bubbles end….

    Like or Dislike: Thumb up 2 Thumb down 0

  41. Paul Hooson says:

    The Berlin Wall didn’t work out so well either…

    Like or Dislike: Thumb up 0 Thumb down 0

  42. Pete S says:

    I have a suggestion. Let’s give the Trump voters the chance to put their money where their mouths are, since the wall seems to be the one campaign promise Trump seems ready to carry out. Let’s be VERY optimistic about the cost of the wall, and say it can come in at $23 billion. I believe about 1000 miles of the border has natural barriers, leaving 1000 miles to be secured by the wall. By my rough back of the envelope math that is about 60 million inches. So I think each Trump voter, to demonstrate “Patriotic Devotion” to their hero and to their country, should be more than happy to pony up $500 to sponsor a segment of the wall. They would each get just over an inch of the new Trump border wall named after them. They could even write their name on their section in gold pen, just in smaller letters than Trump is used to.

    And if this seems like a ridiculous waste of their money, then shut up with the insults directed at Mexico for not wanting to pay for the whole thing.

    Like or Dislike: Thumb up 6 Thumb down 0

  43. t says:

    @Pete S: im sure The “Adopt-a-wall” program will be a huge success

    Like or Dislike: Thumb up 2 Thumb down 0

  44. the Q says:

    Here’s the problem with Wall Street. They are using most of their profits to buy back shares and issue dividends. The amount of business investment has fallen drastically as the greedy baby boomers are destroying productivity. In the old days, corporations would regularly dedicate over half their profits to buying computers, updating equipment, in short they would invest in their employees and their productivity. Hence, one worker could double their production in a few years.

    Now lets look at the boomer ethics at work.

    “Almost 60 percent of the 3,297 publicly traded non-financial U.S. companies Reuters examined have bought back their shares since 2010. In fiscal 2014, spending on buybacks and dividends surpassed the companies’ combined net income for the first time outside of a recessionary period, and continued to climb for the 613 companies that have already reported for fiscal 2015.

    In the most recent reporting year, share purchases reached a record $520 billion. Throw in the most recent year’s $365 billion in dividends, and the total amount returned to shareholders reaches $885 billion, more than the companies’ combined net income of $847 billion.”

    So, no Wall Street doesn’t really serve an effective purpose any longer. It used to be used to raise capital to improve and expand inefficiencies and productivity. Now profits are used to reward CEOs who cash in their stock options, artificially inflated by their own buybacks.

    Worker productivity in the U.S. is frightening low now. See the above for why.

    Like or Dislike: Thumb up 0 Thumb down 0

  45. Pch101 says:

    @chainlinq:

    a trade deficit takes money from main street (jobs) and places it into Wall Street (investments).

    A trade deficit makes goods cheaper for consumers and helps to reduce wage increases. In other words, it allows us to export inflation and maintain lower interest rates.

    That benefits most consumers, although it does hurt some others.

    Like or Dislike: Thumb up 0 Thumb down 0

  46. Just 'nutha ig'rant cracker says:

    @Paul Hooson: Well, not in the end, but for its first 40 or so years, it accomplished its goal–promoting terror among Germans in Berlin and holding the ones living in the eastern portions of the city in misery and despair–spectacularly. Unfortunately, the goal for “our” wall isn’t to exacerbate differences and promote despair. At least I don’t think that’s the goal, Maybe I’m wrong; after all, I AM an ignorant cracker.

    Like or Dislike: Thumb up 1 Thumb down 0

  47. Sleeping Dog says:

    There is no question that free trade, open markets, globalization, whatever you want to call it has benefited the world and the US. The issue is that this benefit in the US has overwhelmingly flowed to a small portion of the population, a problem that no Republicans and only a small number of conservatives are willing to acknowledge and do something about.

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  48. Terrye Cravens says:

    I have relatives who voted for Trump because of this issue. They hate Mexicans, they think they are destroying our culture. They see this as a fight for our souls as a nation. It is, but not in the way that they think.

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  49. Terrye Cravens says:

    @Sleeping Dog: The benefit has not just gone to a small part of the population. American workers and consumers have derived great benefit for these trade policies. I am old enough to remember when people would pay a far larger part of their incomes for basic necessities. There was no walmart or target or costco…Poor people did not have cars or have cable or cell phones. I went to school with kids who never owned new clothes.

    Opening up markets and opportunities for commerce has been a great boon to poor people.

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  50. Terrye Cravens says:

    @chainlinq: The USA had a trade surplus for 9 out of 10 years of the Great Depression…and 26% unemployment…Would you prefer that?

    We have a had a trade deficit for years. It has gone down when people had no money to spend. We had a trade deficit long before there was such a thing as NAFTA. In fact, the trade deficits began when we did away with the gold standard. That made people go to the dollar…so they got our dollars and we got their goods. And overall it has lead to a drop in world wide poverty and an improved standard of living for most Americans.

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  51. MarkedMan says:

    @Tyrell:

    There is a new movie out – “The Great Wall”: it looks interesting.

    Wow, now that I’m paying attention I see that you guys must be right: total troll.

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  52. Jim Brown 32 says:

    @Just ‘nutha ig’rant cracker: We used the term ig’nint in my neck of the South.

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  53. gVOR08 says:

    It is true that large projects seldom go as planned and almost always go over budget and over schedule. This goes back to the transcontinental railroad and probably well before. But once built, big infrastructure projects become indispensable and provide huge payback. It seems to be a fact of life that it’s necessary to oversell and underestimate big projects to get them launched. This, of course, applies to projects of some actual use. It is not a defense of a useless wall.

    (I feel it’s necessary to footnote any comment on “the wall” with cynicism that it will ever be anything more than a few token lengths of wall, some add ons to the existing fences, and a lot of hype. All at great expense to the American taxpayer.)

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  54. dxq says:

    george says:
    Friday, January 27, 2017 at 12:31
    @Pch101:

    I think that its been pretty clear that there’s a significant portion of stupid, especially conspiracy theory stupid, in America since at least the moon landing hoax days. And maybe the Kennedy assassination days, tho’ I’m not sure when the conspiracy theory actually started. And then of course the truthers, birthers, and now the 4 million illegal voters conspiracies are carrying on that tradition.

    I’m not sure if its all about stupid either – sometimes it just seems people love conspiracy theories. I know several reasonably intelligent moon landing hoaxers. I get the feeling that for some there’s just a need to believe you know something the average person doesn’t.

    that’s true, and i have relatives like that, but it’s also a rejection of inconvenient facts. evolution, big bang, supply-side, birth control reduces abortion….they don’t like the consequences of those facts and more, so now the facts and complicated analysis are for stupid ivory-tower eggheads like al gore.

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  55. Yogi says:

    I think that gVOR08 is right: only a few token stretches of The Wall will be built. At that point all 23 billion will have been spent and we will have a bunch of new billionaires and super millionaires. And not much else.

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