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Prepare For A Bad Decade At The Border

Prepare For A Bad Decade At The Border

Submitted by Princeton Policy Advisors

Apprehensions at the US southwest border track US job openings. And that means trouble is brewing.

Jobs and Apprehensions

As readers know, Customs and Border…

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Prepare For A Bad Decade At The Border

Submitted by Princeton Policy Advisors

Apprehensions at the US southwest border track US job openings. And that means trouble is brewing.

Jobs and Apprehensions

As readers know, Customs and Border Protection reports southwest border apprehensions monthly. Readers may be less familiar with JOLTS, the Job Openings and Labor Turnover Survey, a monthly assessment of the US job market published since late 1999 by the Bureau of Labor Statistics of the Department of Labor.

Border apprehensions closely track JOLTS job openings. A quick tour through the historical data is enlightening.

The previous peak for border apprehensions occurred during the hot economy of the dot-com boom in 2000, and apprehensions thereafter followed job openings down, bottoming in 2002 with the subsequent recession. The recovery from the dot-com bust brought more jobs and more migrants, with apprehensions interestingly peaking in 2005 with the US real estate market and declining precipitously thereafter. Indeed, border apprehensions were an earlier indicator than US job openings of the severe recession which took hold in late 2007.

With the onset of the Great Recession in 2008, apprehensions continued to decline and collapsed to levels not seen since the late 1970s. They remained depressed until 2018.

The Obama administration faced a small surge at the border in 2014, but managed to regain control over illegal entries by the end of that year. The border saw yet another surge in the months prior to Trump's inauguration, with migrants accelerating their US crossings for fear of more difficult border conditions once Trump took office. Trump's harsh rhetoric did in fact intimidate migrants into delaying their journeys north, with the result that 2017 border apprehensions were the lowest since the early 1970s. Action did not match words, however, and migrants soon came to appreciate the Trump administration as something of a paper tiger. Border traffic rebounded, culminating in another crisis starting in July 2018 and peaking in May 2019. During this period, the Trump administration undertook a series of measures to induce Mexican and Northern Triangle governments to curtail migrant movement and implemented the much-loathed Migrant Protection Protocols. These reduced apprehensions to more typical levels by the end of 2019, even though the US job market remained strong.

The covid pandemic saw both job openings and border traffic crater. By this past spring, however, US job openings were headed into record territory and border apprehensions were keeping pace, likely to reach all-time highs this calendar year.

The history of the last twenty years strongly suggests that migrants respond to US labor market conditions, both good and bad. Migrants are not driven principally by domestic hardship, as both CIS and I have shown. Rather, when US wages are strong and jobs are plenty, Central Americans head north. The strange and yet inescapable conclusion is that US and Latin American labor markets are to an extent integrated. Guatemala and Honduras may be exotic places in the American imagination, but Central Americans are no strangers to working in the US. The US is not exotic, it's where the jobs are. Therefore, illegal Central Americans and Mexicans may be considered an integral part of the US labor force, a 'subprime' part perhaps, but nevertheless a part of it. This is quite remarkable given that crossing the border is ostensibly illegal. The migrant response to US job openings should not be so dynamic. But it is, and we see a healthy market as though the border were mostly an inconvenience, that is, we see a robust black market in migrant labor finding its way around border enforcement with comparative ease.

Of course, US administrations have successfully limited illegal border crossings in recent years. As noted above, the Obama administration suppressed a smaller surge during 2014; the 'Trump intimidation' brought near record low crossings in 2017; and the various harsh Trump policies from July 2018 managed to restore order by the end of 2019. While all of these worked for a time and to an extent, traffic inevitably picked up if jobs were waiting.

The Biden administration has managed to be both unlucky and inept, a combination not limited to border policy. The administration relaxed border enforcement straight into the teeth of the hottest job market in at least twenty years, with the likely result a record in border apprehensions for the year. The high number of border crossings is partly, but not entirely, due to administration policy. Be that as it may, the Biden administration will carry the blame, in this as in other matters.

The Outlook for Illegal Immigration

In some ways, the more pressing issue is the outlook for future border crossings. Just a few years ago, our friends at some of the think tanks assured us that the threat of massive surges in illegal immigration were over. By this line of thinking, granting amnesty to undocumented residents represented no risk of a new surge in illegal immigration, as had been the case in 1986 following the passage of IRCA, legislation which extended amnesty to undocumented Mexicans in the US. Clearly, the risk of a massive illegal immigration is not over.

What should we expect in the future? Is the current surge an anomaly which will pass, or does it represent a return to earlier historical patterns? As it happens, this depends principally on the interpretation of the decade from 2008 to 2018, which in turn depends upon whether the Great Recession was only a recession, or in fact, a depression.

A short digression on economics

There is no agreed definition of the difference between a recession and a depression. However, if one cares to dig a bit, they can be distinguished, and if one works with a variety of time series data as I do, the hallmarks of a depression are evident after 2008. For example, on the graph below we can see US vehicle miles traveled (VMT) on US roads and highways, generally a good indicator of the country's economic health. During the first oil shock of 1974 and the subsequent oil shocks of 1979-1982, vehicle miles traveled initially fell, but achieved new highs immediately after the recession officially ended. In the 1991 Gulf War recession and the 2001 dot-com bust, VMT barely flinched. By contrast, during the Great Recession, vehicle miles traveled fell steeply and did not regain their 2007 peak until 2014, seven years later. (And for that, thank you, US shales.) And further, VMT was not back on trend until mid-2017, ten years after the beginning of the downturn. Clearly, the Great Recession was qualitatively different from a normal recession, different even from the brutal and prolonged oil shocks of the late 1970s.

These effects are also visible in housing and consumer credit, more relevant indicators for our discussion. Some analysts feel that the business cycle is essentially the housing cycle, and indeed, housing starts largely track recessions and recoveries. However, on only two occasions in modern history have house values fallen and remained depressed: the Great Depression of the 1930s and the Great Recession of 2008. Much like vehicle miles traveled, US house values did not recover their 2007 peak until late 2016, almost a decade later. This matters because homes are the primary collateral of consumers, and homeowners were thus compelled to spend the better part of a decade paying down mortgages and other loans, with consumer credit not recovering its 2008 peak until 2017. In the interim, borrowing remained depressed, employment and GDP growth were tepid, and the public mood remained sour. Establishment politicians struggled for credibility, and voters across the globe regularly turned to outsiders, including television personalities and a few comedians, hoping for a better approach to governance.

So why does all this matter for illegal immigration? Because the patterns of depression are visible there as well. As with housing, vehicle miles traveled and consumer credit, remittances to Mexico from the US peaked in 2007 and did not regain that level until May 2018. Similarly, the undocumented Mexican population, according to estimates by Pew Research, peaked in 2008 and declined through 2018. Clearly, the undocumented immigrant population was under financial stress, as were US homeowners, and this stress may have contributed to some undocumented residents returning to Mexico, on the one hand, and likely acted as an impediment to new border crossers, on the other. A depression from 2008 to 2018 would explain the decline in the undocumented immigrant population.

Remittances recovered their previous highs in May of 2018, and the Trump border surge began two months later, in July. This recovery in border traffic was interrupted by covid, but as the pandemic has eased, apprehensions have soared to what promises to be historic levels. One is left with the impression that the recent, elevated levels of apprehensions are not entirely one-off surges, but rather the restoration of patterns which persisted for decades before the Great Recession. It would appear that the Great Recession was the anomaly, and the Trump and now Biden surges constitute a return to business as usual.

Demographic trends to 2030 -- an aging US society coupled with a shortage of low wage workers -- will make illegal border crossing attractive. Migrants may well be incentivized to jump the border for the balance of the decade. The future may therefore look like the pre-2007 era; indeed, from the migrant perspective, the 2020s may prove the best decade for illegal immigration since the current border regime was established in 1965.

The numbers can be estimated. In the twenty years to 2007, border apprehensions averaged 1.2 million per year, and the undocumented population grew by 0.5 million per year. Therefore, if the Great Recession is the anomaly and the post-2018 period represents a return to normal patterns of illegal immigration across the southwest border, expect the undocumented population in the US to rise from its current level around 10 million to approximately 15 million by 2030.

Everyone Loses

For both the left and the right, a large increase in undocumented immigrants would be a disaster. For the Heritage Foundation, CIS and FAIR, an increase in the undocumented population of 50% is a catastrophic failure of their policy goals. But life is no better for amnesty advocates like fwd.us, the NILC or the Immigration Hub (the prior home of the President's new immigration advisor, Tyler Moran). The emerging equilibrium may well mirror that of the 1987-2007 period, when high levels of illegal immigration made any talk of amnesty moot. Thus, a reversion to historical patterns portends disaster for literally every major stakeholder group dealing with illegal immigration: the border will be in chaos, illegal immigration will soar, and yet long-term undocumented residents will be no closer to legal status in 2030 than they are today. Even DACA may become trapped in the wash. That is what prohibitions and resulting enforcement regimes produce: wretched outcomes for everyone involved.

As I have said many times, ending prohibitions -- including the prohibition in migrant labor -- is not hard. A legalize-and-tax approach ends the related pathologies in short order. We can fix the border and provide legal status for long-time undocumented residents, but we have to use the standard and proven market-based approach. It is the only one which works.

Tyler Durden Mon, 09/13/2021 - 22:40

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Spread & Containment

Potential COVID-19 Treatment Found in Llama Antibodies

The need to uncover effective COVID-19 treatments remains imperative, as case counts remain steady eighteen months into the pandemic. Recent findings point to unique antibodies produced by llamas—nanobodies—as a promising treatment. The small, stable,…

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A significant milestone in the COVID-19 pandemic was crossed this week. The number of deaths in the United States due to COVID-19—more than 675,000—has surpassed the number of deaths that occurred during the 1918 flu pandemic. In addition, there are still roughly 150,000 new cases every day. Eighteen months into the pandemic, the need for effective treatments against COVID-19 remains as great as ever.

One possible treatment, neutralizing single domain antibodies (nanobodies), has significant potential. The unique antibody produced by llamas is small, stable, and could possibly be administered as a nasal spray—an important characteristic as the antibody treatments currently in use require administration by infusion in the hospital. Now, new research shows that nanobodies can effectively target the SARS-CoV-2 virus.

The team from the Rosalind Franklin Institute found that short chains of the molecules, which can be produced in large quantities, showed “potent therapeutic efficacy in the Syrian hamster model of COVID-19 and separately, effective prophylaxis.”

This work is published in Nature Communications in the paper, “A potent SARS-CoV-2 neutralizing nanobody shows therapeutic efficacy in the Syrian golden hamster model of COVID-19.

The nanobodies, which bind tightly to the SARS-CoV-2 virus, neutralizing it in cell culture, could provide a cheaper and easier to use alternative to human antibodies taken from patients who have recovered from COVID-19.

“Nanobodies have a number of advantages over human antibodies,” said Ray Owens, PhD, head of protein production at the Rosalind Franklin Institute. “They are cheaper to produce and can be delivered directly to the airways through a nebulizer or nasal spray, so can be self-administered at home rather than needing an injection. This could have benefits in terms of ease of use by patients but it also gets the treatment directly to the site of infection in the respiratory tract.”

Credit: Rosalind Franklin Institute

The research team was able to generate the nanobodies by injecting a portion of the SARS-CoV-2 spike protein into a llama called Fifi, who is part of the antibody production facility at the University of Reading. They were able to purify four nanobodies capable of binding to SARS-CoV-2. Four nanobodies (C5, H3, C1, F2) engineered as homotrimers had pmolar affinity for the receptor-binding domain (RBD) of the SARS-CoV-2 spike protein. Crystal structures showed that C5 and H3 overlap the ACE2 epitope, while C1 and F2 bind to a different epitope.

Regarding their effectiveness against variants, the C1, H3, and C5 nanobodies all neutralized the Victoria strain, and the highly transmissible Alpha (B.1.1.7 first identified in Kent, U.K.) strain. In addition, C1 neutralizes the Beta (B.1.35, first identified in South Africa).

When one of the nanobody chains was administered to hamsters infected with SARS-CoV-2, the animals showed a marked reduction in disease, losing far less weight after seven days than those who remained untreated. Hamsters that received the nanobody treatment also had a lower viral load in their lungs and airways after seven days than untreated animals.

“Because we can see every atom of the nanobody bound to the spike, we understand what makes these agents so special,” said James Naismith, PhD, director of the Rosalind Franklin Institute. If successful and approved, nanobodies could provide an important treatment around the world as they are easier to produce than human antibodies and don’t need to be stored in cold storage facilities, added Naismith.

“Having medications that can treat the virus,” noted Naismith, “is still going to be very important, particularly as not all of the world is being vaccinated at the same speed and there remains a risk of new variants capable of bypassing vaccine immunity emerging.”

The researchers also hope the nanobody technology they have developed could form a so-called “platform technology” that can be rapidly adapted to fight other diseases.

The post Potential COVID-19 Treatment Found in Llama Antibodies appeared first on GEN - Genetic Engineering and Biotechnology News.

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China Syndrome? Is Evergrande A Symptom Of Deeper Malaise

China Syndrome? Is Evergrande A Symptom Of Deeper Malaise

Authored by Bill Blain via MorningPorridge.com,

“If that’s true, we are very close to the China Syndrome ”

Evergrande’s imminent default is rocking markets – but few believe…

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China Syndrome? Is Evergrande A Symptom Of Deeper Malaise

Authored by Bill Blain via MorningPorridge.com,

“If that’s true, we are very close to the China Syndrome ”

Evergrande’s imminent default is rocking markets – but few believe the collapse of a Chinese property developer could trigger a global financial crisis. What if Evergrande is just a symptom of a deeper malaise within the Chinese economy and its political/business structures? Maybe there is more at stake than we realise? What if Emperor Xi decides he needs a distraction?

Amid this week's market turbulence, and the overnight headlines, Evergrande dominates thinking this morning. The early headlines say the risk is “easing”. Don’t be fooled. S&P are on the wires saying it’s on the brink of default and is unlikely to get govt support. It’s Asia’s largest junk-bond issuer. Anyone for the last few choc-ices then?

The market view on the coming Evergrande “event” is mixed. Some analysts are dismissing it as an internal “China event”, others reckon there may be some systemic risk but one Government can easily address. There is some speculation about “lessons” to be learnt… There are even China supporters who reckon its proof of robust China capitalism – the right to fail is a positive!

I’ve got a darker perspective.

The massive shifts we’ve seen in China’s political/business public persona over the past few years have been variously ascribed: a reaction to Trump’s protectionism, China taking its place as a leading nation, Xi flexing his military muscle, and now a clampdown on divisive wealthy businesses to promote common prosperity.

What if Evergrande is just a symptom of something much deeper?

That that last 30-years of runaway Chinese growth has resulted in a deepening internal crisis, one that we barely perceive in the west? What if the excesses that have spawned Evergrande and the illusion every Chinese can afford luxury flats and a western standard of living is about to implode? Crashing oriental minor chords!

The looming Chinese property debacle will be fascinating, but it many respects will be similar and yet very different to the multiple market unwinds we’ve seen in the west. How it plays out will have all kinds of implications for growth, speculation and how global investors perceive China in the future. Folk are variously describing it as China’s Lehman Brothers, or the next “Minsky Moment” when speculation ends with a sharp jab of reality to the kidneys.

I’m thinking back to a story I read a few years ago about the Shanghai Auto-fair pre-pandemic. Evergrande New Electric Vehicles had the largest stand and was showing off 11 different EVs. Not one of these were actually available to buy – they were all models of as-yet unproduced cars. The company was valued at billions and yet never sold a single vehicle. This morning, it’s just another worthless business Evergrande is trying to flog. (See this story on Bloomberg TV: China’s Zombie EV Makers.)

The market is asking itself a host of questions about Evergrande’s collapse: How bad will its tsunami of Chinese contagion deluge global markets? When it’s going to happen? What knock-on effects will cascade through markets?

Perhaps the most important question is: Who will be exposed “swimming naked” when the Evergrande tide goes out? Who will be left with the biggest losses? As the company is definitely bust, these losses rather depend on just how China’s authorities respond.

Step back and think about it a moment – try putting these in context:

  • Fundamentally all business is about identifying a consumer need and filling it.

  • Fundamentally, greedy businessmen tend to get carried away because the political-financial system enables them.

  • Fundamentally, it’s just another burst bubble and who cleans up the mess.

  • In Evergrande’s case a thousand flowers of capitalism with Chinese characteristics grew into an unsustainable business – fundamentally no different from debt-fuelled sub-prime mortgages, or CDOs cubed, in the West.

The big difference this time is its China! China has done things… differently. The path China pursued in its recovery and growth since 1980 has not been without… consequences.

Thus far we’ve praised China for its spectacular growth and the creation of valuable companies under the red banner of Chinese capitalism. It is going to be “interesting” to see how the subsequent mess is cleared out. Questions about Moral Hazard are going to be shockingly simple – Government has made it abundantly clear that any wrongdoing by company executives will be punished in the harshest possible way.

More importantly, Chinese politics and business works on a very different playing field to the west. Forget the rule of law or the T&C’s of Evergrande bonds. It easy to dismiss and characterise the way Chinese business works as institutionalised systemic corruption – but it’s a system Ancient Roman Emperors would recognise as a patron/client relationship. Emperor Xi’s clients and his princelings will continue to benefit from his patronage in return for their support at his court, and will be protected in a meltdown. The system Xi presides over will have little motivation to intervene to protect western investors who find themselves caught in the Evergrande fiasco.

Where Xi will have to take notice is outside the rich, wealthy princeling cadre which increasingly owns and runs China. There will be massive implications for wealth/inequality among the Chinese people from a property collapse. With a third of Chinese GDP dependent on the property sector, (and about 4 million jobs at Evergrande), the collapse of one of the biggest players, and the likelihood others will follow is much more than just a systemic risk.

Property is a key metric in the aspirations to wealth of the rising Chinese middle classes. The same smaller Chinese investors and savers will likely prove the largest losers from the property investment schemes they were sucked into. These real losses will rise if hidden bank exposures trigger a domestic banking crisis – which apparently isn’t likely (meaning it is..). There are reports of investor protests in key China cities – putting pressure on the govt to act to mitigate personal losses.

Xi’s clampdown on big tech is painted as the Party’s programme to engineer a more socially-equal economy. He has pinned the blame for rising inequality on “corrupt” business practices and has his cadre’s waving books on Xi thought, mouthing slogans about “common prosperity” and “frugality”. These are going to look increasingly hollow if the middle classes bear the coming Evergrande pain, and the Party Princelings continue to prosper.

The really big risk in China is not that Evergrande is going to default – it’s much bigger. If the Party is seen to fail in its promise to deliver wealth, jobs and prosperity for the masses – then that is very serious. China’s host of failed EV companies, an economy still reliant on exporting other nations tech, and a massively overvalued property sector (that the masses still equate with prosperity) all suggest a much less solid economy than the Party promotes.

If the illusion of a strong economy is unravelling – who knows what happens next, but in Ancient Rome the answer would be simple… Blame someone else, and invade..

This could get very “interesting…” and not in a good way.

Tyler Durden Wed, 09/22/2021 - 08:45

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Government

White House Reporters Have Launched ‘Formal Objection’ About Biden Refusing To Answer Questions

White House Reporters Have Launched ‘Formal Objection’ About Biden Refusing To Answer Questions

Authored by Steve Watson via Summit News,

CBS News reported Tuesday that the press pool of White House reporters have launched a formal objection

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White House Reporters Have Launched 'Formal Objection' About Biden Refusing To Answer Questions

Authored by Steve Watson via Summit News,

CBS News reported Tuesday that the press pool of White House reporters have launched a formal objection over the fact that Joe Biden refuses to answer any questions, with reporters routinely being yelled down and physically pushed away by Biden’s handlers.

The revelation came after an embarrassing scene in the Oval Office with British Prime Minister Boris Johnson answering questions, but Biden not being allowed to by aides.

Watch:

Johnson took the three questions from British reporters

CBS reporter Ed O’Keefe said that “Johnson took 3 questions. White House aides shouted down U.S. attempts to ask questions. I asked Biden about southern border and we couldn’t decipher what he said.”

CBS radio correspondent Steve Portnoy later reported that “The entire editorial component of the US pool went immediately into Jen Psaki’s office to register a formal complaint that no American reporters were recognized for questions in the president’s Oval Office.”

Portnoy, also president of the White House Correspondents Association, added that the complaint also extended to the fact “that wranglers loudly shouted over the president as he seemed to give an answer to Ed O’Keefe’s question about the situation at the Southern Border. Biden’s answer could not be heard over the shouting.”

“Psaki was unaware that the incident has occurred and suggested that she was not  in a position to offer an immediate solution,” Portnoy continued, adding “Your pooler requested a press conference. Psaki suggested the president takes questions several times a week.”

In addition, National Review notes that after Biden’s UN speech yesterday, French reporter Kethevane Gorjestani “was asked by a very startled Australian reporter whether WH wranglers were always so strict about ushering the pool out without questions.”

The pathetic display is a continuation of the way Biden’s handlers have been acting since even before he took office, shooing away reporters, giving Biden strict instructions on who he can take questions from, and even muting his mic when he goes off script.

A week ago, Republican Senator James Risch demanded to know who is in charge of controlling when the President is allowed to be heard, noting during a Senate hearing that “This is a puppeteer act, if you would, and we need to know who’s in charge and who is making the decisions.”

“Somebody in the White House has authority to press the button and stop the president, cut off the president’s speaking ability and sound. Who is that person?” Risch asked.

Tweeting out the video, leftists insisted the claims were ‘bizarre,’ ‘ridiculous’ and ‘absurd’:

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Tyler Durden Wed, 09/22/2021 - 10:15

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