The World Bank shook up a lot of people this week with its declaration that by a new accounting, China’s GDP will top America’s this year. But the meaning and significance of that accounting remain at best elusive. Last year, the World Bank reported that using prevailing exchange rates, China’s GDP in 2012 was barely half that of America ($8.2 trillion versus $16.2 trillion). The new report draws on a statistical adjustment called “purchasing power parity” or PPP, often used to compare GDP in two or more countries when exchange rates fluctuate widely. In analytic shorthand, PPP calculates GDP by looking at what it costs households in one country to feed, house, educate and otherwise take care of itself – including the costs of doing business and maintaining government –compared to households in another country.
Setting aside the fact that U.S.-China exchange rates have been pretty stable, here’s how PPP works. You start with a basket of personal and business goods and services in each country, taking account of habits, tastes and preferences. So, the Chinese basket will be different from its American counterpart because, for example, Americans eat potatoes and subscribe to premium cable stations while Chinese eat rice and go to outdoor cinemas. Since a serving of potatoes in America costs more than a serving of rice in China, China’s GDP is adjusted (upward) to take that into account. These comparisons also require adjustments for quality. Americans pay much more for health care and housing than Chinese – but the quality and quantity per-household of these services and goods as Americans consume them is much higher and larger than Chinese enjoy. So, World Bank statisticians have to not only observe prices and levels of consumption, but also come up with adjustment factors for differences in quality for each country. The truth is, nobody knows how to do that for countless goods and services, including the Bank’s PPP experts.
The United States is the baseline for PPP calculations. So if China’s basket of goods and services takes half as much income to buy there as the American basket does in the United States, after accounting for quality differences, China’s GDP is adjusted up by that increment. I should also mention that PPP analysis can produce a range of results based not only on all of the adjustments, but also on which of four distinct and accepted ways of calculating PPP the analyst uses. This week’s announcement of PPP-based GDP came after the World Bank applied a new weighting regimen to one of the four methods. What it means, then, depends on all of those assumptions and calculations, which makes any conclusions based on that accounting problematic, at best. As the Bank itself noted, “Because of the complexity of the process used to collect the data and calculate the PPPs, it is not possible to directly estimate their margins of error.
By any accounting, China’s GDP has been growing very rapidly for several decades. The reasons are pretty basic. They start with the world’s largest workforce producing Chinese goods and services. And thanks to the foreign direct investments of advanced technologies and business methods, much of it from America, Western multinationals have given China the means to make all those workers more productive. Yet, the lives led by China’s people remain a world away from the lives of Americans. Even using the World Bank’s PPP calculations, per-capita GDP in China is just $9,844, compared to $53,101 in the United States.
One more caveat: China’s PPP-adjusted GDP may be said to statistically rival America’s – whatever that means – only because U.S. growth has been unusually slow for more than a decade. If the American economy had continued to expand since 2001 at the rate it grew in the 1990s, our GDP would still be more than 20 percent bigger than China’s even using the World Bank’s new adjustments and accounting. For that, we have no one to blame but our policymakers and ourselves.
This post was originally published on Dr. Shapiro's blog
Yesterday, a group of Republican Senators repeated one of the great canards of the Obama era – that our immigration and border enforcement system is less effective today than when Obama took office. By virtually every measure we have, this is simply not true. With far greater resources, better strategies and improved cooperation with Mexico, the Obama Administration has in fact made the border safer, the immigration system far better while also allowing for an enormous expansion of trade with Mexico (visit here for a deeper dive on these arguments and more).
Let’s review some of what we know:
Crime is Down on US Side of the Border - Crime is down along the US side of the border. The two largest border cities, El Paso and San Diego, are the two safest large cities in America today.
Border Patrol Far More Effective - Four of the five high-traffic migration corridors across the US-Mexico border are already at or near the Senate bill’s goal of 90% effectiveness rate. Many of the nine corridors have seen significant increases in their effectiveness rates in recent years.
Flow of Unauthorized Immigrants into US Has Plummeted – The increased effectiveness of the border patrol along the border, and the deterrent effect of more aggressive removals of those crossing the border has helped dramatically slow the flow of unauthorized migration from Mexico. This flow has fallen from its peak of 770,000 people in 2001 to zero today. Looking at it another way, under President Bush, the undocumented immigration population grew by 3m, or almost 400,000 a year. Under President Obama there has been no increase in the overall size of the undocumented population. The flow has essentially stopped.
The System Is Deporting Far More High Priority Unauthorized Immigrants - The system is removing far more people of consequence from the US than before. According to ICE data, 59% of those deported in 2013 had criminal records, up from 36% a few years ago. And fully 98% of those removed were either caught trying to illegally enter the country or were interior removals with criminal records. In 2013, the number of overall removals was at approximately the same level as the last year of the Bush Administration, and the average number of formal removals has been far higher under Obama than Bush. Prioritizing the removals of murderers and border-crossers over hard-working moms is just smart policy.
While Providing Opportunities for Young People To Contribute – In another smart improvement in immigration enforcement, the President has offered temporary relief from deportation and work permits for more than a million DREAM-eligible youth, allowing these young people to more fully contribute to American society.
Trade Across our Border With Mexico Has Almost Doubled - Trade with Mexico has jumped from $340b in 2009 to about $550b in 2013. Mexico is now America’s 3rd largest trading partner and 2nd largest export market. $1.3 billion worth of goods and 1m people now cross the 2000 mile US-Mexico border each day. This trade supports millions of jobs on both sides of the border.
So what is the big idea these tough Senators propose to make the system better? Move resources to deporting non-criminal migrants in the interior of the country. The result of this in practical terms will be to weaken the highly effective border deterrence system established in recent years, and to cause a drop in the number of criminals we are deporting in the interior. In essence, the President’s critics want to re-establish the Bush era system which did not prioritize murderers over moms, and simply went after all unauthorized immigrants in the interior regardless of their criminal history. The outcome of this strategy will be in fact to weaken the enforcement system in the US, not strengthen it.
This is no idle debate. Last year the House GOP passed something known as the King Amendment which would achieve the same thing the Senate Republicans are advocating for – the roll back of the DHS’s successful new enforcement priorities, a vote that would among other things revoke the DACA program for DREAM eligible youth. The excuse coming from the House GOP today on why they cannot move forward on immigration reform is that the President’s policies have weakened our immigration and border enforcement system – when it is clear that this is not true, that the system is far better today and that their proposals will actually weaken the system not strengthen it. This argument, still alive and potent inside the House GOP is simply ridiculous, and is not a legitimate reason to hold up moving ahead on immigration reform. If they want to once again turn their back on the clear majority of Americans – and their Speaker – who want a better immigration system they simply are going to have to come up with a far better excuse.
With the topic of immigration very much in the news, and the release of more specific data from DHS’s Immigration and Customs Enforcement (ICE) this year, NDN/NPI put together a panel discussion on the Obama Administration’s immigration and border enforcement record.
Marc Rosenblum, Deputy Director of the US Immigration Policy Program at the Migration Policy Institute, Edward Alden of the Council of Foreign Relations, and Tamar Jacoby, President and CEO of ImmigrationWorks USA shared their latest findings and analyses of the current state of affairs. The discussion aimed to help unpack what this new DHS data means, allow experts to weigh in on the Obama Administration’s enforcement record, and take questions from the audience. We think it was a terrific discussion. Please find the C-SPAN and NDN video footage of the event below.
For more on NDN's work in this area of late, please see this recent, comprehensive backgrounder.
On Thursday, April 17th Simon recorded this six minute video offering his thoughts on the current debate over the Administration’s border and immigration enforcement record. His basic take: Obama has made the border safer, the immigration system better and more humane, while simultaneously expanding trade with Mexico. On a tough issue with even tougher politics, the current Administration has done a good job.
See here for a roundup of our recent analyses, and links to other helpful news articles, videos and think tank reports.
Note: At one point in the video, Simon says that both sides need to give the President more credit than he deserves. Of course, what he meant to say is that the President deserves more credit than all sides are currently giving him.
In light of the current public discussion of the Obama Administration’s record immigration enforcement, we offer up the following background materials compiled in the last two months from years of work on this topic. While there is still more to be done, the Administration has made tremendous efforts over the last five years to secure the US border with Mexico, and to smartly prioritize enforcement resources for the removal of unauthorized immigrants with criminal convictions or who have recently crossed the border without permission.
Over the past several months, NDN/NPI has published a series of analyses which argue that through greater investment, better strategies and deeper cooperation with Mexico, the Obama Administration has made the immigration system better and the border safer while seeing a dramatic expansion of trade with Mexico.
Today we release a simple analysis which sheds new light on the hotly debated issue of deportations. Using a broader, more accurate measure of the number of unauthorized immigrants removed from the country since the first year of the Bush Presidency, we find that in fact the total number of “removals[i]” and “returns[ii]” has actually plummeted during the Obama Presidency. In 2012, the Obama Administration removed and returned almost a million people less than the height of the Bush Presidency. And every year of the Obama Presidency has seen a sizable decline in the total number of unauthorized migrants removed or returned to their countries (See this piece by the WSJ's Laura Meckler discussing the report).
Unauthorized Migrants Removed or Returned, FY 2001-2012[iii]
So while we do not yet have the full picture of 2013, it is unlikely that the total number of removals and returns increased, as the total number of “removals” (deportations) measured by ICE fell by ten percent from 409,849 to 368,644 from FY 2012 to 2013.
For years, NDN has argued that the Obama Administration’s management of its border and immigration enforcement responsibilities deserves far more praise it has received. Despite deeply rancorous politics, a very real set of operational and security challenges, and the Republicans’ refusal to adopt long overdue and thoughtful reform, things in the border region are clearly better today. Crime on the US side of the border is down; net migration is zero today; only 10,000 or so non-border-crosser non-criminal unauthorized migrants were deported in 2013; while US trade with Mexico has almost doubled. It is our belief that history will declare the Administration’s management of this tough basket of issues a resounding policy success. For more on this record of success and progress, see below.
Obama Administration Immigration and Border Enforcement: Key Stats
Crime is down along the US side of the border. The two largest border cities, El Paso and San Diego, are the two safest large cities in America today.
Four of the five high-traffic migration corridors across the US-Mexico border are already at or near the Senate bill’s goal of a 90% effectiveness rate.
Net migration from Mexico has fallen from its 2001 peak of 770,000 people per year to zero today.
Since President Obama took office, Immigration and Customs Enforcement has made steps to prioritize removing criminals and recent border crossers. ICE reports that in FY 2013, 82% of the unauthorized immigrants it arrested and removed from the interior US had a criminal conviction. About two thirds of all 2013 ICE removals were people arrested at the border. Of 368,644 removals, only 10,336 individuals were not convicted of a crime, repeat immigration violators, immigration fugitives, or at the border.
In 2012 the Obama Administration implemented Deferred Action for Childhood Arrivals (DACA) to allow about one million DREAMers, unauthorized immigrants brought to the US as youths, to work and study legally in the US.
Trade with Mexico has jumped from $340 billion in 2009 to about $550 billion in 2013. Mexico is America’s 3rd largest trading partner, and 2nd largest export market. $1.3 billion worth of goods and 1 million people cross the 2000 mile US-Mexico border each day.
[i] “Removals are the compulsory and confirmed movement of an inadmissible or deportable alien out of the United States based on an order of removal. An alien who is removed has administrative or criminal consequences placed on subsequent reentry owing to the fact of the removal” (DHS).
[ii] “Returns are the confirmed movement of an inadmissible or deportable alien out of the United States not based on an order of removal” (DHS).
[iii] Source: U.S. Department of Homeland Security, ENFORCE Alien Removal Module (EARM), February 2013; Enforcement Integrated Database (EID), November 2012.
[iv] Source: U.S. Department of Homeland Security, ENFORCE Alien Removal Module (EARM), February 2013; Enforcement Integrated Database (EID), November 2012; FY 2013 ICE Immigration Removals. Graph prepared by NDN/NPI staff.
With the topic of immigration very much in the news, and the release of more specific data from DHS’s Immigration and Customs Enforcement (ICE) this year, NDN/NPI invites you to a panel discussion on the Obama Administration’s immigration and border enforcement.
Please join us Wednesday, April 23rd at 12pm for a discussion with experts Marc Rosenblum, Deputy Director of the US Immigration Policy Program at the Migration Policy Institute, Edward Alden, Bernard L. Schwartz Senior Fellow at the Council on Foreign Relations, and Tamar Jacoby, President and CEO of ImmigrationWorks USA. They will help unpack what this new data means, weigh in on the Obama Administration’s enforcement record, and take questions from the audience. Please feel free to invite friends and colleagues, and we hope to see you there!
Expert Panel on the Obama Administration’s Immigration and Border Enforcement Record
Wed, April 23rd, 12pm-1:130pm Lunch served at 12 noon, presentation will begin at 12:15pm
NDN Event Space: 729 15th St NW, 1st Floor, Washington, DC
PleaseRSVP here. Livestream beginshereat 1215pm, and recording will be on NDN site late today.
For background, see NDN/NPI’s most recent analysis here.
After a wonderful year of working with NDN’s 21st Century Border Initiative, I am moving on later this month to the Latin America Working Group. I will be an Associate on their Justice in Mexico and the Borderlands Campaign, working with human rights defenders on the ground in Mexico and leading advocacy campaigns with a binational coalition to improve policies at the US-Mexico border. I collaborated with LAWG while working in Mexico City, and interned there when I first came to Washington, DC, so I am honored to come full circle and return with more experience in a leadership position.
I could not be prouder or more grateful for the work I have been a part of this past year with NDN/NPI’s 21st Century Border Program. We have endeavored to promote a better, modern relationship with Mexico and a vision of a US-Mexico border that is not merely a dividing line but the center of opportunity. We have continued to fight for commonsense immigration reform that will grow our regional and national economies, strengthen national security, bring millions of people out of the shadows, and make the US a better and stronger country for the future. This work at NDN and with all of you has left me optimistic that, even in a tough political climate, smart bipartisan solutions are still within reach.
Most importantly, this work has brought me in contact with an excellent community of experts and advocates working on immigration reform and the US-Mexico relationship, perhaps the most essential current US policy priority and our most crucial binational relationship. I look forward to continuing this collaboration with all of you in my new role, and hope you will continue to let me know when I can be of assistance with your work. And I plan to see you often at many upcoming NDN community events.
The political struggle over Obamacare has reached a critical inflection point as real events have overtaken its opponents’ basic arguments. That opposition has always drawn on, and encouraged, doubts about the public’s real interest in a federal guarantee to health insurance and their tolerance for a mandate to enforce it. After the program’s fitful start, it is now clear that large numbers of Americans are prepared to spend the considerable time and money required to sign on. The Rand Corporation estimates that 9.5 million people who had no coverage a month or a year ago now do, thanks to the Affordable Care Act (ACA). I also analyzed the data and found that the newly-insured number at least 7.8 million and as many as 10.9 million. And if the governors and legislatures in 24 states had not inexplicably turned down the ACA’s Medicaid expansion – a decision three of those states are reconsidering -- the total number of newly-insured today would range from 11 million to 14 million.
These numbers create a political inflection point, because the program’s demonstrated appeal renders it virtually impossible to repeal. Arguing against a new federal benefit is an easy political challenge for conservatives. By contrast, withdrawing a benefit that millions already depend on is, at best, a herculean task. Just try to imagine any future Congress or President actually withdrawing practical access to medical coverage from millions of moderate-income families, millions of young adults covered by their parents’ policies, and millions of more people with preexisting medical conditions.
This political inflection point will strengthen not only as more people enroll, but also, and even more important politically, as Obamacare generates benefits for everyone else. To begin, surveys show that several million people would like to change jobs but stay where they are, out of concerns about losing their healthcare coverage. Now, they can do as they like – and the enhanced labor mobility should help the economy.
More important, by enrolling large numbers of previously-uninsured people, Obamacare should slow increases in everyone’s insurance premiums -- or even lower premiums. As countless studies have shown, most people without coverage get their medical care in emergency rooms. Since they usually cannot pay the bills for that care, hospitals pass along those costs through higher charges on everyone else, which in turn leads to higher insurance premiums. The ACA will not only relieve some of those direct pressures on premiums; its mandated coverage also will generate more income for insurers, further easing upward pressures on premiums.
This would be very good news for the American economy. Over the last decade, healthcare coverage has been the single, fastest-rising cost for most U.S employers. But as globalization intensifies competition, many of those employers find themselves unable to pass along their higher healthcare costs by simply raising their prices. Their only recourse, as I have written many times, has been to cut other costs – beginning with jobs and wages. In the end, therefore, the ACA could contribute to broader gains in employment and incomes – and that could produce a political inflection point that could support political realignment.
This post was originally published on Dr. Shapiro's blog