Why should Americans trust refugee process?

Everyone loves a good argument and few questions are more likely to start one right now than “should we allow Syrian refugees into the United States?” Answering the question requires balancing competing concerns. First and foremost is the moral imperative of protecting American citizens versus the humanitarian concerns of providing for refugees.

But that isn’t the only set of competing concerns. What about the question of whether the United States should be helping its own -thousands of homeless veterans, for example -before helping others who may represent a unique security threat? Should America’s self-interests be sacrificed in the pursuit of high ideals. And in the 21st century, that self-interest is threatened by the specter of global jihad.

The Obama administration plans to increase refugee admissions for fiscal 2016 to at least 85,000, with 10,000 of the refugees coming from Syria, despite the horrific Paris attack in which at least apparently one of the attackers is believed to have posed as a Syrian migrant to get into France. The plan would move these refugees to the front of the immigration line, ahead of “undocumented” immigrants and those on the “legal” immigration list.

White House Deputy National Security Advisor Ben Rhodes employed the usual self-assured bureaucratic rhetoric, saying that the government has a “very careful vetting process” for all Syrian refugees. Still further, he argued that these refugees are tragic victims; women, children and orphans of the Syrian civil war that has raged since 2011. Put like that, who could disagree with the canonical view of the administration?

The director of the FBI, for one. James B. Comey testified before Congress in October that his agency has neither the resources nor the necessary information to fully vet Syrian refugees. He could not offer assurances that terrorist fighters could not slip in by posing as refugees. Nobody can guarantee ISIS could not use the Syrian diaspora as a way to kill Americans and serve as an ISIS Trojan Horse. There are no solid background records available to confirm that refugees are who they say they are.

All this should not be surprising given that we are dealing with refugees from a broken country in the midst of years-long civil war.

Overlooked in the discussion are security risks presented by the estimated 40 percent of the 11-to-12 million unauthorized residents who came here legally, then stayed after their student, business, or tourist visas expired. Lest Americans forget, on 9/11, 19 foreign terrorists came through America’s front door on legitimate visas, hijacked four planes and murdered almost 3,000 innocent people. On the day of the attack, four of them were continuing to live in the shadows even thought their visas had expired.

If the federal government has not been able to track the arrival and departure of foreign visitors, why would Americans believe their government can effectively screen Syrian refugees. To put it nicely the average American lacks confidence in the competency of their government to identify covert operatives. That is not irrational.

All it takes is one terrorist to get through the screening process. In other words, the government agencies conducting the screening have to be perfect. If you believe they are capable of such behavior, it is likely you think it’s possible to fight a war without collateral damage to civilians.

It is said that the definition of insanity is doing the same thing over and over and expecting a different result. It is a definition Americans should remember as we consider the issue of allowing Syrian refugees into the United States.

Originally Published: November 28, 2015

Corporate mergers and income inequality

You can’t look at the Wall Street Journal or any other business publication nowadays without reading headlines about yet another megadeal. Many industries are consolidating, and that translates to fewer jobs.

This year alone has brought major mergers resulting in a number of industries being dominated by a few firms. Look no further than big-box retailers, too-big-to-fail financial institutions, airlines, health insurers, communications, utilities markets and a broad range of industrial sectors including defense and the beer industry with the $104.2 billion deal between Anheuser-Busch InBev NV and SABMiller.

Last month, after approving Lockheed Martin’s $9 billion acquisition of Sikorsky Aircraft, Pentagon officials warned against further consolidation in the U.S. weapons industry because fewer defense contractors could inhibit innovation, lead to higher costs and result in less competition. Four airlines (American, Delta, United and Southwest) control over 80 percent of the domestic market. There were nine major carriers in 2005.

The wireless industry is also dominated by just four firms. Even there, AT&T and Verizon are much larger than T-Mobile and Sprint, controlling about 70 percent of all subscribers.

In retail, Walgreens, the largest U.S. drugstore, just announced it would acquire Rite Aid, the third­ largest drugstore chain, for $17.2 billion in an all-cash transaction for $9 a share, a 48 percent premium to Rite Aid’s closing price of$6.08. The proposed deal would essentially consolidate the industry into two large retail chains: Walgreens and CVS Health. It follows on the heels of CVS acquiring Target’s nearly 1,700 pharmacies over the summer and the potential merger of Staples and Office Depot.

Business people may be the leading champions of free markets and competition, but Marx, writing in Das Kapital, was spot on when he wrote, “One capitalist always kills many,” meaning that markets that are originally open and diverse evolve into oligopolies with a few firms using their power to keep competitors out and cornering the spoils of a particular industry for themselves.

In theory, consolidation can create economies of scale that reduce costs and consumer prices and save jobs at firms too weak to make it on their own. When it comes to mergers, “synergy” – cost efficiencies including combining complementary assets, eliminating duplicate activities, consolidating stores, integrating computer systems, and increasing profit margins by using increased volume to squeeze concessions out of suppliers – is an often-used word.

It’s all about eliminating redundancies, and that means jobs. Of course, it may be easier to pan for gold than to actually achieve these vaunted cost reductions because the savings are often overestimated and don’t always account for take-over premiums.

On the other hand; it is reasonable to assume that consolidation has played some role in the income stagnation suffered by American workers. This contributes to income inequality, the loss of many middle-level jobs and a record number of American workers no longer participating in the labor force as firms pursue cost efficiencies.

Big corporations hope consolidation makes it harder for new competitors to enter an industry and leads to increased market power. By controlling the market you control the customer and can raise prices unilaterally. And while coordinating pricing strategies is illegal, a smaller number of players in an industry makes tacit collusion easier.

Under current antitrust laws, two agencies -the Antitrust Division of the Justice Department and the Federal Trade Commission- can review proposed mergers and decide whether they are anticompetitive. American consumers and labor should hope these regulators have a grasp of the downsides of consolidation that is better than Roger Goodell’s understanding of due process.

Based on the regulators’ performance in the run-up to the financial crisis, the truth is that if these folks were convicted of being competent, we would be convicting innocent people. Let’s hope we are not going to sit shiva over the notion of competition that rewards hard work and promotes innovation and meritocracy.

Originally Published: November 11, 2015