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November 2014

Obama’s Immigration Temptation: His Executive Order Would Make Durable Reform Harder to Pass.

President Obama will set the tone for his final years in office with his looming decision on an immigration executive order. These columns supported reform long before Mr. Obama, and we still do, but if he does act on his own he’s likely to harm the immigration cause and his own legacy.

Liberal activists and Democrats are pressuring Mr. Obama to broaden his controversial 2012 executive action, the Deferred Action for Childhood Arrivals, which allows immigrants who were brought to the U.S. illegally as children to stay in the country and work. The details of his next edict are still secret, but presumably he’d extend the same provisions of his 2012 order to a larger swath of the undocumented population. Perhaps to millions of adults.

The political case from a Democratic point of view—the only kind Mr. Obama seems to understand—goes like this. Republicans will never pass reform, so he has to act by himself to accomplish something before he leaves office. His base will be pleased, and he’ll divide Republicans. The anti-immigration right may even blow a gasket and further alienate Asian- and Hispanic-Americans between now and the 2016 election. What’s to lose?

The answer is plenty. On the merits, Mr. Obama’s executive order can’t come close to fixing America’s broken immigration laws. The most he can do is to legalize the immigration status of several million people. This would let them remain in the U.S., but it wouldn’t offer a green card or path to citizenship. That requires Congress.

An executive order also can’t increase the number of visas, which means it can’t reduce the future flow of illegal immigrants by providing more legal pathways to enter the U.S. So no new science-graduate visas for tech workers, no visas for farm workers to end the labor shortage in agriculture, and no guest-worker program to create a flexible labor market for other jobs in a growing U.S. economy. Mr. Obama is offering amnesty without addressing the root cause of border-crossing economic migration.

As for the politics, we think there’s a good chance Republicans would pass immigration reform in some form in the next two years. The leadership wants to do it, and a majority of the rank and file privately want to vote for it to end the debate. Most realize the growing importance of minority voters to the GOP’s chances of winning the Presidency.

How to Distort Income Inequality By Phil Gramm And Michael Solon

The Piketty-Saez data ignore changes in tax law and fail to count noncash compensation and Social Security benefits.

What the hockey-stick portrayal of global temperatures did in bringing a sense of crisis to the issue of global warming is now being replicated in the controversy over income inequality, thanks to a now-famous study by Thomas Piketty and Emmanuel Saez, professors of economics at the Paris School of Economics and the University of California, Berkeley, respectively. Whether the issue is climate change or income inequality, however, problems with the underlying data significantly distort the debate.

The chosen starting point for the most-quoted part of the Piketty-Saez study is 1979. In that year the inflation rate was 13.3%, interest rates were 15.5% and the poverty rate was rising, but economic misery was distributed more equally than in any year since. That misery led to the election of Ronald Reagan, whose economic policies helped usher in 25 years of lower interest rates, lower inflation and high economic growth. But Messrs. Piketty and Saez tell us it was also a period where the rich got richer, the poor got poorer and only a relatively small number of Americans benefited from the economic booms of the Reagan and Clinton years.

If that dark picture doesn’t sound like the country you lived in, that’s because it isn’t. The Piketty-Saez study looked only at pretax cash market income. It did not take into account taxes. It left out noncash compensation such as employer-provided health insurance and pension contributions. It left out Social Security payments, Medicare and Medicaid benefits, and more than 100 other means-tested government programs. Realized capital gains were included, but not the first $500,000 from the sale of one’s home, which is tax-exempt. IRAs and 401(k)s were counted only when the money is taken out in retirement. Finally, the Piketty-Saez data are based on individual tax returns, which ignore, for any given household, the presence of multiple earners.

Hezbollah Blames Israel in Death of 5 Nuclear Technicians in Syria By Mitchell Prothero

IRBIL, Iraq — The deaths of five nuclear scientists Sunday in an ambush outside Damascus has raised anew suspicions about whether Israel is conducting an assassination campaign intended to blunt Iran’s nuclear ambitions.

At least one of the men was an Iranian nuclear technician, according to Syrian state television, members of the internal security wing of Lebanon’s Hezbollah militia and the Syrian Observatory for Human Rights, which monitors violence in that country.

Rami Abdurrahman, the observatory’s director, described the dead as “five nuclear engineers” in a Facebook post and said they worked at a scientific research center “near the neighborhood of Barzeh, northern Damascus.” The Britain-based observatory, which works with a network of informants in Syria, has a reputation for accurate reports on events there.

Syrian government officials, speaking to government-friendly television stations, later confirmed that at least one of the men was an Iranian “scientific consultant,” but they released no other details on the nationalities of the other four men killed.

Both Iran and North Korea have provided Syria with technical nuclear expertise in the past, most notably at a secret reactor facility that the Israeli air force destroyed in a surprise attack in northern Syria in 2007. That previously unknown reactor facility was being built with the technical assistance of Iranian and North Korean scientists, according to statements made after the attack by American and Israeli intelligence officials. The facility, which U.S. and Israeli officials said hid a Syrian attempt to start a secret nuclear weapons program, was rendered unusable in the strike and later was dismantled by the Syrians.

“We can confirm that five scientific experts were martyred by terrorists as part of the ongoing plots of the Zionist entity,” a Hezbollah internal security commander said via instant messaging from Beirut. He insisted on anonymity because he is not authorized to speak to reporters. “This follows the pattern of the enemy who backs and controls terrorists inside Syria in a program to hurt the resistance axis.”

The commander also cited the assassination in December 2013 of Hassan Laqqis, a high-ranking Hezbollah official who reportedly was tied to the group’s technical programs, including advanced drone and missile technology, according to accounts in Hezbollah-controlled media outlets shortly after his death. He was killed by unknown gunmen outside a suburban Beirut safe house.