[tw]

Originally Posted by Shocker

One that stuck out to me has been his "burgernomics", big mac index, and the economic concept known as "Purchasing Power Parity". ... There are more forces at work here which influence the PPP between given countries. Yes, trade barriers are a part of what cause disparity in the PPP, however much more goes into it which both complicates and moots his point.

From the first paper:

The attractive feature of the Big Mac as an indicator of PPP is its uniform composition. With few exceptions, the component ingredients of the Big Mac are the same everywhere around the globe.

That eliminates a supposition that different countries demand major differences from Big Mac. Minor differences can account for a $3.15 verses $2.66 disparity? Of course not. That difference is so great as to be explained by factors that distort free markets.

Figure 1 demonstrates a correlation between the Big Mac index and the Penn World Table (PWT) that measures same PPP using a larger data set. PWT also demonstrates Purchasing Power Parity in Mexico and other Central / South American nations is ever worse than The Economist suggests. Whereas 2000 data using Big Mac says difference is 88% (84% in 2006), PWT says disparity is worse - 61%. If we replace the "Big Mac" index with PWT, then reasons for illegal immigration are more obvious. Let's stay on topic. Topic is not minor variences in how PPP is measured. Topic is that PPP also explains illegal immigration.

The paper does demonstrate a Big Mac index will be less accurate. Of course and obvious. A Burgernomic data set is smaller - only one product. But still a Big Mac index agrees with the PWT. Trivial variations of $0.11 and 7% are not relevant to the topic: illegal immigration. PWT says economics disparities that would create illegal immigration are even worse. Data from Pakko and Pollard only support points made in this discussion that economic disparities exist where NAFTA should have eliminated them.

Such wide disparities would exist when external factors distort markets. Pakko and Pollard demonstrate why 7% and 14% differences could exist between "Big Mac" and PWT. But PWT cites a 35% difference between Mexico and US whereas "Big Mac" only claims 20%. PWT confirms price disparities so great as to only be explained by market factors not found in free markets. After a decade plus, we still don't have market parity? This is a same problem that caused virtually every nation to storm out of Cancun in anger and disgust.

Instead of aruging over micro difference in how PPP is measured, why not address the topic - illegal immigration?

BTW it does not matter is Mexico also applied price supports to their agriculture. No other nation so subsidizes agriculture so much by percentage or by dollar amount. No other nation in this discussion even comes close to what the US does to dump agriculture products onto other nation markets and to restrict agriculture trade. How much tariff do we put on ethanol? 54%. That is free trade? But again, this is why virtually the entire world walked out of Cancun, in anger, three days early. Where else has such a mass walkout ever happened?

A paper from Robert E. Scott says NAFTA has moved almost 1 million jobs to Mexico. Good. That means another 1 million that need not immigrate illegally AND that are not ready to join subversive activities. But then if Scott's data were relevant, then why are so many coming to an America that has lost so many jobs? Why does America need millions of illegal immigrants to do jobs that Scott's data says does not exist?

There is this well proven economic trend that contradicts Scott's paper. How do you make more jobs? Each company does same with less people every year. That job loss means more jobs in the economy. Scott's logic pretends that economic trend does not exist.

Yes these are good peer review papers. Pakko and Pollard suggest economics disparity is even worse - thereby suggesting that illegal immigration is due to even worse economics disparities that should not exist with NAFTA. Scott's paper claims job loses in an economy that has not seen job losses. Scott's paper suggests free trade would actually lower illegal immigration by some 800,000 jobs. IOW Scott suggests that without NAFTA, then illegal immigration would be even worse.

Finally Shocker, why does illegal immigration exist? Why is it so necessary? With so much economic data, why do you not answer the question? Why do you instead argue over how PPP is measured? Why do you ignore a fundamental fact - virtually then entire world walked out of Cancun in anger and disgust blaming only two nations who refuse to be free traders - US and France?

We have an illegal immigration problem created, in part, because America has so changed - is not the free trade advocate it once was. Why does virtually then entire world walk out of Cancun three days early complaining speicifcally about US undermining free trade? We give the airlines $8billion without string attached and call that free trade? We put up tariffs of up to 400% to protect some of the world's worst steel manufacturers - and call that free trade? We put 54% tariffs on ethanol when we want to become less dependant on oil from unstable regions? We force Canada to put tariffs on their own lumber exports - when NAFTA is about trade without tariffs. Is that because we want to promote free trade? We apply corporate welfare to sugar, cotton, corn, and so many other agricultural products thereby making it impossible for other countries to create jobs in those industries. Those illegal trade distortions mean more immigrants must come illegally for jobs created in the US by trade restrictions.

Shocker - why do you ignore Cancun and the threatened collapse of the Doha round? Why do you argue minutia on how PPP is measured rather than address illegal immigration? The question is simple: "Why does massive illegal immigration exists and why is it so necessary?"