Borders and Migration: Erecting Fences On the Canadian Border

BROOKLYN, New York -- Borders are never as straight and bright as they appear on maps. They are messy. They are uneven. Due to a whole lot of messiness - in the form of the drug trade, illegal immigration, arms smuggling, and a vicious war between drug cartels and the government - a lot of attention is being paid to the US-Mexico border. But changes are also taking place along America's northern frontier, and they deserve attention and concern.

Earlier this week, authorities erected gates along the border in the towns of Derby Line, Vermont and Stanstead, Quebec. The two towns are essentially one - due to an incorrect survey, the American town was founded north of the 45th parallel. When the border was corrected, nobody saw the need to move the town, so the border line runs through homes and streets, and even through the town's lone public library. American authorities decided last year to clean up the warren of streets that crisscross the border by erecting these gates which will force travelers to move through designated border crossings.

This summer I visited Derby Line, and I went poking around the border to see what changes had been made. The library was closed that day, so I could not go and see the border line painted on the floor, but I did see some shiny new signs advising me to turn back and go through the crossing. When I did turn my car around, I was bombarded by sirens from the border post. When I pulled over, the visibly angry American agent accused me of illegally crossing from Canada and threatened me with a $5,000 fine. When I told him I had made a wrong turn, he lectured me some more and then directed me to the Canadian border crossing, where I continued on my way to Quebec City.

Apparently, turning a small, remote Vermont town into Belfast or Nicosia is what we must endure to be safe from terrorists. While some increased security measures may be necessary along the Canadian border, the problem is that the logic of these changes focuses entirely on security without acknowledging the other impacts of the border. Rather than a zone of interaction, the border is seen as a barrier to keep people out of the United States, thus completely ignoring trans-border social and economic relations.

Fear mongers in the Bush administration like former Secretary of Homeland Security Michael Chertoff pushed for draconian border measures, even suggesting that British citizens of Pakistani origin should be subjected to stricter passport controls than other Britons. The new DHS chief, Janet Napolitano, has not softened the line when it comes to the US-Canadian border. She has repeatedly stated that she wants the border with Canada treated like the border with Mexico: hardened, strengthened, and more closely monitored.

This has had dire economic impacts, especially along the highest-traffic section of the border, that between Michigan and Ontario. Over the past few decades, the American Big Three automakers have have built up networks of production facilities and suppliers that capitalize on certain cost advantages on both sides of the border. NAFTA only accelerated this trend, and last year, Ontario surpassed Michigan as the world's largest auto producing region. Stricter border controls have hampered this model, and this has been a contributing factor to the uncompetitiveness of North American-built cars; the result has been that the recession and unemployment have cut deepest in these two regions. Here's one example of this impact from the Economist last year:

Now the stickier border is adding to the troubles of Detroit's uncompetitive carmakers. A ship carrying 4,000 cars from Asia landing on the west coast of the United States undergoes just one inspection; the components in a car made in North America will, all told, have gone through thousands, notes Jayson Myers of Canadian Manufacturers and Exporters, an industry body.

Conservatives harp on the point (listen to Bill Kristol's points here) that President Obama's positions on many issues related to national security have been and will remain largely unchanged from the policies of the previous president. They see this as a vindication of the their beliefs and proof that history will look kindly upon the Bush presidency. What this opinion fails to acknowledge is that security policy is more often driven by inertia and fear than by reason. It is always easier build a border fence than to tear one down, for fear of accusations of being "soft" on crime or terrorism or illegal immigration. Dick Cheney repeats this line over and over again, maintaining that illegal renditions, vicious torture, and various other war crimes keep us all safe at night. Add to this list the requirement that Americans and Canadians carry passports to cross the border. It is impossible to know how Barack Obama would have reacted had he been president on September 11, 2001, but it is patently absurd to claim that the Bush administration took the best course of action given the circumstances.

This is not to discount the fact that suspects who were plotting terrorist attacks have been apprehended while trying cross the border from Canada, the most notable being Ahmed Ressam, the so-called Millenium Bomber, who was arrested in Washington state in December 1999. However, I believe that many of these border policies are driven by a piece of mythology about the September 11 attacks. In the days and weeks following the attacks, reports began circulating that some of the hijackers had entered the US from Canada. As it turned out, the two men who flew from Portland, Maine to Boston and then hijacked the Los Angeles-bound Flight 11, crashing it into the North Tower of the World Trade Center - Mohammed Atta and Abdulaziz al-Omari - had long been residing in the United States. None of the hijackers sneaked across a land border; they all traveled here by air and entered the country legally. Nonetheless, the mystique of this erroneous report remains, and it contributed greatly towards transforming our land borders, both literally and rhetorically, into front lines in the Global War on Terror.

For a good portion of America's history, the border with Canada has been an area of conflict and division. In addition to the American Revolution and the War of 1812, when Americans twice invaded Canada, the two countries have fought a number of other small conflicts, including the Aroostook War, the Pig War and the Fenian Raids. In hindsight, these incidents seem preposterous, but we are continuing to move on a path towards greater division and securitization of a region that should be a zone of interaction and cooperation between our two countries. Unfortunately, border policy is formulated and implemented at a national scale, directed from Washington, and successive administrations have shown an inability to consider the local-scale impacts of a tightened border. Maybe we should start listening to the residents of Derby Line instead of Dick Cheney.

Well, not this resident. Nobody should listen to him:

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Gambling in Russia and the Rust Belt

BOULDER, Colorado -- Earlier this month, the Russian government implemented a ban on gambling, restricting casinos to four special zones scattered across the country. The Western press was all atwitter over this story, acting as if the Kremlin had declared over night that casinos be shuttered.

The deadline of July 1, 2009 to close or relocate all gambling establishments had actually been established two and half years ago, but due to a lack of planning by the government and the general arbitrariness of the law in Russia, few operators chose to close before the deadline, and none have yet moved to the new gaming zones.

The four tiny enclaves to which gambling is now restricted are located in the Kaliningrad Region along the Baltic Sea; in the Altai Region near the border with the Altai Republic in southern Siberia; near the Far Eastern city of Primorye; and along the border between the Krasnodar and Rostov regions along the Sea of Azov.

The regions have been described in the press as "remote," "far-flung," and "far from Moscow." It should be noted that the last casino zone listed above is not far from Sochi, the city that will host the 2014 Winter Olympics. Like the casino operators view of the ban, I have a similar attitude towards the Sochi Olympics - I'll believe it when I see it.

Says one resident of Siberia, "When do we get the showgirls?"

The Russian Ministry of Finance has plans to spend $31 billion of public and private money (roughly 80% from the private sector, the rest from the state) developing these gambling regions, but so far no one has stepped up to invest anything. Some operators have even chosen to move to the hermit kingdom of Belarus rather than open up shop in the Russian enclaves.

As this ban was taking force, I found myself driving across America's rust belt - though upstate New York, Pennsylvania, and Michigan - where casinos are popping up everywhere. Many of these dying post-industrial cities have decided to bet their chips on gambling to improve their fortunes.

Downtown Detroit is now dotted with massive new hotel casinos, built to compete with the establishments across the river in Windsor, Ontario, a city hit just as hard by the decline of the auto industry. Meanwhile, the landmarks of Detroit's city center remain dilapidated, the city remains as dysfunction and destitute as ever, and the crushing competition for gambling dollars has driven Windsor to become one of the worst cities in Canada.

Bethlehem, Pennsylvania, once one of America's colossal steel centers, has turned to the golden gambling goose to at least slow its breakneck decline. A massive steel crane that in a previous era may had carried iron ore to the blast furnaces is now adorned with a massive sign welcoming you the new Sands resort casino.

This is not a new trend, of course - the former steel town of Gary, Indiana opened its first casino over a decade ago, and a growing list of cities and states with nowhere left to turn to improve their economic plight fight and claw with one another to attract the next gleaming casino to their city.

Not only do casino operators squeeze the most desperate municipalities for tax breaks and financing, but they then turn around and squeeze their profits out of the most destitute members of the population. Anyone who thinks that casino revenues come from high-rollers, or from people who are making a reasoned, informed choice to gamble, has clearly never been to the casinos outside of Las Vegas or the Riviera. Bethlehem, Detroit and Gary will never become vacation destinations, meaning the casinos will sell their "entertainment" to the unemployed citizens of these impoverished cities.

This was the case in Russia as well. Yes, the law was poorly planned and badly executed, but gambling had become a serious social ill in the country. Roughly 400,000 people have lost their jobs as a result, a tough pill in Russia's faltering economy, but I have little sympathy for the operators who are mostly homegrown gangsters or foreign profiteers. I can say from personal experience that the expats working in Russia's gambling industry are some of the worst people in the world.

One of the most depressing sights I have ever seen was a man, drunk and likely homeless, pouring 1 ruble (roughly 3 cents) coins into slot machine outside a Moscow subway entrance. The machine was nothing more than a steel box with three digital clock-like displays that flashed random numbers. No bells, no pictures of fruit, and no waitresses plying him with free drinks. For millions of people, this is the so-called glamorous world of gaming.

Rhode Island: The Michigan of New England

BOULDER, Colorado -- While Michigan is often cited (including in this blog) as being on the leading edge of America's economic downturn, many people would be surprised to learn that Rhode Island also has one of the country's highest unemployment rates, which hit a whopping 9.3% in November. This ranked second behind Michigan's figure of 9.6%, and the two states have seesawed back and forth for the top spot over the last few months.

There are many reasons for this terrible situation - the collapse of manufacturing, poor job retraining, and low levels of education. Rhode Island ranks well behind every other New England state except Maine in terms of the percentage of the workforce with a college education - Massachusetts and Connecticut rank first and sixth, respectively, nationwide, while Rhode Island sits in 19th place. The Washington Post recently posted this video about the state's economic plight, and the New York Times ran this piece on the subject back in October.



Rhode Island is a very provincial place, and residents are struggling to cope with economic transition. Mason Briggs is reluctant to take a job in Oxford, Massachusetts, a town a mere 40 miles away from Pawtucket. His wife catalogs all the towns she has worked in, but they are all only a few miles apart. I am not blaming these people for their hardships, but there are reasons why the state's economic malaise has been confined within its short borders. I am not callously suggesting that they pick up stakes and move, but some measure of economic relief is just a short communte down I-95.

I have always believed that reviving America's manufacturing base will be a critical component of restoring the country's economic competitiveness and fixing the imbalances and inequalities that currently exist. But it is important not to get too nostalgic about the post-war golden age of the American industrial worker that so many pine for. As Itchy mentions about battery manufacturing, many of these jobs and industries are dirty and unpleasant, and few of us would like a factory like this in our backyard. Manufacturing may have given every American family an icebox and a wireless, but it also gave us the Love Canal.

These industries also had an impact on education. In places like Michigan, and to a lesser extent Rhode Island, the existence of high-paying, low-skill manufacturing jobs actually created huge disincentives for people to pursue an education, when they felt confident that as soon as they graduated high school, they would be able to get lifetime employment at the local plant. As a result, Michigan languishes in 36th place when it comes to educational attainment, when its industries should be a source of innovation and research.

To combat this problem, some communities have adopted innovative plans. Last year the city of Kalamazoo introduced a plan they called "The Kalamazoo Promise," which established a scholarship fund that would pay full tuition to any Michigan state college for any student that graduated from the school district. The program has not only increased school enrollment, but it has boosted property values, and cities across the country are hoping to imitate it.

Of course, there is one growth industry in Rhode Island: incarceration. The immigration detention center in Central Falls has been doing booming business, especially since Rhode Island became the only state to mandate that all state and local law enforcement agencies enforce federal immigration law. This is a story that has been repeated across the country from Flint, Michigan to Susanville, California, when laid-off workers move from the assembly line to the corrections academy. Let's all hope that the next generation of workers is made up of more engineers than prison guards.

Pets or Meat: Squirrels to Become Staple of American Diet

BOULDER, Colorado -- Did you know that squirrel can be a delicious and nutritious meal? No, this is not a message from the Arkansas Chamber of Commerce, but rather from the people of England, who are gobbling up the rodents in everything from stews to Cornish pasties.

Annoyed at the infestation of their country by the American gray squirrel (an invasive species), which is squeezing out their beloved native red squirrels, the Brits have decided to kill and eat the interlopers. And as part of their effort to convince you that the United States is just weeks away from complete collapse into an Omega Man-style dystopian future (or perhaps another Charlton Heston film is a more appropriate analogy - Planet of the Apes? Soylent Green?), the New York Times wants to tell you all about this absurd new cuisine. But the reporter concludes:

One might think that because of easy availability, squirrel would be the perfect meal-stretcher for these economically challenged times, but it takes a lot of work to get the meat off even the plumpest squirrel.

Squirrel is not that hard to skin and gut, actually. As the article points out, it is important not to eat the brains, as some people down in Appalachia have contracted ailments similar to mad cow disease from them. Today my friend Tyler sent me these helpful instructions from a Russian book about how to gut a rabbit, but this method could be easily applied to squirrels or other small woodland creatures (the original is posted here):

[A method for disemboweling the carcasses of wild rabbits

1. Firmly wrap your hands around the carcass in the area of the ribcage.

2. Strongly squeeze the carcass in the direction of the stomach, lift it above your head, and with one sharp, strong motion, similar to swinging an ax, swing it downward, bringing your hands between your legs.]

As an additional step, make sure no one is standing behind you when you fling the rabbit's innards out of its anus. As Michael Moore pointed out in his film Roger & Me, rabbits are often the first victims of a recession, as they are one of the few animals that American culture finds acceptable as both pets and meat. But if you lost all of your money in a pyramid scheme, and you are forced to rely on in-home animal husbandry for both your income and your sustenance, make sure you have the proper facilities to legally slaughter, dress, and butcher your furry friends.



Finally, I recently discovered a follow-up documentary that Moore made three years after Roger & Me, which includes interviews with many Flint residents from the first film, including the rabbit lady, Rhonda Britton. The title of the film is, fittingly, Pets or Meat, and you can watch it here on Youtube.

How many yuan (or is it renminbi?) does Michigan cost?

NEW YORK, New York -- This is so sad it's funny. Luckily, rather than invest money in moving the country toward the mass transit the rest of the world has embraced for decades (and we embraced pre-WWII), which would create a recession-shielded, massive source of demand for trains and light-rail that could be produced in Michigan, Obama's following Dubs and giving us all $500 checks to (in my case) put in our savings account, (in most people's cases) pay off debt, or (in a few people's cases) buy Chinese electronics. Enough $500 tax refunds and we can re-prop up demand for consumer goods so China can afford Michigan. Bravo.

Dear Economist: What should I charge China for Michigan?

By Tim Harford

Published: January 10 2009 02:29

Here in Michigan we have a problem: the automobile industry. Thanks to foreign competition and the doubtful management of the Big Three, the state’s economy is in serious trouble. Should we just sell the state to the Chinese? There is a history of this in Michigan – we once traded the city of Toledo to Ohio in exchange for the upper peninsula. So perhaps it would be a good idea. But what would be a good price?
Mrs J, Michigan

Dear Mrs J.,

Make sure you don’t sell yourselves cheap. According to the US Bureau of Economic Analysis, Michigan’s GDP was $382bn in 2007. This is an attempt to measure the value added to all goods and services in Michigan, which includes anything from haircuts to assembling a car – but not, for instance, any components imported from out of state.

The $382bn figure is impressive. It would sneak Michigan into the top 25 economies in the world. Even China’s GDP is less than nine times greater.

So how much would it cost to buy $382bn of productive power? No corporation adds nearly as much value; the economist Paul de Grauwe reckoned that in 2000, value added was $67bn for Wal-Mart and $53bn for Exxon, the two largest companies. Their market value at the time was about five times their value added.

If the same ratio applies, buying Michigan would cost the Chinese almost $2 trillion –roughly what China’s State Administration of Foreign Exchange has to spend. All this assumes that Michigan’s residents, like Wal-Mart’s employees, would be free to leave if they didn’t like the new management.

Still, don’t hold out too long: even before the credit crunch hit, Michigan’s GDP per head was falling in real terms. This may be the right time to sell.

Questions to economist@ft.com

Copyright The Financial Times Limited 2009