Month: December 2025

ICE

When I complained about the masked ICE bandits, I noted that they cover their faces and grab innocent people, including American citizens, off the street. A few people pushed back on my comment

“Why do you think ICE are bandits. They are there to protect Americans. All those who came here illegally must be sent back home.”

The dialog that followed on Facebook prompts me to provide a fuller treatment here.

Those who commit what for a legal resident would be a crime, should be deported, but this applies to a minority of those apprehended by ICE. And we must distinguish between those seeking refugee status from others here illegally. Refugee applicants claim that they would not be safe remaining in their home country (some of my Afghan friends come to mind). Thus, we cannot properly return them to their home country.

Those non refugees here illegally, about half are illegal because they overstayed their (student, tourist, work) visa and about half entered the US without a proper visa. Less than a third of those deported in recent years have been convicted of a crime (many of them traffic violations). Actual crimes (stealing, battery, etc.) are over whelmingly committed by legal residents.

There are currently almost 15 million illegal residents about 10 million of whom have jobs. A proper immigration regime, one that serves the best interests of the U.S., would better enforce legal status and deport those without legal status or provide a legal path to legal status. This is easier said than done. https://wcoats.blog/2025/08/29/immigration/

In 2013, a bipartisan group of eight senators (the “Gang of Eight”) drafted S.744, a comprehensive immigration reform bill that included a multi‑step path to legal status and eventual citizenship for most undocumented immigrants, alongside major expansions of border security and enforcement.​

The bill passed the Senate with a strong bipartisan vote of 68–32, including support from 14 Republicans, reflecting unusually broad elite consensus for an earned legalization and citizenship framework. Then‑Speaker John Boehner refused to bring the bill to the House floor because it lacked support from a majority of House Republicans, even though it likely had the votes to pass with a coalition of Democrats and some Republicans. Thus it sadly died.

Simply deporting these “illegal” (undocumented) workers would cripple the economy which is already fully employed. But I want to focus on the approach taken by ICE that I have been complaining about as contrary to America’s tradition of the rule of law. While I could cite a number of examples of ICE grabbing legal US citizens off the street for deportation, I want to focus on the most famous of them Kilmar Abrego Garcia, a resident of Maryland. He entered the U.S. illegally 14 or so years ago and is married to a U.S. citizen and is the father of three children born here. He has not been convicted of any crimes in the U.S. but U.S. officials have repeatedly accused him of being a member of the MS-13 gang. These claims were largely based on a 2019 police report citing a confidential informant and Garcia’s choice of clothing (specifically a Chicago Bulls hat). He has never been charged with a gang-related crime.

In 2019 he was granted “withholding of removal”, a form of protection that explicitly prohibited the U.S. government from deporting him to El Salvador because of the risk of persecution and violence he would face there.​ Despite this protected status, Immigration and Customs Enforcement (ICE) detained him in March 2025 on alleged gang‑related grounds that a federal judge later described as ambiguous and unsupported.

On March 15, 2025, he was placed on one of three planes of alleged gang members sent under a Trump administration operation to El Salvador, where he was delivered to the CECOT mega‑prison, a facility widely described as one of the most dangerous in the Western Hemisphere.​ The U.S. Supreme Court eventually intervened, and he was returned to the U.S. in June 2025 to face the current pending charges. Bari Weiss has been sharply criticized for cancelling a CBS 60 minutes report on the conditions in that prison. “cbs news Bari Weiss intervention”

The administration has acknowledged to courts and the press that his deportation occurred despite the prior legal bar and has variously characterized it as an “administrative error.”  After being returned to the U.S., Abrego Garcia was indicted in Tennessee on two federal counts: conspiracy to transport illegal aliens and unlawful transportation of undocumented aliens. The government alleges he played a role in a smuggling ring, a claim he vehemently denies.

On December 11, 2025, a federal judge ordered his release from ICE custody, ruling that his detention was unlawful, and he returned to his home in Maryland. A judge extended an order in December 2025 preventing his return to immigration detention while awaiting further details on his case from the government. His trial is set to begin in January 2026, though he is attempting to have the charges dropped.

More than government’s abuse of Abrego Garcia’s rights, we read ugly and often mistaken “arrests” of residents from the streets and from their jobs. Earlier this month, multiple reports described immigrants being turned away or “plucked out of line” at U.S. citizenship oath ceremonies, especially in Boston’s Faneuil Hall and other locations, after new Trump administration directives targeting applicants from 19 so‑called “high‑risk” countries.

These individuals had already completed interviews and been approved, but USCIS officials stopped them at the final step, cancelling or pausing their naturalization, which advocates have described as “unspeakable cruelty.”

There are approximately 2.3 million to 2.4 million individuals with pending asylum cases in the U.S. immigration court system. These individuals are technically part of the unauthorized population but have “procedural protection” from deportation while they wait for a judge to rule on their status.  Because of a massive backlog, the average wait time for an asylum case to be resolved in court is currently about 4.3 years.

So I stand by my characterization of the masked ICE agents as bandits. Our immigration policy and its enforcement have real problems but they need a more thoughtful and serious approach.

But I want to leave you with a last very disturbing comments. One of my Facebook readers ask: “what are your thoughts on ICE government agents required to follow rules and regulations supporting people who do not follow the rules and regulations. I’ve always thought it Odd that law-enforcement has to enforce the law following the rules, detaining those who do not follow rules. Seems a little hypocritical.” Believe it or not he is actually saying that since the police (ICE) are apprehending people who are thought by them to be breaking the law, why can’t the police break it as well. No comment. https://wcoats.blog/2025/06/12/police-state/

Econ 101: Insurance

Insurance pools the costs of unpredictable events (illness, car accidents, etc.) so that the members of the pool share the costs of the events that fall on individual members of the group. Insurance that covers the costs of medical expenses incurred by a few members of the group (the insurance pool) is share among the group. Thus, most members of the group pay a “modest” amount for medical costs they do not incur in order to help pay the costs of care actually incurred by a few.

Your medical costs depend on many things. If you are paying for it, what you receive (and its cost) is agreed between you and your care giver (doctor). If someone else is paying for it, such as your insurance company, they will determine what is provided and its cost. An insurer can specify the doctors you must use with whom they will have agreements on cost and extent of treatment. Or you might choose your own doctor outside the insurers network, but the insurer will set the cost they will pay and potentially the extent of treatment they will pay for.

The fact that medical care is insured does not mean that the cost of providing it does not exist. The details of what the insurance covers can significantly influence the care given and its cost. As insurance is the sharing of the actual or covered costs with a group, the determination of who is in the group (pool) that will share whatever insured costs are incurred is critical.

When health insurance is provided by companies to their employees, the pool consists of those employees.  This has some advantages and disadvantages. It avoids packing the pool with sick people (e.g. those with preexisting health conditions) and thus increasing the cost to be shared (covered by the insurance). But it will generally result in the loss of insurance coverage if you want to change jobs. Forming insurance pools other than via an employer is an interesting challenge. An insurance pool of bird watchers might expect different premiums than a pool of mountain climbers.

Insurance providers attempt to keep the overall cost to be shared, and hence the cost of the insurance premiums, as low as possible by requiring the members of the pool to pay some amount (copay) of the medical bill thus providing them with some incentive to only get care that they really need. Price transparency is also important in this regard. A medical doctor friend complained to me that he doesn’t even know what his patients are being changed for his services. The approach that maximizes your incentive to economize on your medical expenses is to limit insurance to major medical expenses. Once again, the insurance company rather than the patient will negotiate the charges involved (hospital stay, medications, procedures, etc.).

Clearly what medical services are provided, and how that service is organized and its cost, will be significantly influenced by who pays for them. The policy challenge is to enable everyone to receive the essential medical care they need, while keeping its cost as low as possible overall and to each of us individually.

America First

What does America First really mean and how can we best achieve it? It should mean pursuing a foreign policy—our relations with other countries—that best serves our national interest. That requires that our relations with other countries maximize our security and our ability to profitably trade with them including traveling and vacationing in them. In short, our own interest is best served by having friendly relations with our neighbors. It serves our interest for others to trust us and to interact with us on the bases of known and shared rules. Tourism in the US is one of our best exports both in terms of revenue and its contribution to mutual understanding. Sadly, these goals have been seriously damaged over this year leaving us less safe and poorer than we could have been.

I am reminded of the debate over whether companies should strive to maximize profits (shareholder value). As John Mackey, a co-founder of Whole Food, has insightfully argued, a firm’s profits are maximized (assuming the government is not protecting its monopoly) when its workers, neighborhood, and customers are treated well and kept happy with the most efficient cost possible of supplying whatever the firm supplies. We might call this the right way to serve Shareholders First. Supporting this or that charity or cause should be left to the individual shareholders, who are likely to choose to give to different causes.

Econ 101: Interest rates

President Trump wants the Federal Reserve to lower interest rates thinking that that would reduce the interest the Federal Government pays in interest on its debt, which this last year was $1.13 trillion (yes trillion). Prior to 2008, the Fed’s policy interest rate—the so called Fed funds rate—was the overnight rate on overnight (i.e. one day) loans between banks. I will skip how the Fed determines (brings about in the market) that rate. Since 2008, when the Fed started to pay interest on bank reserves (deposits at Federal Reserve Banks), the Fed’s policy rate has been the rate paid on bank reserves.

The interest rates paid on longer (than overnight) loans (e.g., one, two, ten-year bonds) are related to the overnight rate because rolling over overnight loans for ten years is an alternative to a ten-year bond. This note explains that relationship.

The interest rate on, say, a one-year bond reflects what the market (lenders and borrowers) expects the one-day rate to be each day over that period. That, in turn, depends on what the market expects the “real” rate to be plus the rate of inflation. Market rates reflect the real rate plus the inflation rate. If inflation increase, other things equal, market interest rates increase.

So, the interest rate on a ten-year bond will reflect what the market expects the overnight rate to be over the next ten years, which reflects the expected real rate and the expected inflation rate over that period. So what happens to interest rates (say the ten-year bond rate) when the Fed lowers its policy rate as President Trump wants? It depends primarily on what that does to the market’s expectation of inflation over the relevant future period.

On Wednesday Dec 10 the Fed reduced its policy rate .25% to 3.50 to 3.75%. On that day the ten-year bond rate fell from 4.19% the day before to 4.15% but by Friday (two days later) had returned to 4.18% In short the ten year Treasury bond rate is essentially unchanged by the quarter percent drop in the Fed’s policy rate. Why? Because the market expects the drop in the overnight rate to be largely offset by a slight increase in inflation over the next ten years.

If the Fed is correct that lowering its policy rate is appropriate for continuing the reduction of inflation to its 2% target, then the ten-year rate will fall as well. Clearly an excessive cut in the policy rate (one that increases the expected rate of inflation) will increase longer term interest rates rather than lower them. Class dismissed.