Why Now?

Have you ever read a press release and the first thing on your mind is the question "Why Now?"

This happened to me just today.
Please consider the following news release from the US Immigrations and Customs office: Fischer Homes supervisors charged with harboring illegal aliens.



Cincinnati.Com is reporting 80 People Arrested In ICE Raid Of Fischer Homes.

Police took four supervisors and 76 undocumented workers into custody Tuesday in connection with a two-year investigation of Fischer Homes.

The 76 suspected workers were picked up from at least three construction sites in Hebron, Union and Florence, officials with the U.S. Immigration and Customs Enforcement, also known as ICE, said.

Some were also taken into custody at their homes, according to the wife of one man taken away from an apartment complex in Florence.

"I was asleep when I was hearing the commotion around the apartment at about 6 a.m. When I came out, my husband was arrested with his two co-workers," she said. "I looked at him and he started crying."

Those taken into custody will likely be sent back to their home countries if they can't verify their U.S. citizenship. Most of those arrested were from Mexico.

Four employees at Fischer's headquarters in Crestview Hills were also taken into custody, charged with "aiding and abetting" and "harboring illegal aliens for commercial advantage or private financial gain."

They are:

* Timothy Copsy, a Fischer Homes construction manager
* Doug Witt, a Fischer Home superintendent
* William Allison, a Fischer Home superintendent
* Bill Ring, a Fischer Home superintendent

Each is facing a maximum punishment of ten years in prison, a $250,00 fine or both. They all appeared in federal court in Covington Tuesday morning.

"ICE has no tolerance for corporate supervisors who harbor illegal aliens for their workforce and deny labor opportunities for legitimate American employees," said ICE Assistant Secretary Julie Myers.

ICE is part of the U.S. Department of Homeland Security, which is led by Michael Chertoff. He commented on Tuesday's raids.

"We will continue to bring criminal actions against employers who are consistently harboring illegal aliens," said Chertoff. "We will stop this type of illegal facilitation."

Fischer Homes released this statement:

"Fischer Homes utilizes a rigorous screening process for all of its employees, including citizenship verification. We require all subcontractors to sign a document promising they will use no aliens as employees. Fischer Homes does not in any way condone the use or hiring of illegal aliens."

A company spokesman went on to say he's very proud of the Fischer Homes workforce.

I am not sure who Fischer Homes is (I never heard of them before) but they are now officially "burnt toast". Then again this is the USA. It is acceptable to be proud of harboring illegal aliens as long as you can get away with it.

The Mish telepathic question lines are now open.
I am being swamped with questions, and for a change there is lots of variety.
Let's make a list.

1. Why Now?
2. Is Fischer the only home builder hiring illegal aliens?
3. Is this an outlier or some kind of crackdown?
4. Why Ohio?
5. Is this page 15 news headed for page one or is this a local stunt?
6. If we are starting a serious crackdown on illegal aliens what does that mean for the economy?
7. Are we starting a serious crackdown on illegal aliens?
8. Mish do you really believe the "ICE has no tolerance for corporate supervisors who harbor illegal aliens for their workforce and deny labor opportunities for legitimate American employees"?

1) The answer to "Why now?" is sort of obvious, even though it was the #1 question on everyone's mind (mine included). The answer is that as long as other things were OK, corporations were making tons of money off hiring illegals. It now seems that jobs are not what they are made out to be as I reported in Jobs, are they as good as they seem? Bush's approval rating dropped again on Thursday to 31% and Republicans (including the president) are now running scared. Please consider Panic Over Oil. Is sending every US citizen $100 for gas a rational solution to any problem? Of course not. While rounding up illegal aliens may or may not be rational, the rational mind is asking "Why Now". The above is the long answer. The short answer is a single word: "Panic".

2) Is Fischer the only home builder hiring illegal aliens? Hmmm. Lots of people were asking that even though everyone should know the answer. The answer is that "until now, the practice was condoned". This is certainly a change. The real question that many enquiring minds asked is....

3) Is this an outlier or some kind of crackdown? We simply can not answer the question at this time. If the masses are impressed with a "one night stand" then all the masses will get is a "one night stand". On the other hand, if there is more calls for action, this can get a lot uglier. My best guess is that this is not a "one night stand" but we will see.

4) Why Ohio? This one is easy. Ohio, and Michigan and the rust belt has been hard hit with job losses. If Ohio could vote 2004 all over again we would have a different president. Heck is anyone 100% sure Ohio really went for Bush in 2004? Anway, for political reasons it makes clear sense for the administration to start a crackdown in Ohio. They will do the minimum necessary, then if Republicans can keep control of Congress, quickly reverse course.

5) Is this page 15 news headed for page one or is this a local stunt? It all depends on how the masses react. Given that the CPI numbers are a lie, job numbers are a lie, and GDP numbers are a lie, the correct prediction is that this is the beginning of a panic, not a one time event. In that case look for this to make page 1 news.

6) If we are starting a serious crackdown on illegal aliens what does that mean for the economy? This question is simply ass backwards. IF (and it is debatable) that we are just beginning a crackdown on illegals, it is because the economy is weakening rather than it will "mean something in the future" for the economy. In other words it is a symptom of a piss poor economy rather than something that will "cause" a bad economy to happen. Please bear in mind that strikes and protectionism and nationalism are hallmarks of deflationary times, not inflationary times.

7) Are we starting a serious crackdown on illegal aliens? This is essentially the same question as #3. Please see the answer to #3 for my synopsis.

8) The ICE will be as tolerant (and then some) of illegal aliens until the masses demand action. That is what the Proposed Wall on the border of Mexico is all about. The wall will be useless. If (big IF) the government wants to shut off the flow of illegal aliens, all it has to do is crack down on companies hiring them. Is this the opening salvo? That is the key question and the wall is a less than useless sideshow.

Let's readdress the very first question "Why Now?"
The short answer and the long answer are the same.
The simple answer is "Panic by those in power to stay in power".
If elections were not coming up no one would care.
While everyone else is pondering the addition of the word "Yet" added to the FOMC statement today, Mish enquiring minds are asking "Why Now?"
No matter how one twists and turns the answer is not pretty.

Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/