Saturday, June 24, 2006

The Baja 500

Supporting unprecedented increases in immigration levels, as those who have taken up arms against the House’s “enforcement only” bill in favor of the Senate approach do, strikes me as a clever way to support laissez-faire economics while posturing as a high minded liberal—and the highest minded of the piously liberal at that, the egalitarian anti-racist.

Nowhere is that more in evidence than in the text of the “Open Letter on Immigration” offered by Greg Mankiw (I’m not sure if he originated it or is just a signatory, but he seems like a nice enough, if fatally mistaken, fellow to link to), and boasting of five hundred signatures from economists around the country. Here it comes to the fore, flexing the puffed up gym muscles of its moral superiority while proudly flaunting its sock-stuffed-in-the-crotch endowment of five hundred eminent signatures. Probably many of these signatories are more simply liberal individuals than libertarian economists. So it’s hard to imagine that if they were relieved of the considerable pressure to appear sublimely egalitarian they would sign off on something that proposes dispensing with the concerns of the poorest Americans because their concentrated pain is spread out to the benefit of their mostly better off fellow citizens in the form of lower consumer prices:
In recent decades, immigration of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to have been small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.
While a small percentage of native-born Americans may be harmed by immigration, vastly more Americans benefit from the contributions that immigrants make to our economy, including lower consumer prices. As with trade in goods and services, the gains from immigration outweigh the losses. The effect of all immigration on low-skilled workers is very likely positive as many immigrants bring skills, capital and entrepreneurship to the American economy.
Perhaps one has to be an economist to understand how something that costs so little in the form of lower wages at one end (maybe nothing at all; it’s the rebirth of Bush Sr’s “voodoo economics”), brings significant benefits to the whole of the gargantuan American economy at the other end in the form of lower consumer prices. I was under the impression that all the well documented expenses from the public purse emanating from low-skilled immigration amounted to a subsidy of those lower prices, and then some.

Of course, one of the "restrictionist" points of view on immigration is that we should allow ourself the right, and more importantly the self-preservative concern, to place a premium on skills and education; hence the need for border security and a re-evaluation of immigration levels, as well as educational and skill levels of immigrants. Saying "many immigrants bring skills, capital, and entrepreneurship to the American economy," is not just making things more vague by lumping all immigration into one mass, it is an obfuscation of just what the debate is. By all means let's talk about skills and entrepreneurship, but let's be frank about it; some immigrants bring these things, many more don't. Why on earth wouldn't we allow ourselves the right to, brace yourself now, discriminate on the basis of these things? Perhaps the author doesn't understand that's what he is in fact arguing against. As for immigrants bringing significant capital with them, it's been a long time since Ferdinand Marcos touched down in Hawaii.

The author blunders through a couple of fatal fallacies here, not the least of which is that labor--human beings--can be viewed as not vastly different from "goods and services." Here is yet another instance of ideology running aground on the shoals of human nature. Of course, the captain is telling us that as soon as the tide turns and the children of all these unskilled laborers that are flooding the holds below suddenly reverse the trends of the past two generations and all become Silicon Valley entrepreneurs we'll be okay. Meanwhile, us rabble in the crew are bailing water like mad. Time to mutiny.

As is so often the case, the most egregious elitist callousness is lurking behind the facade of liberal concern, "a small percentage of native born" will be harmed; "vastly more" will benefit. The "benefit" claimed has never been coherently proven, other than in the form of lower consumer prices. Some would hold our civilization hostage to the price of lettuce.
In the totemic hierarchy of psuedo-liberal ritual, the poorer, the more foreign, and the less white one is, the higher the position. Dirt poor Latin American mestizo trumps native born working class every time. And pay no attention to the decidedly un-proletarian appearance of the priesthood, as they count their tithes in units of money and political power.
The author would have you believe that the costs are isolated and nearly insignificant but the benefits are spread out and magnified. Unless the nation really is struggling with a significant labor shortage, this is bunkum. Notice that the open borders argument takes for granted industry claims to this effect, despite long standing stagnation in wages in the industries that rely heavily on unrestricted immigration. Many who wouldn't dream of, say, taking General Motors at their word if they complain about the effects of CAFE standards (and I don't know anything about those claims; my point here is to illustrate the hypocrisy of certain otherwise reasonable people when it comes to this highly loaded issue), are now looking off and away, blithely whistling like a bribed umpire while certain industries are allowed to call their own strikes.

I suspect it’s clearer if you’re one who stands to gain more directly; if you’re Big Agriculture, the fast food industry, a major political party (that somehow both think they’re going to ensure their dominance well into mid-century by a sort of reverse gerrymandering of the electorate as a whole), or an economist ensuring his well feathered place in respectable punditry (now there’s a positively affected income).
They just keep laying it on thicker and thicker:
Legitimate concerns about the impact of immigration on the poorest Americans should not be addressed by penalizing even poorer immigrants. Instead, we should promote policies, such as improving our education system, that enable Americans to be more productive with high-wage skills.
This is a rhetorical head fake, albeit not a very good one. We've been grappling with disturbing trends in education for a couple of decades now. We might want to be a bit more prudent, and not sell ourselves on policy that confounds the situation further by promising we'll get around to doing something about it later. Saying we should do something about education means absolutely nothing in this context, unless you are addressing the effect of broad, low skilled immigration upon it. And we know that education is adversely affected by massive inflows of poorly educated, foreign language immigrants. The author would have you leap from a plane, promising he'll throw a parachute down after you. Come to think of it, it takes a lot of nerve to offer then we'll just have to do something about education as a sort of throw-away line. Bravo.

Of course the costs of illegal immigration on education are one of many issues left unaddressed in the letter. Since the letter makes only a few general assertions (perhaps that’s how you get five hundred signatures) I’m assuming that this is an appeal for the Senate’s mass amnesty combined with a doubling or trebling of legal immigration, as proposed in their bill.
Now someone tell me if I’m crazy, or ill-informed, or just plain mean, but this next line might be the silliest thing produced by the beneficiary of an Ivy League education (or this guy is just reaching way out of the strike zone):
We must not forget that the gains to immigrants coming to the United States are immense. Immigration is the greatest anti-poverty program ever devised. The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.
When coming upon a lunatic thought like this, I advise sneaking up behind it. That’s why we’ll start at the ugly rear of the thing, the least of it yes but this thing is a doozy so let’s be careful; “a truly form of effective foreign aid” he says. Is it? Would we consider direct payments to individual citizens in impoverished nations "effective"? Would anyone ever propose such a thing? I'm assuming of course that we're still talking about the best policy for this nation.

If the writer were really so convinced of the entrepreneurial nature of all of these immigrants then he would be, in his oh-so-global concern, fretting about our continually draining our fellow nations of their human capital, and its hobbling effect on their perpetually underperforming economies. Of course, no such thing is happening. Mexico doesn't spend money printing out handbooks on how to sneak into the U.S., nor does it send its president on tours of apple orchards in Washington State, because skills and entrepreneurialism are migrating here. If one considers Latin American migration into the U.S. clearly, it soon becomes apparent that countries like Mexico export their least employable to the United States. They recieve back remittances and net savings on social programs. Perhaps most importantly, they export potential political strife.
This silly argument reminds me of a guy I once heard describing his educational grant as an effective form of economic stimulus, because he was going to go out and spend the money after all.

Remittances (and I think we see where much of that "0-8%" in lost wages is going) represent capital flowing out of the economy. As in not spent here. It’s nice that this money ends up in the hands of the needy, after all, but if one is concerned with preserving this remarkable economy that is such a “beacon”, then it helps to understand that this money going abroad is no different, really, from capital lost to trade deficits. Or to increased spending on schools. Or on crime prevention, or on uninsured health care, or on welfare benefits, or on environmental costs…


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