(What’s Left of) Our Economy: You Bet that Mass Immigration Makes America Less Productive

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amnesty, Bureau of Labor Statistics, construction, demand, Donald Trump, economics, Forward.us, hotels, illegal aliens, immigrants, Immigration, labor productivity, productivity, restaurants, supply, total factor productivity, wages, {What's Left of) Our Economy

An archetypical Washington, D.C. swamp denizen thought he caught me with my accuracy pants down the other day. Last Sunday’s post restated a point I’ve made repeatedly – that when countries let in too many immigrants, their economies tend to suffer lasting damage because businesses lose their incentives to improve their productivity – the best recipe for raising living standards on a sustainable, and not bubble-ized basis, as well as for boosting employment on net by fostering more business for most existing industries and enabling the creation of entirely new industries.

The reason mass immigration kneecaps productivity growth? Employers never need to respond to rising wages caused by labor shortages by buying labor-saving machinery and technology or otherwise boost their efficiency. Instead, they continue the much easier and cheaper approach of hiring workers whose pay remains meager because immigrants keep swelling the workforce.

It’s a point, as I’ve noted, strongly supported by economic theory and, more important, by evidence. But Todd Schulte, who heads a Washington, D.C.-based lobby group called Forward.us, wasn’t buying it. According to Schulte, whose organization was founded by tech companies like Facebook with strong vested interests in keeping U.S. wages low, “the decade of actual [U.S.] productivity increases came directly after the 1986 legalization AND 1990 legal immigration expansion!”

He continued on Twitter, “giving people legal status and… expanding legal immigration absolutely has not harmed productivity in the last few decades in the US.”

So I decided to dive deeper into the official U.S. data, and what I found was that although there are bigger gaps in the productivity numbers than I’d like to see, there’s (1) no evidence that high immigration levels following the 1986 amnesty granted by Washington to illegal immigrants and the resulting immigration increase mentioned by Schulte improved the national productivity picture over the pre-amnesty period; and (2) there’s lots of evidence that subsequent strong inflows of illegal immigrants (who Schulte and his bosses would like to see amnestied) have dragged big-time on productivity growth.

First, let’s examine the productivity of the pre-1986 amnesty decades, which provides the crucial context that Schulte’s claim overlooks.

According to U.S. Bureau of Labor Statistics figures, during the 1950s, a very low immigration decade (as shown by the chart below), labor productivity grew by an average of 2.63 percent annually. Significantly, this timespan includes two recessions, when productivity normally falls or grows unusually slowly.

Figure 1. Size and Share of the Foreign-Born Population in the United States, 1850-2019

During the 1960s expansion (i.e., a period with no recessions), when immigration levels were also low, the rate of labor productivity growth sped up to an annual average of 3.26 percent.

The 1970s were another low immigration decade, and average labor productivity growth sank to 1.87 percent. But as I and many other readers are old enough to remember, the 1970s were a terrible economic decade, plagued overall by stagflation. So it’s tough to connect its poor productivity performance with its immigration levels.

Now we come to the 1980s. Its expansion (and as known by RealityChek regulars, comparing economic performance during like periods in a business cycle produces the most valid results), lasted from December, 1982 to July, 1990, and saw average annual labor productivity growth bounce back to 2.24 percent.

As noted by Schulte, immigration policy changed dramatically in 1986, and as the above chart makes clear, the actual immigant population took off.

But did labor productivity growth take off, too? As that used car commercial would put it, “Not exactly.” From the expansion’s start in the first quarter of 1982 to the fourth quarter of 1986 (the amnesty bill became law in November), labor productivity growth totalled 10.96 percent. But from the first quarter of 1987 to the third quarter of 1990 (the expansion’s end), the total labor productivity increase had slowed – to 5.76 percent.

The 1980s are important for two other reasons as well. Nineteen eighty-seven is when the Bureau of Labor Statistics began collecting labor productivity data for many U.S. industries, and when it began tracking productivity according to a broader measure – total factor productivity, which tries to measure efficiency gains resulting from a wide range of inputs other than hours put in by workers.

There’s no labor productivity data kept for construction (an illegal immigrant-heavy sector whose poor productivity performance is admitted by the sector itself). But these figures do exist for another broad sector heavily reliant on illegals: accommodation and food services. And from 1987 to 1990 (only annual results are available), labor productivity in these businesses increased by a total of 3.45 percent – worse than the increase for the economy as a whole.

On the total factor productivity front, between 1987 and 1990 (again, quarterly numbers aren’t available), it rose by 1.23 percent for the entire economy, for the construction industry it fell by 1.37 percent, for the accommodation sector, it fell by 2.30 percent, and for food and drinking places, it increased by 2.26 percent. So only limited evidence here that amnesty and a bigger immigrant labor pool did much for U.S. productivity.

As Schulte pointed out, the 1990s, dominated by a long expansion, were a good productivity decade for the United States, with labor productivity reaching 2.58 percent average annual growth and total factor productivity rising by 10.87 percent overall. But when it comes to labor productivity, the nineties still fell short of the 1950s (even with its two recessions) and by a wider margin of the 1960s.

But did robust immigration help? Certainly not in terms of labor productivity. In accommodation and food services, it advanced by just 0.84 percent per year on average.

Nor as measured by total factor productivity. For construction, it actually dropped overall by 4.94 percent. And although it climbed in two other big illegal immigrant-using industries, the growth was slower than for the economy as a whole (7.17 percent for accommodation and 5.17 percent for restaurants and bars).

Following an eight month recession, the economy engineered another recovery at the end of 2001 that lasted until the end of 2007. This period was marked by such high legal and illegal immigration levels that the latter felt confident enough to stage large protests (which included their supporters in the legal immigrant and immigration activist communities) demanding a series of new rights and a reduction in U.S. immigration deportation and other control policies.

Average annual labor productivity during this expansion grew somewhat faster than during its 1990s predecessor – 2.69 percent. But annual average labor productivity growth for the accommodation and food services sectors slowed to 1.19 percent, overall total factor productivity growth fell to 1.19 percent, and average annual total factor productivity changes in accommodations, restaurants, and construcion dropped as well – to 6.36 percent, 2.67 percent, and -9.08 percent, respectively.

Needless to say, productivity grows or shrinks for many different reasons. But nothing in the data show that immigration has bolstered either form of productivity, especially when.pre- and post-amnesty results are compared. In fact, since the 1990s, the greater the total immigrant population, the more both kinds of productivity growth deteriorated for industries relying heavily on illegals. And all the available figures make clear that these sectors have been serious productivity laggards to begin with.

And don’t forget the abundant indirect evidence linking productivity trends to automation – specifically, all the examples I’ve cited in last Sunday’s post and elsewhere of illegal immigrant-reliant industries automating operations ever faster — and precisely to offset the pace-setting wage increases enjoyed by the lowest income workers at least partly because former President Trump’s restrictive policies curbed immigration inflows so effectively. 

In other words, in the real world, changes in supply and demand profoundly affect prices and productivity levels – whatever hokum on the subject is concocted by special interest mouthpieces who work the Swamp World like Todd Schulte.

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Glad I Didn’t Say That! Border, Shmorder?

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amnesty, Biden administration, Biden border crisis, border, Glad I Didn't Say That!, immigrants, Immigration, Kamala Harris, migrants, Open Borders

“Vice President Kamala Harris pushes back on criticism for not

visiting the US-Mexico border”

– USAToday, June 8, 2021

“Kamala Harris to make first trip to the border as vice president this

week”

– CNN, June 23, 2021

 

(Sources: “Vice President Kamala Harris pushes back on criticism for not visiting the US-Mexico border,” by Rebecca Morin, USAToday, June 8, 2021, https://www.usatoday.com/story/news/politics/2021/06/08/kamala-harris-lester-holt-interview-pushes-back-border-criticism/7600802002/ and “Kamala Harris to make first trip to border as vice president this week,” by Jasmine Wright and Priscilla Alvarez, CNN, June 23, 2021, https://edition.cnn.com/2021/06/23/politics/kamala-harris-going-to-the-order/index.html)

 

(What’s Left of) Our Economy: An Open Borders Mainstay Gets (Kind of) Woke on Immigration

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amnesty, automation, illegal aliens, immigrants, Immigration, Open Borders, productivity, technology, The Economist, wages, {What's Left of) Our Economy

I’ve always felt that one of the most convincing ways to win an argument is to  spotlight instances of sources that normally oppose one’s positions actually agreeing with them. And I just stumbled onto an especially startling example that appeared about a year ago in the The Economist.

It’s often valid to view such dated material as old and therefore irrelevant news. But in this case, The Economist‘s February, 2020 feature titled “Immigration to America is down. Wages are up. Are the two related?” really is a landmark still worth examining, and for at least three reasons.

First, if there’s a single set of policies identified with this British magazine it’s staunch support for free trade. In fact, The Economist was founded in the mid-19^th century precisely to convince the United Kingdom to dismantle its longstanding tariffs. Not surprisingly, the magazine has also always backed the freest possible immigration flows.

Second, February, 2020 was just before the CCP Virus and the massive economic shutdowns it triggered swept over the United States. So The Economist was commenting on trends when the economy was normal by most definitions, and after three years of Donald Trump’s presidency.

And third, of course, even though a substantial return to a pre-virus normal economic normality is now widely expected sometime this year (whether or not President Biden’s virus relief bill and other “Build Back Better” programs are fully enacted or not), the new U.S. administration clearly is determined to turn the immigration spigots back on.

So it really was pretty startling to come across an Economist article leading off with this paragraph:

“In both 2018 and 2019 [U.S.] nominal wages rose by more than 3%, the fastest growth since before the recession a decade ago. Americans at the bottom of the labour market are doing especially well. In the past year the wages of those without a high-school diploma have risen by nearly 10%. Intriguingly, this has come as America has turned considerably less friendly to immigrants, who are assumed by many to steal jobs from natives and lower the wages of less-educated folk. The two phenomena may be connected….”

Moreover, in recent years, “It appears instead that the overall decline in the foreign-born population is a result of falling numbers of low-skilled migrants…. That is probably a consequence of policies implemented by President Donald Trump, as well as the off-putting effects of his rhetoric on foreigners.”

Not that The Economist endorsed this proposition wholeheartedly. The article correctly notes that “many factors” lie behind these wage increases. Indeed, that’s true for most trends in the economy and elsewhere in our big, complicated world. But it turns out that most of the reasons for skepticism about immigration policy’s decisive role cited in the piece are pretty flimsy when examined closely.

For example, minimum wage increases – and their benefits – have by definition been enjoyed exclusively by lower-income workers overall in the United States. But the magazine also has found that average wages in occupations that are especially low-skill-immigrant-heavy (e.g., construction and landscaping work) “are rising considerably faster than wages in other low-paid jobs.”

In addition, The Economist cites findings from the Brookings Institution (hardly a restrictionist organization itself) that “five big metro areas saw absolute declines in their foreign-born populations in 2010-18” and its own research showing that “wages in those areas are now rising by 5% a year….”

Perhaps most important, the magazine’s initial conclusion about the connection between fewer low-skilled immigrants and higher wages for the established national low-skill workforce is qualified with the phrase “but only for a while.”

In this vein, The Economist points to research allegedly demonstrating that during and after past “occasions when America has clamped down on immigration,” the results “ultimately [offered] little benefit to native workers—and may even harm them.” Yet some of these historical episodes – e.g., the freeze and follow-on restrictions on immigration from China that began in the late-19^th century, and expulsions of Mexican workers during the Great Depression of the 1930s – seem  marginally relevant at best to the U.S. economy today.

Even odder, the overarching lesson drawn by The Economist from this and related studies supports a claim made by current-day restrictionists (like me) that wide-open immigration policies retard productivity growth by enabling many industries to use cheap labor as an earnings- and profit-making or boosting crutch, rather than innovate their way to greater success.

According to The Economist, “In the short term, native workers may well see a wage boost as labour supply falls. But businesses then reorient production towards less labour-intensive products; natives take jobs previously occupied by foreign-born folk, which may be worse paid; and bosses invest in labour-saving machinery, which can reduce the pay of remaining workers.”

Yet logically, anyone supporting this position logically must also think that improving productivity and promoting technological progress doesn’t ultimately benefit entire economies – including workers initially displaced. Is The Economist really supporting such stick-in-the-mud-ism?

The answer, strangely, as readers learn in the very next paragraph, is “Of course not.” Because the article proceeds to claim that “Both low- and high-skilled migration are linked with higher productivity.” In other words, higher productivity is a long-run economic blessing after all, and it’s improved both by reducing and increasing low-skill immigration. Got that?

Of course, change at a single magazine, no matter how influential, is no guarantee of policy change.  But such publications aren’t often called opinion leaders for nothing.  And although rhetorically, the Biden administration seems as set as ever to supercharge U.S. immigration flows, maybe it’s no coincidence that its recent  stance on the southern border looks every bit as confused as this Economist take on immigration.       

Im-Politic: So You’re Outraged by Trump’s Reported –hole Remarks?

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amnesty, Barack Obama, chain migration, Charlottesville, DACA, Deferred Action for Childhood Arrivals, Dick Durbin, Gang of Six, illegal immigration, Im-Politic, Immigration, Open Borders, racism, Trump, visa lottery

Although it’s anything but clear that President Trump made the profane comments attributed to him at a recent meeting on immigration reform with several members of Congress, it’s also anything but outrageous that a reporter would ask him afterwards, “Are you a racist?” His performance after the Charlottesville protests last August alone are grounds for legitimate concern.

But are the alleged Trump comments (which only one participant in the meeting – Open Borders supporter Dick Durbin, a Democratic Senator from Illinois – has “confirmed”) the only outrageous set of remarks or positions characterizing the immigration policy debate specifically since it entered its current phase in the mid-2000s? Not on your life. In fact, here are some questions I wish journalists would ask Durbin and the rest of the pro-amnesty crowd.

>”Are you an adult?” That’s a question that’s justified by the abject refusal of those blanketly opposing all efforts to establish some form of effective controls on immigration flows to inform the rest of us just how many newcomers they believe the nation can safely absorb, and over what period of time. Their apparent belief that the answers are “an infinite number” and “as quickly as possible” can’t accurately be described as anything but childish.

>”Do you have a working brain?” The president’s critics have never acknowledged the reality that any sizable version of amnesty – as Open Borders enthusiasts in both major political parties are still pushing in the current negotiations over illegal immigrants originally brought to the United States as children – is going to strengthen greatly the magnet that encourages populations from all over the world to take whatever steps are needed to enter the country illegally?

It happened after passage of the ballyhooed amnesty-centered immigration reform legislation of 1986. And it happened after former President Obama in mid-2012 announced his decision to postpone deportation for many of the aforementioned illegal immigrant children via his Deferred Action for Childhood Arrivals (DACA) decision. And why wouldn’t it? If Washington announces that nothing will be done to remove illegal immigrants once they’ve arrived, why wouldn’t they keep trying to come?

>”Are you completely cynical?” President Trump gave Congress more leeway than ever (mistakenly, in my view) to come up compromise immigration legislation. His unmistakable and entirely reasonable assumption was that the group of lawmakers he convened last Tuesday would come up with a proposal that would make permanent the protections currently enjoyed by most of the aforementioned childhood arrivals in exchange for (a) significantly strengthened border security measures; (b) ending the “chain migration” feature of current U.S. immigration policy, which has supercharged the entry of newcomers who have little or no prospect of contributing to the economy; and (c) ending the equally doofy visa lottery, which seeks to increase immigration inflows from certain countries simply because they have been deemed inadequate.

What was the initial response – from a self-appointed task force of Democratic and Republican legislators called “the Gang of Six”? Amnesty not only for DACA recipients but for those denied its benefits by the Obama program, and for the parents of most of this entire cohort; threadbare funding for border security; a shell game stunt that leaves the chain migration system fundamentally intact; and a visa lottery proposal that was just as fake.

So I’ll close by repeating a point I’ve made ever since Mr. Trump made his formal debut in presidential politics in late 2015: If his opponents really wanted to send him and his often objectionable style packing – or now that he’s in the White House, to neuter his effectiveness – they’d spend much more time and energy coming up with realistic solutions to the legitimate complaints voiced by him and his supporters than they spend on fulminating about his latest outrages.

Their failure to process that lesson helped fuel the President’s 2016 victory, and their responses to the alleged – hole remarks shows that their learning curve remains entirely too shallow.

Im-Politic: Immigration Hypocrisy (Literally) Hits Home

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amnesty, Clio Chang, domestic workers, illegal immigration, Im-Politic, Immigration, middle class, Open Borders, public services, The New Republic, wages

Thanks to New Republic staff writer Clio Chang, we now know that those resisting the evil President Trump and his particularly evil policy of stepping up deportations of illegal immigrants have begun taking the Sanctuary City (and County and State) one courageous and virtuous step further. They’re starting to create Sanctuary Homes movement to help all the illegal immigrants who they employ as maids, nannies, and in other domestic service positions.

As explained by a leader in this emerging movement,“It’s about creating safe and welcoming homes and communities,” including “simply starting conversations with their employees about the election, giving them time off to be with their own children, finding and sharing legal resources related to immigration and deportation, and offering safe rides home from work.”

Sounds incredibly special, doesn’t it? And Chang reports that “the enormous backlash to Trump has brought many such employers to the table, some of whom may not have been politically active beforehand. The relationship that people have already established with their caretakers and nannies often acts as a good starting place for further action.”

But actually, the Sanctuary Homes movement is just one more example of the naivete (at best) and hypocritical virtue-signaling (at worst) that’s become so characteristic of so many of advocates of more lenient immigration policies.

For as Chang herself notes, the (overwhelmingly affluent) families who employ these domestics have paid them wages that are among the lowest in the nation. And data from the Bureau of Labor Statistics make clear that, during the last decade, as the Open Borders crowd has grown in both numbers and self-righteousness, these rock-bottom wages of the domestics employed by its urban and suburban liberal wing have risen much more slowly than those of the typical worker. From May, 2007 to May, 2016, they’re up only 4.90 percent – versus a 17.95 percent rise for American workers as a whole.

In fairness, as Chang details, and as suggested above, the Sanctuary Homes movement is about much more than helping illegal immigrants. It’s targeted all domestics, who clearly have gotten the short end of the fair labor regulatory stick in the United States.

But in addition to forgetting the admonition that charity begins at home, the domestics’ employers who are jumping on the amnesty bandwagon also overlook how Open Borders, legalization, path to citizenship and other such proposals are bound to strengthen the jobs magnet that keeps attracting to the United States so many workers from very poor countries. If they have reason to think that they, too, will be amnesty-ied down the road if they can make it into country illegally, their numbers will continue to challenge even the most effective border controls. As a result, the labor glut that’s helped limit domestics’ wages will swell even further.

And there’s another effect neglected by immigration advocates: Even if every employer of every domestic paid them significantly higher wages either voluntarily or because the workers somehow manage to organize effectively (tough to accomplish in labor over-supply conditions), the workers’ families would continue to live in lower income areas. For that reason, and because upper income households are much likelier to capitalize on tax reduction options than lower income households, the burden of paying for the schooling and other government services used by immigrant domestics will inevitably be paid mainly by their neighbors, not by their wealthier employers.

As I’ve written, since America’s upper classes benefit so disproportionately from mass immigration, they should be hit with a hefty special tax to support the newcomers as long as the border remains so porous. Until immigration advocates recognize this glaring inequity and the need to eliminate it, it’ll be fair — indeed, charitable — to describe developments like the Sanctuary Homes movement as (at best) economically clueless showboating, not genuine compassion.

Im-Politic: A Preview of Trump-ism without Trump?

Tags

2016 election, amnesty, attrition, Contract for the American Voter, Democrats, deportation, Donald Trump, entitlements, establishment, healthcare, Im-Politic, Immigration, immigration magnet, independents, Jobs, NAFTA, Obamacare, Peggy Noonan, politics, Populism, Republicans, TPP, Trade, Trans-Pacific Partnership, Wall Street Journal

Throughout this circus of a presidential campaign, I’ve emphasized the importance of distinguishing between Donald Trump’s myriad personal failings and the Republican presidential nominee’s campaign positions – which I remain convinced can form the basis of an urgently needed, sensible, and therefore, enduring new American populism. This week, substantial support for this proposition has come from Wall Street Journal columnist Peggy Noonan and, more surprisingly, from Trump himself.

In an October 20 essay, Noonan – long one of the most effective critics of the corporate-funded Republican establishment that Trump thoroughly trounced during the primaries – described the pillars of “Trump-ism without Trump” with her usual wit and grace. Among the highlights:

>He “would have spoken at great and compelling length of how the huge, complicated trade agreements created the past quarter-century can be improved upon with an eye to helping the American worker”:

>He “would have argued that controlling entitlement spending is a necessary thing but not, in fact, this moment’s priority. People have been battered since the crash, in many ways, and nothing feels stable now”:

>And he “would have known of America’s hidden fractures, and would have insisted that a healthy moderate-populist movement cannot begin as or devolve into a nationalist, identity-politics movement.”

The only matter on which I believe Noonan is seriously off-base is immigration. I certainly agree with her that Trump should have “explained his immigration proposals with a kind of loving logic—we must secure our borders for a host of serious reasons, and here they are. But we are grateful for our legal immigrants….” The problem is with her apparent belief that “In time, after we’ve fully secured our borders and the air of emergency is gone, we will turn to regularizing the situation of everyone here….”

As I’ve written, this popular (with both wings of the establishment) version of amnesty inevitably will supercharge America’s “immigration magnet.” The perceived likelihood of eventual legalization can only bring millions more impoverished third world-ers to the nation’s various doorsteps. It’s inconceivable that even a President Trump would take the measures needed – which would surely involve some use of force – to keep these masses, and especially the women and children, at bay.

The far better, indeed only realistic, approach is one that Trump himself has unfortunately barely mentioned: a stout refusal to legalize in any form accompanied by a strategy of attrition – i.e., encouraging illegals to leave both by boosting efforts to keep them out of the workplace, and by denying them (and their anchor children) public benefits.

But it’s almost like Trump was listening. Two days later, he came out with a “Contract for the American Voter” that echoed much of Noonan’s column. He promised that in his first hundred days in office, he would announce his “intention to renegotiate NAFTA or withdraw from the deal,” along with withdrawal from the Trans-Pacific Partnership (TPP) trade deal. Both measures should draw strong support from Democrats and independents. In addition, Trump would designate China a currency manipulator, and order an inventory of predatory foreign trade practices.

On immigration, he omitted any reference to blanket deportation of all illegals and instead focused on starting to remove “the more than 2 million criminal illegal immigrants from the country and cancel visas to foreign countries that won’t take them back”; to de-fund Sanctuary Cities; and to “suspend immigration from terror-prone regions where vetting cannot safely occur. All vetting of people coming into our country will be considered extreme vetting.” Especially in the political climate that would result from a Trump victory, would most Democrats on Capitol Hill fall on their swords to prevent any of this?

And what did Trump vow re entitlement reforms? The phrase doesn’t appear at all in the Contract, although the list of legislative proposals does include the repeal of Obamacare and replacement with a system (described only generally, to be sure) that could well appeal to most Republicans and many independents, and that in combination with other measures mentioned could bend the national healthcare cost curve down further.

Couple these ideas with Trump’s support for a big infrastructure build-out and repair program; his broadly non-interventionist foreign policy stance combined with a big (job-creating) defense buildup; new government ethics reforms that seek to halt the corrupting revolving door between government and private sector; and any kind of serious middle class tax relief, and it looks to me like a (mandate-sized) winning formula – for a politician who can pass the interlocking personality, character, and temperament tests.

Can such leaders emerge from the current political system, as I recently asked? Are American politicians who rise up through this system simply too beholden to special interests, or too thoroughly imbued with the “If you want to get along go along” ethos to favor rocking any big boats? I still can’t say I know the answer. But I’m as confident as ever that unless and until this kind of candidate emerges, American politics is going to remain one very angry space.

Im-Politic: More Anti-Trump Media Bias – Including One Example That’s Homophobic

Tags

amnesty, Bloomberg.com, deportation, Donald Trump, Gang of 8, Hillary Clinton, homophobia, illegal immigrants, Im-Politic, immigration reform, Jobs, John McCain, John Micklethwait, Labor Force Participation Rate, labor markets, LGBT, living standards, Mainstream Media, Mark Zandi, Max Ehrenfreund, media, media bias, part-time, productivity, The Washington Post, Vladimir Putin, wages

I sure hope all you RealityChek readers have had a great Labor Day weekend. Unless it was a complete disaster, it had to be better than the last few days’ performance just registered by the Mainstream Media.

On Sunday, I reported on a truly contemptible smear of white working-class Americans delivered by Time magazine uber-pundit Joe Klein. But published this weekend along with this display of mass character assassination was a swipe at Republican presidential candidate Donald Trump that can only be reasonably interpreted as homophobia, and an example of outright ignorance of the basic economic concept of productivity, and of recent U.S. labor market trends. For good measure, this second piece left out information on its main source that strongly suggests major political bias.

The homophobia was delivered courtesy of no less than John Micklethwait, the current Editor-in-chief at Bloomberg.com who previously held this post at The Economist. Think I’m exaggerating? See for yourself. In the course of an otherwise informative interview with Vladimir Putin, Micklethwait pressed the Russian president in this way for his views of Trump and his Democratic counterpart, Hillary Clinton:

“[Y]ou are really telling me that if you have a choice between a woman, who you think may have been trying to get rid of you, and a man, who seems to have this great sort of affection for you, almost sort of bordering on the homoerotic, you are really going to go for, you are not going to make a decision between those two, because one of them would seem to be a lot more favorable towards you?”

I had to go over this passage several times before convincing myself that I’d actually read it correctly. Even giving Micklethwait’s language the most charitable interpretation it deserves – that the journalist meant it simply as a joke – what exactly distinguishes it from the kind of sniggering locker-room-level humor that’s now recognized as demeaning and hurtful? Therefore, is it remotely plausible to doubt that Micklethwait himself believes that such emotions are fundamentally shameful, and that his attribution of such feelings toward Trump reveal a positively vicious bias against the maverick politician?

Here’s hoping that gay activist organizations come down hard on Micklethwait’s bigotry – and insist that his resignation is needed to guarantee the integrity of Bloomberg’s coverage of both American politics and LGBT issues.

The second major media stumble came in a Saturday Washington Post Wonkblog item spotlighting a claim that Trump’s immigration policies “could put Americans out of work.”

That’s of course an entirely valid and important possibility to report on, but author Max Ehrenfreund (and his editors) failed to fulfill a fundamental journalistic obligation by omitting from his article the unmistakable anti-Trump bias of Mark Zandi, the economist who came up with this finding. Yes, the piece mentioned that Zandi is a former aide to Arizona Republican Senator John McCain. But what it didn’t tell you is that McCain was a charter member of the “Gang of 8” – the bipartisan group of Senators that several years ago launched a powerful push for an amnesty-focused immigration reform bill. Nor did Ehrenfreund mention that Zandi has also contributed to Clinton’s presidential campaign – which has been pushing immigration reform proposals even more indulgent than the Gang’s.

As for the Zandi-Ehrenfreund case that Trump’s immigration policies would backfire powerfully on the U.S. economy, it could not have been more ignorant or incoherent economically. As Ehrenfreund explained it, “deporting [millions of] undocumented immigrants would increase costs for employers, because they would have to compete for the workers remaining in the United States, causing wages to rise.”

Full stop: Amnesty supporters have maintained for years that most illegals are simply filling “jobs that Americans won’t do.” Now they’re saying that if a the supply of American labor shrank due to deportation, increasing wages would summon forth replacements who are either native-born or legally residing in the country? Do tell! Ehrenfreund and Zandi might also have mentioned that robust wage increases have been one of the most conspicuously absent developments during the weak current U.S. recovery since it technically began some seven years ago.

Just as strange was the claim that “Already, the labor force has been shrinking as older workers retire, and the unemployment rate is under 5 percent, which suggests relatively few workers are looking for jobs.” Don’t Ehrenfreund and Zandi know that much of this shrinkage has taken place among working age women and especially men? Or that the number of Americans working part-time involuntarily still remains above pre-recession levels? In other words, there’s an enormous population in the United States that would bid for better-paying jobs.

Perhaps strangest of all is the Zandi-Ehrenfreund contention that “To compensate, businesses would have to increase prices. Some firms would lose customers and could be forced out of business. ‘Asking these folks to leave is going to put a hole in the economy that’s going to cost jobs,’ Zandi said. ‘It’s going to cost the jobs of American citizens.'”

That is, Zandi and Ehrenfreund have either omitted or ruled out the possibility that many companies will eventually respond instead by either automating and/or by otherwise improving their efficiency in ways that boost their productivity – thereby laying the ground for sustainable prosperity and living standard increases going forward. These two pessimists might believe that this venerable maxim of economics no longer holds, and that “this time it will be different.” But maybe they could do readers the courtesy of explaining why?

This Washington Post article’s descent into fakeonomics hardly stops here. But the above reasoning should be enough to establish its silliness – and to prompt the question if comparably doofy pro-Trump studies would ever see the light of day in the paper.

I closed my last post by asking why recent polls show Americans’ confidence in the media has stayed even in the low double-digits on a percentage scale. These Bloomberg and Washington Post pieces don’t merit even single-digit approval.

Im-Politic: How Trump Can Clean Up His (Needless) Immigration Mess

Tags

2016 election, amnesty, anchor children, border security, deportation, Donald Trump, E-Verify, Hillary Clinton, illegal immigration, Im-Politic, immigrants, Immigration, public assistance, Sanctuary Cities

Donald Trump has been getting it from all sides because of his recent, contradictory statements on immigration policy, and whatever the motives, the criticisms of the Republican presidential candidate are richly deserved for one fundamental reason: You don’t need to be an Open Borders fan or a total deportation hardliner to recognize that, with just over two months left till Election Day, Trump should at least have the main details of his approach down cold. It’s painfully clear that he doesn’t.

Even worse, if you’re a Trump supporter, the core precepts of a sensible and politically appealing alternative to current immigration policy – and to the even more permissive version being pushed by his Democratic rival, Hillary Clinton – are anything but rocket science. And this description even applies to policies for dealing with the nation’s current illegal immigrant population, the dimension of immigration reform widely thought to present policymakers with their most difficult, even agonizing, choices, and that’s given Trump the greatest difficulty over the last week.

Trump has announced that he’ll be giving a speech on immigration this Wednesday, and if he has any hope of clarifying his views in a way likely to win more votes than it loses, here’s what he’ll have to do.

To start, Trump needs to remember that the kind of mass deportation he’s referred to in TV interviews was not part of the immigration blueprint he released a year ago – and for very good reasons. Surely at one point he and his team recognized the logistical nightmare, budget-busting costs, and public relations disaster this idea entailed.

Then the candidate needs to remember that he and his team recognized that the nation is by no means therefore stuck with the various versions of soft or quasi-amnesties with which he’s flirted in recent days. For that immigration blueprint made a compelling, though only partial and implicit, case for addressing the great majority of the illegal population that has been otherwise law-abiding through attrition. That is, rather than trying actively to kick millions of men, women, and children out of he country, Washington would concentrate on steadily reducing this population by turning off or weakening the two big magnets collectively responsible for their presence.

The first of course concerns jobs, and the Trump blueprint identifies most of the answer – mandating nation-wide use by employers of the E-verify system, a computerized means of identifying job applicants residing in America without proper authorization. As I’ve reported, where it has been used, E-verify boasts an outstanding record of success. And its effectiveness could be supercharged by requiring that businesses pay truly painful penalties for violations.

The second big magnet encompasses various kinds of public assistance currently being extended to illegal immigrants, but the Trump blueprint covered only some of the bases. Yes, de-funding sanctuary cities would help bring to an end the extra layer of legal protection perversely provided throughout the country even for criminal aliens. But the statement should have also expressly prohibited any state from providing driver’s licenses and public college tuition benefits for illegals.

Even these measures would leave intact two big illegal immigrant drains on the public purse – their families’ use of hospital emergency rooms and public schools, and their eligibility for and use of transfer payments and entitlement programs like Obamacare (especially by “anchor children,” who are born in the United States and thus automatically enjoy full citizenship rights). The Trump blueprint glosses over the former issue and would handle the latter by ending birthright citizenship.

In principle, I support preventing illegals from trying to strengthen their legal status in America by creating these human faits accompli. But I also foresee a huge constitutional fight that would take years at best to resolve. As a result, it makes the most sense to rely mainly on turning off the jobs magnet in order to persuade illegals to leave the United States. Clearly, many would remain, counting on their ability to receive public assistance via the anchor children route. But using an E-Verify-type system to crack down on welfare use gained through falsified documents would pare illegals’ numbers further. And the new barriers to finding American jobs would help prevent future surges in their ranks – especially if the U.S. economy’s growth picked up enough to boost employment opportunities greatly.

Obviously, this attrition strategy wouldn’t placate either extreme on the spectrum of immigration policy views. But along with the serious border enforcement Trump has consistently promised, it would achieve the crucial aims of bringing the illegals population down to much more economically manageable levels, and keeping it there. And attrition would do so in the “fair” and “humane” way that Trump understands a critical mass of American voters – rightly – are seeking.  

Following Up: Why Mass Immigration Can’t Solve the U.S. Entitlements Crisis

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2016 election, amnesty, Bernie Sanders, Branko Milanovic, Donald Trump, entitlements, Following Up, Global Inequality, Immigration, inequality, New York magazine

The (overwhelmingly one-sided) Donald Trump-Bernie Sanders-fueled debate on trade policy that’s broken out in the Establishment Media lately has been so heated that it’s eclipsed even immigration as a hot button presidential campaign issue. Not even Trump’s release of crucial details for his illegal immigration-stopping wall has managed to push trade out of the spotlight. It’s almost as if mainstream journalists and the elites they so often coddle have given up on pimping for Open Borders policies as America’s only non-racist, non-xenophobic immigration policy options.

All the same, who can reasonably doubt that pro-amnesty media propaganda will stage a comeback, especially if Trump shows signs of surmounting his current troubles and cruising again toward the Republican nomination? (Democrat Sanders nowadays is far from a maverick on immigration issues.) If immigration returns to the fore again, it will be worth remembering that one of the world’s leading economists has just punched big holes in one of the Open Borders’ backers’ main economic claims.

As noted in a September, 2014 RealityChek post, mass immigration supporters have taken to arguing that major inflows of newcomers are needed in large measure to help America deal with its looming entitlements crisis. The idea is that because the native-born U.S. population is aging so rapidly, and because so many immigrants are so young – and enterprising – their future earnings potential is the nation’s best bet for responsibly financing the immense wave of baby-boomer retirements that’s already begun.

As I also argued in that post, however, although immigrants who come to the country with high levels of skills and education are good candidates to play this essential role, the same cannot possibly hold for most illegal immigrants and many legal newcomers – who come with none of those attributes. For it’s becoming abundantly clear that America is becoming an economy and society with not only record levels of economic inequality, but an increasingly rigid class structure.

That is, the American Dream is far from completely dead, but Americans who are born poor are ever more likely to stay that way. And why should low-skill, poorly educated immigrants be an exception? Ironically, I added, the inequality crisis has become so apparent in large measure because of research from self-styled progressive analysts who favor more or less Open Borders. In addition, it was great to be able to point to a recent article in establishment organ Foreign Affairs that similarly debunked the portrayal of mass immigration as an economy saver.

Now, more reasons to doubt this pro-amnesty meme has just come in from Branko Milanovic, a former senior World Bank economist now with the City University of New York.

In his new book on Global Inequality, Milanovic has documented three major economic and social reasons for thinking that yawning rich poor gaps in the United States are here to stay, but that they will keep growing wider. As Milanovic explained in an interview in New York magazine: 

> “the share of total income going to capital compared to labor has been increasing” – and its wealthy Americans who dominate income generated by capital (i.e., the return on investments like property or stocks);

> in a new development, many wealthy Americans are now earning income both from their investments and from their labor – e.g., in very high-paying jobs in finance or technology companies; and

> these economic out-performers are increasingly marrying each other, and thus boosting the odds that both their wealth and their natural gifts will be inherited by their children. Interestingly, according to Milanovic, a major engine of this homogamy is the huge increase in the result of highly educated women.

Milanovic also cites a fourth reason to expect widening U.S. inequality – a political system increasingly of, by, and for the wealthy. In fairness, though, however formidable, this obstacle to a more equitable society seems less intractable than the three economic and social factors.

The author also cites reasons for supposing that America’s rich-poor gap might start narrowing once again. But their impact seems unlikely to predominate any time soon. And given the power of the inequality drivers Milanovic describes, nothing seems likelier to swamp the pro-equality forces if they ever do start gathering than a sizable new wave of impoverished, barely literate immigrants. Not to mention the pressure they themselves will place on the nation’s public purse.

Im-Politic: Glimmers of Media Sanity on Trump

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2016 election, amnesty, Charles Hugh Smith, Donald Trump, E.J. Dionne, Establishment Media, Fox News, globalization, Im-Politic, Immigration, National Journal, Open Borders, Ron Fournier, Steve Tobak, The Atlantic, Trade, Washington Post

Yesterday, I slammed America’s Big Media for the slobbering love affair many of its leading lights just revealed over failed Republican presidential candidate Jeb Bush. The brazen gushing over this champion of job- and wage-killing mass immigration and offshoring-friendly trade policies once more exposed establishment journalists in general as virtual spokespeople for plutocrat interests – and active participants in the increasingly desperate effort to squash the presidential run of maverick businessman Donald Trump.

And yet, to every rule, there are exceptions, and sometimes important ones. So in the interests of fair and balanced blogging, here are some recent examples of major pundits who appear genuinely interested in understanding Trump’s growing support – and who, by extension, are (unknowingly, of course!) following my longstanding advice to Trump opponents: If you really want to put an end to Trump-ism in American politics, start responding seriously to the legitimate concerns of his supporters.

Just this morning, Washington Post columnist E.J. Dionne wrote that “If Trump’s campaign leaves behind one useful legacy, it will be a heightened awareness of the deep hurt among the Americans[who] have been brutally battered by globalization and technological change. So far, Trump’s Republican rivals have had little to say to these voters.”

I’d quibble with Dionne’s choice of words. As I’ve repeatedly written, the main international commerce problem is not some impersonal historical force called “globalization,” but a series of trade policies that have shortsightedly encouraged the offshoring or outright destruction by predatory foreign rivals of too much of the productive, industrial heart of the U.S. economy. In the process, these man-made measures not have not only battered working- and middle-class Americans. They’ve helped dangerously hook the entire economy on debt-led growth – or stagnation, as increasingly seems the case. Similarly, pro-amnesty immigration policies, for all the humanitarian arguments made on their behalf, can only have the effect of driving down the wages of native-born workers – that is, unless the laws of supply and demand have been repealed.

But at least Dionne is acknowledging the real and crucially important reasons behind the flow of such voters to Trump’s camp. And his approach contrasts strikingly with the anti-Trump screed just published by his paper’s editorial board – which not coincidentally keeps pounding the table for new trade deals based on failed models, and pays the flimsiest lip service to the idea of secure national borders.

Another national media mainstay deserving of praise in Ron Fournier of National Journal and The Atlantic. In an essay for the latter intriguingly titled “My Love-Hate Relationship with Donald Trump,” Fournier comes down hard on the GOP front-runner for exploiting people’s fears instead of appealing to their aspirations, their better angels. I hate how he gives people license to say hateful things. I understand why Trump’s backers are angry, and I don’t subscribe to the theory that most of them are bigots. But they are condoning bigotry.”

He continues (in a somewhat Dionne-ian vein), “I love his fist to the face of the establishment. In the last 10 years, Americans have weathered historic economic change, the biggest technological surge since the industrial revolution, a demographic makeover, and two major wars. Through it all, the nation’s institutions and their leaders have failed to adapt. Trump is the public’s middle finger wagging in the face of elites.”

And he confesses in conclusion, “I’m having trouble expressing my disdain for Trump without appearing to cast aspersions upon his supporters, or to be a defender of the establishment. So let me be clear. I loathe him. I respect his supporters. And I hope that after Trump is finished grinding the gears of the political machine in 2016 Americans find a better vehicle for change.”

The final mainstream media example of dealing responsibly with Trump comes from prominent management consultant Steve Tobak, who’s not exactly a pillar of the national media establishment, but who writes regularly for FoxNews.com. Tobak is no fan of Trump the person, either. The candidate’s penchant for bombast and sometimes flat-out self-contradiction, he writes,

“leaves us to wonder if the man with an increasingly decent chance of becoming the next resident of the White House just shoots off his mouth and asks questions later, or maybe he really is the type of leader who’s prone to Ready, Fire, Aim, in that order. If it’s the latter, is it not risky to have his finger on the proverbial button?”

Yet Tobak pointedly adds that the Trump movement – along with its Democratic party counterpart, the Bernie Sanders insurrection – reveals a new public “appetite for risk” that shows “just how done the electorate is with the status quo in Washington. This is what people do when you’ve pushed them too far for too long. If this isn’t a wake-up call to the permanent political class – that we’re willing to try almost anything rather than sit back and watch you muck up our country – then maybe it is time to throw the bums out and start over.”

Voices like this remain very much a tiny media minority. I’m hoping, however, that they demonstrate that the Big Media has not completely lost touch with Main Street America, or entirely forgotten its potential to call out a bipartisan political and policy establishment that is rapidly, and deservedly, losing its claim to legitimacy.

By the way, blogger Charles Hugh Smith definitely isn’t a member of the Mainstream Media, either. But his new post on “What the Pundits Don’t Get About Trump” should be must-reading in their ranks – and for you.