Category — Economics

Here are a few good articles from “Jane Galt”, the pen name for an economist with some very interesting views.  I’m trying to figure her out really - either she is a lot more conservative than she claims to be, or I’m a lot more liberal than I think, because I find myself agreeing with her more often than not - it’s hard not to when she makes such good sense.
I love someone with a different political view who is able to rationally talk about it, provide good factual backup to it and is willing to talk about the pros and cons of each side.  Nice job Jane, whoever you are.

Asymmetrical Information: Unwanted guests?

Asymmetrical Information: Some rambling thoughts on immigration

immigration

It’s the topic that’s on everybody’s mind (other than Iraq) and it completely defies traditional political boundaries. Liberals are agreeing with conservatives who don’t agree with other conservatives because they are too busy agreeing with the liberals. Can anything be more confusing?

Interestingly enough, it’s really NOT on everybody’s mind. Despite the fact that this issue will undoubtedly raise a passionate response - regardless of the message - it is still only a single digit percentage point of importance in most national polls. I think that it should be on our minds more, as the effects in either direction will be drastic if not handled properly.

Some people want to round up as many illegal immigrants as possible and deport them, claiming that this is the single largest threat that we face when it comes to national security. Other people want complete amnesty for illegals, citing social and economic upheaval should mass deportation begin. Who’s right?

Well, the answer is that both sides are right, and they should stop arguing with each other and work on a viable solution.

In a perfect world, laws exist for the betterment of society, pure and simple. A law that is detrimental should be reversed and a damaging legal hole should be plugged. Unfortunately, these situations are not mutually exclusive and we are facing both of them in the case of illegal immigration.

Our biggest problem is our border with Mexico – it needs to be secured as quickly as possible. But that doesn’t mean that the millions of illegal Mexican immigrants should be deported. It also doesn’t mean that they should be given amnesty. So, what do we do?

I live in the Los Angeles area, so I may have an odd bent on this topic, but I have to say that the Mexican people are some of the hardest working people I have ever seen. While there are dirt bags from every race, creed and color, certain societies and cultures mesh more than others do. A Judeo-Christian based society is going to fit better with another Judeo-Christian society than with a Tribal Islamic society. Not that the latter is impossible (assuming that you throw out radical doctrine), but it is much harder to do.

Take the average illegal Mexican family – both the mother and the father work at least one job each and they pay their share of taxes - it may be by using your social security number, but that is a separate issue. Their Catholic background and strong sense of family is very compatible with our societal structure. They have ties to millions of legal immigrants who are their family and therefore have a vested interest in the stability of our country. They like that we support Israel, because it is the Holy Land. They have no problem with the pervasiveness of US culture.

And, last but not least, they don’t want to kill us.

I believe that President Bush has an opportunity to break serious ground with the situation the way it is today. Security concerns have never been higher – and that is what is needed in order to go through the painful process of tightening our borders. I don’t think I need to go into why a secure border is necessary – I’ll leave that up to your imagination. But, we do need to figure out what to do with those people who are already here.

I think that Mr. Bush should publicly acknowledge a kinship or commonality with our friends to the south, further acknowledge that the mingling of our two societies is fairly substantial in certain areas and because of these extenuating circumstances, create a specific program to handle the unique situation. Not only would this be politically a smart thing to do, but I believe it would actually be in the best interest of everyone involved. The key is in the specific program – what does that look like? How do you allow for not dishonoring the law with general amnesty, yet still recognize the core value that these folks provide to our society as a whole – thereby satisfying a lion’s share of both sides of the argument.

I believe that there should be a multi-tiered approach that provides 1) a citizenship track for those who want it, 2) a labor program for those that want to retain their foreign citizenship but remain in residence or perform migratory jobs and 3) a phased deportation for those that do not wish to accept the terms of the first two options.

Citizenship Track: I used to live across the street from a Mexican man who had legally immigrated to the US many years ago. I found it amusing when I first learned that he was MUCH more upset about illegal Mexican immigrants that I ever could be – I was amazed that most legal immigrants feel the same way. Why? Because the illegals are cheating their way through a process that the legals labored long and hard to accomplish. The fact is though, that many of illegal people would like to be legal. The issue is that our current laws and quotas make that a very time consuming prospect. Put this together with the fact that there is very little to fear when it comes to getting caught, and we have the nightmare that we are faced with today. Deported today? No problem, they’ll be back in a month… Providing a faster legal track in conjunction with real penalty for non-compliance and tighter borders will most likely bring millions of people out of the woodwork to sign up for legal citizenship.

How is that not amnesty? I think it should be in conjunction with significant penalties for the initial circumvention of the system. I believe that the most viable way to achieve this is through an additional, specific tax levy that will be funneled back into the immigration system for its continued health. A lot of research will need to be done to determine the specific amounts, but I believe that it may work to have different options choose from: 1) a 5% payroll tax that diminishes by 1% or ¾% every year until it is completely gone, 2) a 1% payroll tax levied over 7 to 10 years, 3) a 2% tax over 4 years, etc.

For the people that don’t want to agree to this, they can always opt to leave and then pursue penalty-free, legal immigration that is already available. I do believe that we may need to reexamine the timeframes and quotas that currently exist, as they are what has largely created the problem to begin with. But, that is best left for another topic.

Now, some people will make the argument that this penalty system is unrealistic because many of the people in this section of society are already having trouble making ends meet. I am sensitive to that argument, but would point out that the alternative of deportation is certainly less desirable financially. I also believe that the provided options for penalty payment are sufficient to allow for people to choose a situation that makes the most sense for them. If a person isn’t able to pay an additional 1% of their income, then we have a bigger problem to deal with – and this is the hardest nut to crack. The 1% is immaterial to these cases, as it is immaterial to their already bleak financial situation.

To be sure, it won’t be a pretty sight to have a full understanding of the additional number of people that are living well below the poverty line, but the fact is that we won’t be able to change that in the near future. We can’t create a welfare state – nobody will sign up for that. Rather we must understand that these dismal conditions are conditions that illegal immigrants are already choosing to live in. The fact is that there are jobs that don’t pay very much, but these are jobs that people truly WANT to do – not because they are good jobs, but because the alternative is no job at all. Couple this with the fact that we are simply putting our heads in the sand to the situation that already exists today and you can easily see how this argument against the plan falls apart – that is: not knowing the facts doesn’t change the situation either.

Also, as an aside, I believe that many of the people working at the very lowest of levels of income will be able to raise that income given legal opportunities and also many of these people will likely fall into the second category’s sub-category of migrant worker.

Labor Program – I touched on this briefly in the previous section, but it bears repeating here. There are a number of tough, nasty, low-paying, back-breaking migratory jobs that need to be performed in a complex economy – jobs that our labor-unioned, neuvo-riche, Starbucks society simply doesn’t want to do. And, there are a number of people out there whose alternative is NO job. I’m not talking politics; I’m talking economics and Pareto optimality. Here is a situation where both parties can mutually benefit from a transaction, where the betterment of one doesn’t require the diminishing of another.

Don’t like the way that sounds? Think that this is exploiting the less fortunate? Two points: 1) it’s already going on – people are choosing to do these jobs rather than stay in their country and do nothing (or worse) and 2) I don’t see you giving up your daily $7 Venti Caramel Macchiato in favor of subsidizing a migrant worker. On the off chance that you are doing that – my hat is certainly off to you, but good luck convincing the rest of the country to do the same. I’m not talking about fixing the entire world’s woes – I’m talking about how to handle the issue of border security and rampant illegal immigration in a way that intelligently and humanely provides a real solution to a very tough set of problems.

Anyway, that topic aside, the labor program would look very similar to the Citizenship track (penalties and all), with the exception of gaining permanent residence instead of Citizenship and the addition of the new migratory worker status. This migratory status would certainly need to be fleshed out quite a bit, but I think that is better left to a different post. Suffice it to say that I believe we can take great strides in securing this group of workers while still providing the labor required for industry and the job opportunity for those that elect to take it.

Phased Deportation – This option may be better termed Phased Voluntary Compliance. For those people who don’t wish to agree to the terms of either program above, there is always the option of leaving. The key is making sure that voluntary compliance is less painful than the pain of non-compliance. I believe that this can be done in two ways 1) providing harsh penalty for illegal status and 2) providing for compliance over time to limit the negative effects for the individuals as well as for the economy and society as a whole. Maybe it’s a year, maybe its two years – I don’t know – but I’m talking about a sensible line drawn in the sand for the good of all parties involved. I believe that we need to let go of the emotion, look at the reality and design a well thought out plan.

So, there you have it – a solid plan of action.

Now, notice that I didn’t focus much on how to secure our borders. Some say that a big wall, akin to the security wall in Israel, may be our best shot – they maintain that it will cost much less than appropriately staffing the border with enough patrol units. Maybe it’s a mixture of the two – there is still a lot of study that needs to be done. I honestly don’t think that is the issue though – the real issue is how society deals with this drastic change in policy. Once that is figured out, we can get on with the logistics of fixing the holes in our borders.

Conclusion

I believe that the negative effect of the mass deportation of illegal immigrants on our own nation, on those who are deported and on our relationship with their mother countries are too drastic to ignore. Similarly, leaving our borders (specifically our Mexican border) unsecured during a War on Terror simply isn’t an option.

The tiered plan that I have outlined above addresses many of the concerns voiced by both sides of this argument. It allows for legalization without direct amnesty, a revenue stream for offsetting the initial costs of the proposed changes and provides real options for people to choose their own future. At the same time, it avoids the negative impact to our society of forcefully removing literally millions of hard-working, largely compatible individuals that themselves perceive real benefit from living and working within our borders.

immigration, illegal immigration

Never let it be said that I don’t try to help my friends to left across the aisle…

If you consider yourself a liberal, or have ever uttered the words “the minimum wage should be increased because…”  then you should run, not walk, over to JaneGalt.Net and do a little reading.  Do you really want to help the poor?  For maximum relief, don’t be jaded by preconceived notions and read the analysis with an open mind.  Here’s a quick quote to let you see what’s in-store:

“We are finally starting to get a hazy idea about which poverty programmes solve more problems than they create. Given the huge questions about its effectiveness, and its obvious inferiority to programmes such as the EITC [earned income tax credit], it’s hard to understand why raising the minimum wage is even in the standard liberal policymaker’s toolbelt.”

I believe it to be a fair, all angles view of minimum-wage economics without a bias of trying to prove a point one way or the other.  Just a good discussion.  Disagree?  Let me know what you think… 

Now, if you’re conservative, don’t think I’m giving you a pass with no homework. :)  If you are ever asked about your opinion on the matter, you should be able to “defend the faith” with the best of them - get your ammo by clicking the link above.