Archive for February 2018

History Sure Does Repeat Itself

Who would have thought we would be replaying the 11th and 12th century investiture controversies a thousand years later in China:

Pope Francis has decided to accept the legitimacy of seven Catholic bishops appointed by the Chinese government, a concession that the Holy See hopes will lead Beijing to recognize the pope’s authority as head of the Catholic Church in China, according to a person familiar with the plan.

For years, the Vatican didn’t recognize their ordinations, which were done in defiance of the pope and considered illicit, part of a long-running standoff between the Catholic Church and China’s officially atheist Communist Party.

The pope will lift the excommunications of the seven bishops and recognize them as the leaders of their dioceses, according to the person familiar with the situation.

The Best Thing For Low-Skill Workers Would Be To Make It Enormously Profitable to Employ Them

I am constantly amazed how little people understand about economics and prosperity.  I have to give some background first.  Yesterday Mickey Kaus tweeted, "Isn't point of 'Americans are dreamers too' that there *are* zero-sum aspects: American lo-skill workers, who haven't done well for decades, have to compete for jobs/wages w/ DREAMers and (more important) new illegals a big DREAM amnesty will attract."

People talking about zero-sums in economics always get my hackles up, because they are frequently feared and seldom actually exist.  There is a lot of research that immigration does not reduced native-born unskilled employment, but it is impossible to discuss such things on Twitter without devolving into dueling appeals to authority.  Instead I wrote:

So what about a bipartisan compromise that increases immigration while simultaneously repealing labor regulations that make profitably employing low-skill workers difficult?

This was towards the end of my time on Twitter when I was mad that it was making me a worse person and I resolved to instead focus on trying to bridge differences.  But this proposal got a response I had not expected.

I am willing to believe I don't understand his point or Twitter is limiting his ability to explain himself, but this just seems really ignorant of how markets work.  How are jobs for low-skill workers going to exist if it is NOT profitable to employ them?

Here is how the world works:  Profits attract investment.  Profits are the fresh blood in the water that attracts sharks.   If I am making a good profit employing low-skill workers, then I am likely to reinvest those profits to grow and get more of those profits next year.  But even if I don't, at the same time other people will start to notice my profits and want to copy what I am doing.  Through all of this, we will all be hiring more and more unskilled workers.  None of this growth, none of this investment, none of this job creation happens without the profits.

This is why I have said for years that the greatest thing that could ever happen to low-skill workers in America is for entrepreneurs to find ways to make a fortune employing them.  I always get folks who consider this statement grossly exploitative, but it is the literal truth.  There are tons of well-paying jobs for programmers because a bunch of companies like Google are very visibly making a ton of money employing them.  Unfortunately, it is harder and harder to make the economics of a business that hires low-skill workers a success, something I know well because I run such a business.  The local, state and Federal governments are layering on more and more labor regulations that make it increasingly difficult to viably employ lower-skill workers.   I have a lot to say on this, and hopefully a paper I have written on the topic will soon be published and we can talk about it more.

Postscript:  Margaret Peters argues that one reason the Republican Party is more nativist is that the business sectors of the party that traditionally lobbied in support of immigration have reduced their support, at least for unskilled immigration, because they just don't have as much demand for unskilled labor any more.

As part of my research, I checked to see whether businesses are indeed lobbying less often on immigration. To find this out, I examined which groups testified before Congress on immigration, using that as one measure of lobbying.
Here's what I found. In the 1950s, on average, more than eight businesses used to testify before Congress at each hearing on immigration. By 2010, that number had dropped to two, as you can see in the figure below. The decline has been even steeper for industries that have been exposed to increased imports from foreign countries -- from eight businesses that produce goods that can be traded per hearing in the 1950s to less than one today.

Some industry groups have increased their lobbying for more immigration -- but those are in the tech sector and others that use high-skill labor. We should expect, then, that Trump will continue to push in his State of the Union address Tuesday for a "merit-based system" in which immigrants with high skills get priority.

In contrast, lobbying by nativist groups has hardly increased.

Google beats the doors down in DC lobbying for more immigration spots for programmers.  If someone were making good money hiring unskilled labor, they would be doing the same for unskilled immigration.

I Saw a Lot of Arguments Against Immigration on Twitter Yesterday, But Most of Them Are Poor

Against my recent personal resolutions, I spent the last 24 hours active on Twitter.  My memory of the platform turned out to be largely correct -- it took only a little while on Twitter before I became a worse person, abandoning rational argumentation in favor of clever "gotcha" zings at people whose minds aren't going to be changed anyway. So I am going to respond to some of the things I saw here on the blog, rather than on Twitter.

Much of the traffic in my feed, the day after the President's State of the Union speech, centered around immigration.  As many of you know, I grew up an immigration restrictionist, but morphed over time into a largely open immigration supporter because I simply cannot come up with a moral justification for a free society restricting anyone's freedom of movement and association.  I became convinced (more on this in a second) that not only did immigration restrictions limit the rights of those trying to immigrate, but despite being native born, they limited my property and association rights.

Yes I have concerns and I think there are some valid arguments out there.  It is, for example, really hard to square open immigration with our current definitions of citizenship and various government benefit programs.  In addition, I am frequently concerned that we libertarians are being suckers on immigration, justifying immigration on the grounds of individual liberty and then having waves of immigrants who vote for things that limit personal liberty.  I see that already with "immigrants" moving from California to Arizona, who leave California because of the effects of the crazy regulation regime there and then come to Arizona and vote for all the same crazy stuff that ruined California.

But I actually saw neither of these arguments made all day.  Instead, I saw one form or another of these four arguments:

1.  There are individual examples of immigrants who did bad things. Trump's invocation of the MS-13 gang certainly set the tone for this, but I saw it all day.   This is a classic Conservative civilization-barbarism argument and tends to have immense appeal in that community.  But here is what is funny to me.  Conservatives (rightly in my opinion) oppose using tail-of-the-distribution individual weather events to "prove" climate change.  But those same Conservatives sure like to use rare individual acts of criminal behavior to "prove" immigration is dangerous.  Tied in with this is an observer bias -- the media only presents us with the extreme examples.  When the media only puts the weather on the news when it is extreme, it leads to a false impression that the weather is becoming more extreme.  When Fox News fills the news with crimes committed by immigrants, rather than say crimes committed by natives or acts of kindness committed by immigrants, it leads to a false impression that immigrants are all criminal barbarians making us less safe.  Which leads to #2:

2.  Immigrant crime is 100% preventable because we could just have kept them out.  This is a variation of the Skittles immigration meme that went around before the election, asking if one would voluntarily eat from a bowl of 1000 Skittles if one knew 2 or 3 were poisonous.  An example I saw of this yesterday was this:

I suppose this is correct on its face.  Because in any group of 10,000 randomly-selected human beings some will be criminals, such that banning any group from the country would also ban some criminals.  But the problem is that you could make this argument for any group.  Heck, you could use this equally well as an advertisement for abortion, because every 10,000 births you prevent will likely eliminate some criminals.  Because this argument is equally valid for any group one might ban from the country, it is not a valid argument against immigration.  You still have to say why you want to pick on immigrants vs. some other group.  The first thing Conservatives would say is, "Because they are illegal!" and I will deal with the rule of law argument below in #4.  But the other thing they might say is that immigrants commit crimes at a higher rate than natives, an impression formed by wall-to-wall Fox News coverage over every alleged immigrant crime (see #1 above).  But this impression is simply not the case.  Study after study shows that immigrants commit crimes at a lower rate than native born Americans.  If you really care about crime, immigrants are the last group you want to send away.  Here is one such study from Cato, but there are many.

3.  You lock the front door of your house, don't you?  An example of this argument is here:

The first problem with this argument is that it is fundamentally socialist.  Only in a socialist country is the entire country one entire single block of property.

I really hate the house analogy but if you simply have to use it, then don't think of the country as a house, think of it as a giant apartment building with 100 million apartments.   Each apartment has its own door and then there is a door into the building itself.  When people talk about immigration restrictions, they are talking about limiting who I can and cannot buzz into the front door to come up and visit me.

Bad analogy?  Well, I wasn't the one who started the whole stupid building analogy. Anyway, the correct way to put it is that if I want to hire someone from Mexico in my business, and I want to rent that person a place to live on my property, why do you get to lock the door barring that person from doing these things with me?  That is why I said above that immigration restrictions don't just limit the rights of immigrants, they limit my association and property rights as a native-born American.  I can't hire anyone I want.  I can't have anyone I want come visit me.  I can't rent my property to anyone I like.  I can only do all those things with a person who has been licensed by the Federal government to be able to interact with me in this country.  And those licenses are very scarce and hard to get.

4.  They're illegal!

I will admit the rule of law argument is seductive, but I have a couple of thoughts on it.

First, do you file and pay state use tax whenever you buy things over the Internet that have not had sales tax applied?  Do you pay all the proper employment taxes for your household help, or if they are contractors, file 1090's for what you paid them each year?  Do you always stay under the speed limit and come to a full and complete stop at every red light and stop sign?  Do you always have your dog on a leash in public areas that require it?  If the answer is "no", then stop lecturing me on the rule of law.

I know that the answer to the queries above is typically that those things are all trivial sh*t compared to breaking immigration laws.  Hmm, maybe or maybe not -- they are all basically victim-less, often paperwork crimes.  But here is another way to think of it.  You are breaking the law for some trivial reason, because you want to get to work 30 seconds faster or can't be bothered with an hour of paperwork.  Illegal immigrants are often breaking the law for life and death reasons.  Which of you is more admirable?  More than anything else about the immigration system, I hate that it takes people with qualities we generally admire -- they are trying to improve themselves, trying to make a better life for their kids, trying to find better jobs and schools -- and we turn them into criminals.  Trump is right about one thing -- many of these countries have been turned into sh*tholes by their governments.  I would like to think that if I were born in one, I would be doing everything I could to get out, laws or no laws.

Finally, I would observe that the statement "I am not against immigration, just illegal immigration" is just a cover for most people who say it.  If that were really true, we could fix it in a second -- just make it legal.  But few on the Conservative side are suggesting any such thing.