Tuesday, August 18, 2015

An Examination of Donald Trump's Immigration Reform Plan

By Robert Wenzel

Donald Trump is out with his immigration reform plan.

It is a shocking document filled with a nationalist theme, a genuflection to government power, cluelessness about basic economics and it, appears, even confusion about the U.S. Constitution.

From a libertarian perspective, the only objection to immigrants is that they are allowed to receive benefits from the U.S. government, in the end, at the expense of current U.S. taxpayers.

Trump recognizes this objection:
The costs for the United States have been extraordinary: U.S. taxpayers have been asked to pick up hundreds of billions in healthcare costs, housing costs, education costs, welfare costs, etc. Indeed, the annual cost of free tax credits alone paid to illegal immigrants quadrupled to $4.2 billion in 2011.
But this problem could be solved by simply preventing any immigrants, legal or otherwise, from being allowed such benefits. Beyond that immigrants should be free to work or visit, as long as they are prevented from the government handouts.

I have proposed, as Trump has, to end birthright citizenship. However, there is one problem with this for Trump that is not a problem for me. I am not a fan of the Constitution, but Trump is.

In fact, in his policy reform paper, he writes:
 A nation without laws is not a nation. Laws passed in accordance with our Constitutional system of government must be enforced.
 and
 America will only be great as long as America remains a nation of laws that lives according to the Constitution. No one is above the law. 
This is a problem for Trump because birthright citizenship is granted in the Constitution by way of the 14th Amendment:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.
Trump gives no indication in his reform plan that he is aware that the Constitution would have to be changed for his plan to end birthright citizenship.

Trump also calls for the defundimg of sanctuary cities. A libertarian can not object to the shrinkage of government by the shrinking of funding to cities,or anywhere else. But Trump is not calling for the defunding to shrink government, he is calling for it as a method for the federal government to influence and control cities. A truly horrific idea, from a libertarian perspective. The default view for libertarians on government is that control should be left at the smallest governing entity, certainly not at the Federal level. Here we begin to see Trump's adoration, and  belief in the use of Federal power. All men who desire to use such power should be feared.

From there, Trump only gets worse. He calls for nationwide E-verify.

It is not difficult to see that e-verify would be the first step toward the use of biometric identity system for all Americans. Alex Nowrasteh and Jim Harper write:
E-Verify is an intrusive labor-market regulation that places the onus of immigration law enforcement on American employers. E-Verify is expensive, and it has a startling degree of inaccuracy. It could exclude hundreds of thousands of Americans from employment—at least in the short run. E-Verify is also ineffective at preventing unauthorized immigrants from working in the United States, as the experience of Arizona with its E-Verify mandate shows. E-Verify does not lower wages for unauthorized immigrants enough to suppress unlawful immigration because the wage gap between the United States and other countries is too great. A national E-Verify mandate would not turn off the jobs magnet, but it would spur more unlawful immigrants to engage in identity theft and work under the table.
If E-Verify is mandated nationwide, worker and employer avoidance and noncompliance would cause supporters of interior enforcement of immigration law to seek harsher sanctions on businesses, more punitive measures for unauthorized workers, and a biometric identity system for all Americans—a step that must be avoided. E-Verify’s high costs and ineffectiveness at deterring unlawful immigration should disqualify it as a component of immigration reform.
Rather than being concerned about undocumented aliens, a libertarian president would call for the undocumentation of everyone. Government documentation is the tracking tool of the state. It is not surprising that Trump doesn't recognize the evil in the E-verify system. He clearly loves the state and simply believes that it must be run by someone who is smart and tough. He has in mind, of course, himself for the job.

Trump also calls for more government agents in the form of ICE officers:
Triple the number of ICE officers. As the President of the ICE Officers’ Council explained in Congressional testimony: “Only approximately 5,000 officers and agents within ICE perform the lion’s share of ICE’s immigration mission…Compare that to the Los Angeles Police Department at approximately 10,000 officers. Approximately 5,000 officers in ICE cover 50 states, Puerto Rico and Guam, and are attempting to enforce immigration law against 11 million illegal aliens already in the interior of the United States. Since 9-11, the U.S. Border Patrol has tripled in size, while ICE’s immigration enforcement arm, Enforcement and Removal Operations (ERO), has remained at relatively the same size.
Trump is not a man who is thinking about the shrinkage of government or the evils of government harassment of decent  hardworking people, who are in America, even though they were born elsewhere.

He is about power and control.

And he simply has no understanding on how free trade works or understanding of the law of comparative advantage, and he strikes an absurd, heavy-handed, nationalistic tone:
 Mexico continues to make billions on not only our bad trade deals but also relies heavily on the billions of dollars in remittances sent from illegal immigrants in the United States back to Mexico ($22 billion in 2013 alone).
In short, the Mexican government has taken the United States to the cleaners. They are responsible for this problem, and they must help pay to clean it up... 
Mexico must pay for the wall and, until they do, the United States will, among other things: impound all remittance payments derived from illegal wages; increase fees on all temporary visas issued to Mexican CEOs and diplomats (and if necessary cancel them); increase fees on all border crossing cards – of which we issue about 1 million to Mexican nationals each year (a major source of visa overstays); increase fees on all NAFTA worker visas from Mexico (another major source of overstays); and increase fees at ports of entry to the United States from Mexico [Tariffs and foreign aid cuts are also options].  We will not be taken advantage of anymore.
To be sure, NAFTA and other trade agreements are designed by the elite for the benefit of the elite, but the antidote to this is simply free trade, not greater barriers against trade and barriers against the free travel of individuals.

Somehow, Trump believes the black unemployment problem is the result of Mexican immigrants:
 Decades of disastrous trade deals and immigration policies have destroyed our middle class. Today, nearly 40% of black teenagers are unemployed. Nearly 30% of Hispanic teenagers are unemployed. For black Americans without high school diplomas, the bottom has fallen out: more than 70% were employed in 1960, compared to less than 40% in 2000.
As I have pointed out many times, markets clear, even the jobs market. The only time you have an oversupply of any good, in this case low-skilled workers, is when you have price controls which prevent a good being exchanged at the true market price.

The black unemployment problem has near zero to do with Mexicans. It has to do with minimum wage laws which prevent low skilled blacks from finding jobs.

Trump, remarkably, also argues against the H-1B visas. He writes:
Increase prevailing wage for H-1Bs. We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program's lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program. Mark Zuckerberg’s personal Senator, Marco Rubio, has a bill to triple H-1Bs that would decimate women and minorities.

Does Trump actually believe that there are qualified U.S. candidates for jobs that U.S. corporations are not hiring and instead are hiring overseas workers despite the bureaucratic headache involved in bringing an overseas worker into the U.S.? What would be the motivation for a U.S corporation to do this? This is a bizarre blind spot thinking by Trump.The only reason a U.S. corporation would be going through the H-1B process is because there are no comparable candidates available at the same wage in the U.S.

Bottom line: Trump's understanding of basic economic concepts appears extremely limited, but this does not stop him from proposing a broad swath of measures that include significant new intrusions by the state.  More than anything his policy proposal provides insight into the type of leader Trump would be, a man who is not afraid to increase the number of federal agents to enforce laws, a man unafraid to bully state and local governments that do not move in the direction he wants them to move in, a man not afraid to require more registration and tracking of U.S. citizens. Indeed, a very scary authoritarian. Most scary, it appears there is a segment of the masses that will enthusiastically endorse any Trump proposal. This is how the most dangerous leaders are born.

Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics

27 comments:

  1. Robert!

    I disagree with you on what is or isn't libertarian on imagration. I feel great if the state is spending money on people trying to better thier lives. But I imagine most of it is pure waste anyway and probably does more harm than good. Point is it's better spent on imagrants than Lockheed and Raytheon.

    Also from an economics stand point imagrants benefit us. See Scott Horton interview here. http://scotthorton.org/interviews/2015/07/29/72915-alex-nowrasteh/

    On Alex nowrasteh article here.
    http://www.cato.org/publications/working-paper/fiscal-impact-immigration

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  2. I have never even once seen Medicaid better someone's life, which is the sort of thing that is spent on immigrants. I have seen it end a few.

    It sure is better for Big Pharma and friends. How is that different than giving it to Lockheed Martin?

    I imagine immigrants also have access to housing subsidies...which just bids up the price for all the other poor people and benefits crony renters.

    There is no such thing as welfare helping poor people. It's always corporate welfare in drag, or a vote buying scheme, where the state chops off a leg and offers to give back a foot.

    If you read all of what Robert wrote, particularly the part about H-1Bs, it's very obvious he has nothing against immigration and everything against central planner scheming.

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    1. How is it diffrent than giving it to Lockheed martin? Is that a for real question?

      Obviously Lockheed makes weapons for the government to use blowing up innocent people around the world. So they steal your money to go violate the non aggression principle in the most egregious way. Then when the blow back occurs and terrorist attacks happen, the state enlarges further taking away more freedom.

      With it going to big pharma or healthcare or what ever, there isn't the egregious non aggression principle violation and the ripple effect of the state rachetting up in size is miniscule.

      Besides I quite clearly state I doubt the welfare is does any good and probably causes harm. My point was it kept it out of the hands of the merchants of death.

      Did you listen to the Scott Horton interview or read the article from Cato?

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    2. Medical care does enlarge the state. The state acts to make medical care more expensive upon which it needs more tax money and more control over the industry because it's unaffordable to people. Then the prices go higher and it becomes unaffordable to more people. The state grows again. Rinse. Repeat. That's been the history of its regulation and welfare programs in the industry over the last 100+ years.

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    3. Not nearly the rate of expansion due to war. Read some Robert Higgs. Or just look at a chart of government spending from 1900 thru 2015. Every major increase and we are talking hugespikes in spending coresponds with a war. Higgs coined the term rachet effect because the spending never goes back to levels before the war. Medical spending becoming a large burden is a recent event. The merchants of death have been at it far longer.

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  3. "The only reason a U.S. corporation would be going through the H-1B process is because there are no comparable candidates available at the same wage in the U.S."

    There are cases where there are currently American workers doing the jobs and then being laid off, but before being laid off they are having to train foreign workers to replace them. Disney for instance: http://www.nytimes.com/2015/06/17/us/in-turnabout-disney-cancels-tech-worker-layoffs.html?_r=0

    This article indicates that Disney seems to have suspended their worker replacement program, maybe because they were getting too much heat.

    But this is not an issue of not having available candidates to work. Disney was attempting to radically lower its labor costs.

    Why didn't Disney institute salary and wage cuts of its American workers? If American workers needed their jobs, I'm sure many would have agreed to the cuts.

    My understanding of the H-1B visa is that it locks foreign workers into the company. The worker cannot leave for a better offer elsewhere.

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  4. The Constitution would NOT need to be changed to end birthright citizenship in this manner. Please see, e.g., http://www.thenewamerican.com/usnews/constitution/item/7881-senators-vitter-and-paul-seek-closing-of-anchor-baby-loophole , http://www.thenewamerican.com/usnews/constitution/item/7884-arizona-attacks-birthright-citizenship , http://www.heritage.org/research/reports/2006/03/from-feudalism-to-consent-rethinking-birthright-citizenship , https://www.numbersusa.com/content/learn/issues/birthright-citizenship/born-usa-does-guarantee-citizenship.html -- Felix

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    1. Yes, brilliant. Destroy even further the clear language in the Constitution.

      What part of this are you having trouble comprehending:

      "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside."

      If you attempt to go around the Constitution when it suits you, others will be embolden to go around the Constitution when it suits them.

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    2. Great irony that the paleoconservative New American (who claims that they're the ones who truly support the Constitution) supports an action that the correctly accuse the left and neoconservatives do on a regular basis. Then again like the left and neocons it's ok as long as circumvention is done for an issue they support.

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    3. I have no trouble comprehending any part of the clause you cite, including the part that apparently you are completely ignoring (and/or hoping other will), namely ", and subject to the jurisdiction thereof,". Unlike some, I am not in any way attempting to go around or circumvent the Constitution. -- Felix

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    4. Your are either totally dysfunctional in the reading comprehension department or intentionally misleading.

      Here's the relevant part of the 14th Amendment on citizenship, if you get that citizenship isn't granted by birth in the US, you belong with the rest of the expanders of what the Constitution says:

      "Amendment XIV (1868)
      Section 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."

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    5. Since I trust readers of this blog possess both logic and knowledge of the English language, I would just recommend that they read my posts above, and the "responses" thereto

      Bonus: see how many of these items form Robert's great post here http://www.targetliberty.com/2015/02/the-30-most-common-ways-you-can-lose.html you can spot in the "arguments" by MalcomNYC

      -- Felix

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    6. I post the full applicable section of the 14th Amendment, unlike your taking these out of context. Oh Yeah that's a logical fallacy on my part

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  5. Anti-immigration policies and even deportation, can be viewed as a form of self-defense against theft via taxation. If the government doesn't want to stop taxation to support immigrants, the next line of defense for libertarians is to support anti-immigration policies. What sayeth you?

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    1. Thats askin to the support for drug tests for welfare recipients. It's mean to be a sugar coat for a larger problem. It's easier to attack the individual people than the system itself. The whole welfare system itself is theft

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    2. Individual people who support and empower the system must be attacked. What do you think 'the system' consists of?

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  6. to NY Cynic: You mentioned not attacking the immigrants. What if the immigrants vote and support welfare/socialism/theft for themselves?

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    1. You mean like how native conservatives and native liberals do?

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  7. I think Hoppe has made some very good libertarian arguments against immigration in relation to private property and cultural threats -- these go beyond subsides.

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    1. I respect Hoppe's position but at the end of the day I have the right to hire, fire, rent to as my right as a property owner. It's not my fault that fascists like Trump, populists like Lou Dobbs and conservatives like Pat Buchanan don't understand or refuse to utilize the market by doing business with someone else.

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    2. How the hell do you use the market to eliminate the subsidies illegal aliens are flooding to the USA in search of?. Ninety-three million jobless people want to understand your technique. Then maybe in 30 years they might have a chance at employment--other than flipping burgers with illegals. Your market, such as it is, has cleared them nicely.

      Anyone who cannot see the technique of destroying organized societies with low/no skilled immigrants is a world wide cancer perpetrated on every developed nation where rotten governments have been willing to throw their doors open by political fiat.

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    3. I'm sorry but I dont feel one bit sorry for those who use the "They took our jobs" argument, its nothing but an emotionally driven argument used by conservatives. There is nothing in the Constitution that entitles one to a job, if there is I would sure as hell would love to see it. For all of Trump's bluster he (along with many others) doesn't address problems such as minimum wage and the massive red tape that prevents employers from making their own employment practices.

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  8. Wenzel above uses a attack against the welfare state to attack immigration and while I agree with him that the welfare state should be obliterated (I assume we agree) -- I do see them as separate issues that interrelate only in the sense that most things do -- a proper attack would be on immigration as forced integration.

    I do not think Hoppe would disagree with you on your right to hire fire rent or do business with in general whom you please in the context you stated above.

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  9. Children born to illegal aliens are subject to the jurisdiction of their parents' home country, not the US. The 14th Amendment does not apply.

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  10. After regulatory burden the H1-B Visa program is a net savings for corporations. If it wasn't it would not exist. Not only are the costs of H1-B visa engineers less but they drive down the wages of everyone else. The savings is multiplied.

    When the executive decision is made to go H1-B Visa it's not because there is a unique talent to be had that only some foreign born individual has. It is because the executives see engineers as fungible human resources. Engineering is a field that very rarely richly rewards individual skill sets, talents, and abilities because of this mindset. It doesn't work at that human level. If it did there wouldn't be an H1-B visa program.

    If there were skills/talents/abilities they couldn't find in the domestic population it's because they won't pay enough. Raise the offer high enough and they'll find the people right here in the USA. We don't need an H1-B visa program for professional athletes or anything else except engineering and related fields. Why? There's not one needed for finance people on wall street or traders or anything else. There's no program for any field that requires the same or higher levels of skills, abilities, education, etc.

    In other fields companies raise the offers and the people are there. Nobody has to convince kids to be pro basketball players or compete for positions at Goldman Sachs. But for STEM there has to be all sorts of special programs to steer kids in that direction. When the reward is there people put their talents to use and develop the skills required. Companies don't want to pay engineers properly for the millions of dollars of return on their employement so we have H1-B. It's entirely about cost. Look at pro atheletes. Do the teams have to go overseas to find mass quanities of talent? No. They go overseas to pick up a few six sigma outliers and that's all. No other field has to have special dispensation to hire foreigners except for maybe picking crops. And what is it about picking crops that is a problem? The work is too difficult for the wages offered so americans go do something else.

    If we want to test if the H1B is really necesscary I propose a test. Raise the net cost of an H1B Visa engineer to that of an american engineering earning a gross salary of $200K/yr. If there is really talent they can't find in the USA they'll hire the H1B engineer at that cost. He'll return them multiples if not factors of ten of that employment cost if he's any good. At place like apple all he would need to do is save a few pennies on each iPhone with a clever design.

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