Tuesday, July 21, 2015

Immigration - Obama's Got it Partially Right

Obama threw open the floodgates on our southern boarder and we've now packed in another 2.5 million immigrants. And at this point Liberal talking heads will gush about our efforts to care for them and Conservative media-types will be screaming about rounding them up and sending them back. But as is often the case, our Mindless Media (MM) is failing to show America the bigger picture - a picture that Obama has got partially correct.

America, like most Western nations, experienced a baby boom following WWII. These "boomers" are now at retirement age and leaving the workforce. Because the Boomers had sub-replacement birthrates, and because the Boomers politically stifled immigration, all the Western nations are facing economic shrinkage simply because there aren't enough workers to sustain the peak wrought by the Boomers.

America, unlike many nations, is an attractive place to live and prosper. We do a great job of selling the idea of the American Dream. So we have no problem  getting people to emigrate to here, and our population has shown growth, unlike other western nations who have shrunk. This growth is directly due to immigration.

Yes it is true that we don't get the "best and the brightest" from Mexico. I doubt there are many Einsteins coming across the border in old Chevy's. But it is easy to forget that America's greatness is much greater than the sum of technical achievements, after all, how many Einsteins did the Irish give us?

So Obama, unannounced, and unnoticed by the MM, has set about to fix a huge demographic disaster awaiting us. Funny, we've known this problem existed since back when Reagan was President, but we seem to have collectively forgotten about it. Whether it is the funding of Social Security, or the general size of our economy, or just our very attractive lifestyle  - it all depends on having enough people, enough workers. The West hasn't figured out how to raise productivity fast enough to offset the losses due to shrinking populations.

Reagan stabilized Social Security by raising the tax and delaying retirement age. But we all knew it was just a stop-gap measure. The crash of 2008 and the abysmal recovery afterwards, (lowest level of labor participation ever), has shown us that our massive economy can come crumbling down. The best solution to maintain the status quo is more people - but it is not a popular idea.

OK, so I'm giving Obama credit for solving a huge problem by basically flying under the radar of the MM. But what is Obama screwing up? I.e. like ObamaCare, which is a partial solution at best, what is Obama half-assing this time? Glad you asked. I think it can be summarized thusly:
  1. Massive displacement of American workers - the working poor are hammered by by the influx of low-skilled foreign workers. The computer technology industry is seeing a huge wage decline due the abuse of the H1B visa system. So the wages of entry-level jobs stagnate and the wages at the high-end are falling - all due to massive over-supply. And lest we forget, if some worker gets displaced by some kid from India, we end up supporting that worker - and that is not a "win" economically.
  2. The burden of divisiveness - our schools and public services are bear the burden of accommodating non-English speaking people. Politically the modern robber-barons take advantage of immigrants to build voting block power-bases, which is not the way to make people identify as "American".
  3. Geographical bias - most of our immigrants are from the failed politcal States of Mexico and Central America. Historically a low performing immigrant group. Not many lawyers, doctors, nuclear-rocket scientists come from second-generation Latino immigrants.
  4. Loss of Einstein leverage - we're making it increasingly difficult for the nuclear-rocket-scientists from countries with strong educational systems to emigrate to America. Partially because we still have in place heavy regulations for people who get here via plane, and partially because the influx of poor tarnishes the image of the American lifestyle.
 So just like Obama didn't address cost with ObamaCare, Obama isn't addressing the above issues either. This time I'd give him about a 30% , or F minus. Too bad the MM isn't smart enough to get engaged.

We need immigration, but we need it done right.

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