Former VP candidate Jack Kemp, who retired permanently from public life after questions arose about his dealings with traders tied to the UN Oil-for-Food scandal and who now has his own consulting firm, opines in a WSJ op/ed piece:
Rep. Tom Tancredo, running for president, is miffed at President Bush for trying to design comprehensive immigration-reform legislation. The president wants a guest-worker program that could help alleviate border problems in the Southwest.
It’s a tired bromide. Instead of having an incoming Hispanic underclass killing livestock and defiling ranches along the US-Mexico border, we should allow employers to sponsor third-world menials subsidized by the net taxpayer, spreading the externalities they bring (atavistic disease, increased pollution, poor educational performance, disproportionate welfare use, etc) across the entire country instead of just concentrating them in the Southwest.
In attacking Pat Buchanan for his criticism of the US-Japanese automobile relationship, he asserts the supremacy of the Reagan model. Ironically, it was President Reagan that signed the Voluntary Import Restraint Aggrement in 1981 that limited Japanese imports into the US. To get circumvent the obstacle, Toyota began constructing plants in the US. Apparently that strategy has long-term viability (Kemp, as a member of Toyota’s North American advisory board would know), as Toyota is aiming to have every car sold in the US also manufactured here. Buchanan laments America’s loss of manufacturing, and without Reagan’s acceptance, Japan might not have ever concluded that building in a costly labor market like the US made good business sense. This doesn’t strike me as the best example of protectionism gone wrong.
Finally, he champions job creation as indicative of the success of the Bush Administration’s economic policy:
Overall, since the 2001 recession, according to David Malpass of Bear Stearns, the U.S. economy has created 9.3 million jobs; Japan only 350,000.
A couple of important qualifications are necessary. For one, Japan’s total population is undergoing contraction. It was submerged below the replenishment rate decades ago, and now its absolute numbers have crept up to that precipice (there is a lag of several decades between fecundit changes and corresponding changes in the size of the total population; an illustration of why is here). Secondly, virtually all of those US jobs have gone to new foreign-born arrivals. These new workers make less than established citizens (who have seen their own earnings decline modestly due in part to an increased labor supply).
Fittingly, Kemp’s piece is targeted at Republican leaders. The former Secretary is admonishing GOP chieftans for shifting toward more populist positions. Yet he’s making the appeal in a newspaper that has relentlessly supported all the positions that have seen the Republican Party go from dominance at the decade’s opening to destitution today: The Iraq War and military interventionism in other places of questionable vital national importance, opposition to the federal minimum wage increase, chastising those suspicious of ‘PortGate‘, and support for unfettered open borders, to name a few. What the WSJ op/ed board has advocated has been scarcely short of suicidal for the GOP, yet still its writers wonders why Republicans are increasingly hesistant to follow its recommendations.
My take on free trade is that while specialization and competitive advantage maximize utility in a fanciful world, game theory and democracy work in concert against it. Even if everyone is better off in the long-run if no one cheats, there is always that temptation to do so to realize immediate gains (or in the case of one partner willfully accepting free imports into its own economy without demanding the same of the exporting economy, a sustained national advantage).
I see immigration and global competitiveness as intrinsically related. A state’s position is largely influenced by its human capital, a point that directly leads to questions of how to shape immigration policy to increase international competitiveness, since it is as much the innate abilities of the population as it is the educational system in place that determines the value of that capital.
Unregulated immigration into the US makes about as much competitive sense as the WSJ’s announcement that it will allow anyone who wants a job at the paper to come aboard. Plenty of people would like the opportunity, but that doesn’t mean that making their dreams a reaity is good for the paper.