Politics versus Policy in the New “Public Charge” Rules

On August 12, the Trump administration announced new rules for immigrants seeking permanent residence status (through issuance of a “green card”)  in the United States. Those rules apply a longstanding prohibition on immigrants likely to become “public charges” (that is, dependent on government benefits) to  applicants who have received certain of those government benefits — among them Medicaid, SNAP (“food stamps”), and housing assistance — for more than 12 months.

The politics of the move are obvious: Trump is throwing more red meat to his anti-immigration “base.” The new rules are of a piece with his border wall project and high-profile ICE raids on workplaces where undocumented immigrants are employed. They’re not intended to solve a problem. They’re intended to keep his voters enthused as the 2020 election cycle heats up.

As actual policy, who can really complain? Well, some people can and will. But if the US government is going to regulate immigration at all (I don’t believe that it should, and the Constitution says it can’t), “pay your own way or go away” doesn’t sound like an unreasonable rule.

Interestingly, though, the policy conflicts with the politics. It discourages the “legal” immigration most Trump voters claim to be fine with, and encourages the “illegal” immigration he campaigned on a promise of “fixing.”

Suppose you are a would-be immigrant to the United States.

You can “get in line,” fill out forms, show up for meetings, submit to questioning, bust your hump meeting various requirements, and still find yourself turned away (or sent back) for any number of reasons.

Or you can walk across the border in the middle of the night and go to work, with a much lower chance of being found out, and sent back, than if you interacted with US immigration authorities.

Adding to the burden of the first approach doesn’t mean fewer immigrants. It just means that more immigrants will take the second approach.

Is that the outcome you signed up for, Trump voters?

Anti-immigration agitators fondly quote economist Milton Friedman: “[I]t is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both.” The rule change is a sop to that sentiment. But it leaves out another thing Friedman said about what happens when we try to have both:

“Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as it’s illegal.”

If Americans want fewer “public charges,” the solution isn’t to single out immigrants for exclusion from government welfare benefits. It’s to eliminate, or at least drastically reduce and toughen  eligibility requirements for, those welfare benefits. For everyone, not just for people who happen to  hail from the “wrong” side of an imaginary line on the ground.

Two evils — immigration authoritarianism and welfare statism — do not add up to one good. We should ditch both.

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Reflections from Spain

I just got back from a five-week visit to Spain.  The first four weeks, I was teaching labor economics at Universidad Francisco Marroquín while my sons took Spanish-language classes on Islamism, Self-Government, and the Philosophy of Hayek.  Then we rented a van and saw Cordoba, Seville, Gibraltar, Fuengirola, Granada, and Cuenca.  During my stay, I also spoke to the Instituto von Mises in Barcelona, Effective Altruism Madrid, the Rafael del Pino Foundation, and the Juan de Mariana Institute.  I had ample time to share ideas with UFM Madrid Director Gonzalo Melián, UFM professor Eduardo Fernández, Juan Pina and Roxana Niculu of the Fundación para el Avance de la Libertad, and my Facebook friend Scott McLain.  Using my sons as interpreters, I also conversed with about 25 Uber drivers.  Hardly a scientific sample, but here are my reflections on the experience.

1. Overall, Spain was richer and more functional than I expected.  The grocery stores are very well-stocked; the worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway.  Restaurants are cheap, even in the tourist areas.  Almost all workers I encountered did their jobs with a friendly and professional attitude.  There is near-zero violent crime, though many locals warned us about pickpockets.

2. The biggest surprise was the low level of English knowledge of the population.  Even in tourist areas, most people spoke virtually no English.  Without my sons, I would have been reduced to pantomiming (or Google translate) many times a day.  Movie theaters were nevertheless full of undubbed Hollywood movies, and signs in (broken) English were omnipresent.

3. I wasn’t surprised by the high level of immigration, but I was shocked by its distribution.  While there are many migrants from Spanish America, no single country has sent more than 15% of Spain’s migrantsThe biggest source country, to my surprise, is Romania; my wife chatted with fellow Romanians on a near-daily basis.  I was puzzled until a Romanian Uber driver told me that a Romanian can attain near-fluent Spanish in 3-4 months.  Morocco comes in at #2, but Muslims are less visible in Madrid than in any other European capital I’ve visited.

4. 75% of our Uber drivers were immigrants, so we heard many tales of the immigrant experience.  Romanians aside, we had drivers from Venezuela, Peru, Ecuador, Colombia, and Pakistan.  Even the Pakistanis seemed highly assimilated and almost overjoyed to reside in Spain.  By the way, Uber in Spain works even better than in the U.S.  The median wait time was 3 minutes, and the prices were about one-third less than in the U.S.

5. Refugees from Chavismo were prominent and vocal.  One Venezuelan Uber driver was vocally pro-Trump.  You might credit Trump’s opposition to Maduro, but the driver said she liked him because “He doesn’t talk like a regular politician.”  I wanted to ask, “Couldn’t you say the same about Chavez and Maduro?!” but I was in listening mode.

6. I’ve long been dumbfounded by Spain’s high unemployment rate, which peaked at around 27% during the Great Recession and currently stands at about 15%.  Could labor market regulation really be so much worse in Spain than in France or Italy?  My chats with local economists – and observation of the labor market – confirmed my skepticism.  According to these sources, a lot of officially “unemployed” workers are lying to collect unemployment insurance while they work in the black market.  Immigrants reported little trouble finding work, though they did gravitate toward “New Economy” jobs like Uber driving.  I still think that Spanish unemployment is a tragic problem, especially for the young.  Yet properly measured, finding a job in Spain is plausibly easier than finding a job in France or Italy.  (This obviously raises the question, “To what extent is unemployment in France and Italy inflated in the same way?”  If you know of good sources, please share in the comments).

7. If I didn’t know the history of the Spanish Civil War, I never would have guessed that Spain ever had a militant labor movement.  Tipping was even rarer than in France, but sincere devotion to customer service seems higher than in the U.S.  Perhaps my sons charmed them with their high-brow Spanish, but I doubt that explains more than a small share of what I saw.  A rental car worker apologized for charging me for returning my car with a 95% full tank, adding, “Sorry, but my boss will yell at me if I don’t.”

8. Catalan independence is a weighty issue for both Barcelona and Madrid libertarians.  Madrid libertarians say that an independent Catalonia would be very socialist; Barcelona libertarians say the opposite.  I found the madrileños slightly more compelling here, but thought both groups were wasting time on this distraction.  Libertarians around the world should downplay identity and focus on the policy trinity of deregulating immigration, employment, and housing.  (Plus austerity, of course).

9. UFM Madrid Director Gonzalo Melián was originally an architect.  We discussed Spanish housing regulation at length, and I walked away thinking that Spain is strangling construction about as severely as the U.S. does.

10. Spanish housing regulation is especially crazy, however, because the country is unbelievably empty.  You can see vast unused lands even ten miles from Madrid.  The train trip to Barcelona passes through hundreds of miles of desert.  Yes, the U.S. has even lower population density, but Spain is empty even in regions where many millions of people would plausibly like to live.

11. The quickest way to explain Spain to an American: Spain is the California of Europe.  I grew up in Los Angeles, and often found myself looking around and thinking, “This could easily be California.”  The parallel is most obvious for geography – the deserts, the mountains, the coasts.  But it’s also true architecturally; the typical building in Madrid looks like it was built in California in 1975.  And at least in summer, the climates of Spain and California match closely.  Spain’s left-wing politics would also resonate with Californians, but Spain doesn’t seem so leftist by European standards.  Indeed, Spaniards often told me that their parents remain staunch Franco supporters.

12. My biggest epiphany: Spain has more to gain from immigration than virtually any other country on Earth.  There are almost 500 million native Spanish speakers on Earth – and only 47 million people in Spain.  (Never mind all those non-Spanish speakers who can acquire fluency in less than a year!)  Nearly all of these Spanish speakers live in countries that are markedly poorer and more dangerous than Spain, so vast numbers would love to migrate.  And due to the low linguistic and cultural barriers, the migrants are ready to hit the ground running.  You can already see migration-fueled growth all over Spain, but that’s only a small fraction of Spain’s potential.

13. Won’t these migrants vote to ruin Spain?  I don’t see the slightest hint of this.  Migrants come to work, not to change Spain.  And it’s far from clear that natives’ political views are better than migrants’.  Podemos, the left-wing populist party, doesn’t particularly appeal to immigrant voters.  Vox, the right-wing populist party, seems to want more immigration from Spanish America, though they naturally want to slash Muslim immigration.

14. How can immigration to Spain be such a free lunch?  Simple: Expanding a well-functioning economy is far easier than fixing a poorly-functioning economy. The Romanian economy, for example, has low productivity.  Romanian people, however, produce far more in Spain than at home.  Give them four months to learn the language, and they’re ready to roll.

15. According to my sources, Spain’s immigration laws willfully defy this economic logic.  When illegal migrants register with the government, they immediately become eligible for many government benefits.  Before migrants can legally work, however, they must wait three years.  Unsurprisingly, then, you see many people who look like illegal immigrants working informally on the streets, peddling bottled water, sunglasses, purses, and the like.  I met one family that was sponsoring Venezuelan refugees.  Without their sponsorship, the refugees would basically be held as prisoners in a government camp – or even get deported to Venezuela.  Why not flip these policies, so migrants can work immediately, but wait three years to become eligible for government benefits?  Who really thinks that people have a right to the labor of others, but no right to labor themselves?

16. Our favorite day was actually spent in Gibraltar.  Highly recommended; you simply cannot overrate the apes.  I was astounded to learn that the border with Spain was totally closed until 1982, and only normalized in 1985.  In a rare triumph of the self-interested voter hypothesis, 96% of Gibraltarians voted against Brexit.  Crossing the border is already kind of a pain; pedestrians have to go through (cursory) Spanish and British passport checks both ways, and the car line is supposed to take an hour.  I’d hate to be living in Gibraltar if security gets any tighter.

17. Big question: Why is Spain so much richer now than almost any country in Spanish America?  Before you answer with great confidence, ponder this: According to Angus Maddison’s data on per-capita GDP in 1950, Spain was poorer than Argentina, Chile, Mexico, Peru, Uruguay, and Venezuela, and roughly equal to Colombia, Bolivia, Costa Rica, Cuba, Ecuador, Guatemala, and Panama.  This is 11 years after the end of the Spanish Civil War, and Spain of course stayed out of World War II.

18. Related observation: Once you’ve seen Spain, the idea that underdevelopment and oppression are somehow “intrinsic to Islam” is ridiculous.  The monuments of eight centuries of Muslim civilization in Spain are all around you.  So are basic facts like: Muslim Cordoba was once the largest city in Europe – and plausibly the most tolerant as well.  While bad outcomes are somewhat persistent, dramatic turnarounds are also common.

19. Another example: In less than a century, Spain has gone from being a battleground between reactionary Catholicism and violent atheism to a land of extreme religious apathy.  Non-practicing Catholics now outnumber practicing Catholics 2:1.

20. After I visit a new country, Tyler Cowen always asks me, “Are you long or short?”  In terms of potential, I’m very long on Spain.  The trinity of “deregulate immigration, employment, and housing” is vital in almost every country, but this formula would do more for Spain than nearly any other country.  Wise policy would make Spain the biggest economy in Europe in twenty years flat.  Unfortunately, these policies are highly unlikely to be adopted anytime soon, so my actual forecast is only moderately positive.  At this point, I can picture Tyler aphorizing, “The very fact that a country has massive unrealized potential is a reason to be pessimistic about its future.”  But this goes too far.  All else equal, a higher upper bound is clearly a reason for optimism – and by European standards, the Spanish economy is now doing very well.

21. Overall, my visit has made me more optimistic about Spain.  Much of the measured unemployment is illusory, and immigrants are pouring in to profit from Spain’s combination of high productivity and linguistic accessibility.  Housing policy remains bad.  Since housing regulation is decentralized, however, some regions of Spain will be atypically tolerant of new construction.  Where is the Texas of Spain?  I don’t know, but that’s where the future is.

Correction: I originally stated that Spain had lower population density than the contiguous U.S., but I was mixing up population per square mile and population per square kilometer.

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The Broader Effects of Trade and Tech

Quite a few people consciously favor “free markets, but not free migration.”  When questioned, many explain that unlike free markets in goods, free markets in labor have “broad social effects.”  At this point, I have to suppress my urge to exclaim, “Are you out of your minds?”  They’re right, of course, that free migration has broad social effects.  They’re crazy, however, to imagine that free markets in goods lack these effects.  Indeed, at least within the observed range, ordinary market forces have changed society far more than immigration.

Start with international trade.  If the U.S. were a closed economy, manufacturing would still have shrunk, but it would remain a major source of employment.  The Rust Belt would be doing far better – and less eager for a populist political savior.  Opioid and alcohol use among the working class would likely be considerably lower.  Families would be more stable.  College attendance and the college premium would have risen more modestly.  More speculatively, church attendance would be higher, and nerd culture less dominant.

The broader effects of international trade are however dwarfed by the broader effects of all the technological progress that market forces unleash.  I remember life before the Internet.  When I was a teenager, I was almost completely intellectually isolated.  Overcoming boredom was a constant challenge.  There were no cyberbullies; we had real bullies instead.  When I wanted to publicly speak my mind, I wrote letters to the newspaper.  I had zero friends outside the U.S.  My parents and I were routinely out of contact for hours at a time.  I still feel young, but I remember a world that most EconLog readers would find primitive.

Nor is the Internet an isolated example.  The automobile has broad social effects.  So did household appliances.  So did modern contraception.  Obviously.

The pro-market, anti-migration thinkers could demur, “Yes, we all know that.  Our real complaint is that the broader effects of immigration are generally bad, while the broader effects of international trade and technological progress are generally good.”  But if that’s the real complaint, I say we’re entitled to a careful accounting of these broader social effects.  Who has even bothered to compile lists of these broader effects, much less try to measure them?

If no one is doing the math, why would anyone think that broad social changes are benign?  By the power of hindsight bias!  Once a major social change happens, people just get used to it, with little doubt about whether the change was in fact a net positive.

Immigration is, of course, the main exception.  We can’t imagine going back to a world without the Internet, automobiles, or contraception.  It doesn’t ultimately matter whether their broad social effects are good or bad; we just have to live them them, because turning back the clock would require draconian tyranny.  We can, however, imagine going back to a world with near-zero immigration, so fretting about the broader effects of immigration has great appeal.  Wouldn’t that require draconian tyranny, too?  Well, since the victims aren’t fellow citizens, no.

My personal view is that the broad social effects of international trade, technological progress, and immigration are all, on balance, positive.  For immigration, I’ve done my homework; for trade and tech, however, I’m only guessing.  What’s clear, however, is that broader social effects are ubiquitous.  Selectively invoking “broader effects” may be rhetorically effective, but it does not make you wise.

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Photo ID is Obsolete and Unnecessary. Facial Recognition Technology Makes it Dangerous.

In mid-May, San Francisco, California became the first American city to ban use of facial recognition surveillance technology by its police department and other city agencies. That’s a wise and ethical policy, as a July 7 piece at the Washington Post proves.

Citing documents gathered by Georgetown Law researchers, the Post reports that at least two federal agencies, the Federal Bureau of Investigation and Immigration and Customs Enforcement, have — for years — mined state photo ID databases to populate their own facial recognition databases.

To put a finer point on it, those agencies have been conducting warrantless searches, seizing private biometric data on the entire population of the United States, most of whom are neither charged with, nor suspected of committing, a crime.

They’ve conducted these fishing expeditions not just without warrants, but absent even the fig leaf of legislation from Congress or state legislatures to lend supposed legitimacy to the programs.

The Post story, intentionally or not, makes it clear that Congress must follow San Francisco’s example and ban use of facial recognition technology, as well as repeal its national photo ID (“REAL ID”) scheme, and require federal agencies to delete their facial recognition databases. The states should either lead the way or follow suit by doing away with government-issued photo identification altogether.

Photo ID has always been marginally useful at best. Anyone who’s ever worked at a bar or liquor store knows that it’s unreliable on a visual check — and that its uses have been stretched far beyond its supposed purposes.

The most common form of photo ID is the driver’s license. States imposed their licensing schemes on a seemingly justifiable pretext: A driver’s license proves that the driver whose photograph appears on it has taken and passed a test demonstrating safety and proficiency behind the wheel.

There are ways to do that without a photo.  Three that come to mind are a fingerprint, a digitized summary of an iris scan, or a similar summary of a DNA scan.

Yes, those methods are more expensive and impose a slightly higher burden on law enforcement in identifying a driver who’s been pulled over or arrested (and on anyone else who wants to confirm an individual’s identity). But they’re also far more reliable and less easily used in pulling police-state type abuses like those described in the Post story. They can’t be used for easy warrantless searches via distant cameras.

In recent decades, and especially since 9/11, the conversation over personal privacy has revolved around how much of that privacy “must” be sacrificed to make law enforcement’s job easier.

The answer to that question is “none.”

It’s not an American’s job to make law enforcement’s job easier. It’s law enforcement’s job to respect that American’s rights.

Since law enforcement has continuously  proven itself both unwilling and untrustworthy on that count, we need to deprive it of tools that enable that unwillingness and untrustworthiness.

Photo ID is obsolete and unnecessary. Facial recognition technology makes it dangerous. Let’s take those tools away from their abusers.

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Why is Immigration a “Contentious Issue in Classical Liberalism”?

“Contentious Issues in Classical Liberalism” was the theme of this year’s Mont Pelerin Society.  This gave me a chance to explore a major puzzle: Sociologically, immigration clearly deserves to be on the agenda.  After all, many people otherwise sympathetic to human freedom and free markets support even more immigration restrictions than we already have.  Intellectually, however, it’s hard to see why.

The plot thickens when you notice that pro-freedom immigration skeptics routinely use arguments that almost never use in any other context, starting with:

1. Collective ownership.  Yes, if countries are the collective property of their citizens, then they have a right to regulate immigration.  But this also implies nations’ right to regulate everything else, too!  You can’t live on my land without my consent, but neither can you open a store on my land without my consent, or even hire someone to work on my land for less than the minimum wage without my consent.

2. Collective guilt.  Yes, if e.g. foreign Muslims are collectively guilty for whatever wrongs foreign Muslims have done in the past, then immigration restrictions against Muslims would be justified.  But this also implies that other people can legitimately hold us collectively guilty for whatever wrongs “we’ve” done in the past.  So affirmative action, reparations for slavery and colonialism, returning land to American Indians, and much more are suddenly on the agenda.

3. Shocking anecdotes.  Yes, if we ought to take shocking anecdotes seriously, then any awful immigrant action on CNN justifies a major policy response.  But this also implies that shocking anecdotes about poverty, health care, worker safety, and the environment on CNN also justify major policy responses.

4. Popular support.  Yes, if “This is what citizens want, and they’re entitled to get their way,” then immigration restrictions easily pass muster.  But so do virtually all the policies classical liberals traditionally oppose, starting with protectionism and a bunch of price controls.

Unless you’re going to abandon the whole classical liberal framework, basic intellectual hygiene requires you to excise any argument along these lines.  What remains?  Only arguments claiming that the consequences of immigration are awful enough to overcome the standard classical liberal presumption against government action.

How does that approach fare?  See my full presentation to find out.  Bonus: A bunch of Zach Weinersmith cartoons!

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Donald Trump, Socialist

“Tonight, we renew our resolve that America will never be a socialist country,” US president Donald Trump announced in his State of the Union address in February.  His base, as he had hoped, cheered him on in setting himself up as foil to Bernie Sanders and Alexandria Ocasio-Cortez.

In the three months since, though, Trump has doubled down on his own socialist policy proposals. On trade and immigration, he’s 21st-century America’s most strident — or most empowered, anyway — advocate of an indispensable tenet of state socialism: Central planning of the economy by the government.

Trump wants the government to control what you buy and who you buy it from. Thus, his “trade wars” with Canada, Mexico, the European Union, and China, powered by tariffs intended to advantage “Made in America” goods (and their politically connected makers) over others.

Now he’s announced a plan for “merit-based” government control of immigration under which bureaucrats in Washington decide how many, and which, immigrants the American economy “needs,” instead of leaving such decisions to markets and individuals.

In the past I’ve bemoaned the fact that “socialism” has come to mean such different things to so many different people. From its 19th century definition of  “worker ownership of the means of production,” it’s been continually re-defined to characterize everything from Marxist-Leninist totalitarianism to a more all-embracing “democratic socialist” welfare state powered by heavy taxation on “the rich.”

That’s a pretty broad net. But except among anarchist socialists, state control of the economy is the axis on which all versions of socialism turn, and Trump is clearly all-in on the idea.

He even lends a socialist cast to the  excuses he makes for his economic policies. He continually positions himself as protecting workers from the “dog-eat-dog” competition of capitalism (while avoiding using that word negatively). By adding an emphasis on political borders to those excuses, he changes the discussion from “labor versus capital” to “American labor versus foreign capital.”

That approach is nothing new. See Stalin’s “socialism in one country,” for example, or the marriage between central economic planning and nationalism characterizing the fascism of Mussolini and Hitler.

America’s Republican president campaigns against socialism while attempting to implement it. Meanwhile, America’s progressives  campaign for socialism while attempting to thwart actual worker ownership of the means of production (e.g. the “gig economy”). Talk about cognitive dissonance!

Notice what’s missing from the discussion on both major “sides”: Freedom.

Freedom to move within and across political borders.

Freedom to trade within and across political borders.

Freedom to plan our own lives and live them instead of turning that power, and that responsibility, over to the state.

Neither major political party even convincingly pretends to care about those fundamental human rights anymore.

The entire public discussion revolves around what the politicians should “allow” or “forbid” the rest of us to do next, based on an unquestioning assumption of their moral authority to make such decisions for us.

Unless we break that cycle, we’re on our way into the next Dark Age.

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