Luke Ford

Steve Sailer wrote in 2006:

Speaker of the House Denny Hastert announced last Wednesday that, rather than send House negotiators into the proverbial smoke-filled room with Senators to come up with a “compromise” immigration bill, the House would hold hearings around the country to find out what the public actually thinks about the legislation that will decide the future of America.

Hastert`s declaration is perhaps the closest the American political system can come to the most stirring sentence in the lexicon of parliamentary politics: “We will go to the country”—which is what a party says when it calls a general election to decide a great issue of state.

But the immediate howls of pain showed once again that the last thing America`s elites want on immigration is citizen input and reasoned deliberation.

Instead, the national newspapers demanded a rush to judgment—because haste and heedlessness are the most likely ways they can get what they want.

A New York Times editorial scornfully denounced the House because “they want to take a closer look at the Senate bill”—which is 118,227 words long! The Newspaper of Record raged, “Like the baffled hominids of `2001: A Space Odyssey,` they are poking at the Senate`s big-picture approach with a leg bone.”

The Los Angeles Times editorial board sputtered, “These meetings are nonsense.”

The Wall Street Journal editorialistas hissed, “This is the equivalent of snake-handling.” (By the way, the most honest staffer at the WSJ editorial page is the anonymous person who selects the online reader responses to their editorials. All eleven comments he picked excoriate the WSJ`s open borders dogma. I hope my mentioning his fairness doesn`t cost him his job!)

In the Washington Post, Ruben Navarrette Jr. was in a snit that we weren`t going to see business as usual.

“Congress … is more broken than the U.S.-Mexican border… It`s unusual, to say the least, for one chamber to hold public hearings on the work of another. Besides, if you want to hold town hall-style meetings, why not hold them before bills are passed in the first place? Maybe because August is close enough to November so that hearings could affect the midterm elections.” [Congressional Immigration Stunts, June 25, 2006]

Imagine that—Members of the House trying to win votes by doing what the voters want!

The horror, the horror…!

Why has it become so rare for the majority party in the House to “go to the country” like this?

Over the decades, the technology behind partisan gerrymandering has improved so much that election to the House has become close to a lifetime sinecure—if the Congressman doesn`t blow it by taking the wrong stand on one of the rare issues that voters notice.

For example, that`s why Congress hasn`t carried out its Constitutional duty to declare war since 1942. It prefers to let the President take responsibility for deciding war or peace—because, otherwise, citizens might remember how their Representatives voted and throw them out.

Thus this year`s unusual show of backbone by House Republicans demonstrates just how exceptionally strong is public sentiment against the Senate immigration bill—despite those rigged polls constantly cited in the Establishment media.

The New York Times, in fact, just reported in Bush`s Immigration Plan Stalled as House G.O.P. Grew More Anxious that:

“Representative Thomas M. Reynolds of New York, the head of the Republican Congressional Campaign Committee, went to Mr. Boehner and Mr. Hastert and, using polling data and pointing to what he described as politically implausible sections of the bill, warned of the consequences of enactment of the Senate legislation… Mr. Reynolds had told House leaders that supporting the [Senate] bill would be `suicide for some of our members.`” [By Adam Nagourney, Carl Hulse and Jim Rutenberg, June 25, 2006]

Meanwhile, the Senate will try to strike back against the House. It plans to hold pro-illegal immigration hearings in some of the few states left, such as Pennsylvania, where there aren`t yet enough illegal immigrants to annoy the citizenry.

The San Francisco Chronicle says:

“Senate Judiciary Committee Chairman Arlen Specter, R-Pa., said he came up with the idea for Senate hearings in the shower Thursday morning. `They have hearings on border security and employment verification,` Specter said. `OK, that`s fine … I`m going to have a hearing in Pennsylvania on July 5 … bring in farmers and landscapers and people in the Northeast region as to the necessity of a guest worker program.`“[ Dueling immigration hearings split GOP, Carolyn Lochhead, June 23, 2006]

(This may be another misjudgment—the town Hazleton, PA is one of the national leaders in the use of local ordinances to repel illegals and Senator Rick Santorum has begun to campaign on the issue.)

The reality is that, as the distinguished economics analyst Robert Samuelson has pointed out, the prestige press was criminally negligent in failing to report that the Senate bill would vastly increase legal immigration.

Samuelson wrote in What You Don`t Know About the Immigration Bill back on May 31:

“One job of journalism is to inform the public about what our political leaders are doing. In this case, we failed. The Senate bill`s sponsors didn`t publicize its full impact on legal immigration, and we didn`t fill the void. It`s safe to say that few Americans know what the bill would do because no one has told them. Indeed, I suspect that many senators who voted for the legislation don`t have a clue as to the potential overall increase in immigration.”

As last week`s editorial reactions indicate, that irresponsibility wasn`t an accident. It was a key component of the Main Stream Media`s strategy for covering immigration.

Yet, what you aren`t supposed to know can hurt you … badly.

Let`s step back to put the immigration controversy in a new and broader historical perspective.

At the end of the Cold War, Francis Fukuyama announced that we had reached “The End of History.” Obviously, somebody forgot to send History the memo.

Yet, in the narrow Hegelian/Marxist sense in which Fukuyama used the term “History,” he was correct. The big controversy of the 20th Century—socialism vs. capitalism—was effectively over. Pure socialism was dead. Capitalism had survived, but not laissez-faire. From now on there would be markets, but with government interference.

Unfortunately, many commentators are still living in the past. They think basic ideology is still the big issue—the free market vs. socialism. Well, history hasn`t ended, but it has moved into a new stage. Regulated capitalism has won, so most of the political struggles in the future are not going to be about the old boldface big ideas like nationalizing the means of production, but about the fine print.

The politics of the present and future will revolve around various organized interests trying to put one over on the disorganized rest of us in the particulars of legislation.

Contra Fukuyama, there will never be a ceasefire in this struggle between the clever and the clueless. The Age of Ideology is over but the Age of the Fine Print is upon us.

For instance, back in 1996 when the California legislature unanimously deregulated the state`s electricity market, few in public life bothered to read the fine print because the ideological principle of deregulation seemed so historically inevitable at the time. Well, it turned out the devil was definitely in the details. The only people who mastered the minutiae were the traders at Enron and other such firms, who raped California out of billions.

A basic strategy for the crafty to make money is privatizing profits and socializing costs. To do this, they use tame politicians and journalists to help them hand their costs of doing business off to the public. (Economists, when they aren`t blinded by ideology, call these costs “externalities.”)

By importing “cheap labor,” employers shift major costs—such as medical care and policing—to you and me.

The Senate Sellout would further increase the burdens imposed on us.

And that`s why its supporters in the press don`t want us to worry our pretty little heads about what`s in those 118,227 words.

Harvard economist George J. Borjas writes:

A few days ago I was having a discussion about high-skill immigration with some people who should know better. It suddenly struck me that even though everyone favors more high-skill immigration, there is a lot of confusion about why one should be in favor of it.

Suppose all workers are alike. (This is not a trivial assumption, but the argument pretty much carries through if we allowed workers to be different; it’s just harder to explain. I’m also going to focus on the productivity effects of high-skill immigration and ignore the important fiscal impact on the welfare state).

In the textbook model of the labor market (read: supply and demand), immigrants enter the country, and the wage falls in the short run. It is this wage drop that generates the “immigration surplus”–the increase in the size of the economic pie accruing to natives. Over time, the economy adjusts–firms expand, for example–and the wage goes back to what it was in the pre-immigration era (assuming constant returns to scale), and the immigration surplus dwindles down to zero.

Note I said nothing about whether workers are low-skill or high-skill. Regardless, the wage of competing workers falls in the short run, the economy adjusts over time, the wage goes back to what it used to be, and the immigration surplus disappears.

In order for high-skill immigration to be beneficial in the long run, we need to deviate from this textbook model. The deviation that will do the trick is that high-skill immigrants generate “productivity spillovers.” In other words, “we” natives learn stuff from them, becoming more productive in the process. It is this rubbing off of what high-skill immigrants possess that makes high-skill immigration beneficial.

Is there evidence proving the existence of such spillovers? In some cases of high-skill immigration: Yes. In other cases: No. Over the next few posts, I will summarize what I think is the strongest evidence in favor of such spillovers, and why that evidence may not really say all that much about the impact of the type of high-skill immigration we have in mind when we talk about changes in immigration policy.

Harvard economist George J. Borjas writes:

I’ve been watching the civil war over immigration in the Republican party with ever-increasing interest. And let’s be honest–this really is a war for the soul of the party as there is almost nothing in common between some of the approaches that the candidates advocate. I’m sure that I’ll have much more to say as the year wears on. (Full disclosure: I am not affiliated with any political party).

Let me start by noting that I really liked this very insightful piece by John O’Sullivan. The article touches on how Donald Trump changed the dynamics of the immigration debate by emphasizing some of the losses from mass immigration. Inevitably, the discussion is leading to increased questioning of the parameters that should reflect the Republican Party’s immigration policy. O’Sullivan notes:

Globalization has struck the bourgeoisie. Increasing legal immigration levels and extra H1-B visas for occupations for skilled occupations mean that computer programmers are quite as likely as low-paid restaurant workers to see immigration as a threat to their jobs and pay levels. And they are more likely to be vocal about it…

One of the internal contradictions of Kemp-style ideological conservatism was the attempt to combine mass immigration with the scaling back of entitlement programs: Keeping wages down through immigrant competition is incompatible with moving away from state welfare entitlements to market provision…More widely, mass immigration builds up a large new constituency for state welfare programs of every kind. ​

As a New York Democrat once remarked, the Republicans have a choice: They can either change their policy on immigration or their policies on everything else. Trump stumbled on that insight earlier this year; it may have transformed American politics forever. Or not.

The high-skill workers who are adversely affected by immigration have become much more visible. I have always joked that the best way to ensure a real debate over immigration policy is to create a new type of visa, one that would let just 5,000 journalists enter the country each year. I predict that it would not be long before we saw hard-luck stories of the displaced workers in the front pages of the mainstream media and editorials calling for cutbacks in this very unfair program.

O’Sullivan also touches on the inherent contradiction between the Kemp-style immigration policy that has dominated Republican thought for many years–more is better!–and the welfare state. One often-heard justification for ignoring that contradiction is that “it’s better to build a wall around the welfare state than build a wall around the country.” My reaction to that statement has always been: Which parallel universe are these people living in?

(As an aside, I once had the privilege of sitting next to Jack Kemp on a bus ride in rural Mexico in the mid-1990s. This was shortly after the O.J. Simpson saga had begun. Kemp knew O.J. personally; they had played football together on the Buffalo Bills. Although I’m sure we talked about immigration during the ride, I have to admit that I have no recollection of whatever was said. I was much too fascinated by Kemp’s theory of what really happened in Brentwood the night that Nicole Brown Simpson and Ronald Goldman were murdered).

In related news, there’s this account in the New York Review of Books of how Denmark has reacted to the influx of refugees. It seems that, given the choice of which wall to build, they chose to build the one around the country.

UPDATE: And I ran into this excellent Peggy Noonan column shortly after my post went up. Noonan argues that much of what we are seeing is a reaction by people whose well being has been ignored for far too long.

If you are an unprotected American—one with limited resources and negligible access to power—you have absorbed some lessons from the past 20 years’ experience of illegal immigration. You know the Democrats won’t protect you and the Republicans won’t help you. Both parties refused to control the border…

Many Americans suffered from illegal immigration—its impact on labor markets, financial costs, crime, the sense that the rule of law was collapsing. But the protected did fine—more workers at lower wages. No effect of illegal immigration was likely to hurt them personally.

It was good for the protected. But the unprotected watched and saw. They realized the protected were not looking out for them, and they inferred that they were not looking out for the country, either…

Mr. Trump came from that.

A key theme of my forthcoming book, We Wanted Workers, is that the benefits and costs of mass immigration have not been shared equitably. And this very large redistribution of wealth–accruing to the protected and paid for by the unprotected–may explain why we are now at this strange point in political life.

Harvard economics professor George J. Borjas writes:

A couple of weeks ago I promised to summarize the evidence on whether high-skill immigration generates the productivity spillovers that would produce large economic gains for natives. I apologize for taking so long to get back to this discussion, but I have so many other projects on my plate these days that it’s hard to keep up.

By far the most convincing studies that attempt to document the existence of spillovers are those that look at natural experiments. In a series of important papers, Fabian Waldinger has looked at what happened in Nazi Germany after Hitler fired all the Jewish professors . In 1933, shortly after it took power, the Nazi regime passed the Law for the Restoration of the Professional Civil Service, which mandated that all civil servants who were not of Aryan descent be immediately dismissed. That meant that Jewish professors like John von Neumann, Richard Courant, and Albert Einstein were fired from their university posts. Many of these stellar scientists found jobs abroad, particularly in the United States.

In his 2010 JPE paper, Waldinger showed what happened to the productivity of the doctoral students stranded behind in German universities after their exceptional mentors were dismissed. The productivity of the students stranded behind in the departments most affected by the dismissals suffered. In his 2012 RESTUD follow-up paper, Waldinger looked at what happened to the productivity of the colleagues of the dismissed scientists. The surprising answer is: Not much.

Here is the trend in the productivity of the graduate students left behind:

And here’s the trend in the productivity of the colleagues left behind:

One lesson I draw is that supply shocks consisting of very high skill workers can certainly generate spillovers, but it seems that there has to be a close personal relationship between the migrants and the recipients of the spillover. There’s also a hint that those who compete for resources may not suffer all that much when their esteemed colleagues are no longer around.

Kirk Doran and I have published a series of papers that look at another natural experiment–the exodus of highly qualified Soviet mathematicians after the collapse of the Soviet Union. The New York Times published a report in 1990 detailing the conflicting forces that such a supply shock would generate: Beneficial productivity spillovers and additional job market competition:

[Harvard mathematician] Dr. Diaconis said he recently asked [Soviet mathematician] Dr. Reshetikhin for help with a problem that had stumped him for 20 years. “I had asked everyone in America who had any chance of knowing”…No one could help. But…Soviet scientists had done a lot of work on such problems. “It was a whole new world I had access to,” Dr. Diaconis said…

American scientists…are being peppered with letters and calls asking for invitations…”I have run across a number of very distinguished Soviet mathematicians who have come here as visitors and spend their time going around the country and looking for a job.”

Because of the long separation between Soviet and Western mathematicians, the two groups had essentially gone their own way during the 20th century, with the Soviets focusing more on “Soviet fields” like partial and ordinary differential equations, and Americans focusing more on “American fields” like statistics and operations research. Kirk Doran and I looked at the publication history of Americans who worked in “Soviet fields” and Americans who worked in “American fields” and found that the Americans who most competed with the Soviets experienced a decline in productivity after the supply shock. Here’s the graph from our 2012 QJE paper:

So what does the Soviet context teach us? Although a supply shock of several hundred exceptional mathematicians can generate spillovers, the law of diminishing returns might also kick in (as the busy job-seeking travelers in the New York Times story had suggested). And this additional competition for resources can offset and reverse whatever benefits the spillovers might have produced in the first place.

My take from all this is very simple: At least in the experimental context, the evidence that high-skill immigrants produce beneficial spillovers is most convincing when the immigrants that make up the supply shock are really, really high-skill; when the number of such exceptional immigrants is sufficiently small relative to the market; and when those immigrants directly interact with the potential recipients of the spillovers.

In a future post I will discuss what (if anything) we learn from the non-experimental evidence.

And in case the reader wants more information about these supply shocks: Here’s a very nice AER paper by Waldinger (with Petra Moeser and Alessandra Voena) looking at what happened after the fired Jewish professors reached the United States. And here’s a 2015 JOLE paper by Doran and I looking at the research agenda of American mathematicians after the Soviet supply shock. And here’s a just-published RESTAT paper looking at the productivity of the Soviets left behind.