Archives: August, 2009

Have Mexican Dishwashers Brought California to Its Knees?

By
Daniel Griswold

workerAn article published this week by National Review magazine blames the many problems of California on—take a guess—high taxes, over-regulation of business, runaway state spending, an expansive welfare state? Try none of the above. The article, by Alex Alexiev of the Hudson Institute, puts the blame on the backs of low-skilled, illegal immigrants from Mexico and the federal government for not keeping them out.

Titled “Catching Up to Mexico: Illegal immigration is depleting California’s human capital and ravaging its economy,” the article endorses high-skilled immigration to the state while rejecting the influx of “the poorly educated, the unskilled, and the illiterate” immigrants that enter illegally from Mexico and elsewhere in Latin America.

Before swallowing the article’s thesis, consider two thoughts:

One, if low-skilled, illegal immigration is the single greatest cause of California’s woes, how does the author explain the relative success of Texas? As a survey in the July 11 issue of The Economist magazine explained, smaller-government Texas has avoided many of the problems of California while outperforming most of the rest of the country in job creation and economic growth. And Texas has managed to do this with an illegal immigrant population that rivals California’s as a share of its population.

Two, low-skilled immigrants actually enhance the human capital of native-born Americans by allowing us to move up the occupational ladder to jobs that are more productive and better paying. In a new study from the Cato Institute, titled “Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform,” this phenomenon is called the “occupational mix effect” and it translates into tens of billions of dollars of benefits to U.S. households.

Our new study, authored by economists Peter Dixon and Maureen Rimmer, found that legalization of low-skilled immigration would boost the incomes of American households by $180 billion, while further restricting such immigration would reduce the incomes of U.S. families by $80 billion.

That is a quarter of a trillion dollar difference between following the policy advice of National Review and that of the Cato Institute. Last time I checked, that is still real money, even in Washington.

Topics: 
Trade and Immigration

35,000 Earmark Requests — Just 50 Reps to Go

By
Jim Harper

WashingtonWatch.com’s project to collect congressional earmark data continues to make great strides. Over 35,000 earmark requests are in the database, and fewer than 50 representatives remain on the “wanted” list.

It’s not all good news. Even some appropriations committee members published their earmark disclosures as scanned PDFs. That’s transparency in name, but not in spirit. Cato’s December policy forum on government transparency was titled “Just Give Us the Data!”, and scanned PDFs are not data … .

On the WashingtonWatch.com earmarks home page, the earmark requests collected so far are mapped by state and sortable by member of Congress and senator. Visitors can vote and comment on earmark requests, or edit a wiki article about requests, adding personal knowledge about projects they are familiar with.

Topics: 
Government and Politics, Telecom, Internet & Information Policy

Argentina Decriminalizes Personal Drug Consumption

By
Juan Carlos Hidalgo

Following in Mexico’s footsteps last week, the Supreme Court of Argentina has unanimously ruled today on decriminalizing the possession of drugs for personal consumption.

For those who might be concerned with the idea of an “activist judiciary,” the Court’s decision was based on a case brought by a 19 year-old who was arrested in the street for possession of two grams of marijuana. He was convicted and sentenced to a month and a half in prison, but challenged the constitutionality of the drug law based on Article 19 of the Argentine Constitution:

The private actions of men which in no way offend public order or morality, nor injure a third party, are only reserved to God and are exempted from the authority of judges. No inhabitant of the Nation shall be obliged to perform what the law does not demand nor deprived of what it does not prohibit.

Today, the Supreme Court ruled that personal drug consumption is covered by that privacy clause stipulated in Article 19 of the Constitution since it doesn’t affect third parties. Questions still remain, though, on the extent of the ruling. However, the government of President Cristina Fernández has fully endorsed the Court’s decision and has vowed to promptly submit a bill to Congress that would define the details of the decriminalization policies.

According to some reports, Brazil and Ecuador are considering similar steps. They would be wise to follow suit.

Topics: 
International Economics and Development, Law and Civil Liberties

Embracing Bushonomics, Obama Re-appoints Bernanke

By
Mark A. Calabria

bernanke1In re-appointing Bernanke to another four year term as Fed chairman, President Obama completes his embrace of bailouts, easy money and deficits as the defining characteristics of his economic agenda.

Bernanke, along with Secretary Geithner (then New York Fed president) were the prime movers behind the bailouts of AIG and Bear Stearns. Rather than “saving capitalism,” these bailouts only spread panic at considerable cost to the taxpayer. As evidenced in his “financial reform” proposal, Obama does not see bailouts as the problem, but instead believes an expanded Fed is the solution to all that is wrong with the financial sector. Bernanke also played a central role as the Fed governor most in favor of easy money in the aftermath of the dot-com bubble – a policy that directly contributed to the housing bubble. And rather than take steps to offset the “global savings glut” forcing down rates, Bernanke used it as a rationale for inaction.

Perhaps worse than Bush and Obama’s rewarding of failure in the private sector via bailouts is the continued rewarding of failure in the public sector. The actors at institutions such as the Federal Reserve bear considerable responsibility for the current state of the economy. Re-appointing Bernanke sends the worst possible message to both the American public and to government in general: not only will failure be tolerated, it will be rewarded.

Topics: 
Finance, Banking & Monetary Policy

The Cost of Getting Out of Iraq

By
Doug Bandow

Getting into Iraq was easy.  Fighting the war was expensive in lives and money.  Getting out will cost more cash.

In fact, the Pentagon figures that taxpayers will have to spend tens of billions of dollars to bring home or transfer the equipment strewn about Iraq.  According to Jason Ditz:

A lot of the cost is going to depend on what the military decides to do with the various items it required to occupy the nation and then fight an insurgency for several years with well over 100,000 US troops. Some of the gear will be shipped back to the US, others will be sent to Afghanistan for the ongoing war there. Still others will just be given to the Iraqi government so they don’t have to deal with the other two options.

The US has spent over two thirds of a trillion dollars on the war in Iraq so far (and this is only figuring the direct costs), but while President Obama has already started projecting dramatically lower costs in the near future as the war “winds down” (which so far hasn’t translated to actually removing serious numbers of troops from the nation), the costs just of hauling “mountains of equipment” out of Iraq show that nothing the military does is done on the cheap, not even ending a war.

So much for the occupation that was supposed to pay for itself!

Topics: 
Foreign Policy and National Security, Tax and Budget Policy

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