Tag: migration

Repeating News Story: Eroding Shorelines and Imperiled Coastal Villages in Alaska

U.S. Secretary of the Interior Sally Jewell was in Alaska last week at the invite of the Alaska Federation of Natives to discuss climate change and other issues. During her visit, she made a side trip to the 400 or so person town of Kivalina, located on a low-lying barrier island along Alaska’s northwest coast. The settlement sprung up about a century ago when the Interior Department decided to erect a school there under a program to promote the “education of natives in Alaska.” The same program established schools in other coastal location such as Golovin, Shishmaref, and Barrow.

Now these locations are in the news (see this week’s Washington Post story for example) because they are being threatened by coastal erosion coming at the hands of global warming—and are discussing relocating and who should be responsible for the footing the bill (incidentally, the courts have ruled out the energy industry).

With or without human-caused climate change, bluffs and barrier islands along the coast of northwestern Alaska are inherently unstable and not particularly good places to establish permanent towns. This is probably one of the reasons the natives were largely nomadic.

“Were,” we say, because ironically, as pointed out by the Post’s Chris Mooney, research indicates that the abandonment of the nomadic ways was encouraged/hastened by the establishment of government schools!

Krugman’s ‘Gotcha’ Moment Leaves Something to Be Desired

I’ve had some fun over the years by pointing out that Paul Krugman has butchered numbers when writing about fiscal policy in nations such as FranceEstoniaGermany, and the United Kingdom.

So I shouldn’t be surprised that he wants to catch me making an error. But I’m not sure his “gotcha” moment is very persuasive. Here’s some of what he wrote for today’s New York Times.

Gov. Jerry Brown was able to push through a modestly liberal agenda of higher taxes, spending increases and a rise in the minimum wage. California also moved enthusiastically to implement Obamacare. …Needless to say, conservatives predicted doom. …Daniel J. Mitchell of the Cato Institute declared that by voting for Proposition 30, which authorized those tax increases, “the looters and moochers of the Golden State” (yes, they really do think they’re living in an Ayn Rand novel) were committing “economic suicide.”

Kudos to Krugman for having read Atlas Shrugged, or for at least knowing that Rand sometimes referred to “looters and moochers.” Though I have to subtract points because he thinks I’m a conservative rather than a libertarian.

But what about his characterization of my position? Well, he’s right, though I’m predicting slow-motion suicide. Voting for a tax hike isn’t akin to jumping off the Golden Gate bridge. Instead, by further penalizing success and expanding the burden of government, California is engaging in the economic equivalent of smoking four packs of cigarettes every day instead of three and one-half packs.

Post-World War II Migration and Lessons for Studying Liberalized Immigration

Introduction 

 

This post is about two issues that are closely related.  The first are some facts and history that help explain why internal migration in post-World War II America was an important component of that economic expansion and likely to be as important in future growth.  Some of this data has applications for future research into the role migration plays as a stimulus to and reaction of economic growth.  The second is how studying this period of American migration could inform the academic literature on the probable effects of removing all or most of America’s immigration restrictions – an admittedly radical policy but one that should be understood.

The facts and history surrounding the post-World War II boom are somewhat controversial.  Some critics of immigration argue that post World War II economic growth occurred with relatively little immigration so therefore immigration is unnecessary for economic growth today.  Those critics are mistaken for many reasons, but fundamentally they misunderstand the role that national migration played in feeding economic growth during the 1950s and 1960s.  Ironically, economic growth at the 1950s and 1960s rate would be exceedingly difficult or impossible to achieve without immigration.    

The economic growth of the 1950s and 1960s with relatively closed borders can likely not be repeated today because there are fewer underutilized Southerners, Puerto Ricans, and women who could enter the workforce as substitutes for immigrants.  Growth during that time was partly fueled by the great migrations (migration is internal movement, immigration is international movement) of Americans from much poorer parts of the country, namely the South and Puerto Rico, to wealthier locations.  After the government began to severely restrict low-skilled immigration in 1921, migrants from the South and Puerto Rico moved in larger numbers to fill the economic gap left by the curtailment of low-skilled immigration, some migrants moved from rural areas to urban ones, and women began to enter the workforce in greater numbers.  Without the great migrations that brought tens of millions of black southerners, white southerners, and smaller numbers of Puerto Ricans to Northern and Western cities, American economic growth during those boom years would probably have been much smaller. 

Furthermore, American internal migration during the 1950s and 1960s was a one-time event due to unique historical, demographic, and economic circumstances that would not repeat today if immigration were similarly restricted.  Migrants and immigrants together as a percentage of the U.S. population move similarly with the average annual hours worked per worker and, thus, the labor component of production.  Lawful immigration is essential to recapturing the labor force growth necessary for approaching the economic growth rates of the 1950s and 1960s.         

The Great Migration

The growth of the post-war American labor force was dramatic.  From 1948 to 1982, the size of the U.S. labor force grew from 60 million to 111 million.  Over the same time, the number of people employed in the U.S. labor market increased from 58 million to 99 million.  The Labor Force Participation Rate (LFPR) increased from 58.6 percent to 64.1 percent and the total number of hours worked per worker decreased by 9.3 percent from 898 hours a year to 814 hours a year – likely because wealthier American workers opted to “purchase” more leisure time – meaning that they can afford not to work so many hours.  Here are the history and economics behind the post-World War II great migrations organized by group.

Even the Establishment Media Is Now Admitting the French Economic Model Is Fatally Flawed

Some things in life are very dependable. Every year, for instance, the swallows return to Capistrano.

And you can also count on Dan Mitchell to wax poetic about the looming collapse of French statism.

Geesh, looking at that list, I guess I’m guilty of - in the words of Paul Krugman - being part of the “plot against France” by trying to discredit that nation’s economy.

Or maybe I’m just ahead of my time because we’re now seeing articles that almost sound like they could have been written by me appearing in establishment outlets such as Newsweek. Check out some amazing excerpts from an article by Janine di Giovanni, who lives in France and serves as the magazine’s Middle East Editor.

…what is happening today in France is being compared to the revocation of 1685. …the king closed churches and persecuted the Huguenots. As a result, nearly 700,000 of them fled France, seeking asylum in England, Sweden, Switzerland, South Africa and other countries. The Huguenots, nearly a million strong before 1685, were thought of as the worker bees of France. They left without money, but took with them their many and various skills. They left France with a noticeable brain drain.

It’s happening again, except this time the cause is fiscal persecution rather than religious persecution. French politicians have changed the national sport from soccer to taxation!

Since the arrival of Socialist President François Hollande in 2012, income tax and social security contributions in France have skyrocketed. The top tax rate is 75 percent, and a great many pay in excess of 70 percent. As a result, there has been a frantic bolt for the border by the very people who create economic growth – business leaders, innovators, creative thinkers, and top executives. They are all leaving France to develop their talents elsewhere.

It’s an exaggeration to say “they are all leaving,” but France is turning Atlas Shrugged from fiction to reality.

More Americans Going Galt

President Obama promised he would unite the world…and he’s right.

Representatives from all parts of the globe have bitterly complained about an awful piece of legislation, called the Foreign Account Tax Compliance Act (FATCA), that was enacted back in 2010.

Michael Ramirez/Investor's Business Daily(Michael Ramirez/Investors Business Daily)

They despise this unjust law because it extends the power of the IRS into the domestic affairs of other nations. That’s an understandable source of conflict, which should be easy to understand. Wouldn’t all of us get upset, after all, if the French government or Russian government wanted to impose their laws on things that take place within our borders?

But it’s not just foreign governments that are irked. The law is so bad that it is causing a big uptick in the number of Americans who are giving up their citizenship.

Here are some details from a Bloomberg report.

Americans renouncing U.S. citizenship surged sixfold in the second quarter from a year earlier… Expatriates giving up their nationality at U.S. embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, according to Federal Register figures published today. That brought the first-half total to 1,810 compared with 235 for the whole of 2008. The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside.

I’m glad that the article mentions that American law is so out of whack with the rest of the world.

Facebook Billionaire Gives Up Citizenship to Escape Bad American Tax Policy

It is very sad that America’s tax system is so onerous that some rich people feel they have no choice but to give up U.S. citizenship in order to protect their family finances.

I’ve written about this issue before, particularly in the context of Obama’s class-warfare policies leading to an increase in the number of Americans “voting with their feet” for places with less punitive tax regimes.

We now have a very high-profile tax expatriate. One of the founders of Facebook is escaping to Singapore. Here are some relevant passages from a Bloomberg article.

Eduardo Saverin, the billionaire co-founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill. …Saverin’s stake is about 4 percent, according to the website Who Owns Facebook. At the high end of the IPO valuation, that would be worth about $3.84 billion. …Saverin, 30, joins a growing number of people giving up U.S. citizenship, a move that can trim their tax liabilities in that country. …“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement. …Singapore doesn’t have a capital gains tax. It does tax income earned in that nation, as well as “certain foreign-sourced income,” according to a government website on tax policies there. …Renouncing your citizenship well in advance of an IPO is “a very smart idea” from a tax standpoint, said Avi-Yonah. “Once it’s public you can’t fool around with the value.” …Renouncing citizenship is an option chosen by increasing numbers of Americans. A record 1,780 gave up their U.S. passports last year compared with 235 in 2008, according to government records. …“It’s a loss for the U.S. to have many well-educated people who actually have a great deal of affection for America make that choice,” said Richard Weisman, an attorney at Baker & McKenzie in Hong Kong. “The tax cost, complexity and the traps for the unwary are among the considerations.”

What makes this story amusing, from a personal perspective, is that Saverin’s expatriation takes place just a couple of days after my wayward friend Bruce Bartlett wrote a piece for the New York Times in which he said that people like me are exaggerating the impact of taxes on migration. Here are some key excerpts from Bruce’s column:

In recent years, the number of Americans renouncing their citizenship has increased. …This led William McGurn of The Wall Street Journal to warn that the tax code is turning American citizens living abroad into “economic lepers.” The sharply rising numbers of Americans renouncing their citizenship “are canaries in the coal mine,” he wrote. The economist Dan Mitchell of the libertarian Cato Institute was more explicit in a 2010 column in Forbes, “Rich Americans Voting With Their Feet to Escape Obama Tax Oppression.” …[T]he sharp rise in Americans renouncing their citizenship since 2008 is less pronounced than it appears if one looks at the full range of data available since 1997, when it first was collected. As one can see in the chart, the highest number of Americans renouncing their citizenship came in 1997. …The reality is that taxes are just one factor among many that determine where people choose to live. Factors including climate, proximity to those in similar businesses and the availability of amenities like the arts and cuisine play a much larger role. That’s why places like New York and California are still magnets for the wealthy despite high taxes. And although a few Americans may renounce their citizenship to avoid American taxes, it is obvious that many, many more people continually seek American residency and citizenship.

I actually agree with Bruce. Taxes are just one factor when people make decisions on where to live, work, save, and invest.

But I also think Bruce is drinking too much of the Kool-Aid being served by his new friends on the left. There is a wealth of data on successful people leaving jurisdictions such as California and New York that have confiscatory tax systems.

And there’s also a lot of evidence of taxpayers escaping countries controlled by politicians who get too greedy. Mr. Saverin is just the latest example. And I suspect, based on the overseas Americans I meet, that there are several people who quietly go “off the grid” for every person who officially expatriates.

The statists say these people are “tax traitors” and “economic Benedict Arnolds,” but those views are based on a quasi-totalitarian ideology that assumes government has some sort of permanent claim on people’s economic output.

If people are leaving America because our tax law is onerous, that’s a signal we should reform the tax code. Attacking those who expatriate is the fiscal version of blaming the victim.

Sweet Commerce

A study on anti-Semitism in Germany offers the disturbing finding that “communities that murdered their Jewish populations during the 14th-century Black Death pogroms were more likely to demonstrate a violent hatred of Jews nearly 600 years later,” during the Nazi era. But cities

with more of an outward orientation—in particular, cities that were a part of the Hanseatic League of Northern Europe, which brought outside influence via commerce and trade—showed almost no correlation between medieval and modern pogroms. The same was true for cities with high rates of population growth—with sufficient in-migration, the newcomers may have changed the attitudes of the local culture.

Free trade helps lead to peace, prosperity, and the erosion of prejudice.