CIS’ “All Job Growth Since 2000 Went to Immigrants” Report Is Flawed

The Center for Immigration Studies (CIS) has released a number of reports purporting to show that all employment growth since the year 2000 has gone to immigrants.  The CIS report does not include econometrics. However, the report includes a few references to the economic literature (those few references present have little to do with native job displacement caused by immigration, which is the topic of the CIS report).  Nonetheless, the CIS report has gained significant attention.

The CIS method of measuring job displacement caused by immigration is not used by professional economists to study this issue.  Fundamentally, they assume a static number of jobs that is unchanging based on immigration and do not consider what the job market would look like with fewer immigrant workers, entrepreneurs, and consumers – estimates essential for understanding the actual labor market impact of immigrants.  I discuss those actual effects here, here, and here

Regardless of their flawed methods, I decided to recreate CIS’ research in order to exactly understand how they got their results.  The CIS study did not find any evidence of immigrants pushing natives out of the job market.  After spending hours recreating their data and checking it, all I can conclude is that immigrants hold about a percentage of jobs in the economy that is roughly equal to their percent of the population.  I am underwhelmed by that finding. 

Below I will present the academic literature on immigration-induced job displacement, explain how CIS got its results, and detail why their analysis of the data does not prove that “All Job Growth Since 2000 Went to Immigrants.”  (If you just want the meat, scroll down to “CIS’ Three Big Conclusions are False”).

In Suburban D.C., A Revealing Turf War

Montgomery County, Md., the suburban D.C. jurisdiction known for bans on polystyrene take-out trays, e-cigarette vaping, free bags at retail checkouts, and other disapproved elements of the mass-market economy, is now considering a ban on many common lawn and turf pesticides used by homeowners and commercial landscapers. Critics point out that since the safety of particular pesticides and their application is already comprehensively regulated at the federal and state level, the measure would put county lawmakers in the position of second-guessing safety determinations made by other, more scientifically expert levels of government. My favorite bit of the story, however, is this from yesterday’s Washington Post:

Opponents have aligned with soccer moms and dads concerned that playing field grass — also covered by the measure — will be less safe if it isn’t thickened with the help of traditional chemicals. They have an ally in County Executive Isiah Leggett (D), who wants to see [county athletic] fields exempted from the measure.

Wasting Billions on Improper Payments

Federal outlays in 2014 topped $3.5 trillion. Over the next ten years, federal outlays are expected to climb to $6.1 trillion. The Government Accountability Office (GAO) tries to keep tabs on some of the obvious waste in the vast federal budget. One of its efforts is an annual report highlighting areas of duplication, improper payments, and other types of inefficient spending.

Last week, GAO released a report analyzing whether or not Congress and the executive branch have followed their past recommendations. GAO said that only 29 percent of its recommendations have been fully addressed.

The report discusses a number of themes within previous duplication reports, but devotes a large section on the increasing problem of improper payments by federal agencies. The federal government spent an estimated $125 billion in 2014 on improper payments across 124 programs, an increase of 18 percent from 2013.

Will the Venezuelan Opposition Fall into UNASUR’s Trap?

A new political crisis is brewing in Venezuela as the economy continues its free fall, social unrest grows, and the government escalates its crackdown of the opposition. Two weeks ago, the mayor of Caracas, Antonio Ledezma, was arbitrarily arrested under spurious changes of planning a coup. Other leading figures of the opposition are being targeted by Nicolás Maduro’s regime and could be detained at any time.

Once again, the Venezuelan opposition, as well as international human rights organizations and former presidents from other Latin American countries, have demanded that the Union of South American Nations (UNASUR), an intergovernmental organization of South American countries, take a stand on the situation in Venezuela. Well, it has. On several occasions, either the secretary general of UNASUR, Ernesto Samper, or the ministers of foreign relations who have been tasked with mediating the conflict, have unequivocally sided with Maduro’s regime.

After meeting with Maduro a few days ago, Samper said that “All the countries of UNASUR reject any attempt, domestic or external, to destabilize the stability and democratic tranquility of Venezuela. We have received evidence (of the attempts).” Ten days after Ledezma’s arrest, Ricardo Patiño, foreign minister of Ecuador and one of UNASUR “mediators” in Venezuela held a “solidarity event” for the Maduro regime, saying that “We are willing to travel to Venezuela as many times as necessary to collaborate with the elected government’s revolutionary authorities on behalf of Venezuelans, and contribute to stopping what presents itself as a new coup that we deem unacceptable.”

It’s pretty evident that UNASUR’ mission in Venezuela is to boost the government. Why is it then that some leaders of the Venezuelan opposition as well as other international actors still expect this organization to play a constructive role in the crisis?

M. Stanton Evans, R.I.P.

Back in the late 1940s, when the modern welfare state was all but unopposed in America, a small band of conservatives and libertarians emerged from Yale University, “standing athwart history yelling ‘Stop!’” as the late William F. Buckley Jr. would later write. Following Buckley as editor of the Yale Daily News was another giant of what would become—in several variations today—the movement to oppose that state, M. Stanton Evans. A libertarian conservative in the mold of the National Review’s great fusionist, Frank S. Meyer, Stan died last week at the age of 80.

After leaving Yale, Stan worked with Leonard Reed, founder of the Foundation for Economic Education, serving briefly as assistant editor of the Freeman under Frank Chodorov and studying under Ludwig von Mises at NYU. Perhaps his most important early contribution, however, was as draftsman in 1960 of the Sharon Statement, the principles on which Young Americans for Freedom was founded, the first significant national conservative organization. That and more of Stan’s career was well covered last week by the New York Times: the youngest editor of a major daily in America, the Indianapolis News, where he served for 15 years; head of the American Conservative Union from 1971 to 1977, which joined Ed Crane, Eugene McCarthy, the ACLU, and others in Buckley v. Valeo, the seminal 1976 campaign finance decision; and founder and head from 1977 to 2002 of Washington’s National Journalism Center, which trained hundreds of now-noted journalists.

But apart from his many other accomplishments, including his several books, it was Stan’s humor and infectious personality that so many of us remember. George Will caught it perfectly in a Summer 2006 Cato’s Letter: “The Cato Institute understands the nature of the modern liberal,” Will wrote; “in the words of M. Stanton Evans, a modern liberal is someone who doesn’t care what you do as long as it’s compulsory.” Stan reveled in tweaking humorless liberals—“Any country that can land a man on the moon can abolish the income tax”—but he didn’t spare conservative either—“I never really cared for Nixon, until Watergate.”

As graduate students at the University of Chicago in the early 1970s, my wife Juliana and I had the great pleasure of entertaining Stan after the talk we’d invited him to give at the university. An early rock-‘n’-roller myself, I did not know what we were in for once Stan saw my guitar in the corner. It turned out he knew the words—and the beat—to every hit we could name—and the night was young! Whoever said conservatives were no fun didn’t know Stan.

So Begins the Contest to Blame China the Most

Some things are an inevitable part of every election season.  Without a doubt, every candidate running for President in 2016 will, for example, make unrealistic promises and pander to special interests.  They will also just as surely try to blame America’s perceived problems on a foreign menace.  For economic issues, China has become the overwhelming favorite as a target for these attacks now that blaming Japan and Mexico has gone out of style. 

In the 2012 election, the chief China-basher was Mitt Romney, who transformed himself into a mercantilist and promised to be tough on Chinese currency manipulation.  Republicans running for Congress that year had a similar predisposition, and Pete Hoekstra certainly deserves an award for running the most tasteless anti-China ad.  In 2014, it was the Democrats’ turn to blame China on the campaign trail for stealing American jobs.

Now we’re getting a taste of how China bashing will play out in the 2016 election.  According to Politico, Mike Huckabee has started talking about the Chinese menace in Iowa.

He complained that American wages have been stagnant since Chinese trade agreements went into effect over the past few decades.

“People are working hard, and they have less to show for it,” he said. “We need to quit apologizing for being America, and we need to start making it so that Americans can prosper and not just so that the Chinese can buy Louis Vuitton and Gucci bags.”

The comments came in response to questions about why the government has kept the embargo in place against Cuba, even as trade barriers with China have been lifted.

“We have basically surrendered to the Chinese market,” Huckabee said. “We’ve not put the pressure on them.”

Aside from pandering to xenophobia, these kinds of comments are distressing because they demonstrate a willingness to vilify normal economic activity.  Huckabee describes trade as “the Chinese” fighting a battle against the U.S. economy in pursuit of frivolous luxury.

I suppose some rhetorical license should be granted to candidates who need to package their policies in a way that appeals to the most people.  So maybe instead of “surrendered to the Chinese market,” Gov. Huckabee meant to say that the United States government has lowered taxes on American consumers and businesses.  And maybe instead of “Louis Vuitton and Gucci bags,” he meant clothes, food, and medicine.

And maybe, just maybe, when he says “we need to start making it so that Americans can prosper,” he means the government should stay out of the way of mutually beneficial commercial activity and stop protecting politically powerful industries from consumer demand for innovative and affordable products and services.

Maybe Mike Huckabee or some of the other candidates will even remember that a majority of Americans in both major parties think that trade is good for the United States.

Slow Federal Spending and Stop Debt with the Niskanen Amendment

While the Obama administration lectures Europe about the latter’s fiscal policies, Washington continues to run deficits. The problem is bipartisan. When George W. Bush took office, the national debt was $5.8 trillion. When Barack Obama took over, it was $11.9 trillion. Now it is $18.2 trillion.

These numbers will look like the “good ole’ days” when the entitlement tsunami hits in coming years. Economist Laurence Kotlikoff figures total unfunded liabilities today run about $200 trillion.

It long has been obvious that the American political system is biased toward spending. Public choice economics explains how government agencies have interests and why spending lobbies so often prevail over the public.

Congress demonstrates a “culture of spending” in which members tend to back higher expenditures the longer they serve. Washington richly rewards legislators for “growing” in office and joining the bipartisan Big Government coalition.

Some analysts still hope that electing the “right people” will fix the system. But without creating some institutional barriers to political plunder the system will continue to produce the same overall results, despite slight differences in exactly how much is spent on whom and when.

The late William Niskanen proposed a measure that was simple and impossible to game. Niskanen, acting Chairman of the Council of Economic Advisers under President Ronald Reagan, left that position to become Chairman of the Cato Institute.

Two decades ago Niskanen proposed a simple 125-word amendment requiring a three-fifths vote to increase the debt limit or raise taxes and federal compensation to states and localities for any mandates. These provisions would be suspended in the event of a declaration of war. “Nothing has changed in the interim to render Niskanen’s proposal obsolete or impractical,” noted Lawrence Hunter of the Social Security Institute in a new study for the Carleson Center for Welfare Reform.

The measure would put taxing and borrowing on a level playing field, eliminating the current bias for piling up debt. Moreover, the three-fifths requirement would make it easier for legislators to reconsider outlays than to collect more money to waste. This would create a useful corrective for the pervasive pro-spending bias built into the system today.

However, it has become evident that the Senate filibuster, with a three-fifths rule, has proved to be only a limited impediment to the growth of government. Thus, the required super-majority should be two-thirds. Wrote Hunter, experience makes clear that the three-fifths requirement is “not sufficiently stringent to overcome the enormous bias in the legislative process.”

Moreover, Hunter noted that Congress has subverted the debt limit by effectively setting a floating number “suspended” to accommodate whatever amount Congress ends up spending. Thus, he proposed that the Niskanen Amendment be updated to explicitly restrict any suspension to no more than 30 days per Congress, and require the same super-majority vote to suspend the limit.

Finally, Hunter proposed prioritizing spending in the event that borrowing hits the debt ceiling. Hunter would set repayment of the national debt, both principal and interest, as the top priority to eliminate any possibility of default. Then Washington would repay Social Security recipients to prevent big spenders from threatening retirees’ livelihoods.

Congress must again address the debt limit by the Ides of March. It would be a good time to push the Niskanen Amendment. Equally important, any debt increase should include language prioritizing payments with existing funds. Let President Barack Obama threaten to veto a debt measure because it includes language requiring him to pay the most important claims first.

While it would be hard to reject a debt limit increase for spending already approved, congressional Republicans should begin preparing for the next debt fight. As I point out in American Spectator online: “The only hope for reducing the growth in federal debt is to create institutional barriers to its growth. Otherwise the red ink likely will rise until Uncle Sam is both insolvent and bankrupt.”