Keller and Krugman

Both Mr. Keller and Prof. Krugman are full of questions today.  In “Liberals vs. Immigration Reform” Keller asks one of the stupidest questions I’ve heard this month of Sundays:  Did Senate Democrats sell out to big business?  It is to larf out loud.  Prof. Krugman also has a question in “Defining Prosperity Down:”  Is mass unemployment becoming the new normal?  Probably, because it’s better for business to have desperate people willing to work for less just to maybe have a crumb of food on the table.  Here’s Keller:

As a flaming liberal … and strong supporter of immigration and its reforms, I would have voted against the bill [the Senate] just passed.

This bill stinks: it takes far too long to grant citizenship and does little or nothing to protect American jobs … The Dems always get rolled.

With its costly sop to xenophobes in the form of useless border control overkill, this bill is already a joke.

[There will be] a huge political backlash once it becomes obvious to Americans that a broad swath of our citizenry is being sold out in favor of vote-hungry politicians, corporations eager to cut labor costs even further and military contractors trolling for still more pork.

I never thought I’d see the day when I’d be grateful for the knee-jerk opposition of Republicans in the House, but that day has arrived … It’s a slap in the face of the American working class and the millions of unemployed Americans…

The Democrats lost my vote w/this. They no longer represent anyone but billionaires and Big Business.

And so on.

If the immigration bill that passed the Senate on June 27 dies the death of previous reforms, it will not be because of the angry Democrats quoted above. It will be the familiar obstructionism of House Republicans, and particularly Speaker John Boehner, who may refuse to let the measure even come to a vote. That is why the news coverage has focused on the hostility of Republicans.

But if you scroll down from The Times’s news article to the 522 reader comments, you will find plenty of unhappy Democrats as well — not on Capitol Hill, but Out There. The howls of betrayal sampled above reflect the main complaints from those on the left: The bill, they worry, will steal jobs from American workers by admitting new streams of both low-skilled and high-skilled competitors. It wastes more than $40 billion to militarize the Southern border. It makes the 11 million unauthorized immigrants already here wait 13 years for full equality. And, by the way, how can any self-respecting liberal be for something that enjoys the support of Grover Norquist, the Koch brothers, the Chamber of Commerce and the Fox News commentariat?

There is a strong conservative case for the elaborate contraption called the Border Security, Economic Opportunity, and Immigration Modernization Act of 2013. And no, it is not just about neutralizing the hostility of Latino voters. For the conservative brief, I refer you to David Brooks (here and here) or Douglas Holtz-Eakin (here).

My aim here is to address some of the liberal misgivings. Like virtually every milestone in the history of Congress, the Senate bill choreographed by the tireless liberal legislator from New York, Charles Schumer, is a package of compromises, enticements, marketing (see the title), electoral calculation, micromanaging and kitchen sinks (such as SEC. 4503. ENCOURAGING CANADIAN TOURISM TO THE UNITED STATES). The question that troubles liberals is, did Schumer give away too much in the quest for Republican votes? After slogging and scrolling through the 1,198 pages of devilish details, I think the answer is no.

Specifically, the aims of comprehensive reform are three: to impose some regulatory order on a legal immigration system that is dysfunctional and illogical; to assert greater control over our borders, for reasons of economics and security; and to deal humanely with the 11 million who came here outside the legal channels. Despite imperfections, the Senate bill accomplishes all three.

OVERHAULING LEGAL IMMIGRATION The Senate bill replaces a system that was based mainly on family reunification, country-by-country quotas and something resembling indentured servitude to one based mainly on the job market. Reuniting nuclear families — spouses and minor children — is still a priority, and is actually increased and accelerated. But beyond that, the bill adopts an approach that has proved successful in Canada and other developed countries, favoring immigrants who bring skills the country needs to replenish our aging work force and build new businesses.

When the new law is fully implemented, the best guess is that it will increase the number of new green cards issued every year from about 1 million to at least 1.5 million, probably more, mostly for specific categories of workers.

This issue — admitting new workers — is a perennial conundrum. How do you balance the need for fresh energy against the interests of those already here? But the battle is being waged this time in a context that makes liberals especially uneasy. For one thing, we are contemplating an extraordinary opening of our country at a time when 22 million Americans are unemployed or underemployed. For another, the balance of power in Washington has shifted against the working class. In past battles over immigration, American workers counted on organized labor to defend against an influx of cheap foreign workers. But in the past 30 years labor has lost much of its clout. And some unions have recalculated their interests: now they see new legal immigrants (and legalization of those already here illegally) not so much as a threat to their incumbent members but as potential recruits, a way of reversing union decline. Meanwhile business, which has always tended to favor more open borders, has gained influence the old-fashioned way, with campaign money and a legion of lobbyists. And the tech industries, which have mobilized especially aggressively on this issue, have the added cachet of being the cool kids at the party.

So, yes, the bill contains major concessions to businesses that claim they have trouble filling some jobs even at a decent wage. The bill would create new channels of permanent immigration and temporary visas for low-skilled labor, especially in agriculture, and for more highly skilled workers in technical fields.

But the bill makes employers jump through a lot of hoops to take advantage of this new labor pool. To hire a foreign temporary worker you have to pay a $2,500 fee, offer the worker the prevailing wage and (at the low-skilled end) show that you’ve tried to fill the job domestically. In many cases, that foreign worker will end up costing you more than an American citizen.

And, as Ana Avendaño, who handles immigration issues for the A.F.L.-C.I.O., points out, the bill introduces new safeguards against worker exploitation. Workers here on temporary visas are no longer captives of their sponsoring employer; they can change jobs. Workers cannot be deported for blowing the whistle on an abusive or unsafe workplace. There are new protections against human trafficking. The labor federation, with some misgivings, supports the bill.

The bill is especially — perhaps overly — generous to employers at the high end. Any foreigner who gets a graduate degree from an American university in science, technology, engineering or mathematics (STEM in the vernacular) and has a job offer can apply for a green card — even if he or she studied for a field that is already crowded with native job applicants. The bill would award permanent residence to anyone with a Ph.D. in any subject from any university in the world, if he or she has a job offer in that field. (“We want the smartest people here,” Schumer explains.) As the demographer Michael Teitelbaum points out, you can find shortages of skilled labor at some times, in some fields, and in some places, but over all there is plenty of domestic STEM talent looking for work. Teitelbaum suggests the bill would be improved by establishing an independent and authoritative panel, like the one in Britain that advises the government on adjusting the annual visa limits in different skilled specialties based on credible evidence about these labor markets. Schumer’s people say what works in Britain would be too cumbersome in a job market of 150 million workers. “By the time you gather the data, it’s old,” said Schumer’s immigration guru, Leon Fresco.

The nonpartisan Congressional Budget Office estimates that over the first decade the bill will have a negative but minuscule effect on employment and average wages. And then the influx of new workers will improve growth, create jobs and reduce the deficit. Other studies, from the Center for American Progress on the left to the Cato Institute on the libertarian right, have also concluded that the long-term economic effect is positive and substantial. All of these estimates are more than a little speculative, depending on human behavior and government enforcement. But most experts agree that the country will ultimately benefit, as it has in the past, from being the preferred destination of the ambitious, the industrious, the brave, the new.

And as the bill supplies new streams of legal labor, it attempts to restrict the flow of illegal labor. As Doris Meissner of the pro-reform Migration Policy Institute notes, “It replaces a laissez-faire illegal system with a regulated legal system.” Which brings us to …

CONTROLLING THE BORDERS The $46.3 billion earmarked to double the size of the border patrol, raise fences and install monitoring technology on our Southern flank is a nice stimulus package for border states and a windfall for a few favored technology companies, but it is mostly for show. Forty-percent of those here illegally didn’t jump a fence; they simply overstayed a student or tourist visa.

By far the most promising control measure in the bill is one business hates, one that has been overshadowed by the border fortification boondoggle: mandatory employer verification. Employers will now be held accountable for verifying that anyone they hire has a legal right to work here. It replaces the current voluntary system, which is almost universally ignored, with real penalties and real enforcement. Foreign workers will be required to have a tamper-proof ID, including a photo and a fingerprint. Citizens can use a driver’s license or a voter ID. The bill also launches a project to design a fraud-proof Social Security card. Some inventive employers will find loopholes. But there are plenty of teeth in those 1,198 pages.

THE 11 MILLION For most liberals I suspect this is the heart of the bill — and not just because Democrats crave the approval of the country’s surging Latino constituency. (Although, come to think of it, isn’t responding to the electorate what democracies are supposed to do?) The status quo is an undocumented underclass of families living in fear, subject to exploitation and scapegoating, depressing wages by working off the books, denied any say in how they are governed. Unless you think it is realistic to forcibly deport a population the size of New York City plus Chicago (and 21 percent of Americans subscribe to that heartless notion, according to the latest Pew poll), you have to let them out of the shadows.

Most of the debate focuses on the path to citizenship — 13 years for adults, a shorter time for those brought here as children. Citizenship is important, and 13 years is a long time to wait. That is the concession advocates of full equality made in fairness to others who played by the rules, and as a disincentive to future illegal immigrants.

But while they are on that long path, they are legal residents of America. Soon after the bill becomes law, undocumented workers who have not been convicted of a serious crime can apply for legal status as “registered provisional immigrants” — not voters, and not eligible for welfare or food stamps or insurance subsidies under Obamacare, but free to work, study, travel (including out of the country) without the fear of being snatched from their families and deported.

To me, and I think most residents of the undocumented netherworld, the long path to citizenship is a fair price to pay for the short path out of hiding.

Now here’s Prof. Krugman:

Friday’s employment report wasn’t bad. But given how depressed our economy remains, we really should be adding more than 300,000 jobs a month, not fewer than 200,000. As the Economic Policy Institute points out, we would need more than five years of job growth at this rate to get back to the level of unemployment that prevailed before the Great Recession. Full recovery still looks a very long way off. And I’m beginning to worry that it may never happen.

Ask yourself the hard question: What, exactly, will bring us back to full employment?

We certainly can’t count on fiscal policy. The austerity gang may have experienced a stunning defeat in the intellectual debate, but stimulus is still a dirty word, and no deliberate job-creation program is likely soon, or ever.

Aggressive monetary action by the Federal Reserve, something like what the Bank of Japan is now trying, might do the trick. But far from becoming more aggressive, the Fed is talking about “tapering” its efforts. This talk has already done real damage; more on that in a minute.

Still, even if we don’t and won’t have a job-creation policy, can’t we count on the natural recuperative powers of the private sector? Maybe not.

It’s true that after a protracted slump, the private sector usually does find reasons to start spending again. Investment in equipment and software is already well above pre-recession levels, basically because technology marches on, and businesses must spend to keep up. After six years during which hardly any new homes were built in America, housing is trying to stage a comeback. So yes, the economy is showing some signs of healing itself.

But that healing process won’t go very far if policy makers stomp on it, in particular by raising interest rates. That’s not an idle worry. A Fed chairman famously declared that his job was to take away the punch bowl just as the party was really warming up; unfortunately, history offers many examples of central bankers pulling away the punch bowl before the party even starts.

And financial markets are, in effect, betting that the Fed is going to offer another such example. Long-term interest rates, which mainly reflect expectations about future short-term rates, shot up after Friday’s job report — a report that, to repeat, was at best just O.K. Housing may be trying to bounce back, but that bounce now has to contend with sharply rising financing costs: 30-year mortgage rates have risen by a third since the Fed started talking about relaxing its efforts about two months ago.

Why is this happening? Part of the reason is that the Fed is constantly under pressure from monetary hawks, who always want to see tighter money and higher interest rates. These hawks spent years warning that soaring inflation was just around the corner. They were wrong, of course, but rather than change their position they have simply invented new reasons — financial stability, whatever — to advocate higher rates. At this point it’s clear that monetary hawkery is mainly a form of Puritanism in H. L. Mencken’s sense — “the haunting fear that someone, somewhere may be happy.” But it remains dangerously influential.

Unfortunately, there’s also a technical issue that plays into the prejudices of the monetary hawks. The statistical techniques policy makers often use to estimate the economy’s “potential” — the maximum level of output and employment it can achieve without inflationary overheating — turn out to be badly flawed: they interpret any sustained economic slump as a decline in potential, so that the hawks can point to charts and spreadsheets supposedly showing that there’s not much room for growth.

In short, there’s a real risk that bad policy will choke off our already inadequate recovery.

But won’t voters eventually demand more? Well, that’s where I get especially pessimistic.

You might think that a persistently poor economy — an economy in which millions of people who could and should be productively employed are jobless, and in many cases have been without work for a very long time — would eventually spark public outrage. But the political science evidence on economics and elections is unambiguous: what matters is the rate of change, not the level.

Put it this way: If unemployment rises from 6 to 7 percent during an election year, the incumbent will probably lose. But if it stays flat at 8 percent through the incumbent’s whole term, he or she will probably be returned to power. And this means that there’s remarkably little political pressure to end our continuing, if low-grade, depression.

Someday, I suppose, something will turn up that finally gets us back to full employment. But I can’t help recalling that the last time we were in this kind of situation, the thing that eventually turned up was World War II.


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