In “The National Death Wish” Bobo tells us all about two senators with a recipe for American stagnation. I’m slammed today and didn’t have time to read the comments, but I’ll bet they’re choice… Prof. Krugman, in “Death and Tax Cuts,” explains what Republicans mean when they talk about freedom. Here’s Bobo:
A few weeks ago, Tom Cotton and David Perdue, Republican senators from Arkansas and Georgia, introduced an immigration bill that would cut the number of legal immigrants to this country each year in half, from about a million to about 500,000.
In a press conference, Cotton offered a rationale for his bill. “There’s no denying this generation-long surge in low-skilled immigration has hurt blue-collar wages,” he said. If we can reduce the number of low-skill immigrants coming into the country, that will reduce the pool of labor, put upward pressure on wages and bring more Americans back into the labor force.
It seems like a plausible argument. That is, until you actually get out in the real world.
Cotton and Perdue’s position, which is now the mainstream Republican position, is based on the unconscious supposition that American society is like a lake, with a relatively fixed boundary. If you cut the supply of fish coming from outside, there will be more food for the ones born here.
The problem is that American society is actually more like a river. Sometimes the river is running high, with a lot of volume and flow, with lots of good stuff for everybody, and sometimes it’s running low.
Let’s illustrate the point by looking at one portion of the labor market. Right now construction is booming in many cities. This has created high demand for workers and pervasive labor shortages.
Nationwide, there are now about 200,000 unfilled construction jobs, according to the National Association of Home Builders. If America were as simple as a lake, builders would just raise wages, incomes would rise and the problem would be over.
But that hasn’t happened. Builders have gone recruiting in high schools and elsewhere, looking for people willing to learn building skills, but they’re not having much luck.
Construction is hard, many families demean physical labor and construction is highly cyclical. Hundreds of thousands of people lost construction jobs during the financial crisis and don’t want to come back. They want steadier work even at a lower salary.
Employers have apparently decided raising wages won’t work. Adjusting for inflation, wages are roughly where they were, at about $27 an hour on average in a place like Colorado. Instead, employers have had to cut back on output. One builder told Reuters that he could take on 10 percent more projects per year if he could find the crews.
In other words, the labor shortage hasn’t led to higher wages; it’s reduced and distorted the flow of the economic river. There’s less home buying, less furniture buying, less economic activity. People devote a larger share of their income to housing and less to everything else. When builders do have workers, they focus on high-end luxury homes, leaving affordable housing high and dry.
The essential point is that immigrants don’t take native jobs on any sort of one-to-one basis. They drive economic activity all the way down the river, creating new jobs in some areas and then pushing native workers into more complicated jobs in others. A comprehensive study of non-European Union immigrants into Denmark between 1991 and 2008 found that immigrants did not push down wages, but rather freed natives to do more pleasant work.
An exhaustive U.S. study by the National Academy of Sciences found that immigration didn’t drive down most wages, but it had a “very small” and temporary effect on native-born workers without a high school degree.
The way to help working families is not to cut immigration. It’s to help everybody flow to the job he or she wants to take.
The last time we cut immigration, in the 1920s, we were in the middle of a baby boom. Today, fertility rates have plummeted. If the Cotton-Perdue bill became law, the working-age population would shrink, the nation would age and America would decline.
For the life of me, I can’t figure out why so many Republicans prefer a dying white America to a place like, say, Houston.
Houston has very light zoning regulations, and as a result it has affordable housing and a culture that welcomes immigrants. This has made it incredibly diverse, with 145 languages spoken in the city’s homes, and incredibly dynamic — the fastest-growing big city in America recently. (Personally, I wish it would do a bit more zoning — it’s pretty ugly.)
The large immigrant population has paradoxically given the city a very strong, very patriotic and cohesive culture, built around being welcoming to newcomers and embracing the future. As the Houston urban analyst Tory Gattis points out, the Houston Rodeo has so many volunteers it has recently limited their special privileges. In 2015 it had the healthiest philanthropic sector in the nation. The city is coming together to solve its pension problems better than just about any other big place.
Cotton and Perdue are the second coming of those static mind-set/slow-growth/zero-sum liberals one used to meet in the 1970s. They’ll dry up the river. I wish they had a little more faith in freedom, dynamism and human ingenuity.
Now here’s Prof. Krugman:
Across the country, Republicans have been facing crowds demanding to know how they will protect the 20 million Americans who gained health insurance thanks to the Affordable Care Act, and will lose it if the act is repealed. And after all that inveighing against the evils of Obamacare, it turns out that they’ve got nothing.
Instead, they’re talking about freedom — which these days is the real refuge of scoundrels.
Actually, many prominent Republicans haven’t even gotten to the point of trying to respond to criticism; they’re just whining about how mean their constituents are being, and invoking conspiracy theories. Talk about snowflakes who can dish it out but can’t take it!
Thus, Representative Jason Chaffetz insisted that the public outcry is just “a paid attempt to bully and intimidate”; Sean Spicer, the White House press secretary, calls all anti-Trump demonstrations a “very paid, AstroTurf-type movement.” And the tweeter in chief angrily declared that protests have been “planned out by liberal activists” — because what could be worse than political action by the politically active?
But perhaps the saddest spectacle is that of Paul Ryan, the speaker of the House, whom the media have for years portrayed as a serious, honest conservative, a deep thinker about how to reform America’s safety net. That reputation was never justified; still, even those of us who long ago recognized him as a flimflammer have been struck by his utter failure to rise to this occasion.
After years to prepare, Mr. Ryan finally unveiled what was supposedly the outline of a health care plan. It was basically a sick joke: flat tax credits, unrelated to income, that could be applied to the purchase of insurance.
These credits would be obviously inadequate for the lower- and even middle-income families that gained coverage under Obamacare, so it would cause a huge surge in the number of uninsured. Meanwhile, the affluent would receive a nice windfall. Funny how that seems to happen in every plan Mr. Ryan proposes.
That was last week. This week, perhaps realizing how flat his effort fell, he began tweeting about freedom, which he defined as “the ability to buy what you want to fit what you need.” Give me consumer sovereignty or give me death! And Obamacare, he declared, is bad because it deprives Americans of that freedom by doing things like establishing minimum standards for insurance policies.
I very much doubt that this is going to fly, now that ordinary Americans are starting to realize just how devastating loss of coverage would be. But for the record, let me remind everyone what we’ve been saying for years: Any plan that makes essential care available to everyone has to involve some restriction of choice.
Suppose you want to make insurance available to people with pre-existing conditions. You can’t just forbid insurance companies to discriminate based on medical history; if you do that, healthy people won’t sign up until they get sick. So you have to mandate the purchase of insurance; and you have to provide subsidies to lower-income families so that they can afford the policies. The end result of this logic is … Obamacare.
And one more thing: Insurance policies must meet a minimum standard. Otherwise, healthy people will buy cheap policies with paper-thin coverage and huge deductibles, which is basically the same as not buying insurance at all.
So yes, Obamacare somewhat restricts choice — not because meddling bureaucrats want to run your life, but because some restrictions are necessary as part of a package that in many ways sets Americans free.
For health reform has been a hugely liberating experience for millions. It means that workers don’t have to fear that quitting a job with a large company will mean loss of health coverage, and that entrepreneurs don’t have to fear striking out on their own. It means that those 20 million people who gained coverage don’t have to fear financial ruin if they get sick — or unnecessary death if they can’t afford treatment. For there is no real question that Obamacare is saving tens of thousands of lives every year.
So why do Republicans hate Obamacare so much? It’s not because they have better ideas; as we’ve seen over the past few weeks, they’re coming up empty-handed on the “replace” part of “repeal and replace.” It’s not, I’m sorry to say, because they are deeply committed to Americans’ right to buy the insurance policy of their choice.
No, mainly they hate Obamacare for two reasons: It demonstrates that the government can make people’s lives better, and it’s paid for in large part with taxes on the wealthy. Their overriding goal is to make those taxes go away. And if getting those taxes cut means that quite a few people end up dying, remember: freedom!