My supply-side Bloomberg debate with Noah Smith

A variety of points are made, here is one of mine:

Finally, on immigration you might be right about the points system but I’m not yet convinced. I say take in more high-skilled immigrants, but I wouldn’t move to a Canada-like points system. It seems the current American criteria already attract entrepreneurs. Do we really want to focus admission on more degree-holding service-sector professionals who work in industries with low rates of productivity growth? I’m not so sure.

And Noah’s response:

As for skilled immigrants, both they and Americans can switch between jobs. For example, if we import more foreign doctors, pushing down U.S. doctor salaries, more bright young Americans might choose engineering over the medical profession. So I’m not at all worried about bringing in the “wrong kind” of skilled immigrants.

Do read the whole thing.

Comments

"So I’m not at all worried about bringing in the “wrong kind” of skilled immigrants."

Noah Smith makes an excellent point. Massive immigration of low skilled labor has significant down sides. Many of those down sides are mitigated or irrelevant for high skilled immigration.

A consistently applied points system as used by Canada over the last few decades would have removed much of the pressure for a Trump-like figure in the US today. As it stands, failure to make changes in this area guarantees that the demand for an anti-immigration figure will only get stronger in the US regardless of who wins this election.

Why does immigration make economists go full retard? It's the one area where the routinely argue for maximizing uncertainty and destroying price signals. Even most Austrians, who are sticklers on central banking, lose it on immigration.

No, Noah's assertion about job switching is actually opposite of reality. Unskilled workers are the ones that can easily switch between jobs. It takes almost no retraining to switch between McDonald's, Walmart, driving an Uber, picking grapes, etc. That's why those jobs are called unskilled. In fact, many workers hold more than one of these jobs simultaneously.

Tyler is right to say that he doesn't know what kind of workers we need. No one person or government committee does. That's why the best point system is the one the market uses.

"That’s why the best point system is the one the market uses."

There are significant externalities associated with immigration. Furthermore we don't have an immigration free market, we have an immigration black market. Black markets aren't particularly good at generating efficient transactions.

I hope this is cardboard debate Tyler, and not self-balanced Tyler, because it all comes off as a rather blithe rejection of negative externalities.

Kind of.

"Or take fracking. It has made energy cheaper, created jobs and helped lower carbon emissions. And yet it remains a legally fraught enterprise."

If indeed fracking is good, and coal is bad, that says how to shape your regs, not to have none and hope for the best.

Isn't that the libertarian way? Pretend negative externalities don't exist.

Tyler didn't say that fracking should have no regulations. You are setting fire to a straw man.

I interpret "full of" to mean a preponderance, a large majority.

"The economy is full of pointless or counterproductive regulations that boost business costs, lower employment and slow innovation."

So you from a certain percentage right to 0.

Anyways, it seems the original statement, not your strawman, is correct.

No one says "full of" without implying a percentage.

The neutral route would have been to say "The economy [has] pointless or counterproductive regulations that boost business costs, lower employment and slow innovation.”

The current "socialist and leftist" position is that "The economy [has some] pointless or counterproductive regulations that boost business costs, lower employment and slow innovation.”

I read "full of" as "plenty of" not "the majority of"

How much does a glass that is full of water contain?

"containing as much or as many as is possible or normal"

"The water in the glass is full of chemicals."

Does this imply that the majority of the water consists of chemicals? Or just more than normal or expected?

Or straight from the dictionary: "The room was full of pictures." Does this mean pictures were piled on the floor comprising a large majority of the volume of the room?

The position of the environmentalists was that fracking would cause, among other things, groundwater pollution, respiratory disease, and increased carbon emissions. None of these occurred in a systemic, significant way. Just for the record.

In fact, if you have any concern about global warming, fracking is a miracle technology. Long-term we may have to move beyond natural gas, but it beats the heck out of coal.

I favor points, and the thing about awarding points to accomplished people is that the are probably adaptable as well. Hamdi Ulukaya (Chobani yogurt) came to study political science.

That makes me want to write in Hermann Goering. Greek Yogurt is awful.

I like my yogurt sour, like life.

Noah Smith is a Jew who seems to spend most of his time promoting immigration and social leftism for gentile countries such as the US and Japan.

Welcome to 2016.

Here he seems to be promoting a more hard-nosed immigration policy than we currently have, or Cowen favors.

His "hard nosed immigration policy" consists of promoting more and continued immigration.

It's like anon and Mulp arguing over the appropriate level of banking regulation.

Irk. This was mean of me, and unfair to Tyler and Noah too. I withdraw it.

Several points:

1) Immigrants is a fine short term solution but it tends to be politically unstable and creates backlashes.
2) It appears there is a shortage of skilled labor, say construction, who were completely {PSST workers 7 years ago. Longer recessions changes the skills of the workers.
3) Again, we have an unemployment rate today equal to the lowest unemployment of the Reagan Revolution 4.9% (which was achieved in 1989 Bush administration). So it appears the problem of AS labor supply is the Generation X avoided family formation until 2000. So how Supply Side going to make Americans want larger families with lower working class wages and the increase of more/flexible hours?

I'm not a huge fan of points.

I think immigrants should be like the Spanish conquistador who after landing set fire to his boats to encourage the men. Immigrants ought to be motivated and desperation is a motivator that even overtakes greed. Someone who's got a degree and cash and a family back home who'll support them if worst comes to worse is probably not super motivated. On the other hand if you've got nothing at all except the knowledge that there's some group of people from whence you've come who're expecting *you* to send home some dollars then you're motivated. People who put themselves in that position tend to be hungry.

The other analogy I'd draw is those drug sniffing dogs. Apparently the number one thing you need in a dog trained to sniff out drugs is not an ability to smell. All dogs can smell drugs. The number one thing is that the dog likes treats. The only way they can learn is if there's nothing they want more then a treat.

Same thing with immigrants. If the person coming to here is a motivated idiot the range of outcomes probably goes from success (unlikely but not impossible) to grinding away in some crappy job. But even in the worst case scenario they'll be working 9 to 5 and badgering any kids they have to make something better of themselves. Honestly just that - just staying out of trouble and doing right by your kids - would be great. For the immigrant who's got everything - money and/or a degree - then it's possible (likely?) they're taking a turn at a roulette wheel. If the number doesn't come up then they're going to walk away because they've got choices.

Hmmm... maybe I *do* like points - I just don't think the people awarding points would be awarding them in the manner I prefer.

"Again, we have an unemployment rate today equal to the lowest unemployment of the Reagan Revolution 4.9% (which was achieved in 1989 Bush administration)."

Talking about the current unemployment rate without referencing the steep decline in Labor Force participation is misleading.

In 1989, LFP was around 66.5, it's currently around 62.8%.

Focusing on the points system in Canada or Australia is misleading.

First, family members of the 'skilled' applicant make up about 80% of immigrants in Canada and the new government is now shifting its focus even further into family immigration.

Second, the average immigrant in Canada still does poorly in terms of income. The government defines the Canadian into three main categories - indigenous people, single mothers and immigrants - while the Fraser Institute pegs the net cost of immigrants at $22 billion a year, which is the equivalent of $220 billion in the US.

Third, the reason Canada's immigrants do better relative to those in Europe and the US is not so much the points but the source. Immigrants to Canada are mostly from Asian countries like China and India who have proved much more committed to success-oriented values at school, work and within secular western culture itself.

You don't think the points have anything to do with the source? I'm fine with taking the high-IQ people and their high-IQ spouses and children as well.

"I’m fine with taking the high-IQ people and their high-IQ spouses and children as well"

You don't get it, notwithstanding your touching faith in the verity of results from the Stanford Binet test.

These countries don't 'test' for IQ - they score for educational attainment, & youth.

The higher the former, & lower the latter, the greater probability of being accepted by Dept of Immigration.

Although my High IQ wife cucked me so you know...

IQ tests have an extremely high correlation with educational attainment

"IQ tests have an extremely high correlation with educational attainment"

Yet people like you never cite any peer reviewed papers to support this assertion

& what's 'attainment'?

FAIL.

People who lose their good paying jobs to immigrants, and then don't get another job, or else get another job that does not cover their basic necessities of life, might disagree with all of this love of immigration. Friends of mine in the San Francisco area have been in this situation.

If we're going to be taking in a certain amount of immigrants, we need to be sure we are not taking lots of jobs away from Americans and/or lowering wages to where people can't cover their basic expenses. Immigrants may be okay with living in a small apartment with tons of other people, in order to manage the cost of housing. But it's not realistic to expect Americans to, and it's not fair to lower wages to that point because the company can get away with hiring skilled workers on the cheap with H1B visas. Yes, I know, they're not supposed to be able to use those visas unless they can't find an American who is qualified to do the job. But they are usually lying about that. They just can't find an American to do it for the low wage they intend to pay.

I agree with wiki in the 2nd comment here that "As it stands, failure to make changes in this area guarantees that the demand for an anti-immigration figure will only get stronger in the US regardless of who wins this election." If we fail to change it, stand ready for more and more Trumps.

Trump type politicians appeal to those people who are invisible to the "free market" theorists-- those invisible people who have a rough time when the "free market" outsources their job to China, or insources it by inviting immigrants into the U.S. to take the job the American will get laid off from. Some of these folks won't be laid off until after they train their replacement worker. Those folks are VERY responsive to Trump type politicians.

Should American Immigration Policy be designed to maximize the increase in welfare of the existing stock of Americans over the next 10 years or the increase in welfare of the future (existing +new) stock of Americans over the next 10 years? Pretty different questions.

Or the welfare of the future stock of Americans plus illigel immgirants in 10 years?

Wow, the commenters at Bloomberg. And I thought that Reddit was taken over by the radical left.

We're going to be in real trouble.

https://hbr.org/2016/10/immigrants-play-a-disproportionate-role-in-american-entrepreneurship#

"""Immigrants constitute 15% of the general U.S. workforce, but they account for around a quarter of U.S. entrepreneurs

The average initial employment for firms founded by immigrants exclusively is 4.4 workers, compared to 7.0 workers for firms launched exclusively by natives. When both types of founders are present (i.e., “mixed founder team”), the average is 16.9 workers."""

These debates are likely to continue forever and we just need to make sure we follow our own way and don’t be silly with blindly following these happening. I keep it pretty straight forward which is due to OctaFX broker which is first rate having tiny spreads, zero balance protection, swap free account while they also have cash back service, it’s all very handy and helps me working with extra confidence and allows me to be relaxed which brings plenty of rewards.

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